Let's Start All Over Again

The Role of the NFF in labour market reform

Ray Evans

Farmers have a special place in Australian life. There are much fewer of them than there used to be but the culture remains and their output has grown dramatically in the last two decades, and particularly in industries such as dairying where most predictions were those of rapid decline. The export sectors of rural Australia then were meat, wool and cereals, predominantly wheat. These industries, along with the mining industry, were carrying the huge cost of protectionism, and one of those costs was a trade union culture which had grown up during the previous 70 years, but particularly since the Clarrie O'Shea case, which held at its core that the unions were essentially above the law.

So those unions which imposed huge costs on the farming export sector were a focus of farming discontent. But until 1978, those discontents were diffused rather than concentrated.

Farmers were then, mostly, small business operators. Today they tend to be businessmen and women who have investments worth many millions in their farms. In the mid to late 1970s a conjunction of events took place which resulted in the story which I am to tell. Falling commodity prices, over-mighty unions, disappointment at the Fraser Government's failure to do anything (other than passing Sec 45 D&E of the TPA) about the problem of trade union power and privilege, and the emergence of some very able leaders, all came together to generate the energy and the vision which was required to do the job.

Sir Rod Carnegie, CEO of what was then CRA, was invited to open an NFF Annual Conference in the early 1980s. He said "I was keen to do this because I wanted to acknowledge that on the important economic policy questions, the NFF was right and NFF was first"

Arguably the most significant event in the long story of the NFF and its critical contribution to the attack on trade union power and legal privilege was the Live Sheep dispute on 1978. This dispute took place before the NFF was formed, but because the live sheep dispute was, from the farmer's point of view, such a stunning success, it provided the context in which the various farmer organisations could come together in one national body. In other words I think it is true to say that no Live Sheep, no NFF.

Thanks to David Trebeck we have an excellent account of the Live Sheep dispute which can be found on the HRN website. He gave a paper at our 6th conference, 'No Ticket, No Start--- No More!' held in Canberra in February 1989, entitled "The Industrial Significance of the 1978 Live Sheep Export Dispute" It is a comprehensive and fascinating account of what happened. Ian McLachlan also gave a paper on the same events from his perspective which adds colour and verisimilitude to David Trebeck's account.

The background to this dispute was the decision of the AMIEU, (the Australasian Meat Industry Employees' Union) to place limits on the export of live sheep or, preferably, to ban the trade altogether. They believed that the export of live sheep was replacing the export of chilled or frozen sheep carcases, and thus reducing job opportunities for their members.

There was no evidence to support this belief, but early in 1977 the AMIEU announced a ban on live sheep exports from Queensland, NSW, and Tasmania and that stock movements from Southern Queensland and NSW into SA for export would be blocked.

This is not the time to summarise the week-by-week particularities of the dispute which will be found in David Trebeck's paper. The most important fact at that time was that the various farmer organisations and statutory boards that were involved, were divided about the policy they should adopt in the face of this union threat to their export trade. Only the Australian Woolgrowers' and Graziers' Council held firmly to the line that no person, and no organisation, should interfere with the right of farmers to lawfully sell their stock to whomsoever was willing to buy.

The Fraser Government had already developed a reputation for setting up a committee presided over by a minister, and inviting the unions and the employer interests to attend meetings where the employers would be pressured into a compromise which would meet all, or most, of the union objectives.

The union demand was the establishment of a ratio of sheep carcases exported to live sheep exports, variously 2:1 or 3:1 which would, obviously, severely limit the expansion of the live sheep export trade and possibly diminish it, if the export of carcases declined.

In the face of the AMIEU's on-going campaign, and its record of willingness to shut down abattoirs in order to assert its power, a number of farmer organisations were inclined to settle for such a regime.

So the debates which took place within the farmers' organisations, and Ian McLachlan's pivotal role as Chairman of the Combined Livestock Committee in South Australia, finally took the farmers to a critical decision point. The campaign by the AMIEU against the live sheep trade grew in intensity through the unlawful use of pickets at the loading ports, and the black-banning of stock carriers who moved the sheep. The farmers responded by using the recently passed Section 45D of the Trade Practices Act, with considerable success; and the prospect of the farmers actually winning this dispute, without conceding anything, repeat anything, to the AMIEU began to concern people, including even the then Prime Minister, Malcolm Fraser.

