Unions, neoliberalism and the royal commission

The furore of the last few days over the Trade Union Royal Commission and revelations about serious and illegal underpayment of workers (especially foreign students) by 7-Eleven, Australia Post and others have brought into sharp focus a wider political question.  This article deals with the first of them, and I’m aiming to write a post about the second over the weekend.

It is increasingly clear that neither the political nor industrial wings of the Labor movement have come to terms with the full implications of the neoliberal revolution that Bob Hawke and Paul Keating embraced and set in motion from 1985 onwards.  Labor is far more interested in discrediting Royal Commssioner Dyson Heydon at just about any cost than in confronting the evident systemic problems that its hearings have revealed.

Flowing from the wholesale union amalgamations of the early 1990s and the implementation of large industry-based occupational superannuation funds with board members including trade union officers, the nature of unions and the relationships between union officers and their members have been radically transformed.  Union management is very different from back in the days of small, guild-type trade unionism. Union officers commonly have never worked in the industry whose workers they represent, and usually don’t know many of those workers well.  A job with a trade union is just a step on a well defined career path, where union officers obtain relevant university qualifications; progress from working for the union to working in a Labor politician’s office or party headquarters (sometimes the sequence is reversed); then get pre-selected for a safe seat in federal or state parliament (depending on their factional clout); and finally cash in on the contacts they’ve made by taking lucrative consultancies or board positions with big corporations, where they sell their party and union contacts and influence  to the highest bidder.

Rather like the fluid boundaries between employment with one of the Big 4 accounting firms and the ATO, ASIC and ACCC, it can often be hard to distinguish between gamekeepers and poachers. That isn’t to deny that this sort of career progression/oscillation can be useful.  An effective bureaucrat needs to have a “hands on” understanding of the corporations he/she is regulating, just as effective trade union officials needs to have a good working relationship with the business executives in their industry, and a sufficient understanding of the problems businesses are grappling with to be able to negotiate effective EBAs that both protect and enhance members’ pay and conditions and allow the business to survive and thrive.  Obviously the interests of workers and management don’t coincide, but nor should they always be radically antagonistic. To a significant extent what is good for the business is likely also to be good for its workers, and even where interests diverge “win win” solutions are possible with creativity, communication and mutual goodwill.

Essentially that was Bill Shorten’s argument before the Royal Commission. My impression is that it was received with undue scepticism by Commissioner Heydon and counsel assisting Jeremy Stoljar.  As I discussed yesterday with veteran lawyer blogger and now tweep Robert Corr:


This is the real problem with TURC. Not an invitation to speak at an event. They think collective bargaining is inherently criminal.

I replied:

Although it’s a long way from certain that the unions would succeed in persuading the High Court that there is a real apprehension of bias on Heydon’s part, they wouldn’t have any difficulty persuading me.

However that doesn’t mean I deny that there are any real problems with trade unions and their governance, just that a less evidently biased Commissioner should be examining them. Serious and seemingly entrenched CFMEU thuggery could in theory be dealt with by existing law enforcement agencies but in practice has never been seriously addressed, although it’s been going on for years.  By contrast, the sorts of cosy corporate collusive practices that Bill Shorten in his AWU days and even more so Cesar Melham seem to have embraced probably aren’t criminal in nature, but certainly need examination and assessment of what oversight and governance rules may be needed.

There’s no problem with a union entering agreements with employers to provide workplace services like health and safety training and so forth, but with two provisos:

(1) that the services are actually provided at reasonable arm’s length market prices and are not just empty pretexts for kickbacks: and

(2) that there is full disclosure and informed consent to the proposed arrangements by union members.

It isn’t clear that either of these elements were always present in the examples examined by Heydon’s Royal Commission.

