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Secret ballot or secret war?

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Trade unions Industrial relations Australia
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Strikes are a soft target for governments nowadays. Just 2 to 3 per cent of workers are involved in a strike annually compared to a third of workers in the early 1970s. Strikes have always been controversial but they were often part of national campaigns for shorter hours or better wages for everyone. But those days are long gone - finished off by enterprise bargaining - and strikes now simply evoke irritation, inconvenience or indifference for most people.

So few eyebrows are going to be raised by the latest round of legal restrictions on strikes. But they should be. This is the latest phase in the ‘secret war’ the federal government has been waging with a handful of blue collar unions. But the reforms are so far-reaching they take Australia into unchartered waters.

The Coalition’s IR changes appear designed to hollow out the legal right to strike while giving employers an almost unlimited freedom to lock out their employees. In a world first, Australian law will be tilted dramatically in favour of employer lockouts.

A series of limitations have already been placed on strikes. They are no longer permitted while an agreement is in force (even if the issue isn’t covered by the agreement). Multi-employer or sympathy strikes are illegal (which, according to the International Labour Organization, is in breach of international conventions). A technical definition of ‘employment matters’ limits what unions can strike about, and excludes matters like consultation rights as well as social and political matters. Moreover, big penalties have been introduced for strikes which don’t fit within these parameters.

In future, the coalition will require unions to hold a secret ballot of members before they can legally take industrial action. This sounds reasonable enough - until you flick through the 45 pages of Kafkaesque bureaucracy and regulation in the last bill.

Unions will have to get ‘permission’ from the IR commission even to hold a membership ballot. If they get past the objections of legal counsel acting for employers, they must then apply to the Australian Electoral Commission (AEC) for a ballot. The AEC draws up a roll of eligible voters, collates names, posts ballot papers, waits for them to be returned and collates the results. Over 40 per cent of eligible voters must vote and 50 per cent of them must vote yes. Legal counsel for employers can challenge the result on the grounds of ‘irregularities’.

Workers can then finally take industrial action after giving a further three days’ notice. But if their action doesn’t conform to the precise wording of the ballot the lawyers can move in again. Even after a group of workers finally navigates its way through this legal quagmire, the legalities are still not over.

In the Better Bargaining Bill, quietly slipped into parliament last week, any ‘significantly affected third party’ will also now be able to apply to have a strike suspended - any student, any commuter, any customer, any patient, any business. The law’s so open-ended that it’s difficult to think of a strike that would be unambiguously legal.

Contrast this with their treatment of employer lockouts. A lockout is the employer version of a strike - the employer stops paying employees and refuses to allow them into work until they yield. Unlike strikes, the number of lockouts has been increasing; they now account for over half of the ‘long disputes’ (that is, dusputes running for a month or more). This is a direct result of earlier reforms by the federal government. (In the state industrial relations systems, meanwhile, lockouts remain virtually unheard of.)

Federal lockout law is already the most deregulated in the OECD. The Workplace Relations Act expressly permits ‘AWA lockouts’ to pressure employees into signing individual agreements. Other nations either prohibit lockouts or limit them to exceptional cases where the employer is considered to suffer an imbalance of bargaining power. No other nation allows employers to lock out their employees to force them into signing individual contracts. Most countries limit lockouts because employers generally have more bargaining power than their employees; to give them too powerful a weapon would potentially allow them to run roughshod over employee ‘freedom of association’ or bludgeon concessions out of vulnerable employees - which is precisely how AWA lockouts have been used in Australia.

In the most famous lockout to date, referred to by a Federal Court judge as a ‘baseball bat lockout’, 300 workers at the O’Connors abattoirs eventually signed up to an AWA which cut their pay by between 25 and 33 per cent after an eight-month lockout. The Federal Court noted evidence of financial devastation, mental illness and personal ruin - but the law gives adjudicators little power to deal with lockouts leading to AWA lockouts, and they can consequently run for months and months. In another case, a single individual was locked out for two and a half months.

The Coalition, however, is doing nothing about these abuses of power - or to live up to its promise that no one would be forced to sign an AWA. In fact, AWA lockouts are excluded from these new laws. Whereas any individual will be able to contest a strike, AWA lockouts are virtually immune from legal challenge (the AIRC has a discretionary power under s127 to end a lockout but as a matter of principle is extremely ‘reluctant’, it says, to exercise it).

The new laws will actually encourage AWA lockouts by making them the least regulated form of industrial action. Collective bargaining lockouts are covered by the Better Bargaining Bill but not secret ballots. The solicitors who advise employers in these types of disputes will point their clients towards AWA lockouts to avoid complications.

Either way, whereas it could take months for a group of employees to go through a ballot process overseen by the IR Commission and the AEC, an employer can simply lockout their employees with three days’ notice, no questions asked.

If the ballot process is about democracy, why are employers not also required to ballot their shareholders before locking out their employees? Why are industrial action ballots supervised by the AIRC and the AEC whereas employers are permitted to self-conduct ballots of their own workers to determine whether they consent to non-union agreements? Why dismiss proposals for a ballot process to determine whether employees prefer individual or collective bargaining (standard practice in other decentralised bargaining systems) - an issue which goes to the heart of freedom of association and choice for the entire workforce - but introduce a ballot to ensure workers consent to strikes?

The answer, of course, is that these reforms have precious little to do with rational policy-making. These changes deliver short-run advantages to some employers but other employers will find themselves dragged into the quagmire with their unions. The focus of the parties in dispute often becomes the ballot process, not the underlying issues, and the process brings lawyers (who are rarely good at facilitating effective compromises) to centre stage.

And the experience of the UK - which implemented a much simpler ballot process - shows it can drag disputes out. The ballot process becomes a vote of confidence in managers and polarises the parties. There were fewer disputes but longer strikes when the vote was ‘yes’ (and after learning the ropes unions very rarely lost ballots).

It’s questionable whether this represents a good policy outcome. Strikes are at historic lows and 90 per cent of strikes finish in less than to days with few lasting consequences. Strikes may not be popular but they are widely recognised as an important part of a free, democratic society and a check against excessive management power - and for that reason they are protected under international law as a human right.

The role of the government should be to balance the right of employees to strike as part of the bargaining process against the needs of the community (to ensure essential services, for example) and the economy. Australian bargaining laws will contain none of the checks and balances found elsewhere; they will simply, unashamedly load the dice in favour of employers.

In the long-run, bargaining systems thrive when their legitimacy is high, generating productivity through improved relationships and agreements seen by the parties to be fair bargains.

These changes, along with the litany of other reforms which systematically tilt bargaining power towards employers, will do nothing to alleviate, and may even worsen, the real problems of contemporary working life: issues like work/life balance, the very low work participation of mothers (a more effective way of addressing labour shortages than targeting welfare recipients) and deepening inequality. Instead of addressing these difficult, complex policy challenges, the Coalition prefers to play war games with blue collar unions.

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