The PM therefore invited the disputants to a meeting in Canberra, which he would personally chair, in order to reach a settlement.

The farmers had to decide whether they would accept the invitation. After much hesitation, and in particular, after the decision by Sir Samuel Burston, the President of the AWGC, to go back to his farm at Casterton, Vic, and to walk over the hills on his property to think it over, they finally decided to reject the invitation.

In my view, that decision was a decision with extraordinary and historic consequences.

It made it impossible for the farmers to retreat. They declared in this rejection that their rights as Australians to sell their produce, according to law, to whomsoever they chose, was an inalienable right and was not to be traded away by governments, or to be interdicted by unions.

It was that decision that subsequently brought forth the National Farmers Federation, with all the consequences which followed.

I now wish to divert a little from the main thread of my story. The reason for doing so is that it is one of the subsidiary consequences from the live sheep dispute, and it illustrates the awful contrast between the mindset of the Arbitration Commission as it then was, and the Federal Court. The story of Jim and Marlene Gibbins, who ran a stock carting business in the Western District of Victoria was set out by Barrie Purvis in articles in Quadrant in Oct 1986 and the IPA Review in Feb 1987

During the live sheep dispute the AMIEU had black-listed a number of livestock carriers who had defied union picket lines to deliver sheep to the loading ports. One such carrier was the partnership of Jim and Marlene Gibbins who ran a livestock trucking business out of Portland, Vic, and had in 1978 delivered live sheep to Portland for export.

The AMIEU had told Borthwicks, the English meat processing company with works at Brooklyn and Portland Vic, that the drivers they had black-listed were to be barred from entry into Borthwicks' works, or face the consequences. Borthwicks initially sought relief by using Section 45 D of the TPA but the case ended up in the Arbitration Commission under Deputy President Joe Isaac. What happened then was extraordinary.

Despite the fact that the C&A Act explicitly required the Commission to notify any persons who might be involved in a dispute, so that they could become parties to the proceedings, neither the Jim and Marlene Gibbins, nor any other of the 30 black listed carriers , were informed. Yet DP Isaacs, who was responsible under the Act to notify all 'affected persons' wrote, in his confidential written statement which recorded the 'settlement',

    "I should note that the drivers who are involved in this matter have neither appeared nor shown any interest in the proceedings before me. However, I would hope that persons who may not benefit by this resolution and desire to do so would be able to put themselves into a position where the their differences were resolved with the employees at Portland consistent with the resolution of this dispute and that this should happen as soon as practical."

The 'settlement' which was agreed to by Borthwicks and the AMIEU included the following statement:

    "It is accepted that for many and varied reasons put by the union and for valid commercial reasons, the company feels it necessary, if things are to become normal (sic) at its Brooklyn and Portland works, that for industrial relations reasons those people known to the company not be invited or engaged to come onto the works, nor will the company or any of its agents require members of the union to attend to those known persons."

With the backing of the VFF, the Gibbins sought redress from the Federal Court. Justice Reginald Smithers heard the case and delivered his judgment in June 1986. In the course of the proceedings in the Federal Court it was found that the record of one the day's conciliation proceedings was missing from the official file in the Arbitration Commission and also in the Government's Archives. In entering judgment with costs for the Gibbinses, His Honour said the Agreement between the union and the company

    "represented a complete surrender to the Union demand that because certain carriers carried on their lawful occupation by carrying live sheep to the ships their occupation as carriers to abattoirs should be destroyed. That surrender was made at the expense of the absent persons affected thereby and one can only wonder how that aspect of the matter could be proper. The reference to the lack of interest shown 'by others who are involved in the matter' failed to recognise the fact that those others were in complete ignorance of then proceedings. The final sentence is obscure and appears to be directed to persons who will never be informed of it. The only meaning to be attributed to it is that it is a declaration that if carriers desire to do business with Borthwicks they must cease to carry stock to the ships in the Middle Eastern trader. The reference to persons subject to this policy, as persons 'who may not benefit' from a proposed resolution of the dispute, is a naive and ingenuous description of persons who are to suffer in their livelihood by being directly excluded from the ordinary exercise of one aspect of their lawful occupation."

