ACTU Research Officer, Tim Harcourt outlines what trade unions do in Australia the role the peak coucil, the ACTU plays and talks about issues regarding the ACTU’s economic and social policy.
Thank you for the invitation to speak today and apologies from Alan Matheson, the ACTU’s highly respected International Officer, who is currently overseas (as International Officers naturally are – for some of the time, anyway!).
I am happy to talk to International students for two reasons. First, whilst an economics student myself at Adelaide University I had the pleasure of studying with a number of fellow students from Singapore, Malaysia, Indonesia and Fiji. I also resided with many from Singapore and Malaysia at our residential college, Lincoln, which is affiliated to the University.
For some reason, Lee Kuan Yew sent 18 highly gifted Singaporeans to Adelaide to do economics, when most of them had requested to do Mathematics and Engineering at Oxford. Oxford’s loss was Adelaide’s gain – and this especially benefited my studies. They helped me with Mathematical Economics and Econometrics, while I, as a quid pro quo, helped them with Economic History, Australian Politics and Industrial Relations.
It was what economists call a pareto-optimal outcome, or what Industrial Relations people call a “win win” outcome. Anyway, I made many friends as a result of those interactions and have been lucky enough to visit my friends in South East Asia at regular intervals ever since.
My second reason is that I myself was an international student when I did a Masters at the University of Minnesota in the USA. That University had one of the largest student bodies in the USA and an extensive program for international students at graduate and undergraduate levels. The Americans (or rather Minnesotans) were extremely hospitable to me as a foreign student, so I think it is important that we in Australia do the same. I am glad therefore that VUT is running such a program.
I have titled this talk: “Everything You Wanted to Know About the ACTU But Were Afraid to Ask”.
You would gather that trade unions are very different around the world and vary from country to country.
By way of background I want to outline what trade unions do in Australia and in particular what role the national peak council, the ACTU plays.
I also want to talk about some specific issues in regard to the ACTU’s economic and social policy.
The ACTU represents 3.4 million workers in Australia. Nearly all major trade unions are affiliated to the ACTU. There used to be something like 325 unions in Australia, but through a series of strategic amalgamations we are aiming at having 20 major unions plus some smaller specialist unions. Unions have been around in Australia since the late nineteenth century. The first unions were mainly rurally based (such as the shearers) and craft based (such as the carpenters, bootmakers etc.). Changes in unions have reflected changes in the labour force. Whilst those early unions were craft or agriculturally based, they were later joined by industrial based unions (metal workers, textile, clothing and footwear unions etc.). In addition, Australia has since developed clerical, education and service based unions.
The first unions were affiliated to State trades and labour councils in the major cities. The Victorian Trades Hall is the local body – the building that you might have seen on Lygon Street in Carlton is one of the oldest in the State. The State labour councils were influential in forming the Australian Labor Party (ALP) in the 1890′. It was not until 1927 that a national trade union body was formed the Australian Council of Trade Unions (ACTU) with the State labour councils remaining as the State branches of the ACTU.
The ACTU has always been based in Melbourne. There is historical argument over why this is so. The official reason is because Melbourne was the industrial capital of Australia at the time. Most of the major companies were based here (specifically manufacturing ones) as were the employers bodies and the Conciliation and Arbitration court (the predecessor of the Industrial Relations Commission). The ‘unofficial’ view is that the N.S.W based union officials preferred to have the national ACTU down in Melbourne so as to maintain some independence in Sydney. In fact, in the 1940’s there was a vote taken to ‘move’ the ACTU to Sydney but it was never carried through with during the war. (Who knows – there might be another ‘push’ to put the ACTU in Sydney – perhaps around the year 2000 in time for the Olympics?)
The ACTU is the decision making forum for the unions. There is a Congress every two years (alternating between Sydney and Melbourne) and the ACTU Council, and Executive which meets four times a year. The ACTU operation itself consists of only 50 or so staff who assist unions in their industrial work, make submissions for wages and conditions in the Industrial Relations Commission, provide a union view point on international and domestic economic, social and political issues, and provide research work and other functions in finance, childcare, legal services, occupational health and safety etc. The ACTU has also provided some public figures whom may be well known to you, former Prime Minister Bob Hawke, was research officer (1958-69) and President (1969-1980), current Keating Government Ministers, Ralph Willis (Treasurer) and Simon Crean (Employment, Education and Training) were Research Officers and President respectively, and several Industrial Relations Commission Deputy Presidents worked at the ACTU. Jan Marsh, for example, was ACTU Advocate for 18 years.
