Mary Gaudron Address to the 2017 Annual Dinner - "Rethinking Trade Unionism"

I regret to inform you that you have invited a very grumpy old woman to speak to you tonight. There is much of modern life that I resent and resist. I will spare you the list but at the very top of it is the decline and demonisation of Trade Unions. I suppose I should declare at the outset that Trade Unions were an influential part of my formative years. My father was a member of and, from time to time, the local rep for the AFULE (Australian Federated Union of Locomotive Engineers). 

Thanks to the AFULE, Santa Claus came to town each year bearing gifts for the children of its members and, once a month, it arranged for a book carriage to replenish the library at the Railway Institute. The AFULE was there for advice and support if there was a workplace accident or if there was a query as to rights or entitlements, and to provide representation if there was to be an enquiry into a derailment or other incident likely to result in the demotion or worse of a member.

My grandmother's partner was a militant shearer and longstanding member of the AWU. He was vehemently insistent that Union Officials act only in the interests of members. Although remaining fiercely loyal to the Union, he never forgave Charlie Oliver for being “too-clever-by-half” during the 1956 Shearers' Strike. Perhaps, I should explain. During the Korean War, wool was a pound a pound and squatters were driving leather upholstered Daimlers and Bentleys. After the war, the price of wool began to fall and the Pastoralists' Association served a log of claims on the AWU and then applied to the Conciliation and Arbitration Commission to reduce the shearers' rates by 30/- in the hundred. The Pastoral Award, as it then stood, applied to unionists and non­unionists alike, having been made on an AWU log of claims which sought the same rates for all shearers, whether or not members of the Union. The Pastoralists' application was successful, resulting in the reduction of 30/- per hundred - a reduction of approximately seven pounds ten shillings per week at a time when average male earnings were of the order of sixteen pounds per week. Naturally, a strike ensued. At some stage during the strike, Charlie Oliver tried to convince the men to return to work, telling them that there was a bright young lawyer who would apply to the High Court to have the new rates declared unconstitutional. For the most part, the men refused to end the strike but application was duly made to the High Court, it being argued that employers could not create a dispute by serving a log of claims on the Union and, thus, the old rates must prevail. The argument was successful in part: the High Court held that the employers could create a dispute as to union members but not as to non-unionists. And so non-unionists were to be paid 30/- per hundred more than the Union members. Not the AWU's finest hour! The bright young lawyer was Lionel Keith Murphy.

Notwithstanding the AWU's own goal, most shearers, including my grandmother's partner remained loyal to the Union. And in the 1950's nearly every adult male whom I knew or knew of was a member of a Union. Today, I know only three people who are Union members - hardly surprising when, according to recent figures only 9% of private sector workers and 38% of public sector workers are members of a Union. Overall, in 2015, only 15% of the Australian work force were members of a Union, a figure which had fallen from 40% over two decades. Although there is evidence of recent improvement in some sectors, the latest figure is 13.3%. Contrast this with Scandinavian countries where membership is nearer to 65%

With Union membership at an all time low in Australia, the need for worker protection is at an all time high. One regularly reads of workers being underpaid - "wage theft" is the term aptly coined by Sally McManus. Penalty rates have been cut, sometimes with the complicity of Unions in the course of enterprise bargaining and more recently by a decision of Fair Work Australia. Stories abound with respect to the mistreatment of what I shall call "guest workers' - backpackers, international students and people on temporary work visas. Wage growth is at an all time low and it is not uncommon for employers to seek to reduce wages even further by application to cancel an enterprise agreement, as in the recent case of Streets’ Ice Cream, or to thwart attempts to negotiate a new agreement by lockout, as in the case of PPG paint manufacturing at Villawood. Add to this the precariousness of work for casual workers, those who work on fixed-term contracts and those who are participating in what is called “the gig economy”. It is no wonder that inequality is seen as a pressing economic and political problem!

As well as the decline in Union membership, there has been a whittling away of Union rights, including the only right that traditionally was of any real worth - the right to strike. That right is now circumscribed by requirements as to notice that can result in an employer taking counter action, as in the cases of Streets' Ice Cream and PPP Paints.

How did it come to this? There are many causative factors, including the decline of manufacturing, the diversification of industry, offshoring, out­ sourcing, labour hire firms and technological change. However, there were other factors at work in no particular order, I would mention the adoption of neo­liberal economics in Australia in the 1980’s and early 1990’s, the failure of some Trade Unions to act in and only in the best interests of their members and the determined demonisation of the Union movement through the political processes.

