"We swear by the Southern Cross to stand truly by each
other,
and defend our rights and our liberties." Oath
taken by the
miners at Eureka Hill. Nov 30th 1854
POSITION ON THE
UNIONS
"The
entity that makes and controls the rules must win the game. That
is why 'the people' must make the rules and those rules
must
never allow either owners, investors, management, unions or workers a
monopoly
on winning the game. The fact is - we are collectively the
people.
We have equal rights and therefore should share just rewards according
to our input to the grand
system we call democracy. Balance
and
sharing under the auspices of an unbiased just and powerful umpire is
vital
for wealth creation and the long term good of all. That umpire,
as
the champion and representative of the interests of all people, is government
alone (with its eyes open).
GLOBAL
ACTION (AUSTRALIA) will directly defend the fair and democratic
rights
and entitlements of workers, owners, investors, management and
other
legitimate stake holders in every workplace on the Australian
Industrial
scene by centering the pendulum of exertion and reward fairly
for
all parties.
As
a strong, unbiased, umpire GLOBAL
ACTION (AUSTRALIA)
will go a long way to doing this by
legislating
for total transparency from all parties including owners,
management,
union bosses and workers, by removing 'rent extraction' * privileges
and
by eliminating the Al Capone practices of all
parties that so
damage
the
wider community. This includes major reforms to Industrial
Relations
Legislation to eliminate the privileged position of Unions that
at present locks in corrosive, corrupt 'rent seeking and rent
extraction'
practices, community punishing strikes, picket lines, lock outs and
cost
free legal privilege.
At
the same time union management needs to understand that they have been
mightily used and abused. Historically unions fought for the rights of
the working class - the majority of Australians. Once unions had
become a force they helped frame legislation to help workers, but more
than that they became the power that created political parties.
And
this is where it all went wrong, because the political parties,
financed largely by workers, were hijacked by hidden interests who had
no care whatsoever for the wellbeing of workers or their
families. These hidden interests and crooked Labor party
leaders sought only egotistical power and wealth for themselves.
The interests of workers and the unions were buried by the pure greed
of the political wing of the movement.
The
chief public figures amongst these greedy egotistical destroyers of the
working class and of unionism in Australia were Bob Hawk and his
apprentice Paul Keating. These two cynically destroyed the gains
that workers had achieved over decades and through 'conciliation' ,
smoke and mirros, dismembered the movement, weakened
the power of workers, and paved the way
for Howard's
Thatcherite international corporate greed driven policies of
economic rationalism and industrail reform. All of which
favours only on group - investors/shareholders.
Now,
workers find the union movement gutted, their rights gone and their
future on a par with workers in China and India.
GLOBAL
ACTION (AUSTRALIA) will introduce new legislation to halt the 'merciless
divide and conquer' mentality of owners and investors that (in the
name of economic rationalism and in some cases sheer greed)
often
brought over zealous cost cutting and down sizing - resulting in
insecurity
of work tenure and hours, falling real workers incomes and misery for
tens
of thousands of Australians.
GLOBAL
ACTION (AUSTRALIA) as the
umpire will preserve the concept of work
place contracts, but will underpin all such contracts with safety nets
and union representation for all workers. Unconsionable conduct
on the part of both employers and employees will meet with swift,
stern and effective action.
Every
Australian worker has the right not only to a living wage, but also to
receive sufficient income above a living wage to allow workers to
improve their lot.
Sweatshop
employers and those that manifestly fleece their workers and the
community will raise their game or be driven from business by new
legislation.
Outsourcing
of jobs overseas (Indian and foreign call centres) will become illegal
and the importation of foreign workers will be severly restricted -
with no hope of such workers ever becoming Australian
citizens. Immediate deportation will await those who over stay
visas or who commit serious crimes and such people will be listed with
immigration "Never to re-enter Australia."
GLOBAL
ACTION (AUSTRALIA) will create the environment in which all parts of
the Australian community can expect appropriate rewards for their work
and that includes employees, employers and investors.
GLOBAL
ACTION (AUSTRALIA) will legislate to create an industrial and workplace
environment that allows everyone to get on with the job by
creating
clear, present and tangible productivity incentives for all.
"Traditionally
unions
have perpetuated a caste system (a caste of worker ants) which seeks
only to
further its own ends at the expense of all other sectors of the
community.
Management is of course another caste. Shareholders another
..."
Lyn Vickery
The
'closed shop',
'no ticket, no start',
'roping in'
regime
of industrial blackmail and extortion that has lined the pockets of
unions,
bedeviled the industrial scene and ripped off owners, tenants, workers,
investors and in fact the entire community with inflated costs will
become
history under Global Action (Australia).
Finally,
the cost to the community of strikes will in future by born by the
opposing
parties (owners/management/unions/workers), thus providing a massive
incentive
to reach agreement in or out of the legal process in record time and
with
minimal disruption and financial disadvantage to anyone."
Lyn Vickery.
Australians
work the second longest working hours of all the OECD countries
after South Korea.
50%
of Australian workers take no holidays whatsoever or reduced
holidays.
Dec 2002
What
is the result? Where were the supposed defenders of workers
conditions
and rights over the last three decades? High unemployment,
stress,
marriage breakdowns, full time workers thrown into part time jobs in
which
it is impossible to forward plan or budget their personal expenses. In
other words degradation of our working peoples living standards and a
massive
growth in lower income families in the name of Economic Rationalism
(and
a wages Accord contrived by Hawke to get the Unions off his back while
he was in power in Canberra), down sizing and cost cutting.
For
the last three union power has been in retreat!
Buy
this bumper sticker now
THE
ACCORD AND REAL WAGES
"The
annual increase in real wages for males under Fraser was 0.7 per cent;
Under Hawke/Keating: 0.3 per cent; and under Howard: 2.9 per
cent.
No figures were available for the annual increase in real wages for
females
during the Fraser years. Under Hawke-Keating the increase was 0.6
per cent, compared with 3.1 per cent during the first four years of the
Howard Government. " According
to a
1999-2000
Research Note prepared by the Parliamentary Library
It doesn't say much
for union
power or for Labor does it?
"More
than
a century ago Henry Bournes Higgins's idea was to bring unions that
had,
during the 1890s, engaged in continuing
violence, arson, and other crimes, into a
new legal framework by offering
them a special
and privileged place
within that framework. The assumption behind all his thinking was that
the common law had failed to provide peace
and
concord in the workplaces of the colonies and that a 'new province for
law and order' was required. His legacy
is, today, a set of institutions which enjoy privileges which exceed
those
of any other organisations in the nation, and it
is the consequence of those privileges which now bedevil the
construction
industry, amongst others.".
Ray Evans
Privilege
that is abused is very soon taken away!
