Labor Tries to Move the Goalposts

Last week, following an Australian Consumer and Competition Commission application, the Federal Court imposed $100,000 fines against three unions, the ETU, AWU and AMWU, for breaches of the secondary boycott provisions of the Trade Practices Act, after picketing at a gas plant construction site in 2002.

The pickets at the Patricia Baleen gas-processing plant in East Gippsland, Victoria, were imposed by the unions to try and stop the use of Australian workplace agreements (AWAs) and to force company-specific enterprise agreement negotiations onto unwilling firms.  The pickets and other activity defied Australian Industrial Relations Commission orders, stopped construction and cost the venture partners nearly $1.4 million.

The union action was another example of the use of industrial might during construction to gain industrial control of plant operations.  This is what the Japanese food giant Saizeriya was subjected to and which has caused them to withdraw $300 million plus of future investment in Australia.

What makes the Patricia Baleen case highly relevant is that it coincides with federal ALP proposals to remove secondary-boycott provisions from the TPA and to place them in industrial relations legislation.  If the ALP succeeds, the impact on economic activity would be profound.

In the Australian economy, the point at which industrial relations and competition law intersect and clash defines the extent to which free, competitive markets are allowed to operate.

In 1999, the National Competition Council reviewed the issue briefly and opted to maintain the status quo.  It accepted that industrial relations law legalised "collusion" between employers and employees but asserted that this was "socially beneficial" and was managed through the Workplace Relations Act.

But five years on, the Patricia Baleen case and the experiences of many firms show that the WRA is not effective, because orders under the act are routinely ignored.  Without the force of the TPA, competition would systemically be rorted.

This failure of the WRA, combined with the new federal ALP policy gives cause for an extensive debate revisiting the interface of competition and industrial relations law.

The current government touched on the issue with the Dawson Inquiry (TPA) and Cole Commission (construction industry) investigations, but neither dug deep into industrial relations versus competition concepts.  The current reviews by the ACCC to allow some small businesses to collectively negotiate with large monopoly suppliers come near the issue.

But what has never been confronted is the extent to which legalised collusion between employers and employees creates opportunity for masked collusion between employers and employers.  This arguably is a problem in the construction industry.  And frequent appeal by unions for employers to agree to level playing fields is really code for delivery of competition-limitation mechanisms.

As global pressure for ever-increasing business performance leaves no business untouched, how industrial relations and competition laws intersect becomes critical to domestic economic success.  Proposals to move the goal posts warrant robust public debate to ensure Australia gets any new balance right.

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