One aspect of the neo-liberalism adopted in Australia was “The Accord” - basically a tripartite arrangement between the then Labor Government, Unions and employers with respect to wages and other conditions, an arrangement that produced distinct benefits for workers in the short term, including superannuation and unfair dismissal laws. But it sidelined the Conciliation and Arbitration Commission and led ultimately to its loss of influence and the ability of Unions to have certain claims determined by compulsory arbitration, a process which, over the years, had in a number of respects facilitated improvement in workers’ wages and conditions. Additionally, as part of the Accord, Unions embarked on a number of Union amalgamations. There is debate as to whether, in the case of Trade Unions, bigger is better. In theory at least, bigger unions should lead to greater power and economic efficiencies. However, my experience as a member of the Conciliation and Arbitration Commission in the 1970’s was that very often smaller unions provided better services for their members, largely because they were more knowledgeable as to the industry or enterprise concerned and more closely connected to their members. Certainly, one would have to consider the possibility that union membership would be greater if there were a closer relationship between unions and their members. And that seems inherently more likely in the case of smaller unions.

The other development in the 1980’s and early 1990’s was the encouragement of collective bargaining in preference to arbitration. Until the 1990’s, federal industrial legislation was predominantly based on s 51(xxxv) of the Constitution, the power to legislate with respect to conciliation and arbitration for the settlement of interstate industrial disputes. In the 1990’s that shifted to the corporations power - the power to legislate with respect to corporations formed within Australia - with the High Court holding that that power extended to regulate dealings with corporations. And of course most employers were and still are corporations.

Although the changes that occurred in the 1980’s and early 1990’s were not directed to curbing the influence and power of Trade Unions, they provided the basis for that to happen on a change of government. The Howard Liberal government introduced what became known as "WorkChoices". Amongst other things, unfair dismissal laws were weakened, the "no-disability" test for collective agreements was removed, collective agreements and individual workplace agreements were allowed and, for the most part, were allowed to abolish or restrict award entitlements. The number of matters that could be dealt with by award was limited. The right of Union entry to workplaces was restricted, as was the right to strike which had to be preceded by secret ballot. Those changes, which came into force in March 2006, almost precisely coincided with the beginning of the slide in union membership from 40% to its present low of 13.3%, probably because would-be members appreciated that there was little a Trade Union could do on their behalf. That slide continued even after the abolition of WorkChoices in March 2008. Notwithstanding that abolition, restrictions remained and still remain with respect to the right of entry to workplaces and, also, the right to strike.

The second matter to which I should like to refer is the behaviour of Trade Unions and Trade Union officials. Some recent examples of that behaviour make Charlie Oliver’s own goal pale into insignificance. At the very least, there is reason to think that the interests of some Trade Unions, as legal entities separate from their member, have from time to time conflicted with those of their members and that their members’ interests have not always been at the forefront of their consideration. At least that much emerged from the Heydon Royal Commission. And then of course, there has been the example of egregious dishonesty by officials of the Health Services Union. In the face of that dishonesty, I, for one, would not have wished to be a member of that Union. And although there is now evidence of some improvement in its membership, the HSU lost 6,000 members in six months in 2011. One can only speculate as to the impact of that dishonesty on union membership more generally. There are other examples of behaviour on the part of Unions and their officials that are deserving of criticism. It is unnecessary to detail them, it is sufficient to say that the behaviour of some Trade Unions and their officials has played into the hands of those who would destroy the Union movement. And that brings me to the third matter to which I should like to refer, namely, the demonisation of Unions through the current political processes.

Question Time in the Australian Parliament regularly has members of the Government front bench stridently and enthusiastically attacking the Labor Party and the Unions as enemies of the working class, portraying Unions in the words of Jacqueline Maley in the Sydney Morning Herald of 4-5 November this year, as “corrupt, venal job destroyers who whinge too much and the Opposition leader as a man who if not actually corrupt himself is beholden to [the Unions]”. She added that “[m]illions of dollars have been thrown at this project, in the form of the highly politicised Royal Commission into Trade Union Governance and Corruption”. She wrote this in the context of the recent police raids on AWU offices in Melbourne and Sydney, raids which, at least initially, provided another opportunity in Question Time for members of the Coalition front bench to allege Union corruption.

In her article, Jacqueline Maley expressed the view that the real target of these attacks was the Labor Party and its leader, Bill Shorten. Doubtless that is part of the union demonisation strategy, but it is difficult to regard Unions as mere collateral damage in the face of the splenetic rhetoric and the various laws that have impacted directly and adversely on them. One can be forgiven for reading into that rhetoric a pathological hatred of Trade Unions, probably because of their support, financial and otherwise, for the Labor Party. And there is reason to think that the campaign of demonisation will be continued with the objective of removing Trade Unions from involvement in superannuation. That having been said, I think it is fair to say that the present political campaign of demonisation is harming both the Labor Party and the Trade Union movement, with Unions probably suffering the greater damage.

