DISCUSSION PAPER: Do unions have a future?


The ACTU has led a very fine campaign against WorkChoices and is winning the public debate. However in the long term if the union movement is to regain and increase membership and play a critical role in Australian workplaces and society, it needs to add another important dimension to its strategy: unions need to become an important and publicly recognised force for improved productivity, sustainability, skills and jobs.

Union membership is down to 24% density overall and only 17% in the private sector, (some suggest it is lower), although there has been a small upturn during the last couple of years. This is one of the most dramatic falls of any country in the OECD, as it has come off a comparatively high base of over 60% in about thirty years. A significant proportion of this loss happened before the Howard government came to power. Polling and research suggests that 40% of unionists voted for Howard at the last election. This is not a good record.

Following a strategy of transforming unions into a force for improved productivity will be very difficult, and the problems should not be underestimated in the current political and cultural climate. In the long run, only the union movement is responsible for its own success or failure, as no one else will do the job for it, although an ALP government would be of great assistance. Electing an ALP government must be the highest priority in ’07, because it is committed to far better industrial relations legislation. However the union movement must always implement its own independent strategy, and not simply rely on the election of the ALP.

This strategy suggests that the important and growing alliance of progressive forces who see the union movement as critical to their own democratic rights actively seek out and engage those employers who have an interest in maintaining a constructive relationship with their unions.

Are Howard’s laws more productive?

The arguments used by the Howard Government for its IR laws are that more jobs will be created, and productivity will improve. In fact we know that this will not happen. When New Zealand had similar but less extreme laws from ’91-’99, the ‘Employments Contract Act’, they dropped from third in the OECD for productivity improvement to twenty fourth. During that period Australia still had a collective approach to industrial relations, and had a much better productivity record. And if any jobs are created by the new laws (which is very doubtful), they will be at the low end.

The union movement is correctly concentrating on the unfairness of the laws and the need for the restoration of democratic union rights. However the unions also need to present themselves as an important component of improved business performance, through vigorous bargaining about management issues within enterprise and industry agreements.

The critical role of the labour process

The process by which a product or service is created is still the key to the creation of profit/surplus. Adam Smith in the late 18th century was the first to focus on how productivity could be greatly enhanced by breaking down the production process into very small components, so that instead of one person making a whole product, many workers would each do a very small part and pass it on to the next person, thus producing vastly more product with lesser skills at significantly lower costs.

During the 19th century, Babbage, often referred to as the father of computing, and particularly Frederick Taylor developed these ideas further, with Taylor drawing up his code of Scientific Management which divided tasks to the absolute minimum so that low skilled people could be employed on the creation of complex products. This laid the ground for the low cost, high volume, mass production techniques exploited by Henry Ford, and all subsequent production of consumer goods, as well as clerical work. To this day, even in so-called knowledge industries, the influence of Taylor can still be seen as his system was not only about cheaper production but about management exerting maximum control over the labour process.

Marx got to the essence of how a labour process controlled exclusively by the employer was not only the source of surplus value, but also the source of the deep alienation experienced by most employees. This is not only about the fact that the employee has no ownership of the product/service he or she produces, but also about the frustration of dealing with debilitating work processes at the bottom of a hierarchical structure. With very little room for using one’s intelligence and innovative abilities, and with the proliferation of tyrannical management systems (which are now exacerbated by the Work Choices legislation), is it any wonder that many workers are frustrated?

The limitation of most union movements over the last century and a half has been that they have dealt with the symptoms of exploitation and alienation through improved wages and conditions but rarely by taking on extremely bad management systems. This is not to suggest that the former achievements have not been significant, but they have rarely tackled the underlying problem of alienation. Marx recognised this limitation of unions fairly early. But because the labour movement in its left formations leapt to the conclusion that only a change to social ownership could deal with this fundamental problem, this limitation was never fully recognised by the movement itself.

Social ownership has not changed the labour process

We learnt the hard way that social ownership as it was practiced in the Soviet Union and Eastern Europe had little or no impact on alienation or productivity and was often worse, especially when Taylorism was embraced in a militarised form. The wide experience of government ownership and public service employment in the western world also demonstrated that this form of ownership and employment had little impact on the alienation and often poor health of employees. In fact huge bureaucracies, created by the infinite division of labour, often made it worse. No matter what the form of ownership, for the worker, the fundamental problem of debilitating work systems and hierarchical structures remains.