The ACTU internationally is affiliated to the International Confederation of Free Trade Unions (ICFTU) and its regional body ICFTU-APRO, the South Pacific Oceanic Council of Trade Unions (SPOCTU) and the Commonwealth Trade Union Council (CTUC).
The ACTU has always belonged to international bodies that encompass the principle of free independent democratically elected trade unions. We have avoided links with unions or union peak bodies that have been government or military dominated (be they regimes of the Right or Left). We have also strongly supported the tripartite approach of the International Labour Organisation (ILO).
Whilst trade unions remain independent of Government, this is not to say that we can’t work with Government. In fact in recent times it has been quite the contrary.
The prices and incomes ‘Accord’ between the trade union movement and the Federal Labor Government is a great example of the unions and the national Government working together.
To illustrate this, I would like to briefly discuss ‘the Accord’.
II. The Accord
During the last recession in 1982-83, the ACTU signed an agreement with the Federal Labor Party. It was an agreement on economic and social policy that would be delivered if Labor won the 1983 election. Labor defeated Fraser and ‘the Accord’ became the centrepiece of the Hawke Government’s economic strategy.
To understand why the Accord was signed it is necessary to look at what Australia was like 12 years ago.
Australia in 1982, was like many other nations in the world experiencing high levels of unemployment and high levels of inflation.
The Unemployment rate was rising beyond 10%, accompanied by an inflation rate of 11.5%. ‘Stagflation’ had hit most industrialised countries and ‘monetarism’ was gaining ascendancy over the economic policies of the 50’s and 60’s.
The Australian manufacturing industry was in decline, wages were increasing by 14%, the conservative Government was seeking to impose a wage freeze.
Industrial disputation had increased significantly. Over 6 1/4 million working days were lost in the two year period 1981/1982.
With the exception of a brief period of ALP Government between 1972 to 1975 the preceding 30 years were periods of conservative Government. (What we call ‘Liberal’).
Whilst the nation had made progress over the period it was not without costs, distractions and inequities.
The industrial environment was politicised. The anti-union strategy of the Government of the day was the basis for shifting blame from Government to unions.
Whilst Australia was a multi-cultural nation with rapid migration it was still a nation that looked inward and often back to its past.
A generation of conservative governments had left Australia with
- Superannuation – less than 40% of employees had any entitlement;
- Old Age Pensions – inflation had eroded the (already low) real value of social security pensions and benefits to less than one quarter of male Average Weekly Earnings;
- No job security – managerial discretion to terminate employees was virtually unfettered
- Education – the retention rate to final year of secondary school was one in three; very few people participated in post-secondary school education;
- Health – after some erratic policy changes the health system was in a mess. Some 2 million Australians had little access to affordable, quality health care;
- Wages – there had been some erratic changes in wage policy by the Federal Liberal Government, resulting in widespread industrial unrest.
The Accord was developed between the ALP Opposition and the ACTU in response to the Federal Liberal Governments divisive economic and industrial strategy. It was formed to show that a Labor Government and the unions could work together to solve our economic problems in contrast to the Fraser who was then constantly in conflict with the unions.
However, the Accord was not just a response to the Liberals, it was also a response to the failure of the Labor Government of 1972-75 led by Gough Whitlam. The Whitlam Government, did not have an ideal relationship with the ACTU (at this time led by Bob Hawke). As a result, when Labor lost office and returned to Opposition. Both the ALP and the unions saw the 1972-75 period as a lost opportunity and admitted that both had a lot to learn about governing the country. A number of prominent union leaders also recognised the internal weaknesses and mistakes of the union movement itself. When Labor won under Bob Hawke, in 1983, they got a second chance and the Accord was born.
The Accord was originally a small document on principles of economic and social policy. It has since been a term used to describe the relationship between the Federal Labor Government and the trade unions.
The Unions believed that the Accord could produce:
- recovery from recession
- improved living standards over time
- a fairer, more equitable society
The objectives of the Accord were:
- to reduce unemployment and inflation simultaneously
- to provide a consensus based policy approach
- to integrate economic and social policy.
