Light on the Hill: Industrial Relations Reform in Australia
The Queensland Industrial (Commercial Practices) Act
The Honourable Paul Clauson, MLA
I welcome the opportunity afforded by this Conference
to examine recent Queensland Government initiatives,
specifically the Industrial (Commercial Practices)
Act, aimed at redressing the balance of power in industrial
There has been considerable misinformed and unsubstantiated
comment about the Queensland Act over recent months,
and this address will allow me to place the legislation
in its proper context.
The comments made today are of particular pertinence
in the context of the fierce community debate about
the Commonwealth's Industrial Relations Bill. It would
now seem that political events and perceived electoral
considerations have caused the Commonwealth Government
to defer this legislation, with a view to holding further
discussions with employer organisations and the ACTU.
In announcing the deferral of the Bill, however, Mr
Willis made it clear that the Commonwealth Government
still believed that it should override the Queensland
While targeted at Queensland, the Commonwealth Bill
in its present form has implications for all State
laws covering industrial relations. I make no further
comment on this attempt to interfere with the sovereign
rights of a State to make laws covering irresponsible
union conduct towards industry and commerce. If the
Bill becomes law, Queensland will of course use every
avenue to resist what would amount to attempted constitutional
By traversing the history of the Industrial (Commercial
Practices) Act, we may gain a more thorough understanding
of its necessity and purpose.
The Act was introduced in late 1984 to deal with conduct
injurious to trade and commerce through interference
with the supply of goods and services. Viewed in retrospect,
it has proven a most effective remedy to many forms
of industrial action which adversely affect the community.
At that time decisive action by the Queensland Government
was deemed necessary because of the Federal Labor Government's
plans to repeal sections 45D and E of the Trade Practices
The Queensland Act was intended to preserve the operation
in Queensland of sections 45D and E and extend their
operation to those areas in which the Commonwealth
had no power to legislate, namely intrastate trade
and the protection of non-corporate victims of secondary
boycott. Fortunately for the rest of Australia
the Senate rejected the proposed repeal of sections
45D and E, thus leaving employers a cause of action
against secondary boycotts, such as the one imposed
by the Australasian Meat Industry Employees Union against
the Mudginberri Abattoirs in the Northern Territory.
As the Queensland Act was originally designed to reflect
the secondary boycott provisions of the Trade Practices
Act, it is instructive to consider further the experience
of that legislation.
The need for statutory remedies dealing with secondary
boycotts was highlighted by the Trade Practices Act
Review Committee (the Swanson Committee) in 1976. The
Committee noted community concern about union-imposed
boycotts, and concluded that:
'...no section of the community should be entitled
to be the judge in its own cause on matters directly
aimed at interfering with the competitive process between
The Committee also stated that 'in the usual case,
secondary boycotts do not involve a dispute between
an employer and employees which could be brought before
the Australian Conciliation and Arbitration Commission'.
Further, '...the employer may not choose to bring the
matter before the relevant body, even if he wished
to do so, for fear of widening the 'dispute' and being
shut down'. On the matter of recourse for the employer,
the Report found that '...there are some common law
actions in tort which might, in theory, be available
but these are in most cases dead letters in practice'
The strict accuracy of this statement might well be
questioned in the light of recent developments, particularly
the Dollar Sweets case.
But it is fair to say that the causes of action are
complex and were not well known in Australia at the
The Committee's conclusion, however, remains apposite,
and may be considered in relation to both the Trade
Practices Act (which was amended following the Report)
and the Queensland legislation: 'We believe the trader
who is the object of the employees' action should not
simply have the choice of toeing the line or suffering
substantial damage or in some cases going out of business.
He too is entitled to have his 'day in court''.
Section 45D of the Trade Practices Act, as originally
enacted, was designed to take an even-handed approach
to the problem of secondary boycotts, in that it applied
to both employers and employees. In practice, however,
most litigation involving this section has been against
unions and unionists. Following the Leon Laidely case
in 1980, these provisions were strengthened by the
inclusion of section 45E.
