Donna McKenna and Michael Easson in Michael Easson and Jeff Shaw, co-editors, Transforming Industrial Relations, Pluto Press for the Lloyd Ross Forum, Leichhardt, 1990, pp. 88-100.
A good deal of idiocy is associated with many debates about preference to unionists and its perceived corollary, “compulsory unionism”. It must be stressed at the outset that, as a matter of law, there is no such thing as legal compulsory unionism in Australia. As Paul Latimer noted in “Principles Underlying Preference to Unionists Awards in Industrials Law”:
Case law shows that an award of preference may not:
- Exclude non-unionist (preference implies choice not compulsion);
- Provide for compulsory unionism;
- Provide for monopoly of employment to any one union.
Clearly the fact that industrial tribunals can make awards and register agreements giving effect to preference to union employment is a major incentive in ensuring union security. This shows it to be a distinct advantage to be a union member. Awards obtained by unions for their members further encourage the principles of unionism.1
Nonetheless, it is hotly argued in some quarters that “compulsory unionism” is a denial of human rights and that coercion in this area requires redress and governmental action. Those who advance such arguments display a misconception about the legislative underpinning of efficient centralised overview of industrial relations. They also fail to acknowledge the pivotal role played by trade unions in advancing employees’ industrial interests generally, but even more especially in a centralised arbitration system. In this context, the “Non-Unionists’ Psalm” is apposite:
The dues paying member is my shepherd
I shall not want,
He provideth me with the rest days and vacations,
So that I may lie down in green pastures
Beside the still waters.
He restoreth my back pay,
He guideth my welfare, without cost to me.
I stray in the paths of the non-righteous,
For my money’s sake.
Yea, though I alibi and pay no dues
From generation to generation I fear no evil, for he protects.
The working conditions which he provides,
They comfort me.
He annointeth my head with oil of workers’ compensation,
Sick pay, annual leave and long service leave,
And the thirty-eight hour week.
And my cup runneth over with ingratitude.
Surely his goodness and loving kindness
Shall follow me all the days of my life
Without cost to me.
I shall dwell in his house forever
And allow him to pay the bill.
Catchphrases aside – both for and against – what is the purpose of preference arrangements and why is there so much confusion about the issue? The main purpose of this chapter is to argue that the principles underlying preference for unionists’ arrangements which are provided for under New South Wales law should be defended. Nothing should be done to upset such arrangements under the mischievous ruse of “banning compulsory unionism”.
The Legislative Underpinning
As part of the proposed “transformation” of industrial relations in New South Wales put forward by the Liberal/National Party government, the new Industrial Relations Bill 1990 (NSW) contains provisions designed to prohibit preference to unionist over non-unionist (cl.374(1)). A limited form of preference would, nonetheless, continue to apply whereby preference could be awarded in favour of a member of a particular industrial union over a member of another industrial union (cl.374 (2)). Somewhat surprisingly for a conservative government, there is provision for statutory closed shop agreements. However, these arrangements would be subject to an employer veto even where supported by 65 per cent of workers voting in a secret ballot (cl.185). The legislation broadly reflects the recommendations made by Professor Niland in Volume 1 of the Green Paper Transforming Industrial Relations in New South Wales. The proposals also reflect the Federal Liberal-National Parties Industrial Relations Agenda.
It can be seen from a net of interlocking provisions that the new legislation is plainly structured to discourage union participation (e.g., absence of special anti-victimisation protections to union members and delegates currently found in s.95 of the Industrial Arbitration Act; and provisions concerning the ready availability of certificates of conscientious objection).
It is curious that such features should occur in the Bill given that one of the specified objects of proposed legislation is “to recognise and facilitate the organisation of representative bodies of employers and employees and to encourage their democratic control and efficient management” (cl.3).
Currently, the legislative framework set out in the Industrial Arbitration Act 1940 and the Industrial Relations Act 1988 (Cth) is designed to encourage union participation by legitimate means. One of the principal mechanisms for such encouragement of these legislative codes is the award of preference to unionists.
Fundamental to the scheme of centralised industrial arbitration is the existence, viability and continued operation of industrial unions of employers and employees. One of the principal purposes of the conciliation and arbitration system has been, therefore, to encourage the registration of representative organisations of employers and employees. The existence of these collective units is of crucial importance to employees, as the legislation prescribes that the industrial grievances should be channelled into the centralised tribunal system through the medium of registered industrial unions of employees.
Indeed, there is an overwhelming case that in any statutory and compulsory system of industrial conciliation and arbitration must necessarily encourage representative registered bodies on both the employer and employee sides to articulate the disparate views of individual members and to consolidate those views, expressing them as the views of a collective body.
