Right to strike mystery in an election year: back to 1993?

My hunch is that soon Labor and union negotiators will turn to their 1993 version of the right to strike to finalize their workplace and industrial relations policy for the national election. In this post I suggest why from their point of view and discuss what that might mean.

The immediate context

From the point of view of workers the unrestricted right to strike is the most important new rule that is at stake in the Change the Rules (CtR) campaign in this final run to the election. In essence, it means more power in their hands relative to the institutions that significantly govern their standard of living. In any serious stock take – see below – this is a decisive element.

The national election period coincides also with the union movement’s responsibility to lodge and pursue its claim for an increase to the national minimum wage in the Annual Wage Review. This is a decisive event in the struggle against inequality. And there is the 50th anniversary of the national strikes that defeated the anti-worker, anti-democratic penal powers against workers in the old system of industrial law.

Where the right to strike sits in the Labor Party (ALP) election proposals is right now a bit of a mystery. It is not explicitly mentioned in Chapter 5 of its new platform, although arguably there are indirect references.

The current state of play

The parliamentary ALP and union negotiators have reached agreement on a number of genuine reforms to the Fair Work Act 2009 (FWA09). These fall into 2 categories: those that have been publicly announced and those that will be announced and explained in a planned process over the next few weeks. Within the latter there are issues that have not yet been worked out, including the extension of bargaining to some form of multiple employer bargaining. The right to strike is in this category but it is not being publicly discussed, except in the fear mongering of the Morrison government.

The parliamentary Labor Party do not trust their ability to defeat, in the public arena, the fear campaign that would be mobilized by the coalition of employers, the LNP and the mainstream media.

But this is also an “elephant in the room” for the ACTU’s CtR Campaign, perhaps the decisive street and workplace campaign to bring down the LNP government. But, it seems, that right now the majority of the impressive growing army of activists in the campaign are unsure of themselves on this issue.

Some brief basics on the right to strike

I have discussed this before. (Also here and here.)The right to strike puts power into the hands of workers, not the institutions that control workplace and industrial relations – the Fair Work Commission, the Fair Work Ombudsman, judges and the courts, and ministers of the crown. The right to strike is the essential counter power to the power of employers to withdraw or re-locate their capital or threaten to do so, and other forms of workplace oppression.

The right to strike in a legal sense takes the form of a protection for workers against common law damages and statutory penalty.

Australian workers are denied the effective right to strike in a number of ways, but especially because it is oppressively confined to a failed enterprise bargaining framework. Therefore, using industrial action when workers need it is a breach of the law and requires an act of defiance, or naivete.

The 21st century workforce in general have very little strike experience to shape their commitment to winning this new right.

Labor’s 1993 Right to Strike: background and key details

The 1993 Right to Strike was introduced by the Keating Labor government in its “Industrial Relations Reform Act”.

Before 1993 there was no legal right to strike in Australian industrial law, even though strikes were regarded as a necessary tactic. Industrial law had since Federation (1901) been built on the “conciliation and arbitration power” of the Constitution ( section 51, part 35). In brief summary, the law enabled the conciliation and arbitration Commission to conciliate and arbitrate on most (not all) industrial disputes. Access to conciliation and arbitration depended on the creation of a dispute. A dispute could be “real” industrial action or threatened, or a “paper” dispute, that is a letter or statement of demand that was rejected or ignored. The dispute would be resolved when the Commission issued its decision as an Award, or a variation of an Award. Generally, awards and their content applied to whole industries, or industry sectors and sometimes to large, specific employers. Bargaining “above the award” was not uncommon and led to wages and conditions that were better than the award and that sometimes were codified in a decision of the Commission.

The whole architecture included powerful provisions to protect employers, applied in the first instance by the Commission, but when necessary by the Courts. If you are a CtR activist who hankers after the old system, beware. It was never perfect from a workers’ point of view. Why should it be?

The Keating government changes did 3 big things, relative to the established system, in response to a very effective employer strategy that had started in about 1987.

First, it shifted the basis of the industrial and workplace law from the “conciliation and arbitration” power to the “corporations” power (s. 51, part 20).

Second, it elevated enterprise bargaining above award based bargaining as the primary method to protect and improve wages and conditions and, extended it to non-union workers.

