Union Privilege v. Workers' Rights
Reflections of a New Boy
The Hon. Tony Abbott, MP
Edmund Burke once described a political party as a group of
people working for the national interest according to a particular
principle on which they all agree. The Liberal Party's animating
principle is freedom: not absolute freedom because freedom can
only exist in a context of order, stability and fairness---still,
as far as is reasonably possible, individual, social and commercial
freedom. Freedom is the 'light on the hill' to which we always
aspire and the yardstick by which we always wish to be judged.
Our commitment to freedom is based on a hopeful conception
of humanity. Liberals believe that most people, most of the time,
on most subjects will do the right thing because humans are inherently
social animals, with the desire to cooperate hard-wired into our
nature. There is a certain tension between liberal optimism about
human progress and conservative pessimism about man's fallen nature
but both sides can agree on the desirability of freedom---either
as end in itself or as an important mechanism to restrain competing
As a comparatively new Minister trying to come to grips with
a complex portfolio, I have found---on both sides of the industrial
fence and on the Senate crossbenches---people of good will striving
to make the most of a system which often strains common sense.
I'm not sure that people inured to the system quite realise how
baffling it can seem to outsiders, even one whose first political
mentor was BA Santamaria. As a new Minister, I am rather in awe
of my predecessor's achievements as well as being acutely conscious
of how much remains to be done. As a philosophical conservative,
I'm reluctant to tamper with traditional ways of behaviour, but
as a political liberal confronting an entrenched industrial culture,
I am inclined to exclaim: 'man is born free but everywhere is
There are few more heavily regulated activities in Australia
than dealings between employee and employer. Australia's workplace
relations system assumes that workers and bosses are incapable
of managing differences, that workers are always weak and gullible,
bosses are always greedy and manipulative, that daily relations
need to be governed by complex rules, and that the inevitable
disagreements must be resolved by someone else. I'm sure that
Australians are better than that. Good workers are always in demand.
Most bosses try hard to keep the people they've trained. Even
conceding a few bad apples, do we really need a system that assumes
the worst of the people in it?
The sporting metaphor traditionally used to characterise Australian
workplace relations depicts two teams in perpetual conflict with
an independent umpire standing between a fair fight and an all-in
brawl. Because the system was set up in the era of robber baron
capitalism, essentially to give unions a mechanism to advance
their cause without going on strike, it gives unions the built-in
advantage of making the first move through initiating a dispute.
It's like ensuring that one side always wins the toss.
Some say that the provision of labour is so central to personal
dignity that it cannot be regarded as just another commodity to
be freely exchanged between two people and to be governed by the
ordinary law of contract. There's much to be said for the sentiment
that workplace relationships are akin to family relationships---but
not for the conclusion that workers and managers should be organised
and directed like the partners in an arranged marriage. The more
important the relationship, the more important that it should
be freely entered into and largely self-directed into the paths
The Government takes the view that the ability to sell one's
labour for the best possible price and the most advantageous conditions
is a basic human right. The ability to make the best possible
use of one's property is another basic human right. Provided no
coercion, intimidation or fraud is involved, and provided minimum
standards are met, the Government believes that workers and managers
should be allowed to act like adults capable of making their own
The Government also believes that human enterprises work best
when participants talk among themselves first rather than to third
parties. Workers, managers and owners should be talking to each
other rather than to unions, employer organisations, commissioners,
judges and courts at the first hint of a disagreement. We're fundamentally
opposed to lazy management which would prefer to talk to a union
organiser than its own workforce. Since 1996, we have tried to
refocus the Australian Industrial Relations Commission on setting
minimum standards rather than elaborating all the conditions under
which people should work. Above all, we've encouraged people to
make individual or collective enterprise agreements which suit
the conditions of their own workplaces rather than operate under
one-size-fits-all industry standards.
Our changes have been founded on commonsense values and a pragmatic
intuition of what works. The Government will help the 300,000
Victorian workers not covered by federal awards. We will do what
we can to stop the so called Victorian Fair Employment Bill because
we want a better deal for workers rather than a new $10 million-a-year
bureaucracy. We think that some cures are worse than the disease
and that a make-work tribunal for the Victorian Government and
Trades Hall is not worth the cost of up to 40,000 Victorian jobs
(according the latest ACIL study).