Buy
this bumper sticker now
"To
make the
pie of prosperity ever bigger is the real task of government, bankers,
investors, management, unions and workers. So let's stop
squabbling
over who gets what slice or crumb and let's all get on with making
a
bigger pie. That way there will be plenty for all!"
Lyn Vickery.
GENERAL
COMMENTS
GLOBAL
ACTION (AUSTRALIA) sees an urgent need for unions to re-invent themselves in the 21st century
if they
are to have any relevance or more effectively serve all the
working
people of the nation and provide a strong counterbalance to the
power of big business, the economic rationalists and international
investor interests
that do not act in the interests of the nation.
GLOBAL
ACTION (AUSTRALIA) will seek to work constructively with the unions to
forge a strong intelligent
new alliance, unfettered
by past traditions, to bring better times to all Australian people
- not just to workers.
GLOBAL
ACTION (AUSTRALIA) will legislate wide new powers and controls upon
Unions:
a. Clearly defined territories and responsibilities for
each
union.
b. Secret ballots for members.
c. GLOBAL ACTION (AUSTRALIA) will push for greatly reduced,
but compulsory, union style dues
for all employees and organisations, both commercial and government, to
cover the full costs of
industrial action in the courts. Such dues to be automatically deducted
once per year by the
Taxation Department and paid to a government trust body commissioned to
collect, hold, invest
and disburse such funds in capped limits equally to both parties in the
event of an industrial
dispute (equality before the law). Any surplus resulting from
such
dues to be invested and once
per year zeroed out by
transfer to the public health system for direct
use in Australian medial
research and the purchase or lease of new hospital equipment.
ALSO SEE: TAXATION
Also
see: EMPLOYMENT
COMMERCE
AND INDUSTRY SMALL
BUSINESS TAXATION WORKPLACE
RELATIONS
*
FOOD FOR THOUGHT
Rent-Seeking,
Rent-Extraction and the Role of Trade Unions in Australian Society
by Ray Evans[1] See Bio Below. February 2003. See also HR
Nicholls
Society.
Introduction
The Royal Commission into the
Building
and Construction Industry has drawn attention to trade union involvement
in '...significant corrupt and quasi-corrupt conduct and widespread
coercive
and collusive practices' in the
industry.[2] This raises two
questions,
both of which are outside the purview of the Royal Commission but which
are, nevertheless, of great public interest. The first is whether the
condition
of the construction industry and the
role of trade unions within that industry is a special case within the
Australian economy; or is it merely a more
visible manifestation of union and employer behaviour which occurs, but
more discreetly, in other industries? The
second is the extent to which the scandalous behaviour characteristic
of
the industry is a consequence, direct or
indirect, of de jure and de facto privileges granted to trade unions
over
many decades, by governments, arbitral
tribunals and courts, either under policies devised deliberately for
political
reasons, or through passive acceptance
of what would be normally seen as illegal behaviour.
Some important insights into these questions can be gained from a
relatively
recent and important chapter in the
history of economic thought known as the theory of 'rent-seeking'. This
term was invented by Anne O
Krueger,[3] in a landmark paper entitled 'The Political Economy of the
Rent-Seeking Society' published in 1974
in the American Economic Review. Because rent-seeking theory explains a
range of corrupt or otherwise
objectionable behaviour commonly observed in the interface between
markets,
governments and statutory laws
and regulations throughout the world, Krueger's paper has been widely
and
frequently cited in the literature of
economics, and the term 'rent-seeking' has permeated into the general
discourse
of public debate. Costs
associated with rent-seeking have been shown to be especially damaging
to economic growth and living standards
in developing countries. In what follows we sketch a model of
rent-seeking
which provides insights into the
objectionable practices in the building and construction industry
identified
by Royal Commissioner Terence Cole
QC (these practices are listed in the
Appendix).
Not only can this model can be used to benchmark other
industries, particularly industries which are known to have suffered
from
trade union violence, but it also indicates
pathways to effective reform.
Legal
Privilege and Incentives for Rent-seeking
The basic thesis of the theory of rent-seeking is that people, acting
individually
or as interest groups, seek to
manipulate political and legal processes with the objective of creating
a legal and institutional environment which
enables them to extract transfers of wealth, outside the normal
processes
of voluntary market exchange, from
other people in society. In essence, rent-seeking groups seek to
acquire,
through statutory and/or legal privileges,
the power to restrict the quantities supplied of particular goods or
services,
thereby acquiring for themselves the
monopolistic power to set prices for those goods or services above
those
that would prevail in openly competitive
or contestable markets. The resultant wealth transfer is known as an
'economic
rent' because it derives from an
asset with especially valuable characteristics which, in this case, is
the exclusive, politically or statutorily based
power to set prices significantly above corresponding competitive
market
prices. Economic rents are conceptually
completely distinct from commercial rents, the latter being money paid
for leasing property such as a house, an
office, or a shop, which are part and parcel of everyday commercial
life.
In addition to the perverse effects of
such wealth transfers on income distribution, rent-seeking also damages
living standards by distorting consumer
prices, and therefore the value people derive from the goods and
services
they consume.
The prospect of success in manipulating political and bureaucratic
processes
to gain access to rents, creates
incentives for rent-seekers to spend time, energy and money to persuade
governments to introduce the legal and
regulatory restrictions which give them effective monopoly power, and
to
then ensure that they are maintained
and, where possible, extended, over time. Because resources devoted to
creating and maintaining these
government-supported restrictions on competition produce nothing of
value
to society Columbia University's
Jagdish Bhagwati, another major contributor to the rent-seeking
literature,
has coined the term 'directly
unproductive profit-seeking activities' (DUP activities) to describe
the
rent-seeking process. The implication, of
course, is that rent-seeking is detrimental to productivity and living
standards generally in a society. Because
of its
scale and pervasiveness, development economists consider rent-seeking
to
be a major impediment to economic
growth in many developing countries.
Protectionist policies provide the archetypal example of rent-seeking
and
economic rents created through the
political process. Producers of particular traded goods in a country
can
effectively create and extract rents by
persuading the government to restrict imports through tariffs, quotas
and
other less transparent barriers to trade.
These restrictions allow them to set prices for domestically produced
goods
and products which are higher, often
much higher, than international prices for these goods, thereby
extracting
rents from domestic consumers. The flip
side of the rent-seeking process is that those industries or groups
which
are particularly damaged by
rent-extraction have incentives to invest time and money in attempts to
roll back the privileges granted to the
rent-seekers. This compounds the social cost of rent-seeking although,
if the anti-rent-seekers are successful,
significant welfare gains can be realised.
