The death of unions
Australian industrial relations laws have one objective - to keep unions alive
I’ve been operating in the Australian industrial relations space for around thirty years. But it’s probably wrong to say that I’ve been ‘in’ it, because in fact I specialise in operating ‘outside’ of the industrial relations game. That is, I specialise in self-employed, independent contracting. By definition we, (self-employed people) are not subject to industrial relations law – thank goodness! If you’ve followed me for some time you’ll be well aware of my twenty five years of running Self Employed Australia advocating for self-employed people. Im pleased that I’ve had some success in this area.
But in being ‘outside’ of the industrial relations game I’ve found it sensible to make sure I have a pretty good understanding of Australia’s industrial relations laws, dynamics and how the industrial relations ‘game’ plays out.
In this Substack article I thought that some of you might be interested in my overview analysis of the new Albanese Labor government industrial relations laws. These laws can be understood pretty simply I think!
The Albanese Labor government laws (2022-2024) are structured around a belief that the laws will force an increase in union membership. It’s as straightforward as that.
Issues of productivity, workers’ rights, the need for an efficient economy, cost of living and so on are irrelevant to what these laws are intended to do. They are exclusively about the union movement surviving as an institution.
I’ll explain the reasoning from the union/Labor perspective.
Unions crashing membership
But first the following stats set the scene for understanding.
In 1992, 41.1 per cent of workers were union members. Today it is only 12.5 per cent. Only 8 per cent of private-sector workers are union members.
This percentage is set to decline further. Union membership is ageing. Of Australia’s 1.4 million union members, 570,000 are over the age of 55. Over the next five years most of these will leave the workforce and unions. They will not be replaced. For example, only 5 per cent of workers aged 20–24 are union members.
The result is that union membership is set to drop well below the 1 million mark quite quickly, to less than 7 per cent of the workforce. Private-sector union numbers will likely halve to 4 per cent. Union executives and their institutional/political collaborators are well aware of this.
The Albanese Labor government laws have one objective, that is to stop this crashing of union membership.
The industrial relations law changes 2022–24
To give you the background, following the May 2022 Federal election, the new Albanese Labor government moved quickly to implement dramatically different industrial relations laws. This involved two significant pieces of legislation. The first passed parliament in late 2022. The second passed in early 2024.
This package of laws can be easily understood. Essentially, the Labor movement has determined that the past industrial relations approaches have not stopped the rapid collapse of union membership. These past laws include industrial relations laws create by Labor itself under the Gillard/Rudd Labor governments (2007-2013).
Put simply, the Albanese laws are designed to force employers to (in turn) force workers to be union members. In other words, the 2007-13 Labor legislation did not give unions enough leverage over businesses to force businesses to ‘do deals’ which would force workers to be union members.
That is, union membership is best enforced, when employers effectively force their employees to join unions. I know this sounds illogical but believe me this is the reality and unions central strategy operates to achieve that ‘reality.’
So, if you look at the Albanese laws through that perspective, you’ll get a good picture of what’s actually going on.
Here are key elements of the 2022–24 laws:
Enterprise Bargaining. The idea of ‘enterprise agreements’ has been dumped. Unions are now able to ‘negotiate’ an ‘enterprise agreement’ with one company which then applies across an entire industry sector. For example, an ‘enterprise agreement’ with one food manufacturer becomes an ‘agreement’ that applies to all food manufacturing companies. The idea is that unions will create an agreement that entrenches union membership (unofficially) with one company but then applies that agreement to all businesses in that sector. Unions/the Labor government believe that this will result in higher union membership.
Model enterprise agreements. This runs ‘hand in glove’ with the effective destruction of enterprise agreements described above. It will force all agreements to comply with certain (union-favourable) formats. The intent of combining ‘sector’ agreements with ‘model’ agreements is to create a system of old-style ‘awards’ across all business/worker activity. Unions/the Labor government believe that this will result in higher union membership.
Destruction of casual employment. The definition of a casual employee has been drastically changed. Unions hate casual workers because they don’t become union members. The new definition of ‘casual’ is so technically restrictive that most businesses currently employing casuals will be doing so illegally (after August 2024). They will have to employ the bulk of current casuals as full- or part-timers. This will mean a reduction in income for casuals of between 6 to 9 per cent. (In other words, casual workers lose their 25 per cent loading, but receive holiday pay, etc.) Unions/the Labor government believe that this will result in higher union membership.
