Change the Rules, by Damien Cahill

It was a moment that sent shock waves through boardrooms and the conservative establishment across the country: in 2017, newly elected ACTU Secretary Sally McManus said, on 7.30:

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

It’s worth rewatching. Right after McManus’s mic drop, Leigh Sales, the normally unflappable interviewer, pauses. You can almost hear her thought process: ‘She. Said. What…?’

This statement by McManus set the tone for the ACTU’s Change the Rules agenda. It is easy to forget how big a departure this represents from the Australian union movement’s recent history. After decades of moribund leadership, McManus has been a breath of fresh air, and the Change the Rules campaign represents a bold agenda to reshape industrial-relations laws in Australia.

Yet one of its first goals—to change the government—fell flat at the recent federal election. This has led some to claim that the Change the Rules campaign was a waste of union time and resources. Former ACTU assistant secretary Tim Lyons, for example, is reported to have claimed that ‘there’s absolutely nothing to show for it’.

While we don’t have hard data on the effectiveness of the campaign, its limitations are certainly readily apparent. The campaign was targeted almost exclusively at union members. Whether it was persuasion calls, rallies or social media, the campaign spoke to a relatively small social base. On the other hand, when the ACTU adverts were more broadly pitched they were mostly indistinguishable from Labor’s campaign.

But in our understandable rush to examine critically the Change the Rules campaign we risk missing its significant achievements. Since Sally McManus’s appearance on 7.30 back in 2017, the ACTU campaign has brought about a significant shift in public debate. Concepts such as economic inequality, wage theft and precarious employment are now front and centre in the mainstream media. The Labor Party, too, has shifted on industrial relations, committing to limits on casualisation, the possibility of industry-wide bargaining and removing employers’ ability to terminate enterprise agreements, among many other changes. All of this is testament to the success of the ACTU’s bold new focus.

It is worth reflecting on how big a shift this is, both for the ACTU and for the Labor Party. An uncomfortable truth for the union movement in Australia is that the ACTU and Labor governments share responsibility for enacting some of the most significant industrial-relations rules that they are now seeking to change. Enterprise bargaining, which most in the union movement now admit is failing workers, was introduced by the Keating Labor government in 1993 with the enthusiastic support of the ACTU.

This arose through the Accord—a set of formal agreements between the ACTU and the Labor government regarding the conduct of economic restructuring and industrial relations. Trade unions were effectively brought into the making of public policy, yet the general policy direction had a strong neoliberal bias (including extensive industry deregulation, tax cuts and the rise of inflation-targeting monetary measures). This is why Liz Humphrys describes the Accord as ‘simultaneously deepening corporatism and advancing neoliberalism’.

And the beginnings of the neoliberalisation of industrial relations came towards the end of this Accord period through the introduction of enterprise bargaining, which devolved negotiations over wages and conditions from the industry-wide level to the level of the firm and was strongly supported by the ACTU.

The consequences of this radical shift that was originally endorsed by the labour-movement leadership are now clear. Research by Alison Pennington shows that there has been a sharp decline in enterprise-agreement coverage, with only 12 per cent of private-sector workers now protected by enterprise agreements, with a corresponding rise in the proportion of workers reliant solely on awards, which tend to be far less generous with respect to pay and conditions. The system also rewards free-riding, whereby non-members benefit directly from the sacrifices of trade-union members in efforts to improve pay and conditions.

Similarly, the Fair Work Act (which, although getting rid of individual workplace contracts in the form of Australian Workplace Agreements, also kept in place much of the Howard government’s draconian restrictions on the ability of workers to act collectively) was introduced by the Gillard Labor government in 2009 and was again enthusiastically endorsed by the ACTU. The Fair Work Act was described by the ACTU at the time as ‘an historic step forward for the rights of working Australians and their families’.

While the ACTU is yet to look at itself in the mirror publicly and confront its historic complicity in weakening the trade-union movement through support for such legislation, its transformation under the leadership of McManus and Michele O’Neil is clear enough. And its more assertive focus on changing the rules is to be welcomed.

It now remains to learn the lessons of the Change the Rules campaign and to chart a course through what is likely to be a challenging period under a newly emboldened conservative government and its corporate allies.

Whereas the campaign so far has been exclusively political in its focus, it seems clear that the next terrain of battle needs to be centred on workplace organising, coupled with industrial and political strategies. Unions are hamstrung by low membership density, which sits at about 14 per cent of the workforce. While not the only index of union power, it is a pretty decent proxy. And this low density necessarily limited the potential audience of the Change the Rules campaign. To shift this situation, unions need to build density and power by giving people a reason to join them rather than free-ride. Longer term, changes to the law designed to penalise or prohibit free-riding should be on the ACTU’s agenda.

Compounding this problem are limits on the right to take industrial action in the Fair Work Act. Between enterprise-agreement negotiations (which generally occur about once every three years) workers lose the legal right to take industrial action of any sort. While unions still have plenty of tactical options available to them, including political campaigns, workplace meetings or rallies, and legal challenges to employer actions under the terms of enterprise agreements, the latter typically only require employers to, at best, ‘consult’ with employees about workplace changes, and the former are poor substitutes for the withdrawal of labour, the legal right to which has been removed for most workers, most of the time.

If unions are to reclaim workplace power, this has to change. In this context it is telling that Labor refused to commit to such changes beyond non-specific and unobjectionable commitments to supporting International Labour Organization conventions on workers’ right to organise.

If unions are serious about changing the rules on industrial relations, it is worth taking a hard-headed look at history. This would suggest that major progressive changes to industrial-relations law and practice generally only come about when the existing system is rendered dysfunctional. Given that the existing system so severely curtails workers’ right to strike, perhaps it is time to acknowledge these laws as unjust and to act accordingly.

About the author

Damien Cahill

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