Australia is now decades behind most of Western Europe and even the United Kingdom, in its commitment to consultation and participation by workers in the enterprise says ACTU Secretary Greg Combet.
While I’m sure all of you in this room understand the importance of the discussion we are preparing to have here today, I would imagine that some in the community might be asking what all this talk of Works Councils is about.
They may also be asking why are unions encouraging this debate?
From my point of view the answer to these questions is pretty simple.
The debate about Works Councils in an Australian context is a debate about the right of employees to be informed and consulted about the decisions that affect their lives.
And it’s an important debate.
I think Professor Ron McCallum, who we will hear from later today, put it pretty succinctly in a recent article published in the Melbourne Age when he said:
“It has always seemed incongruous to me that while Australian citizens are able to elect their governments, when they enter their work and become industrial citizens, they have no legal right to elect a consultative body to participate in workplace governance.”
Mischievously, and to advance their own political objectives, some sections of the business and political community will no doubt try to characterise any debate about workplace consultative mechanisms as a debate about unions.
They’ll say it’s a back-door grab for membership, more evidence of the evil intent of union leaders. John Howard will warn in a tremulous voice of ‘wall-to-wall trade unionists’ with a socialist plan to take over the businesses of innocent employers. It’s quite scary really. I hope the Prime Minister doesn’t lose sleep over these things.
But both observers and participants in this discussion should remember that this is not a debate about the rights of unions in Australian workplaces.
This is a debate about the rights of Australian citizens in the workplace.
An employee’s ability to participate in decision-making at work is arguably as critical to his or her citizenship in a democracy, as is the right to vote.
Some may argue that this is a radical new concept. But it is hardly radical when one considers the amount of time people spend at the workplace, and the critical part management decisions can play in an employee’s ability to provide for themselves and their families.
So why do we need to have a debate about employee consultation in Australia? Well, unlike citizens in many other developed democracies around the world, employees under Commonwealth law in Australia currently have no legal right to be consulted in the workplace.
This has not always been the case.
Although we have never had the legislated mechanisms for consultation that exist in Western Europe for example, the balancing of managerial prerogative with the right for employees to be consulted has in the past played some part in Australia’s industrial relations system.
It was in response to the ACTU’s 1984 Termination, Change and Redundancy Test Case that the Industrial Relations Commission first created a legal basis for formalised consultation at work in Australia.
As a result of that case provisions were inserted into awards requiring employers to consult with employees and their representatives as soon as a firm decision had been taken about major changes in production, program, organisation, structure or technology which was likely to have a significant effect on employees.
Not long after, in 1987, the High Court also held, in Re Cram, that issues which might be considered to belong to managerial prerogative, such as staffing levels, could also be included in awards as industrial matters.
In this decision, the High Court unanimously rejected the notion, still held dear by some employers and the Liberal Party, that it is the sole and exclusive prerogative of management to decide how a business should operate without the workforce having any stake at all in the making of such decisions.
Although the 1984 TCR decision did not establish any structural mechanism by which consultation was to take place, most awards also contained provision for consultative committees or some other form of consultative mechanism.
These provisions were a result of the Commission’s 1991 Wage Fixing Principles which made wage adjustments dependent on awards requiring enterprises to establish mechanisms for consultation with employees on matters affecting efficiency and productivity.
So what went wrong?
What happened to the tentative steps we had taken towards employee consultation in Australia?
The Howard Government killed it.
Peter Reith’s 1996 amendments to the Workplace Relations Act unilaterally removed all provisions dealing with employee consultation from awards.
In addition to this, the scope of the Commission’s power to deal with issues going to managerial prerogative, like staffing disputes, was also narrowed.
All of these matters are now ‘non-allowable’, and cannot be included in awards.
Howard and Reith, with the support of the Australian Democrats, wound back the consultation agenda and re-instated unilateral management prerogative.
It is extraordinary, when you think about it, that the Australian Democrats, who are committed to greater democracy at work, as well in the community, voted with the Government in 1996 to remove the fairly minimal consultative rights of Australian workers.
And the employee consultation picture in Australia is not pretty.
Even in unionised workplaces, where workplace union delegates are the mechanism for employee consultation, the number of Australian workplaces with any reasonable level of union delegate activity was less than 18% at last count. And unions are battling all of the time to ensure that delegates have the representative rights necessary to fulfil this role.
Unions are determined to lift this level of activity, and to establish rights for delegates.
But it is not enough for us now to just look back in anger at the abolition of consultation rights, and perhaps aspire to the re-establishment of the minimal standards that once existed.
Its time Australia had a fresh look at this issue. And in particular to have a close look at democratic workplace structures which would deliver a statutory right to information and consultation. Hence the discussion of Works Councils.
There have been a number of key developments in other democracies around the world in recent years and we need to consider what these might mean in an Australian context.
