Chapter 5

Trade Unions: Structures, Functions and Future

Definition Trade Union definition: a trade union is an ongoing association of wage earners with the purpose of maintaining or improving their working conditions (Webb and Webb, 1894)

These lecture slides are copyright to Eruditions Publishing and may not be used or reproduced without written permission of the publisher, except in those institutions and courses where Petzall, Abbott, Timo, Australian Industrial Relations in Asian Context 2E is a prescribed student textbook.

Introduction Trade Unions in Australia Existed since European settlement First unions mutual benefit associations for social and employment support Today big organisations with political and economic agendas Important labour market regulators: control the supply and conditions of labour, also ration labour to ensure work for members Overcome unequal bargaining relationship between employers and workers 19th Century Australian Unions formed a political wing: the Labor Party (ALP) The purpose was to encourage Parliament to pass more favourable labour laws

Theories of Trade Unionism (1) Webbs Theory Key proponent: Sydney and Beatrice Webb (1894) Theory: (first history of unionism in UK) Unions restrict access to trades and protect going wage rates The reason unions form: 1) worker financial insurance against hard times: accident unemployment strikes etc. 2) collective bargaining with employers 3) political pressure group for better laws for working people Unions justify behaviour as 1) protecting jobs rights like property rights 2) collective bargaining as part of competitive capitalist system 3) political pressure on state for common good eg. minimum wage Webbs theory assumes trade unions are a legitimate institution in a developing liberal democracy, and is less relevant to Asia

Theories of Trade Unionism (2) Marxist Theory of Class Conflict Key proponent: Hyman (1975) Theory: Based on theory of class conflict, inherent conflict between labour and capital Lenin believed true purpose of trade unions was to raise political consciousness of workers leading to revolutionary overthrow of capital system Marxist analysis in decline since collapse of Soviet system Unions As Monopolistic Organisations Key proponent: Freeman and Medoff (1984) Theory: Collective voice & Monopolistic Organisation Unions are not simply collective voice labour market institutions evident in all bargaining and communication activities with management Unions behave as monopolistic organisations evident in controlling wages, employee numbers, conditions and methods of work

Theories of Trade Unionism (3) Perlmans Theory Key proponent: Perlman (1949) Theory: business unionism (from UK, German, Russian and US unions ) Unions and collective bargaining essential parts of the democratic society. Business classes risk-takers. Manual workers security / scarcity conscious. Role of unions was to establish job rights. Unions accept legitimacy of capitalism, but wish to limit its excesses. Intellectuals seek to influence unions to their vision of a better society Based on 4 countries studied, 3 factors controlled union activity 1. capitalisms power to resist the demands of organised labour 2. extent of the influence of union intellectuals 3. maturity in the outlook of the trade unions Problems: Perlmans business unionism does not explain socialism and political activism (ALP) of Australian unions. Also Australias centralised or compulsory arbitration system (the Conciliation and Arbitration Act of 1904) differs from other countries.

The history of Australian trade unionism (1) European settlement to 1890 1828 - draconian Masters and Servants Act 1828 (NSW) outlaws unions 1829 - the first successful strike in Australian history, by printers 1850 - workers societies in existence 20 in Sydney, 12 in Melbourne 1850s - Gold Rush influx of workers from Britain with union backgrounds 1860 - first union of coal miners 1872 - gold miners union set up in Bendigo 1874 - seamens unions formed in Sydney and Melbourne 1884 - trades and labour councils were established 1886 - first shearers unions (later the AWU) 1880 to 1900, the first white collar unions: post office workers and teachers 1850 to 1890 - an era of economic prosperity, demand for labour strong trade unions very successful in improving terms and conditions eg. 1856 - achieved 8 hour day (or 48 hour week) in Sydney and Melbourne building trades (spread to most workers by 1890).

The history of Australian trade unionism (2) 1890 to Federation 1901 1890-4 - Great Strikes: shearing and maritime transport main issue attempt by employers to break union working conditions for right to contract (i.e. hire non-union labour) (compare 1998, MUA) 1891-1900 - simultaneous bad economic depression Employers won conflict with Govt assistance: scab labour escorted onto wharves, into mines and into shearing sheds, Many unionists lost their jobs, unemployment rose to estimated 30% Results of Great Strikes: Unions turned political, forming the ALP. 1894 - Contested NSW elections winning 25% of seats. 1899 - First Labor Government in the world was formed in Queensland (25 years earlier than UK) 1901 - Federation Constitution gives federal government power for compulsory conciliation and arbitration under s.51.

