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)

 Perlman’s 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 activity1. capitalism’s power to resist the demands of organised labour2. extent of the influence of union intellectuals3. maturity in the outlook of the trade unions

Problems: Perlman’s ‘business unionism’ does not explain socialism and political activism (ALP) of Australian unions.

Also Australia’s ‘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

1850’s - 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 - seamen’s 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 19451905 - 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 1946-

1949 - 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. services to members eg. insurance, legal aid

2. improved employment conditions

3. job security

4. political objectives

 

Byrt (1985) 3 broad goals of unions:

1. economic – higher wages by arbitration and collective bargaining

2. political – through ALP in Australia

3. 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. craft (skilled trade eg. boilermakers)

2. occupational unions (similar workplaces with similar range skills - eg. public service unions)

3. industry unions (industry based rather than skill based eg. automotive, mining industries)

4. general unions (less common, large diverse, eg. AWU, ALHMWU –Australian Liquor Hospitality and Miscellaneous Workers Union)

5. 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. Workplace – ‘shop steward’ or ‘job delegate’ first point of contact for members. (Shop stewards are employees not paid organisers.)

2. District – hold regional meetings of members

3. State/Branch – state councils in capital cities, monthly meetings, paid and elected officials plus paid staff. Day to day running of union

4. 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. Job regulation (as in apprentices etc.) – declining because of multi-skilling, team work etc.

2. 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).

3. Abitral regulation – using arbitration system to advance conditions

4. 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 UNIONSRecent declining membership has led to research on this subject. Complex factors influence joining a union:• level of satisfaction with worker’s 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 – STATISTICSABS Stats on UnionsHighest 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% unionists1989 -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 workforce1996 – 24% union membership in workforce2002 – 23% union membership in workforceWhy 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

friendly4. Dissatisfaction among traditional blue collar unionists5. 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 Govt’s 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.