Can Labour Win? New Directions for an old union

This speech was delivered to the National Press Club in 2002.

Every morning I get up and begin thinking of the tasks ahead I am full of pride - for the union, its members, its history and the important role that lies ahead. I am an Australian Workers' Union official and proud of it.

I know that Tony Abbott will blame unions including our own for all the evils they can conjure. I have only yesterday given evidence in a Royal Commission into the construction industry.

In the course of this speech I want to address the criticisms made of unionism in general and in particular my union, but moreover I want to concentrate on the future - of our union and that of the ALP.

So that you understand me and where I come from let me outline some of the things about which I and the AWU believe.

We believe:
· That workers are not greedy but want fair wages and conditions for fair days' work
· That an effective conciliation and arbitration system is vital to protect and advance the interests of working people.
· The union has a responsibility to bargain wherever it can but to do so freely and within the rules.
· The ALP has played and will continue to play the key role in the legislative protection and advancement of workers.

Yet at this time Mr Howard and Mr Abbott would have you believe that workplace relations is a dismal science and unions are a brake on Australia's future. Why else expend $60 million of taxpayers money on the Construction Industry Royal Commission?

The truth is unions and industrial relations are not the top issues that weigh heavily on Australians' minds and adversely affect their daily lives. Steel industry research and pre-election Newspoll surveys last year showed Australians' top concerns were: Education, Health care, Job security and the Economy. Industrial relations ranked ninth. Focusing on unions is a distraction policy from the real issues. It's the same kind of distraction policy that made the current account deficit the boogeyman of the eighties. Now, despite it being three times higher, we rarely hear of it in those dire terms.

What is happening to debate in Australian politics is unfortunate. The messages coming from one side are largely negative. Industrial relations is a good example of what I am talking about. It's an area of policy where there can be positive initiatives such as job creation, improving safety and ensuring workers' entitlements are safe.

The AWU is an old union with a place in Australian folklore which wishes to reassert its role in Australian society. We are a practical union with new directions. We think the future of industrial relations is about forming partnerships with employers to improve the productivity and export success of our industries. That means more jobs. With too many corporate collapses last year, we believe that to protect our members' jobs we need greater rights to intervene before they collapse. The AWU is also about working with employers to improve employees' training so that both employees and employers benefit from productivity. Through a joint AWU employer-funded education scheme, members will be able to get further training, empowering them to make meaningful choices about their lives.

We know industrial relations is good news not bad news.

Unfair Dismissal laws
Instead, this government frames the debate from the wrong end of the telescope. Its view of the world is small-minded. Proposed changes to unfair dismissal laws are not about job security, but about making it easier to be sacked. There is nothing fair about it and yet the amendment bill is labelled the fair dismissal bill. It's the tenth attempt since taking office that this government has sought exemptions to unfair dismissal laws. Only this time the definition of a small employer has changed to exclude more workers from seeking unfair dismissal than previous amendment attempts. Instead of the status quo of defining a small employer as a person who has 15 staff or less, Abbott wants to change it to 20.

Where does it stop?

After all, Abbott has asserted publicly "the Bill could create over 50,000 jobs". Using his logic the abolition of all unfair dismissal laws, and indeed the award system, should create full employment and a perfect and benign workplace.

This bill is not about creating jobs but discriminates between the rights of workers on the basis of who employs them. We do not disagree with employers' prerogative to hire and fire provided there is a reasonable test of fairness on dismissal. But lets not exaggerate.

Since 1996, 2715 unfair dismissal applications have been arbitrated under the federal system. The vast majority of employees are found blameless and less than five per cent (4.9 per cent or 132 people in 5 years) of arbitrated cases have been reinstated. The figures show compensation, not reinstatement is the likely outcome. But what system is fair when a worker is sacked without due cause, but still loses their job? If the Government was serious about improving employment and decluttering the system, it would look at giving the AIRC greater power to use reinstatement as a remedy for blameless workers.

Another problem is the multiple courts and jurisdictions. Australia's state/federal system of government means an unfair dismissal could be heard in several jurisdictions. This is confusing for the parties involved, but it also means the outcome of similar cases is of very little predictive value. Our regulatory framework is overcomplicated and does not provide consistency of treatment or outcome. This could be fixed by having uniform national standards for hearing and dealing with unfair dismissals.

