The value of education, the need for collective labour law, responding to the deregulators & the Workplace Relations Act. Speech by Ronald C McCallum, Blake Dawson Waldron Professor in Industrial Law, University of Sydney to the Third Whitlam Lecture.

1. Introduction

President Jennie George, Secretary Bill Kelty, members of the ACTU Executive, distinguished guests, ladies and gentlemen. It gives me enormous pleasure to deliver the third Whitlam lecture under the auspices of the Trade Union Education Foundation. It is indeed rare for a disabled person to be given this sort of stage, and I dedicate this lecture to my intellectually and physically disabled sisters and brothers, many of whom are amongst the most marginalised persons in our society.

1.1 The Value of Education

Mr E G Whitlam was one of the most outstanding Prime Ministers whom this country has produced, for he was able – by sheer strength of will – to re-group and to lead the ALP back into government after twenty-three years in opposition. Throughout his entire life, he has been a strong believer in the force of education to improve, to strengthen and to nourish the community. It is fitting that this lecture series which is designed to educate Australian working women and men is named after him. I am privileged to be a patron of the Trade Union Education Foundation, for it is my believe that lasting progress can be made only through education. Bad laws thrive in a democracy only when the voting public are either ignorant or have been fed with misinformation. Education destroys ignorance and teaches people to ferret out the truth.

1.2 Seven Years

Just seven years ago in May 1990, approximately 80% of Australia’s workers were covered by awards and agreements promulgated and/or vetted by federal and State industrial relations tribunals[2] As a means of settling the industrial disputes which came before them, the tribunals handed down awards which established for all practical purposes, minimum codes of wage rates and employment standards for most Australian employees. Federal and State tribunal test cases ensured that advances in terms and conditions of employment like parental leave 3 and family leaves, 4 were evenly spread across the nation. These test case decisions bestowed social as well as economic benefits upon the Australian people. Awards and agreements were policed by registered trade unions which, in the main, had monopoly rights before Australia’s network of industrial relations tribunals. In other words, they possessed the exclusive right to make agreements and/or to obtain awards for the occupational or industrial classifications over which they had coverage. Within the space of seven turnings of the seasons, much of this machinery has been swept away. Even before the Howard Government took office in 1996, awards had been relegated to being safety nets, and enterprise bargaining had become the pre-eminent method of determining wage rates. No longer do trade unions possess monopoly rights to seek awards and agreements. In the six Australian industrial relations mechanisms which currently operate,[5] non-union bargaining, even by individual employees and employers, is a reality.[6]

Seven years ago, 46% of the Australian workforce were financial members of trade unions.[7] Since then, however, trade union membership has plummeted. In June 1996 – the latest year for which figures are available – only 35% of employees belong to trade unions[8]. It does appear, however, that these figures may slightly over estimate membership[9] and in reality trade unionists may comprise no more than 32% of employees. In the private sector, it seems that only one in four workers is a unionist. There are several reasons why fewer and fewer Australian employees belong to trade unions. First, the pressures of economic globalisation[10] on Australia have hastened industry restructuring whereby many blue collar manufacturing jobs have disappeared. These workers were amongst the most highly unionised in the country. Secondly, the increased use of casual employees and independent contractor labour – many of whom are women – has altered the composition of the workforce. These “atypical” workers have not been flocking to join trade unions. Thirdly, trade unions – together with other traditional groupings like the Christian churches – are suffering from alienation. Many employees, rightly or wrongly, believe that trade unions cannot offer them anything and that there is no place for them within their bureaucratic structures. Above and beyond these three factors, however, it is clear in my judgment that the fall in trade union membership is also due to the down-grading of Australian conciliation and arbitration and to the enactment of voluntary trade union laws which now cover the entire nation.[11]

Given the changes which have taken place over the last seven years, what will the picture be like if we go forward seven years to 2004, or even a further seven years to 2011? At the beginning of the second decade of the 21st Century, will our mechanisms of compulsory conciliation and arbitration be historical relics of the past. Will they be likened to the rather quaint divorce laws which operated in this country before the enactment of the Family Law Act[12] in 1975.

In March 1983, the Australian Labor Party was elected to federal office and remained in power for the next thirteen years. At the beginning of its long term in Government, I did not foresee that within fourteen years I would witness the demise of Australasian Conciliation and Arbitration.[13] Similarly, when I was in Berlin in October 1982, I did not imagine that in seven years time the Berlin wall would come tumbling down and that this would herald the beginning of the end of Soviet and East European communism.

1.3 The Need for a New Collective Labour Law

The future of collective labour law in Australia is not bright. If the decollectivisation of labour law continues at its current pace, it will diminish in importance by the early years of the next decade. In other words, collective labour law is in crisis mode. The purpose of this lecture is to provoke thought on possible ways of constructing a new type of collective labour law which is especially designed for Australia. In what follows I will not pull any punches: The remedying of this crisis requires the taking of strong medicine, especially by those of us who have grown up with compulsory conciliation and arbitration and who have lived through the onslaughts of the last seven years.

It is my contention that the maintenance and the possible growth of collective labour law cannot be achieved through clinging to the past with the hope of an eventual revival of compulsory conciliation and arbitration as it was in 1990. Nor can the Australian labor movement rely solely upon international law and international labour conventions as a panacea which will lead to the resurrection of collective labour law. What is required, however, is a new vision of collective labour law which is designed for Australia in the early 21st Century. This new vision must not merely sustain us during this time of crisis, but it must be one which we can sell to the electorate and enact into law when the Australian Labor Party next forms a federal Government.

