Trade Union Reform
Is Trade Unionism Dying?
N R Evans
The title of this paper, posed as a question, arises
because the custodians of the Australian trade union
movement, historically at the apogee of their influence
and power, are now clearly nervous and defensive about
that power and influence. This defensiveness is not
now a matter of argument. The ACTU Executive, at its
Hobart meeting at the end of November 1986, levied
its affiliates for an amount believed to be $1.5 millions,
in order to finance a public relations campaign to
counter the influence of the 'New Right'. The President,
Simon Crean has, in recent weeks, frequently asked
what he regards as the rhetorical question:
'What would Australia be like if it were not for the
strength of the trade unions?'public standing of trade
There is, undoubtedly, concern within the ACTU camp.
The reasons for this concern are widely understood
if rarely commented on. The polls conducted by the
Hancock Committee, the results of which are buried
discreetly in the appendices of the Hancock Report,
show a depth and breadth of public distaste for union
power which should give Simon Crean restless nights.
Let me quote the Hancock results. Only 28% of respondents
conceded unions, in any industry, the right to strike,
and only 14% accepted the use of work bans.
In February 1985, McNair Anderson found that 81% of
respondents wanted penalties for unions disregarding
Arbitration Commission directions. The Hancock Committee's
poll found that 47% supported fining unions, 43% supported
loss of representation rights, 34% supported abolition
of the union, 21% supported removal of an award, 17%
supported jailing union leaders, 8% couldn't say, 2%
supported all of these measures, but only 2% supported
none of them. Now these figures add up to more than
100%, but, even allowing for double or triple dipping,
there is very clearly a high level of public distaste
for what is regarded as abuse of power by union leaders.
Even more interesting are the results of the 'Age'
polls concerned with these matters, taken over nearly
two decades. They show a steady deterioration in the
public standing of trade unions. In answering the
question, 'Do you think trade unions in Australia have
too much power?' in 1967, 47% responded 'yes'; in 1971
49%; in 1980 68%; and in 1986, 78% responded 'yes'.
Such a response can only mean that very large numbers
of trade union members think that trade unions have
too much power.
Particularly significant is the result of an 'Age'
poll conducted only a couple of months ago.
Only 40% agreed with the proposition that the Arbitration
Commission should play the central role in employer-employee
relationships. Forty two per cent of respondents supported
direct negotiations between workers and employers,
and 13% supported direct negotiations between trade
unions and employers. That is, 53% supported abandonment
of the Arbitration Commission. These figures suggest
an enormous gulf between our political elites and ordinary
people, since it has been an axiom of political life
in Australia, for decades, that the Arbitration Commission
has been a central pillar of our polity. For example,
Mr Peter Ross Edwards, the leader of the National Party
in Victoria, and regarded by many as a sagacious politician,
made a Christmas statement ridiculing those who seek
the abolition of the Commission.
Given that this body has always publicly seen itself
as the guardian of the public interest, the referee
in the class war between employers and employees, this
repudiation by those whom it claims to protect must
have come as a bitter blow. It is not as if the Arbitration
Commission has come under a concerted attack. None
of the main political parties has come within a lightyear
of suggesting that it should be abandoned. Gerry Gutman,
in his paper to the Nicholls Seminar in March this
year, was very careful to argue for reform rather than
euthanasia. What this poll strongly indicates is that
the carefully nurtured myths of the IR Club, based
on the 1929 defeat of Stanley Bruce, which John Hyde
discussed at that same seminar, have no impact on the
public mind, no resonance with public opinion.
An important plank of the trade unions' legitimacy
platform is the very substantial membership of the
unions. Simon Crean, in a speech to the Metal Trades
Industry Association, in October 1985, said:
'What is wrong with the trade union movement exercising
its collective responsibility, in terms of a genuine
partnership in this country? Given we directly represent
2.6 million members, together with those dependent
upon them, it is not an insignificant group in the
Such arguments raise directly the nature of trade
union membership and its record throughout our history.
