Australian Trade Unions - Case Study Example

Impact of Trade Unions upon Organisations and the Economy Introduction Australian trade unions have proved ineffective in making an impact on organisations or the economy. This work contends that Australian trade unions are unsuccessful in making an impact on the organisation or economy. The following discussion proves this contention. There are three models of ideal trade unionism. First, business unionism. This model emphasises collective bargaining, promotes a mutual-gains agenda between union interests and business, and strongly supports the notion that the basic objective of unions is to provide its members with better economic results. The second model is that of social movement unionism, wherein unions functioning under social democracy endeavour to transform the economy from a capitalist structure to a social structure. The goal is to moderate market processes and forces and engender social equity and justice. The last model is that of radical unionism, wherein unions concentrate upon class conflict, embark upon a militant anti-capitalist agenda, and attempt to further the interests of the working class by activating social and political forces[Goo13]. However, none of these models proved to be successful in making an impact on the Australian economy in the present era, due to changes in the policies of the government and on account of legislation. Australian industrial labour achieved tremendous success between the years 1921 and 1950. The Australian Council of Trade Unions (ACTU) was formed in May 1927. Despite this development, it proved impossible to unite all under a single union, and this idea was finally discarded as being infeasible. All the same, the ACTU provided unions with a national voice, which they had not possessed in the past. During the 1920s, a major development was the 44 hour week, which became the norm. This transpired due to the initiative of state Labor governments, which enacted laws to reduce working hours. Thereafter, the trade unions commenced agitations to reduce working hours to 40 per week. This demand of the trade unions was conceded by the Commonwealth Arbitration Court in the year 1947[Bow11]. The early Australian trade unions provided support to unemployed members or injured members, and funeral benefits to their family. These trade unions used to resort to striking work. These actions were successful to some extent, and collective bargaining was uneven. In the 1880s a stronger labour movement emerged and this had better success with collective bargaining. This decade of comparative success came to an end in the 1890s, and several of the trade unions eschewed these methods in favour of state-sanctioned arbitration. Thereafter, between 1996 and 2005, legislation was enacted to render strikes illegal[Ell08]. Some strikes did take place, despite their being illegal. All the same, the importance of the government remained in place. Most of these strikes were aimed at bringing issues for arbitration and conciliation, and their duration was short. The number of working days lost per thousand employees, in Australia, was 1,300 in 1974. This low number was the outcome of the partnership between the federal Labor government and trade unions, in the 1980s, economic conditions, and subsequent legislative measures[Ell08]. Trade union security had been safeguarded by the initial provisions of federal industrial relations legislation. It was believed at that time that the interests of individuals were sufficiently protected by collective groups. This situation was in place from 1904 to the 1970s. During the late 1970s, freedom of choice and the right of individuals to distance themselves from trade unions were promoted by the laws. The transformation noticed in Australia was a reflection of the international trend. The latter promoted neoliberalism, which was not supportive of trade unions. Although, the contemporary Fair Work Act 2009 promotes collectivism, freedom of choice was seen to be central to it[Lam13]. Moreover, a system of industrial relations, distinguished by compulsory arbitration, had been developed in Australia, during the beginning of the 20th century. In that system, specific governmental authorities used to resolve disputes and create binding agreements. These agreements had stipulated working conditions and wages. In the year 1993, the Industrial Relations Reform Act was enacted. This engendered such change that for all practical purposes, there was no arbitral model. This act restricted the terms and conditions of bargaining and made it possible to have legally sanctioned non-union agreements[Goo06]. The conduits of wage determination were fragmented by this legislation, leading to significant destruction of wage outcomes. Legislative change took place along with a massive decline in unionisation. For instance, membership of trade unions reduced from 39.6% in 1992 to 25.7% in 1999. Thus, the Australian regulatory system underwent sweeping change[Goo06]. The Australian industrial relations framework, during the 20th century, had been distinguished by centralised and third-party institutional arrangements. These schemes served to fortify the function of trade unions and implicit voice systems. At that time the standards were that of formal and structured processes of dispute resolution and bargaining[Sab13]. A major feature of this era was the presence of obligatory arbitration. However, the industrial relations system underwent several transformations, subsequently. These changes have affected the forms, category and processes of voice mechanisms. A decline in the trade union density to less than a fifth was discerned, which facilitated the management to bring in direct voice mechanisms. In addition, an erosion had transpired with regard to the importance of the arbitral system, trade unions and industrial tribunals to the workplace. In the early 1990s a transition towards decentralised enterprise based bargaining transpired, and this facilitated direct voice and workplace consultative systems[Sab13]. Moreover, the Work Choices legislation resulted in a shift towards individual bargaining from collective bargaining. This strengthened managerial prerogative and eliminated several direct voice systems. Furthermore, the Fair Work statute produced several legislative developments, which rendered redundant, at a particular level, the necessity for bargaining and direct engagement[Sab13]. This