1.4 A Road Map of This Lecture

It will assist in your comprehension of this lecture if I set out a road map of this journey. I shall begin in section 2 by describing my new vision of collective labour law which is based upon the needs and aspirations of modem workers. In the next section (section 3), I shall contrast my vision of a new collective labour law with some of the backward looking arguments which we used to oppose the labour deregulation in the 1990s. In my judgment, it is precisely because these arguments did not contain a vision that they failed to gain acceptance by the people. The Workplace Relations Act[14] has continued the decollectivisation of federal labour law, and in section 4, I shall describe the manner in which it lessens collectivism and I shall argue that it represents only the beginning of the free market onslaught. In the final section (section 5), I shall contrast the current laws with my vision of collective labour law and shall argue that when this new form of collectivism is placed within the conceptual paradigm of citizenship, it will deliver fairer and more just outcomes to Australians than will any free market driven model.

2. My Vision Of Collective Labour Law

2.1 The Purpose of Labour Laze

If the labour market was capable of delivering fair and just outcomes to workers, there would be little need for labour law. However, as Henry Bournes Higgins explained ninety years ago when delivering judgment in the Harvester Case,[15] terms and conditions of employment cannot be left to the ” … unequal, contest, the ‘higgling of the market’ for labour, with the pressure for bread on the one side, and the pressure for profits on the other.”[16] Professor Otto Kahn-Freund stated the purpose of labour law eloquently in the first of his Hamlyn lectures which was delivered a quarter of a century ago. He said: “The main object of labour law has always been, and I venture to say will always be, to be a countervailing force to counteract the inequality of bargaining power which is inherent and must be inherent in the employment relationship.” [17] While it is unfashionable in some circles to adhere to this viewpoint, the truth is that most employees possess far less bargaining power than do their employers. Of course, a minority of employees do possess an equality – or near-equality – of bargaining power with their employers with respect to wage rates etc. However, within the labour relations realm of the late 20th century, inequality must be examined in a broader context. Even where employees possess significant bargaining power, they will still remain at the mercy of the bureaucratic powers inherent in the structure of modem enterprises, be they public or private.[18] A modem labour law system must protect employees from the arbitrary and unjust wielding of power. The protection of workers, however, must not beat the expense of the young, the aged, the unemployed and those not engaged in the labour force. In other words, a modern labour law framework cannot be constructed in isolation, for cognisance must be taken of economic growth, the size of national debt, the social security laws and the levels of direct and indirect taxation.

Given all of the above, however, when establishing any legal regime, it is essential to articulate the needs of the stakeholders who will utilise the system. In regard to collective labour law, the primary stakeholders are employees and it is essential to examine what they desire the law to do for them in this field. It is trite to state that workers require fair terms and conditions of employment which give them adequate wages to sustain themselves and their families. However, I wish to focus upon less publicised needs. All employees have the right to be secure in body and mind whilst at work. Workers require freedom from physical, genetic and mental injuries. This not only includes hazards like chemicals, but sexual[19] and other forms of harassment and bullying which occur in the modem enterprise. Employees also have the right to seek redress against arbitrary power, whether on an individual or systemic basis. This covers unfair dismissals and demotions, as well as other forms of discriminatory and arbitrary conduct.[20]

Women, young persons, aborigines and persons of non-English speaking background also require special protection. With regard to women, equity in the workforce is paramount. No labour law system worthy of the name can content itself with giving women merely equal pay for work of equal value. Full pay equity is not just an ‘add-on’, but it is a necessary ingredient of a fair and just nation.[21]

An increasing number of employees do not come within the protective envelope of traditional labour regulation, either because they are independent contractors or because they are not full-time employees.[22] Over the past ten years, the number of independent contractor workers has increased,[23] while the growth in the use of casual labour has been overwhelming. At present, one in four workers is a casual employee and most of these are women. This growing army of persons are crying out for both recognition and protection.

Lastly, employees wish to be treated as adults at work. At the very least, they have the right to be consulted on the operations of the enterprise. These operations include health and safety, rostering, the introduction of new technology and redundancies. A modem labour law mechanism must facilitate this form of workplace consultation.

2.2 Labour Law and Collectivity

Those advocating labour deregulation regard the agreements reached between an employer and an individual employee as being private in nature. In their view, unless there is law breaking, government agencies, other persons and especially trade unions have no business in scrutinising these private arrangements.[24] On the contrary, the act of working is a communal and a social act for it involves the interaction of persons within the public domain. The undertaking of paid work is the major public activity engaged in by most adults.

In seeking to argue for the private nature of work within the realm of the individual agreement, the deregulators focus upon wage rates. They assert that the level of wages agreed upon between an employer and an employee, should be as secret as is the price of a car when one individual sells it to another. Even if a case can be made out for wages simpliciter (and I am by no means convinced), most of the modem needs of employees, I contend, cannot be placed within the private sphere of individual agreement-making. Issues of health and safety, of pay equity, of discrimination and other matters like technological changes and redundancy cannot be handled on an individual basis. They belong within the public domain and require co-operative and collective solutions. In this area, we have much to learn from modern labour law practices in Germany and Japan.[2]5

Workplace consultation in German enterprises is achieved through the establishment of elected works councils which have been operative in German labour law since 1920. The employees in an enterprise elect fellow employees to the works council, whose function it is to deal with issues in the undertaking through consultation and discussion.[26] Although Japanese labour law does not provide for separate works councils, Japanese enterprises consult with their employees and with the enterprise union on a regular basis.[27] Japanese undertakings share information with their workers and operate on a co-operative basis.” As Ed Davis and Russell Lansbury have shown,[28] significant Australian employers with cutting-edge labour relations approaches, have also adopted consultative and collective mechanisms as a way of increasing productivity by caring for long-term and highly skilled employees.

Up until 1990, two features of Australia’s compulsory conciliation and arbitration mechanisms structured the nature and width of consultation. In the first place, award making and agreement vetting focused upon a narrow range of labour relations issues like wages, hours, leave and staffing levels etc. In other words, labour law was conceived of as relating only to the arbitral process and the contract of employment. Discrimination on the grounds of sex or race, harassment and health and safety were not generally regarded as matters coming within this framework. In the second place, the only collective voice for employees was via registered trade unions who possessed monopoly rights before industrial tribunals with respect to award and agreement-making. These two features have, for all intents and purposes, disappeared. For employees, issues of discrimination and of safety are as significant as wage rates and staffing levels. Approximately three quarters of the private sector workforce are not unionists, and the trade union monopoly to obtain awards and process agreements is at an end.

