Enterprise bargaining and the un-Fair Work Act

The system of Enterprise Bargaining restricting lawful strike action to bargaining periods is at the core of laws that have removed the right to strike explains David Glanz

The statement from new ACTU secretary Sally McManus that workers are justified in breaking unfair laws delighted union activists around the country.

Interviewed by the ABC in March, shortly after her election, she was asked about legal action faced by the construction union, the CFMEU.

If interviewer Leigh Sales was expecting a routine statement distancing the ACTU from “militancy” she was in for a shock.

McManus’s reply was simple and a breath of fresh air—“there’s no way we’ll be doing that”.

“The CFMEU, when they’ve been fined, they’ve been fined for taking industrial action,” she said. “It might be illegal industrial action according to our current laws, and our current laws are wrong.

“I believe in the rule of law when the law is fair and the law is right. But when it’s unjust I don’t think there’s a problem with breaking it.

“It shouldn’t be so hard for workers in our country to be able to take industrial action when they need to.”

McManus’s position, which she defended over the next days despite ruling class outrage and Labor leader Bill Shorten’s rejection, is significant.

This is the first time in decades that the national leadership of the union movement has not just criticised anti-union laws but advocated they be broken.

Her statement came as workers everywhere were outraged by the Fair Work Commission’s cut to weekend penalty rates for workers in retail, hospitality and pharmacies.

And she stuck to her word when Fairfax journalists in Melbourne, Sydney, Brisbane and Newcastle walked out in early May on a so-called illegal strike over job cuts, tweeting: “I visited The Age’s MEAA members to show my solidarity & let them know we have their back.”

The challenge now is to spread that sense of defiance through the union movement (and among workers not yet organised), to start to undo the damage caused by more than three decades of retreat.

The scale of the challenge was revealed in early May when the Australian Bureau of Statistics released the latest figures on union membership.

Private-sector union membership is down to 9.3 per cent from 11.1 per cent two years ago. Public-sector membership is down slightly to 38 per cent.

The current laws restricting workers’ right to strike are enshrined in the Fair Work Act, introduced by Kevin Rudd’s Labor government in 2009.

But the origins of this sorry situation can be traced back much further, to the election of Labor under Bob Hawke in 1983—Australia’s first neo-liberal government.

Hawke struck an agreement with the union leaderships—the Accord. Workers were told that if they moderated their pay claims and cut back on industrial action, the economy would improve and Labor would raise the “social wage” (welfare, education, health, etc).

The reality was a decline in real wages while an initial increase in the social wage fell away. Profits soared 25 per cent each year between 1983 and 1988.

Alongside the fall in living standards came damage to union culture. Fewer strikes meant workers slowly began to lose ingrained habits of defiance and solidarity.

Union delegates who had been used to running their own disputes and working across networks of rank-and-file activists began to be reined in by their officials. They were increasingly being turned from worker leaders into messengers for the union bureaucracy.

Compared to today, strike figures were still high. In the June 1988 quarter, the rate of strike action was 101 days per 1000 employees. There was a late spike to 104.6 days in the last quarter of 1992, fuelled by mass strikes against Jeff Kennett in Victoria. Last September, the Australian Bureau of Statistics recorded 3.3 days per 1000.

Enterprise agreements

The main game for Hawke and later Paul Keating was to shift workers from nationwide, industry deals (awards) to enterprise-based agreements, with wages linked to the employer’s profitability.

Labor employed salami tactics—one slice at a time. In 1987 they introduced a two-tier system with central deals topped up with local agreements.

Then, in April 1991 and in the midst of a recession, workers were given a stark choice. Wait for rare “safety net” pay rises or get an enterprise agreement.

Enterprise bargaining both split up workers and led to shoddy deals.

The Commonwealth public service, previously a single employer with pay rates that applied across all departments, was divided into multiple agencies, each with its own pay scales.

In the metal industry, deals saw skilled workers agree to take on semi-skilled work or, at the Ford plants in Victoria, any job on the shopfloor.

