Militant Unions? Not A Problem For Oz Employers


Like much of our public debate, comment on workplace relations from our elected representatives generates far more heat than light. The public posturing kicked off again in response to the release of the Fair Work Act Review, which more or less gave the Fair Work Act 2009 a clean bill of health. In response to the predictable crowing from the Government and the poo-poohing from business lobby groups, Tony Abbott ran in the media with the idea that Australia has what he calls a "militancy problem".

When asked to elaborate, he was vague to the point of cryptic in his comments. That’s unsurprising, given the ALP is likely to spring on any comment from the Coalition in this area as an excuse to wheel out the WorkChoices zombie.

Presumably Abbott meant we have a union militancy problem. He’s certainly not suggesting that employers like Qantas are out of control and need to be regulated. Abbott echoes a view widely held (and enshrined in the Fair Work Act’s objects) that industrial action always has an adverse effect and should therefore be curtailed. As far as it’s possible to tell, the Coalition and business lobby’s working definition of militancy seems to be "employees doing stuff collectively".

Working from that definition, do we have a militancy problem that the authors of the Fair Work Review missed?

On the face of it it is easy to answer without even needing to wade into the review. The ABS has good data on "industrial action from measurements of:

  • unauthorised stopwork meetings;
  • general strikes;
  • sympathetic strikes (e.g. strikes in support of a group of workers already on strike);
  • political or protest strikes;
  • rotating or revolving strikes (i.e. strikes which occur when workers at different locations take turns to stop work);
  • unofficial strikes; and
  • work stoppages initiated by employers (e.g. lockouts).

The majority of these are actions taken by workers, so with certain reservations the ABS data is a reasonable measure of employee action. Whether this is the same as militancy is open to debate. But if you assume industrial action is always "militant", then how militant are workers? Here are a couple of graphs to illustrate:

Number of disputes, and working days lost per 1000 employees. Source: RBA from ABS data.


ABS Quarterly dispute rate in Australia working Days lost per thousand employees 2000—2009. Source: ABS Industrial Disputes, Australia, September 2009

Grog’s Gamut has a great breakdown of the information into a multitude of graphs. The point is the same with three graphs or with 30: By any measure, the graph only goes down, and has done so for 25 years.

One way to look at this is to acknowledge that the number of disputes has dropped over time without any reference to the regulatory framework, and therefore everyone should stop pretending that changing legislation will have any effect. That’s unlikely to be an argument that persuades many commentators or interested parties in the area.

Leaving aside the particulars of the legislation, and the tinkering the review recommended, all sides of the debate are likely to continue in their positions about what the legislation should and shouldn’t do regardless of the review, or data that shows they are wrong. In light of the militancy argument though, the data on strike action warrants further examination. There might be something in the argument that the Fair Work Act has had an effect on strikes — but it’s not the effect you might think, or the one the employer organisations say.

There are a number of things we don’t know from the ABS data, one of which is crucial. The data doesn’t disaggregate industrial disputes out by jurisdiction — it doesn’t tell us what is happening in the state systems and what is happening in the federal, Fair Work Act-regulated system.

In 2006, after an unsuccessful High Court challenge by the States, WorkChoices shifted most employees from the State to the Federal system by virtue of the corporations power of the Constitution, and the Fair Work Act has extended its reach beyond this after the referral (by all States except WA) of their private sector employers. Estimates of the number of total employees of Australia’s workforce now in the Federal system start around 80 per cent and go up.

While most employees, then, are in the federal system and subject to the Fair Work Act, a fair chunk remain outside it. This is key to judging what effect the Fair Work Act (or any Commonwealth workplace law post 2006) has on strikes. The Fair Work Act covers all federal system employees, but the ABS data includes industrial action in all State systems and the federal system. It captures everyone, not just the workers covered by the Fair Work Act. Local government, State government, and some other employees are still within their respective State jurisdictions. The ABS counts their strikes as part of an overall measure of industrial action, and it’s here that we’ve had the most action recently.

The ABS identifies media reports as one of the methods for gathering data on strikes. A quick search of "strike" identifies that in 2012, we’ve seen strikes from teachers and firefighters in NSW, with action being mooted by public sector unions in Queensland. There was also a busy end-of-year in 2011, with the September quarter ABS data capturing a day of action from NSW public sector workers. All of these strikes are in response to various bargaining positions or budget announcements by State governments and took place in the State systems. They are not generated by, or even related to, the Fair Work Act.

There are strikes happening in the federal system — but outside a few, such as actions by Toll workers at Coles distribution centers, they are examples of militancy only insofar as you can assume the employer isn’t happy they are happening. Most are "protected industrial action" for the purposes of the Fair Work Act.

The institution of "protected action" is a peculiar one, first introduced by the Industrial Relations Reform Act in 1993. Australia has attracted much criticism for this regime, which has persisted since the 1990s under ALP and Coalition governments, as many see it as failing to meet our international obligations under International Labor Organisation (ILO) conventions which broadly provide for a right to strike. Whether you think it meets our ILO obligations or not, workers have a right (after going through an application process for a ballot) to take industrial action during their bargaining period. Given that Australians in general and employers in particular think industrial action is always a bad thing, it is possible that this is the militancy problem employers are identifying: that workers are seeking to exercise some collective power while bargaining for a new agreement.

In the ACCI submission to the review, they home in on this specifically, noting "ACCI’s analysis of secret ballot results published since 2006 by Fair Work Australia illustrates a significant increase in the overall trend of unions seeking protected action ballots."

Well, so what? This is an entirely legal process, and one that’s been part of the IR framework for some time. It specifically falls within the provisions of the bargaining sections of the Fair Work Act. Where workers take action outside of this framework, employers have flagged that they will pursue damages against unions, and their own employees individually.

So what do employers want to see happen to fix the so-called militancy problem? Presumably it’s to see all strikes made unlawful, even those permitted under the Fair Work Act. This could turn out to be something of an own goal: all strikes were illegal before 1993, yet industrial action is almost 90 per cent lower now than then, when some strikes are permitted. Now, even protected action during bargaining periods is a rarity.

Without the data it’s impossible to say, but I suspect that were you able to take out public sector industrial action, then the number of strikes in the federal system wouldn’t just continue its downward trend; it would fall off a cliff. If you accept the proposition that IR regulation has something to do with preventing industrial action, then the Fair Work Act has, I suspect, been even more successful than WorkChoices at doing so. It reaches further into the private sector and permits a small amount of certain actions during bargaining, but that’s all. By extending the reach of the Commonwealth, it may have helped to reduce worker collective action.

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