Unions Start to Use Influence

While the industrial relation environment appears to be in a period of remarkable calm, real tensions lie under the surface.

These will inevitably surface in the next federal election.

The main source of tension is the decline in power and influence of the union movement.  The union movement now represents less than 18 per cent of the private sector work force.

To put this into perspective, there are now as many people employed under Australian Workplace Agreements (non-union, individual agreements) as employed under union agreements.  And individual contractors- that is people working outside the coverage of the industrial relation system -- are greater in number than union members.  These trends, under current policy settings, are set to grow, with union membership shrinking and individual contracts and contractors growing.

The union movement has used its power over state ALP governments to try to halt its decline.  In the WA for example it pressured the Gallop Government into enacting legislation to replace non-union individual agreements with union-based collective agreements as well as giving union's additional powers over non-unionised workplaces.  This was done despite the cost imposed on that state's vital mining sector, which had shifted almost entirely to individual agreements.

In South Australia the Rann Government has a draft bill that attempts to force contractors into the industrial relations system by redefining contractors as employees, thereby subjecting them to union influence.  Similar legislative changes have been tried in Victoria, NSW and Queensland.  These changes have been promoted by union;  contractors and businesses that employed contractors have resisted them.

The unions have now pressured the federal opposition into promising to re-unionise work places.  In its 2004 Platform the federal ALP committed to eliminating AWA's, thereby forcing over 455,000 workers in 7,600 businesses into unionised collective agreements -- including most WA mining firms that adopted AWAs when state-based individual agreements were phased-out.  The Platform also commits a future ALP Government to regulating contractors as employees;  thereby bring more than 1.6 million contactors under industrial relations system and union influence.

The Platform includes a raft of other pro-union changes including:  forcing employers of non-unionised workforces to bargain with unions;  giving union officials a legal right to access non-union business;  allow secondary boycotts;  applying unfair dismal legislation to small business;  giving preference in government contracts to unionised businesses;  and giving casual workers the right to convert their employment to regular part time.

At the same time, it is abundantly clear that existing industrial relations system, particularly enterprise agreements and collective agreements, are not providing the level of flexibility and innovation necessary to sustain competitiveness.  This is becoming more apparent with the higher exchange rate and rise of China.

As a result there is a need to not just to continue down the path of labour market deregulation but to accelerate the pace.  In short to do what Keating proposed in 1993.

These conflicting tensions -- the desire to save a declining union movement and to maintain labour market deregulation -- will define the IR debate and potentially the whether the ALP is fit to govern.

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