Harsh Justice Is Coming For The Unions

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As ACTU Assistant Secretary Tim Lyons pointed out on Tuesday night, the last Liberal prime minister who didn't find time to hold an anti-union inquiry was Billy McMahon.

Tony Abbott was instrumental in setting up the last one, the Howard Government's 2001 Cole Royal Commission into the building and construction industry. Malcolm Fraser, now beloved by many progressives for his stance on refugees, organised two: the 1980 Costigan Commission into the Federated Ship Painters' and Dockers' union, and the 1981 inquiry into the building and construction industry unions, which was the beginning of the end for the old Builders Labourers Federation.

The current union witch-hunt, the Royal Commission Into Trade Union Governance and Corruption, was announced at last on Monday by Abbott, George Brandis and Eric Abetz. The Commissioner will be retired High Court Judge Dyson Heydon, who will celebrate his 71st birthday in the inquisitor's chair.

The rationale behind Heydon's appointment is so transparent that the Coalition and its supporters are already celebrating. The Australian's Legal Affairs columnist Chris Merritt wrote this week that his appointment was a "no-brainer", because of his previous views on organised labour.

Heydon's appointment will give him the chance to implement his "big idea". During an 1989 inquiry for the Greiner Coalition government, Heydon proposed that unions should be structured and policed by the corporate regulator (which would now be ASIC), under a system derived from corporate law, rather than by a separate system of industrial law courts.

"As royal commissioner, Heydon will have another chance to give life to this vision," Merritt wrote. "And this time he will have more coercive power than he ever enjoyed as a judge." Why is Heydon interested in such an idea? In 2002, prior to his appointment to the High Court, he gave a speech at a Quadrant magazine dinner, where he decried so-called "judicial activism", saying:

"The rule of law operates as a bar to untrammelled discretionary power. It does so by introducing a third factor to temper the exposure of particular citizens to the unrestrained sense of self-interest or partisan duty of other citizens or institutions – an independent arbiter not affected by self-interest or partisan duty, applying a set of principles, rules and procedures having objective existence and operating in paramountcy to any other organ of state and to any other source of power."

Unions, and especially militant unions whose members work in high-risk jobs and trades, are occasionally prepared to bend or break laws for political ends. And so they should, especially when those laws are less the product of "a set of principles … having objective existence", and are transparently the result of regulatory capture, corruption or out-and-out class war.

This puts organised labour at odds with the black-letter legal mentality that sees a common system of corporate regulation for both unions and "employer associations" as "objective". It should go without saying, but there weren't many members of the Business Council of Australia worried about their futures after the Toyota announcement this week. Neither are there 1.8 million members of employer associations clamouring for better wages and conditions, who can't hire silks to do it for them.

The fiduciary and regulatory requirements of a corporate law style system would be the end of whatever union militancy exists. Will this be the result of Heydon's Royal Commission? As Michael Bradley, the managing partner of Marque Lawyers wrote in March last year, at the end of his High Court tenure he "didn’t think things were getting better … I guess Heydon would say that he didn’t become grumpy, the rest of the court just got more activist and he stood his ground."

In real terms, that translated to some interesting figures:

"As recently as 2010, Heydon delivered dissenting opinions in only 15 per cent of cases, but that rose to 45 per cent in 2011 and 40 per cent in 2012 … If he’s right, the High Court has actually been wrong over 40 per cent of the time in the last two years"

A "Heydonist" Australia is not one many on the left would welcome. According to Bradley, in such a world:

"Tobacco plain packaging would have failed, the Malaysia solution would have succeeded, refugees could be detained indefinitely, and we would not have an implied constitutional protection of freedom of speech."

Heydon, whose main field of inquiry will be the CFMEU after recent corruption allegations, is described as a brilliant, if pedantic, legal mind whose conservatism has been overstated. Luckily, the Abbott Government has given the nod to two men whose conservatism can hardly be stated enough: Nigel Hadgkiss and John Lloyd. Both men were appointed by Abetz last year to the Fair Work Building Industry Inspectorate, Hadgkiss as Director, and Lloyd as Chair of the advisory board.

Hadgkiss and Lloyd have a long history in the construction union-busting biz. After John Howard's Cole Royal Commission, Hadgkiss headed up the Building Industry Taskforce. As chronicled in the SMH in 2005, the BIT reported that — surprise surprise! — trade unionists in the construction industry had "a culture of civil disobedience, coercion, intimidation, threatening behaviour and contempt for the law". The CFMEU condemned the BIT's report as propaganda from "a cheer squad for extremist elements in the Howard Government".

The BIT then became the Office of the Australian Building and Construction Commissioner, which had the power to set up star chambers to interrogate union members. The Ark Tribe case, where a unionist was prosecuted for refusing to obey directions from the ABCC, led to the watchdog's dissolution. Hadgkiss was its infamous deputy commissioner from 2005 until 2008. John Lloyd was commissioner from 2005 until 2010. What's the chance that they will they present a "wall of silence", as was the case when unions and their sympathisers fronted the Cole Royal Commission? 

The Master Builders' Association, the employer association for the construction industry, cheered the appointment of the two union busters, saying it was a "welcome step towards the reinstatement of the ABCC and industry specific legislation" that "could be interpreted as a sign that the FWBC will shift its operational focus back to its core function of investigating and prosecuting breaches of industrial action, right-of-entry, freedom of association and coercion".

CFMEU Construction Secretary Dave Noonan has tried to mount a counter-attack, calling for the Royal Commission's terms of reference to be broadened to include Coalition-affiliated "slush funds" and management corruption. His demand isn't without merit. The 1992 Gyles Royal commission into the NSW Construction industry found that:

“[T]here is evidence of widespread lack of integrity and probity amongst the management of contractors and others involved in the industry … This is reflected, for example, in the offering of dishonest inducements to union officials, workers, council inspectors, Workcover inspectors and those able to procure work…"

Noonan is unlikely to get his wish. As the Master Builders' Association wrote in a 1998 paper presented to the Australian Institute of Criminology, the point of the IR club's legal assault on unionism is only incidentally about cleaning up the industry:

"Prior to a movement towards a system of enterprise bargaining all conditions of employment were regulated by award. This system, coupled with the nature of the industry, led to a lack of identification on behalf of employees with the interests of their particular employer [emphasis mine]."

Heydon is the intellectual and legal face, Hadgkiss and Lloyd are the attack dogs, but the goal is the same: to kill off whatever sympathy exists remains for unions, and restructure workplaces in favour of the Coalition's pro-employer program. Or as Heydon put it in his Quadrant speech, "Radical legal change is best effected by professional politicians who have a lifetime's experience of assessing the popular will."

This story is part of our series on Tony's Cronies. the Abbott Government's appointments. Read the rest here.

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