Until 1994, a union had to be party to every industrial agreement.
In 1994, for the first time, the Keating Government permitted
agreements to which unions were not party, but only if no union
objected. One of the most important Howard Government policies
has been the introduction of Australian Workplace Agreements negotiated
with individual workers in which unions need have no part. There
are now more than 150,000 AWAs and new AWAs are being approved
by the Office of the Employment Advocate at the rate of 5,000
a month. In addition, some 10 per cent of collective agreements
are struck without union involvement because, under the Workplace
Relations Act, members have to request that unions represent them
Thanks to a focus on better pay for better work, average weekly
earnings have increased by 12 per cent since 1996, after increasing
by just 4 per cent in the previous 13 years. Under the Coalition,
basic award earnings have increased by 9 per cent, after falling
5 per cent under the former Labor Government (admittedly in the
context of a wage/tax trade-off). Post-1996 pay rises are sustainable
because they have been based on productivity increases and have
not been eroded by higher inflation, higher interest rates and
higher unemployment. There are now nearly 800,000 more jobs than
in March 1996 and more than half of those are full-time. What's
more, industrial disputation under the Coalition (measured in
days lost per thousand workers) has been just one third the rate
of that under the former Labor Government, and, in 2000, industrial
disputation was the lowest since records were first kept in 1913.
Still, as Des Moore pointed out in a paper commissioned by
the Workplace Relations Ministers' Council, 'we now have an uncomfortable
hybrid of the old, highly centralised system and a more decentralised,
less regulated system. Yet the trend is surely well established....
By drawing on the lessons from our own past, and from those with
less regulated labour markets, such a new start would offer the
potential for Australia to jump from being well below world best
practice to number one'.
At 600 pages, the federal Workplace Relations Act is
considerably shorter than the Tax Act but it operates through
2,300 awards and 36,000 certified agreements ultimately administered
and enforced by its own tribunal, the Industrial Relations Commission,
which is about the size of the Federal Court. The federal Act,
award structure and tribunal system is replicated in five states---or
six, if the current Victorian Government has its way. Around the
country, there are 4,500 industrial awards (that's one for every
1,500 workers) regulating everything from the temperature of the
water in tea urns, to the number of beds on building sites, to
the hours allowed for trade union training. Above all, the system
is based on artificial disputes created and then settled by employee
and employer organisations to which individuals are presumed to
belong but to which they might have as much allegiance as football
players subject to the AFL draft.
Despite the introduction of AWAs and the recognition of individual
contracts at common law, more than 80 per cent of Australian workers
are still 'award governed' in that the relevant award (rather
than a specific individual contract) is the legal foundation of
their employment. Instead of a few 'commonsense' provisions covering
job description, rate of pay, hours of work and leave arrangements,
the need to pass the 'no disadvantage' test means that even 'template'
workplace agreements prepared by the Office of the Employment
Advocate typically run to 12 pages for a small business and up
to 34 pages for specific industries.
Under the Government's award simplification process, nearly
1,500 archaic federal awards (such as the 1993 Algae Harvesting
Award) have been scrapped. Another 600 federal awards have been
simplified to just 20 allowable matters. Simplification has meant
that the Building Award no longer forbids the use of a five-inch
paintbrush, the Hospitality Award no longer stops bar attendants
washing tables and the Pastoral Award no longer stipulates that
employees shall not ill-use any sheep. On the other hand, the
'simplified' Timber Award, though reduced from some 700 to 200
pages, still refers to 23 additional awards and contains special
allowances for dealing with charred or wet timber. To ascertain
whether a workplace is covered by the 'simplified' Graphic Arts
Award, it's necessary to know, among other things, whether it's
within the 'shops and factories district of Brisbane as constituted
under the Factories and Shops Act 1900-1958 of the State of Queensland'.
There are nearly 1,000 awards yet to be 'simplified'---and the
Government has just lost a Senate fight to have the venerable
institution of the union picnic day excluded as an allowable matter
under the award safety net (although it could still have been
included under a certified agreement).