Often, the creation and extraction of rents through political processes
sets off a chain of rentseeking by other
individuals or groups, which perceive opportunities to compete for the
spoils. Trade unions and suppliers of
intermediate inputs to a protected industry, for example, may perceive
that concerted action with producers to
strengthen the pressure on a government to maintain or raise trade
barriers,
is likely to be mutually beneficial from
their (i.e. interest group) perspectives, giving the parties involved
access
to even larger rents. These are shared
amongst the rent-seeking groups in various forms including higher
profits,
higher wages and 'featherbedding'. An
important implication of this, discussed in more detail below, is that
groups other than trade unions may be able to
indirectly 'feed' off the legal and other privileges enjoyed by unions.
Beyond this, trade barriers may create
opportunities for people to siphon off some of the rent by, for
example,
bribing customs officials to allow import
restrictions to be circumvented. This in turn creates incentives for
people
to devote resources to seeking
appointments as customs officials, both by obtaining suitable
qualifications
and by bribing those with the power to
make the appointments. The chain of corruption set off by rent-seeking
can become a very long one.
In conclusion, rent-seeking reflects the scope for individuals and
groups
to advance their particular and sectional
interests through political and legal processes at the expense of the
community
at large. It is an important
manifestation of 'political failure'. It is commonly associated with
diverse
forms of corrupt and objectionable
behaviour, including violence, both in developing and developed
countries.
However, because the costs are
widely dispersed and usually not easily recognised by those who bear
them,
the underlying privileges on which
rentseeking depends are often very durable. The European Union's Common
Agricultural Policy and the US farm
subsidy programme exemplify spectacularly successful rent-seeking, in
these
cases by farmers and companies
involved in processing farm products. The transfers of wealth that take
place in these contexts are astronomic and
great hardship, particularly amongst would-be exporters of primary
products
in developing countries, is a direct
consequence.
Trade Unions and Rent-Seeking
The traditional view of economists is that trade
unions act primarily as labour market monopolies
which exercise
their market power to extract rents for their members through their
employers.
These rents are received in the
form of wage premia, diverse perquisites and featherbedding, and help
to
finance union activities through high
membership fees. Tracing the source of these rents is not always easy,
but there are good reasons for believing
that the larger proportion of the costs
fall
ultimately on consumers. Revenue from
membership
fees is reinvested
by the unions in maintaining rent flows through rent-seeking activities
such as lobbying, litigation, donating to
political parties and financing 'industrial action'. To the extent that
unions behave as monopolists they not only
reduce economic efficiency, and therefore overall living standards in
society,
but may also contribute to greater
inequality throughout society.
It should also be recognised, however, that not all labour unions are
in
a position to abuse their legal privileges and
that unions can have positive effects on economic life and social
welfare.
For example, in the 19th and early 20th
century, trade unions provided unemployment relief and other welfare
services
for their members. More recently,
economists have shown that there are theoretical reasons, supported by
evidence, that by giving employees
'voice', unions can and do have positive effects on productivity and
welfare.
For example, given that labour
market transactions are characterised by information asymmetries
(employers
and employees have different levels
of information about each others objectives and capacities) and that
people
can, and do, act opportunistically,
enterprise unions are likely to reduce the transactions costs
associated
with the employment relationship, notably
costs associated with the need to control violations of contractual
obligations
both by employers and
employees.[4]
As the Cole Royal Commission
has demonstrated, whatever the ostensible objectives of unions might
be,
there
are some trade unions in Australia which, in their day-by-day
activities,
give meaning, purpose and substance to
their institutional lives primarily (if not wholly) through rentseeking
activities---using de facto and de jure
privileges to create and maintain monopolies in the supply of labour to
particular industries and enterprises. The
resultant monopoly power is used to extract continuing streams of
economic
rents through enterprises which have
no choice but to employ, directly or indirectly, only union members on
union-negotiated, or more pragmatically,
union-imposed, terms and conditions.
There are two prerequisites for union success in rent-seeking. First,
if
a trade union attempts to extract rents from
an enterprise which does not have the capacity to generate rents
(revenue
in excess of the opportunity costs of
productive inputs) then that enterprise will eventually be forced into
insolvency. The recent demise of Ansett
Airlines exemplifies this. Accordingly, above-market wages and other
perquisites
can be extracted only from
enterprises which can generate rents in the first instance. It is for
this
reason that militant unions have been
concentrated in industries where enterprises have natural advantages
(for
example, mines based on rich mineral
deposits; or natural monopolies attributable to economies of scale or
scope
such as water, telephone, and
electricity distribution networks); or politically created advantages
(for
example, tariff protection or valuable
patent rights). Strong unions are also to be found in the public sector
(which is subject to the possibility of
insolvency only in times of national economic crisis).
The second prerequisite for success in creating and extracting rents is
the ability to eliminate competition from
non-union sources of labour. A necessary condition for unions to
negotiate
above-market wages and conditions is
the power to prevent employers from hiring non-union labour. This power
is based ultimately on the capacity to
mount credible threats of violent resistance to any attempts to cross a
picket line. Thus, as part of the rent-seeking
process, some trade unions have fought tenaciously for many decades not
only to legitimise peaceful picketing, but
also for the right to prevent people and vehicles from crossing picket
lines. Such power necessarily implies the
power to physically coerce (a power traditionally reserved solely to
the
state). The term 'scab', when used to vilify
people who attempt to cross a picket line, is a relatively low-level
coercive
measure aimed at preventing the
replacement of workers who have 'withdrawn their labour'. But violence
of a life-threatening kind has often been
seen on Australian picket lines in recent years, and 'peaceful' pickets
have to be recognised as usually only the first
stage of an escalating campaign of threats and intimidation.[5] The
picket
line not only is designed to prevent the
employer from engaging non-union labour, but also prevents intermediate
products and finished products from
entering and leaving the plant. When these two conditions are
satisfied,
the union then has the capacity to mount a
very credible threat to impose severe costs on a business by closing it
down with a strike.
A strike forces the owners of an enterprise (or the managers who are
responsible
to the owners) to choose
between earning no revenue, or acceding to union demands. To the extent
that these demands exceed prevailing
labour market terms and conditions (e.g. above-market wages and working
conditions, and/or excessive staffing)
they constitute extraction of economic rents from the business
concerned.
Such a process of rent-extraction is,
quite simply, extortion by hold-up.
The funds thus diverted deprive other people (primarily the business
owners
and/or the ultimate consumers of the products of the business) of
income
at least equal to the value of the
extracted rents (often substantially more). Today the business owners
are
often other workers whose
superannuation funds are channelled into share ownership and other
commercial
investments.
