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Selective collectives

Nicholas Way |  05 June 2006

All political parties agreed. It seemed an eminently sensible reform to enhance the competitive position of small business. The Dawson report, a commitment the Federal Government made to business before the 2001 election to examine how competition law was working, handed down a recommendation to streamline the process by which small business can collectively bargain and boycott in its dealing with big business.

It was little wonder the Federal Government pounced on this recommendation, one of the few ‘headline grabbers’ to emerge from this eight-month review of the Trade Practices Act (TPA). It appealed to small business—one of the Federal Government’s core constituencies that Liberal Party founder Sir Robert Menzies identified as being part of the ‘forgotten people’. Nearly half a century later, when giving the 1996 Sir Robert Menzies lecture, Prime Minister John Howard tapped the same political sentiment. ‘Menzies’ success lay in building a broadly based constituency at the heart of which were the ‘forgotten people’—Australians of the mainstream who felt excluded by the special interest elitism of the Liberals and from Labor’s trade union dominance … (They) include small business people who want to expand, invest and employ more Australians.’ In mythology, if not reality, the cornerstore owner is an integral part of the heart and soul of the conservative side of politics.

What this commitment to small business means, in words if not reality, is that the conservatives see themselves as the natural defender of a constituency that often perceives itself as being squeezed by bureaucracy, big business and, of course, trade unions. When it comes to competition law, the ‘villain’ is big business. It is Coles Myer and Woolworths versus the cornerstore.

The Federal Government did not spell it out quite like that after the Dawson report was handed down in April last year. Criticism of big business was implicit, not explicit. Treasurer Peter Costello’s press release put it succinctly: ‘Rural and regional stakeholders and small business will welcome the introduction of a notification process to facilitate collective bargaining by small businesses dealing with large businesses.’ But the Minister for Small Business and Tourism, Joe Hockey, was more effusive. In a press release titled, ‘Victory for small business’ (meaning a loss for big business?), he said: ‘In a significant rebalancing of the relationship between small business and big business, 1.1 million small businesses, including farming bodies, will be able to collectively negotiate with big business. For the first time, local corner stores will be able to compete with suppliers like Coles Myer on price, while retail tenants should be able to better negotiate collectively with big landlords.

‘Collective bargaining by smaller firms, where it does not have an anti-competitive effect, empowers small businesses to take on the larger firms. Measures include the introduction of a notification process for collective bargaining by small businesses, the quick turnaround of applications (14 days) and reduced fees.’ (The legislation, incidentally, is still in the pipeline.)

The release is more significant for what it doesn’t say than for what it does. For implicit in all of Hockey’s comments are two underlying themes. First, that while much of big business pays lip service to competition, in truth they want to limit competition. The history of Australian business, especially before the Whitlam Labor Government passed the TPA in 1974, was a history of monopolies, oligopolies or cartels, often with government connivance or even support (the two airlines policy is an obvious
example). Certainly that famed comment by 18th century economist and philosopher Adam Smith seems apposite: ‘People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.’ Second, that for small business, bargaining collectively is essential, not just for its wellbeing but its survival, when confronting the powerful commercial interests at the big end of town.

What the Federal Government is saying is that there is a power imbalance between big and small business. It fits neatly, and deeply, into the party’s psyche—the guardian angel of the forgotten people. At the same time this Government has consistently argued, since returning to power in 1996, that any power imbalance between employers and employees is largely the figment of union bosses’ imagination. On the labor front, employers, big employers included, can be trusted. Sure, not all of them play by Queensberry rules, but, in the main, businesses value their employees and treat them equitably.

Think about it. Small business is encouraged to act collectively—a potent weapon in dealing with big business. But employees, with minimum rights enshrined, should trust their employer. Indeed, as the former Workplace Relations Minister Tony Abbott once said, employees should see bad bosses like bad fathers or husbands—‘they tend to do more good than harm’.

In the public furore that followed that comment, Abbott retreated from this position. But it was Dunkirk, not Stalingrad. He was always returning to the theme that the cooperative workplace, the caring employer, the loyal, committed worker, was the norm. While he held the Workplace Relations portfolio from January 2001 to October 2003 he articulated this position with conviction and passion. He used his speeches, arguably more than any predecessor, Liberal or Labor, to explain the philosophical underpinnings of the Federal Government’s approach to workplace relations.
 
In a speech titled ‘Reflections of a New Boy’ to the H.R. Nicholls Society, in March 2001, just two months into holding the portfolio, he said: ‘There are few more heavily regulated activities than dealings between employee and employer. Australia’s workplace relations system assumes that workers and bosses are incapable of managing differences, that workers are always weak and gullible, bosses are always greedy and manipulative, that daily relations need to be governed by complex rules, and that the inevitable disagreements must be resolved by someone else. I’m sure Australians are better than that. Good workers are always in demand. Most bosses try hard to keep the people they’ve trained. Even conceding a few bad apples, do we really need a system that assumes the worst of the people in it?’

He later added: ‘The Government believes that human enterprises work best when participants talk among themselves first rather than to third parties. Workers, managers and owners should be talking to each other rather than to unions, employer organisations, commissioners, judges and courts at the first hint of a disagreement. We’re fundamentally opposed to lazy management that would prefer to talk to a union organiser than its own workforce.’