2.3 Re Building Collectivity

In order to translate my vision of modern labour law into reality, it is necessary to re-build collectivity. There is much remaining in Australian labour law on which to build. There is still a flourishing network of industrial relations tribunals and the trade unions are a significant force. It is possible to give the necessary legislative powers to the Australian Industrial Relations Commission (the “Commission”) and to State tribunals to redress systemic discrimination and to make pay equity a reality. The tribunals can act as facilitators in ensuring workplace consultations take place over technological changes and redundancies.

In unionised industries and enterprises, the trade unions can play their part in both consultation and in representing their members before the tribunals. However, and this is of crucial importance, the trade unions must recognise that in order to re-build and enhance collectivity, they must share worker representation with other bodies. In the foreseeable future, trade union membership will not rise to its past levels of 50% of the workforce. The movement must become open to other forms of employee representation. In other words, it must adopt a pluralist approach to collective industrial relations.

In my view, the best method of ensuring collective employee and employer consultations is to mandate by legislation the establishment of works councils in enterprises over a certain size. The membership of these works councils would be elected by all employees in the undertaking. Initially, enterprises with at least fifty employees could be required to establish these councils, for the federal Government could use its corporations power[29] to establish these consultative bodies.[30] This is not a new thing for Australia. Most of the State Occupational Health and Safety statutes require the establishment of safety and health committees within enterprises. [31] In unionised workplaces the members of these health and safety committees are usually trade unionists. Similarly, if consultative committees were established for Australian corporate enterprises, in unionised undertakings the elected members would be trade unionists. Where the trade unions had little representation in an enterprise, naturally enough, the persons elected to the works council would not be trade union members. Obviously, much preparatory work is required to spell out the functions and the limitations of elected works councils. It is essential to ensure that the composition of these bodies fully represents the diversity – gender, race, age etc – in Australian workplaces. It is also clear that the members of elected works councils require adequate training and back-up to carry out the tasks which would be imposed on these bodies by statute. In my view, however, if the law does not mandate elected works councils, the coverage and importance of collective labour law will shrink. I venture to think that it is no longer possible for the trade unions to remain the sole repository of collective employee representation in our nation.

3. Responding To The Deregulators
Over the previous seven years, labour law deregulation has swept across this continent like a summer bush-fire. Instead of confronting this assault by forging and building a new and modern form of collective labour law which is more consonant with the present aspirations of employees, the proponents of conciliation and arbitration have been content to fight the battle with backward looking arguments on the grounds chosen by the deregulators. If we are not to repeat these mistakes in the future, it is essential to examine our follies over the last seven or so years. In my view, our arguments opposing deregulation can be categorised into three types: The first type of arguments which we have made concerns deregulation. In advocating changes to our industrial laws, we have been content to accept various modes of deregulation, but with safeguards. This argument is reactive, in the sense that it reacts to deregulation by partial- acceptance without putting forward an alternative vision for the future. Secondly, we have tried to defend our position by drawing misplaced analogies with the industrial battles of the 1890s; and finally, we have sought to convince the public of the follies of deregulation by relying upon complex comparative arguments which have only passing relevance to the Australian context.

3.1 Active and Reactive Industrial Relations Policies

From the mid-1980s to the present, the proponents of Australian industrial relations deregulation have possessed a vision of the future. True, this vision broadened from an enterprise focus in the late 1980s to a contractualist model in the 1990s,[32] but at its heart there has always been a landscape where trade union power is diminished and where the influence of industrial tribunals is at a minimal level. I would describe these policies as active ones because their proponents have possessed a vision of the future, and they have been able to market this vision and implement it in labour legislation. They advocated labour market flexibility at a time when federal and State governments were shrinking their public sectors and reigning in their spending. Governments bought the idea that greater labour market flexibility would limit unemployment. At this time, the social capacity of governments to cope with welfare programs and payments was diminishing, but if it would limit unemployment then deregulation was worth a try. From being regarded as outsiders in 1985, through adhering to their active policies they have taken centre stage in 1997.

On the other hand, the defenders of collective industrial relations have, in the main, adopted reactive policies. They have reacted to calls for greater flexibility by participating in making labour law more flexible. While some flexibility was overdue, laws enacted by the Australian Labor Party laws during this period lacked a coherent vision for the future. Even the Industrial Relations Reform Act 1993[33] of the Keating Government was by and large a reaction to labour law deregulation in the States and especially in Victoria. The Industrial Relations Act 1996[34] of the Carr New South Wales administration, in whose drafting I participated,[35] was also partially reactive in the sense that it sought a reversal of much of the 1991 deregulatory legislation.[36] It brought enterprise bargaining back under the supervision of the Industrial Relations Commission of New South Wales, and at one and the same time it established mechanisms to redress the imbalances caused through past systemic gender discrimination.[37] For those on the left of the political spectrum, however, it is hard to find an Australian Labor Party industrial relations policy by an opposition or government which contains a clear, concise and appealing vision in favour of collective labour law.

3.2 Re-Fighting the Labour Battles of the 1890s

Another trap into which we have fallen, has been to liken the current labour deregulation legislation of the 1990s to the freedom of contract battles of the 1890s. There are three difficulties with this viewpoint. In the first place, the deregulatory legislation of the 1990s is not advocating a wholesale abolition of collective labour law; rather its approach is more subtle. It fosters a climate in which collective labour law will become less significant. On the other hand, the employers of the 1890s advocated freedom of contract, in the main because at that time when no conciliation and arbitration machinery existed freedom of contract represented the status quo. The two situations are dissimilar.