The AWU will hold an unfair dismissal conference in Melbourne on April 19 where the nation's experts on unfair dismissal law will debate these important points. We urge Mr Abbott, who has been invited to speak, to reconsider his divisive approach to unfair dismissal laws and instead of discriminating against small business employees, focus his efforts on achieving uniform standards that are fair, consistent and accessible to all Australians.

Fairness is timeless. Despite the changing pressures and demands created by technological change, social change, changing family roles and globalisation, I believe the values of Australians today are little different from the values of the working people who formed the AWU 116 years ago. Then, when William Guthrie Spence, the founder of the Australian Workers' Union, was organizing shearers near Ballarat his quest was that the aspirations of working class people should be accepted as no less worthy than those of other classes. He believed humanity was the quality, and I quote: "that placed humankind at the top of the apex of all created things." And that it was through our humanity and knowledge that we created fair laws to improve the circumstances under which we live. His generous-spirited view of the world was characteristically Australian. As a passionate unionist he knew that the mass organization of workers in industries of a common calling was the best way to improve the conditions of workers. This has not changed.

It is through collective action since the days of Spence and the 1890s shearers' strike that the union movement has won hard-fought gains that underpin our contemporary way of life. Gains such as a minimum wage, an arbitration and conciliation system, unfair dismissal laws, equal pay and annual leave.

Unions have been the engine for driving these changes.
Take enterprise bargaining. How many companies do you know have lodged a claim on a union? It was unions, not employers, that improved conditions and wages and productivity across Australian industries. Unions are not just a backstop for improving workers' wages, but a creative force of ideas. In the 1980s, it was unions that contributed to this nation's economic prosperity by agreeing to wage restraint to defeat inflation. By engaging in the Accord, unions brought to life the social wage, which delivered non-wage benefits like superannuation, further education and family-friendly provisions. This is our history, yet despite such significant contributions, the Howard Government sells us as the enemy at the gates.

I came to the AWU in 1994, after working for a labor law firm. I had encountered unionism at an early age watching my father working in the ship repair industry in Melbourne's wharves. Through my Catholic education I identified with the union values of community. I've always had an interest in politics and history. But it was when I got involved in young Labor that I saw it was unions, more so than grassroots politics, that could initiate change to improve people's daily lives.
What has happened to the union movement and to the AWU in the years between the leadership of William Spence and today is well documented. Union membership has fluctuated as different industries rise and decline, governments and generations change. We've had some glorious times. During the early 20th century we were the biggest union. We've joined with proud unions such as the Federated Ironworkers and the Australasian Society of Engineers. But we've had some less glorious memories too - historically we were complicit with the White Australia policy, we have since confronted our past and in the modern era stand for tolerance of others.

Let me say this - it is the AWU who takes responsibility for their own failings and what we do or don't do. We do not seek to pass off that responsibility to the ACTU, which is well led and in which we are active participants. After overcoming a decade of post-amalgamation factional fighting and a rapid decline in manufacturing. We have arrived at the crossroads.
Let me tell you about our membership today. Through the first independent survey of 2500 AWU members last month, our members listed their top concerns as job security, workers' entitlements, education and further training, and safety. Our members are primarily men aged in their forties who have belonged to the union for longer than 10 years. This snapshot shows they are flexible. Half work shift work and 56 per cent do regular overtime. One in four do more than 10 hours overtime a week. Their average wage is between $40,000 and $45,000 a year. One in eight do not have permanent jobs and one in four were born overseas. Just under half have access to the Internet. Most are not against free trade and think we should help people leaving their own country because of persecution. Half of our members live outside east coast capital cities. Our members are the people who are injured when workplace safety is neglected. These Australians suffer when companies collapse and workers' entitlements are squandered. But even so, 20% of our members voted for the coalition at the last election.

Workers' Entitlements
The Federal Government and ACTU estimate that each year about 19,000 workers lose entitlements worth between $110 million and $140 million annually. Our members are among the victims. 2001 was a shocking year for its number of high-profile corporate collapses such as HIH, One.Tel, Ansett and job losses at Harris Scarfe, Bradmills and Pasminco. In instances such as HIH and One.Tel, thousands of employees not only lost their livelihoods, but also their lawful entitlements.