Although both forms of enterprise agreements were underpinned by comprehensive awards, many unionists were alarmed that the door was open to break down the award system.

Especially in the left unions, as a defensive measure, the required enterprise bargaining practice included a clause that referenced and protected the status of the relevant award.

An industrial award’s great advantage for workers was that it was a vehicle through which competition between employers to drive down wages and conditions, especially among the 35-45% of workers who were not union, could be managed or influenced by workers themselves. Over award standards, at a good point in time, could be spread as the minimum standard for all workers. For example, this is how Australian workers – through their unions – established both the 40 hour and 38 hour weeks.

Third, it introduced, for the first time in Australian industrial law, a very restricted statutory right to strike. So restricted that many, especially in the union movement, questioned at the time whether it was real.

The Keating enterprise bargaining priority had 3 important characteristics.

First, it enabled the ‘protected’ industrial action inside a protected bargaining period, if in support of a new enterprise agreement and provided the action was directed against that employer. The protection was provided through a limited immunity from civil liability for industrial action during the bargaining process.

Second, it required an attempt to reach agreement first and to give 72 hours’ notice of any action.

Third, the then Commission was “able to terminate action and arbitrate the dispute if action threatened health, safety or the economy.”

The protected bargaining period ended either because the parties had reached agreement or because the AIRC suspended or terminated the bargaining period.

Protected action was not made available in relation to the negotiation of non-union agreements, the determination of awards, or where industrial action involved personal injury, willful or reckless damage, the unlawful taking of property or defamation.

Keating’s enterprise bargaining strengthened the bosses’ competitive hand in which the gains made by the strong could not be effectively flowed on to the weak. In Keating’s system, the standards of the weak would shape, as they eventually and inevitably did over time, the standards of the strong, instead of the other way around.

A useful elaboration of the Keating system can be found here. A 1994 ACTU justification for the new system can be found here, including the myth that the system complied with international labour standards.

Why might Labor turn to the 1993 version, or something close to it?

The main reason is that it is, in their way of thinking, the least obnoxious of the restricted right to strike because they created it. Never mind that in the creation it was inevitable that a more right wing government would, as the Howard government did, impose even tougher restrictions within the neolaboral enterprise bargaining framework.

And, they can say to the employers, that back then it did not harm their interests. It is a compromise that could neutralize the employer-LNP- Murdoch fear campaign.

The reasoning can also be found in a close reading of the two major speeches from Brendan O’Connor and Sally McManus, (and of Chapter 5 of the Platform) that helped prevent the issue from escalating at the Conference.

Further, there is the reinvigorated laborist idolatry for the Keating legacy and his inheritors Rudd and Gillard.

It is in the rich Laborist tradition that tosses a tiny bit of lamb into the mutton stew.

Will this be acceptable?

It is too early to say for sure, but it does seem that right now the majority of CtR campaigners are not determined enough to win a workers’ breakthrough on their right to strike. The CtR campaign is almost exclusively an electoral campaign, of which more in a separate post.

Most appear satisfied with what parliamentary Labor is now on the record as “committed to”.

Although history tells is there is usually a big difference between a Labor commitment and the outcome of consultations with business, as well as unions, before and after the election.

But also Labor’s current commitments are not to be scoffed at. They do meet several of the big demands identified at the start of the CtR campaign nearly 2 years ago. Again on previous history these “commitments” will help many Australian union leaders to be pragmatic or ‘soft” on the right to strike.

They include, among other things,

  • abolish the Australian Building and Construction Commission (ABCC);
  • restore penalty rates for up to 700,000 low-paid workers, and make sure award variations never reduce take home pay;
  • improved multi-employer bargaining:
    • for “low paid with insufficient industrial strength” (leaving unknown how the threshold is defined and who does that),
    • where enterprise bargaining has failed or is failing,
  • FWC to order pay increases for workers in female dominated industries
  • stop the use of labour hire by employers to undermine the pay and conditions of direct employees,
  • a national labour hire licensing scheme, to rid the industry of those unscrupulous employers,
  • crack down on sham independent contracting,
  • a fair definition of casual,
  • significantly increase penalties for employers and related entities who systematically underpay and exploit workers,
  • stop the unilateral termination of agreements,
  • 10 days’ paid family and domestic violence leave.