The second point to make about this supposed analogy is that in the 1890s, as the contemporary accounts show,[38] there was an actual industrial battle between workers, pastoralists and ship owners where the trade unions were defeated. A feature of the 1990s which is recognised right across the political spectrum, is that there has been very little industrial disputation. In other words, we have not witnessed any big industrial battles.

Lastly, apart from labour history buffs like me, the 1890s struggles between capital and labour have little relevance to most Australians. After all, these industrial battles occurred a quarter century before Galipoli, and even World War I is a fading memory for most Australians. This type of argument should be thrown into the waste paper basket.

3.3 The Thathcherism Analogy

In order to attack the present deregulatory measures, we have tried to show the public the consequences of this approach by likening our situation to the early days of the Thatcher conservative government in England. In his fine book, The State We’re In,[39] Will Hutton has shown that rigid monetarist economic policies coupled with labour deregulation did not lead to an economic boom in Britain. Instead, they exacerbated the inequalities in that country. It is true that the Thatcher approach to labour law regulation was gradualist in the sense that it took the Parliament a dozen years of law making to whittle down British collective labour relations.[40] It is also true that the Australian deregulators – especially at the federal level – have adopted a gradualist approach to labour law deregulation with the Workplace Relations Act marking out the first step. I also believe that if the Howard Government retains its monetarist economic approach and continues to lessen governmental spending, inequality of incomes will increase. However, Australia under Mr Howard is not Britain lead by Mrs Thatcher.[41]

Arguments can be mounted which show – to my satisfaction at least – that through a comparison of similar countries, free market economics and labour relations deregulation will reduce real wages and increase poverty. However, these economic arguments are complex and involve elements of extrapolation and prediction. They are not the types of arguments which win the hearts and minds of the voters. In the era of the television grab and the radio sound bite, they can be dismissed by a quick and resounding shake of the head and a snappy “we are not Britain or the United States”. They should not be ignored, but they should be back-ups to more straight forward arguments which propound a vision for the future.

4. The Workplace Relations Act

During the early 1990s, the governments of New South Wales, Tasmania, Victoria and Western Australia deregulated their industrial laws.[42] While the ALP held power at the federal level of government, however, the effects of labour law deregulation remained limited. Within twelve weeks of the landslide victory of the Howard Government in March 1996, Mr Peter Reith – the Minister for Industrial Relations – introduced into the Australian Parliament the Workplace Relations and Other Legislation Amendment Bill 1996.[43] After the holding of a Senate inquiry[44] and the signing of an agreement with the Australian Democrats,[45] the bill passed through Parliament and in late November it received the Royal Assent[46]. On New Year’s Eve 1996, the Workplace Relations Act came into force.

4.1 Decollectivising Labour Law.

This lecture is not the place to give a detailed analysis of the Workplace Relations Act,[47] however, comment is warranted on the manner whereby it down-grades the collective elements of our labour laws. The key elements of this process of decolletivisation concerns awards, individual agreement-making, strikes and its freedom of association.

Before the enactment of the Workplace Relations Act in late 1996, the federal Commission and its predecessor bodies[48] possessed a broad discretion to settle industrial disputes through the promulgation of awards which had the potential to cover most aspects of the employment relationship. Over the last ten years, a series of High Court decisions broadened the scope of awards[49] and rolled back managerial prerogatives,[50] Using an award-making strategy, the trade unions were able to place a grid of broadly-based terms and conditions of employment right across the nation. The Workplace Relations Act has sought to reverse some of this strategy by narrowing the terms and conditions of employment which may be placed in awards. All Federal awards are down-sized to some twenty allowable award matters,[51] and these matters like wages, hours and leave represent minima only.[52] There is, of course, scope for the Commission to arbitrate in exceptional cases which fall outside these allowable award matters,[53] but any Commission orders are of a limited duration.[54] The allowable award matters focus upon individual entitlements, but many collective rights are absent. For example, awards will no longer contain clauses concerning training or staffing levels: nor will there be clauses requiring employers to consult with trade unions over the implementation of technological change or redundancy. These matters were introduced into awards after the Commission’s 1984 Termination, Change and Redundancy Test Case,[55] as a means of protecting vulnerable workers from rapid job losses.

The gap which is created by the down-sizing of awards – to use an old fashioned expression – has brought about a widening of managerial prerogatives. Within this new paradigm, employees no longer will be prepared to remain on minimum awards and eventually will seek to enter into agreements with their employers. The Workplace Relations Act allows the making and the vetting of enterprise agreements. However, it endeavours to further decollectivisation by enabling the making of Australian workplace agreements (“AWAs”) between individual employees and employers who are either constitutional corporations or who are otherwise qualified under the legislation.[56] In order to remove AWAs from the realm of collective labour law, the Workplace Relations Act has created the Office of the Employment Advocate to administer this process. The making of AWAs requires employers and employees to adhere to a series of complex steps, [57]culminating in a compliance process overseen by the Office of the Employment Advocate. Agreements must be signed and dated, and the Employment Advocate must hold that they pass a global “no-disadvantage test”.[58] Where the Employment Advocate is unsure that an AWA will pass this test, then it must be referred to the Commission which is to determine the issue.[59]

While awards and enterprise agreements are squarely within the public domain, the Workplace Relations Act regards AWAs as coming solely within the private sphere. Once an AWA is in operation, it totally displaces any existing awards[60] and the AWA usually becomes the sole instrument governing the employment. The Workplace Relations Act provides that the approval process for AWAs is secret. When the Commission certifies agreements or promulgates awards it publishes its decision, however, different rules apply to AWAs. First, the proceedings in the office of the Employment Advocate and before the Commission are private.[61] Apart from the parties and their bargaining agents, no third parties may intervene.[62] Secondly, if AWA approval decisions or extracts therefrom are published, neither the Employment Advocate[63] nor the Commission[64] may disclose information about AWAs either by the staff of the Employment Advocate[65] or of the Industrial Registry,[66] where the information would reveal the identity of AWA signatories.