The proportion of workers in Australia who are members
of trade unions has oscillated since the First World
War between 50% and 60%. But at the time of federation,
in 1901, according to the Hancock Committee, the proportion
of trade unionists in the workforce was 6%. By 1911,
it was 28%, by 1919, 50%. These figures show, and
the Hancock Committee concedes, that membership and,
presumably, support for trade unions did not precede,
but followed, the legal privileges bestowed upon them
by the 1904 Conciliation and Arbitration Act. Trade
Unions, at least as organizations with very large memberships,
are a post 1910 phenomenon. Historically the high
point was 1953, when the industrial groups were at
the height of their influence; Sir Raymond Kelly was
the President of the Commission; and the proportion
of trade unionists was 63%. Arguably, this was the
high point of mediaevalism in Australia.
From a labour market point of view what is of even
greater significance is the proportion of the workforce
that is covered by arbitral decisions. It is commonly
accepted that that figure is now about 80%. The proportion
of the Australian workforce in trade unions is one
of the highest in the world. Sweden is the only OECD
country, I think, with a higher proportion. It would
be of very great interest to obtain international comparisons
of the percentage of workforce, not so much enrolled
in unions, but regulated with respect to wages and
conditions, by arbitral authority.
Behind the aggregates of trade union membership, however,
there has been in the last twenty years a fundamental
change, the change from private sector unionism to
public sector unionism. This is explored in a paper
given by Dr Don Rawson, of the ANU Research School
of Social Sciences, at a recent conference on Industrial
Relations in the Public Sector. Seventy three per
cent of public sector employees are members of unions
compared with 39% of private sector employees. Further,
increases in employment in the last 8 years have been
predominantly in the public sector. Rawson gives us
figures for the period 1978-84. The increase in private
sector employment in that period was 4.7%, compared
with 16.5% for the public sector.
So, despite the public hostility to union power, we
have a high proportion of trade union participation
in the workforce generally, and in the public sector
particularly. We have also had the opportunity to
observe in Victoria, in the last month, an unprecedented
strike by the nurses of the Royal Australian Nurses
Federation. This strike has been very timely, at least
from the point of view of writing this paper. That
trade unionism is alive and well in the nursing profession
in Victoria is beyond argument. Some estimates give
a figure of 80% of qualified nurses who have left their
patients, and their responsibilities, in accordance
with the requests of the RANF leadership. It is noteworthy
that there is no closed shop in Victorian hospitals.
The only weapons which the RANF leadership have been
able to use to persuade nurses to support the strike
have been those of persuasion and argument.
Thus we have contradictory indications. On the one
hand there is the indisputable hostility of public
opinion to what is seen as excessive union power.
On the other hand, the continuing participation of
a high proportion of the workforce in trade unions,
and the new militancy of groups such as nurses, are
facts that any protagonist for a paper tiger theory
of trade unionism must accommodate.
Any association of people must have some basis for
association. Those who belong to bowling clubs, do
so in order to play bowls. Those who belong to Christian
churches do so because they subscribe to the Athanasian
Creed, or at least to some of the 39 Articles. Sometimes,
of course, there are hidden agendas. But we do have
to ask: why do people belong to trade unions? What
is the equivalent of the Athanasian Creed for the trade
union movement? What is the doctrinal base of trade
unionism? Was that doctrinal base valid in the nineteenth
century when trade unionism first became a significant
social movement in Western Europe and Australasia?
If it was valid then, is it valid today? And if the
answers to those questions are yes and no respectively,
what has changed to make that which was valid one hundred
years ago, invalid today?
When we consider the history of trade union agitation
and activity we find an extraordinary mixture of mediaeval
and modern ideas. Political and intellectual elites
in Britain, during the nineteenth century, had accepted
Smithian ideas, and the British Parliament had swept
away much of the stifling regulatory apparatus which
had been inherited from as far back as Tudor and Plantaganet
times. In reacting to these changes we would find,
as we delved into the ideas and inherited attitudes
of the working class preachers of the early trade union
movement, an antipathy to the market place, a desire
for regulation and uniformity, and a deep wish for
predictability, that was evident, for example, in the
sumptuary laws of mediaeval times. There is a verse
of the hymn 'All things bright and beautiful' which
can still be found in 'Hymns, Ancient and Modern' but
in no other hymnal. It goes as follows;
The rich man in his mansion,
The poor man at his gate,
God made them high and lowly,
And ordered their estate.
