Public Interest or Vested Interest

Enterprise Bargaining---The Way Forward

The Hon Joe Thompson, AM

Australia is now on the verge of an economic disaster which could be one of the most serious in our history. The Accord between the ACTU and the Federal Labor Government has worsened our international trading position, particularly in our manufacturing industries, and its benefits have been largely illusory.

Many employers, particularly in the metal manufacturing industry, have closed down the manufacturing section of their enterprise and moved offshore, using their Australian facilities for storage and distribution only. We are importing a vast range of products in our building industry and for the supermarket shelves, which previously were produced in Australia. Our motor industry is only a shell of what it was 5 years ago with a vast range of component parts being imported and sold, when assembled, as a so-called Australian car.

Much of our decline can clearly be traced to the Accord, and we are now about to negotiate Accord Mark VI. Most workers find it difficult to understand why the real value of their wages has been deliberately reduced in deals between the ACTU and the Government, while people not bound by the Accord have never been better off. Luxury housing can be sold overnight at immense prices and importers of luxury cars find it difficult to keep up the supply. There certainly has been a major boom but few workers under the Accord have shared in this boom.

The price the leadership of the ACTU and the Hawke Labor Government have paid in the pilots' dispute to prop up the Accord will be felt by the trade union movement long after the Accord has been dismantled and buried. It will be interesting to see what the reaction of the ACTU will be if a future non-Labor Government, faced with a strike which they deem to be of national importance, imports workers, both skilled and otherwise, to break the strike and also subsidises the employers during the strike.

There can be little doubt that we need to completely re-appraise our whole system of industrial relations in Australia and this applies at both State and Federal level. Until we have a sound industrial base, we will continue to fall further and further behind the rest of the world. The two most prosperous nations in the world, Germany and Japan, have built and are continuing to build their prosperity on a manufacturing base. Tourism and other forms of 'Mickey Mouse' industries have only played a very minor role in their economic success.

The New South Wales Government has taken the lead in attempting some reform in the industrial relations system in that State and part of the reforms will be the encouraging of enterprise bargaining. To date the legislation has not passed through the parliament and there is some opposition from the NSW Labour Council. There is also opposition from some employer associations, or what is called the 'Industrial Relations Club', and this is to be expected. Not only is our industrial relations system the most inefficient in the world but also the most legalistic and hence the opposition from the industrial courts, commissions, unions and employer associations, who live off the system.

For enterprise bargaining to be successful only one union should legally be allowed to represent the workforce in a particular enterprise. The core of Australia's chronic industrial relations problem is the multitude of unions at both enterprise and industry level. Until the problem is solved our chaotic system will continue and our chances of re-activating our manufacturing industry will be nil.

No amount of discussions with the ACTU will lead to enterprise or industrial unionism. Obviously the ACTU, which is the most powerful national trade union body in the world, wishes to keep its power, which primarily stems from multitudes of unions in every industry. Our system ensures the dominance of the ACTU to represent the broad interests of the whole workforce. In the United States the equivalent body to the ACTU, the American Federation of Labor and the Congress of Industrial Organisations (AFL-CIO) does not have the same power as the ACTU primarily because in the United States only one union or bargaining agent is permitted at each enterprise.

The Hancock enquiry into our industrial relations system failed miserably in this area with only a recommendation to allow single union coverage in new enterprises. This has led to the so-called 'greenfield industries legislation', under section 118 of the new act. Even this section is unclear, as no provision is made to cover the problem of unions not having the constitutional coverage to cover all workers in that enterprise. In the Green Paper on Industrial Relations prepared by Professor John Niland for the New South Wales Government, recommendation 35 certainly goes in the right direction for a single union or bargaining agent to represent a particular enterprise.

There is increasing evidence to show the degree of disenchantment among the rank and file union members with their union leaders. A number of unions whose leadership was predominantly left have changed to leaders of the right-wing persuasion and a number of right-wing led unions have fallen to the left. This disillusionment within the union movement generally is the major reason for the continued fall in union membership, and unless the ACTU realises that its prime responsibility is to represent the Australian workforce and not assist in the propping up of a dubious Accord, union membership will continue to decline.

Australian industrial relations systems evolved from the latter part of last century when we were insulated from international competition and relied primarily on the export of primary products to Britain in exchange for most of our manufactured goods. It was under this easy system that our industrial relations system evolved and it laid the basis for what was to be a reasonably satisfactory system. We were spared some of the extreme labour disputes which countries such as the United States endured, which in many case led to bloodshed and great suffering by the workforce.

