LABOR UNIONS IN AUSTRALIA
Introduction
The workplace is a dynamic entity. The continuous interaction between managers and employees guided by labor laws and organizational policies constitute a complex matter. Employees and management pursue their own interests and sense of justice in the performance of their tasks. Most of the time this sense of justice of each individual in the organization is a source of conflict.
Conflict in the workplace is a common result of working conditions. Each employee wants to have a just and conducive working situation in order for him or her to successfully carry out his functions. But due to the constant change in labor structures and policies, the employee sometimes gets lost in the flow. The basic response of employees when labor conflicts in the workplace occur is thru a labor or trade union.
Trade or Labor Union is commonly defined as an organization of employees or workers with the common purpose of collectively negotiating with the employers/management regarding terms of employment and policies favorable to the general membership.
Trade unions vary from organization to organization, country to country. The social forces surrounding a union and the country’s culture influence its function respectively. The diversity of working consequences also contributes to the distinctiveness of each labor union.
Industrial Relations and the Role of Trade Unions in Australia
(1998) declared that employment conditions for the majority of Australian employees prior to the 1990s were heavily dependent on highly prescriptive multi-employer awards determined on their behalf by third parties removed from the workplace. The focus at an aggregated or occupational industry level served to promote a high level of uniformity across enterprises. The authors continued that a major transformation in the structures and processes that underpin industrial relations arrangements occurred through a hybrid system which places much greater emphasis on the enterprise and workplace. These formal changes in the systems of industrial relations have also been accompanied by dramatic shifts in the structure of the role of trade unions.
Trade unionism in Australia is organized on a professional basis especially along industry or enterprises. Trade unions basically engage members from more than one industry and typical medium-sized factory of 500 employees will be composed of 5 to 10 unions with separate groups for production workers; white-collar and clerical people; maintenance and utility personnel; and the supervisors and managers ( 1986). (1987) stated that trade unions have direct input into the policy of the largest political party, the Australian Labor Party (ALP) and serve as the training ground for high officers of the ALP.
The Australian union movement has long considered itself in a density crisis. ( 2004). Trade union membership has fallen from around 50 percent of the workforce in the mid-1970s to 31 percent by 1996 ( 1998) to approximately 23 percent by 2004 ( 2004). The decline can be attributed to two main factors as reported by (2006). First is increased government and employer opposition to unions that resulted in a substantial reduction in the incidence of closed shops and compulsory unionism and second is structural changes in the economy. (2004) added that under the 1996 Workplace Relations Act (WRA), unions are finding it increasingly difficult to implement strategies for recruitment as a result of the outlawing of closed shop workplaces and the introduction of Australian Workplace Agreements (AWA) as the preferred method of bargaining. Unions also faced increasing limitations on access to workplaces and the systematic dismantling of the system of compulsory conciliation and arbitration, mainly through the reduced powers of the Australian Industrial Relations Commission (AIRC). The roles of the AIRC and industrial awards were downgraded and restrictions were placed on the rights of unions to organize, under provisions supposedly designed to guarantee freedom of association (2006, p. 4). Today few small craft-based unions exist and membership is more concentrated in a handful of large industry and multi-industry unions ( 1998).
(1998) argued that compounding and reflecting this decline in trade union membership has been a simultaneous reduction in manufacturing as a proportion of national gross domestic product, falling from 20 to 14 percent since 1973, with the direct loss of some 400,000 manufacturing jobs. Also, the Australian Labor Party’s electoral success rested on a broad coalition of support centered on its trade-union base. Thus, the Labor’s internal struggles were prompted by and tied to its broader political dilemma; the extend to which the Australia’s diminishing numbers of trade unionists can serve as a base or core of a political party competing for national office via a majoritarian electoral system ( 2003, p. 269). A report by the International Labor Organization released in 1997 showed that loss of revenue caused by declining membership has led to numerous mergers among unions seeking to streamline their operations. The larger unions emerging from this process may have sometimes lost touch with their grass roots. In addition, unions have usually remained focused on workers in mass production in very large enterprises, thus ignoring the increasing numbers of workers employed in small and medium-sized enterprises (SMEs), in services or in unconventional employment circumstances, such as part-time, informal and home workers. Employers organizations have made similar oversights, notably in failing to organize SMEs or informal-sector employees.