This is reflected in the provision of a power to award preference to unionists.
It is true that preference to unionists may, as a practical effect, result in general union membership or (even) in closed shops. But this issue needs to be considered within its proper legislative framework. Justice Menzies, in the Altona Petrochemical Case, addressed his attention to this particular issue, namely, that the claims for preference by the union could not be granted because they would in effect eventually give monopoly in employment to unionists. In rejecting the argument, his Honour said:
I must consider a more general argument of counsel which was, in effect, that, taken as a whole, what is demanded goes beyond a claim for preference and amounts to a claim for monopoly of employment for unionists.
It does seem to me that if what I do regard as claims for preference were granted, the long term consequence would be that clerical employment in the industry would be restricted to unionists. More and more unionists would be engaged and more and more non-unionists would be dismissed.
Nevertheless, I do not regard this likely consequence as turning what are prima facie claims for preference into claims for monopoly of employment for unionists. It is necessary to examine what is claimed rather than the long term consequences of the granting of what is claimed in order to determine whatever the claims are in relation to an industrial matter. Regarding the claims as I do, I reject the contention that, either separately or together, they constitute, not a claim for preference, but, a claim for monopoly of employment.
His Honour had earlier stated that the section is limited to the granting of preference and does not authorise the granting of compulsory unionism.
In the Industrial Relations Act 1988 (Commonwealth), there are express objects to encourage the organisation of representative bodies of employers and employees and their registration under the Act.
As part of this legislative scheme, s.122(2) directs that preference be given to members of organisations whenever the Commission feels it is necessary:
a) for the prevention and settlement of an industrial dispute;
b) for ensuring that effect will be given for the purposes and objective of an award;
c) for the maintenance of industrial peace; or
d) for the welfare of the society.
Since 1904, under the Conciliation and Arbitration Act and the Industrial Relations Act, there have been provisions for the award of preference to union members, coupled with exemptions of the grounds of conscientious objection. Notwithstanding the clear legislative authority to grant such preference, members of the Commission and its predecessor, the Court, have been reluctant to make orders granting preferences to unionists. Of approximately 150 contested cases during the period 1904-1970, only 18 awards of preference were made.
Prior to 1973, the approach of the tribunals had been marked by the acceptance of the approach that preference should only be granted where it could be shown that employers were actively discriminating against union members. This unduly restrictive interpretation meant that the intention of the legislation was largely undermined until the landmark case, Federated Clerks Unions of Australia v. Altona Petrochemical Co Pty Ltd (1973).2 There, the Full Bench of the Australian Conciliation and Arbitration Commission said of the Conciliation and Arbitration Act:
We cannot, as a matter of law, introduce compulsory unionism, but we think that the Act, which is out charter, contemplates that we should encourage unionism. If the implementation by us of a statutory intention reduces the absolute freedom of management, then we think even so we must apply that intention in such a way as we think proper.
Moreover, Sir Victor Windeyer, sitting as a justice of the High Court of Australia, acknowledged that the Conciliation and Arbitration Act 1904 (Cth) “is based upon the existence of industrial organisations of employers and employees” and took the view that the desire of a union to add to its membership numbers was a “legitimate aim”.3
Although there is no specific object in the Industrial Arbitration Act 1940 (NSW) the provision of preference arrangements and an examination of the various cases make it clear that the State legislation is also designed to encourage the resolution of industrial grievances through registered industrial unions of employees. (For example, the Act was amended following the decision in Monk v. Dow Corning Pty Ltd (1984)4 after a successful application by an individual for reinstatement).
Justice Macken made some important observations on the place of unions and their membership in the State’s industrial relations system in the case Travenol Laboratories Pty Ltd v. Federated Storemen and Packers’ Union of Australia, NSW Branch (1987).5 His Honour pointed out that the Industrial Arbitration Act, from its earliest days, has been administered by the Industrial Commission in a way that is supportive of unionism as a principle:
In the current economic climate the position is taken much further in that second tier wage negotiations have at their industrial heart the mutual co-operation of union and employer alike in restructuring industry and in building a new and improved industrial relations climate. In this process, unions are not merely tolerated appendages to industry, but essential participants… Tribunals, as does the Act itself, have encouraged unionism while stopping short of awarding compulsory unionism.
Preference arrangements in the NSW jurisdiction have had a considerably shorter history than under the Federal provisions.