With the industrialisation of Australia, however, the arbitration system needed to evolve to meet the changed circumstances. Our union movement strongly followed its British counterpart with a system of craft unions but unlike Britain we also have a highly centralised and legalistic system of industrial relations which was based on compulsory arbitration.

The system encouraged multitudes of unions and insisted, as it still does, that a union have a registered constitution, which lays down the scope of a union's membership coverage. This is the prime reason why we see up to 26 unions in some organisations, most with State and Federal registrations and constitutions, and many with only a handful of members, but having the power to stop the company or enterprise from working. It is this situation which gives such immense power to the ACTU as it acts as the co-ordinator.

This situation applies to the whole of Australia's workforce and is unique in the world. Until legislative steps are taken to break the stranglehold of this system, we will never be able to compete on a world basis in any industry but particularly in manufacture. Much of our economy has been deregulated to allow us participate in a rapidly expanding world economy, but, our industrial relations system has now been regulated to an extent never known before.

Any union which had the idea of breaking away from the centralised wage system would think twice after seeing the treatment meted out to the Federation of Air Pilots.

The ACTU executive is little more than an arm of the Federal Government. In Eastern Europe the Communist Party is disintegrating and with it, their so-called trade unions which were an arm of government, to be replaced with genuine trade unions, independent of the government.

There is a clear message in this for the Australian trade union movement. The centralised wage system has placed our whole workforce on the basis of the lowest common denominator. Enterprises with a fine workforce or a highly successful operation are put on the same level as the mediocre and the inefficient. The pilots' dispute has highlighted the weakness in our industrial relations system. Had the pilots been affiliated with the ACTU, the ACTU would have found a way to accommodate them. This has happened many times when powerful affiliates have demanded a way be found to circumvent the guidelines of the Accord and a way has always been found. The decimation of the pilots' union has strengthened the ACTU immeasurably and a small group of people on the executive of the ACTU now, for practical purposes, control the whole of the Australian workforce, and this applies whether they are members of a union or not.

Enterprise bargaining ensures that it is in the interests of both employers and employees for an enterprise to become and remain prosperous, and they can do this without the need of a legalistic industrial court system or the ACTU. We need legislation to ensure that employees are given the right to bargain collectively with their employers or through their own union if they so choose.

The right of workers to be able to choose a union to represent them is most important. In our industrial relations system they are not given this right but are forced to accept a union which has the constitutional coverage to cover them whether they approve of the union or not. They are not allowed to present their own case before the Industrial Relations Commission, and in many cases an award which is legally binding is placed over their enterprise with the employees having no input whatsoever.

As a first step to enterprise bargaining, legislative action is necessary to remove the impediment of 'constitutional coverage'. Currently, if a union wishes to change its constitutional coverage, it must notify the Industrial Registrar and then all other unions are notified of the proposed change and given the right to object. Obviously no union is going to agree to a competitor and so for practical purposes it is almost impossible for a union to change its constitution.

For enterprise bargaining to be successful, only one union must represent a workplace. Currently groups of unions, particularly in the building industry, have set up, usually with the assistance of state labour councils, some type of collective agreements on particular jobs, but it is a crude and inefficient method of enterprise bargaining and again shows the need for legislative change to remove the shield of 'constitutional coverage' which prevents unions from competing with each other for union membership.

The ingrained legalism in the Australian system of industrial relations must be removed before we can start to restructure our manufacturing industry properly. The trend of many companies to move offshore to escape the system is very damaging to our national interests and must be reversed.

A further step which would be of great benefit to all enterprises and in particular to those engaged in manufacture is an expansion in employee involvement. Many progressive companies are introducing such schemes but an impediment to their success has been the multitude of unions in the workplace. Some unions are strongly opposed to such schemes and others place conditions on them which can affect their efficient working. In New South Wales there have been quite spectacular results with some employee involvement schemes but in every case the success has been linked to an enterprise which has had only one union covering the workforce.

Whilst our whole system of industrial relations has been based upon a third party (the Commission) to settle disputes, an efficient enterprise bargaining system would place greater emphasis upon direct negotiations with the workforce itself and the management. This rarely occurs under our present system, where normally a union official and a representative of the company's industrial relations section appear before the Commission, some agreement is made and the employees are told of the agreement at a meeting with a recommendation that they accept.

In conclusion, we need a complete re-think of our industrial relations system. If we are to survive in the world economy we must re-activate our manufacturing industry and this will only be possible with a system of industrial relations more in tune with the rest of the world. This will require legislative action to ensure that only one union represents each industry or enterprise and that employees have a free choice of who shall represent them.