State of the Unions: Can Australia’s Existing Industrial Relations System Survive the

State of the Unions:

Can Australia’s Existing Industrial Relations System Survive the Shock of Coronavirus?

Nicholas Haughain

With unemployment expected to exceed 10%, and with Australia entering its first recession in over twenty five years, the coronavirus pandemic has challenged the existing confrontational nature of the Australian industrial relations system. Both unions and employers are forced to work together to save flailing businesses and protect jobs.

Under Section 51(xxxv) of the Constitution (the ‘conciliation and arbitration power’), the Commonwealth has the power to legislate for ‘the prevention and settlement of industrial disputes extending beyond the limits of any one state’. The Commonwealth Conciliation and Arbitration Act 1904 (Cth) aimed to further regulate industrial disputes by establishing a national compulsory arbitration system with wage fixing and industrial dispute resolution powers being granted to the Commonwealth Conciliation and Arbitration Court. Compulsory arbitration ensured that Australian workers were, on average, some of the best paid workers in the world whilst establishing commercial stability by preventing strikes.

The ‘Harvester’ case in 1907 established the world first’s living wage, with the High Court ruling that a wage must be sufficient for an unskilled male worker to support a wife and three children in ‘frugal comfort’. With broad support for compulsory arbitration and centralised wage fixing by federal and state industrial relations tribunals by both major political parties, the industrial relations system enshrined the role of unions at the centre of the Australian economy with union density reaching a peak of 51% in 1976.

Since the introduction of the Workplace Relations Act 1996 (Cth), industrial relations in Australia has arguably mutated into a partisan, confrontational blood sport. The introduction of Australian Workplace Agreements, a form of individual employment contracts (which allowed employers to override long established collective bargaining agreements), the prohibition of closed shop agreements, and the introduction of unparalleled restrictions on industrial action allowed many to be concerned with an irrevocable shift in bargaining power to employers at the expense of unions and workers.

The 1998 waterfront dispute in which the Patrick Corporation conducted an illegal lockout of Maritime Union of Australia members highlighted this new hyper confrontational environment in which sought to undermine unions. One might argue that trade unions such as the Construction Forestry Mining Maritime and Energy Union (‘CFMMEU’), have been forced to become more militant and industrially aggressive as a response to successive federal governments who have become increasingly ideologically opposed to unions. This is a far cry from the commitment to consensus based industrial relations and compulsory arbitration by more moderate Liberal governments led by powerhouses such as Robert Menzies and Malcolm Fraser.

The introduction of enterprise bargaining in 1994 by the Keating Labor Government aimed to increase labour productivity and reduce working days lost to industrial action, however, has objectively contributed to stagnant wage growth levels. Despite declining union density, Australia’s collective bargaining coverage rates have remained unchanged from 1996, at 60% of the total Australian workforce. Under the Fair Work Act 2009 (Cth), enterprise agreements must pass the ‘Better Off Overall Test’ (‘BOOT Test’) and be approved by the Fair Work Commission in order to come into effect.

However, recent moves by both employer groups and trade unions to ensure that businesses survive the ongoing economic crisis, and as many as possible employees remain employed; has increased industrial

“The old power dynamic of ‘workers versus bosses’ continues to weaken in an economy with ever growing numbers of selfemployed contractors and small business owners.

collaboration. The joint application by the union representing hospitality workers, the United Workers Union, the employer group, the Australian Hotels Association to vary both the Hospitality Industry (General) Award 2010 and the Restaurant Industry Award 2010 allowed for greater flexibility for employers. The changes allowed employers to direct employees to take personal leave with 24-hour notice, and direct permanent full-time employees to work an average of between 22.8 to 38 hours a week, paid on a pro rata basis. In light of the impact of coronavirus, the National Tertiary Education Union (‘NTEU’) is also currently in negotiations over establishing an agreement with all Australian universities to save university jobs and ensure the ongoing financial viability of the Australian higher education sector.

In an era of declining union density, stagnant wage growth and rising inequality; increasing the bargaining power of trade unions is key to ensuring that the Australian union movement regains some of its lost industrial power and relevance. The old power dynamic of ‘workers versus bosses’ continues to weaken in an economy with ever growing numbers of self-employed contractors and small business owners.

Increased collaboration between unions and employers and a more productive, robust industrial relations system can only occur if employers respect the legitimacy of employers and the key role they play in boosting productivity and reducing industrial strife. Employers must not engage in divisive, confrontational union busting behaviour or they risk provoking industrial warfare in Australian workplaces. On the other hand, unions need to understand that the most effective and largest unions in Australia such as the moderate Shop, Distributive and Allied Employees Association (‘SDA’), and the Australian Nursing and Midwives Federation (‘ANMF’), primarily rely on a collaborative and consensus based approach to industrial relations to ensure that workplace disputes are efficiently resolved, and that their members enjoy some of the best pay and conditions in the world for their respective industries.

Only an industrial relations system based on genuine consensus with an unpolitical national workplace relations tribunal will provide stability for employers and the overall Australian economy, whilst ensuring that Australian workers continue to enjoy some of the highest pay and conditions in the world.