Injunctions under the Trade Practices Act have been
granted by the Federal Court in relation to such examples
of trade union action as refusals to load and unload
petroleum products; refusals to slaughter meat for
particular butcheries; refusals to load and unload
ships; refusals to deliver liquor to clubs; bans on
In many cases the granting of an injunction has in
itself been sufficient to effectively end the boycott
action, bringing about a return to industrial normality.
Despite---or indeed very probably because of---the effectiveness of these Trade Practices Act provisions
as a counter to illegitimate union action, the Commonwealth
Government proposed in 1984 to repeal sections 45D
The Commonwealth's view was expressed by the Minister
for Employment and Industrial Relations, Mr Ralph Willis,
in introducing the Bill to repeal these provisions:
'...the Government does not believe that (secondary
boycott) action is so different in nature to other
forms of union and employee action in support of their
industrial claims that it should be singled out to
be dealt with under the Trade Practices Act rather
than through the established industrial channels. The
principal objective of any regulation in this area
must be the speedy, fair and effective resolution of
the underlying dispute. The Government believes that
this will not be achieved by the legislative prohibition
of secondary boycott activity. . . .The special characteristics
of industrial disputes demand that they be handled
by expert bodies under our industrial machinery rather
than under trade practices legislation which is not
designed to resolve the underlying issues which give
rise to the boycott activity'.
The introduction of the Industrial Relations Bill
last month demonstrates that Mr Willis still holds
similar naive views. Such arguments can be quickly
demolished by brief reference to the actual use of
sections 45D and E. This is equally pertinent to the
philosophy behind the Queensland Act.
First, it is obvious that not all disputes can be
resolved by industrial tribunals either because of
their social or political nature, or because of a union's
sheer determination to bring an employer to his knees
It is not unusual for businesses to be confronted
by boycotts arising from non-industrial issues. The
value of sections 45D and 45E in dealing with such
non-industrial situations, and the difficulties which
an industrial tribunal would face, were demonstrated
by the granting of an interim injunction by the Federal
Court of Australia against the Seamen's Union of Australia
on 6 November 1981.
The matter involved the export of uranium concentrate
through the Port of Brisbane by Mary Kathleen Uranium
Limited. The uranium concentrate was produced at Mary
Kathleen by the company employing 500 persons at its
mine and treatment plant. No industrial problems were
encountered by the company in the transport of that
uranium concentrate from Mary Kathleen to Brisbane
on the Queensland railways or on Queensland roads.
In April 1981 it became apparent to the shipping agents
that there was likely to be trouble in getting members
of the Seamen's Union to handle ships carrying future
cargoes of uranium concentrates. In June the 'Act 4'
could not be moved in the Port of Brisbane for several
days because of bans imposed by the unions. In July
the Seamen's Union of Australia imposed a ban on the
'Paralla' because it had carried uranium concentrate.
This resulted in heavy losses to MKU. More importantly,
however, it resulted in a refusal by shipping companies
to accept further bookings from MKU until there was
a change in union policy. In his decision, Mr Justice
Morling declared that MKU was suffering grievous loss
running into hundreds of thousands of dollars; it was
incurring operating costs at its mine and treatment
plant of about $1m per week and the company's inability
to ship uranium concentrates had cut off its income.
Accordingly, he granted an interlocutory injunction,
indicating there was no evidence that the unions had
taken any decision to cease their protest action which
was denying tug services to ships carrying uranium
from Australia. His Honour found a prima facie case
had been established that the unions had engaged in
behaviour calculated to prevent or hinder MKU from
engaging in commerce between Australia and overseas
and that on the balance of convenience there was an
overwhelming case in favour of granting the relief
Clearly this was a case of unions engaging in activity
to further a social or political cause. It was a non-industrial
activity outside the legitimate role of unions and
of a nature outside the scope and capacity of an industrial
tribunal to resolve.