For the first time since the inception of compulsory conciliation and arbitration at the turn of the century, individual agreement-making in the form of AWAs has been made the public policy of federal labour law. Given the limitations surrounding the making of AWAs, many employers desiring to conclude individual agreements will do so by entering into common law employment contracts. The rules of the common law contract of employment – through the guise of the implied term – are heavily weighted in the employer’s favour.[67] Under the common law, job control is the employer’s prerogative.

The Workplace Relations Act strengthens the prohibitions against strikes. The Commission has been given a broad power to issue orders to prevent or to stop industrial action,[68] and employers are prohibited from paying wages to employees who have taken industrial action[69] provided the employer has not agreed to this conduct.[70] The provisions proscribing secondary boycotts have been placed back into the Trade Practices Act[71] and strike action affecting overseas trade is prohibited.[72]

Finally, the Workplace Relations Act establishes a freedom of association regime[73] which prohibits conduct aimed at forcing employees, employers and independent contractors either to join, or not to join trade unions or employer associations. The Commission cannot place preference to trade unionists clauses in awards, and all other forms of trade union security arrangements are outlawed.

The original framers of conciliation and arbitration legislation regarded the fostering of collectivism as a key feature of the system. The public policy underpinning these processes was to encourage workers to form and to join trade unions. It has been shown by Roy Adams that one of the prerequisites of healthy collective industrial relations are laws which foster collectivity on the part of workers.[74] Conversely, where labour legislation does not assist the making of collective arrangements, collective labour law diminishes in stature. The Workplace Relations Act has not abolished collective labour law in one foul swoop. Yet, its stance towards trade unions is at best neutral. For its farmers, they are little more than voluntary associations who should be left to flourish or wither without assistance from the State. However, as feminist scholars have shown us, laws which are neutral on their face usually have a disparate affect on groups which lack power.[75] I have no doubt that by changing our national public policy towards collectivity and trade unions, the Workplace Relations Act will lead to a weakening of collective labour law and to a lessening in trade union workplace activities. However, if collective labour law is to flourish, collectivity on the part of employees must be encouraged and fostered by the law.

4.2 The Workplace Relations Act and the Future

In my judgement, the most significant effect of the Workplace Relations Act is that it has established an industrial relations public policy whereby individual agreement-making is fostered and collective activities are lessened. However it would be a mistake to believe that this statute represents the culmination of the Government’s industrial relations program.

One reason which the Government gave for passing the Workplace Relations Act was that it will shorten the length of the unemployment queues. Under neo-classical economic theory, if a labour relations regime is deregulated so that it approximates more closely to the market forces of supply and demand labour costs will fall. In other words, the discipline of the market will prevent the cost of labour from rising above its productive worth. If labour costs diminish, employment is bound to increase. However, even for neo-classical economists, things are never quite that simple. Over the last decade, we have witnessed a re-emergence of a less market driven form of labour economics which is know as the new labour economics.[76] Its proponents assert correctly in my view, that the differences in the human capital of the labour market from the market for the sale of goods mean that employment is far less susceptible to market forces than might be imagined.[77] Prudent employers will invest in their human capital of the labour market from the market for the sale of long-term and motivated workers are more efficient. When a firm wishes to hire labour, it has two choices: It can either hire from the ranks of the unemployed, or can offer employment to workers who are currently employed in other undertakings and who possess motivation. While in the short-run it might be cheaper to hire from the unemployed, in the long-run, it will make commercial sense to pay for more expensive labour from other undertakings. In other words, although there is a large supply of unemployed labour, the demand to fill jobs from this labour pool is less than most people imagine. It is clear to me that without workable labour market training programs and other supportive measures, the deregulatory provisions contained in the Workplace Relations Act will not lead to a lessening of the nation’s unemployment.

Although the Workplace Relations Act has been in force for only four months, we have already witnessed a dilution in its safeguards. In March this year, the Prime Minister announced that the federal unfair dismissal laws would be changed to exempt new employees from their scope for their first year of employment in an enterprise employing affect a minority of small employers,[78] this announcement was greeted with widespread applause. With the fall in federal Government spending, unemployment is unlikely to decrease, and I venture to think that at some time before the next election proposals to further deregulate federal labour law will be mooted.

The Western Australian Government is currently endeavouring to pass its second wave of industrial relations deregulatory measures through that State’s Parliament. This bill seeks to broaden the anti-strike laws and to restrict the legitimate activities of trade unions. Often deregulatory experiments in one Australian jurisdiction are adopted by other governments. For example, many of the ideas behind the federal Australian workplace agreement provisions in the Workplace Relations Act had their genesis in Western Australia’s 1993 deregulatory industrial relations legislation.[80] It will be interesting to see whether the advocates of further federal deregulation will draw upon some of the measures in the Western Australian second wave reforms for possible enactment by the federal Parliament. Whatever be the shape of the future Howard laws, I am sure that many workers who are either unemployed or who fear imminent job losses are likely – in a misguided way – to support further deregulation. They will do so in my opinion, until a plausible alternative is presented to them. While the Howard Government holds sway in Canberra, increased labour relations deregulation is virtually inevitable. This is the harsh political reality which must be faced by those of us who are adherents of collective labour law.

5. Implementing My Alternative Vision

The new collective labour law which I have outlined in this lecture, is the anithesis of the Workplace Relations Act. This statute seeks to begin the process and individualising and decollectivising federal labour law, by down-sizing awards, and through encouraging individual agreement-making. On the other hand, I would seek to re-build collectivity by broadening the powers of the Commission, and more importantly, to establish elected consultative committees within enterprises. I have argued that this type of mechanism will be more responsive to the modern needs of workers, and will do so within a co-operative framework.

However, the implementation of this vision into law requires clear thinking and hard work. This vision needs to be placed squarely within the national political consciousness if it is to have any chance of being accepted by most Australians. This can be achieved by arguing that collective labour law is a necessary element of citizenship in the Australian polity.