Section 129B(1) of the Industrial Arbitration Act sets out preference for unionists arrangements. The section was first enacted by the Industrial Arbitration (Amendment) Act 1953. The Industrial Arbitration (Amendment) Act 1959 repealed the earlier section and substituted the present provisions. The section requires the Commission or a committee, upon application, to insert in an award or industrial agreement provision for absolute preference of employment to the members of the industrial union or unions specified in the award. The Industrial Commission or a committee may make arrangements providing for absolute preference at the “hiring and firing” stages of the employment relationship, i.e., the preference to which the section refers to is limited to the point where a union member and non-unionist are offering for service in employment at the same time, or, in the case of retrenchment, to the point where a unionist is to be dismissed from service or employment.
The leading case on preference arrangements in the NSW jurisdiction, following the Federal Altona Petrochemical Case, was the Preference in Employment Case (1977)6 where the NSW Industrial Commission found that:
i. It is implicit in an award provision providing for the giving of absolute preference within the meaning of s.129B that the preference is limited to persons who are suitable and competent for employment.
ii. The standard of suitability is that which the employer sets reasonably and in good faith.
iii. Whether or not a particular person attains that standard is a matter to be determined objectively and, if necessary, by the determination of a judicial tribunal.
It can be seen that “absolute preference” to unionists has been read down by the NSW Industrial Commission. Moreover, Latimer argues:
The principle of encouragement of unionism must be read according to the facts, and with possible exceptions in mind. For example, in one industry it had been the practice of the employers to require employees to resign union membership when appointed to certain supervisory positions. The union’s application for discontinuation of this requirement – as being contrary to the Act’s encouragement of unions – was rejected on the basis of a conflict of interest between an employee’s loyalty to the interests of the union and his loyalty to his employer for whom he was acting in a supervisory capacity.7
The existence of preference arrangements must be read in conjunction with two further statutory features prevalent in the Federal and NSW Acts: a) the right to be exempted from union membership and the operation of preference arrangements on the basis of conscientious objection; and b) the right to join the appropriate union.
These provisions are complemented by certain procedures concerning exemption from preference arrangements for those persons who have a conscientious belief against joining a union.
S. 129B sets out:
a) Wide conscientious belief provisions such that this includes any conscientious belief whether the grounds thereof are or are not of a religious character and whether the belief is or is not part of the doctrine of any religion;
b) Regulations providing for the procedures for a person claiming conscientious objection to union membership leading to the issuing by the Industrial Registrar of a Certificate of Exemption from membership of an individual union;
c) Appeal rights to the Industrial Commission for any person denied a certificate of exemption; and
d) Payment into consolidated revenue of an amount equivalent to the subscription prescribed by the rules of the union for membership of that union.
Those who argue against preference arrangements usually assert that individual workers are being unfairly excluded from union membership. It is simply incorrect to claim that unions have the right to exclude persons from union membership “whom they do not like”. In fact, s.115 of the NSW Industrial Arbitration Act provides:
- All persons who are, by the nature of their occupation or employment, of the class of which a trade union is constituted, and who are not of general bad character, shall be entitled to be admitted to membership of the union, and to remain members thereof and enjoy all the advantages of membership so long as they shall comply with the rules of that union.
- Any question or dispute as to the character of any applicant or the reasonableness of any admission free, subscription, fine or levy or other requirements of the rules of any trade union, shall be determined by the Commission, which shall also have power to direct that the rules of a trade union shall be altered or annulled in any particular order to bring them into conformity with what it declares to be reasonable in the circumstances, and upon any such direction being given the rules affected shall be deemed to have been altered or annulled accordingly.
This provision virtually compels unions to admit to their membership any person of good character entitled to and wanting to join. Moreover, the law provides for review of an action by a union officer or executive seeking to deny or frustrate a person from joining a union. Thus, it can be clearly shown that the claim that joining a union in New South Wales is a matter of arbitrary union fiat is a myth.
It follows from this description that it is a nonsense to assert that compulsory unionism is allowed under New South Wales law.
Justification for Preferential Arrangements
Apart from the legislative rationale outlined above, one of the most telling justifications for preference arrangements was sharply stated by Justice Higgins in FEDFA v. BHP Co. Ltd. (1911):8
The union men have to fight for non-unionists, as well for themselves, in the efforts to obtain better terms from the employers; that the unionists have to pay subscriptions and levies, sacrifice time and energy and (not infrequently) their employment; and that the non-unionists often assist the employer against the unionists in the struggle, and yet come to enjoy the fruits of the unionists’ exertions and sacrifices… A priori, one would think that, between two men of equal qualification, one a unionist and the other a non-unionist, the employer would be inclined, after a struggle in the Court or elsewhere, to employ the non-unionist, as being more docile and helpless, and as not being protected by an award, and that he would be inclined to punish men who have been active in the union.