The effectiveness of the Trade Practices legislation
in these matters was, ironically and no doubt unintentionally,
acknowledged by a Labor member of Federal Parliament
and former South Australian Attorney-General, Mr Peter
Duncan, on 19 November 1985. Mr Duncan said:
'If these sections had been in force in the early
1970's the green bans which were so successful in stopping
socially disruptive development would never have succeeded.
These sections not only prevent the trade union movement
from supporting other unions, but also prevent it from
supporting other community movements. There can be
no direct trade union action in support of the Daintree
campaign, there can be no direct trade union action
in support of consumer protection, there can be no
trade union action in support of moves against anti-social
developments while sections 45D and 45E remain in force'.
Regardless of any merits the issues listed by Mr Duncan
might have, it is quite clear that there is no place
for trade unions to take industrial action in connection
with those issues, which are quite unrelated to the
working conditions of employees and to the legitimate
role of unions in contemporary society.
The plan to repeal sections 45D and E also relied
upon the argument that the principal objective of any
regulation in this area must be the speedy, fair and
effective resolution of the underlying dispute. This
theme is again evident in the current Commonwealth
Industrial Relations Bill. The speedy, fair and effective
resolution of disputes of an industrial nature, whilst
a principal objective of Australian industrial tribunals,
has not always been achievable. Some industrial disputes
have not been capable of speedy resolution however
much the Commission may have desired that result. Indeed
the appropriate proceedings before the Commission (applications
for bans clauses) have rarely been used in recent times
due to hostility to them on the part of the Commission.
It is wishful thinking to believe that either the
Australian Conciliation and Arbitration Commission
or its planned successor will have the ability to apply
speedy, fair and effective resolutions to non-industrial
disputes involving social and political questions
More likely the investing of the Arbitration Commission
with such jurisdiction will create a public forum for
unions to advance the views of officials on political
questions whether they represent the views of the members
In the meantime, businesses subjected to union boycotts,
with their owners having no other means of asserting
their legal rights, will slowly wither on the vine.
Perhaps the major value of the boycott provisions
of the Trade Practices Act (and indeed of the Queensland
legislation) lies in their deterrent value. The provisions
have been effective in curtailing unjustified attacks
on business, and have resulted in numerous industrial
actions being brought to a quick and equitable conclusion.
Opponents of sections 45D and E often proclaim that
statistics indicate that these provisions are scarcely
used and therefore industrially unnecessary. In fact
it was reported in Federal Parliament last month that
there have been 129 actions taken under sections 45D
and E, resulting in the granting of 66 injunctions.
There is no evidence to suggest that actions not proceeded
with did not have the effect of inspiring a return
to work. In any case, statistics are hardly a measure
of the effectiveness of legislation. The mere existence
of those sections is in itself a useful deterrent to
irresponsible union action.
I return now to the Queensland legislation.
The Industrial (Commercial Practices) Act provides
protection against substantial loss or damage to employers
and businesses affected directly or indirectly by strikes.
A lesser known fact, but one equally important, is
that it also provides protection against industrial
action that has the effect of causing a substantial
lessening of competition in any market in which the
target of that action acquires goods or services.
Additionally, the Act prohibits a contract, arrangement
or understanding between a union and another person
that prevents or hinders the supply of, or the acquisition
of, goods or services to or from a third person. Many
of us here have heard of the Leon Laidely case. It
is the Government's intention that arrangements such
as existed in that matter to the detriment of small
business do not develop in Queensland.
The Act was further strengthened by amendment during
the electricity dispute early in 1985 when primary
boycotts covering demarcation disputes and preference
in employment for union members were made actionable.