The history of Australian trade unionism (3) Federation 1901 to WWII 1945 1905 - Commonwealth Arbitration Court set up. Many States follow. Unions support independent tribunals. Registration process leads to union growth. 1907 - Harvester decision, Justice Higgins: first minimum or basic wage 1900 - 100,000 unionists in Australia 1914 500,000 unionists in Australia 1927 50% of workforce incl. many white collar professions 1927 ACTU formed 1928 - 1930 Militant waterside workers, timber workers and coal miners, all suffer severe defeats in big strikes 1930s - Union Growth stopped with Great Depression 1931 - Arbitration Court cuts wages for first time 1932 27% unemployment 1935 - 42% workforce unionised. Communist control growing. 1941 - Labor Government headed by John Curtin

The history of Australian trade unionism (4) Post WW II 19461949 - national coal strike Chifley Labor Govt use troops to break strike. 1949 1951 - Communists defeated in most trade unions, but DLP / ALP split keeps ALP out of office for decades 1956 61% workforce unionised 1950-1970 - Increasing white collar unionism and militancy (eg. teachers ) 1969 - ACTU test case at Conciliation and Arbitration Commission: equal pay for equal work for women 1972 - Whitlam Labor Govt, introduces wage indexation for high inflation 1974 - record 6 million working days lost to strikes 1975 - union membership in decline. More women / white collar workers 1976 - Fraser Coalition Government anti-union measures 1979 - 55% workforce unionised 1983-1995 - Hawke and Keating ALP Governments and wages Accords 1996 Howard Coalition Govt and Workplace Relations Act 1996

The purpose, and goals of trade unions Deery (1989) 4 goals of unions: 1. 2. 3. 4. services to members eg. insurance, legal aid improved employment conditions job security political objectives

Byrt (1985) 3 broad goals of unions: 1. 2. 3. economic higher wages by arbitration and collective bargaining political through ALP in Australia Job control by a) controlling access b) controlling conduct of work

TYPES of TRADE UNIONS Nature of regulatory system can impact types of union. In Australia, 5 basic types of union: 1. 2. 3. 4. 5. craft (skilled trade eg. boilermakers) occupational unions (similar workplaces with similar range skills - eg. public service unions) industry unions (industry based rather than skill based eg. automotive, mining industries) general unions (less common, large diverse, eg. AWU, ALHMWU Australian Liquor Hospitality and Miscellaneous Workers Union) enterprise unions - very few in Australia (eg. CBA Officers Assoc), but common in Japan. Encouraged by current federal govt.

TRADE UNION ORGANISATION 4 levels in Australia: 1. 2. 3. 4. Workplace shop steward or job delegate first point of contact for members. (Shop stewards are employees not paid organisers.) District hold regional meetings of members State/Branch state councils in capital cities, monthly meetings, paid and elected officials plus paid staff. Day to day running of union Federal national office and committee strategy, policy, national campaigns and negotiations. Some unions strong at federal level (eg. ALHMWU) and some at State level (AWU)

METHODS OF UNIONS Gardner (1989) 4 Methods of unions: 1. 2. 3. 4. Job regulation (as in apprentices etc.) declining because of multiskilling, team work etc. Collective bargaining with employers, using: industrial action to demonstrate strength closed shops to maximise power common rule standards or pattern bargaining (i.e. spread of gains from one successful group to all workers in industry). Abitral regulation using arbitration system to advance conditions Political action influencing political parties (closely connected to using arbitral system)

STRATEGIES OF UNIONS Bargaining strategies to achieve political /industrial aims Membership strategies- for obtaining and retaining members All strategies operate nationally, politically, at workplace and individually. Bargaining strategies differ depending on regulation, awards, history of conflict, state of economy, competition etc. TRADE UNIONS IN WORKPLACE Australian Workplace Industrial Relations Survey (AWIRS) every few years examines role of unions and union reps in workplaces. AWIRS 1997 74% workplaces have at least one union member (decline from 80% in 1990) 79% of union delegates involved in individual grievances resolution 32% of delegates involved in pay negotiations

LEGISLATIVE CONTROL AND UNION DEMOCRACY State regulates unions because of social and economic impact of activities In Australia State and Federal governments control: registration and de-registration, membership, voting, governance, strikes, financial management, banning activities Registration is important, giving unions: protection of legal standing in employment negotiations rights to hold property rights to exclusively represent members as bargaining agent

Unions tend to concentrate power at the top of a hierarchy, offset by member participation often legislatively enforced as union democracy eg. WRA 1996. (However, WRA also used to weaken unions. WRA allows multiple, smaller and enterprise unions, disamalgamation, direct bargaining between employers and employees etc.)

WHY WORKERS JOIN UNIONS Recent declining membership has led to research on this subject. Complex factors influence joining a union: level of satisfaction with workers economic position extent worker wishes to influence workplace degree union represents workers to management peer pressure cost of unionism increase collective bargaining power level of contact by union with worker ability of union to provide benefits (eg. job protection, wages) industrial insurance esp. among female workers political or ideological reasons Reasons can be classified as instrumental (improve conditions), utilitarian (benefits outweigh cost), ideological (Marxist/political esp. blue collar male workers) or involuntary conscripts (closed shop). (Age, gender, education, marital status are not predictors of union membership.)