At Alcoa, weekly hours rose from 38 to 42. Workers at the Commonwealth Bank agreed to weekend and evening work at ordinary rates.

In 1993, Keating brought in a game-changer.

As Greg Jericho, writing in The Guardian, put it: “Comparing the industrial landscape now with pre-1994 is almost pointless. In December 1993 the laws regarding strikes fundamentally changed when the Keating government introduced protected industrial action.

“This gave workers a legal right to strike but also narrowly defined the areas on which they could do so. For example, you could no longer strike in support of workers in another industry, enterprise or union.

“The Industrial Relations Reform Act 1993 defined that a strike could take place if it was ‘about matters pertaining to the relationship between employers and employees’. Crucially, the strikes had to occur within the ‘bargaining period’ of the enterprise agreement … The laws reduced strikes almost overnight.”

This marked a huge shift in the way that workers, and most importantly their officials, viewed industrial action.

Right to strike

Strikes and work bans had never been legal in Australia, outlawed at federal level by the Conciliation and Arbitration Act of 1904.

But for a century, workers had taken action with a large degree of impunity. Rather than waiting for legal rights to be granted, they created real rights through struggle.

At times the bosses pushed back. The Liberal government led by Bob Menzies brought in harsh penal powers in 1953 that saw striking unions heavily fined.

In 1985, Melbourne confectionary company Dollar Sweets won a case against its workers’ union in the Supreme Court, the first time in Australia that a union was forced to pay damages for the losses caused by picketing.

But until 1994, workers saw themselves as free to take action at any time. Workers and their officials would argue claims, tactics and the chances of winning, but the law was not part of the debate.

Keating turned this world upside down. There would now be bargaining periods where unions could take action without the fear of damages. But the flip side was that as soon as an enterprise deal was struck, the right to take protected industrial action ceased.

If the boss cut jobs or victimised activists the day after the deal was signed, workers’ hands were tied.

The decline in union membership accelerated. In 1986, 46 per cent of Australian employees were union members; by 2007 that was down to 19 per cent.

Part of that was related to redundancies in blue-collar industries that had been heavily unionised.

But the decline was across the board. Why join a union if it couldn’t actively defend members’ interests outside of small windows of protected action?

Union officials

Keating based his strategy on an understanding of what motivated union officials.

First, enterprise bargaining had significantly increased their workload—instead of negotiating awards that covered whole industries, they had to do a multitude of smaller deals. Keating’s law meant they would spend less time on the picket line.

Second, the penalties in the law were aimed primarily at union assets, rather than at members. By threatening assets, Keating was putting pressure on the officials to keep the rank and file in line.

When John Howard was elected in 1996, he continued with the carrot and stick of protected action and threats to union assets.

He also tightened the screw. The Workplace Relations Act stripped back awards to 20 allowable matters and introduced individual contracts—Australian Workplace Agreements, which could over-ride collective agreements.

Employers were, for the first time, given the option of putting agreements to staff ballots, over the heads of the union officials or activists.

It was not until Howard over-reached with the passing of the WorkChoices legislation in 2005 that the union leadership finally drew a line in the sand.

WorkChoices severely ratcheted up the restrictions on union activity and attacks on workers.

Secret ballots were now required for strike action; unfair dismissal became harder to get—and impossible if you worked for an employer with fewer than 100 employees; and the “no disadvantage” test was ditched, which meant that collective and individual agreements could leave workers worse off than under the award.

The law helped bring down Howard in 2007. But the ACTU campaign against it put few demands on Labor.

Rudd dumped AWAs and the unfair dismissal clauses, but kept the poisoned chalice that had been passed down from Keating to Howard to Rudd—the barring of industrial action outside protected periods.

This is the situation that McManus rightly criticises. Bad laws that encourage workers to be passive for years at a time.

Throughout this period of retreat there have been groups of workers who have been prepared to fight despite the law.

Construction workers, nurses, teachers and Fairfax journalists have all been at times prepared to call the law’s bluff.

With McManus’s words in their ears, other workers need to take the same path and once again assert their rights through struggle.


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