5.1 The Concept of Citizenship

Ever since the writing of Marshall,[81] the concept of citizenship has been growing in significance within the realms of political science and public law.[82] More recently, interest in the notion of citizenship has been awakened on this continent.[83] In essence, citizenship defines the public and political rights of persons in a free and democratic society. It has been used with some success by aborigines and women to advance the rectification of their less than equal status in the nation. For a woman, full citizenship in the nation must mean that all the benefits of citizenship which are bestowed upon men – equal access to the political process, equal opportunities in education and employment, and security of the person etc – are bestowed in equal measure upon her. For all groups which lack power, full citizenship is, I suggest, a right and a necessary pre-condition to a modern democratic state.

As Keith Ewing has shown,[84] the ideas embodied in citizens at work go back to the writings of Harold Laski.[85] The concept of industrial citizenship made a re-emergence in the 1960s[86] and in the 1990s political and industrial citizenship are well understood concepts. In a modern democratic society, industrial citizenship is, I suggest, as necessary as political citizenship in the development of modern nation. Writers in Great Britain[87] and in the United States[88] have advocated the use of industrial citizenship in building a new model of collective labour law. In my judgment, when workers receive the badge of industrial citizenship by a society, this marks out a recognition of their individual and collective rights. It is this rights-based approach which marries my new collective labour law to the concept of citizenship.

5.2. Citizenship, Deregulation and the New Collectivism

Many of the key rights of industrial citizenship have been casualties of the push for deregulation. For example, full citizenship means at the very least the right to a reasonable degree of security of employment, where employment terminations are fair, and where redundancies are only entered into after consultation. Citizenship also covers a safe working environment where employees are secure in their persons. Equality of treatment – especially for women and minorities – is a necessary prerequisite to worker citizenship. So too is the legal capacity of employees to resist arbitrary or improper behaviour, either from employers or trade unions.

At the heart of industrial citizenship, however, is the enhancement of human dignity. Adult industrial citizens of a modern democratic state have the right to participate in workplace governance by sharing in the rule making and rule interpretive processes of the enterprise. This can be achieved via collective bargaining, through the operation of public tribunals, or through the creation of workplace consultative committees. However, it cannot be secured through individual bargaining where most employees lack the necessary power to bring about an equilibrium in the approach to workplace governance. It may be argued by the deregulators that either the AWA or the individual employment contract gives the employee an opportunity to participate in rule making. Australian workplace agreements are designed to empower employers. If an employee does not abide by an AWA, she or he is liable to the employer in damages.[89] The common law contract also prescribes rules, but the terms implied by force of law into these contracts bestow job control in the hands of employer. Rule making, and more especially rule interpreting, goes beyond the individual employer and employee relationship. It requires a collective mechanism which mandates dialogue between the employer and the employees. While collective bargaining and industrial tribunals may involve independent trade unions, these organisation are not essential actors in this process. Consultative committees and other forms of worker participation are appropriate. It is the task of legislation establishing full and participative industrial citizenship to make these participatory arrangements available to employees.

It is time for industrial relations and labour law scholars and practitioners, together with trade union leaders, to gather together their wits and to re-fashion new forms of their disciplines. They must be unshackled from the past, and they must be appropriate for a highly educated and forward thinking workforce. Unless an alternative to deregulation is fashioned, collective labour law and collective industrial relations will disappear from the scene. If the new labour law and industrial relations have at their centres the concept of industrial citizenship, they will be more than a match for the deregulators for whom, in large part, fairness is a necessary casualty of their globalistic approach. By Ronald C McCallum, Blake Dawson Waldron Professor in Industrial Law, University of Sydney. The Third Whitlam Lecture, The Trade Union Education Foundation. Newcastle, Wednesday 14 May 1997.

[2] AmaalianB..ofStatistlm,AwardCoverageAmtrali.May1p90,catalogu,No6315.0.

[5] The Victorian system was effectively abolished, at least for the private sector, when in late 1996 the Victoria Parliament ceded its Industrial Relations powers to the Australian Parliament. See, Commonwealth Powers (Industrial Relations) Act 1996 (Vic).

[6] Workplace Relations Act 1996 (Cth); Industrial Relations Act 1996 (NSW); Workplace Relations Act 1997 (Q); Industrial and Employee Relations Act 1994 (SA); Industrial Relations Act 1984 (Tas); Workplace Agreements Act 1993 (WA).

[7] Australian Bureau of Statistics, Trade Union Statistics December 1995, catalogue No 6323.0.40.001.

[8] Australian Bureau of Statistics, Trade Union Statistics June 1996, catalogue No 6323.0.40.001.

[9] The Australian Bureau of Statistics compiles these figures from information supplied by individual trade unions. It does appear that there may be some unintentional double counting, S Deery and D Plowman, Australian Industrial Relations, (McGraw-Hill Book Co Australia Pty Ltd, 3rd ed, Sydney, 1991) 227 fn 38.

[10] S M Jacoby, The Workers of Nations; Industrial Relation in a Global Economy, (Oxford University Press, New York, 1995) 3-29.

[11] P Weeks., Trade Union Security Law: A Study of Preference and Compulsory Unionism, (The Federation Press, Sydney, 1995); and R C McCalum, “Voluntary Trade Unionism in New South Wales: Timely Innovation m Backward Step?” (1994) 7 AJLL 1.

[12] Family Law Act 1975 (Cth).

[13] M Vranken, “Demise of the Australiasian Model of Labour Law in the 1990s” , (1994) 16 Comp Lab L J 1.

[14] Workplace Relations Act 1996 (Cth), hereafter refereed to in the footnotes as the “WRA”.

[15] Ex Parte H V McKay (1907) 2 CAR 1.

[16] Id, 3.

[17] O Kahn-Freund, Labour and the Law, (Stevens & Sons, Londin 1972), 8; and see also his 2nd ed, (Stevens & Sons, London, 1977),6.