The issue of how we divide up the pie when a company collapses so that employees are not denied their rightful entitlements has become a major policy concern. Since the Tristar dispute and the scandalous preferential treatment given to the Prime Minister's brother, Stan when National Textiles, the company of which he was a director, collapsed several entitlement schemes emerged.

The AWU favours the introduction of a portable national long service leave scheme. It would be administered by industry superannuation funds that accumulate money to meet the entitlement liability, rather than insuring it. This way an additional cost on employers through an insurance premium is avoided. Existing state-based construction industry long service leave funds that have become self-funding prove that the concept can work.
Corporate accountability
However, an effective workers' entitlements scheme is no remedy for preventing corporate collapse, it's simply a way of treating the pain. Prevention is superior.

Saving permanent jobs is better than social security payments and the community dislocation that follows corporate collapse. It is certainly preferable to Howard's system of requiring taxpayers to fund the shortfall in unpaid entitlements.

A problem with Australian businesses is that they often enter voluntary administration too late, and are insolvent when the decision to get an administrator is made. Directors won't act at the pre-cancerous stage. Our members often see the symptoms of impending insolvency before the directors and banks. We believe nearly every one of the recent corporate collapses was avoidable.

The common denominators leading to insolvency have been lack of working capital and, what I call, directorial optimism. While directors have defined responsibilities under corporations law, the test used to measure their performance can fail to alert stakeholdes of probable collapse. The test for insolvency is when you can't pay invoices when due. But if the senior management extend the terms of trade is it simply due to a temporary cash flow problem? Or are the problems more serious with the employer accumulating uncontrollable debt?

Banks know early detection of insolvency is crucial to effective commercial recovery, and they watch business by accessing key operational management information and financial data not just the annual public reports.

Why do banks get this information? Because orthodox financial theory is that as banks carry risk, they deserve to have all the facts in a timely fashion. We say our members also bear financial risk - their entitlements; their jobs.

The AWU should get similar access to financial data as banks. Banks can obtain fixed charges - and the timely knowledge of what is happening to all the floating charges allows them to value the changing risks of companies. Why shouldn't union members be able to take fixed charges too?

Although not all of mining company Pasminco's problems were debt-related, early intervention by the AWU may have helped the company by prompting debate about selling costly assets. By giving unions access to real management accounts, unions may modify industrial claims accordingly. Industrial flexibility is more achievable if workers are part of a transparent process.

Another way to lower the risk of collapse is to hold directors liable for entitlements, using a sliding scale of penalties depending on the extent of the shortfall. This could be waived if the director can demonstrate adequate provision has been made.

The combination of early intervention measures, directorial responsibility and a workable entitlements scheme, provides a real safety net that does not burden the taxpayer.
To debate these issues we are organizing a business roundtable mid-year. Together, with employers, academics, and delegates we will at how to stop good businesses from needlessly failing.

The AWU business conference is also an opportunity to talk about the more absurd elements of the Australian economy like state bidding wars and the unnecessary variations in state laws. While we accept that every state of Australia is competing with every other state to attract investment, our members, and tax-payers, suffer in these poaching battles for industries such as whitegoods, manufacturing and aviation.

While it is difficult for unions to stop states offering cash incentives to attract business, it is our imperative that lower legislative industrial standards not be the source of unfair competitive advantage. Legislation with regard to long service leave, workers compensation, transmission of business and health and safety should not be bargaining tools used by states with lower standards.

Variations in state laws are also time-consuming and frustrating for employers. It is ridiculous there are more than 130 pieces of state and federal legislation pertaining to industrial law. Long service leave is a good example of the illogical variation with 16 separate acts. Why should it be that an employee in NSW is entitled to eight weeks long service leave after 10 years? Yet an employee doing the same work in South Australia gets 13 weeks after 10 years, while their counterpart in Western Australia gets 13 weeks after 15 years?

The answer is not to hand state powers to Canberra. Rather, we believe the ALP with its coast to coast governments, and the AWU with its presence in every state and region, is in a unique position to improve legislative uniformity.