This verse is much derided these days but it does
show us how deep was the antipathy of many nineteenth
century Anglicans to the anxiety producing social mobility
and increasing prosperity of their times. Such conservatism
was widely shared by many people, including non-churchgoers,
who saw themselves as belonging to the lower classes.
Mr Justice Higgins' aversion to the higgling of the
market place, was not an original flash of brilliant
inspiration. The idea of the 'just price', like the
prohibition against usury, are mediaeval doctrines
which once enjoyed the support of Church and State
and which we can still see defended, from time to time,
in the pages of 'News Weekly'.
Mr Justice Ludeke, a Deputy President of the Arbitration
Commission, gave the counsel for the Commonwealth Government,
Ron Merkel QC, a dressing down on 26 November last
because of the Government's failure to control prices.
From the transcript of the proceedings it is clear
that Mr Justice Ludeke considers himself very well
qualified to comment on the prices of chickens in supermarkets.
He pronounced from the Bench that competition in the
table chicken industry was non-existent; he wished
to know the basis for a decision by the Prices Surveillance
Authority granting a 10% increase in chicken prices;
and he concluded by criticizing, in ominous terms,
Woe unto those who spend money on antique French clocks
and foreign suits. Woe unto those who buy Mercedes
when Fords would do. Woe unto those who fly First Class
when there are seats available in Economy! Here we
can see the Deputy President struggling to wrest the
hammer from Martin Luther's hand, as Luther nails his
95 theses to the door of All Saints Church at Wittenburg.
Here is the learned Justice trying desperately to
forestall the Reformation, and the freedom, both religious
and economic, which it would bring in its train.
It seems reasonable to argue, then, that British,
nineteenth century trade unionism was a conservative
reaction to the Manchester or Smithian doctrines which
British governments, since Pitt the Younger, had followed.
In doing so, these governments had helped to foster
a technological and commercial revolution which made
Britain the world's greatest power. But periods of
great social change, such as that of the nineteenth
century, throw up a variety of responses to change,
and because the new capitalism was constantly attacking
privilege and inherited status, a coalition between
conservative wealth and the conservative poor became
a potent political force; a force moulded and inspired
by that brilliant, albeit unscrupulous, politician,
This coalition was instrumental in creating a myth
of nineteenth century immiseration and impoverishment
which is still very widely believed. Disraeli was
an extraordinarily successful pedlar of romantic nonsense
and I have been astonished at engineering colleagues
in academia who, on the one hand, have been well versed
in the triumphs of nineteenth century engineering,
but who are, on the other hand, still convinced that
but for the trade unions, we would all still be living
in rat infested slums in Liverpool and Manchester.
As well as mediaeval nostalgia, what we can call the
Disraeli factor, Marxian influence, for two reasons,
was also important. Not only did Marx and his followers
popularize and legitimise, in the most profound way,
the idea of class, but with the labour theory of value
they were able to turn a German mining industry term
'ausbeuten', (in English 'exploit') meaning optimal
ore recovery from particular rock, into a word that
now denotes theft or expropriation. They were also
confidently able to predict, using this theory, the
terminal instability of a capitalist system relying
on market prices for the determination of wages.
My introduction to the labour theory of value was
through Mr Bob Balcombe, whom I knew 25 years ago as
the then former Assistant Secretary of the Victorian
Branch of the ALP, and who was also Secretary of the
Federated Fodder and Fuel Trades Union. Bob Balcombe
was convinced, with religious certainty, of the power
and efficacy of the doctrine of the labour theory of
value, and it sustained him through many years of political
disappointment and defeat. In Lloyd Ross's biography
of William Lane we find some characteristic expressions
of this doctrine. Francis Adams, the poet, Lane's
'The vast edifice of civilization is built on the
essential wrong of recompensing labor, not according
to the worth of its work, but according to the worth
of its numbers in the market of unlimited competition'.
Trade unionism, therefore, was more than just another
association of people who shared the common interest
of working at the same occupation. Such professional
or commercial associations were succinctly described
by Adam Smith in his oft quoted remark:
'People of the same trade seldom meet together, even
for merriment and diversion, but the conversation ends
in a conspiracy against the public, or in some contrivance
to raise prices.'
