Union-busting policy shows signs of amnesia

Two decades ago, Eric Hobsbawm’s distinguished history of the 20th century, The Age of Extremes, lamented the “destruction of the past”. The rupture between contemporary experience and the labours of earlier generations was “one of the most characteristic and eerie phenomena” of the latter part of the century. “Most young men and women,” he ruefully concluded, “grow up in a sort of permanent present lacking any organic relation to the public past of the times they live in.”

Hobsbawm died in 2012 aged 95. As an undergraduate student and paid-up member of Generation X, I recall scoffing at the barely concealed contempt of the ageing Marxist historian. Put it down to my own ageing process, but his warning – one made before the rise of the internet, social media and mobile phones – looks more prophetic by the year. 

There can be no more dramatic example of this trend than contemporary attitudes towards organised labour. A nation that once boasted one of the most highly unionised populations on earth – 65 per cent of working Australians held a union ticket in 1948 – has been struck by a severe case of historical amnesia. According to this fable, high wages and decent working conditions are mere expressions of what former prime minister John Howard banally termed the “Australian way”, some sort of bipartisan gift from our political gods. 

But here’s the rub. The status quo for much of the 19th century was for wages to be non-negotiable. Penalty rates were off the agenda. Ditto sick pay, annual and long-service leave provisions, health and safety laws, workers’ compensation, unfair dismissal protection and superannuation. And the small matter of weekends. The idea that working men and women might have some say regarding their treatment at work by bargaining collectively was as fanciful as the proposition that they might send representatives into parliament to direct the affairs of the nation. Yet that is precisely what the arrival of mass unions heralded, to the chagrin of many.

Raising the cry of “freedom of contract”, some opponents tried to ignore unions. Debilitating strikes soon ended that strategy, eventually leading to the establishment of federal and state arbitration courts as a means of mediating industrial conflict. Recalcitrant employers and antagonistic governments were not so easily assuaged. During the 20th century they tried all manner of tactics, from establishing bogus unions to using the coercive power of the state. In 1929, the wealthy patrician and Nationalist prime minister Stanley Melbourne Bruce tried to do away with the edifice of federal arbitration. He lost government to a former union official and his own parliamentary seat.

History repeated three-quarters of a century on with John Howard’s ill-fated WorkChoices laws. Introduced in the afterglow of his 2004 election victory, this legislation reduced unfair dismissal laws to near uselessness, placed onerous restrictions on union organising, created the Fair Pay Commission with a conservative agenda, and enhanced the power of employers to impose individual contracts upon their workforce. 

Labor and the ACTU responded with a successful campaign known as “Your Rights at Work”. Howard belatedly introduced a so-called Fairness Test, before eventually dropping all reference to WorkChoices prior to the 2007 federal election. It failed to prevent Howard sharing the same fate as Bruce. WorkChoices, then-opposition leader Tony Abbott pronounced in mid-2010, was “dead, buried and cremated”. 

Since that election, union membership stabilised, but not enough to arrest a longer-term trend of decline, and the national amnesia has set in again, opening the doors to a resumption of attacks.

Which brings us to the Abbott government’s recently announced royal commission into the union movement, to be led by former High Court judge Dyson Heydon. During last year’s federal election, Abbott promised only a limited judicial inquiry into alleged cases of union corruption, with special reference to the so-called AWU affair.

Following reports by the ABC and Fairfax Media alleging criminal activity in the construction and building industry, Abbott broadened its scope. In February, announcing the terms of reference of
a fully fledged royal commission, estimated to cost $100 million, the prime minister predicted it would “shine a great big spotlight” on the nation’s “dark corners”. Oddly enough, the focus has fallen squarely on five Labor Party-affiliated unions.

It is difficult to avoid the impression that Abbott’s royal commission is a calculated political strategy. Instead of launching a full-frontal legislative assault, Abbott is seeking to weaken and morally discredit unionism. Armed with the predictable recommendations of a Productivity Commission report into Labor’s Fair Work laws, a renewed campaign will inexorably follow. 

