Reform the Unions

Author

Here we go again.  The season for union bashing is upon us.  Corruption in the CFMEU.  Craig Thompson before the court.  A royal commission to take place.  When the government is turning on unions, maybe it is time to take a step back and look at the situation in a broader context.

Are unions still relevant?  We know they were when children were down coal mines, and women were confined to the kitchen sink.  Is there still a need for unions?  What can they contribute?

What a union can contribute is organisation and a single voice.

  • Organisation is about getting a group of people together and representing their wants, needs and aspirations.
  • A single voice is to negotiate as a group rather than as individuals.  I am not sure if there is a phrase that describes it, but if there was it would be the opposite of ‘divide and conquer’.

Let’s examine the organisational aspect.  Individually workers, like any mix of people will have a range of views.  For example, wage increase expectations will cover a whole spectrum from zero to double or more.  A Union can help the individuals agree what is a reasonable and fair increase.  Once a number is agreed, the Union can negotiate with their counterparts – the employers.  It is one group (the employees) negotiating with another group (the employers).  A fairer match than an individual (the single employee) negotiating with a group (the employers).

The range of things that are negotiated will range from the absolutely essential to the plain silly – on both sides.  Absolutely essential may include safety conditions.  Plain silly may be obscure allowances the employer cannot possibly afford, or reducing conditions such as sick leave or holidays for workers.  It would be good if common sense prevailed, but it usually doesn’t.  Negotiating positions and unrealistic expectations drive what is asked for by both parties.  That is a fact of life.

Just because some of the demands from both sides are never going to happen, does not mean the whole process is flawed.  Until we can come up with a better, more equitable scheme, the negotiation between groups of employees and groups of employers is probably the best method.  An ideal situation may be where unions and employees work together to share the profits and losses more equitably.  This should be called a bonus scheme but the bonus system has become corrupted.  Today it is seen more as an entitlement for upper and middle management.

So where are the flaws in the union system?  It mainly comes down to three areas.

Firstly is union management.  Many union leaders rose up through the ranks.  On one hand this is a good thing in that they understand the grass roots.  On another it is a bad thing in that may not have the education and experience to lead a major organisation.  They might also be less aware of governance issues and become subject to allegations of corruption.  Their counterparts – the corporations – spend much more money and effort to enforce governance standards.  Even then they regularly get it wrong.  The allegations against Craig Thompson would be far less likely to have happened in a corporate environment such as a major bank or a mining company.

The second flaw is in the relationship between workers, unions and companies.  There seems little trust in the chain.  If a manufacturer is suffering a financial crisis, should a union be asking for more wages?  Why is the union not working with the company to help them survive and provide a future for the workers?

The transport unions are a prime example.  We know that trucks are having to operate under dangerous conditions to meet demands from the Coles and Woolworths of this world.  They are the two obvious companies but not the only offenders.  Why are the various unions not attacking the root cause which is the demands of those who use freight services?  Imagine if all the unions who have workers in Coles and Woolworths threatened industrial action against those companies unless they became less demanding on transport workers.

The third flaw is the industry based approach.  Within any industry, there are companies doing well, and companies struggling.  A single approach ensures those doing well benefit, and those doing poorly loose.  There should be more scope to vary conditions from company to company.  For example, it may be better for all concerned if the struggling company were to focus on employing single mothers between 9:30 and 3:00 on an hourly wage rather then require people to work 9 to 5.  Maybe allowing them to take off time at school holidays would work.  Perhaps more use of casuals, outside of award conditions, would help the company and would suit those workers.

The answer is not simple.  There is a need for unions but there is also room for improvement.  Personal interest is always a driver, and for employers, less union involvement is in their interest.  In a country where unions and the Labor Party are historically linked, it is always going to be to the advantage of those opposed to a Labor government to blacken the face of unions.  It would be much better for Australia if we talked about how we could reform the unions rather than how we remove them.