In a wider systemic sense, trade unions now have a corporatist identity and culture.  Just as the interests and culture of corporate board members and executive management differ from each other and the interests of both differ from their shareholders, so it is with 21st century unions.  Just as corporations need regulators for different purposes (ASX, ASIC and ACCC) to ensure honest governance, so too effective trade union governance requires more than just oversight by the Fair Work Commission.  We really need an effective and unsullied Trade Union Royal Commission to reach strong and plausible recommendations on those issues.  Heydon’s Commission was handicapped from the start by Abbott’s thinly disguised cynical partisan motives.  It is now terminally discredited whether or not a High Court challenge is pursued and whatever its result.  The best result we can now hope for is that a judicial review challenge is pursued, that it succeeds, and that Abbott (or his successor as PM) appoints a more credible impartial Royal Commissioner in Heydon’s place.

The historical and continuing links between Labor’s political and industrial wings mean that the ALP in government will not pursue these issues with the determination that is needed.  I largely agree with Martin Ferguson that such a royal commission has important work to do, and that it could at least conceivably produce results that would actually benefit the interests of workers and indeed the Labor movement itself (even though that is the opposite of what Tony Abbott aims to achieve).

About Ken Parish

Ken Parish is a legal academic, with research areas in public law (constitutional and administrative law), civil procedure and teaching & learning theory and practice. He has been a legal academic for almost 20 years. Before that he ran a legal practice in Darwin for 15 years and was a Member of the NT Legislative Assembly for almost 4 years in the early 1990s.
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derrida derider
derrida derider
8 years ago

Ever work in the building game Ken? It is, bluntly, an industry where thuggery and extortion are not at all on one side of the employer/employee relation. I might be more impressed with this commission if I saw some subbies as well as unionists in the dock – but of course given the ToR that was never going to happen.

Unfortunately while the TURC may be discredited in the eyes of any knowledgeable observer the Murdoch papers are not going to let their readers acquire that knowledge. The TURC will thus serve Abbott’s purpose more than adequately.

8 years ago

Norm Gallagher … Jack Mundey … Bill Shorten … Kathy Jackson. Hmmm.
Bill Kelty and Lindsay Fox.
Martin Ferguson, Simon Crean, Greg Combet.

Yep, they all go together well.

Lt. Fred
Lt. Fred
8 years ago

There’s no need for a royal commission. There needs to be some institution that can systematically investigate these sorts of things, every day, no matter when they happen. And they need to investigate, obviously, mostly corporations, not unions, since corporations break the law most often.

Another partisan commission into how bad unions are isn’t going to cut it. A federal ICAC with jurisdiction over unions, corporations and the bureaucracy and state and local government would do it.

8 years ago
Reply to  Ken Parish

I am reminded, Ken, of that lovely photo of the modestly elderly lady at a political protest holding the placard that read “I can’t believe I still have to protest this”.

I can’t believe we still have to hope that one day we’ll get a working “ICAC” to cover, as Lt. Fred puts it “… unions, corporations and the bureaucracy and state and local government…”.

Florence nee Fed up
Florence nee Fed up
8 years ago

True, all questioning seems to be based on the premises that unions have no rights. Nor workers for that matter.

If the boss says no, that is it. No right to go back and try again. One gets impression. words of the contractors are automatically taken as truth. All actions and words of union officials have hidden meaning. Comment made by speaker on a phone saying I don’t want to talk on phone, is taken as one must be discussing something sinister, if not illegal. In my case, I have always found phones not a good medium to discuss things in detail. Need to be face to face to do so. Just one example that comes to mind.

Seems it is a crime for union to promote what they believe to be good companies to others in the trade, By the way, official didn’t run any firm down

Yes, TURC seem to believe unions have no rights at all. No concept of how a union works.

Some of the questioning is just plain stupid.

I am and will always be Not Trampis
I am and will always be Not Trampis
8 years ago

Not for the first time Ken’s political antenna goes haywire.

The calls for Heydon to no longer head up the RC is one question at odds with most of what he has written. it is really cut and dried and despite Heydon’s sophistry a question he hasn’t come to terms with. In essence it means his RC is no damaged goods in a political sense.
how such a really smart person can be so dopey on this is really strange.

the CMFEU and others have the perfect excuse now when finding against them are found.

You do not need a RC to investigate and prosecute illegal activities.

it has now become a huge waste of money.

It is ironic in that if you really wanted to hit the industrial wing og Labour and even the political wing then the ICAC or something like it would have been far better.