 I am aware of the proud role the union movement played in the formation of the Labor Party and the close links that have been maintained ever since. I realise that what I am about to say will be unpalatable to many but I think the time has come for the Labor Party and the Unions to sever their formal links, whether by way of affiliation or otherwise, so that Unions cease to have any formal or institutionalised role within the councils or other organs of the Party. I do not mean to suggest that Union officials should not, as individuals, be members of the Party or that Unions should be prohibited from donating to the Party or engaging in activities to support it or its policies, any more than, for example, the Business Council of Australia or similar organisations should be prohibited from engaging in like manner with the Liberal Party. In reaching the view that the Unions and the Labor Party should sever their formal links, I assume that the Labor Party will continue to be the natural ally of the union movement, just as the Liberal Party will continue to be the natural ally of the business community. In this context, it is also relevant to note that the interests of the Unions and the Labor Party do not always coincide. And Labor Governments have not always acted in support of Unions. Take, for example, the Chifley Government's deployment of the army against coal miners in 1949 or the Hawke Government's payment of the wages of “scab” pilots forty years later during the so-called “pilots’ strike”. It can also be said that Unions have not always acted in the interests of Labor Governments. In any event that is not the role of Unions: their primary role is to act in the interests of their members not those of the Labor Party.

I realise that my suggestion that Unions sever their formal links with the Labor Party will not find favour with those officials who use their Union's affiliation with the Party as a means by which they and/or their factions advance their or their factional allies’ political careers. But as I have said their primary responsibility is to the members of their Unions. Moreover, it may be that not all members of the Labor Party would regard it as a bad thing if Unions held less sway in the councils and other organs of the party. But ultimately, I am of the view that both the Party and the Union movement would benefit from the severance of formal links: the incentive for the political demonisation of Unions, which must surely have an adverse impact on union membership would be lessened, one means of attack on the Labor party would be removed, as might a disincentive for non-Labor voters to join a Union.

Before turning to measures that might be taken to improve the position of Unions, it is useful to consider what constitutes a Trade Union. A “trade union” is generally defined as an association of workers organised to protect and/or improve their conditions of work. The earliest associations were bound together by nothing more than an oath of mutual support. Indeed, the crime for which many trade unionists were transported to Australia was swearing an unauthorised oath. From at least the early twentieth century, State and Federal laws allowed for the creation and registration of Trade Unions. Registration brought with it separate legal personality, enabling the Union to act and to own property in its own name. Registration also usually conferred monopoly or near monopoly rights to represent a particular class or classes of workers, with registration being refused to other would-be unions to the extent that there was already a union to which its would-be members could conveniently belong. Of course, the Constitution confers no express power on the Australian Parliament to legislate with respect to Trade Unions. Initially, legislation for the registration and regulation of Trade Unions was based on the power to enact legislation that was incidental to the conciliation and arbitration power and other useful heads of power, for example, the territories power. In so far as the corporations power extends to dealings with a corporation, that power combined with the incidental power may even extend further than was previously the case. In any event, the Parliament has legislated to regulate registered trade unions and employer organisations which are now subject to the Registered Organisations Commission, the body that sought the warrants for the recent police raids on the AWU. That body has extensive powers to regulate and investigate, including to require the provision of information and the production of documents by persons even if not members of the Union being investigated. And, of course, it has power to apply for search warrants.

A body can be a trade union without being a registered organisation. Indeed, in 1959, in order to avoid compulsory arbitration, all pilots resigned from the Australian Pilots’ Association which then deregistered itself. The success of this tactic was short-lived: the Commonwealth relied on its power with respect to civil aviation and simply created a new tribunal and compulsorily re-registered the Association. The same fate or worse would likely befall any Union that sought to escape current restrictions by deregistration. Even so, the situation may be different if the organisation has never been registered. The recent example of the test cricketers comes to mind. It seems that even if only for a short time, they constituted a trade union in the ordinary sense of that word and were able to engage in industrial action free of the constraints that apply in the case of registered trade unions. There may be scope for similar action by other sportspersons, contract workers and those who work in the “gig economy”. However, it must be admitted that the occasions on which they will be in the strategically advantageous position of the test cricketers are likely to be rare.

As the law presently stands, it seems to me that there is not a lot Unions can do to improve their standing, except to improve their image and, perhaps, engage in a “charm offensive”. It goes without saying, that if Unions wish to improve their image, they must always act in the best interests of their members and be seen to be doing so. And of course they must take whatever steps are available to them to improve their membership. I am conscious of the difficulties posed by the lack of easy access to the workplace, but Unions must foster and maintain a close connection with their members and endeavour to connect with non-members who work within the fields in which they operate. Unions can, as I know some do, provide information, assistance and advice to non-members who make contact with them when faced with particular difficulties. And what is wrong with organisers inviting members to join them for a drink after work and suggesting that they might like to invite a non-union colleague to join them? And perhaps there are other social activities that could serve the same function. I know that these are small measures that will not necessarily have any great impact but in these present parlous times Unions must take whatever steps they can to improve their image and market their services.