Trade unionism was much more than a Smithian conspiracy
to raise prices. Trade unionism had a doctrine of
secular redemption and one of the crucial problems
of trade unionism was the threat it posed to the authority
of the State. The Tolpuddle martyrs were transported
not because they had joined a trade union (the Combination
Acts having been repealed many years previously) but
because they had 'taken oaths', and because there had
been an outbreak of haystack burning which had caused
much local apprehension.
The taking of oaths had been associated for centuries
with treasonable attitudes and behaviour. Indeed the
taking of an oath was akin to renunciation of allegiance
to the Crown. It is true that by the time of the Tolpuddle
haystack burnings, it had been argued that such oath
taking did not imply seditious activity or intent.
But as the nineteenth century progressed, doctrines
which held that international loyalties to class should
take precedence over allegiance to one's country, were
widely promulgated. These doctrines came to nothing
when the young working men of town and country, in
Germany and France, tragically slaughtered each other
by the millions in the Great War.
The relationship between trade union and State has
become more complex than hitherto because of the growth
of the State as an employer, either direct or indirect.
As Rawson pointed out, over half the people who pay
capitation fees to the ACTU are in the public sector.
Most strikes now take place within the public sector.
My explanatory hypothesis for this is that people
who work in the public sector find trade unionism an
outlet for the frustrations which are part and parcel
of a life spent working in, or under, a bureaucracy.
And since trade unionism is sanctioned by the State
(indeed it takes on the form of part of the State bureaucracy)
it is a natural progression from school teacher to
a member of the NSW Teachers' Federation, and an even
more natural progression from teachers' union bureaucrat
to Ministry of Education bureaucrat. Indeed, it has
become a recognized career path.
Ultimately, the citizens must decide where their ultimate
loyalties lie. The last major clash between a union
and the State in Australia was in Queensland, with
the power worker's strike, a story which is familiar
to readers of 'Arbitration in Contempt'.
In Victoria. the nurses' strike is now moving into
its 5th week, and there is nervous talk of it continuing
through Christmas. Despite the fact that the Victorian
Government, or at least its agents of one kind or another,
have generated the most appalling bureaucratic mess
within the hospital industry, there seems to be little
concern within the government about the consequences,
either political or medical, of a prolonged strike.
The defeat of the ETU in Queensland has, arguably,
had political consequences that have spread beyond
both State and Party borders.
It is, in my view, impossible to avoid the conclusion,
as we consider the history of trade unionism in this
country, that it is totally dependent on the authority
of the State for its continuing life and activity.
This dependency relationship was summarized by Clyde
Cameron, over a decade ago, in a letter to George Crawford
which I hope to see much more widely read and considered
than has so far been the case.
Mr Crawford, as General Secretary of the Plumbers'
and Gasfitters' Union, had strongly objected to amendments
to the Conciliation and Arbitration Act, which Mr Cameron,
as Minister for Labor, had piloted through the Parliament;
amendments which gave rank and file union members some
measure of redress against tyrannical union officials.
Mr Cameron wrote to George Crawford, in 1973, in these
Let the unions run their own affairs you yelled....I
have never heard you object to the law giving your
union monopoly rights to enrol plumbers and gasfitters.
I have never heard you object to the law that permits
you preventing another union seeking award coverage
for plumbers and gasfitters. Nor have I ever heard
you complain against the law that permits the Commission
to give preference of employment to plumbers and gasfitters
who belong to your union.
I have never heard your objection to the law that
prohibits victimization against your union members.
I have never heard you complain about the law that
gives you the right of entry to places employing plumbers
and gasfitters. I have never heard you protest against
the law that permits your union to sue an employer
for breach of award and for wage arrears.....I could
go on and on, for I have already listed 23 additional
powers which go with registration under the Conciliation
and Arbitration Act.'
Clyde Cameron was well versed in the Conciliation
and Arbitration Act. He had spent many years litigating
against Tom Doherty in the AWU. We will only find out
whether trade unions are important social institutions,
capable of attracting allegiance and loyalty, when
the monopoly privileges they enjoy, bestowed by the
State, are withdrawn by the State.
