Wrong Way---Go Back

What Does The Future Hold For Trade Unions?

Steve Harrison

In opening I should point out that 1 have had the privilege of having worked for a trade union for 20 years, and leave with no animosity. Indeed I have been very privileged to have been in a position to have a major impact on some of the very important social, political and industrial changes that have taken place during this period of time. The comments I intend to make are for me not new, nor rethinking subsequent to my leaving the Australian Workers' Union. Many of the comments have been made previously in other contexts albeit probably not locked together in the forum of a review of the future of trade unions.

To discuss the future of trade unions we need to look back a little in history to make such a discussion relevant. Trade unions essentially grew in the late 19th century as a result of the early introduction of capitalism arising out of the industrial revolution. In fact, they become capitalism's answer to the Marxist alternatives of socialism or communism. They developed this role not by planning or forethought but by a process of natural evolution. I raise this issue to point out that trade unions, with all their individual faults and abuses of power from time to time have in fact been a battle ground for much of the ideological conflict over the last century.

At first they were targeted by Marxists throughout the industrial developed world as a vanguard for the introduction of socialism or communism. There have been at times vicious fights within trade unions by those who believed in capitalism (whether they themselves expressed it as clearly as that) against those who wished to move into the socialist world. With the advent of communism in Eastern Europe, Soviet Union, China and other countries, it was again the trade unions who were very much at the fore in arguing issues affecting liberty and freedom. One need only make reference to the role of "Solidarity" in Poland, the vicious persecution of the free trade unions in the USSR and the substantially under-reported role of trade unions in the demonstration at Tianimen Square in China that led to the subsequent massacre. Similarly in the largely authoritarian regimes of Korea, Burma, Chile and the like, it is trade unions that have largely provided most of the organised opposition.

A very good friend of mine, Michael Easson, who was previously the secretary of the New South Wales Labour Council, once expressed the clearest description of trade unions that I have heard when he described their role as that of "civilising capitalism". It should be noted in this regard that trade unions are almost universally supported and endorsed by churches of almost all denominations. All my experiences lead me to the inevitable, if little understood, conclusion that trade unions have been a fundamental part of the checks and balances required in developing a truly democratic society. Just as democracy as a political form of government has developed in the Western world, so has capitalism evolved over the last century.

I mentioned previously that trade unions largely evolved at the end of the last century. To place that in context, one needs only to remember that trade unions commenced growing scarcely 20 years after slavery was abolished in the United States, decades before universal suffrage had been attained in Great Britain and over half a century before black people got the vote in the United States and Australia. Subsequently there were wars against Nazism and fascism and the cold war with socialism and communism.

In the background papers of the H R Nicholls Society for proceedings this weekend are many references to the terms freedom and liberty. I put to you tonight that freedom is more than just the right to choose. It must also incorporate the economic ability to have the right to choose. It is on this fundamental issue that I disagree with the views supporting moves to individual contracts in which to deal with employees in Australian society. For many, there is no choice in accepting whatever contract the employer offers; such an approach while perhaps well-intentioned, quickly opens the door to removing the checks and balances that contribute to a nation's wealth.

One must he very careful in applying criticisms that are valid today (or may be valid today) to criticise actions of 90 years ago. 1 believe that the role of the Industrial Commission has in fact given Australia a huge political and competitive advantage for much of the 20th century. It is fundamentally why Australia remained more stable, more egalitarian (in the good sense of the word) a land of opportunity to move across socio economic groups. While other countries faced up to the development of full democracy in very traumatic ways, Australia went about it steadily, slowly and in a very just way.

I do not subscribe myself to the view that unemployment and Australia's poor economic performance since the 70s are directly as a result of the role of the Commission or for that matter Australia's industrial law. Far more damaging has been the artificial world we created for Australia, living behind high tariff barriers. The nation lived off the natural wealth of this country, while becoming less and less competitive. In many ways if I can be so cheeky this group would be better termed the Alf Rattigan Society, named after the head of the Industries Assistance Commission who particularly during the 1970s began laying the seeds for attacking the high tariff barriers we had erected under McEwen in particular in Australia. The problems outlined in your discussion paper that you attempt to address as the H R Nicholls Society are in fact dealing with symptoms of an illness, rather than the illness itself. As in medicine the treatment of a particular symptom may not in fact cure the illness. As an analogy, would treating the bleeding and nausea caused by cancer rather than the cancer itself subsequently cure you?

The most serious attempt to deal with the illness was the decision to float (or deregulate) the Australian dollar and the commitment to lower tariffs enforcing them through our signatory to the GATT trade liberalisation process. It is in this context that trade unions in Australia survived longer as a powerful institution than in the rest of the Western world. They were, as was the Industrial Relations Commission and the award structure, secure behind the high tariff barriers.

I return to the issue of the future of trade unions. The inherent contradiction is that trade unions by their very success in civilising capitalism in fact put themselves out of business. In crude terms they have actually won the war of providing checks and balances they set out to win, but still do not realise that the war is largely over. I find it amazing the number of Australian Trade Union leaders in very senior levels who still perceive that there is in fact a class war basis for the concept of trade unions.
In a practical context, when trade unions started there was no minimum wage or safety net wage, there was no Annual Leave Act, no Long Service Leave Act, there was no unfair dismissal case law or legislation, there was no State workers compensation laws, no occupational health and safety laws, the right to bargain collectively was illegal, there was no right to freedom of association, there were no superannuation laws. There were no legal instruments such as awards governing hours of work, leave and similar entitlements. These were developed over the century, and have become enshrined by legislation. Governments of all persuasions and in most countries now accept that the bulk of those laws (subject to weighting of aspects of it) are a fundamental part of good government. When you think about it what is there in fact left for a trade union to do?