Abbott’s approach is hardly unique. Conservatives have long regarded breaking the power of unions as an essential method towards weakening the ALP. Anti-union legislation has been one tactic; another strategy is politically motivated royal commissions. In 1980, Liberal prime minister Malcolm Fraser tasked Frank Costigan, QC, with inquiring into alleged criminal conduct within the Federated Ship Painters and Dockers Union. Violence and graft on the waterfront were unearthed – along with employer tax evasion courtesy of bottom-of-the-harbour schemes – but its raison d’être was anti-unionism. 

Abbott has form, too. In 2001, as a Howard government minister, he appointed Terence Cole, QC, to investigate the building and construction industry. According to then ACTU secretary Greg Combet, the royal commission spent $60 million and devoted 90 per cent of its time to union allegations. No criminal convictions were recorded and just one civil prosecution ensued – of a company offering strike pay. The main game appeared to be diverting attention from the government’s political problems and, as would become obvious, a means of girding the government’s loins for a bigger fight with the unions. 

The inconsistency of this latest royal commission scarcely requires comment. For example, the 2000s witnessed a number of corporate scandals and collapses, many of which occurred under the watch of Howard. Yet there were no calls for a royal commission inquiring into the conduct of Babcock &Brown, ABC Learning or Walton Construction. The latter company, which collapsed in 2013 owing $50 million to workers and other creditors, was a major funder of the Coalition.

See, too, the silence over the Howard government’s involvement in the conspiracy to smash the Maritime Union of Australia. In April 1998, Patrick stevedoring company sacked its entire unionised workforce, liquidated its assets in order to avoid having to pay redundancy entitlements, and imposed a nationwide lockout. It was later revealed that then workplace minister Peter Reith and the National Farmers Federation had helped to train former army commandos in Dubai as strike-breakers. Perhaps Heydon will investigate that “dark corner” of history. Or not.

It would take a brave supporter to predict that the unions or the ALP will emerge unscathed from the royal commission. And nor is it sensible to deny the existence of bad union apples – any movement representing two million Australians will inevitably contain a few – or to hold that there should be anything but a zero-tolerance attitude towards corruption. (ANU associate professor of history’s Frank Bongiorno has made the intriguing point that Abbott perhaps is doing the ALP’s “necessary dirty work”.) Rather, Australia needs to have a mature conversation about how unions can assist in these troubled times. Because they can.

A little honesty will be required. In their rush to defend the Rudd/Gillard government’s credentials, labour movement types like to ignore the elephant in the nation’s economy. The unemployment rate (whatever credence can be given to the definition of “employed” as having worked one hour during a given week) stands at nearly 6 per cent for the first time in a decade. Each week seems to bring new job losses and industry closures, particularly in manufacturing. Part-timers, casuals, outworkers and contractors make up an estimated 40 per cent of the workforce, which means millions are denied a range of non-wage benefits. There are now more workers over the age of 55 than those under 24. This is a political economy in crisis and one that did not begin on September 7. 

A nation worth looking towards here is Germany. Unions there are not demonised by conservatives but are crucial to its social market economy. A system of works councils and co-determination – whereby the workforce is represented on management boards – vocational regulation of entry into the labour market, and stress on regional banking and investment in long-run profitable businesses rather than short-term speculation, has made Germany’s economy dynamic and resilient and its society more egalitarian and democratic. Whereas Australian manufacturing lies in tatters, Germany, which actively supports its industries and pays good wages, is the world’s third-largest exporter. This is an economy built upon workers, unions, companies and government taking a long-term view of the common good, rather than chasing a quick buck or bashing unions for political gain. 

Instructively, Britain’s Labour Party, on track to win office at the 2015 general election, is making noises about emulating Germany. It is the kind of political economy that post-financial crisis Australia desperately needs to invest in: a highly skilled, well-paid workforce of people who actually make things. Instead, we have a government that proposes to generate work for lawyers. Now that’s something to ponder over the weekend.

This article was first published in the print edition of The Saturday Paper on Mar 29, 2014 as "Union-busting policy shows signs of amnesia".

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Nick Dyrenfurth is an adjunct research fellow at Monash University’s national centre for Australian studies, and has worked as a Labor adviser and speechwriter.