Differences in union density between industries can be related to differences in the wage gains from union membership and inter-industry differences in costs of organization due to differences in factors such as establishment size. Analysis of the effects of trade unions has focused on wages. Research found that the estimated union effects were due to correlation between union density and firm size, and the failure of early studies to control for the effect of firm size on wages. Large union wage effects between workplaces where there is a high degree of unionization and less-unionized workplaces have occurred only after the introduction of enterprise bargaining in the early 1990s. Other studies of union effects have considered negative impacts on worker turnover, workplace productivity, and employment. (2003, p.112).
A Look at New Approaches in Industrial Relations
In this day and age of enterprise bargaining and growing workplace diversity, it seems the working public is finding unions to be less and less useful. Along with the re-election of a more powerful Howard Government, the union movement has an uncertain future ahead of it ( 2004).
The latest Australian Council of Trade Unions (ACTU) initiative to reinvigorate the union movement, unions@work, was a result of an ACTU overseas delegation in April/May 1999. The key priorities contained in the report are: strength in the workplace by boosting workplace organization and union education so delegates can play a greater role in bargaining, recruiting and grievances; growth in new areas or investing in the organization of non-union workplaces and making a commitment to expand into employment growth areas; technology for the times or the use of technology and call centers, with the efficient use of funds and management of union operations; and a strong union voice by enhancing communications and campaigning, participating in public debate, setting industrial goals, and involving people in unions ( 2006, p. 16).
(2004) conveyed that a renewed focus on member activism is a step in the right direction. (2002) proposed three alternative industrial relations schemes for employee representation which would place employee interests within the scope of the firm: works councils, employee board representation and cooperatives.
Works Councils
Works councils offer employees the possibility of participation and representation in vital workplace decisions that affect their lives. ACTU Secretary pointed out that Australia is now decades behind European Union’s developments in consultation rights. Australian law fails to recognize the basic right to be informed and consulted when companies fail or engage in major workplace restructuring. Through their representative structures, works councils perform a protective function, allowing employees to protect their own interests.
Another important function of works councils is its capability to enhance corporate productivity. The pressures of globalization have intensified competition in product and labor markets, underscoring the need for greater efficiency and productivity. New mechanisms for employee information and consultation have significant potential to enhance job flexibility and productivity. Moreover, a distinctive but unrecognized function of works councils is enhancement of job satisfaction. One of the authors argued that happiness is a significant goal in any democratic system, and that promoting employee satisfaction is inherent in the industrial representative’s role. Works councils perform this function by focusing primarily on personnel policy, which is significantly associated with job satisfaction. Works councils implement the objectives of protection, efficiency and employee satisfaction in a dynamic and flexible manner, and advocate their legislative enactment.
Employee Representation on Boards
This kind of model could be implemented by placing employee representatives on boards of management (ERB), or employee directors, which could represent a significant form of employee involvement in the governance processes. The purpose of this reform is to recognize the activities of boards of directors and managers. Consideration of employee representation on management boards was argued to broaden the contemporary corporate governance debate in Australia. The best approach for Australian context would be to establish employee elected representatives constituting a significant but minority bloc on management boards. This could be achieved by federal legislation without significant extra costs to employers. The legislation is necessary to generalize the benefits of ERB, to provide equity in rights and obligations of ERBs between different companies, and to remove the process from the control or influence of either management or unions.
Cooperatives
The possibility of embracing workplace cooperatives in Australia will be patterned from the Mondragon experience in Spain. The Mondragon experiment embodied the cooperative principle with its two cornerstones being employee ownership of the workplace and the role of the credit unions as engines of growth for the region. Credit unions provide cost-effective finance and advice and the employees own and control the means of production. The success of Mondragon was attributed to three factors: motivation on the part of the members of cooperatives, solidarity and mutual support within and between cooperatives, and competitive advantage in the marketplace due to agency cost savings. Australia can draw from the Mondragon lessons and credit unions in the country could shift from their focus on personal lending to large scale community projects, thus becoming “business incubators”. As such, the actual governance structure of Mondragon and the inter-dependency that underpins such an approach could be of some benefit to the formal organization of the Australian workplace.
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