Ideas@TheCentre
Unions vs Representation
Growing up in New Zealand, where the labour market was deregulated (in 1991) when I was only eight years old, I didn’t know what award wages were. They were something one encountered while reading about New Zealand before the mid-1980s – a sort of historical curiosity. After all, the idea of a benchmark national wage for any given industry seemed faintly ridiculous.
Then I moved to Australia.
What many Australians don’t realise is that most of the Western world wouldn’t believe Australia’s award system. And more than anything else, it is awards that give Australian unions their behemoth power.
In New Zealand, most workplaces are covered by two agreements – a collective (union) agreement and an individual contract. New employees can choose from either and change their choice at any time. The union (and I have been a member of two) has to compete with the individual contract option. In practice, this means representation at wage negotiations with the employer, consultation over shift patterns, and representation if a worker gets wrongfully dismissed or accused of negligence. That’s about it. If a union doesn’t offer decent services, people don’t join it.
In Australia, because of the very existence of awards, unions mobilise to get the most benefit for their entire industry. Not only does this create artificial baseline relativities (what a nurse earns compared to a fitter or a turner) but it also fuels intra-union ‘big man’ competitions. Union bosses compete to get the most favourable deal relative to other unions but out of proportion to what employers can afford to pay.
This is when the workers being represented get left behind. Throw in the Siamese twin type relationship with the Labor Party, the fact that many union organisers have never worked in the industry they represent, and you can see how workers get left behind. Ideology and competition trump what a union’s real role should be: representing the interests of its members, not building little fiefdoms of empire building and intrigue.
Australian industrial relations system needs reform, and it should begin with scrapping award wages.
Luke Malpass is a Policy Analyst at The Centre for Independent Studies.