In the first report of this week's ACTU congress in Brisbane, the Sydney Morning Herald ran a story on the first day's proceedings, basically responding that the trade union movement was into trinket selling. Whether it was the lucky door prizes and free watches for recruitment by the Nurses Union, or workers free trip to Fiji as an incentive by the metal workers union to sign-up rank and file members, none of the reports suggested that the union movement is in fact doing the fundamental analysis required of itself for the future. Yet I heard an interview with Michael Costa of the New South Wales Labour Council on the ABC reporting on a recent survey conducted by that body which indicated that the major issue affecting rank and file membership was in fact job security. Unions, he admitted, are perceived not to be able to significantly affect this issue. In fact it is the very issue they should be addressing. Private sector unionisation has dropped to 24% from well over 50% in the 1970s. It is not because employers are getting more benevolent nor is it because of anti-union laws at this time in history.

The rank and file member now knows that unions are not providing the service that they need. Claims based upon past wins, historical class allegiances or fears about what employers might become are largely, and should be largely meaningless to the average employee.

The bulk of the workforce is mobile, particularly amongst small employers. Pay, job satisfaction, alternative opportunities, personal skills and vocational education are the criteria deciding whether a person stays in his or her current employment. It is rare that any of these people would go to a union. In the large establishments in the private sector there is much more preference to still have a union although most are dissatisfied with the service. The conventional union wisdom is that the unionisation rate is highest in the public service, teaching and nursing fields as examples because of higher education. I in fact do not believe this is so. These areas are in fact the last remaining bureaucracies, and the unionisation is in fact a symptom of the size of the workforce, centrally controlled by government budgets and consequently much like a true blue collar site of the past.

The traditional mould of unionism will still survive in some areas, where they can flex their muscle, such as construction and maritime industries, or in areas where people are exploited such as many of our low paid industries where migrants work yet they are an ever dwindling grouping. But, a modern trade union to survive needs to regard itself as earning a fee for service. Similar to an insurance company, it needs to be professional.

The regulation of trade unions under the Act in fact prevents this. The requirement for union officials to be elected means that there is very limited control over those officials. The Federal Court will time and again intervene at attempts to discipline or to cut short a term of office. I had the recent experience of having a national official come to work intermittently for between one and two years yet could do nothing about it because of the elected officer syndrome and factional considerations. That person was re-elected for another four years on one of the factional tickets. Similarly I was required to retain four officials in a branch in Victoria for over two years with almost no members to service and no work to do because they had been elected and were part of an amalgamation agreement, as a result of a decision of the Federal Court,

Traditional affiliations and associated costs chew out $20-25 of all revenue received from members (such as ALP, election donations, ACTU, Labour Council, Affiliation to International Union Bodies, political campaigns). The electoral structure is such that talented young people are rarely encouraged and are mostly discriminated against because they threaten the incumbent lifestyle or security of the existing officials. These are problems across all unions and largely arise out of the regulation of unions. Consequently apart from the historical and cultural edge that unions have, they are in fact at a disadvantage in terms of providing a service to the workforce compared to other bargaining agents.

I go back to the one issue that the workforce nominates, job security.

As a result of the changes from the floating of the dollar and the lowering of tariffs, trade in Australia is very much more competitive. Consequently job security is synonymous with the health and profitability of the respective companies. Not only job security but equally the ability to improve pay and entitlements in a competitive environment flows from exactly the same issues. This was the fundamental concept underlining the steel plan with BHP, the substantial industrial reforms that were made at ICI and the essential and important conceptual basis applying to enterprise bargaining which I was instrumental in developing in my old union, the FIA.

The ACTU's decision this week to revert to pattern bargaining again makes the union movement less relevant to its membership because it flies in the face of the structural changes that are moving through our country. It is a return to the 1960s and 1970s, and is completely incompatible with the structural changes working through the Australian economy.

Some unions will survive but they need to understand that capitalism and democracy have substantially evolved, and they need to as well. More and more we will see the development of bargaining agents that are essentially private enterprise unions. Whether they are a more traditional union or a bargaining agent, the future workforce will demand that these bodies are non-political, enterprise focused, professional and work in co-operation with management in terms of the prosperity of the particular enterprise.

It actually remains very much in the employer's interest for the same reason to have representation of their workforce. Such representation provides the same checks and balances as are needed in society generally. If representation is based on these principles, a union or bargaining agent actually becomes an ongoing, low cost internal quality assistance auditor for the company. The very issue of discussing substantial issues with a third party who is sympathetic but not necessarily in full agreement forces management to think through actions with independent criteria.

Movement to arbitrary or authoritarian control must almost by definition lead to a deteriorating performance of a company. There are increasingly volumes of studies overseas supporting this view. In even the most simple economic terms it is cheaper for the company to have independent feedback of problems within their enterprise when this feedback is delivered in a constructive method. Unions or bargaining agents that do not meet this criteria will in fact remain out in the cold bitterly opposed by management and not really seen as providing appropriate service by the workforce.

The Japanese system wherein unions are fundamentally much closer to the company and where disagreements are represented not in class warfare terms but via internal discussions, and equally management's ability to act on such criticism, is looking much more like "the light on the hill" rather than as a contemptuous example referred to so often over the last decade by the ACTU. There will be a future but I believe it will be a vastly different and lesser future for trade unions into the future.

Why HR Nicholls?