In the last term of the Howard Government, it proposed a unified national system by extending the federal jurisdiction using the corporations power under section 51 in the constitution. We can do better than that. Why allow the lowest common denominator to prevail. Now is the time when Australia has the opportunity to lift our standards and have "best practice" legislation in every state. The Victorian Government has already showed initiative with its proposed industrial manslaughter laws. We would like to see the Victorian Government's initiative apply as the minimum standard across Australia.

To play our role in attaining national safety standards, the AWU has set up a national industrial manslaughter advisory committee. It includes barrister Peter Rozen, AWU delegates and academics Richard Johnstone from the ANU, and Terry Farr, from QUT. The committee is drafting a paper on the need for national minimum standards. The report will launch a national campaign and be discussed at a mid-year conference.
Enterprise bargaining and stronger awards
Disparities in workplace standards are not only evident between states, but show up between strong and weak industries, and regional and urban Australia. Some of the differences can be attributed to the patchy application of enterprise bargaining. While it has been a successful system for unionised workers in delivering higher pay and conditions in strong industries, unfortunately many non-union workers have missed out on enterprise bargaining and further suffered because the Howard government has stripped awards and strongly resisted safety net increases. By renewing awards in weaker industries, especially in regional areas, to include common conditions achieved in enterprise bargaining, we can help narrow the gulf between the strong and weak.

After several rounds of enterprise bargaining, many employers and employees have developed bargaining fatigue. In many workplaces there is a need to develop a new agenda for genuine productivity gains beyond the simplistic bargaining tradeoff of industrial conditions for better pay.

To overcome these problems it is time awards were overhauled. We will advocate stronger awards by running tests case in the AIRC on our outmoded awards. We will seek market standards of work that give clear definitions of reasonable working hours, reasonable overtime, improve the position of casual, probationary workers and injured workers, and provide for paid parental leave.

We have consulted some of Australia's eminent industrial relations experts such as former NSW Industrial Relations minister and Attorney General, Jeff Shaw, University of Melbourne's Jo Isaac and former federal minister and deputy president of the AIRC, Joe Riordan. From these talks we chose the pastoral and metalliferous mining (non-coal) industries to begin our campaign to improve minimum standards. Both are iconic industries of the AWU and Australia.

We will begin with the shearers pastoral award because of the AWU's poignant relationship with these workers and because their conditions need improvement at the same rate as other workers. The AWU was born from the sheep's back. It began as a Shearers' Union and became known for fighting for improvements in wages and conditions through the industrial courts. In preparation for our AIRC hearing we commissioned a national survey of shearers. We believe it is the most comprehensive study of shearers recorded to date.

The results were damning for the future of the industry. It found:

· 87 per cent of shearers didn't believed their income would provide them with a comfortable retirement
· 70 per cent of shearers would not encourage their friends, family or children to follow in their career footsteps and become a shearer

• Of those 42 per cent said the work was too hard, the next highest responses were that the industry had no career path and there were better jobs in other industries.

Better training and education
Part of a secure financial future is not just strong awards, but also about having skills that have currency. The last major survey of employer-provided training by the ABS revealed a 3% fall in employers' spending on structured training from the previous survey. Employers also provided less hours of training. Training dollars were skewed towards professionals. Education outside the workplace was more likely to be employer-funded for employees in highly skilled occupations.
The AWU will seek to reverse this workplace training deficit and democratise accessibility by negotiating a Paid Education Leave clause in upcoming agreements. Employers will contribute five cents for every hour worked to an education fund administered by the AWU. Employers benefit because they gain more productive employees and create goodwill in the workplace. Alcoa, Smorgons and One.Steel are among employers who have registered an interest in participating in our scheme.
Paid Education Leave is not a radical concept. It operates successfully in North America and countries such as Belgium, Sweden and Norway. A Dutch study into the productivity outcomes of Employer-funded training schemes showed productivity increases of up to 10 per cent.

As well as PEL, we have other programs to develop the skills of our own union officials through further education and training. This year will be the first that the AWU will offer six-month international exchanges to Britain and America for our officials to learn about the global economy and industrial relations.