Under the Constitution, the Federal Government's industrial
relations power is limited to measures necessary for the settlement
of disputes extending beyond the limits of any one state. To begin
the award-making process, unions typically serve a 'log of claims'
on as many businesses as possible stipulating what they hope to
achieve. The current Shop Assistants Union ambit claim seeks six
weeks' annual leave, four weeks' bereavement leave, four weeks'
compassionate leave, two weeks' conference leave and six weeks'
education leave every year. In the 30 weeks left for work, it
seeks a rostered day off every fortnight, a day off a month to
attend union meetings, ten minutes break every hour, and two days'
shopping leave---no doubt to spend the Christmas bonus of five
weeks' pay. And that's the claim of a highly responsible union.
The Metal Workers Union claim seeks 10 weeks' annual leave, 12
weeks' compassionate leave and 12 weeks' special leave and, in
the 18 weeks left for work, minimum all-up pay including allowances
of $3,200 a week. By definition, neither of these ambit claims
is unrealistic because the High Court once decreed that 'fanciful'
claims could be struck out.
Regardless of how odd some of this seems, it would only really
matter if it impeded workers from making a living and managers
from improving their business. If the system actually worked,
fretting over the formal institutional arrangements of workplace
relations would make as much sense as introspection about the
nationality of the head of state.
Unfortunately, the system does hold back workers and frustrate
managers. Between 1980 and 1991, while Britain de-regulated its
labour market and Australia pursued the 'Accord', UK productivity
increased 1.3 per cent a year compared to just 0.6 per cent in
Australia. Between 1984 and 1995, real wages in the UK rose by
3.3 per cent a year, compared to just 0.1 per cent in Australia.
The Accord was supposed to keep strikes and wages down and profits
and productivity up. In the very short term, centrally-directed
wage restraint might have helped business cope with some of the
former Labor Government's other changes (such as de-regulating
the finance market, privatisation, and floating the dollar) but
it also helped perpetuate the 'big brother' mentality which has
long held Australia back.
At the core of most union-initiated industrial disputes is
concern for unions' prerogatives rather than workers' pay and
conditions. Some of the biggest disputes of the past two decades
(at the South East Queensland Electricity Board, Robe River, and
Rio Tinto) have been over questions of 'industrial governance'.
The 1998 waterfront dispute was ostensibly to protect the wages
and conditions of crane drivers earning, on average, about $80,000
a year for a 27-hour working week. The fact that crane drivers
are now earning well over $100,000 a year (admittedly for somewhat
longer hours) shows that it was really about the Maritime Union's
iron control over manning levels and work practices. The fact
that average crane rates are up from 15 to 25 an hour (with a
world record of 55 lifts an hour on one shift) while average port
costs are 15 per cent lower shows what can happen when common
sense begins to replace confrontation.
The most significant recent industrial flash point has probably
been at BHP in the Pilbara, where the company offered individual
contracts to workers previously on a union-negotiated collective
agreement. Because moving to contracts involved more flexible
hours, BHP could afford pay rises for contract workers. The difference
between a collective agreement and an individual contract is not
that one is negotiated by a union and the other is not---because
unions can be bargaining agents---but that most unions haven't
learned to cope with workers on contracts. As far as the unions
are concerned, this dispute is not about workers' pay and conditions
but about union 'rights' to a monopoly over workplace bargaining.
Before any legal recognition of non-union agreements, union
membership had begun to fall from over half to under a quarter
of the work force. Instead of making union membership more attractive,
the ACTU is now seeking new ways to force people into unions.
Last year, it became official ACTU policy that non-union members
should pay 'bargaining fees' (or compulsory union levies) in workplaces
covered by collective agreements. Any other business which tried
to charge people for services they had not requested would be
in breach of fair trading legislation. Notwithstanding its conclusion
that such a levy was an attempt to 'coerce' people into joining
the union, the Industrial Relations Commission recently found
(subject to appeal) that it was not in breach of freedom of association
The real question here is not so much 'are unions above the
law?' but why is there so much law in the first place. Industrial
law came into being at the height of class war antagonism mostly
as a way of demonstrating to workers that the system was 'on their
side'. Where unions have real support, industrial law has rarely
stopped them achieving what they want. Where unions survive through
habit and inertia, industrial law continues to give them a representative
role to which they have no right.
If workers believe that their safety is at risk or that they're
unfairly missing out on the rewards of their work, they should
talk to the boss---just as the boss should take staff into his
confidence if the business is in trouble. If that fails, workers
should be entitled to take proportionate industrial action aimed
at their employer. Under no circumstances should sabotage and
intimidation, coercion and unconscionable conduct be acceptable
because they take place in the course of an industrial dispute.