The “commitment” to multi-employer bargaining is weak:

“… in a careful and considered way, looking at the evidence and consulting with experts, employers and unions, we are examining whether there is scope to enhance the role of multi-employer bargaining…. “

And we can see the fear of the expected employer – LNP fear mongering about strikes: “Despite what the Morrison government may say, there is no evidence that multi-employer bargaining leads to increased industrial disputation, let alone their hysterical forecast of economic doom.”

There is nothing explicit about ‘right to strike’ except possibly this very vague formulation: “Labor is guided by the principle that workers should have the right to genuinely bargain collectively to get a fair and reasonable outcome”, and references to ILO standards.

What about the employers?

I will discuss the employer response properly in a separate post. For now, we can say this. They are alarmed at the prospect of “industry wide bargaining”.

Immediately after the Conference the Australian Industry Group wrote to O’Connor to express their alarm and to outright oppose an extension of bargaining to a “multi-employer” framework. This will be the ambit position to strengthen their hand in the consultations and discussions that O’Connor is promising them. The employers who have been hacking into the wages and conditions of Australian workers know they will be invited into and respected in the ALP’s consultation process.

But, for the CtR campaign there is a potential weak point in the employer position, as stated. Among other things they say:

“Industry bargaining makes no sense in the Australian context because Australia, unlike other countries, has a system of industry awards to set minimum wage rates and conditions at the industry level. Australia’s system of industry awards and enterprise bargaining has served Australia very well over the past 25 years.”

But the industry awards they want are “multi-employer agreements”.

The CtR demand and the ALP response should be to say “yes”, let’s retain awards as the multi-employer system but add to the award system workers’ rights to protected industrial action in any process that involves changing them.

What does it mean? Real questions for CtR activists

There are some basic questions for serious discussion in the CtR campaign and not just for elected leaders.

Is the workers’ unrestricted right to strike so important that it should be relegated as a priority in the next few months?

What is more important, more real power for workers? Or, more power for the institutions that control their standard of working and living?

Do we prefer new powers for the institutions over and above new power for workers?

If we drop it as a priority are we being pragmatic or naïve?

If we give up now can we build a campaign during a Labor government to establish it in the future? What will it take to pursue and win it in the post-election period?

Do we want to win a big increase in the national minimum wage in this year’s annual wage review?

What sort of industrial campaign should be run to do this? Or are we fully conceding that for a few months we will not be an industrial movement?

Will we allow the threatening economic crisis to concede our key demands?

“Solidarity Forever”: Robots, Workers, and Profitability

Don Sutherland (March 2018)

Everyone I know with any form in the Australian union movement loves the song “Solidarity Forever”. The song includes these 2 lines:

They have taken untold millions that they never toiled to earn 

But without our brain and muscle not a single wheel can turn

What do these words mean for real working lives in our times?

This is a relevant question amid the new wave of production and other technologies, including robots and “cobots”.

The introduction of robots and other automated or semi automated machines into work processes is nearly absolutely controlled by employers. The Fair Work Act 2009 prohibits new technology like robots from being a negotiated issue in enterprise bargaining. It is wrong but it is simply unquestioned that employers should have this absolute control and that, therefore, nothing of any import can go wrong.

The second point is that the introduction of robots and other automated machines is a capital investment. There is a consequence to this that can only be fully grasped by workers and their organisations by chewing over those beloved words in “Solidarity Forever”, and understanding their 21st century economic meaning from the standpoint of workers.

Without getting too technical about it, what those words say is that all accumulated and new wealth derives from the application of human labour by workers.

Therefore, from the standpoint of workers, capital investment does not create wealth, it is a part of the total wealth that is created by workers through their labour. Specifically, it is a part of the total “profit” that is taken by the boss after paying wages and associated benefits to workers. It’s application is intended to enable employer-controlled workers produce new wealth that can be expropriated.

Commonly, workers are “taken on” to use tools and machines in factories and other work sites, to transform raw material from nature, or partially finished products, into goods for exchange and sale in the market place. Nowadays these include algorithms embedded in software or that enable the function of machines. (Most of these algorithms originate in the knowledge and thought of workers that is acquired and applied during their work process …. a separte discussion.)