I know from my experience as a fitter, shop steward, union official of nearly thirty years, numerous seminars and discussions with members and activists, as well as a great deal of reading and international experience, that there is a deep well of resentment about this. There is therefore enormous potential support for the union movement if they develop a strategy to bring workers’ alienation into the open and make it an integral element of the bargaining process.

This approach should not be mistaken for the kind of ‘quality of working life’ or ‘job satisfaction’ strategies practiced by many employers and human resource managers over the last thirty years. Such initiatives usually end up creating more cynicism as they are superficial and designed to leave all the processes and management in control. Unions require a strategy that goes much deeper.

Worker Voice?

Nor is it about the amorphous concept of ‘worker voice’ which we now hear so much about. If ‘worker voice’ means starting with some form of consultative process such as joint consultative committees, forget it. Experiences from the nineties demonstrate that the starting point for workers is to have the authority and skills to improve their local work systems. These systems are the immediate source of their frustrations, the ones they know most about and know how to improve. Once this process is under way, then consultative mechanisms dealing with the broader, systemic issues have real meaning, provided they deal with practical issues and make real decisions which are carried out.

Eventually consultative mechanisms, implemented in a step by step process, start dealing with sophisticated issues such as business strategy, investment in the workplace etc. If worker voice means this, then it can have a future: the critical issue is the process of how it develops, and that the starting points be real and practical.

The trailblazing Scandinavian unions, governments and employers which pursued quality of working life strategies in the eighties, still often missed the point that dealing with inefficiencies is really what gets workers interested in change. In a recent discussion a Norwegian colleague with very long experience of such work, agreed with that view.

Employees Dislike Inefficient Workplaces

When workers set out for work each day they probably subconsciously hold the following goals in mind:

  • Get home in one piece.
  • Do something worth while for the community, and be recognised for it.
  • Do something interesting and challenging.
  • Produce a worthwhile product or service.
  • Do the work effectively and efficiently. (Effective means that a result is achieved; efficient means that it is achieved with minimum input and waste.)
  • In the process, learn something, improve skills and have the possibility of going on to more skilled work.
  • Work in a congenial atmosphere where friends are made.
  • Get reasonably rewarded.

What gets employees enthusiastic to improve and change work systems, is not a superficial quality of working life project or win/win, (not that they can’t be helpful), but doing something about the inefficiency and waste which they experience every day. Most workers don’t like working in wasteful and inefficient workplaces, particularly when they can usually see how things could be made much better, but are never asked. This goes for white, blue collar and knowledge workers, as most businesses are nowhere near as productive as they could be.

Once employees have the freedom to make improvements – which inevitably means working differently e.g. in teams, more decision making, less demarcation, new skills and responsibilities, etc. – that’s when they experience more challenging and interesting work. In other words, we don’t develop quality of working life as an end in itself, but as a beneficial side-effect of making the workplace more productive. When this happens quality of working life takes on a new meaning, and employees once started won’t give that up without a fight.

Managing is too important to be left only to managers

In a large New Zealand dairy company a union-initiated management improvement system called TRACC has been running for several years with the goal of improving productive performance. The union in question supported TRACC or as it is known in that company Manufacturing Excellence (ME), because it is a genuine process for business improvement. It begins at the shopfloor, where virtually from day one employees are trained to understand the concepts underpinning productivity (such as the importance of teamwork and leading and managing change) as well as being trained in the technical aspects of productivity measurement and methodologies. Entry-level employees increasingly take responsibility for saving time and waste, controlling quality, innovating new processes and even products from material previously wasted. As a result, there is a change in the role of middle managers; they have a coaching role that makes them more visible and accountable as part of the work team. The employees become more skilled with important responsibilities, and they like it.

About 12 months ago the company indicated that taken together four of their plants had savings over five years of $100 million, much of it resulting from reduced down time and increased product coming through to the market, from the same inputs. There was no loss of jobs in the areas where ME was operating, but as a result of increased efficiency and productivity, and higher quality in certain product lines, this put pressure on other parts of the organisation, e.g. logistics and sales operations, to respond.

On top of their bargained wage increase the employees received a bonus for this improvement. Management after a recent international study tour announced that they intended to keep working constructively with their unions because they found in their study that workplaces with such a constructive relationship were more productive. The company at the executive level now understands the importance of working with the unions instead of attempting to bypass them as some middle managers had done in the past.