Much of the history of trade unionism and the arbitration system in
Australia,
since 1904 (when the Watson
Government, with HB Higgins as Attorney-General, passed the
Conciliation
and Arbitration Act), is best
understood from a rent-seeking perspective. There
is a close interconnection between our industrial relations
system and protectionism, which is
succinctly
described in GO (Gerry) Gutman's book, Retreat of the Dodo
published in 1982. Tariffs and quotas
provided
the rents, often equivalent in magnitude
to
federal government
budget outlays. Arbitral tribunals were quick to perceive that their
place
in the system could be consolidated by
claiming the very popular role of distributing the rent proceeds
between
the owners and the workers in the
protected industries. Although Australian consumers as a whole paid
much
more for a wide range of goods, in
sectoral terms the farming and mining export industries had the
greatest
incentive to seek to roll back the burdens
which protectionism imposed upon them.
Paradoxically perhaps, it was the Hawke
Government,
supported by the Coalition in Opposition, which in 1983
began unwinding protectionism in Australia.
The extraordinary resiliency and dynamism of the Australian economy
since the late 1980s, manifest most clearly in the rapid growth and
increasing
diversity of Australian exports,
demonstrates how severely the protectionist policies of the Deakin
Settlement
of 1902-1908 (and the chain of
rent-seeking it set running) impeded economic growth and development in
Australia for nearly 80 years.[6]
As
protectionism has been wound back, the role of trade unions, as key
institutions
in the rent creation and
distribution process, has correspondingly declined in many sectors of
the
economy. The decline of trade union
membership in the private sector is, today, an uncontroversial fact of
life. As tariffs continue to be phased out in
those industries which still enjoy a significant measure of protection
(such as textiles, clothing and motor cars) the
purpose and vitality of trade unionism in those industries will also
decline.
Trade Unions and the Law
As a general rule, successful
rent-seeking
requires statutory or governmental support.
It is difficult to imagine a
situation in Australia in which trade unions could create and extract
rents
without the legal privileges which
registered trade union have enjoyed since 1904. It is official
recognition---registration---by the
Industrial
Relations Commission (formerly the Arbitration Commission), which
grants
to trade unions legal privileges which
are unique in Australian society. The Cain
Government in Victoria, exasperated at the delays and scandals
associated with the construction of the lighting towers at the MCG,
finally
and successfully sought deregistration
of
the Builders Labourers Federation. The BLF's legendary leader Norm
Gallagher
('The General') was so confident
of his power that he belittled the significance of deregistration. But
within months the BWIU had usurped his
position in the construction industry and the BLF was broken. The
inference
was inescapable: No registration: No
legal privilege: No Norm Gallagher.
An insider's description of these privileges was given by Clyde
Cameron,
Minister for Labour in the Whitlam
Government, who had spent years fighting Tom Dougherty, the
all-powerful
National Secretary of the AWU. In
1973, Cameron introduced legislation which gave rank and file trade
union
members some means of redress
against tyrannical union officials.
The then General Secretary of the Plumbers' and Gasfitters' Union, Mr
George
Crawford, objected to this
legislation and Clyde Cameron wrote to him in as follows:
Let the unions run their own affairs you yelled ... I have never heard
you object to the law giving your union
monopoly rights to enrol plumbers and gasfitters. I have never heard
you
object to the law that permits you
preventing another union seeking award coverage for plumbers and
gasfitters.
Nor have I ever heard you
complain against the law that permits the Commission to give preference
of employment to plumbers and
gasfitters who belong to your union. I have never heard you object to
the
law that prohibits victimisation
against your union members. I have never heard you complain about the
law
which gives you right of entry
to places employing plumbers and gasfitters. I have never heard you
protest
against the law that permits
your union to sue for breach of award and for wage arrears ... I could
go on and on, for I have already listed
23 additional powers which go with registration under the Conciliation
and Arbitration Act.
Clyde Cameron described the monopoly rights of worker representation
which
the union enjoyed in 1973, and
which they had enjoyed since 1904. Those monopoly rights have now been
wound back in some small degree by
the 1996 Workplace Relations Act. For example, preference to unionists
is no longer lawful, but it continues de
facto under the rubric of seniority. And if companies can get through
all
of the difficulties involved in establishing
Australian Workplace Agreements, then their employees can escape being
roped into the award system which
enables the unions, through their privileged access to the Industrial
Relations
Commission, to cast their net far
beyond their actual union membership.
One of the most important privileges which unions enjoy is the right
of access to workplaces where people who
could become union members (in terms of the coverage bestowed by the
IRC)
are employed. A person who
came uninvited to a workplace and demanded access to employees would
normally
be told to leave, and if
persisting in his demands could be charged with trespass. But an
employer
is obliged by law to invite union
officials to enter his business premises. From there it is a short step
to intimidation, not so much with threatening
words (which might be recorded on a hidden tape recorder) but with
threatening
body language, and the use of
coded language, often with respect to health and safety issues. Union
officials
also have the right (on 24 hours'
notice) to inspect the books relating to employment matters of any
business
which employs people (not union
members) who could be covered by an award to which the union is a party.
One of the most important contemporary examples of judicial
re-interpretation
of parliamentary statute, is how the
Federal Court took the 'freedom of association' provisions of the 1996
Workplace Relations Act, and turned
them upside down, so that the old Section 5 provisions of the
Conciliation
and Arbitration Act, the
'victimisation provisions' were restored to a far higher place on the
ladder
of legal privilege than had ever been the
case prior to 1996. This was Justice Tony
North's Alice in Wonderland
contribution
to
the Waterfront dispute of
1998, and it was upheld by a Full Bench of the Federal Court comprising
Wilcox, von Doussa and Finkelstein
JJ.[7]
The 'freedom of association provisions' were thereafter used by the
unions
to ensure that workplace reform could
not take place in those highly unionised, rent-rich industries which
were
most urgently in need of reform. This
particular episode demonstrates the folly of avoiding fundamental
issues,
in this case the massive legal privileges
enjoyed by the unions, by seeking to finesse the issue, in this case by
giving some legal standing to non-unionists.
Another important example of legal
privilege
is the 'no-costs' rule in the IRC.
This enables unions to litigate
without fear of being on the losing side. All they lose is their own
legal
costs, which their membership fees are
designed to cover. But for
the businesses they take to the IRC, legal costs can be a nightmare,
and when there is
no possibility of winning costs from the unions, even under the most
bizarre
situations, the advice such businesses
usually receive is to settle, even under the most outrageous
circumstances.
The no-costs provisions for unions are
now being interpreted to apply in the common-law courts, a truly
ominous
development.
