Shop worker who shook the industrial relations world

Good news this week: Paul Kelly wrote that our new Prime Minister had no time for “ideological and religious-inspired obsessions” with regard to climate change issues. Fingers crossed for the same approach to the industrial relations agenda, because ideology is the enemy of good IR policy.

For inspiration on how to craft a popular and effective reform agenda, the government should reflect on the case of Duncan Hart, a 23-year-old Coles employee and union member.

In July, a collective agreement struck between Coles and its 77,000 staff was approved in the Fair Work Commission. By the end of the month, Hart had applied to the full bench of the commission for permission to appeal against the approval.

Originally, Hart had been represented during the bargaining process by his union, the Shop Distributive and Allied Employees Association. Nevertheless, he told the full bench the enterprise bargaining agreement should not have been approved because by his calculations it left up to 50,000 workers financially worse off than they would be under the relevant award, and that the union had sold workers out because it was more interested in gaining power in the Labor Party.

Hart’s employer made a submission against his application. So did his own union. However, Hart won; this week he was granted permission to appeal. If Hart wins his appeal, the Coles EBA will be overturned or significantly altered by the commission so that no workers are financially disadvantaged.

Can you imagine how both the company and the union, which stand accused of collusion, are going to look if Hart succeeds?

This case provides a clue to the government on how best to position the industrial relations reform package. It is a perfect example of — and if you have time, I highly recommend googling this — top-down organising. This term was coined in the US, where the practice is common, but it is much more prevalent in Australia.

In theory, unions unionise workplaces democratically, from the bottom up, by asking workers to join and harnessing people power to engender positive change. In practice (because the theory is hard to realise) many unions unionise workplaces undemocratically, from the top down, by ignoring the workers and joining forces with the management instead.

The parties enter arrangements to benefit each other, at the expense of the employees.

Top-down organising provides companies with competitive advantages (usually from discount labour deals) and provides unions with funds — from forced membership or from the employer via other channels.

Participation in top-down organising arrangements is the last refuge of the incompetent management team and recently, we have seen numerous examples of it in the royal commission into union governance.

Think of the Peter MacCallum Cancer Centre in Melbourne.

In 2003, employees were owed more than $3 million in back pay. The hospital negotiated with the union. Against the hospital’s legal advice, the union was given $250,000 and the debt to workers was forgiven.

The union official at the time, Kathy Jackson, popped the funds into a bank account she controlled and the rest is history.

An ideological mindset cannot comprehend top-down organising and does not disapprove of it.

People who take an ideological approach think that unions represent workers and if a union official agrees to something then that means the workers have agreed. Further, if a dodgy deal is done to benefit a business, well the business got a benefit and if people’s rights were trampled on, then so what.

A non-ideological mindset understands how easily top-down organising can occur and perceives it as inherently wrong, seeing plainly that it harms workers as well as the free market. Consequently, any rational thinker will see the glaring need for Australia to implement a suite of policies to prohibit the practice and provide redress for individuals when it occurs. Who could argue against the idea that union members should be able to sue when the union disadvantages them? Think of the workers at Peter MacCallum; why shouldn’t a law firm be able to run a class action?

If the government rejects the ideological approach, then a new industrial relations narrative will be needed.

Ideologues focus on unions and employers and take one side or the other, categorise unions as good unions or bad unions. Non-ideologues focus on people and how they behave, and insist on a standard of behaviour from everyone. If the government wants its policies to receive widespread acceptance, it will have to grasp these nuances.

In the royal commission wash-up, the government should stop talking about unions. Instead, it should talk about workplace corruption and how its proposed polices are going to protect people from it.

Grace Collier
The Australian
October 31, 2015