Another NZ manufacturing plant which had never made a profit was turned around using the same system and resulted in the employees receiving $6,000 each in bonuses, again with no lost jobs.

In 2006 at a national discussion of shop stewards involved with the dairy ME example, a number of those present agreed with a comment to the effect that, ‘there would be a riot in my plant if either the union or management were to withdraw ME, we would never again co-operate to improve performance’. In a survey conducted by Michael Law of Waikato University among the union members about ME, there were generally positive responses about the impact on their jobs, while also indicating weaknesses and criticisms. However in response to the question ‘In general do you agree that unions should be involved in promoting High Performance Work Systems such as ME?’ 70.7 per cent agreed or strongly agreed. This alone suggests that it is a crucial element for a union strategy of relevance.

In David Peetz’s recent book, ‘Brave New Workplace’ he quotes from a study within a large Australian bank which examined ‘duel commitment’ i.e. union members having both a commitment to their union and the performance of the company, and the authors concluded:

‘The findings of this study are quite clear. Bank branch performance was clearly higher when employees displayed loyalty to their union, were satisfied with its performance and believed that the industrial relations climate between the two parties was trustful and co-operative. A collective work orientation was also associated with better performance outcomes’.

It is not surprising to hear that this company continues to work constructively with their unions, and is not interested in the WorkChoices legislation.

Also from David Peetz’s book :

‘surveys show unionists simultaneously want unions to cooperate with management and (even more strongly) want management to cooperate with unions, while demanding (more strongly again) that unions vigorously stand up for the interest of members when they are threatened. Indeed it may seem paradoxical, but union members are more willing to go into conflict with the employer when members perceive their union to have been cooperative’.

Unions, collective bargaining & productivity

There has been a fair amount of research about the links between unions/collective bargaining and productivity, some of which has been conducted by, inter alia, Peetz, the World Bank and Black and Lynch in the US, who have produced a number of papers since ’96 examining union presence and productivity. In general the conclusions suggest that there is little evidence that unions/collective bargaining per se are an impediment to business performance. Even research commissioned by the Business Council of Australia designed to show that individual contracts and less union intervention will improve productivity, could not prove the point (Peetz 2006).

What does come through in the World Bank study study published in ’03, of 1000 peer reviewed papers examining collective bargaining, is that it is more equitable (which is to be expected), and that on balance it probably assists productivity. The Lynch and Black studies show that where a management is introducing a process for improving performance e.g. TRACC, and the employees are unionised, the improvement will be significantly better than when they are not unionised. They also show that unionised workplaces are more likely to adopt new technology more efficiently, and are more likely to have training programs and be more skilled.

This is not saying that all unionised workplaces are more efficient than non-union workplaces. Black and Lynch show that where a management has no effective plans for change such as for example introducing a TRACC process or are incompetent and the place is unionised, the likelihood is that productive performance will fall.

The responsibility for improved performance rests with management, but if they are competent and visionary they will realise that a unionised workforce has considerable potential, and some employers, especially a few larger ones, acknowledge this and work constructively with their unions.

Unfortunately the leaders of most Australian employer organisations – many of whom have never managed anything – are ideologically driven to deny the considerable amount of research demonstrating the positive role unions can play.

If unions have a potential positive effect even as passive participants, then if they were to pro-actively bargain and take the initiative about business performance, mobilising the knowledge and commitment of their shop stewards, officials and members, the impact of unions should be much greater.

By setting out to make themselves indispensable to the success of the business, and take their strategy beyond bargaining about traditional wages and conditions, unions can not only earn the support of their existing membership but also s recruit new members.

A very important lesson from recent New Zealand experiences and from examples of collaboration between employers and unions in Australia in the nineties, is that the unions must have their own clear and independent strategy for bargaining about workplace and industry performance. Without that not only will the process not lead to improved performance, but the unions and their members will lose out.

Boxing and dancing

This is not simply a process of partnership, but of arms length bargaining – similar to the familiar process of bargaining over wages and conditions. However the unions must have their own set of objectives, for example their own principals for better work systems for their members, for consultative mechanisms, high skills, better OH&S, job security, stronger union organisation and more members etc. If the bargain with the employer does not match union principals, then the union should not agree.