The important thing in the Accord was the jobs were put first and that wage claims were made only as the economy recovered. It was a strategy that would tackle unemployment without causing wage inflation.
The unions provided wage restraint to ensure the economy returned to high levels of employment. The unions also promised to reduce industrial disputation. In return, the Government implemented the ‘social wage’ to assist workers and their families. This included provision of Medicare, Education, Social Security and Taxation Reform. The Accord was geared to reducing unemployment.
The Accord has been re-negotiated a number of times since 1983. They have since been referred to as ‘Accord Mark 1, Mark 2 etc. (a term that came from a Financial Review Journalist). The stages were in brief:
The Stages of the Accord [see Attachment 2)
Accord 1: Election of Labor Government sees implementation of the Prices and Incomes Accord. Wage restraint until profits recovered, jobs first, wage indexation restored. Medicare.
Accord 2: From mid 1985 it is clear that a severe Terms of Trade decline has slashed Australia’s national income. Accord is re-negotiated to discount wage increases for the price impact of currency depreciation, compensated by income tax cuts.
Accord 3: June 1986 – wage adjustment is discounted as agreed and superannuation up to 3% of wages is introduced.
Accord 4: March 1987 – continuing national economic difficulties required complete revision of Accord with respect to wages system. Two-tier wages system introduced: first tier to protect weaker groups against continuing inflation, second tier to promote productivity and efficiency. Union movement explicitly embraces the cause of national wealth creation, in addition to traditional concern regarding equitable distribution.
Accord 5: February-May, 1989 – Award restructuring introduced as thorough overhaul of Australian system of industrial awards. Restructuring of the regulatory infrastructure. Career paths, training, equity, efficiency are key goals.
Accord 6: March 1990 – April 1991 – Enterprise Bargaining agreed – logical next step in award restructuring, to implement facilitative (enabling) provisions of restructured awards at workplace level.
Accord 7: February – March, 1993 – “Putting Jobs First” – commitment to continue enterprise bargaining plus “safety-net” wage adjustments for weaker and lower paid. Commitment to low inflation and continuing workplace reform.
It must be emphasised that the Accord has always been concerned with employment.
In the 1980’s, the Accord delivered on employment.
From 1983 to 1989, unemployment fell from 10.2% to 5.9% and 1.6m jobs were created. Australia had the highest employment growth rate in the OECD. However there was also an increase in the Labour Force Participation Rate with more people looking for work than ever before. There was also a noticeable increase in female employment and in part time work during that time. This means that in recovering from the 1991-92 recession we have to find jobs for people who lost theirs in the recession, those new people who joined the labour force and those who are entering the labour force in the 1990’s.
In the 1990’s we have a bigger job to do. Accord Mark VII, signed before the 1993 election specifically links wage rises with the creation of 500,000 jobs by 1996.
To date, there have been 230,000 additional jobs created since February 1993 so we are on target to surpass the minimum jobs specified in the agreement.
The Government’s White Paper, Working Nation, will assist the employment enhancing efforts of the economic recovery.
On industrial disputes, the Accord delivered a 60% reduction in stoppages. There is a considerable amount of industrial harmony compared to the 1970’s and early 1980’s. The unions made a major contribution to bringing industrial peace to Australian industry.
III. The Social Wage
The Australian union movement, unlike its counterparts overseas, believes that unions have a place in negotiating on social issues on behalf of workers. This has been the case in terms of issue such as health care and safety issues in the past or child care, family leave, and traineeships in more recent times. The social wage is an inherent part of the Accord.
At each stage of the Accord there has been a priority given to social wages:
– Employment : Putting Employment First, has been the key priority of the Accord throughout its tenure.
– Medicare: A universal health care system.
– Superannuation: For all workers, not just executives.
– Child Care: Especially given increased female participation in the labour market in the 1980’s.
– Job Protection and Security: Termination Change and Redundancy (TCR).
– Taxation reform More equity, FBT, means tests, direct income tax results.
– Occupational Health and Safety
In addition the unions have been concerned with social security and have been at the forefront of negotiations regarding pensions. Ensuring that provision of social security is equitable and goes to the genuinely needy.
The unions have regarded these issues as part of the labour market reform process providing:
- The basic safety nets to ensure that part of the growth of society is distributed to those in need.