We are also developing our relationship with universities and students with an interest in industrial relations, by awarding academic prizes to high-achieving law students. We will award a full scholarship in honor of AWU official Andrew Knox who was murdered on September the 11th in the terrorist attack on the World Trade Centre. The scholarship will be co-funded by Andrew's former employer and assisted by the United States Government. We are also offering extended summer work experience to the sons and daughters of members enrolled in tertiary institutions. We are unashamedly going after the brightest and the best. Our future depends on it.

Before I finish I would like to touch on recent social issues that have caught the attention of our union and members, such as asylum seekers and the ALP-union relationship.
During the last election Howard and Ruddock had an opportunity to lead the debate on asylum seekers and immigration. Instead, in the same way that the Howard Government has taken a negative attitude to industrial relations and made a bogeyman out of unions, it similarly stifled real debate on immigration and looked for scapegoats.

The truth is migration is good for Australia and it can help create employment. The truth is if you want a negative debate, ask negative questions and provide negative information.

We asked our members in our national census for their views on Tampa, immigration and trade. Our members had mixed views on the immigration debate reflecting that it is not a straight-forward issue. When asked, AWU members on one hand supported Howard's handling of the Tampa yet they overwhelmingly said Australia had an obligation to help people who were trying to get away from countries where they were being persecuted. On the one hand our members were concerned about immigration yet when we linked it to employment the same percentage supported immigration. About 80 per cent said that immigrants over the last 20 or 30 years had added positively to Australian culture. The result was equally positive when asked whether people of any religion or racial background had an equal right to apply to come to Australia. It is telling that 70% to 80% of members could equally agree to both positive and negative propositions about asylum seekers and immigration.

From this, we would say that our members are prepared to support positive immigration messages. It is possible for Labor to win back any of our members who may have been influenced by Howard's appeal to insecurity at the last election. The AWU supports an honest debate about how a net increase in overseas migration levels can benefit Australia.

Most of our members said they wanted policies that promoted population growth. We know that with Australia's birth rates falling and our aged proportion of the population growing, our population will be in decline by 2033. By 2006 the greatest growth in our population with be octogenarians. That leaves us with a modern dilemma. Who will be working to support our aged? The so-called Pacific solution has cost tax-payers $482 million so far, ignoring the fact that not all asylum seekers arrive on boats, there are plane people too. Conversely, any of our members working at the Port Hedland detention center will tell you in no uncertain terms that the domestic privatised incarceration solution is dangerously under-resourced.

Now turning to the AWU view on its relationship with the ALP, the existing structure of union bloc votes at the ALP State Conference (the 40 - 60 rule) has come under scrutiny. Before we review the union component, which connects the ALP to approx. 2 million workers, let's look at how the 40 per cent branch component is functioning.

There is a problem in the party structures when my wife's football club, Hawthorn, has more members than the ALP in Victoria. Some branches are dominated by the few who can endure the 'Survivor' like test of monthly attendances at suburban branch meetings.
Often, it is the union votes at a State Conference that stop extremist ALP branch rank and file resolutions from becoming party policy. Unions have proven to be useful at assisting the process of sensible party management. If we were to remove union involvement from preselections, there is no guarantee that small inner-suburban ALP branches will get it right. For instance, the history of outcomes in rank and file preselection ballots without union involvement has not proven to be any better.

However, if the 40% is more representative, then - provided unions are recognised as a fundamental partner in the ALP - I do not think reforming 40 - 60 is insurmountable. The focus for reform should not be the specific percentage of votes at a state conference, but rather on choosing meritorious candidates and improving the transparency of the ALP processes.

Conclusion
I don't appear here today pretending to be someone I am not - I have a fair amount of traditionalism in my blood and in my mind.

But I do not believe it is sufficient to be a traditionalist, whilst we may yearn for the past, I and the AWU know this:
· The economy of the 2000's is fundamentally different to that of the 80's let alone the 50's.
· That workers genuinely want more say in how their companies operate - they equally want more say in how their union operates.
· Employers are better divided into groups. Decent employers who respect workers and pay reasonable wages and employers who operate on the lowest common denominator.
· That I prefer to reach agreement - to negotiate. I get paid to give advice to workers on what is in their interest: I respect their views and want them to reach agreements with their employers on terms fair and reasonable to both.

I am a union democrat who believes in sponsoring participation and involvement. The AWU recognises the world economy in which we live and the competitive pressures on workers.

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