This leads to the point that the existence of a strong union movement facilitates the operation of the industrial system through collective strength giving to employees the right to participate in job regulation which they may otherwise lack.
It can be seen that the views put forward by Justice Higgins are some of the main arguments in favour of preference arrangements – essentially to facilitate the orderly workings of the conciliation and arbitration processes through support for representative organisations of employees. In this regard, it is also interesting to note the Australian Democrats’ policy document “Industrial Relations and Democracy” which attempts to strike a balance between union membership issues and recognition of the work undertaken by unions through the centralised system. It states:
The Australian Democrats will seek industrial relations legislations and practices which… provide freedom of choice regarding union membership but which requires that non-members pay unions a ‘fee-for-service’ should they be working under awards achieved through union negotiation.
The Relevance of ILO and UN Conventions
Two documents are widely cited in arguments about compulsory unionism and preference arrangements, namely the Universal Declaration of Human Rights (1948) and the ILO Convention No. 87. Not for the first time are the same words used to justify opposite conclusions. This section argues that the Declaration and Convention 87 cannot validly be used by those who argue against a retention of the current preference arrangements.
It is frequently alleged that union security arrangements such as the closed shop, membership agreements and preference to unionists infringe basic human rights. In support of this assertion, reference is commonly made to the Universal Declaration which stipulates that: “No-one may be compelled to belong to an association”.
But what does this wording mean? It is not a simple matter to determine the meaning of any particular clause of the Declaration. This process can be assisted by examining the historical context of the drafting of the Article to evaluate what it means – and what it is not. The original United Nations committee (chaired by Eleanor Roosevelt) which proposed the Declaration of Human Rights, including the Declaration of Freedom of Association, specifically excluded from its consideration the question of the closed shop. Nonetheless, from that date to this, there has been the dishonest promotion of the “freedom of association” slogan as having application in a field which was specifically excluded. (In any event, as earlier outlined, there is no such thing as compulsory unionism in New South Wales, particularly given the conscientious objector protection in the existing law.)
A 1987 International Labour Organisation publication on Freedom of Association provides a detailed commentary on the relevant ILO Conventions, including Convention 87 (Freedom of Association and Protection of the Right to Organise) and Convention 98 (Right to Organise and Collective Bargaining). The following observation is made:
In many countries, the law guarantees, directly or indirectly, what is sometimes called ‘negative freedom of association’, that is, the right not to join trade union organisations, and forbids the exercise of any constraint that would oblige a person to adhere to or support a trade union.
In a number of countries, the law allows ‘union security clauses’ in collective agreements or arbitration awards. The legislation sometimes imposes conditions on particular types of union security clause or prohibits specific arrangements of this kind. Such clauses, which have the effect of making trade union membership or the payment of union dues compulsory, may take different forms, of which the following are examples:
a) Clauses specifying that an employer can recruit only workers who are members of a trade union and must remain members of the union in order to keep their job (the closed shop);
b) Clauses under which the employer may recruit the workers he chooses, but these must then join a union within a specified period (the union shop);
c) Clauses that make it compulsory for all workers, whether or not they are members of trade unions, to pay union dues or contributions, though these do not make trade union contributions, membership a condition of employment (the agency shop);
d) Clauses under which the employer, according to the principle of preferential treatment, agrees to give preference to trade union members in respect of recruitment and other matters.
The aim of these clauses is to strengthen the position of the trade unions by ensuring that they become better established among workers, by giving them greater weight in relation to employers and by ensuring that all workers who benefit by the work of trade unions contribute to them fairly.
The ILO, in this publication and consistently elsewhere, has maintained the position it adopted in 1948 – namely, that union security clauses are neither sanctioned nor prohibited by its Conventions. So it is wrong to assert that such Conventions favour some absolutist and individualist arguments against preference to unionists clauses in awards or industrial agreements.
Another opinion worth canvassing at this point is that of the New South Wales Anti-Discrimination Board in its 1983 publication Trade Unions: Membership and Non-Membership where it is argued:
While the Board acknowledges that employees can be disadvantaged because of their union membership and activity or their non-union membership, such cases do not always, or necessarily, constitute discrimination.