The most important element of the British
Trade Union Disputes Act of 1906 was that
it gave trade unions
immunity from tort. Thus, under its
protection,
British unions could lawfully engage in conduct which (through
strikes, pickets, secondary boycotts, etc) could
bring a business to bankruptcy. The
targeted
company or
employer, however, had no means of redress to the courts. This
effectively put the unions above the law, and the
noted US author and economist, Thomas Sowell, has recently cited this
Act
as a major cause of British economic
decline from 1910 until the Thatcher reforms of the 1980s.[8]
Apart from Queensland for the period 1915 until 1976, trade
unions in Australia have never enjoyed such a
blatant measure of extraordinary privilege as this, but today they
still
stand on a different plane to everyone else
with respect to tort law. If an 'ordinary
Australian' commits a nuisance, for example by parading up and down
outside a business with placards denouncing the proprietor, then the
aggrieved
party can seek immediate
injunctive relief, and have it granted, straight away. If the offending
party is a registered trade union, then such
relief is only available from the IRC, and three days expires before
any
ruling is forthcoming, by which time
considerable damage can be suffered. During this period of anxious
waiting
and financial haemorrhaging, advice to
the injured party to compromise will appear more and more reasonable.
The law may be very clear on what is lawful and what is unlawful, but
if
the police decline to enforce the law, and
their disinclination goes unchecked by the government of the day, then
criminality is institutionalised and major
social and economic problems will develop. It
is now accepted by police forces around Australia that police
should not enforce the common law at picket lines. This refusal by
police
forces to uphold the law lies at the heart
of trade union rentseeking power.
In recent years, as contestability and competition have become more
entrenched
in Australian business life (the
Trade Practices Act has contributed much in this regard) many of the
rents
that were available from collusion and
other anti-competitive practices have vanished.
Businesses that had been sharing the rents with unions found they
were caught between a rock and a hard place, and were facing bankruptcy
if they were unable to wind back the
awards which formalised the rent transfers. This was usually
impossible,
so the alternative was to sell the business
to someone else who could do so. However the courts have now
interpreted
the Workplace Relations Act
so
that a new owner has to accept the industrial awards and agreements, as
well as all the other liabilities and assets
of the failing business. Ansett, in its death throes, was unable to
find
a buyer because the Transmission of Business
rulings would have brought bankruptcy to any new owner in its train.
More than a century ago Henry Bournes
Higgins's
idea was to bring unions that had, during the 1890s,
engaged in
continuing violence, arson, and other crimes, into a new legal
framework
by offering them a special and privileged
place within that framework. The assumption behind all his thinking was
that the common law had failed to
provide peace and concord in the workplaces of the colonies and that a
'new province for law and order' was
required. His legacy is, today, a set of institutions which enjoy
privileges
which exceed those of any other
organisations in the nation, and it is the consequence of those
privileges
which now bedevil the construction
industry, amongst others.
It has to be emphasised that the rent-extraction process is based on
the
capacity of a trade union to enforce its
position as a monopoly supplier of labour. The ability to call a strike
is a necessary condition for establishing a
labour monopoly but, by itself, not a sufficient condition. The
sufficient
condition is that the union must have the
power to prevent non-union labour from offering labour services to
targeted
employers on terms and conditions
different from those demanded by the union (that is, market-based
rather than monopoly-based terms and
conditions). Since other people would not
voluntarily offer labour services to the targeted employers unless they
expected to be better off, union coercion is necessary to prevent them
from doing so. The most effective means of
doing this is to mount a credible threat of violent retribution for
crossing
a picket line, although lesser measures
such as vilification can also be effective.
A strike without the threat of intimidation or violence against strike
breakers is essentially a mass resignation,
which is almost always lawful, and morally unexceptional, since the
workers
who have left their job, en masse,
are relying on their superior experience and skill, in the marketplace,
to be able to rewrite their contracts of
employment if they should wish to do so. This is a risky strategy, of
course,
and the risks taken by the employees
in putting themselves in hostage to the employer, dramatically change
the
legality and the morality of the situation.
Such
a scenario, however, is of the textbook kind rather than of any real
experience
in Australian workplaces
over the last century,
In reality, the threat to strike, or its implementation, when backed up
by a readiness to use intimidation and
violence for crossing a picket line, is no
different in kind from the offer which a Mafia boss puts to a
prospective
victim, telling him that it is 'too good to refuse'.
For this reason, as an integral part of their rent-seeking strategy,
labour
unions have, for more than a century,
sought to identify the 'right to strike'
as an essential part of democracy, along with
the right to free speech, and the
right to vote. These notions have been
persistently
'stretched' by the labour movement to try to gain public
acquiescence for violent picketing.
To this end the labour movement has
invoked
Marxian ideas of class warfare
and the need for employment contracts to be governed by special rules
based
on the Marxian distinction between
labour services and commodities.
Common-law courts have, however, always
regarded
strikes as a breach of contract, and picketing, depending
on the violence employed, as a criminal act.
Breen Creighton, one of the most prominent of the labour lawyers
within the ACTU orbit, and whose book (with Andrew Stewart) provides an
excellent source of information on
the history and the development of the common law in these matters,
summarises
the position thus:
[13.06] It is hardly surprising that strikes and other forms of
industrial
action should encounter significant
difficulties with the legal process, given that their essential purpose
is to exert pressure upon other parties through
the imposition, or threatened imposition of economic loss. This is
reflected
in the fact that so many of the early
legal problems encountered by the early unions in both Britain and
Australia
related to strikes in general and the
activities of pickets in particular. Indeed so far as the common law is
concerned, virtually all industrial action
would be unlawful as a tort, a breach of contract, and frequently a
crime.[9]
The violence frequently manifested in
picket
lines, and the intimidation which is the primary objective of the picket
line, has never been accepted by mainstream Australia as legitimate
behaviour,
and the common law antipathy to
strikes and other forms of 'industrial coercion' reflects this
mainstream
sentiment. It is to be much regretted that
the
common law (and commonsense) position regarding the illegality of
strikes
was cut down by the passage of the
Industrial
Relations Reform Act of 1993
(the Brereton Act)
and re-affirmed in the 1996 Workplace
Relations
Act (the Reith-Kernot Act). This
legislation
provided statutory legitimacy to 'the right to strike' and to 'the
right
to
lock-out'. Parliamentary legitimisation of 'the right to strike' has
made
it politically more difficult for those who
uphold the traditional common-law antipathy to the threats of violence
and the coercion necessary to maintain
union monopoly power, to oppose union-sponsored lawlessness.
Rent-seeking in the Construction
Industry
The notorious state of the construction industry which led to the
establishment
of the Cole Royal Commission
is a
manifestation of the process of creating, securing, extracting and
distributing
rents on the part of building
contractors, sub-contractors, and the unions supplying labour to the
industry.
Since, in many cases, the rents that
can be realised in the industry are very large, the incentives to
create
and maintain the institutional arrangements
which facilitate rent extraction are very powerful. The key to
understanding
the form of the arrangements that have
evolved is recognition that a delay in the process of construction a
multi-million
dollar building on a multimillion
dollar site can be very costly---approximately the interest that could
be earned on the sum of the site value plus
construction costs up to the time of the delay, which may amount to
many
tens of thousands of dollars per day in
the case of large projects.
