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While the government argues it needs tough new powers to break up thuggish, militant unions, experts say the average union member is a 50-something woman working in aged care. By Mike Seccombe.

Coalition bets anti-union bill on Setka rebuke

The Morrison government must be thanking its lucky stars for John Setka.

Who would it point to in order to stir support for the latest tranche of proposed anti-union legislation, were it not for Setka?

Perhaps underpaid teachers. Or workers in understaffed aged care facilities. Nurses? The teenagers who serve at McDonald’s?

In his speech introducing the Fair Work (Registered Organisations) Amendment (Ensuring Integrity) Bill 2019 into parliament, Christian Porter – who is both attorney-general and minister for industrial relations – referred expansively to “organisations” that “have nothing but contempt for the law”, but mentioned only one by name. That was Setka’s – the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU).

And Porter spoke about its “repeated law-breaking” at some length.

“As recently as last month,” he said, “the CFMMEU and its officers faced another fine of over $100,000 for unlawful entries and threats on construction sites. That decision saw them top $4 million worth of court-ordered penalties for the 2018-19 financial year alone.

“In fact, the CFMMEU’s behaviour has been so poor for so long that in 2017, one Federal Court judge described that union as ‘the most recidivist corporate offender in Australian history’. It seems, sadly, little has changed.

“That is why the government is committed to passing this vital legislation, which will take a significant step towards curbing the behaviour we have seen threaten the rule of the law in Australian workplaces,” said Porter.

That was on July 4, and in the weeks since, Porter and others in the government have taken every opportunity to refer to the record of the union, and of Setka in particular. A number of Coalition members have used identical words. On Monday, Nicolle Flint, the Liberal member for Boothby, said:

“John Setka has, to this point, amassed around 59 court convictions for a multitude of offences, including assault police, five times; assault by kicking, five times; wilful trespass, seven times; resisting arrest, five times; theft, attempted theft by deception and intent to coerce, nine times; and coercion, 10 times.”

Setka and the union are no doubt tough nuts, and the government insists it needs tough new measures to crack them.

The proposed laws would not only make it easier for the courts to remove union officials who, as Porter puts it, “flout the law”. They would also make it easier to deregister entire unions or parts of unions that act unlawfully, and for courts to appoint administrators, in cases where “the organisation or part of the organisation has ceased to function effectively”. And they would give the Fair Work Commission the power to veto union amalgamations if they were deemed not to be in the public interest – if, for example, the amalgamating entities had bad records of compliance with the law.

And if you were only considering these proposed changes by reference to Setka and his crew, you might think “fair enough”.

Certainly, Jacqui Lambie, Tasmanian independent and a crucial senate vote, is tempted to think that way. Last week, she told Australian Council of Trade Unions (ACTU) president Michele O’Neil: “you got a problem with the IR bill and it’s called John Setka”. She subsequently told The Sydney Morning Herald that “every day” that Setka continues to hold his job does more harm to the union movement and makes it more likely she will vote with the government.

Setka shows no signs of going – from either the Labor Party, which wants to expel him, or the union. He is fighting the party through the courts, and has won the backing of his members, despite the urging of the ACTU that he should go for the good of the movement.

And that suits the government, which clearly would rather Lambie and other members of the senate crossbench focus on the hard case of Setka, rather than the broader reality, which is that most unions are not like the CFMMEU.

As Labor’s industrial relations spokesman Tony Burke put it in his speech on the bill this week, much as the government might seek to characterise the average union member as “a bloke … involved in a blue-collar industry, who gets into lots of fights … the typical union member these days is a woman in aged care.”

Nor, says Dr Jim Stanford, director of the Centre for Future Work at The Australia Institute, are they at all militant. The number of days lost to industrial action has been in steady decline for the past several decades, and now is down more than 95 per cent compared with levels of the 1970s and ’80s. The number of workers involved in disputes is down, and so is the number of working days lost.

“Interestingly, major and long-lasting lockouts (like the 742-day lockout at Esso Longford) make up a growing share of total days lost in work stoppages,” says Stanford. He also notes a “clear correlation” between the historically low levels of employee-initiated industrial action over the past six years with historically low wage growth.

Stanford points to the government’s latest “Trends in Federal Enterprise Bargaining” report, released this week by the Attorney-General’s Department, as confirmation of the weakened position of unions.

The report shows that average annualised wage increases (AAWI) in newly approved agreements continued to fall in the March quarter, across the board – in private-sector deals and even more so in the public sector. Overall, the AAWI fell by 0.1 per cent to 2.7 per cent.

“In all current agreements – rather than just the newly approved ones – the AAWI held steady in the private sector, and slipped slightly in the public sector,” says Stanford.

“Another interesting point is that close to half of all workers covered by newly approved [enterprise agreements] in the March quarter – 45.5 per cent, to be precise – had ‘non-quantifiable’ wage increases. What that means is their wage gains are not specified in the deal, but rather are tied to things like future increases in the minimum wage, or changes in award wages.

“This report clearly confirms that the wage slowdown in Australia is getting worse, not better … [and] that the power of unions to win higher wage increases continues to erode, in the face of employer and government opposition to unions and collective bargaining, and a very hostile legal and regulatory environment.”