Without the backing of the VFF Jim and Marlene Gibbins could not have entertained an appeal to the Federal Court, where they were fortunate in finding a judge of the calibre of Justice Reg Smithers to hear their case.

After the success of the live sheep dispute, the NFF was formed in July 1979. Paul Houlihan was appointed as IR Director in 1981. Paul had been Secretary of the Clerks Union in Hobart and there was some opposition to his appointment. But his handling of the Wide Combs dispute which erupted after a ruling by the IRC in favour of wide combs was handed down, demonstrated to all his resourcefulness, courage and determination to win. This dispute is described by Paul in the proceedings of our 1988 conference "In Search of the Magic Pudding"

I can summarise the paper by stating that the NFF went through a lengthy process of demonstrating to the Commissioner McKenzie of the Arbitration Commission that wide combs could be used to shear merino sheep without any difficulties and that the Pastoral Award should be modified to make them legal in the Australian shearing industry.

First the Commissioner and then a Full Bench of the Commission agreed to do so, the final decision was made in March 1983. The AWU then set out to change the Commission's mind with a national strike in the shearing industry.

What followed was the equivalent of a military campaign. There were two constituencies that had to be won. First was the shearers themselves, who had to be convinced that the AWU no longer could command the loyalty of the shearers. The NFF had to organise on a regional basis to make sure that shorn sheep were placed in the front paddocks as living testimony to the fact that sheep were being shorn; and to provide support for farmers who were threatened with arson and other threats of violence.

The second constituency was the general public. The Hawke Government had just taken office and it was important to ensure that no one in the Government thought it useful to get involved in the dispute. The Hawke Government, unlike the Fraser Government, showed not the slightest inclination to get involved.

As the weeks went passed and it became obvious that the sheep were getting shorn, the AWU found itself in difficulties.

A face-saving formula was eventually found and the strike was called off. Once again, Ian McLachlan, who was then Chairman of the Wool Council of Australia and Chairman of the Industrial Committee of the NFF was at the centre of things and was elected President of the NFF in 1984.

The wide comb dispute broke the power of the AWU in the shearing industry in that compulsory unionism, hitherto a very widely accepted principle, was swept into the dustbin of history.

The Wide Comb dispute was Paul Houlihan's first major battle as the NFF's Industrial Relations Director. His next battle was Mudginberri, and he gave an excellent account of that dispute at the first meeting of the Society which was published in Arbitration in Contempt.

I cannot resist using the first quotation he cited in that paper. It was a statement by Bryan Noakes, Director-General of the Confederation of Australian Industry (CAI), which read:

    'The notion that industrial relations should be a matter for the individual employer and the individual employee is one which strikes many responsive chords but it is so far removed from reality that it is a dangerous distraction.

Mudginberri Station was a pastoral lease in the flood-plain country of Arnhem Land, 250 km east of Darwin. Jay Pendarvis was manager of the lease, owned in the 1970s by Pioneer Concrete, and at that time he developed a small abattoir at Mudginberri to take advantage of the huge herds of feral buffalo which existed in the flood plains of the region.

In 1981 the Industries Assistance Commission (IAC) as it then was held an inquiry into the meat processing industry, an industry of key importance for the meat export trade. The NFF commissioned a report by W D Scott & Co which then served as the basis for their submission to the Inquiry. The Report made it clear that the AMIEU, because of its legal privileges, and the way in which the union pushed the envelope of their privilege from legality to illegality was extracting huge rents in the form of, amongst other things, the unit tally system.

In 1983 the AMIEU (the Australasian Meat Industry Employees' Union) served a log of claims on every abattoir in the Northern Territory, including Mudginberri.

After lengthy proceedings within the Arbitration Court a judgement came down which allowed employers in NT abattoirs not to have to use the unit tally system if they did not wish to do so.

The AMIEU was not going to accept this decision without making life very difficult indeed for the owners and managers of the various abattoirs in the NT.

Mudginberri was different from other NT abattoirs in that it killed for export, and the services of the meat inspectors of the Commonwealth Dept of Primary Industry were required before the shipments could proceed.