The experience of the power workers with SEQEB is
most interesting in this context. Wayne Gilbert tells
us in his chapter of 'Arbitration in Contempt' that
those who continued to carry out their duties with
SEQEB, a decision which required, in some circumstances,
a great deal of courage, lost no time in forming an
association to carry out the responsibilities of representation
with their employer. This new association, deliberately
not called a union, has just been recognized, after
much legal expense, as a registered organization by
the arbitral authorities. The story of the SEQEB dispute,
and the Power Workers Association, indicates that the
desire for association, in that very difficult situation,
was strong. My view is that the pressures towards
association will vary greatly from situation to situation.
SEQEB is a statutory monopoly and for many skills it
is, at least in Brisbane, a monopsonist buyer of labour.
Thus the drive for countervailing power, through association,
is understandable. In other situations, where there
are many buyers for labour, I would be surprised to
find any real pressure for association.
Monopsony in labour markets, then, creates strong
pressures towards association. In the Australian context,
where registered organizations have monopoly rights,
there are often insurmountable difficulties for an
employee to associate with any group other than the
registered union. Thus in industries dominated by governments,
for example, health and hospitals, education, electricity
supply, telecommunications and transport, we usually
find unions which command allegiance from their members,
however grudging that allegiance may, at times, be.
In industries characterized by competition in the labour
market, for example, retailing, the tourist industry,
financial services, allegiance to unions, however legally
well entrenched they may be, is usually weak.
If the present tide of support for the privatization
of many government owned industries is translated into
government policy and action, then one of the consequences
will be (provided such privatization brings with it
a competitive market for skills in those industries),
a dramatic decline in union influence in those industries.
That the unions are well aware of this is evident
from the expensive campaign that has been run by various
trade unions, notably the Australian Telecommunications
Employees' Association, against privatization proposals.
Another shift in public opinion which poses major
problems for Australian trade unions is the shift in
public opinion on the issue of tariff protection. It
is less than twenty years since Bert Kelly was sacked
as Minister for the Navy, and began to devote his energy
and skills to changing opinion through his weekly Modest
Member's column. He was not entirely alone in this
extraordinary battle, but to him must go the major
part of the credit for the change in sentiment that
has occurred. Protectionists are now a very quiet group,
and although the dismantling of tariffs and quotas
is still a difficult part of our national political
agenda (the time is never opportune), it is difficult
to see how any government can go into reverse gear
on the slow untying of our protectionist millstone.
Protection and trade unionism were the crucial elements
of the autarkic coalition which won the crucial political
battles of the early years of Federation. The Presbyterian
manufacturers got tariffs, and the Irish Catholics
got legally privileged unions, with which they could
ensure that the monopoly rents from the tariffs were
passed on to the workers through Arbitration Court
fiat. This was a swindle which could only endure
whilst those who were paying for it did not understand
what was going on and that is an era which has, at
long last, come to an end. But whilst it did last the
unions had a cast iron claim to legitimacy. If employers
could set their prices by obtaining tariffs, then it
was only fair that employees should get their share
of the loot, and the mechanism of registered unions,
Industrial Registrars, union rule books, and the Arbitration
Court has provided a good living over the years for
the members of the Industrial Relations Club.
But if tariffs vanish then so do the monopoly rents
which they bring, and the justification for institutions
such as legally privileged trade unions, and high living
Arbitration Commissioners, whose role is to divide
up the monopoly rents, also vanishes. This is the reason
why those unions, notably the AWU, whose members are
predominantly found in the export industries, and whose
livelihood is made more precarious and less prosperous
by protection, have always supported their union colleagues
whose members are direct beneficiaries of tariffs.
Trade unionism, in its Australian essence, has always
been a pillar of the protectionist temple, and the
protectionist interest has always supported and maintained
this vital pillar. Men and women are social beings,
and civilized life is inconceivable without language
and association. Cricket clubs, Bar associations, professional
societies, churches, industry associations, choirs,
repertory groups, schools, colleges, political parties,
public companies, string quartets, jazz bands, are
examples of such association. The State and the family
are more fundamental examples. The trade unions have
long pretended that they share with the family and
the State a fundamental claim on the allegiance of
the citizen. On the arguments I have considered in
this paper, trade unionism is an empty shell which
is kept alive by a combination of extraordinary legal
privilege, and government monopsony in much of our
Why HR Nicholls?