[18] For comment, see H Collins, “Labour Law as a Vocation” (1989) 105 LQR 468, 479-80

[19] T Mac Dermott, “The Duty to Provide an Harasment-Free Work Environment”, (1995) 37 JIR 495.

[20] For Hugh Collins, the controlling of this behaviour is the new vocation of those labour lawyers who base their approach upon the protection of the individual employee. See H Collins, Op Cit 479-80.

[21]. For comment on pay equity, see A Women’s Worth: Pay Equity and the Undervaluation of Womens’ Skills in New South Wales: Issues Paper, (Womens’ Equity Bureau, Department of Industrial Relations of New South Wales, Sydney, 1996).

[22] For a discussion of the limitations in traditional labour law, see R Owens, “The Traditional Labour Law Framework: A Critical Evaluation”, in R Mitchell (Ed), Redefining Labour Law, (Centre for Employment and Labour Relations Law, University of Melbourne, Occassional Monograph Series, Melbourne, 1995)3..

[23] For comments on this phenomenon, see H Collins, “Independent Contractors and the Challenge of Vertical Disintigration to Employment Protection Laws”, (1990) 10 OILS 353; R Hunter, “The Regulation of Independent Contractors: A Feminist Perspective”, (1992) 5 C & B L J 165; and A Vandenheuvel and M Wooden, “Employee Contractors in Australia” How Many and Who Are They?” , (1995) 37 JIR 263.

[24] For comments along these lines, see P Brook Freedom at Work: The Case for Reforming Labour Law in New Zealand, (Oxford University Press, Auckland, 1990); and see also R C McCallum, “”Review of Freedom at Work” (1992) 5 AJLL 295.

25 See, J R Bellace, “The Role of the Law in Supporting Cooperative Employee Representation systems”, (1994) 15 Comp Lab L J 441; and C W Summers, “Comparison of Collective Bargaining systems: The Shaping of Plant Relationships and National Economic Policy”, (1995) 16 Comp Lab L J 467.[]

[26] Bellace, Op cit, 444-49; Summers, Op Cit 475-8; M Weiss, Labour Law and Industrial Relationsin the Federal Republic of Germany, (Kluwer Law and Tax Publishers, Deventer, Neterlands, 1987) 87-9, 149-72; and P Auer, “Co-Determination in Germany: Institutional Stability in a Changing Environment”, in E M Davis and R D Lansbury (Eds), Managing Together. Consultation and Participation in the Workplace, (Addition Wesley Longman Australia, Melbourne, 1996) 160.

[27] Bellace, Op Cit, 449-54, Summers, Op Cit 473-75; Y Kuwahara, “Industrial Relations in Japan: Theory and Practice”, in E M Davis and R D Lansbury (Eds), Managing Together: Consultation and Participation in the Workplace, (Addition Wesley Longman Australia, Melbourne, 1996) 208.

[28] See the material collected in E M Davis and R D Lansbury (Eds), Managing Together: Consulation and Participation in the Workplace, (Addition Wesley Longman Australia, Melbourne, 1996).

[29] The federal Government may make laws with respect to trading and financial corporations under s5 (xx) Australian Constitution.

[30] There has been some discussion in Australia on the possibility of establishing works councils. Twenty years ago Robert Prichard argued that the corporations power could be used to promote industrial consultative mechanisms. See R L Prichard, “Legal Perspectives on Industry Democracy in Australia”, in R L Prichard (Ed), Industrial Democracy in Australia, (CCH Australia Ltd, Sydney, 1976) 99, 130-1.

[31] Sec, e.g. Occupational Health and Safety Act 1983 (NSW) ss 23-25; and Occupational Health and Safety Act 1985 (Vic) 37.

[32] R C McCallum, “The New Millenium and the Higgins Heritage: Australian Industrial Relations in the 21st Century” , (1996) 38 JIR 294, 298-305.

[33] Industrial Relations Reform Act 1993 (Cth).

[34] Industrial Relations Act 1996 (NSW).

[35] I was the technical advisor to the Industrial Relations Act Review Working Party which was established by the New Sourth Wales Government in April 1996.

[36] Industrial Relations Act 1991 (NSW)

[37] For comments on this Act, see R C McCallum Genral Introduction”, Butterworths Industrial Laws New South Wales, (Butterworths, Sydney, loose leaf service, continually updated) (in press); and see also J W Shaw “A Balanced Industrial Relations Reform Package for New South Wales”. , (1996) 38 JIR 57, and J W Shaw, “The Industrial Relations Act 1996 (NSW); Some Legal Aspects”, (1996) 9 AJLL 273.

[38] W G Spence, Australia’s Awakening: Thirty Years in the Life of an Australian Agiitator, (The Worker Trustees, Sydney, 1909, 47-221); and for a later account based upon contemporary sources, see J T Sutcliffe, A History of Trade Unionism in Australia, (MacMillan, Melbourne, 1921, reprinted MacMillan, Melbourne, 1967) 90-167.

[39] W Hutton, The State We’re In, (Vintage, London, 1996) 82-110

[40] P Davies, and M Freedland, Labour Legislation and Public Policy, (Oxford University Press, Oxford, 1993) 425-639; S Auerbach, Legislating for Conflict, (Clarendon Press, Oxford, 1990); and W Wedderburn, “Freedom of Association and Philosophies of Labour Law”, (1989) 18 IJL 1.

[41] For comment on the difficulties of transplanting foreign laws onto indigenous soil, see O Kahn-Fruend, “On Uses and Misuses of Comparative Law”, (1974) 37 Mod L Rev 1.

[42] B Dabscheck, The Struggle for Australian Indsutrial Relations, (Oxford University Press, Melbourne, 1995) 100-115; and R C McCallum and P Ronfeldt, “Our Changing Labour Law”, in P Ronfeldt and R C McCallum (Eds), Enterprise Bargaining, Trade Unions and the Law, (The Federation Press, Sydney, 1995_ 1, 14-27.

