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Union Amalgamations

Joe Thompson

Following the unsuccessful amalgamation attempt by the Building Workers Industrial Union (BWIU) and the Federated Engine Drivers' and Firemen's Association (FEDFA) a number of other unions have made attempts to amalgamate and in most instances these attempts have been unsuccessful.

The Storemen and Packers Union has been successful with its attempt to amalgamate with the Rubber and Allied Trade Union and is pursuing amalgamation proposals with other small unions but no successful amalgamations have taken place between any major unions.

The attempted amalgamation between the Australasian Society of Engineers (ASE) and the Electrical Trades Union (ETU) was unsuccessful and the failure of this amalgamation proposal can have major significance for the trade union movement generally.

The Federated Ironworkers Association and the Australasian Society of Engineers are again proposing to amalgamate and the success of their proposals will have a major bearing upon the future of both organisations. A number of years ago, amalgamation proposals between these two unions failed after a ballot of the membership.

It is most important in our National interests that this attempt is successful. If it fails, it will enable the Amalgamated Metal Workers Union to have a stranglehold upon the whole of Australia's metal industries. It would also enable that union to recruit forcefully or otherwise at least 150,000 new members who are currently non-unionised but working in the metal industry primarily as white collar workers. This would bring the union membership to at least 320,000.

There appears to be a reluctance upon unions which have a large craft membership to amalgamate with a union whose predominant membership is in the semi-skilled category. This appeared to be the major barrier to the proposed amalgamation between the ASE and the ETU and also to the previous amalgamation proposals between the ASE and the Federated Ironworkers Association.

Since the failure of the proposed BWIU and FEDFA amalgamation the ACTU appears to be moving to a preference of what they term 'A Preferred Union' for a particular industry. In many ways this is a far more logical approach than their previous attempts to amalgamate Australia's over 300 unions into 20 mega unions. There has been no positive statements from the ACTU of course that they now do not favour mega unions covering a whole broad spectrum of industries and companies irrespective of occupation but they appear to be favouring the concept of a preferred union in each particular industry.

If the amalgamation proposals between the Federated Ironworkers Association and the ASE is unsuccessful the principal union for the whole of the metal industries would then obviously become the Amalgamated Metal Workers Union (AMWU). The ASE would be in a very difficult situation and could eventually lose its membership to the AMWU and the Federated Ironworkers Association would be largely confined to the steel industry.

One can imagine what the situation would be for Australian Manufacturing Industry if the AMWU controlled the whole of our metal industry.

The Vehicle Builders Union (VBU) have had a number of talks with the AMWU and there is little doubt that if the AMWU had complete control of the metal industry in a short space of time the VBU would become part of the AMWU and then the whole of the Australian Vehicle Industry, including component part manufacture, would be under the control of this one union whose militant and irresponsible activities are well known and well documented.

The left of the trade union movement now has control of the Vehicle Builders Union in both South Australia and Victoria where at least 80% of the union membership are employed and in almost all major plants in these states the AMWU has considerable membership in the maintenance areas. There is every reason to believe that the proposals to amalgamate the semi-skilled membership of the VBU with the AMWU could be successful with the assistance of the AMWU members in most vehicle industries locations.

The position of the Federated Ironworkers Union is most disturbing. This union under the leadership of its National Secretary, Mr Steve Harrison is the most logical and stable union in Australia and is paving the way for the successful future of the Australian Trade Union Movement. With the introduction of new legislation and Section 118 of the Industrial Relations Act the FIA has been able to seek and gain a single union agreement with a number of companies and enterprises with the FIA having complete coverage irrespective of occupation of that company or enterprise.

This has led to a bitter dispute with the AMWU who have made public statements to the effect that they will seek to destroy the FIA if they continue to enter into agreements under Section 118 of the Commonwealth Industrial Relations Act with enterprises which the AMWU believe they should cover.

The attitude of the ACTU was disappointing when the dispute was first brought to their notice. They made statements to the effect that they did not intend to intervene and it was only when they realised that the dispute could lead to a split in the executive of the ACTU itself, that they appeared to take some interest. One could be excused for thinking that privately, the leadership of the ACTU was favouring the AMWU.

The only successful amalgamation proposal is the recent ballot between the 50,000 member Hospital Employees Federation No. 1 and 2 Branch and the 30,000 membership of the Health and Research Union.

This proposal after a ballot of members has been successful but the disturbing feature of the ballot was that only 22% of the membership even bothered to vote on the proposed merger. This is very disturbing when it is considered that a secret ballot was conducted and all members had the amalgamation proposal posted to their home with a stamped addressed envelope and it was only necessary to fill in the ballot paper and post. This clearly shows some of the apathy which is very evident in the trade union movement generally and could be attributed to the compulsory unionism aspect.

If the Vehicle Builders Union were to amalgamate with the AMWU that union would then cover almost the whole of Australia's Metal Manufacturing Industry and would include vehicles, component part manufacture, all forms of engineering, the building of rail cars and railway rolling stock and the whole of Australia's metal manufacturing industries. This could have a very serious effect on the economic future of Australia.