In a recent case before the industrial commission, two union
organisers had shoved and pushed management and staff whose premises
they were entering---and the Commission found that they had acted
improperly. However, the Commission also found that an Office
of the Employment Advocate press release announcing that it was
taking action against the two organisers had been 'prejudicial,
tendentious and partisan'. To re-phrase Churchill, this strikes
me as a refusal to be partial as between the fire brigade and
In the community, there is a tendency to distinguish between
industrial and non-industrial criminality because the former is
in a good cause. A former ALP MHR, Brian Courtice, recently detailed
corruption allegations inside the Australian Workers Union involving
slush funds, membership padding, and pre-selection fixing---but
this was OK because that's politics and Peter Beattie's Government
deserved another term. Dissident elements in the Construction,
Forestry, Mining, and Engineering Union are circulating a 'samizdat'
document alleging bribes, kickbacks and standover tactics in the
building industry but people seem less interested in stopping
crime than in stopping a comeback by former Builders Labourers
Federation activists. This tradition of assuming that unions are
too strong to be expected to obey the law gained a degree of official
recognition in the 1988 Hancock Report and led to union exemption
from the anti-secondary boycott laws. This meant that the Maritime
Union could instantly close Australian ports when the former Labor
Government announced the possible sale of the Australian National
Line---and it was perfectly legal.
In a changing world, no battles are ever finally won and all
improvements are essentially provisional. In the early 1990s,
Labor figures such as Paul Keating and Bill Kelty began to concede,
at least rhetorically, the need for enterprise bargaining based
on a recognition that without profit and productivity there could
be no employment and no higher pay. Their successors, unlike the
Bourbons, seem to have learned nothing and forgotten a great deal.
Labor's current policy is to abolish individual workplace agreements,
scrap the Office of the Employment Advocate, allow industry-wide
strikes, turn contractors into employees, impose a $500 a year
union tax on non-unionists and exempt unions from the provision
of the Trade Practices Act.
When union officials such as Sharan Burrow talk about 'good
faith' bargaining and partnerships in the workplace, they mean
cooperation between bosses and unions, not between managers and
individual workers. If Kim Beazley became prime minister, the
ACTU would once more be the ghost at the Cabinet table and union
heavies would once more do their deals at Kirribilli House. In
all probability, the last three ACTU presidents would actually
be sitting at the Cabinet table. This generation of union officials
are bureaucrats rather than activists and would far rather legislate
for de facto compulsory unionism than do the hard yards
'selling' the benefits of membership. Under these circumstances,
the HR Nicholls Society would not be concerned about the slow
progress of reform but with workplace relations rollback.
Since 1986, this society has reminded governments that freedom
is indivisible and that it's hard to sustain a de-regulated economy
with a highly regulated labour market. At times, freedom is messy,
awkward and inconvenient. Freedom means the freedom to make mistakes,
at least within limits. A free society will never be perfect and
the enlargers of freedom exist in a constant state of tension
with the advocates of an ideal. The HR Nicholls Society is fated
to exist in a permanent state of disappointment with governments
which never entirely live up to their principles. Even so, you
are entitled to reflect with pride and satisfaction on the difference
you have made.
Gerard Henderson told your 1986 conference that 'the key to
industrial relations reform is to make it legal for employees
and employers to reach their own agreements about work conditions
and work practices---free from the interference of trade unions
or industrial tribunals. This should be combined with incentives
which encourage profit sharing and employee share acquisition'.
Fred Chaney told your 1987 conference that the Liberal Party's
industrial relations objectives were: 'prosperity through productivity,
more jobs, industrial harmony, workplace flexibility and reduced
union power'. Legislative reform often seems painfully difficult
and is then subject to de-construction by the Industrial Commission,
the Federal Court and the High Court.
'In front the sun climbs slow, how slowly,
But westward, look, the land is bright.'
Managing workplace relations is always unfinished business.
Over the next few months, the Government will continue to push
for incremental legislative improvement, further encourage employee
share ownership and promote the possibilities of extending the
most liberal industrial jurisdiction through use of the existing
corporations power of the Commonwealth. The risk is not that this
Government has run out of reform but that an alternative government
would undo all that has been achieved.
Why HR Nicholls?