Connecting the dots: robots – investment – human labour – total profit – profitability

The product (or service) must be useful but to contain money wealth it must also be “saleable”: that is, it has a use value and an exchange value intertwined within it. Out of the sale, the human labour put in leads to a total money value that is new wealth, and inside that is total profit, and also total wages. The total wages must be less than the total value that has been created by the worker. The process of work is in its essence a process of exploitation of workers by their employers.

The owners of the machines etc, and for set periods every day also of the labour potential of the workers, obsesses over whether what they have taken, the “total profit”, is enough relative to “their” investment that has been made possible in the first place by the labour of the workers they have employed.

It’s hard to think of an employer who is not obsessed with his / her profit, especially relative to the investment made, and in relationship to their competitor(s). (Unfortunately and incorrectly, the importance of profits, and profitability, is skated over or ignored even by most ”modern” labour economists.)

In dollar terms, profitability is shown by the total profit relative to the investment put into it. As an equation, profitability = total profit / capital investment.

So, what does this mean for the introduction of “robots” or “cobots “?

Robots are a capital investment by the employer, that seek to reduce labour costs and increase profits.

They are meant to make an impact on productivity: the same or more output relative to the quantity of human labour hours required to make it happen. However, in contradiction, they are also an immediate and longer term threat to profitability, the primary obsession of every employer.

With robots the labour time of fewer workers is necessary to produce the total wealth that includes the profit share and the (reduced) wages share, thus the proportion of capital investment increases relative to the input of workers, and to total profit.

For example, in one “moment”, profitability might mean total profit of 150 units divided by total capital investment of 300 units. Profitability equals 0.5. In the next “robot moment” that follows, the new capital investment increases relative to the human labour hours required (hopefully, putting aside breakdowns for the moment). So 150 units is divided by, say, 320. Profitability falls.

This is a tendency, it is not absolute. To reduce or prevent the tendency, wages and associated labour costs must be driven down no matter what the productivity.

This is why the Fair Work Act 2009 is working well for employers. It provides employers with those controls across the economic system. Thus, under 21st century capitalism, there is no logic that enables it to provide for reduced working hours in general while improving and equalizing the standard of living. To make that happen would require more universal and more powerful workers’ struggles through their unions, or in other ways.

This is a real dilemma for employers (and their champions): in 21st century capitalism (just like all capitalism before it) increasing the productivity of labour through more automated machines – robots – tends to reduce the profitability that all employers crave, and may even cause or hasten a renewed economic crisis that causes more unemployment and income security for the 90% plus.

But that’s the “logic” of a capitalist system. Production is not for social needs and values but to provide profitability and the accumulation of wealth for the minority who own and control the machines. In this system robots and “cobots” drive more insecurity.

Interim and ultimate solutions?

If you have a problem with this logic, then “it’s time” to cease the hypocrisy of singing those key words in “Solidarity Forever”.

More seriously, “solutions” like the “universal basic income” will be naïve and ultimately impractical.

Nevertheless, the real potential of automation does lie in reducing and sharing more equally productive working time.

The new leisure time that goes with that must be rooted in zero poverty and shared access to a bounty of socially and personally enriching activities. However, for that to be realised the 90 per cent, or a much bigger part of it, must take the necessary actions in support of the specific demands towards replacing with their collective selves the current owners of the machines and the systems that produce the 21st century necessities of life.

It’s worth looking at what the Corbyn and Sanders movements are coming up with in this light (and others in other parts of the world). And what the ACTU, the ALP and the Greens have to say about it. For me, that’s for another time and a good deal more reading and discussion, some of which might be found in the submissions to the current Senate Enquiry into the Future of Work.

https://soundcloud.com/radio-skid-row/don-sutherland-discusses-wage-theft-reports-1-december-2017.

Here On “Workers Radio”, Caroline and I discuss the latest reports of wage theft and hyper exploitation of aboriginal workers in remote Australia and meat workers in northern NSW. WE ALSO START A SERIES OF DISCUSSIONS ABOUT WAGES SUPPRESSION IN AUSTRALIA, INCLUDING NOT JUST WHATS HAPPENING BUT WHY. This discussion will continue over the coming weeks and will connect to the ACTU’s Living Wage Claim to be heard as part of the National Wage Review as it continues in 2018. Please discuss and share. Also send comments, questions and information to workersradio2017@gmail.com .