It was at this time also that the obligation to give
seven days' notice of a strike was introduced into
Since then evidence has shown that this legislation
has been extremely effective in bringing about speedy
resolutions of industrial disputes. Often the mere
threat of its use seems to have been enough to deter
irresponsible union leaders from taking hasty strike
Examples of the cases where the Act has been used
- the granting of a Supreme Court injunction in September
1985 against the Meatworkers Union convinced them not
to proceed with a threatened strike over the Mudginberri
issue. It is significant to note that the strike still
proceeded on that occasion in New South Wales and Tasmania;
- an application for injunctions against the Plumbers
and Gasfitters Employees Union restraining it from
harassment of employers in order to coerce them into
providing superannuation benefits under the BUS scheme;
- earlier this year the Government initiated legal
proceedings under the Act against the various coal
industry unions over a snap 48-hour strike which began
at midnight on 5 February 1987.
This latter action was taken in the interests of industrial
peace and continued production in an export industry
vital to the State and national economy. That strike
alone prevented extraction of 1.2 million tonnes of
coal valued at $65m---at the very time a trade delegation
from Japan was visiting Australia.
The industrial disputes record of coal miners is a
particularly sorry one. Recent statistics indicate
that it is approximately 50 times greater than the
average of all Australian industries. In Queensland
during 1986, the coal industry accounted for 60 per
cent of the working days lost due to industrial disputes
(104,200 out of 173,400) despite the fact that less
than 11,000 employees are involved.
This disruption in the coal industry forms part of
the essential background to the most recent amendments
to the Act made in April this year.
Those amendments have drawn very emotive and, as I
said at the beginning of this address, very misinformed
comments from a diverse number of people.
The amendments mainly focus upon, firstly, industry
involved in the production and supply of goods for
export, and secondly, the carrying out of research
and development by industry.
Australia's current precarious economic circumstances
are well known. The potential for recovery will depend
on this country's ability to become a stronger trading
nation. This in turn requires a strategy aimed at substantial
export growth and import replacement, in order to capitalise
on the dramatic fall in the value of the Australian
Australia's position compared with that of our major
trading partners in terms of industrial disputation,
inflation and productivity requires substantial improvement
if we are to lift the overall standard of living in
- our industrial disputes record is far worse than
that of our major trading partners;
- our inflation rate is up to three times that of
our major trading partners;
- Australia has recently experienced negative growth
in productivity while other economies have recorded
Against this background, the Queensland Government
concluded that it was necessary to provide the maximum
protection for exports and research and development
activities from unwarranted industrial disruption.
Accordingly, the legislation now applies to primary
boycotts affecting interstate and overseas trade, and
research and development. Australia's reputation as
a reliable trading nation has been under a cloud for
far too long. In these days of strong competition from
overseas countries, particularly developing countries,
Australia must maintain its export markets. Those markets
should not be put at risk by unfulfilled or delayed
contracts brought about by irresponsible strike action.
Australia's response to the challenges posed by the
current economic situation calls for an ability to
adapt speedily and flexibly to changing market demands.
This in turn depends on applied research and the development
of new technology and new industrial processes.
Vital research and development work must be allowed
to proceed unhampered by unthinking and irresponsible
union action motivated by a Luddite mentality.
By extending the requirement to give seven days' notice
of a strike to include, not only the immediate employer,
but also the Minister and any other person who is likely
to suffer loss or damage in his business, the potential
for loss by those not directly involved in the dispute
is minimised. Because of misinformed comment in the
media. I emphasise that this notification provision
applies to those people who have previously given notice
of their wish to be notified of strike action: in other
words, those with a valid interest. I would venture
to say that most Queenslanders would support the giving
of notice of a strike which also allows a cooling off
period when saner counsel may prevail and conciliation
is given a chance to work.
The new evidentiary provisions contained in the amendments
have drawn criticism but are not all that new, having
existed in this State's Industrial Conciliation and
Arbitration Act since 1985 and are very similar to
those contained in the Essential Services Act of 1979.
It has been said that these evidentiary aids amount
to a 'media muzzle' and will prevent employers and
unions from commenting on industrial issues.
I can say without hesitation that this amendment is
not aimed at impeding the media; and if the other two
statutes can be used as gauges for stifling comment
in the past, I am not aware that they have, in fact,
had that effect within the community. The provisions
simply enable evidence of what was said to newspaper
reporters to be received without the necessity of requiring
the reporters themselves to give evidence.