Provided, and this is the key proviso, competition from non-union
labour
can be eliminated, this exposure to
hold-up makes a strike, or a credible threat of a strike, a very
potent instrument of extortion with which
to
pressure contractors into capitulating to union demands for
above-market
wages and working conditions.
Accordingly, construction sector unions have assiduously lobbied
governments
and arbitral tribunals, and have
argued in courts, to seek to entrench a
culture
(workplace practices and long standing traditions) which compel
contractors to hire labour only on terms and conditions acceptable to
unions.
These much higher labour costs are
financed partly out of economic rents attributable to site locations
(higher
constructions costs are passed back to
site owners in the form of site values lower than otherwise) and partly
by passing the higher construction costs
forward to future owners and tenants of the buildings under
construction.
Beyond this, the prospect of extracting lucrative wealth transfers from
site owners and future building tenants has
created incentives for incumbent construction contractors to make
common
cause with unions to restrict entry to
the industry. Would-be interlopers are deterred by threat of industrial
action by unions as a tacit quid pro quo for
acquiescence in union demands for lucrative terms of employment for
their
members. The resultant market power
gives incumbent building contractors the capacity to extract rents by
setting
prices for construction contracts that
are much higher than would be the case in an open and transparent
market
situation. Again, these
higher prices
are partly passed back to site owners (in the form of reduced site
values)
and partly forward to building owners
(in the form of higher prices for buildings) and thence, ultimately, to
tenants. Since such rent-sharing arrangements
are beneficial for both unions and construction companies, there are
powerful
incentives for the parties concerned
to come together to maintain them over time.
Documents produced by the Royal Commission to date show that it has
made
significant progress in
understanding and elucidating the strategies used by contractors and
unions
to create and extract rents. Practices
such as 'no ticket---no start'
(agreement not to hire non-union labour); 'roping
in' (all
firms
agree to adhere to
union-negotiated terms and conditions of employment); and
payment of secret commissions
to various parties to
ensure their complicity; are all manifestations of rent-seeking and
rent-extraction
strategies. These practices reflect
continuing efforts on the part of unions to push the envelope of labour
market legislation, and to prod and push the
institutions under which it is implemented, to facilitate
rent-extraction.
In summary, although the existence of large
rents provides a continuing incentive for new contestants to seek entry
into the industry, the problem facing a new
contestant is to find a labour force which will not be 'roped in' to
the
existing arrangements for rent-extraction and
rent disbursement. Construction industry unions act as guarantors of
the
'closed shop',
by making it virtually
impossible for new entrants to break in, except under the same terms
which
apply to the incumbents.
It is not only in Australia where the construction industry has been an
industry subject to predatory rent-seekers.
In various parts of the US, the Mafia has
long sought, often with considerable success, to become the monopoly
labour supplier in the construction industry.
Indeed, the current TV series 'The Sopranos'
featuring the life of Tony
Soprano, a Mafia Boss operating in the construction industry in Newark,
New Jersey, has become a smash hit in
the US---to the extent that Tony Soprano cookbooks are on the market!
Reforming the Building and
Construction
Industry
Rent-seeking and the consequent rent extractions are damaging to
society.
As noted above, resources devoted to
rent-seeking activities, including lobbying against it, are DUP
activities---those
resources could be used to
produce other goods and services of value to people. Moreover, although
union movement rhetoric attempts to
justify rent-extraction by appealing to notions such as class warfare
and
exploitation of labour in capitalist
economies, there is no good reason for believing that income transfers
in the building and construction industry are
from higher income groups to lower income groups---or from capitalists
to workers. Much of the investment in
the large structures built by the building and construction industry,
and
the sites for those structures, is undertaken
by superannuation funds on behalf of people from all walks of life, but
predominantly workers, most of whom are
far from wealthy.
Similarly, many of the enterprises who buy space, either on a rental
basis
or outright, in these buildings are owned,
ultimately, either by other workers or superannuants who are anything
but
wealthy. Assessing the income
distributional consequences of rent-seeking in the industry is further
complicated by the fact that superannuation
funds invest in many of the major construction enterprises which may be
beneficiaries of the rent-seeking process.
Accordingly, the most likely consequence of rent-extraction in the
building
and construction industry is that it
redistributes income haphazardly across differing income groups rather
than from wealthier people to poorer
people or from capitalists to workers. It is therefore extremely
doubtful
whether rent-seeking and rent-extraction
in the building and construction industry is even remotely consistent
with
generally accepted tenets of fairness.
Moreover, to the extent that extraction of rents by hold-up distorts
incentives
to invest in particular areas it may
inflict further damage on the economy. In
short, for reasons of both equity and efficiency, there are convincing
reasons for eliminating rent-seeking and rent-extraction from the
building
and construction industry, and indeed
from every sector of the Australian economy.
The discussion in early sections suggests two broad approaches to
reforming
the building and construction
industry. One is to enforce more
stringently
the common-law sanctions against violent retribution for crossing
picket lines. Even more potent would be legislation banning picket
lines
per se. The argument that picket lines do
nothing more than convey information to prospective employees and
therefore
should be accepted as part of our
tradition of free speech is, as FE Smith pointed out in 1906, a
travesty.
Such legislation would be bitterly opposed
by the trade unions and, presumably, the ALP, for all the reasons that
have been set out in this analysis. But if
political leaders who seek to get support for such legislation make the
point that picket lines are not only an
essential tactic for extracting rents for trade union members, but also
for their employers, the debate will take a
different path.
Although picketing and the threat of violence which always accompany
picketing
has been promoted by the
unions as part of Australian democratic life, and this rhetoric has
been
accepted by sections of the broadsheet
media and TV as reasonable comment, opposition
to union power is a continuing theme in Australian sentiment.
In 1983, as part of the Accord process, Prime Minister Hawke
commissioned
Professor Keith Hancock, as he
then was, to conduct an inquiry and to advise on desirable changes to
industrial
relations law and institutions.
Professor Hancock was supported in his labours by George Polites, the
doyen
of the employer side of the
Industrial Relations duet, and Charlie Fitzgibbon, who had been federal
secretary of the Waterside Workers
Federation, and had held many other important union posts.
The Hancock Committee
spent two years or so in taking evidence, conducting research, and
seeking
bilateral
support for its proposals. The Hancock Report is of considerable
historical
interest, (its publication led directly to
the founding of the HR Nicholls Society) and it produced a great deal
of
valuable information. The Committee
carried out extensive research into public opinion and the results
(which
are buried discreetly in the appendices)
show a depth and breadth of public
distaste
for union power which must have shocked
the
union leadership of the
time. On the right to strike, for example, only
28% of respondents conceded unions, in any industry, the right to
strike. Only 14% accepted the use of work bans.