[43] Mr Reith, Minister for Industrial Relations, second reading speech on the Workplace Relations and Other Legislation Amendment Bill 1996 (Cth). Parliament of Australia, House of Representatives, Hansard, 23 May 1996, 1295.

[44] Senate Economic References Committee, Report on Consideration of the Workplace Reltaions and Other Legsilation Amendment Bill 1996, Parliament of Australia, the Senate Printing Unit, Canberra, 1996.

[45] Senate Economics Reference Committee, Report on Consideratioin of the Workplace Relations and Other Legislation Amendment Bill 1996, Parliament of Australia, the Senate Printing unit, Canberra, 1996.

[46] This agreement was unvalued on 27 October 1996.

[47] For comment on the Workplace Relations Act, see the sereis of articles collected in (1997) 10 ALJJ 1-171; and T Mac Dermott, “Industrial Legsialtion in 1996: The Reform Agenda”, (1997) 39 JIR 52.

[48] It was originally styled the Commonwealth Court of Conciliation and Arbitration.

[49] Re Cram; Ex Parte New South Wales Colliery Proprietors’ Association Ltd (1987) 163 CLR 117; and Re Amalgamated Metal Workers Union of Australia and Ors; Ex Parte Shell Co of Australia Ltd (1992) 108 ALR 229.

[50] a Stewart, “Jurisdiction Over Industrial Matters: The Demise of Managerial Prerogatives”, (1988) 1 AJLL 70, E Stern, “Industrial Disputes and the Jurisdiction of the Federal Indsutrial Tribunal: An Analysis of Recent Developments” , (1990) 3 AJLL 130; and K Wood and R C McCallum, “Crafting the Law: The High Court and Superannuation as an Industrial Matter”, (1995) 8 AJLL 121.

[51] WRA s89A

[52] The re-fasioning of awards into ones containing only the 20 allowable matters must occur by 30 June 1998. This is the date which concludes the “interim period” of eighteen months during which award restructuring must take place. Workplace Relations and Other Legislation Amendment Act 1996 (Cth) s 41 definition of “Interim period”. This section is one of the traditional provisions.

[53] WRA s 89A(7)

[54] WRA s 120A

[55] Termination, Change and Redundancy Case (1984) 294 CAR 175; (1984) 295 CAR 673 (supplementary decision).

[56] WRA ss 170VC, 170VF, 170VG.

[57] For details, see R C McCallum, “Australian Workplace Agreements: An Analysis” (1997) 10 AJLL #1 (in press).

[58] WRA s 170VPB(1)(a).

[59] WRA s 170VPG(3)-(4).

[60] WRA s170VQ(1).

[61] WRA s 170WHA.

[62] WRA s 170WHC.

[63] WRA s 83BT

[64] WRA s 170WHC.

[65] WRA s83BS.

[66] WRA s 170WHB.

[67] B Creighton and A Stewart, Australian Labour Law – An Introduction, (The Federation Press, Sydney, 2nd ed, 1994) 7-11; and A Brooks, “The Contract of Employment and Workplace Agreements”, in P Ronfeldt and R C McCallum, (Eds), A New Province for Legalism: Legal Issues and the Deregulation of Industrial Relations, (Australian Centre for Industrial Relations Research and Teaching (“teaching” has been replaced by “training”). University of Syndey, Monograph #9, Sydney, 1993) 14.

[68] WRA s127.

[69] WRA ss 187AA-187AB

[70] WRA s 4(1) definition of “Industrial action”.

[71] Trade Practices Act 1974 (Cth) ss 45D-45EB.

[72] Trade Practices Act 1974 (Cth) s 45DB.

[73] WRA ss 298A-298Y

[74] R J Adams, “Regulating Unions and Collective Bargaining: A Global, Historical Analysis of Determinants and Consequences”, (1993) 14 Comp Lab L J 272

[75] M Minow, “Feminist Reason: Getting It and Losing It”, in K T Bartlett and R Kennedy (Eds), Feminist Legal Theory: Reading in Law and Gender, (Westview Press, Boulder Colorado, 1991) 357, reprinted from (1988) 38 J of Legal Educ 47.

[76] Economic Planning and Advisory Commission, Future Labour Market Issues for Australia; Commission Paper no. 12, (Australian Government Publishing Service, Canberra, 1996). For a useful summary of this report, see R Giddins, “How the Labour Market Works in the Real World”, (Sydney Morning Herald, 14 September 1996) 80.

[77] L C Thurrow, Dangerous Currents: The State of Econmics, (Random House Inc, New York, 1983 Issued by Oxford University Press, Oxford, 1984) 173-225.

[78] Apart from the State of Victoria where consitutional considerations are irrelevant for the private sector, very many other Australian small employers under federal awards and agreements are not consitutional corporations.

[80] Workplace Agreemnts Act 1993 (WA)

[81] T H Marshall, Sociology at the Cross-Roads and Other Essays, (Heinemann, London, 1963).

[82] K D Ewing, “Citizenship and Employment” , in R Blackburn, (ED), Rights of Citizenship, (Mansell, London, 1993)99.

[83] K Rubenstein, “Citizenship in Australia: Upcoming is Meaning”, (1995) 20 MU L R, 503, 515-525.

[84] Ewing, Op cit, 100.

[85] H J Laski, A Grammar of Politics, (Allen and Unwin, 4th ed. London, 1938) Ch 3.

[86] W H Arthurs, “Developing Industrial Citizenship: A Challenge for Canada’s Second Centurey”, (1967) 45 Can B Rev, 786.

[87] K D Ewing, “Democratic Socialism and Labour Law”, (1995) 24 ILJ 103, 111-2.

[88] R J Adams, Industrial RELATIONS Under Liberal Democracy: North America in Comparative Perspective, (University of South Carlina Press, Columbia, 1995), 131.

[89] WRA s 170VW(1).