The trade union movement, supported by the Federal
Labor Government, is claiming that this legislation
has 'turned the clock back 100 years'. This is just
not so. The introduction of this legislation in 1984
marked the turning-point in this State in the return
to sanity in industrial relations.
The one-sided balance of power enjoyed by the union
movement has been brought back to a state of equilibrium
through employers now being given the means to seek
redress for the misuse of industrial muscle directed
The Act does not interfere with the normal industrial
relations process. Disputes are still to be notified
to the Industrial Commission for resolution, and Award
matters such as penalty rates and hours of work etc.
may still be determined by conciliation or arbitration
as the case may be. To this extent the essential rubric
of Queensland industrial law remains the same.
But we have seen time and again, throughout the country,
unions 'thumbing their noses' at arbitration tribunals
whose decisions have gone against them. The community
at large is sick of being the pawns in this type of
irresponsible behaviour and has been calling for a
stop to it for a long time now. The Queensland Government
has heeded that call and the results are there for
all to see.
It has been further claimed that the recent amendments
to the legislation prevent employees exercising their
inalienable right to strike. I am not aware of any
country where there is an unfettered right to strike.
It should be remembered that every employee enters
into a contract with an employer when joining the workforce
and that a refusal by that employee to work amounts
to a breach of contract with the consequent possibility
of some action being taken against him---for example,
the mass dismissals from SEQEB in the electricity dispute
Even the most extreme protagonists of this doctrine
of the right to strike recognise that it is limited
particularly where essential services and the well-being
and security of the community are involved. Often it
would seem that 'freedom of association' is confused
with this so-called right to strike. In this context
it is worth citing a pertinent Canadian judgment of
1984. In upholding an Act which prohibited strikes
and lock-outs in dairies, the Saskatchewan Court or
Queen's Bench declared that: 'The right to strike
is not a fundamental freedom. It is applicable in a
particular context, in particular types of association
and under certain circumstances. It is expressly limited
by laws in cases of national emergency, essential services,
national security and when at times irreconcilable
labour disputes arise'.
It can in fact be argued that any right or necessity
to take industrial action is contrary to the philosophy
behind a system of compulsory arbitration. This was
certainly the view held by many of the Australian system's
'founding fathers', including H B Higgins himself,
whose famous phrase describing the system as 'a new
province for law and order' has unfortunately acquired
an ironic sense today. In Queensland, persons as dear
to the Labor Party as T J Ryan and E G Theodore frequently
stated that the provisions of an effective arbitration
system rendered strikes completely unnecessary.
It must be remembered that the system furnishes trade
unions with a procedure by which they obtain orders
that employers provide employees with certain minimum
terms and conditions of employment. The system also
provides trade unions with a range of benefits, including
corporate status, exemption from income tax, and a
monopoly of representation of certain employees. In
return, trade unions are expected to use the processes
of the system in preference to direct action. Where
trade unions systematically choose direct action, provisions
must be available to enable those injured by that industrial
action to recover their losses from those who cause
Absolute claims to 'the right to strike' were criticised
in 1978 by a respected senior British judge Lord Denning.
In a lecture at Birmingham University he said:
'I would declare at once that there is no such right
known to the law, not at any rate when it is used so
as to inflict harm on innocent bystanders, or disrupt
essential services or to bring the country to a halt.
So far as the law is concerned, those who do such things
are exercising not a right but a great power, the power
It is the abuse of this power to strike which the
Queensland legislative initiative was designed to curb.
The main thrust of the Queensland legislation is by
no means at odds with developments elsewhere in the
world. In fact, it is very much in keeping with responses
in other countries to the emerging demands of the economy
for stability in industrial relations.