AUSTRALIAN TRADE UNIONS STATISTICS ABS Stats on Unions Highest unionisation. 48% - gas water electricity industries (blue collar trades public sector), 42% govt (education), 37% govt (admin) 37% transport 28% manufacturing and mining Lowest unionisation: 11% clerical and service workers 11% of managers are union members Total Workforce: 25% of male workers are union members 22% female workers are union members Low union membership among part-time and casual employees but unions slowly increasing membership here. UNION STRUCTURE - Reform 1989 - BCA attacks union structure in to promote enterprise bargaining 1990 45 unions with over 20,000 members = 15% unions, 80% unionists 1989 -1994 Significant amalgamations, from 506 to 312 ACTU agrees too many unions is unproductive and inefficient. Move to Super Unions.

EXPLAINING DECLINE IN UNION MEMBERSHIP 1982 49.5% union membership in workforce 1996 24% union membership in workforce 2002 23% union membership in workforce Why decline is in both recruitment and retention across most industries: 1. Decline in manufacturing industry 2. Service sector increase in employment (decentralised workplaces, use of casuals) 3. Increase in female employment, unions traditionally not female friendly 4. Dissatisfaction among traditional blue collar unionists 5. Role of management and globalisation (adoption HRM practices, eg. hindering union activity, buying out employees) 6. Role of state discouraging unionism (both federal and state govts) eg. WRA limiting industrial action, outlawing secondary boycotts, unions liable for damages of for unlawful strikes, de-amalgamation, AWAs 7. Accords removed reason to be unionist.

ACTU Response to declining membership ACTU: Peak Australian union council: 65 affiliated unions, 3 million workers. Branch in each state- State Labour Councils. 1987 - 2 reports by ACTU: Australia Reconstructured and Future Strategies of Trade Union Movement. AR called for strategic unionism on European model integrated long term objectives, centrally co-ordinated goals. FS about challenges: poor community attitudes, policies of New Right, declining coverage, disenchantment of members, inadequate services, slow response to change, changing structure workforce, technological change, globalisation, anti-union employer practices. Argued amalgamation would assist meeting challenges. 1995 - ACTU adopted Organising Works Program hiring union recruiters, trial was effective using member services approach at workplace level

Trade Unions in Asian Countries: Japan 1930s - Military regime in destroyed independent unions: state controlled. 1949 - Post WWII independent unions re-emerged 56% density 1970 union membership down to 35% 1996 - 23% density, mostly men (but does not count unregistered enterprise level employee associations) Union decline due to: decline in manufacturing, increase in services, rise in standard of living, enterprise loyalty/lifetime employment. Unions largely enterprise level affiliated to larger industrial federations, in turn to national centres. Main centre is RENGO (Japan Trade Union Confederation) 78 industrial federations, 8 million workers, favours co-operative labour-management relations, little influence with govt. Few industrial disputes. Significant participation at enterprise level. Very democratic. Union officials remain employees and return to employer after term.

Trade Unions in Asian Countries: Singapore late 1960s - unions became subject to Govts overriding economic objectives (state corporatism) 1986 Last recorded strike 1998 - 15% membership Strikes impossible without govt approval Economic reasons for no strikes: 92% own homes, good wage increases, labour shortages before 1997 Unions perceived as means of implementing economic policies eg. may be asked to discourage conflict and increase production. Arbitration used to further national interest not worker conditions Singapore one of richest nations in world by per capita GNP

Trade Unions in Asian Countries: Malaysia 1970s-1990s Malaysian economy one of fastest growing in world (hit hard in 1997) Unions subject to stringent legal controls imposed by registration Union objectives may only be economic not political Strict structure, governance and membership controls Enterprise unions favoured Many govt employees, professionals and managers prohibited from membership Strike activity strictly controlled esp. in essential services Strikes do occur Peak Organisation: Malaysian Trade Union Congress (50% of all unionists affiliated) Unions particularly excluded from foreign-owned electronics industry High levels of foreign workers many illegal keep union membership low

Trade Unions in Asian Countries: South Korea Unions at Plant level all unionist join same union Elected leaders affiliate with occupational federations and regional councils Elected leaders bargain with employers Federation of Korean Trade Unions (FKTU) is State controlled, favours enterprise unions and bargaining, supported by employers Attempt to set up alternative Korean Confederation of TU (KCTU) Trade unionism stronger in larger organisations, but overall less than 15% density Labour militancy in 1980s and again in late 1990s Corporations or chaebols have been actively anti-union eg. Hyundai Union militancy played major role in democratisation and political goals are paramount.

These lecture slides are copyright to Eruditions Publishing and may not be used or reproduced without written permission of the publisher, except in those institutions and courses where Petzall, Abbott, Timo, Australian Industrial Relations in Asian Context 2E is a prescribed student textbook.