- The processes of accelerating change are backed up by economic and social projections.
- Redundancy pay, superannuation, pensions and unemployment benefits and latterly labour market programs and a by part of the process.
- The provision of fair and equitable health and education systems whilst integral to the labour market are essentially public goods that individual employers can not be relied upon to deliver in full as society needs.
- The recognition of occupational health as a fundamental prerequisite of a safe and productive working environment.
The search for a society whose constituent groups do not wage war on one another and the amelioration of the pressure of class conflict motivated both the Government and Unions to negotiate a safety net of basic societal projections and opportunities. The Union movement wants to avoid the development of an ‘underclass’ that has occurred in other industrialised countries.
The union movement has also been heavily involved in the education and training agenda in Australia. This is to ensure social justice in educational opportunities as well as ensuring that Australia develops a highly skilled, sophisticated workforce that brings productivity benefits to employers and the Australian economy.
In the education reform program:
The ACTU is working with Government and employers to establish:
- Competency based training, from basic literacy and numeracy and interpersonal skills right through the conceptual, analytical and specialist ranges.
- The establishment of the Australian Vocational Certificate.
- Career opportunities and work organisation.
- The removal of gender inequities.
- Improving support for Industry Training Advisory Boards.
- The development of a variety of pathways to achieve qualifications.
- Increased credit transfer arrangements.
- Increased resources for achieving the national reform agenda.
IV. Enterprise Bargaining And Industrial Relations Reform
You may have noticed that industrial relations reform has been in the news lately as a result of the Industrial Relations Reform Act which came into force on March 30. Surprisingly there have been few previous attempts at reform, since the first bill, the Conciliation and Arbitration Act was passed in 1904 soon after federation.
The new industrial relations package we believe will assist recovery and employment generation.
There has been in recent years a move towards ‘enterprise’ or ‘workplace’ bargaining. The new legislation facilitates this change. Whilst in the past wage rises were mainly received via National wage ‘indexation’ cases, it is becoming more prevalent now to do more wage bargaining at the workplace level. However, it is still a dual system which the legislation recognises.
As negotiated in Accord Mark VII, the system of enterprise bargaining is under pinned by the award system. Awards are a set of minimum wages and conditions that are legally binding on employers and workers both unionised and not. The Award system provides a ‘safety net’ to protect Australian workers who are not in strong bargaining positions.
The most recent rise of $8.00, (the first national pay rise in over 2 years ) next to the lowest paid workers, those who do not have access to enterprise bargaining or ‘over awards’ (i.e. are paid wages above the award minima).
There is presently a new safety net since being negotiated with the Government (as well as spreading further the $8.00). The safety net increases are based to job creation.
Provided workers are covered by an award safety net, then a more secure basis if provided for enterprise bargaining. Enterprise bargaining means workers and their employers work out an agreement themselves for mutual benefit. The workers may ask for a pay rise or an improvement in benefits whilst employers may ask for a change in work operation to improve the functioning of the enterprise or workplace. There are a number of different agreements around and they vary considerably depending on the type of industry, number of workers etc. some industries prefer a national (multi-employer) framework as a guide to enterprise bargaining as a whole, and they fine tune the agreement at the enterprise level. Other industries do it all at a company by company level.
The main aim of enterprise bargaining is to provide consultative solutions to improve efficiency and productivity of the company whilst improving the quality of work life. This is especially important given the internationally competitive environment that Australia operates in today. Past experience shows that good work environments are a key function in competitiveness, and that cost cutting, negative approaches (such as knocking off tea breaks, cutting back conditions etc.) have the opposite effect.
The legislation will assist enterprise bargaining and will also ensure that a ‘no-disadvantage test’ is passed to protect employers and that genuine consent is given.
The legislation is important in its strengthening of the award system. This is the major difference between the Federal system, and the one that operates in Victoria.
In the Federal system, if you cannot agree with your employer on a workplace agreement you still have the award as a safety net. In Victoria, all awards were frozen on 1 March 1993, and new employees have no award.
In the Federal system you are protected, in Victoria there is no award and no arbitration. If you don’t agree, your only option is to find a new boss elsewhere. At a time of high unemployment an individual employee has not much choice – she or he has to cop it or join the dole queue.