The plan by Senator Peter Cook, Minister for Industrial Relations, to force unions to amalgamate by the threat of legislation which would make it mandatory under most circumstances for a union to have at least 20,000 members to become registered would certainly assist the ACTU in its plan for 20 mega unions.

There can be little doubt that Senator Cook would not be pursuing this line unless he had the full approval of the ACTU and it is also logical to believe that this line would not now be pursued if the earlier amalgamation attempts had been successful. This is little more than a strong power grab by the ACTU to force union amalgamations irrespective of the wishes of the members. The only real winners will be the ACTU who, for practical purposes, will control the whole of the Australian workforce whether they are union members or otherwise through the Award System and the centralised wage system if the legislation is passed.

It would also have the effect that for practical purposes future governments would find it almost impossible to reverse the position and it could destroy forever any possibility of real attempts to reform Australia's chaotic industrial relations system. It would also ensure the continuation of a centralised wage system which is placing great strain upon the remaining sections of Australia's manufacturing industry and place us in an even more uncompetitive position.

The accord and the centralised wage system continue to widen the gap between Australian Manufacturing Industry and our overseas competitors. There does not appear to be a realisation in the leadership of the ACTU that when Australia had a centralised wage system propped up by tariffs and quotas we could survive in this cosy if inefficient situation but with industry facing increasing competition from a world which does not have such systems the result has been the virtual collapse of much of our manufacturing industry.

Germany and Japan are both classic examples of the need for nations to have a strong manufacturing base. Both countries have built highly efficient manufacturing industries which have allowed them to gain world dominance in so much of the manufacturing sector.

They have not relied upon tourism or the extraction industries, which Australia is doing, and there is little doubt that this country has no real future unless our manufacturing industry can become competitive by world standards. This will never come about whilst we have a centralised wage system and an accord with the Federal Government which is dictated by the ACTU.

Modern industry requires great flexibility both in labour and management. As an example: some technology which is highly productive is also very expensive and needs to be worked continuously to warrant its installation. Australia's award system militates against its installation as for practical purposes it is impossible for a union and an employer to bargain in the area of conditions which are considered National Standards in all awards.

The Australian Motor Vehicle Industry is a classic example. At present a tariff of 40% applies to the importation of passenger motor vehicles and under the so called 'Button Plan' by 1992 this will fall to 35%. There are no quotas on the importation of motor vehicles and the vehicle industry could be decimated. The Ford Motor Company, which is Australia's most progressive motor vehicle manufacturer is obviously deeply concerned about the position of the industry after 1992.

This company has a very fine employee involvement program and must be given credit for the way it handles its Industrial Relations, but like the rest of the industry it is tied in with a national award system which does not give that flexibility that is required if it is to compete successfully with the rest of the world.

A number of Australia's economists continually say that if tariffs are reduced our industries will become more efficient but the facts do not bear this out. What is really occurring is that with an inflexible centralised wage system and no real scope for enterprise agreements unless they are imposed on top of the award structure our industry simply cannot compete and manufacturers close off their Australian Manufacturing Section, move offshore and use that part of their enterprise which is left for distribution in Australia.

Twenty years ago almost 27% of the Australian workforce were employed in some form of manufacturing industry and this has now fallen to 16% and will continue to fall. Obviously some of this decline has been caused by better methods and modern technology but the overall reason for the decline has been the decisions of companies to close down their Australian manufacturing section and move offshore.

In simple language the ACTU and the Federal Government are living in cuckoo land if they really believe we can continue to survive under a system of an 'accord' which is tied to a centralised wage system with the ACTU playing a dominant role both with the government and the Industrial Relations Commission. We ignore at our peril the decline of our manufacturing base.

We now have an overseas debt of such magnitude that it is becoming increasingly difficult to even service the interest and our own deficit for 89-90, was a staggering $21.16 Billion. Obviously this situation cannot be allowed to continue.

If the world enters a period of deep recession, our exports of commodities will decline and the tourist industry, hailed by the Federal Government as the great employer and earner of foreign currency will be shattered. The effects upon employment will be felt nationally and our whole standard of living will decline.

It is quite elementary that we need a strong manufacturing base to assist with import replacement and also export.

The NSW Government is attempting to introduce a limited form of 'Enterprise Bargaining' by legislation. The Opposition led by the BWIU and the AMWU is bordering on hysteria with much of the leaflets explaining their opposition to the legislation either as untrue or seriously distorted. Their reaction confirms the state of our Industrial Relations System.

Our whole industrial relations system is in need of major drastic surgery. This should include the abandoning of the 'accord', which in the long term has been very damaging to the Australian worker whom it was supposed to assist, and a review of the centralised wage system. Before we can reactivate our manufacturing base we need to encourage enterprise bargaining which is the norm in most of the industrialised world and workers should have a free choice of what union they wish to belong to.

We cannot have a sound manufacturing base unless we have stability, and that stability will be lacking while we have a system of industrial relations, which, by its very nature, encourages instability.

The ACTU and Federal Government's amalgamation proposals will not assist in bringing in the reforms which are so necessary for our economic wellbeing and may only make a bad situation worse. Australia's economic future is dependent upon a complete and meaningful reformation of our industrial relations system if we are to survive in an increasingly competitive world.

Why HR Nicholls?

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