Lots of discussion online about Labor’s IR policy, most of it framed in terms of whether it’s a good product to take to the next election. Some of it, however, indirectly raises an important question, which is this: how should employment conditions be fixed in a society like Australia’s?

This question goes to the heart of the discussion about IR but it’s a question that many people avoid, or argue as if the answer is obvious. Yet various countries all around the world have answered the question in different ways. In Australia, over the last few years, we’ve changed our answer, yet a lot of people don’t seem to have grasped the implications yet.

Throughout most of the 20th century, mnimum wages and conditions of employment in Australia were mainly fixed by special tribunals established for the purpose. Sometimes employers and unions would ask the tribunal to ratify an agreement they’d reached by themselves, and sometimes the tribunal would arbitrate and issue a decision, but whichever it was, the tribunal had the final say. An extensive, complex set of principles evolved that guided the work of the tribunals, meaning that IR became a much more specialised field than was the case in many other countries.

The tribunal system gave a uniquely important role to trade unions. In most countries, unions only existed for as long as they had voluntary, committed support from workers. That wasn’t the case in Australia. The tribunals gave unions monopoly rights to represent certain categories of workers and awarded union members preference in employment. The enabling legislation, maintained by governments of all political persuasions, specifically encouraged workers to be represented by unions. Employers were likewise encouraged to form employer associations.

This unusual (compared to other countries) situation gave rise to what is called the ’service model’ of unionism. Unions’ main functions were to represent members in the tribunals, which required specialised professional capabilities, and to police the award system. Unions therefore became somewhat distant from members; in many members’ eyes they were just another organisation to which they had to pay money in return for services. Some thought the service was good and others thought it was crap - a bit like members feel about the NRMA - but they didn’t think of the union as ‘theirs’.

There were exceptions of course. Some unions continued to have an involved membership base but they were few and far between. Most unionists felt quite alienated from the union officers. The union amalgamation program pushed through by the ACTU in the 1980s pushed union bureaucracies even further away from their membership. Shortly afterwards, two things happened to undermine the institutional framework that had given unions their pivotal position in the IR system for so long. First, enterprise bargaining progressively replaced the award system as the main source of wages and conditions for workers. Second, preference to unionists was made unlawful and the Howard Government vigorously prosecuted any employer who tried to force employees to join a union.

The result is that today, ‘the unions’ are generally regarded as a group of organisations quite separate and distinct from workers. Unions are there to offer services in return for fees, and the onus is on them to satisfy workers that the benefits are worth the money. The precipitous decline in the proportion of workers who choose to be members suggests that unions have failed to rise to the challenge of succeeding as service-providers in a market-based model of IR.

While all this has been going on, the Howard Government has brought about a fundamental change to the institutional foundation of Australian IR. By successfully resorting to the corporations power, it has fixed minimum wages and conditions of employment for most Australian workers. Sure it’s included the Fair Pay Commission in its processes as a sop to the old arbitration system but it didn’t have to. It could easily have done what most other governments do around the world, and simply pass laws setting labour standards as part of the normal legislative process … just as parliament passes laws about consumer protection and marital breakdown and all the other relationships that are the subject of statutory regulation.

The thing about the legislative model, as opposed to the arbitral one, is that it doesn’t need trade unions or employer associations at all. Making and amending laws about IR becomes part of the political process. Political parties develop their policies with regard to voters, not members. And if an employer breaches the applicable standards it’s a matter for law enforcement by the executive government. Unions are not required.

So what role is left for unions? Well they can lobby political parties to improve legislative standards, but that’s unlikely to keep members paying hundreds of dollars a year in subscriptions. The most realistic option is for unions to stop being service organisations with a fee-for-service mentality, and revert to the original model of unionism in which unions are primarily run by members. This is the ‘organising model’ which the ACTU has been promoting for several years, with indifferent success.

Under an organising model of unionism, members at the workplace level mobilise to achieve collective goals through their union. It’s no longer a matter of what the union can do for members, it’s a matter of what members can do for themselves using the resources and institutional framework of a union.

The Rudd IR system maintains the Howard Government changes that make it terribly difficult for a union to organise effectively, unless it already has an active membership in a workplace. The ability of a union representative to enter the workplace is effectively controlled by the employer. The prohibition on pattern bargaining prevents workers in the same industry acting collectively - even though there is nothing to stop employers doing this. Worst of all (for unions), industrial action is severely limited and can only be taken after secret ballots - measures that effectively deprive the unions of most of their negotiating power.

Ultimately, however, the solution lies in the hands of workers themselves. If they aren’t prepared to pitch in and support their union in a practical way, then their union has no future under the mobilising model. And if the union has little in the way of services to offer in return for membership fees, then it has no future at all. If this is the fate awaiting many Australian unions, and recent developments suggest that it might be, then we should perhaps stop paying so much attention to what labor’s IR policy will mean for the unions and concentrate on the new minimum standards that are proposed for workers.

Share This