Industrial relations is a complex field involving the balancing of the rights of quite disparate groups such as employers and employees, unionists and non-unionists, whose interests are often in direct conflict. This can make discrimination difficult to determine. For example, while it disadvantages the non-unionist, union membership can be a legitimate requirement where it signified the possession of a trade skill or is stipulated justly by an employer as an essential job requirement, as it may be for personnel reasons, along with other conditions such as hours of work. In the latter case, a person who accepts the job in full awareness of its conditions but then refuses to join the union, does not meet all the job requirements and can hardly complain of unfair dismissal if such action results. There are yet other cases where discrimination against non-unionists would seem apparent at face value, but redress for these in individuals would, in the long term, undermine “the common good” by weakening the power of unions to represent and protect working people generally. It would be a short-sighted policy, indeed, that defended the rights of some individuals while jeopardising the rights of the majority.
One’s attitude to the question of preference arrangements depends on views with respect to unionism and the role of the compulsory system of conciliation and arbitration. In reality, there is a conflict of opinion regarding the application of such principles. And in all such conflicts relating to the morality and utility of a particular concept, it is a matter of judgment when balancing and deciding which rights and arguments should prevail.
Sidney Hook in Paradoxes of Freedom, however, argues:
It is a profound error to conceive of balancing as if it were a process of value deliberation in which all elements have equal weight, as if nothing had been historically and politically established by its fruits in experience, and every decision taken with the innocence and freshness of the first morning of man. There are presumptions of validity, which, even if not final, are still presumptions, which give overwhelming weight to freedom of the press when this interferes with freedom from litter of city streets, or to freedom of expression when this disturbs another person’s peace of mind.9
In this regard, Ronald C. McCallum in the Australian Bulletin of Labour made the following observations:
In 1982, Canada inserted a Charter of fundamental rights and freedom into its constitution. The Charter sets out a number of fundamental freedoms including Article 2 (b), the ‘Freedom of Association’. These fundamental rights and freedoms have enabled Canadian Courts to turn many rights of labour and related issues into constitutional questions concerning human rights under the Charter … Australian tribunal decisions such as [Hein v. Jacques] have the potential through ultra-individualistic stances, of turning the industrial relations right of working people to utilise their collective strength as a counter-weight to the power of management, into civil liberties questions on the rights of individuals. If care is not taken, and if we do not learn lessons from the experience of Canadian labour, ill-considered decisions such as the instant case will leave the field open for political forces to utilise a cavalry of Trojan horses as a means of weakening democratic trade unionism under the guise of civil liberties.10
Despite such argument, there is the clamour by the ideological conservatives that there should be an absolute right not to join a union. But this is a strange battle cry when such a proposition is already provided for by law. Obviously the shield manufactured to batter down the imaginary doors of compulsory unionism is really aimed at the preference arrangements – despite the historical origin and the good industrial relations achieved through such arrangements. The proposed abolition of preference arrangements in New South Wales crystallises an unwelcome body of ideas about Australian trade unions, which if passed into law, will weaken the fabric of democratic trade unionism in this country.
- 123 JIR 163
- 150 CAR 387
- See R v Holmes; ex parte Altona Petrochemical Co. Pty. Ltd. (1972) 126 CLR 529 p. 573
- AILR 234
- 21 IR p. 395
- Latimer, Paul, ‘Principles Underlying Preference to Unionist Awards in Industrial Law’, Journal of Industrial Relations, 1981, p. 175.
- 5 CAR 9 p. 25
- Hook, S., Paradoxes of Freedom, Prometheus Books, New York, 1987, pp. 54-5.
- ‘Civil Liberties and Industrial Relations; Hein v. Jacques Ltd’, Australian Bulletin of Labour, Vol. 13, No. 4, p. 234.
‘The Non-Unionist Psalm’ is adapted from Riordan, Joe, ‘Letter to the New South Wales Minister for Labour and Industry, Mr J.J. Maloney’, March 1954 (copy in possession of the Labor Council of NSW).
Chapter 4 of A Fair Deal at Work, Labor Council submission to Professor John Niland, Sydney, 1988.
Hook, Sidney, Paradoxes of Freedom Prometheus Books, New York, 1987 (first published in 1961).
Latimer, Paul ‘Principles Underlying Preference to Unionist Awards in Industrial Law’, (1981) 123 Journal of Industrial Relations.
Anti-Discrimination Board, Trade Unions: Membership and Non-Membership, ADB, Sydney, 1983.
ILO, Freedom of Association: A Worker’s Manual ILO, Geneva, Second Edition, 1987.
This was Donna McKenna’s and my best effort at putting the case for preference arrangements in Australian awards.
Elsewhere I wrote about the merit of “fee for service” arrangements in lieu of union membership. Such is permitted in some (but not all) states in the United States. But in Australia, conservative lawmakers sought to outlaw the arrangement, which never took off the ground in this country.