I hope it is clear from what I have said so far, that there must be a system of industrial regulation involving the active participation of a strong trade union movement if there is to be anything approaching industrial and economic justice for workers, without which I believe our democratic and supposedly egalitarian way of life is put at peril. Our present system delivers much less. The anecdotal evidence of underpayment, particularly of part time and “guest” workers is alarming. And if anyone believes their position is adequately protected by the existence of a body such as the Fair Work Ombudsman with power to investigate and enforce workers’ rights, he or she should ask how it is that anyone gets away with paying a worker less than his or her proper entitlements, much less on the scale we saw with respect to 7-Eleven workers. 7-Eleven was eventually obliged to establish a compensation scheme for its underpaid workers. There were 2,382 claimants with an average of a little under $40,000 paid to each claimant, amounting in all to slightly in excess of $110,00,00. It is not good enough that wages may ultimately be recovered and, even that significant penalties may be imposed. In my experience, there are few workers who can afford to be kept out of their wages for the time it takes to recover them. Of course, one reason why underpayment occurs is simply that workers, particularly casual and contract workers fear the loss of employment if they complain. At the very least, the law must be changed to prevent employers from dismissing or taking any retaliatory action against workers who complain on reasonable grounds of underpayment or other failure to observe the terms or conditions of an award or agreement.

Note, that I have used the word “workers”, not “employees”. This protection should be available to all workers, including contract workers and those who work in the “gig economy”, even if not employees in the strict sense of that word.

Given that most employers are corporations, there is no doubt that a federal government can legislate extensively - perhaps, almost exhaustively - to establish an industrial system that secures justice for workers. I do not believe it can secure that end without conferring greater rights and freedoms on trade unions and without imposing corresponding obligations on employers. Before turning to some such rights and obligations, I should say that I imagine that industrial regulation will continue as an amalgam of collective or enterprise bargaining and award arbitration, with perhaps an increasing emphasis on enterprise bargaining. There are, I think, some changes that should be considered. The first is to extend protection to any person who for monetary reward provides work and/or personal services to or for the direct or indirect benefit of a corporation. That is to say, it should extend, for example, to sports persons, those who work in the “gig economy” - Uber drivers and the like - and bread carters such as those who were the subject of a recent ABC 7.30 report, whether or not they also provide their own equipment.

Within that context, it would seem necessary that Unions be permitted to extend their membership to persons who are not strictly employees or have not traditionally been regarded as such and, also, to facilitate the emergence of new unions. And I see no reason why unions should have monopoly or near monopoly rights with respect to a particular class or classes of workers.

Certainly such rights were useful, although not strictly necessary, when awards were made to cover entire industries or an entire class of workers. However, the move to enterprise bargaining has narrowed the focus of regulation. In that context, I see no reason why two or more unions - even “ad hoc” unions, such as the test cricketers - should not be permitted to represent the interests of workers or a group of workers who take the view that their interests do no align with those of the Union traditionally having coverage of that work or those of a majority of its members. Nor do I see any reason why there should not be special interest unions - perhaps operating “ad hoc” to advance the interests of their members. For example, there might be a working mothers' union or a working students' union, with such unions working either independently or co­operatively with other existing unions.

When it comes to Union rights, it is essential that contact between Unions, their members and prospective members be facilitated. To this end, Unions must have improved workplace access, particularly if there are health or safety concerns and, perhaps, with notice on other occasions. And given privacy concerns, they should have the right to require employers to distribute Union material, including reports of Union activities and concerns, to all their workers. Additionally, employers should be required to inform all workers of the terms of the Agreement or Award applicable to them and provide them with the name and contact details of the Union or Unions party to that Award or Agreement.

And given the apparent prevalence of underpayment, it is essential that Unions be given the right to inspect wages records at least every six months. And where there is evidence of systemic underpayment or failure to observe the terms of the Award or Agreement, there should be an unfettered right to strike. It seems to me only fair that employers who fail to observe their obligations should be denied the protections that the law would otherwise confer upon them.

There may be other steps that can be taken to improve the lot of workers in this country but I fear for their rights if something is not done soon to improve the position of Trade Unions. As it is now clear that a federal government has ample constitutional power to ensure industrial justice for workers and Trade Unions. I hope that a future Labor Government will use that power to do just that. If it does not, I suspect the words "Fair Work" that currently appear in much of our industrial legislation will be the greatest oxymoron of all time.