Ideas@TheCentre
Whose business is it anyway
Should an employer be forced to negotiate with a union? And under what circumstances, if any, should the state be permitted to intervene in the employer-employee relationship?
Cochlear’s management has been negotiating with its employees on a non-union basis. Many of its workers are women and are from non-English speaking backgrounds such as Chinese, Vietnamese, Cambodians and the Filipinos.
Management has been under increased pressure from the Australian Manufacturing Workers Union (AMWU), which intends on representing Cochlear’s workers in negotiations, and claims that employees have expressed support for union representation.
So far Cochlear has resisted the call to bargain from the AMWU, saying its workers are paid well over award wages and that its flexible relationship with its workers is possible because they deal directly with each other.
Flexibility is of particular importance to Cochlear. Because of a product recall, Cochlear reported a half yearly loss of $20 million. Its management claims that the workers’ positive response to the product recall illustrates the need for ‘direct engagement with the workforce.’
Production is set to recover from the recent hit, but naturally, management is concerned Cochlear’s financial situation may again become vulnerable – and worried about being able to contain union demands for increased wages if forced to negotiate.
The AMWU has applied to Fair Work Australia for bargaining orders against Cochlear, which, if successful, will force management to recognise and bargain with the AMWU. The bargaining orders hold that if a majority of workers support union representation in bargaining, management must negotiate with the union.
So the crux of the issue is this. If a majority of workers support union representation, should they be able to use the state to force management to bargain? Or should the state be left out of employer-employee negotiations altogether?
Classical liberals hold that all transactions in commerce should be conducted under mutual consent. Since both parties are out to serve their own interests, no agreement will take place unless both parties are satisfied.
Thus in the absence of fraud, coercion or theft, there is no role for the state to intervene.
Applying this rule, if Cochlear’s management do not consent to negotiations with a particular trade union, that is their right. But this implies that employees must continue to represent themselves or find a more union-friendly employer.
Alex Philipatos is a Policy Analyst at The Centre for Independent Studies.
