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Letís not write off the unions just yet

By Krystian Seibert - posted Tuesday, 22 May 2007

Recent Australian Bureau of Statistics figures show that trade union membership is declining, and has been for some time.

In 2000 union membership was at 24.7 per cent of all employees, in 2002 this had dropped to 23.1 per cent, in 2004, to 22.7 per cent, and in August 2006, this figure was at 20.3 per cent.

Opponents of trade unionism have seized on the figures, using them to argue collectivism in Australian workplaces is in decline, that employees no longer see a role for union representation, and that they are increasingly willing to negotiate their employment conditions with their employers one-on-one, without the need to involve ''third parties'' such as unions.


However, in doing so they ignore one important fact, which is that you can be employed under a collective agreement, and not be a member of a union. And ABS figures showing the percentage of workers employed under collective agreements provide a completely different picture of the state of collectivism in Australian workplaces. In 2000, 36.7 per cent of employees in Australia were employed under registered and unregistered collective agreements. In 2002 this had increased to 38.3 per cent, in 2004 this figure was at 40.9 per cent, and in May 2006 this figure was at 41.1 per cent.

In fact, collective agreements are currently the most common method of setting the employment conditions of employees. Unregistered individual arrangements (or common law contracts) are not far behind on 31.7 per cent. Significantly, in May 2006 registered individual agreements (or Australian Workplace Agreements) set the employment conditions for only 3.1 per cent of employees.

These figures raise two important questions. First, why does collectivism in the workplace remain so strong? One reason is that a preference by individual employees to negotiate collectively in the workplace is a rational response to the inherent imbalance of power that exists between employees and employers.

Owners of capital (investors) have the same rational response. They set up their own collectives, in the form of corporations, among other reasons, in order to increase the amount of power they have in the market, especially negotiating power. Another reason is that collective agreements provide a signal to employees that conditions in those agreements are competitive, given that other employees have agreed to be employed under them. This is particularly applicable in the case of new employees in an organisation.

Second, why is there such a disparity between the percentage of employees who wish to be employed under a collective agreement, and the percentage of employees who wish to be union members? A major reason for this is that workplace relations laws make it particularly hard for unions to access workplaces and organise employees, and this has become even more difficult under WorkChoices.

However, the disparity may also be a consequence of the fact that some employees may have a perception of unions as old fashioned and therefore find it difficult to relate to them, their values and their methods. And undoubtedly, some unions are old fashioned, with old-fashioned values and old-fashioned methods. And these unions are generally the ones whose membership is decreasing.


But it is important to remember, that in this sense the union movement is no different to the corporate world. In the corporate world, there are corporations which reform and modernise and they stay competitive and profitable. And there are corporations which don't and they struggle to survive. Unions that have reformed and modernised have stable or even increasing membership. As more old- fashioned unions are forced to reform and modernise, their membership may stabilise or even increase as employees find it easier to relate to them.

Undoubtedly, trade unionism in Australia faces many challenges. But while the proportion of employees employed under collective agreements continues to grow, arguing that collectivism in the workplace is in decline simply isn't credible.

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First published in The Canberra Times on May 18, 2007.

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About the Author

Krystian Seibert is a public policy professional based in Melbourne. He has worked as a policy adviser to two Australian Ministers and studied regulatory policy at the London School of Economics.

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