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 unions?

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 community.'

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,

    'extravagant expenditure in Australia upon extravagant consumables by certain individuals.'

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, Benjamin Disraeli.

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 collaborator, wrote:

    '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 terms:

    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 labour market.

Why HR Nicholls?