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:

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:

@robcorr Too aggro to bosses (CFMEU) = corrupt. Too chummy with bosses (AWU) = corrupt. Allows 7Eleven exploitation (Shoppies)= great union.

— Ken Parish (@KenParish1) September 3, 2015

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).