In February 1985, pollsters McNair Anderson found that 81% of
respondents
favoured penalising unions which
disregarded Arbitration Commission directions. The Hancock Committee's
poll found that 47% supported fining
unions, 43% supported loss of representation rights, 34% supported
abolition
of the union, 21% supported
removal of an award, 17% supported jailing union leaders, 8% couldn't
say,
2% supported all of these measures,
but only 2% supported none of them. Now these figures add up to more
than
100%, but, even allowing for
double or triple dipping, there was very clearly a high level of public
distaste in the mid 1980s for what was
regarded as abuse of power by union leaders.
Even more interesting are the results of
polls
conducted by the Melbourne
Age concerned with these matters,
taken over nearly two decades. They show a steady deterioration in the
public standing of trade unions. In
answering the question, 'Do you think
trade
unions in Australia have too much power?' in 1967, 47% responded
'yes'; in 1971 49%; in 1980 68%; and in 1986, 78% responded 'yes'.
Such a response can only mean that very
large numbers of trade union members think that trade unions have too
much
power.
It is unlikely that public opinion on these matters has changed since
those
polls were conducted, and legislation
specifically banning picketing could well prove to be supported by a
large
cross-section of Australian opinion.
A further important reform would be to abolish
the union privilege of unfettered right of entry onto a building site
or workplace and to restore the rights of employers and businesses,
when
confronted with tortious conduct by
trade unions, to seek immediate injunctive relief.
These measures would substantially reduce opportunities for
union intimidation designed to enforce the 'closed shop'.
Changing the rules of the IRC so that costs are to be awarded to
defeated
litigants would likewise remove a legal
privilege which causes great harm to economic and social life.
Pattern bargaining
in the construction industry (and in other industries) is an important
weapon in the union's
rent-seeking and rent-extraction armoury. Pattern bargaining could be
prevented
by changing the rules for, and
structure of, bargaining in employment contracting under the Workplace
Relations Act, to restrict
union-organised employment contract negotiations to a single
enterprise.
Such a reform would make labour
supply to the building and construction industry (and other industries)
more openly competitive while preserving
the scope for reducing transactions costs offered by a unionised (as
opposed
to individual) approach to labour
market contracting noted above.
All of these measures would amount to a substantial clawing back of the
legal privileges trade unions enjoy and,
naturally, would be bitterly contested by the unions.
Contestability both within the
construction
industry generally, and within the labour force within the industry
particularly, is the key to changing the present culture of
rent-seeking
enforced by the closed shop. One
strategy
for making the industry more competitive would be to repeal those
sections
of the Trade Practices Act 1974
which exempt employment relationships and the bargaining process which
unions seek to monopolise from the
anti-collusion sections of the TPA.
Amongst
other things, provision of employment contract negotiation services,
which under our industrial relations system have, because of the degree
of union privilege, been monopolised by
unions, would become more openly competitive. This would be
advantageous
for workers.
The domestic housing industry exemplifies the advantages of being able
to arrange the work of an industry outside
the legal strictures which now bedevil the employment relationship and
thus well away from the influence of trade
unions and arbitral bodies. Although there are some employees in the
domestic
housing industry, most workers
are contractors rather than employees, and despite many attempts by the
unions to break that system and return
to a workforce of unionised employees, all such attempts have proved
fruitless.
The reason for this continuing
failure is that under the system of contracting and sub-contracting
which
prevails in the domestic housing industry,
the workers in the industry do well, both from a financial as well as
from
a psychic income perspective. The
workers as well as the consumers both share in the productivity gains
which
have characterised the industry for
some decades. Although the domestic
housing
industry has suffered from time to time from fraud and contrived
bankruptcy, its competitiveness and efficiency are recognised as world
class. One reason for this is that it is
based
largely on independent contracting
thereby avoiding the heavy transaction costs that our industrial
relations
system
now imposes upon the traditional employment relationship.
Is Trade Unionism Always an
Expression of Rent-seeking?
Trade unions have a history extending back to the guilds of mediaeval
times.
These guilds were usually
combinations which today would be illegal under our Trade Practices
Act,
but as well as controlling entry into
particular trades and occupations they also provided welfare services
for
members and educational facilities for
apprentices and sometimes for poor children. The key to understanding
the
role of trade unionism in
contemporary Australia is the legal privileges which unions enjoy,
which
when combined with opportunities in
certain industries for rent-creation and extraction, will almost always
lead to rent-seeking and employer-union
collusion on a scale limited only by the rents that can be created.
The phasing out of protectionism in
Australia
has destroyed a huge quantum of rent and thus the role of trade
unionism in the formerly protected industries is also vanishing.
Only in some particular industries (including the
construction industry), can rents be created or, as in the government
sector,
are readily available, to be fought
over. These are precisely those industries where the combination of
legal
privilege and rent-seeking can lead to
violence and general lawlessness, particularly disregard for the
anti-collusion
sections of the Trade Practices Act.
Would trade unionism survive in
Australia
without the legal privileges which were established in 1904 in order to
promote the trade union movement? The
future
of workplace relations can only be surmised under such a
privilege-free regime, but if economic theory concerning the
transaction
costs of administering the employment
relationships in large enterprises is well founded, then enterprise
unions
will become a feature of companies
employing large numbers of people doing similar jobs, e.g. the
retailing
industry.
Conclusion
In an economy where the rule of law
prevails---where
contracts are upheld by the courts, and property rights are
respected---the use of strikes, pickets, and other forms of
intimidation
is no different in kind from the extortion
rackets which the Mafia and other criminal gangs have operated in
southern
Europe and in the US, sometimes for
long periods. The exception to this
general
rule is found in the public sector where employees must necessarily
negotiate with an employer (the Government) who is immune to market
disciplines
and imperatives.
The Conciliation and Arbitration Act of 1904, and its successor Acts,
bestowed
important and unique legal
privileges upon registered trade unions, whose raison d'etre was either
the distribution of government created
rents (as in tariffs or import quotas) or in the creation and
distribution
of rents in industries which were immune
from import competition. The creation of such rents, however,
ultimately
required the use of techniques of
extortion which were unacceptable to deeply entrenched common-law
principles
of contract and tort, and the
history of trade unionism can be seen as an ongoing campaign to
legitimise
tactics such as picket lines, which were
rightly seen as crucial in the establishment and maintenance of a tight
monopoly position in the supply of labour.