Under the federal legislation, all Australians will be protected by the safety net regardless of the State or Territory they live in. Award rights are guaranteed, covering:-
- minimum award wages
- equal pay for work of equal value by men and women
- protection against unfair dismissal including the request for an employer to offer a valid reason for dismissal, severance pay and appeal to an impartial tribunal against unfair dismissal
- unpaid parental leave.
Equal pay is extremely important. The ACTU fought and won the equal pay case for women in 1972. It is also important that workplaces assist career development for women as well as men. The trade union movement is also ensuring that equal opportunity exists with the trade unions. We have an affirmative action policy that will require 50% of women on ACTU Council by the Year 2000. There are currently 16 on Council which compares to 10 years ago when current Assistant Secretary Jennie George was the first (and only) woman on the ACTU Executive.
Equal pay, anti-discrimination measures, family leave, support for workers with family responsibilities, affirmative action are an important part of the union movement’s aim of improving the opportunities for women in the Australian workforce. This is especially important as enterprise bargaining becomes more developed.
V. Future Strategies – Australia And The Region
Finally, I wanted to talk about the future. Despite the Accord and our involvement with national economic and social policy making, there are some problems that unions face as institutions in their own right.
No-one can deny the trends against unionisation internationally and in Australia that have taken place in the last 15-20 years. Australian union density (the proportion of the workforce who belong to unions) has fallen despite the labour force and population growth of the last decade.
We have been getting new members, but not at the rate at which people have been joining the workforce. We have not recruited well in certain sectors (eg services), and certain workers (eg. part timers, casuals, young people etc.)
Restructuring the union movement will help. Having 325 unions in Australia made it difficult for unions to resource, recruit and service their members. We now have 20 unions covering 98% of the workforce. There are now vast resources for organisation and recruitment available to the larger amalgamated unions. We have put a renewed emphasis on recruitment this year, the ACTU set up ‘Organising Works’ hiring 50 young people in Sydney and Melbourne to train as union recruits. Recruitment and organising will be a big issue for Australian unions in the 1990s and beyond.
It is also important that unions continue to be democratic, accountable, and representative as the workforce and the workplace undergoes change.
Unions are agents of change (not resisters to change) and agents of democracy. Unions are agents of democracy in the historical sense. Workers who were disregarded at the workplace, their position ignored formed unions as their industrial representatives (and later found the ALP as their parliamentary representatives).
In this sense unions need to be always thinking of democratisation – involving union delegates, shopfloor, committees, providing training, and being prepared to give disadvantaged groups assistance to achieve equality of opportunity.
There is also the question of services – what do unions do?
Recruiting and servicing union members is union business – our market is our members, our clients are our members. Unions can offer a substantial number of services for workers. These include:
(1) Maintain and improve wage rates
(2) Improve conditions of employment
(3) Better health and safety at work
(4) Job security
(5) Workers Compensation
(7) Protection from discrimination and harassment
(8) Home Loans – Competitive Rates
(9) Financial Services
(10) Access to training, better work organisation/careers and equal employment opportunities
(11) Job Placement, Traineeships
(12) Non-financial services
(13) Child Care and family friendly policies – company/region
(14) Access to Government – lobby with Government on their behalf.
Our services will be adapted to the changing needs and aspirations of the workforce.
The role of the unions in the Asia Pacific region too is undergoing great change.
As a result, the Australian union movement is changing its focus, to concentrate more on the region just as our Government and business community has been.
This topic is clearly another speech altogether but I will mention the importance of training in the region (the Australian unions provide training to SE Asian, and Pacific Island officials) and occupational health and safety (OH&S).
Australia’s reputation in OH&S is a good one that even drew praise from the Indonesian Ambassador recently.
Australian unions can do a lot of practical things to assist the workers of our near neighbours. It is a major challenge of Australia’s current generation of union officials. We need to be less European focussed and more Asia-Pacific orientated.
Indeed, I hope gathering like this one today assist in understanding Australian unions and our policies throughout the region.
In closing, thank you for your invitation. I hope I have made Australian industrial relations and the ACTU less mysterious to you. but no doubt there will be many questions that will arise and I am happy to answer a few in the remaining time.
Tim Harcourt, Research Officer, ACTU. Speech to International Students, Victorian University of Technology (VUT), 10.00am, Thursday 2 June 1994.