Given that Australia now is experiencing the lowest wage growth since World War II, says Stanford, the Morrison government should be endeavouring to raise wages, rather than pushing measures to further curtail union activity.

Burke made the same point in his second-reading speech on the legislation.

At a time when the great economic challenge is to get wages up, when wage theft by employers is a growing problem and real wages are a growing problem, said Burke, the government’s response is “to attack the organisations” that argue for wage increases and defend against wage theft.

Of course, as advocates of the labour movement, Labor would say that. But so do important unaligned voices. It now has been more than two years since the Reserve Bank governor first publicly referred to a “crisis of low pay” and called on workers to push for rises.

How is that to be achieved though, given the already tight constraints on employees’ capacity to bargain?

“People tend to think of Australia as a worker-friendly society,” says Stanford, “perhaps because of cultural markers like the Eureka rebellion, the Harvester decision [which in 1907 established the basis for the minimum wage], or the old Conciliation and Arbitration Commission.

“But it absolutely is not, anymore.

“I can think of no other country in the industrialised world where a union has to jump through so many hoops in order to take industrial action of any kind. No other country where the government tells a union and an employer what’s legitimate to talk about in collective bargaining – this whole ‘legitimate matters’ regime in Australia. No other advanced country where the government has to give permission for a union to reorganise itself.”

He points to a surprising source of support for his argument – the World Economic Forum, an organisation funded by 1000 global private companies, best known for its annual high-level meetings in the Swiss resort town of Davos.

“They are not exactly a group of raving Bolsheviks,” says Stanford. “They have assembled an index of respect for fundamental labour rights, a comparison across countries. They ranked 26 OECD countries. Australia ranked 22nd, just a nose ahead of the United States.”

Anthony Forsyth, professor of workplace law at RMIT University, says a quarter-century of hostility towards unions reached its peak under the Howard government’s Work Choices scheme.

“The Howard government wound back traditional legal supports for unions – rights of entry to workplaces, rights to take industrial action – and took on strong unions like the [Maritime Union of Australia]. It also had the CFMEU in its sights, through the Cole royal commission, resulting in special legislation to impose the rule of law in that industry [and] succeeded in breaking union power through individualised/non-union bargaining in industries like mining.”

And unions have been significantly weakened, with membership now down to about 14.7 per cent of the workforce and only 10 per cent in the private sector, he says, although they maintain significant influence in some sectors, “like construction, education, nursing” and in the Labor Party.

What the Morrison government now proposes, Forsyth says, “will provide new weapons in the armoury of government and employers”.

He cites the example of nurses, concerned about staff–patient ratios.

“The [current] system allows protected industrial action when you’re negotiating a new agreement, so nurses could, for example, have bans on performing particular kinds of work as part of that negotiation,” he says.

If such action is taken outside the protected negotiating period, their employer can apply for orders or injunctions to stop it.

“But if this bill’s passed then there is a new avenue open to that employer: to try and get union officials disqualified from office or, in an extreme case, get the union deregistered.

“Or the government, if it decides it doesn’t want this stuff going on in the public hospital system, could apply as an interested party. Not just to stop the unlawful industrial action, but to have a crack at the right of the union official, the union, to exist at all.”

Forsyth notes the risk to conservative parties of overreach in their eternal battle with organised labour. Work Choices, after all, cost Howard the 2007 election. And he thinks the current government appears to have learnt from that.

“The Howard government, through Work Choices, attacked not just unions, but the rights of individual workers – through individual agreements, through removing unfair-dismissal protections. And that’s why they lost, I think.

“In Australia, for over 100 years, we’ve had a social compact about fairness in the workplace. People might not like unions so much, but they are attached to [the] concept of individual worker rights, and to the notion of an independent umpire.

“The Coalition, still scarred by the [consequences of] that overreach, has not, until now, gone really hard on removing individual workers’ rights. They’ve attacked unions and tried to restrain union power,” he says.

And luckily, they have Setka and the CFMMEU to point to as abusers of that power.

“That’s what they want people to focus on,” says Forsyth.

He says the propensity for construction unions to act in defiance of the law “goes back a long way”. The response of previous governments – starting with the Howard government and continuing in “somewhat diluted form” under Labor – was to set up a specialist regime, under separate legislation with a separate regulator and higher penalties, to deal with it.

Forsyth believes the government’s proposed new laws to be in breach of International Labour Organisation principles on freedom of association. Nor does he think deregistering the CFMMEU would achieve much.

“But you have a union that just continues not to care about that and continues to act in defiance of whatever legal restrictions are imposed; well, I honestly don’t know how you deal with that, short of deregistering the union,” he says.

Interestingly, Forsyth believes the CFMMEU could potentially be deregistered under current law “because there are provisions for that where there has been a history of non-compliance.”

That would suggest John Setka is not the reason for the proposed legislation, but the excuse. 

This article was first published in the print edition of The Saturday Paper on Aug 3, 2019 as "Coalition bets anti-union bill on Setka rebuke". Subscribe here.

Mike Seccombe
is The Saturday Paper’s national correspondent.