Recent overseas trends in industrial relations have
aimed broadly in two mutually compatible directions:
first, to provide greater flexibility to the labour
market by removing some of the constraints on the organisation
of work; second, to modify the legal framework of collective
bargaining especially by reducing trade union immunities
Thus in Great Britain the coercive power of trade
unions has been limited by the Employment Acts of 1980
and 1982 and the Trade Union Act of 1984. Legislative
changes include restrictions on secondary industrial
action and a narrowing of the definition of lawful
Provisions in US law also have their parallels in
the Queensland legislation, despite the differences
between the basic Australian and American systems of
industrial relations. The US National Labor Relations
Act includes notice requirements before industrial
action, time periods when strikes are forbidden, and
restrictions on boycotts and on action aimed at securing
It might also be mentioned that New Zealand law requires
up to 14 days' notice of strikes in specified industries.
Much of the ill-informed comment about the Queensland
Act has failed to place it in the context of the Government's
overall legislative package for industrial relations
and associated matters.
I would here make only brief mention of two aspects
of this package.
One initiative was the Government's response when
the trade union campaign for occupational superannuation
gathered impetus in 1984, spear-headed by the building
unions. It will be recalled that there was considerable
concern expressed about the potential for economic
damage and distortion of financial markets caused by
huge union dominated funds. Despite the time this has
been an issue, the Commonwealth Government, in a display
of protracted tardiness, took until May 1987 to introduce
a Bill dealing with operational standards for occupational
superannuation. In Queensland, however, the legislature
enacted the Superannuation Trust Funds (Protection
of Employees' Entitlements) Act, which lays down certain
requirements designed to avoid the objectionable features
of the ACTUcontrolled, coercive and union-dominated
schemes. It has been successful in meeting this objective.
It is relevant here to note that the Industrial (Commercial
Practices) Act also applies to conduct designed to
induce an employer to adopt or contribute to a particular
superannuation fund in preference to an equivalent
Second, there has been little attempt in public comment
to acknowledge and rationally examine the opportunities
afforded by the recent proposal to enable voluntary
employment agreements to be made between employers
On 8 April this year a Bill to amend the Industrial
Conciliation and Arbitration Act to provide for such
agreements was introduced into the Queensland Parliament.
It will lie on the Table until debate resumes during
the August Parliamentary Session.
Two types of voluntary employment agreements are envisaged:
- agreements between unions of employees or employee
associations and employers or employer associations;
- agreements directly between employers and employees.
These would be possible only if at least 60 per cent
of employees agree to make the agreement.
Relevant standards of the State industrial system
are to be retained as minimum conditions.
This is not a revolutionary step that is intended
to demolish the existing award system. It allows an
evolutionary process whereby consenting employers and
employees can vary award conditions in the context
of preservation of certain basic award provisions as
to ordinary pay and leave.
It is hoped that all parties in the industrial system
will approach this initiative constructively with a
view to the opportunities it provides for the more
productive use of labour, the development of mutually
acceptable work patterns, and increased productivity.
In discussing the Queensland Act today, I have attempted
to place it in its proper historical, social and industrial
context. It does not displace the established system
and structures governing industrial affairs in this
State. It should not be regarded as a panacea for all
industrial ills nor is it intended for use in every
situation. It is, however, in similar fashion to the
provisions of the Trade Practices Act, a substantive
measure which provides statutory rights and remedies
for people and business adversely affected by illegitimate
trade union action. It is a decided and deliberate
deterrent to strikes which cause damage to the community
and the economy.
Whilst some strikes are of little consequence, others
can and do inflict great hardship on the community
and economic loss on businesses and innocent bystanders
alike, including the families of the strikers. While
much has been said about the perceived rights of unions
and employees to engage in strikes, very little has
been said about the rights of the majority of people
who are adversely affected by them. They, too, have
rights and the Queensland Government is committed to
ensuring that they are observed.
Few would deny that recent years have witnessed many
instances of the blatant abuse of union power in the
quest for unjustified, selfish gains for minority groups
with no regard for the wider public welfare. In the
light of these developments, the Queensland Government
has taken effective steps to ensure the restoration
of a sane balance of power in industrial relations
in this State.