Forcing businesses to have and pay for union delegates. Large and small businesses are now forced by law to have union delegates. Large businesses must pay to have the delegates trained by the union movement. This is supposed to ensure that every workplace in Australia has a union representative answerable to, trained by and directed by union executives. Unions/the Labor government believe that this will result in higher union membership.
Capturing the entire transport sector. Large numbers of truckies run their own businesses. The new laws declare that independent truck drivers are ‘employee-like’ and are to be controlled by a new industrial relations system that mirrors the current system. This extends beyond truck drivers to the ‘supply chain’ (warehousing and so on). Unions/the Labor government believe that this will result in higher union membership.
Capturing self-employed business owners. The laws force anyone running their own small business using digital (gig) platforms to be treated as ‘employee-like’ and to be controlled by a new industrial relations system that mirrors the current system. Unions/the Labor government believe that this will result in higher union membership.
There are other elements in the new legislation with similar effect, but these are the main ones.
The new laws are closely modelled on how Australian unions control the commercial construction sector and major parts of the transport sector. Both of these sectors have comparatively higher union membership numbers than other parts of the economy.
At its core, the new laws involve layers of ‘lawful intimidation’ where business owners/managers (small and large) have removed from them their capacity to make decisions on how they engage their workforce/s. That is, the laws neuter management decision-making in critical areas of workforce management, deliver much of that decision-making power to unions, and thereby increase union control over businesses. In doing this, unions ‘require’ businesses to (in turn) ‘require’ workers to be union members. Unions/the Labor government believe that this will result in higher union membership. In short, unions have vastly increased legal leverage to force businesses to ‘do deals’ to force membership.
It's really about bullying workers, all workers
I’d like you to break away from thinking of ‘worker power’ as a bosses v worker war. Here’s an alternate perspective.
The primary focus of the new Albanese legislation and of the unions is to force or bully managers into forcing or bullying workers into being union members. This ‘bullying’ of managers and workers uses the power of legislative intimidation to achieve its effect. Managers are really just workers too. Managers in big businesses, in particular, are just employees. They don’t ‘own’ the business. What the legislation does is to stop ‘workers’ cooperating to work things out. The legislation shifts decision-making power from the workers (all workers) to a highly legalised and complex process. Think of the situation as not being ‘outcome’-driven but ‘process’-driven. The ‘process’ neuters decision-making. Take the following as a comparative example.
Say you go to the shops to buy a loaf of bread. You go to the bakery counter to choose a loaf of bread. But standing beside the shop assistant is a lawyer with a clipboard. The lawyer says that before you can buy the bread, they must assess whether the bakery shop is ‘exploiting you’. The lawyer opens the clipboard and takes a whole lot of information from you about your health, how many people there are in your family, whether you are going to put butter and jam on the bread, or toast it, and so on. The lawyer scowls at the shop assistant and takes reams of information about the shop, its recipes, where it bought its flour, and so on. With all this information in hand, the lawyer opens a huge book containing all the laws. Then the lawyer declares that, according to the law, the shop must sell you rye bread and not wholemeal bread as you requested. You feel like walking out and going to another bread shop. The problem is that every bread shop has a lawyer standing behind the counter doing the same thing.
This comparative scenario is, of course, ‘silly’. It’s a scenario that treats you and the shop assistant and the rest of us as if we are all stupid. But this is how the industrial relations system is designed to operate under these new 2022–24 laws. It is that silly and it is that stupid.
A creeping process
In summary, to comprehend what the new laws are designed to do it’s important to understand that the laws do not mandate the outcomes detailed above to come into effect immediately. There will be no sudden change. Rather, the laws establish a process through the Fair Work Commission to enable the outcomes above to be achieved over time. Unions will make application sector by sector, business by business. The process happens ‘inside’ the workings of the Fair Work Commission and attracts little if any media coverage. It’s designed for the outcomes to creep up on people until people say, ‘what happened’?
You’ll find more of my analysis on Australian work and industrial relations issues at this link Aust Work Issues. This includes CFMEU-What the heck is going on?
Ken, you are always a champion !!! Atta boy !!!