was with respect to a number of minimum non-negotiable conditions. All the same, legislation governing the workplace, such as that relating to occupational health and safety, and anti-discrimination and equal employment opportunities compel organisations to engage in information-sharing, consultation and enforcement of workplace conditions. The multinational enterprises (MNEs) have to engage with their employees and inform them, in order to comply with statutory arrangements governing the workplace and employment. This requirement is independent of the presence of trade unions and direct bargaining with them. In addition, the requirements associated with Fair Work Australia regulations and the underlying agreements and awards may mandate that employees have to be informed, consulted and allowed to participate in workplace change and grievance redressal processes[Sab13]. In addition, the requirements associated with Fair Work Australia regulations and the underlying agreements and awards may mandate that employees have to be informed, consulted and allowed to participate in workplace change and grievance redressal processes. Due to these developments, an intricate industrial relations system has emerged. This system retains collective arrangements that coexist with individual and workplace bargaining. Some scholars have stated that in Australia, the focus is, to a greater degree, upon management and union preference for creating their own arrangements. The emphasis tends to be lower with regard to statutory provisions for employee voice. The outcome has been, in several organisations, an amalgam of direct and indirect approaches to employee voice. Thus, in the Australian milieu, several organisations have direct human resource management and trade union led voice mechanisms[Sab13]. The direct approach to employee voice diminished the importance of trade unions. In addition, the Enterprise Bargaining Principle was adopted by the Australian Industrial Relations Commission in 1991, which was a major industrial relations policy reform. The usual form of enterprise bargaining constitutes single employer negotiations with a trade union. With the advent of this new regime, industrial relations commissions issued awards that merely stipulated the standards for employment and wage that were to constitute enterprise agreements. The function of arbitration, gradually declined in Australia. For instance, in 1990 68% of the workers had relied upon it; whereas, in the year 2000 this was 23%[Wad05]. The influence of arbitration diminished with the introduction of enterprise bargaining. The trade unions were compelled to concentrate to a greater extent upon negotiating enterprise agreements, whose benefits were provided solely to the parties specified in the agreements[Wad05]. Wage setting underwent a decentralisation to the enterprise level, and this enhanced the influence of market forces upon wage setting. This trend reduced the importance of trade unions. For example, the Australian Council of Trade Unions has been persistent in its demands upon successive governments to support its claim. These efforts have failed to influence government policy[Gri04]. The tradition of labour in Australia has presented insurmountable impediments to attempts aimed at destroying it. This tradition has a standing that exceeds a century. Moreover, there is widespread acknowledgement of the benefits derived from this tradition. Some of the major achievements of the trade unions are the four weeks annual leave and the provision of superannuation to blue collar workers[Gri04]. In addition, during the Howard era, major changes were made, after collective bargaining was labelled union monopoly. The contention of that government was that employees and employers were being rendered equally capable and entitled to select the type of agreements to regulate work. A major legislative initiative that facilitated this was the Workplace Relations Act of 1996. This piece of legislation was significantly biased against union-based collective bargaining. It effectively enervated the award and collective bargaining mechanism, deprived trade unions of their power as bargaining agents, and diminished their capacity to recruit, access and effectively represent members of the workforce[Coo08]. Moreover, there was other legislation and direct governmental intervention that was aimed at depriving the militant unions of their power. Some of the changes wrought by the Workplace Relations Act 1996, were the introduction of severe fines for industrial action, making union access to workplaces more difficult, and diminishing the power of the Australian Industrial Relations Commission to resolve industrial disputes. Moreover, the labour law promoted an individual agreement mechanism. These contracts were termed Australian Workplace Agreements, and they reduced union involvement in representing employees or agreement making to a minimum[Coo111]. These agreements proved to be excellent devices for individualising employment relationship regulation, as they were deemed to be superior to the conditions in collective agreements. In the period from 1996 to 2007, the government relentlessly contended that collective bargaining had become obsolete. The government argued that measures had to be adopted to promote the productivity and efficiency of the workforce, for becoming internationally competitive[Coo111]. However, the government contended that union rights, such as freedom of association were safeguarded by legislation. Despite the presence of clauses that made it illegal to discriminate against union members, a ballot process for permitting employees to be represented or not to be represented by a union was absent. The employer was not under an obligation to enter a collective agreement with his employees, even if the majority of these individuals were in favour of such agreement [Coo111]. Thus, there was no union recognition under the extant legislation. Moreover, the intricacy of economic management in Australia increased with the devaluation of its currency and the inflation of the early 1980s. The ACTU found it difficult to make the unions hold to the Accord, on account of the real wage stagnation. Between 1983 and 1991, considerable tension was present in the Accord, as it required the federal arbitration tribunal to uphold the wage policies agreed upon by the government and the ACTU. In the initial stages, the tribunal provided