Trade Union Reform


John Stone

On 30 September, 1986 The H R Nicholls Society held a dinner at the Southern Cross Hotel, Melbourne, on the occasion of the launching by Professor Geoffrey Blainey, A.O. of 'Arbitration in Contempt'---a work which, as Professor Blainey said on that occasion, had probably been the subject of wider (and more heated) public discussion in the period leading up to its launching than any other book he could personally remember.

During my own remarks at that dinner on the topic 'Repairing Australia', I quoted from a then recent statement by the New Zealand Business Roundtable in which, in discussing the problems New Zealanders are having with their labour market, and the need for reform thereof, that highly respected body said:

    'The clash between labour market and other policy settings is at the heart of Australia's current economic difficulties, which offer a telling example of what happens when economic policies are incoherent and inconsistent.'

Just so---albeit (as I observed on that occasion) a trifle humiliating to have our current economic difficulties so accurately, and so pithily, diagnosed by a New Zealand group.

Those 'labour market settings' to which the New Zealand Business Roundtable referred are in turn the product of an extremely powerful trade union movement working within the framework of an arbitration system which represents one of the most important bases of that power. As many observers have pointed out in recent years, it is therefore nothing to the point to speak merely of the need to obtain more economically rational outcomes from our system of determining wages and other conditions of employment. It needs to be simultaneously recognized that doing so must inevitably mean addressing the problem of trade union power.

Our present Government used to talk a great deal about its 'consensus' approach to policy questions, particularly where those questions were potentially socially divisive. Yet if there is one proposition on which, among people across the length and breadth of Australia, a true consensus does exist, it would be that our trade union bosses today have too much power.

In the fact of this undoubted consensus, what is our Government contemplating? It is contemplating legislation which would give our trade union bosses even more power. In particular, it is contemplating legislation which would remove all legal processes relating to trade unions from the realm of real law, and real courts, and place them in a Labour Court (or perhaps more accurately, Labor Court) to be newly created for that purpose.

The so-called 'Justices' of this new kangaroo Court would be the President, and those legally qualified Deputy Presidents of the Commonwealth Conciliation and Arbitration Commission who, when not sitting in this Court, would be sitting in the Commission within which they presently operate. What H R Nicholls would have said about this particular put-up job is difficult to imagine in detail, but I do not think words would have failed him.

Clearly, if Australia is to have any hope of reconciling both its economy and its society with the demands of the 21st Century, these matters are going to have to be tackled, and on a number of fronts. As noted earlier, one of those fronts to be addressed relates to the excessive power of trade unions in Australia, and the need for trade union reform more generally.

Against that background the H R Nicholls Society convened a Seminar on Saturday, 6 December 1986, on the overall topic of 'Trade Union Reform'.

Some may think that to talk of 'reforming' our trade unions is a contradiction in terms. However, while there is certainly much evidence for that view, it is not my own view, nor is it the collective view of the H R Nicholls Society. What is clear, however, is that our trade unions have suffered the fate embraced by Lord Acton's famous dictum, that 'power corrupts, and absolute power corrupts absolutely'. It was therefore to that process of corruption---using that word in its widest sense---that our Seminar was basically directed.

The five papers presented to that Seminar are now published herewith in order that they might become available to a wider audience. Of course, in a one day Seminar, it would be unlikely that five speakers could, between them, cover all aspects of a topic so wide as trade union reform. To take but one obvious gap in their coverage, none of them addressed that particularly unpleasant form of corruption of the trade union movement which actually results in direct criminal activity by trade union officials.

It was activities of that kind, for example, which initially led to the setting up of the Costigan Commission of Inquiry. The history of the United States trade union movement is riddled with examples of its penetration by criminal elements ranging from the Mafia downwards. Without in any way seeking to tar the Australian trade union movement with that brush, it would be a very foolhardy person who asserted that we have no such problems in Australia today, and an even more foolhardy one who asserted that, with the increasing power of trade unions, we shall not have a good many more such problems in the future.

Despite the absence of discussion of this and some other aspects, however, the papers published herewith cover a wide sweep of issues relating to trade union reform and make fascinating reading. Perhaps I should say in passing that I do not personally agree with every point that is made in every one of them; for example, there are some important elements of Mr Routley's paper from which I personally would differ. Nevertheless, it is the great virtue of all of them---and of Mr Routley's paper not least---that they provoke thought, and debate, about the fundamental issues they address. Since that is after all the sole purpose of the H R Nicholls Society, their authors have indeed served us well.

It is important to note that not merely economic issues are at stake. Professor Kemp's paper on 'Trade Unions and Liberty' goes to the heart of the issues raised by its title. One quotation only from that paper will serve to show their gravity:

    'Liberty.. requires law protecting individuals against the harmful conduct of others... the free society ... requires an ethic of respect for others and for their equal rights to pursue what is important for them.... It requires private institutions which have a genuine independence.... institutions of government responsive to the values and standards of the community....

    Unionism is compatible with such a society. The particular kind of unionism which has evolved in Australia is not. Australian unionism has become grounded to a significant extent in compulsion and conscription of both people and resources. It actively seeks the replacement of the law which protects individuals with a law which denies individual rights; Australian unionism has too readily ........ taken the view that the end justifies the means, and that damage to the livelihoods and even the lives of others is permissible in the pursuit of union goals. In seeking to transcend the independence of business, educational, public service and other institutions .........and in pursuing continuing extension of its influence over the leaders and management of these institutions, Australian unionism has eroded the institutional pluralism of a free society, and laid the basis for the monopolistic policy process of the corporate state.'

These are not mere theoretical musings. Mr Purvis' paper spells out in detail instances of the unprincipled use of trade union 'muscle'. It thereby provides chilling evidence of the extent to which our democratic society is already threatened by that same view that 'the end justifies the means' to which Professor Kemp refers. A further instance is given by Mr Russell in his paper on 'Trade Unions: Privileges and Power', when referring to the notorious case of Gibbins & Others v. Australasian Meat Industry Employees' Union, heard last year in the Federal Court.

In any society there comes a time when, if abuses continue to go unchecked, they will increase both in number and in magnitude, to the point where the task of correcting them threatens to be beyond the capacity of democratic Governments. That essentially was the road down which trade union power travelled in Argentina under Peron. The first casualty of such a process is freedom.

The need in Australia for significant reform of our trade unions must therefore be seen as vital not merely by those who have the future of the Australian economy at heart, but also by those who are concerned with the future of democratic freedoms in this country.

Why HR Nicholls?