In its lack of commitment to consultation and participation by workers in the enterprise, Australia is now decades behind most of Western Europe and even the United Kingdom, which does not have any history of statutory consultation requirements.
The British Government has recently legislated to implement the European Union’s Works Council Directive.
The Regulations, which came into effect in the UK early last year, apply to any undertaking with at least 1,000 employees in the European Union, and with at least 150 employees in each of two or more member states.
On a request from at least 100 employees or their representatives, management must negotiate the establishment of a European Works Council with members elected by employees.
These Councils have a right to be informed and consulted about issues such as the economic and financial situation of the business, its likely development, probable employment trends, the introduction of new working methods and significant organisational changes.
If, as an employee, you are about to be downsized, corporatised, privatised, casualised, outsourced or replaced by labour hire, at least you’ve got a right to know – not like Australia – so-called land of the fair go, the home of egalitarianism.
In Europe, it is proposed that the right to a Works Council will soon be extended to employees of large companies operating within any single European Union member nation.
While the UK’s conversion to the principles of employee consultation is fairly recent, Works Councils have been long-established features of enterprise structures in most of Western Europe.
These workplace-based organisations have different names and functions in different countries. In some cases they are established by statute; in others, such as in Italy, workers set them up directly, without legislation.
Generally, the Councils do not have employer membership and are directly elected from the employees at a workplace or company, representing both union members and non-members.
In some cases, unions have direct representation and/or put forward candidates for election.
Most countries with Works Council systems place statutory obligations on employers to provide them with information and to consult. While some Works Councils do engage in collective bargaining, the most common model is that employees negotiate wages and employment conditions not through the Works Council but through their unions, often at an industry or sectoral level.
That is, unions remain the vehicle for collective bargaining. The Works Council is a vehicle for collective employee consultation. And this is a very important point.
Because, many of us who are committed to the right of employees to be consulted in the workplace, are also deeply committed to the right of unions to collectively bargain on behalf of members.
I, for one, would not support any model for the establishment of consultative structures in the workplace that negated, undermined or diminished the right or ability of unions to organise, represent and collectively bargain on behalf of their members.
I do not believe, however, that properly handled, the Works Council concept necessarily threatens this fundamental commitment.
Any model for the establishment of formal consultative structures in the workplace must recognise the essential difference between collective consultation and union representation, collective consultation and collective bargaining.
The right and ability of workers to organise and associate together in unions is the most fundamental means of addressing the inherent power imbalance between an employer and an individual employee, thus ensuring fairness and justice in the workplace.
This right can never be replaced by mere access to information, and the act of consultation.
But, having said that, I think it is also the case that the establishment of consultative mechanisms like Works Councils could complement union organisation. After all, collective employment relationships have been under the most sustained attack in this country since the 1890s.
The conservative strategy is to assert management control through individual contracts. A collective consultative mechanism would at least ensure some form of collective organisational structure and culture – which would be a positive development.
So what functions and characteristics should an effective and legitimate Australian approach to Works Councils have, in order to secure union support?
I have mentioned the key considerations, and obviously we have many more detailed ideas. But essentially that is what must be produced from a union debate about the issue.
As unions we have a responsibility to fully explore and reach a considered consensus policy position on the merits of a system of Works Councils in an Australian context.
To do that we will need to keep encouraging the discussion of this concept at forums like this, in workplaces and in all union decision making bodies.
But if we really want to achieve a genuine democratic right for employees to information and consultation, we may need to broaden our outlook beyond traditional union structures, and traditional workplace structures.
This is a time of dramatic change in the workplace, of momentous change in the economy. It is a time of deepening complexity in employment structures and relationships. It is a time of sustained attack on collective employee rights.
Employees deserve to know what is happening to them.
If anyone saw the Sunday program yesterday about the appalling treatment of workers at G&K O’Connor’s meatworks, one of the critical factors leading to the dispute was the refusal by management to provide the information to back up their claims for cuts to costs. If they had been required to provide that information maybe things would be different.
But, of course, once Peter Reith got in the company’s ear the whole disgusting bias of the Workplace Relations Act was brought to bear. The lack of any right to information paled into insignificance compared to the intimidating power of the employer’s nine-month lock-out, and the lack of any real right for the workers to collectively bargain.
The current Federal industrial relations system is sick. It is biased against employees, it gives employers too much power, it violates ILO conventions, it deserves no place in a democratic society. It needs extensive and comprehensive change.
In generating debate about Works Councils, about employee rights to information and consultation, we are generating debate about just one amongst many important policy issues.
The challenge for all of us, unions and other fair-minded organisations and individuals, is to look creatively and constructively for solutions that ensure a genuine fair go for people.
I hope that this forum provides a small opportunity for pursuit of that challenge.
Greg Combet delivered this address at Australian Works Councils Seminar, RMIT, Melbourne, Victoria 9 April 2001.