We constantly hear that trust is needed to achieve significant workplace change and business improvement – but that is putting the cart before the horse. Trust only emerges when there are genuine negotiations and proper implementation of the negotiated agreement. This rarely happened in Australia in the nineties so very little changed except that which the employer had decided was in their best interest. In retrospect the lack of a clear union strategy undermined the union’s role and tended to make many members cynical about the exercise.

The process is best described in a recent book from Europe, ‘Strategic Unionism and Partnership’, as one of ‘ Boxing and dancing’. That is, unions continue to bargain with employers as always. At times they ‘dance’ (cooperate with employers to improve business performance), and at other times they will box (take industrial action) in the traditional way when necessary to protect and advance their interests. The important point about boxing and dancing is that boxing is recognised as a legitimate element of employer/union relationships and it will occur from time to time, but that should not stand in the way of resuming the dancing mode.

In a quote from the book by the President of the Swedish Metal Workers Union he said:

‘Sometimes it’s a dance, sometimes its boxing. We also have a referee when we box in the form of the [agreement] rules. We have also talked about how big the ring should be, how many rounds there should be, and what one should hit and shouldn’t hit’. Although both boxing and dancing existed previously, their nature had changed … ‘If you take the old dance floor – we both boxed and danced. But one danced sometimes after one boxed, in order that boxing matches weren’t too long … now its about 90% dancing and 10% boxing. With three year deals there are very short boxing matches …But it’s bloody important that we don’t stop boxing .. we wouldn’t get any legitimacy for the Industry Agreement if it wasn’t clear that we can also take industrial action.‘ (Emphasis added)

New Zealand unions seek new directions

Arising from the experience of TRACC in the dairy industry and other businesses, the New Zealand union movement through the NZ Council of Trade Unions (NZCTU) is currently developing strategies to give the unions’ role in improving business performance a higher profile, under the rubric ‘Unions and High Performance Work Systems’ (HPWS).

In partnership with the NZ Government and with support from some employers, the NZCTU is currently taking 3,600 shop stewards through training to help them understand productivity and HPWS, and begin to equip them to bargain at the enterprise about business performance. The early reports of the training suggest that the participants are not only very interested in productivity, but want to do something about it when they return to their workplace.

A couple of unions are preparing material for use by officials and shop stewards which sets out union principals for workplace change, steps for consulting their members, identifying impediments to efficiency, and how they might bargain about these.

The union movement is developing its own agenda for business improvement and not simply relying on the employer.

Occupational health and safety

Another very important reason for unions to intervene in the management-designed labour process is occupational health. An extract from an article by Peter Botsman In Australian Prospect of ’05 referring to the work of Michael Marmot sums it up rather well;

‘Organisations that make you sick have always existed, but the mass pathology associated with work and organisation is a new discovery. In a twenty five year long research project that began with a study of health and longevity among Whitehall public servants, Michael Marmot found that autonomy, security, the amount of control that people have over their lives, and above all, place in the organisation hierarchy, are critical factors in the prevalence of ill health.’ (Marmot 2004)

Marmot’s original study found, contrary to expectations, that ‘it was not the case that people in high stress jobs had a higher risk of heart attack, rather it went exactly the other way: people at the bottom of the hierarchy had a higher risk of heart attacks’ (Marmot ’02). In extending his original findings Marmot found that the lower the place in the public servant hierarchy, the higher the risk of all major causes of death.

The Whitehall study found that amongst male British civil servants, all in stable employment, none in poverty, there was nonetheless a gradient of mortality. ‘Each grade in the civil service has higher mortality than the one above it’ (Marmot 1999)

In his further examinations of the public health implications of this work, Marmot finds that across all western countries a similar gradient of ill health occurs. In the US for example, people in the lowest income category had 3.9 times the risk of dying than people in the highest income category.

Marmot argues that ‘The work environment, particularly the lack of control over the work environment, was an important predictor of coronary heart disease. These findings were replicated in a variety of different national settings. The data was so robust that Marmot concluded: ‘Where do we find the health gradient? Pretty well everywhere’. (Marmot ’04)

This understanding of the health impact of the way work is organised is not usually obvious (we normally look for the obvious causes of accidents or disease). But it provides a further compelling argument for unions to intervene in the way work is organised and managed. The medical profession should be trained and required to examine the working system and conditions their patients work in, as if Marmot is correct, such knowledge will go a long way in explaining some illnesses.

