Democratising the workplace or back to the 19th century?

Plans for amendments to the Workplace Relations Act (1996) were outlined by Employment and Workplace Relations Minister Kevin Andrews in his speech to the CEDA think tank last month. Thus far these solidly reflect traditional conservative ambitions within the context of traditional IR relations in Australia. They won’t do anything to further workplace democracy or give employees a stake in the businesses they work in. If anything, such a development will increase insecurity for employees, destabilise production and consumption, reduce democratic rights, damage employee loyalty, reduce wages and be productive of greater, possibly massive, industrial unrest. The time left for family life, an increasing concern in Australia, is bound to suffer more. Understandably unions are already mobilising for a package of traditional responses.

The Coalition’s plan is to abolish the state industrial relations system by using the federal law to override them. Minimum rates of pay would not be set by a union making a claim against an employer with the final resolution the result of negotiation or arbitration. The status of the IRC would be reduced, minimum wages lowered, and awards downgraded or removed altogether. Centralising IR with such objectives in mind could well result in legal challenges by the (ALP) states even if only to seek a stay of execution.

However, the High Court is stacked with Howard’s appointees so it doesn’t seem to make sense to actually take that route. Apart from the great expense it is likely to fail from the union’s point of view. Hopefully, the preferred route for the unions surely is to look forward rather than backward, which is regrettably, what they have tended to do for the last 30 years. Why not change tack? Opting for employee ownership and workplace democracy would serve their members well, as well as the unions’ own recruitment future. The union movement could and should take the initiative in IR reform.

The ACTU/TDC report Australia Reconstructed (1987) showed the way forward but Bob Hawke rejected its blueprint for industrial democracy as culturally inappropriate, something that “couldn’t be done here”, which was an opportunity lost. Enterprise bargaining was perhaps a very minor step in the direction of workplace democracy, one which could be vastly expanded. This was hardly the intention of its designers but it did have that effect. For a short period of time workplace agreements can be negotiated at workplace level and that has provided an experience that was new in Australian workplace relations. Now let us move on to "Employee Share Ownership".

The modest recommendations in the Nelson report, Shared Endeavours (2000) - 45 of them - to encourage employee share ownership, have hardly been taken up yet. It is most disappointing, that the possible role ESO could play in the Coalition’s IR reform agenda has thus far not been mentioned at all by Mr Andrews. If it was part of the agenda it is conceivable that the trade union movement could adopt a negotiating position, or strategy, of linking the permissible degree of both centralisation and deregulation of employment relations to the degree of employee involvement in enterprise ownership and governance. Therefore it is not just the management view that ESO is about increasing "responsibility and risk taking", but also about the employee perspective of increasing "rights, rewards, stability and employment security".

Many Australian unions don't want to know about employee share ownership, or have a very cautious attitude towards it, but the fact is that in the UK workplaces with employee share ownership have much higher union membership than those without it! The new Employee Ownership Act in Belgium (October, 2002) was negotiated with the union movement there and has the full approval of the unions. It is on the AEOA website. Trade unions in Europe have also been suspicious about the trend towards employee ownership, as in Australia.

In the past the EU itself has been predominantly active with employee participation in decision-making rather than employees owning shares in the business. But the Pepper Reports of the 1990s have had a far-reaching impact on new EU directions. Now even Roger Blanpain has written about this new development in favourable terms. He was surprised about what happened in Belgium, where the breakthrough took 30 years to happen.

Australia is 30 years behind Europe and the US on both counts of workplace democracy and employee ownership, a huge gap to be bridged.

Turning the clock back again would be a costly non-reform, no doubt productive of endless litigation with much energy wasted on the wrong process. The opportunity for an innovative IR culture shift exists right now and even more after July 1. Centralising IR is great, but the entire adversarial IR system needs to be replaced at the same time.

Australian trade unionism can take a pro-active position in this reform process and drive a hard bargain which could benefit all parties and foster a new culture. If they do, the membership of unions will grow again, probably quickly and significantly, productivity will gain and society will benefit as a whole in terms of employment and rewards. There are some examples in Australia today which can be referred to as best ESO practice: for example, Bluescope Steel, Wollongong; and Furphy's and Sons Pty Ltd, Shepparton.

AEOA’s Public Officer, Alan Greig, recently commented that “in Australia the areas that have the highest participation levels in ESO schemes are also those with a strong presence of trade unions and high levels of trade union membership. These areas are the five banks (including St George) which are covered by the Finance Sector Union, the manufacturing industries that are covered by the AWU (particularly Blue Scopesteel and Onesteel), the building and construction industry (Lend Lease), the retail sector (Coles Myer and Woolworths, covered by the Shop Assistants Union) and QANTAS (various unions)”. The time for innovative action on the union front has arrived.