What Abbott and his colleagues believe, and what they argue unions either don’t believe or don’t understand, is that people in a company, from the manager down to the cleaner, have more uniting them than dividing them. The real enemy is the competitor down the street, not the boss in the carpeted corner office. And most workers know and appreciate this. ‘(The) preoccupation with beating the boss rather than beating the competition means that some union leaders would rather see a business close than compromise their demands. If a business subsequently complains that its cost structure is too high, the standard union response is to reduce competition rather than boost productivity because the competition unions understand is between capital and labor rather than between business and business,’ he told the Confectionary Manufacturers annual industry lunch in December 2001.

Where this position leads Abbott, and the Federal Government (his successor, Victorian Kevin Andrews, who refused an interview for this article, is, judging by his press statements, on the same wavelength), is inexorably to a position where unions have no role in the workplace. Workers will be more productive, cooperative, flexible and their morale higher without unions. How else can this comment by Abbott, made to Commerce Queensland in August 2002, be interpreted. ‘I’m pleased that as well as hundreds of thousands of (collective) agreements with unions, … that we now have an increasing percentage of (non-union collective) agreements … I’d like to see that continue, and develop, and expand in the months and years ahead. Not because I have anything against unions. Responsible unions have a lot to contribute to Australia. But because I believe that in the end it is impossible to run business, it is impossible to mange an operation, without having a direct relationship with your staff. And if what you want is a direct relationship with your staff then what you should do is negotiate directly with them, cut out the middle men, and try and go for agreements that reflect the fundamental bonds of trust and confidence that should exist between workers and the managers at any particular workplace.’ (my emphasis) In policy terms, this approach has been most evident in the Federal Government’s fervent commitment to Australian Workplace Agreements (AWAs)—individual contracts between employers and employees—and a policy that small business (20 or less employees) should be exempt from unfair dismissal laws. (This proposal has failed to get Senate approval.)

Unions and Labor simply decry this position as old-fashioned Tory union bashing. While there is an element of that in Federal Government utterances, especially when it comes to the left-wing Australian Manufacturing Workers Union and the Construction, Forestry, Mining & Energy Union (the only two large unions that still wield genuine industrial clout), it also reflects a belief that unions—which emerged as the vehicle by which workers collectively responded to the excesses of the industrial revolution—are relics of a view that society is based on class and therefore no longer relevant. To steal Leon Trotsky’s memorable line, they should be consigned ‘to the dust heap of history’.

That the Federal Government has implicitly taken this position at this time in our history is difficult to comprehend. Unions, as the Federal Government tells us ad nauseam, are in decline. Possibly terminal decline. Union numbers have halved in the past two decades for many reasons: their own ineptitude, the changing nature of work and better and emboldened employers to name some. Industrial activity is at historically low levels.

Workplaces, union and non-union, are more productive.

So does it reflect a government unsure of its liberal principles? Does it mean the right to collective action is the preserve of some—small business—but not others—unionised workplaces? How does this dovetail with Abbott’s opening paragraph in that same speech to the H.R. Nicholls Society: ‘The Liberal Party’s animating principle is freedom: not absolute freedom because freedom can only exist in a context of order, stability and fairness—still, as far as it is reasonably possible, individual, social and commercial freedom.’ Freedom is the ‘light on the hill’ to which we always aspire and the yardstick by which we wished to be judged.’ It is a sentiment none of his colleagues would quibble with.

In this context surely freedom encompasses the right to join a union, especially for Andrews and Abbott, practising Catholics no doubt aware of Rerum Novarum, and, in the later case, an unabashed devotee of the late B.A. Santamaria. In years past, unions enforced closed shops. So, too, did employers. Today, with a few notable exceptions (CBD building sites), union membership is voluntary. Many employers, too, chose to negotiate with unions, in part respecting their employees’ choice to be in a union. While the Federal Government would argue, vehemently, that it does not oppose the right of workers to join a union, the continual stream of statements emanating from Canberra questioning the legitimacy of unions undermines their position in society. It is not subtle. Unions, big and small, militant and passive, left and right, are all lumped in the same basket.

When the Premium Group, a group of about 300 dairy farmers in south-east Queensland, got permission from the Australian Competition & Consumer Commission (ACCC) to negotiate collectively with the milk processor Pauls in August 2001, no one on the conservative side of politics railed against this collective action. Nor did they when agreement was reached. Indeed, quite the opposite, judging by a statement issued by federal Agriculture Minister, Warren Truss, in April 2003. In a move eerily similar to Labor handouts to their union constituency, he dipped into taxpayers’ money to provide $100,000 for workshops designed to help dairy farmers bargain collectively. ‘The ACCC’s decision to allow dairy farmers to bargain collectively is a fair and sensible one, and should redress some of the imbalance in market power currently present in the dairy industry,’ he said, without a hint of embarrassment. No doubt Pauls’ workers got a similar handout to bargain collectively.  

Nicholas Way is a senior writer for Business Review Weekly.

 


Nicholas Way


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