Union ambivalence about playing a productivity role

Unfortunately many unions and especially a lot of union officials are ambivalent about the union impact on business performance. There are those who argue the class struggle theory and say that it is not the unions’ job to help the employer run their business because there is a fundamental conflict between employees and employers. Even if there is such a conflict however, their members don’t necessarily see it that way, and would appreciate the opportunity to play a significant role in improving performance.

In numerous seminars in which I have been involved where these issues were discussed the shop stewards rarely saw inefficiencies as a class or systemic issue, but the cause was incompetence of their particular management, and that management down the road at another workplace would have to be better. This even led to discussions where the participants argued that no place could have a management as bad as their particular one. On one occasion in a shop stewards seminar in the USA, the participants argued that US managers had to be the worst in the world!

It is important that union training in Australia should include sessions/material for union officials especially, but also shop stewards to understand key elements of what makes businesses more productive. This will equip them even in today’s very difficult climate, with some knowledge and skills to bargain with management when companies get into difficulties due to poor management, so that they don’t only bargain about redundancy pay, but can talk in some detail about how the business might become efficient enough to maintain most if not all the jobs which would otherwise be lost.

Traditional class struggle?

Nowadays there has to be a serious question mark over class struggle as the basis for mobilising workers, as there is little sign of it among workers. In Australia at the moment there is a vicious class attack by most employers, particularly employer organisations and the Federal Government on workers, especially the lower paid, but there is little evidence that this is being reciprocated by a class response from workers. It is estimated that 40% of unionists voted for the Howard Government at the last election which hardly suggests an understanding of class struggle. Class struggle assumes there are two classes in combat and that is currently not the case, nor has it been in Australia for at least a couple of generations. We must not mistake the very good campaign conducted by the unions in opposition to the WorkChoices legislation as class struggle, as it is only mobilising a small percentage of workers, despite the polls continuing to show strong public opposition to the IR laws.

There are still union officials and activists who take an uncompromising approach that all employers are the enemy. A laudable attitude if the rest of their members agreed with them, but the overwhelming majority of them don’t see it that way. Most workers do not see themselves as working class or as participants in a class struggle, nor do they hate their employers, even when at times it would be well justified, and only a very small percentage have ever experienced industrial action. In other words, although the ruling class is attacking workers as possibly never before since Federation, there is no subjective recognition of this fact from the overwhelming majority of workers, and to have a class struggle it would seem necessary for that to be the case.

The book by Prof. Walter Korpi ‘The Democratic Class Struggle’ in the mid-eighties, raised a lot of interesting thoughts about class struggle in the era of globalisation. Korpi argued that modern class struggle now had to have the strengthening of workplace democracy at its core, and that traditional militant action did not necessarily indicate a higher level of class/political consciousness nor sustained gains.

He pointed out that while countries such as Italy, USA, and Australia had far more strike activity than Sweden, in terms of sustained gains in wages, working conditions, and particularly welfare provisions for protecting the unemployed and the less well off, the Swedes had done much better. While the Swedish labour movement had much less strike activity, their threat of industrial action had been far more important than its actual use. This is because over the years when push came to shove the Swedish union movement has been able to deliver. For example it called the most widespread general strike ever in any country, in the early eighties, which leaves a long memory, so when they threaten action, the employers and governments know very well it can be delivered.

Prof. Korpi argued that class struggle should be manifested in democratising the workplace through what he termed ‘power resources’. Each time workers/their union increase their power vis a vis the employer/industry (e.g. by establishing a union presence and organisation, potential for industrial action both as threats and carried out, rights to a major say in occupational health and safety, consultative mechanisms such as works councils, access to information or participation in company decisions, new work systems which increase worker prerogatives, increased skills, bargaining for improved business performance, etc.), they improve their power resources. Each power resource achieved provides the springboard for the next.

This does not suggest that it is a linear process with no setbacks. Clearly in the Australia of 2007 a number of power resources have been lost and will need to be fought for again with a view to them being sustained in any economic or political climate. However the idea of building on each gain as a logical step to the next, helps to provide a longer term and clearer labour movement strategy, and also to see class struggle in another way, better suited to the modern, globalised world.

Contingent workers and the role of workplace change

A difficult problem for many union movements is the increased numbers of contingent workers, especially in Australia where they are said to make up at least 25 per cent of all employees. Organising people with a portfolio of jobs is a challenge requiring new methods – some of which are already in place. The strategy suggested here of tackling management about high performance work and management systems could be very helpful in engaging this hard-to-reach sector of the workforce.