The AMIEU established a picket line at Mudginberri, a picket line which the meat inspectors would now have to cross. Previously they had been accommodated on the Station itself, but without explanation they were relocated at Jabiru, 15 km to the south. The consequence was they had to cross the picket line to get to work, an action they refused to do.

Mudginberri Station then sought an interim injunction under S 45 of the TPA, and then a permanent injunction, which was duly granted on 12 July 1985. The NFF kept the legal processes moving until in the end the AMIEU was required to pay Mudginberri station $1.75 millions in damages. Thus the real courts were brought into Higgins' "new province of law and order" much to the chagrin of the unions who were accustomed to seeing themselves as beyond the reach of the real courts of the land.

Mudginberri was a huge win for the NFF and for Australia. I still recall the front, half-page photo which "The Australian" ran at this time. The picket line was a very good example of Australian serious middle-aged masculine obesity, slumped in a deck-chair with a stubby by his side. It is said that a picture tells more than a thousand words. In this case it told more than a million words.

One of the consequences of Mudginberri was the establishment of the NFF fighting fund, more accurately known as the Australian Farmers' Fighting Fund, with a Board of Trustees independent of, but linked by commonality to, the NFF, through the selection of trustees. This Fighting Fund, has been extraordinarily effective, just because it exists.

Previously the unions had known that in picking on small businesses or even medium sized businesses, they could simply use their financial muscle and just grind down the company they had targeted so that the company had to choose between bankruptcy or surrender.

With the Fighting Fund in place, that assumption was no longer valid. Dollar Sweets was one of the first examples where the Fighting Fund came to the rescue of a small business; with very successful and important results. The Trouble Shooters case was another.

The cases I have cited are a selection of the work load that the NFF carried out during the eighties in the IR reform process.

I wish now to say something about the major figures who drove this important chapter in Australia's history.

Sir Samuel Burston was President of the AWGC at the time of the Live Sheep dispute. Sam had been a major figure in rural organisations for 30 years. He had persuaded the Bolte Government to establish the CFA in Victoria, an organisation which today is the men's equivalent of the CWA. He was regarded with great respect throughout the wool industry and one can imagine him striding across the hills of Casterton (he is a very tall man) chewing over the implications of refusing to go to Canberra to take part in discussions designed to resolve the Live Sheep dispute, to be chaired by the Prime Minister who, incidentally, was his local MP and a friend of long standing.

A lot has been said about Ian McLachlan over the last twenty years or so. Some day, no doubt, a biography will be written. He will be a difficult subject for the author because Ian dislikes being written about. I am not going to get into difficulties today on this score except to note that, as I have said before, his greatest achievement in my view was when, in Sept 1992, he held the line as Shadow Minister for Industry against the intense campaign by the motor car industry amongst others, Ford in particular, to resile from the phasing out of tariffs policy which the Hawke Government initiated in 1983-4. That campaign was focused entirely on the Opposition, in the sure knowledge that if the Coalition broke on the issue, the Keating Government would quickly follow.

In my view it was Ian's steadfastness, at that critical juncture, which saved the day.

I do want to say something about Paul Houlihan, and because he is not here I can do so much more freely than would otherwise be the case. He was appointed to the NFF in 1981. Ian McLachlan supported the appointment against some opposition within the ranks. It was an inspired choice. At first sight it seemed an improbable team---the tough Scottish grazier and the wild Irishman. But the record shows that the dynamic duo changed the course of Australian history.

When I talk to Paul Houlihan I am reminded of the fact that after the flight of the earls, which took place after Cromwell, the various armies of Europe, Russian, Austrian, French, were manned in large proportions by Irishmen. Charles De Gaulle was descended from them. The Russian general Timoshenko, liquidated by Stalin, was descended from a Tim O'Shea. The British Army under Wellington had a high proportion of Irishmen, and there was continuing concern about their loyalty if Napoleon should succeed in establishing a beach-head in Ireland.

Paul is an outstanding example of this extraordinary capacity of the Irish to fight, particularly when the cause they are fighting for is close to their hearts.

Another typically Irish trait which Paul has in large measure, is his capacity for talking. He is one of the most entertaining, indeed brilliant, talkers I know. He has a marvellous sense of humour and a robust understanding of human folly. These attributes have helped him greatly in his career. He is indeed a national treasure.