The transformation of what is
essentially
criminal behaviour into socially acceptable conduct (accepted at least
by
many in the media and some in society generally) that began many
decades
ago, and has been assiduously
promoted ever since, is a prime example of rent-seeking. Thus,
over the decades, and through the back door,
violent picketing was quasi-legitimised, inevitably leading to the
increasing
use of strikes and the threat of strikes
as part of normal life. This climaxed in the early 1980s. The election
of the Hawke Government in 1983 was, in
part, a response to the Fraser Government's inability to uphold the
law,
and thereby maintain peace and concord
in the labour market. It was argued by the ALP in the run-up to the
1983
election that the 'Accord' between the
ALP and the ACTU would, if Labor was elected, guarantee a return to
quietude
in the labour market. This
promise was largely fulfilled, although it is certainly arguable that
other
factors were at work. Nonetheless, by
acceding incrementally to industrial lawlessness as part of a code of
'industrial
realism', arbitral tribunals and, more
recently, even the Federal Court (as in the Electrolux decision) have
sought
to maintain and extend their
jurisdictions, thereby becoming part of the rent-seeking chain.
The life of a rent-seeker, however,
is
never
a comfortable one. Rents are always extracted from unwilling or
unknowing fellow citizens, and if the
rents
are ordained by government (as in tariffs or import quotas) then
considerable and continuing rent-seeking activity is required to
maintain
the political support which governments
require to continue the transfers. If the rents are created through
illegal,
or legal but morally distasteful methods,
then the rent-seeker can find himself subject to Macbeth-type fits of
doubt
and remorse. Usually, however,
rent-seekers at the rough end of the rent-seeking spectrum take after
Richard
III, rather than Macbeth, and a
substantial upheaval in the construction industry (as in the Waterfront
dispute of 1998) is required to change the
rent-seeking and rent-maintaining culture which has been entrenched for
decades.
The successful phasing out of protectionism from the mid-1980s on, was
a historic Australian watershed. As
competition from imports began to change the culture of Australian
business,
and as more and more employees
became contractors, the Higgins legacy of union privilege and disguised
rent-seeking became intolerable in many
industries. The waterfront was the first big battleground. The
construction
industry is now under close scrutiny,
and the Cole Royal Commission will play a critical role in this drama.
The Higgins legacy still weighs heavily on economic life in Australia.
The Reith legislation of 1996 was a case of
two steps forward and one step back. The Howard Government, with Tony
Abbot
bearing ministerial
responsibility for the next attempt at reform, needs to define the
issues
which will be at the centre of political
debate, and to do so in such a way that, in the context of a
double-dissolution
election, the electorate can
understand who will gain and who will lose as a consequence of proposed
reform.
This paper seeks to provide an understanding of what, behind all the
Marxian
rhetoric of class war, is really going
on, not only in the construction industry, but in the world of
employment
relations generally, a world characterised
by legal privilege for trade unions, inordinate transaction costs,
frequent
collusion between unions and employers,
and much lower incomes, particularly
for lower-paid workers.
The Author of this paper
Ray Evans was a founder of the
HR Nicholls Society, and has
been President since 1989. He
was Executive Officer at
Western Mining Corporation
Ltd from 1982 to 2001. He was
awarded the Tasman Medal in
1996 in recognition of his
contribution to ideas and public
debate in Australia.
Appendix
Inappropriate practices and conduct
identified
in the First Report of the Royal
Commission
into the
Building and Construction Industry.
widespread disregard of, or breach of, the enterprise bargaining
provisions
of the Workplace
Relations Act 1996;
widespread disregard of, or breach of, the freedom of association
provisions
of the Workplace
Relations Act 1996;
widespread departure from proper standards of occupational health and
safety;
widespread requirement by head contractors for sub-contractors to have
union-endorsed enterprise
bargaining agreements before being permitted to commence work on major
projects in State
capital central business districts;
widespread requirement for employees of sub-contractors to become
members
of unions in
association with their employer obtaining a union-endorsed enterprise
bargaining
agreement;
widespread disregard of the terms of enterprise bargaining agreements
once
entered into;
widespread application of, and surrender to, inappropriate industrial
pressure;
widespread use of occupational health and safety as an industrial tool;
widespread making of, and receipt of, inappropriate payments; unlawful
strikes, and threats of
unlawful strikes; threatening and intimidatory conduct;
underpayment of employees' entitlements;
disregard of contractual obligations;
disregard of federal and State codes of practice in the building and
construction
industry;
disregard of the rule of law.
Endnotes
1. The author is indebted to HR Nicholls Society colleagues Geoff
Hogbin
in particular, Des Moore
and Ken Phillips, for comments and advice during the writing of this
paper.
The author is
nevertheless solely responsible for any errors of fact or logic which
readers
may find.
2. Prime Minister of Australia, Royal Commission to investigate
building
industry, Media Release
26 July 2001.
3. Anne O Krueger, formerly Professor of Economics at Stanford
University,
is now First Deputy
Managing Director of the International Monetary Fund.
4. A widely cited article which summarises some of these arguments and
evidence is Richard B.
Freeman and James L. Medoff, 'The two faces of unionism', The Public
Interest,
52, pages 69-97,
1979.
5. An historic description of picket lines was given by FE Smith, later
Lord Birkenhead, who in the
debate in the House of Commons in 1906 on the Trade Union Disputes Act
said:
We are asked to permit a hundred men to go round to the house of a man
who wishes
to exercise the common law right in this country to sell his labour
where
and when he
chooses, and to 'advise' him or 'peacefully persuade' him not to work.
If peaceful
persuasion is the real object, why are a hundred men required to do it?
If I were a man
who was wishful to dispose of my labour as I chose, although the member
for Merthyr
[Keir Hardy] might not persuade me to break a contract, still, if the
hon.
member came
with fifty other peaceful persuaders to the house where I and my wife
live,
I fear I should
be much more likely to yield to persuasion than if the hon. Gentleman
came
by himself.
We are told that another object of these well-attended deputations is
that
information
may be given. Is it more convenient that information should be given by
fifty men, than by
one man? Even in this House it is recognised that, as a general
principle,
it is more
convenient that one member should address the House at one time.
Every honest man knows why trade unions insist on the right to a strong
numerical
picket. It is because they rely for their objects neither on
peacefulness
nor persuasion.
Those whom they picket cannot be peacefully persuaded. They understand
with great
precision their own objects, and their own interests, and they are not
in the least likely to
be persuaded by the representatives of trade unions with different
objects
and different
interests. But though arguments may never persuade them, numbers may
easily
intimidate them, and it is just because argument has failed, and
intimidation
has
succeeded, that the Labour Party insists upon its right to a picket
unlimited
in respect of
numbers. House of Commons, 30 March 1906.
6. Paul Kelly, in his outstanding book The End of Certainty, Allen and
Unwin, 1992, provides an
excellent analysis of the Deakin Settlement.
7. Patrick Stevedores Operations No 2 Pty Ltd & Ors v Maritime
Union
of Australia & Ors, 1998,
397 FCA, 23 April 1998.
8. Thomas Sowell, Culture and Conflict, Basic Books, 1998.
9. Breen Creighton and Andrew Stewart, Labour Law: An Introduction,
Federation
Press, 2000.
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