One important feature of high performance work systems is that once a company moves down a road demanding sophisticated work and management systems, higher skills, and greater employee responsibility, then that company also requires a stable workforce. The constant chopping and changing of a temporary workforce is at odds with a modern high performance work system, which requires skilled, committed, flexible employees with an ever deeper knowledge of their workplace.

Therefore unions by pursuing a strategy of high performance and tackling management about their inefficiencies, can also begin to demonstrate that short term, low cost employment policies undermine their business performance.

Community unionism is not an answer in itself

As unions worldwide experience decline, there is a tendency to look for quick and simple solutions. One of these is so-called community unionism, i.e. involving local communities in identifying common goals and joining in organising drives.

This is not to suggest that community support and working with communities is not important, or that unions don’t need their critical support at times. However we need to understand that unions are uniquely about work, the workplace and industry, and that is their priority and starting point, and any strategy for renewal and growth must keep that front and centre.

To be effective, links with the community and other coalitions must be based on the concrete interest of the union members, and not some amorphous idea of common interest.

For example in the early nineties the food processing unions through the ACTU developed a comprehensive union workplace and industry strategy with the objective of making the industry globally competitive through new work systems, higher skills, better management, new government initiatives, etc. This logically led into a constructive dialogue with the farmers through the NFF (prior to the Howard Government) because both parties realised that there was mutual benefit in such a high quality industry. It also led to constructive relations with the Australian Consumers Association around the issues of healthy and good quality food and proper labelling. The unions had useful discussions with the Australian Conservation Foundation around the issue of how the union strategy for a high quality food processing industry should also contribute less waste and environmental damage. Finally it was also the basis for a constructive dialogue with the large food processing companies, who felt obliged to discuss a comprehensive, and strategic plan for their industry coming from the unusual source of their unions.

The point about this example is that the unions engaged the wider community and especially strategic allies, not in some abstract way, but based on the logical relationship of how these allies and community groups could work together to improve the workplace and industry, to the benefit of consumers and the wider society.

Superannuation and investment funds

There is an irony in the current attack on unions and wages by employers given that a significant percentage of the investment funds which fuel their businesses is actually made up of workers’ superannuation contributions. Attempts are slowly being made both in Australia and internationally to influence boards of trustees, and particularly employer representatives to understand the kinds of investment and management systems which will not only provide better business performance, but have a greater likelihood of sustaining the business over a longer period. However it is a long and difficult process.

Institutional funds have traditionally been very reluctant to intervene at the board, or even the annual general meeting, preferring to leave the business strategy and day to day management to the so called experts. Recently we have witnessed some increased institutional investor activism regarding corporate governance, board and CEO remuneration, and internationally in a couple of cases to influence companies to treat their employees and local communities better, with some small success.

The most offensive investors are the private equity funds, described by one writer as the ‘barbarians at the gate’, whose purpose is to take a successful company into private ownership, squeeze every possible dollar out of it through sackings, speed ups, slashing of wages and conditions, breaking up the company, and then selling off the pieces at a short term profit, often destroying the business in the process. This is precisely what is happening to Qantas at the moment, where we are likely to see the destruction of significant value and jobs, and possibly the demise of the company, so that a very small handful of people can make a huge profit and move on. One writer in the business pages, commenting on the potential Qantas takeover, has already warned the unions of a possible attack on their wages and conditions.

Part of the tragedy is that institutional investors such as some industry superannuation funds are likely to be involved. If the union movement is to embrace a strategy which involves them as an integral element of wealth creation and value adding, it will be very important that it is a holistic strategy, which includes a planned and systematic approach to institutional investors, especially industry superannuation funds. It will be critical to have them understand what kind of management delivers the best results, and that the unions will be playing a constructive role.

It is imperative that if the suggested strategy is to succeed, unions establish some legitimate influence with investment decisions using their member’s money, otherwise the best changes at the workplace level will be easily destroyed by decisions taken in investment board rooms.

A national climate for constructive engagement?

Having raised some thoughts about a more constructive engagement between the union movement and employers, we need to explore whether and how that might be possible. The right climate certainly doesn’t exist in Australia at the moment, but it needs to be thought about, and some discussions need to take place right now.