rulings that were acceptable to the Accord partners. However, by the late 1980s there was an enhancement in tension, and by 1991, the centralised mechanism for determining wages floundered[Han141]. Furthermore, in the 1990s, Australian trade unions underwent a steep decline. This was exacerbated in 2004, with the election of a government that was seized with eradicating unionism. This government introduced the Work Choices laws, which depicted the strongest opposition to unionism. To counter this, the trade unions conducted a three-year long campaign Your Rights at Work. The Unions New South Wales, the largest peak union of Australia, attempted to develop novel strategies based upon community engagement, long-term planning, marketing and new structures[Ell13]. As such, a sharp decline had been noticed in Australia’s union density, which declined to 25% from 41% between the 1990s and the year 2000. As of the year 2010, it was 18%. In addition to reducing union density, the trade unions’ political influence underwent significant attrition. Some researchers have pointed out that the trade unions no longer wielded power and influence over employers and the government, and their legitimacy had been doubted. The capacity of the trade unions to attract members had declined, they were rendered less representative of the working population, and reduced revenue had brought about financial crisis to several trade unions[Ain14]. Additionally, the Global Financial Crisis caused considerable difficulty to the nations of the world. Australia was successful in evading the worst of this crisis. Nevertheless, public services at the national level were subjected to financial constraints, such as reduction in budgetary allocations. This was in the year 2011, and was the outcome of the government’s attempts to attain a budget surplus. In order to address this adverse development, the Australian Public Service (APS) trade union and the Community and Public Sector Union (CPSU) developed certain strategies. The CPSU resorted to its vast experience in functioning under the conservative government to expand its competencies and activities [Rol12]. This resulted in merely a partial renewal of trade unionism. Moreover, during the 20th century, trade unionism was distinguished by its utilisation of the state controlled obligatory arbitration and conciliation. A major feature of the arbitration awards was that the same conditions were provided to unionists and non-unionists. This indicated the diminishing power and influence of the trade unions in Australia[Ell08]. Australia has witnessed significant changes to working-time. The trade unions have not responded to these changes in a rapid manner. Concerted efforts to address these changes are of recent origin. During the latter half of 1998, a union sponsored Work/Time/Life conference had been conducted. This provided some momentum for tackling working-time issues[Coo09].This impetus could also be attributed to the change of guard in the ACTU. Nevertheless, there was scant emphasis upon the issue of unpaid overtime. This issue was referred to in the report of the Work/Time/Life conference, which made several suggestions for taking concrete action. The national survey on Employment Security and Working Hours, highlighted the presence of serious working-time issues, such as the presence of substantial amounts of unpaid overtime[Coo09]. Conclusion Australian trade unions, in the initial stages enjoyed a certain amount of influence and power with employers and the government. During those jubilant days of trade unionism, membership was substantial. Negotiations were invariably conducted with their participation. However, by the 1890s, such success became a thing of the past, and there was a transition towards state-sanctioned arbitration. Subsequently, strikes, a major weapon of the trade unions, were declared to be illegal by statute. During the 1970s, laws were implemented that permitted direct negotiations between employees and their employers. This served to drastically reduce the importance of the trade unions. At the same time, trade unions were made redundant in some areas, such as wage negotiations and working conditions, which were determined by specific government authorities. For instance, the Fair Work legislation made bargaining and direct engagement superfluous. In addition, enterprise bargaining introduce a new paradigm that substantially reduced the influence and importance of arbitration. In conjunction with decentralisation, wages were determined by market forces. This was a major blow to the trade unions. Another important legislative intervention, namely the Workplace Relations Act, served to significantly emasculate the trade unions. This piece of legislation provided for strict penal action, which rendered union access to workplaces an onerous task. Moreover, the Australian Workplace Agreements drastically limited trade union interventions. Some of the problems being envisaged by the trade unions in this regard are; defining interests and their scope, and difficulty to bring about mobilisation of the work force. Moreover, institutional and legislative changes have been effected in Australian economy that could further reduce the capacity of trade unions to mobilise and exercise political influence. In this manner, the trade union movement in Australia was affected adversely. The emphasis shifted to market trends and promotion of capitalist market realities. As such, it can be surmised that Australian trade unions have been unsuccessful in making an impact on Australian economy or organisations in the present era. References Goo13: , (Goods, 2013, p. 16), Bow11: , (Bowden, 2011, p. 64), Ell08: , (Ellem & Franks, 2008, p. 50), Lam13: , (Lambropoulos, 2013, p. 436), Goo06: , (Gooderham, et al., 2006, p. 1498), Goo06: , (Gooderham, et al., 2006, p. 1499), Sab13: , (Sablok, et al., 2013, p. 624), Sab13: , (Sablok, et al., 2013, p. 625), Wad05: , (Waddoups, 2005, p. 309), Gri04: , (Griffin, et al., 2004, pp. 89-90), Gri04: , (Griffin, et al., 2004, p. 104), Coo08: , (Cooper & Ellem, 2008, p. 538), Coo111: , (Cooper & Ellem, 2011, p. 54), Coo111: , (Cooper & Ellem, 2011, p. 55), Han141: , (Hancock, 2014, p. 273), Ell13: , (Ellem, 2013, p. 65), Ain14: , (Ainswortha, et al., 2014, p. 2511), Rol12: , (Roles, et al., 2012, p. 633), Ell08: , (Ellem & Franks, 2008, p. 51), Coo09: , (Campbell, 2002, p. 133), Coo09: , (Campbell, 2002, p. 134), Read More