Australia’s ‘repressive’ labour laws breach international law

Why is Australia so hard on its unions, and should employers expect things to change?

Union membership and influence in Australia have plummeted over the past half-century.

For this year’s Labour Day (2 October 2023), we’re looking back at the causes of this decline and considering what it says about the need for unions in the modern Australian workforce.

Unions aren’t just in trouble; they’re dying. Consider the following:

• According to the ABS, since 1976, union membership density in Australia has fallen from 51.6 per cent to 12.5 per cent.
• Over the same period, the frequency of industrial action has declined by 97 per cent.
• Today, wages are growing at the slowest rate in the postwar era.

How did unions lose their bite?

It depends on who you ask.

Some commentators point to a changing economic landscape where emergent trends like hybrid working, globalisation, and the rise of the gig economy have severed the connection between workers and their places of work.

Others, like Ken McAlpine, senior industrial officer of the National Tertiary Education Union (NTEU), point to the legal chokehold placed on unions by Parliament and the courts.

“Australia has the most repressive union laws of any comparable country in the world,” said Mr McAlpine.

He continued: “If you were designing a system to make it impossible for unions to operate, you could hardly do better than Australia.”

Indeed, experts have suggested that Australia’s labour laws have curtailed the rights of workers to such an extent that they are in breach of international law.

“The [International Labour Organisation] for the past 20 to 30 years has told governments of both political persuasions that we are in breach of international labour standards,” Professor Andrew Stewart of Adelaide University told the ABC.

“Not only are we flagrantly in breach, but our laws are also so restrictive on the right to strike that they are way out of step with the laws of just about every other developed country,” Professor Stewart added.

What kind of laws?

According to Mr McAlpine, among the most severe restrictions on the rights of unions in Australia are the following:

1. The ‘free rider’ problem

Under s346 of the Fair Work Act 2009, employers are prohibited from giving benefits to union member employees at the exclusion of non-union member employees.

In a paper by Mr McAlpine and Sarah Roberts of the NTEU, they said that this inability for unions to provide services to its members above those afforded to non-members is a business model that “would quickly send most [businesses] broke”.

“[Union] members are essentially bargaining for the rest of the workforce, who make no contribution to what they do,” said Mr McAlpine.

2. The right to strike

Under international law, the right to strike is a fundamental human right. According to several experts, the right in Australia is so heavily curtailed that we are in breach of this fundamental right.

As mentioned by Mr McAlpine, “we’re seeing various strikes in Britain at the moment that just couldn’t happen in Australia. They would be illegal.”

The right to strike is a key aspect of the union-employer power balance.

Industrial relations are a push and pull between the rights of the employee and the needs of the employee. As noted by Dr Geraldine Fela, postdoctoral research fellow of Macquarie University’s department of history and archaeology: “it’s a truism, but unions grow when unions are fighting”.

Laying the blame

It’s often said that the Hawke-Keating Accord era, which saw the advent of enterprise bargaining and the “social wage” in exchange for restrained wage growth, set the groundwork for the later union decline.

Mr McAlpine said: “I just don’t think that they [Hawke-Keating], or the union movement, saw what was coming.”

When asked why Australia’s unions are struggling today, Dr Fela said: “I think it’s hard to point to any one thing. But I do think there’s been a fairly low level of general industrial struggle in Australia over the last few decades.”

“And we have had successive governments that have either introduced, or maintained, legal frameworks that make it harder for unions and workers to organise and take industrial action."

Present reforms

On 4 September, Labour introduced the Fair Work Legislation Amendment (Closing Loopholes) Bill 2023 to the Federal Parliament, which, among other things, would expand enterprise bargaining rights.

When asked whether the bill, if passed, might move the needle on union membership density, Mr McAlpine was ambivalent.

“The capacity to bargain on an industry basis is going to make things different. And could well lead to a small increase in density,” he said.

“However, I don’t think it takes the central message away from the paper, which is that if people think that these laws and better organisation by unions [are] going to make a significant difference to the level of union density, then I think they are very much mistaken.”

Looking forward

Current and predicted trends in workplace composition and the Australian economy paint a mixed picture for unions.

Many point to the increasing atomisation of the workforce through, for example, a deeper transition towards a service-based gig economy as evidence of their decreasing relevance.

Others find in these trends a greater need for unions.

Dr Fela said that recent concerns around stagnated wages and the attendant cost-of-living concerns have led to a “growing appreciation of the need for trade unions and advocacy on behalf of workers’ rights”.

Dr Fela added that, internationally, there’s evidence that workers are adapting to the challenges plaguing unions in the modern workforce.

“Unions can and always have been able to organise people who are essentially gig workers and casual workers doing insecure work. It doesn’t matter how globalised an economy is … that doesn’t stop trade unions from organising,” Dr Fela said.

These trends, Dr Fela said, “might make things harder, but not impossible”.

The question, then, is, what kinds of changes are required?

In the words of Mr McAlpine, we must ask “whether it is actually possible for unions to organise their way out of their crisis without radical changes to the legal framework”.

In his opinion, “the answer is clearly no”.