International experience suggests that such constructive engagement is far more achievable when government and labour laws provide an encouraging climate for it. The traditional culture in Scandinavia for example has meant that even when social democratic governments have been defeated such as in Sweden recently, the culture of constructive engagement is strong enough to withstand such change, with some different tactics and with greater difficulty. The same goes for much of Western Europe. Interestingly the same can be said about some states in the USA where despite vicious attacks on the union movement at the Federal level, a number of states with more progressive governors have been important in facilitating constructive engagement between unions and employers.

In Ireland there has been a tri-partite agreement between the government, employers, unions, and now involving many other signatories, negotiated every three years since ’87 which has been the key to the spectacular improvement in Ireland’s economy and living standards, and provides the culture for constructive engagement between the social partners, as they are widely known in Europe.

Since ’99 the New Zealand Labor Government has provided a far better climate for constructive engagement, but it hasn’t happened without a lot of effort, as the unions have had to work through new strategies, especially arising from the attacks on them in the nineties by the National Government and the Business Roundtable. While the unions have survived despite losing about 60% of their membership and are now slowly growing, they are only slowly clawing back the 33% drop in wages among the lower paid which resulted from those attacks. Learning from those lessons they are positioning themselves to play an important role in the productivity of New Zealand’s economy – and virtually forcing employer organisations to take notice of them and reluctantly engage in dialogue about a high-road economy.

Can this happen in Australia?

While we have just about the worst of all climates under the current IR laws, every opportunity needs to be pursued for constructive dialogue with the better employers to discuss a range of issues, but especially that of a high road economy.

Some things are going well such as the National Manufacturing Forum – which is about pursuing a high road economy – initiated by all Labor states with the ACTU playing a major role along with some employers. This initiative needs to inform a more comprehensive strategy so that it is only the beginning of a much wider dialogue.

The union movement needs to grab every opportunity to engage employers in a constructive dialogue about the future productivity of our economy, with the long term objective of maybe a more substantial agreement when we have a government that will commit to such objectives. In other words we need to be putting that in place as much as we can right now, and not hold our breath until a Labor Government is next elected.

Every employer who is prepared to engage constructively with their union/s despite the new IR laws (and often despite significant pressure from the Howard Government to reject their unions), should also be engaged in a wider dialogue about the future of Australia. Constructive engagement seems in most countries to be superior in delivering more productive outcomes and living standards, and the kind of productive and equitable society the union movement is committed to.


  • The union movement through the ACTU is conducting an excellent campaign against the Howard IR laws focusing on fairness and union and workplace rights.
  • A further element needs to be added to the campaign to challenge the claim that WorkChoices will lead to higher productivity – that of positioning the unions as an important force for a high road economy, and better productive performance through High Performance Work Systems.
  • To do this the unions must have their own independent strategy for productive improvement.
  • The strategy of pursuing High Performance Work Systems can be another tool for union organising especially with contingent workers.
  • Unions need to pay more attention to the micro labour process of the way work is performed.
  • Employees/Union members are interested in and prepared to work towards dealing with the inefficient and frustrating management systems they work within as part of an attempt to improve productivity. This in turn leads to more interesting and higher skilled work for those members.
  • Workplace change must be a bargaining process and not some amorphous partnership where the employer holds most of the cards.
  • Union training must include some segments/materials to equip officials and shop stewards with an understanding of the key elements of what makes businesses productive.
  • Traditional class struggle theories need to be modified to focus on democratising the workplace and increasing workers’ power in their place of work and industry.
  • Unions need to position themselves as an indispensable element of a business’s success.
  • The process can be described as ‘Boxing and Dancing’, where traditional industrial action is used where necessary, as well as constructive dialogue about company performance, and not one or the other.
  • Community unionism is unlikely to be very helpful to rebuilding the union movement unless it is closely linked to union objectives for work, the workplace, and industry, which is the unique role of a union.
  • The strategy must be holistic in that there are many components, and investment funds, especially the industry superannuation funds, will need to be brought into the loop over time to play a progressive role.
  • The whole union movement needs right now to grab and develop every opportunity to engage the better employers in constructive dialogue about a more productive and equitable Australia, with a view to a more comprehensive agreement leading up to or during the rule of a Labor Government.

Max Ogden would like to thank Dave Davies, Dave Feickert, and Greg Pettiona for their helpful comments.