Arbitration In Contempt

The Nature of Trade Union Power

Hugh M Morgan

In their letter to those who were asked to come to this seminar the gentlemen responsible for this occasion cited two primary reasons for their invitation. First, to commemorate the memory of Henry Richard Nicholls, the editor of the Hobart 'Mercury', who at the age of 82 was acquitted by Griffith CJ., Barton and O'Connor JJ., of a charge of contempt of the High Court, and who was subsequently acclaimed by the citizens of Hobart at a public meeting in the Hobart Town Hall on 27th June 1911. Second, to stimulate debate in Australia on the role and purposes of trade unions and the various arbitral tribunals which are embedded in our industrial relations matrix.

I welcome their initiative. Australia's export industries now find themselves battling on an economic Kokoda trail. They now face survival problems of, I think, unprecedented magnitude. But unlike the Australian soldiers who fought the Kokoda trail battles of 1942 and who knew that the rest of Australia was watching and praying for them, the farmers and miners today feel that the rest of the country regards their present struggle with unconcern.

For the rest of Australia, it seems to be business, and borrowing, as usual.

It seems beyond dispute that the public advocacy of many trade union leaders; the philosophical underpinnings of the arbitral bureaucracy which stands on the shoulders of the trade union movement; together with the insulation of an ever growing proportion of our workforce from the discipline and vagaries of the market place, are responsible for this lack of community concern for our front line troops in the world market place.

It Is, I think, noteworthy, that it is not yet three short years since the ACTU and the newly elected Labor Government, elected on a great wave of enthusiasm, and riding very high in public esteem, joined with representatives of the business sector at the economic summit held in the House of Representatives, and laid the basis of consensus politics---the acceptable, even the superficially attractive, face of corporatism.

Three years later, in 1986, it is clear from the papers to be given at this seminar, from the impact of Mudginberri and Dollar Sweets, that there is a feeling that at long last the dark forces, to use Star Wars terminology, might be on the defensive.

Much has happened since 1983 to produce this change of opinion, and whilst I do not wish to attempt a detailed history of the period, there are two events, however, which I think merit citation. The first was the appearance, in the September 1983 issue of 'Quadrant,' of Gerard Henderson's seminal essay on the Industrial Relations Club. I understand that Paddy McGuinness claims proprietorship of the term and he may be correct in his claim. None-the-lese, we can date the transition from approbation to scorn from Dr. Henderson's essay.

The second event which I wish to note took place in August 1984. That event was the Edward Shann Oration, given by John Stone on the eve of his resignation from the Treasury, in which he laid the blame for our scandalous unemployment situation, particularly amongst our young people, on the shoulders of our arbitral tribunals and the unions behind them.

There have, of course, been many other people who have made important contributions to our changed situation. President Regain and Prime Minister Margaret Thatcher are two people whose actions and policies have influenced opinion and events here in Australia. Our Queensland Premier must be included in such a list of political leaders.

It seems to me that the fundamental question which ought to be at the forefront of our deliberations, is the origin, the nature, the purpose, of trade union power.

Why is it that every time the Amalgamated Metal Workers Union is cited in the Melbourne 'Age' it is preceded by the adjective 'powerful'?

Why is it that the Hancock report contained these two sentences?

'Trade unions are, to varying degrees, centres of power: they replace the powerlessness of individual workers with collective strength'.
'It is a mistaken view of the pluralist society to assume that every 'subject' is equally dominated by the might of the State and its arms of enforcement.'

Those two sentences are, I think, pregnant with significance. The first sentence is an attack on the dignity and worth of the individual with the throw-away description 'powerlessness'.

The second sentence would, in Elizabethan times, have put its authors at risk for imprisonment or worse, for treasonable utterance. It is an open attack on the sovereignty of the state.

How could the Hancock Committee have signed their names to such extraordinary sentiments?

Formulating such questions is one thing. Answering them is another. To at least set out to try to discover an answer, we must, naturally, look at the origins and early history of trade unions. Just as Weber, for example, studied in great detail, the life of the early Calvinist communities in Holland and New England, in order to trace out the connecting links between religious belief and economic success, so should we, I think, go back to the latter part of the last century and look again, very carefully, at the origins and growth of trade union ideology, in order to understand the connections between trade unionism and economic decline.

Now I cannot pretend to be an expert on the history of trade unionism, but I was, not so long ago, moved by the repeated use of the word 'charisma,' (with respect to our Prime Minister) to read Max Weber's seminal essay on charismatic leadership. I could not help but be forcibly struck when reading this essay, that Weber knew all about, for example, Norm Gallagher.

Let me quote some striking sentences from this great essay.

'The domination exercised even by a gifted pirate may be charismatic, and charismatic political heroes seek booty, above all in the form of money. But the important point is that charisma rejects as dishonourable all rational planning in the acquisition of material goods, as in the case of the charismatic war hero'.
'The charismatic hero does not derive his authority from ordinances and statutes, rather he acquires it and retains it only by proving his powers in real life. He must perform miracles if he wants to be a prophet, acts of heroism if he wants to be a leader in war. Above all, however, its divine mission must 'prove' itself in that those who entrust themselves to him must prosper'. .

However, if charismatic leaders succeed in establishing institutions which live after them, those institutions must make an accommodation with economic constraints, or collapse through bankruptcy or through loss of credibility.

Weber described this process with these words:

'All charisma, however, in every hour of its existence finds itself on this road, from a passionate life in which there is no place for economic matters, to slow suffocation under the weight of material interests, and with every hour of its existence it moves further along it. '

I think there is little doubt that trade unions were founded by charismatic leaders in the latter half of the nineteenth century. This was a time when unprecedented prosperity promoted literacy as well as newspapers and pamphlets of all kinds; publications which were read by the rapidly growing populations of Western Europe, North America, and Australasia.

Trade unions were a product of the nineteenth century growth and prosperity which provided extraordinary opportunities for charismatic leaders to establish themselves.

Trade unions in their early days were not only involved, as Weber put it, 'in a passionate life in which there is no place for economic matters'. They were deeply involved in what we would call insurance or friendly society activities---sickness benefits, funeral benefits for example, but, as William Lane exemplified when he set off with a loyal band of disciples to build the New Jerusalem, or as he called it, New Australia, in Paraguay, the charismatic element was predominant.

Now it seems to me the charismatic origins of trade unionism are of fundamental importance to our understanding of the situation. Established institutions, such as church and state, have to face the recurring problem of how to handle outbreaks of charismatic activity. The standard response of the Roman Catholic Church, for example, has been to establish the charismatic leader as head of a new missionary order and send him to far off countries to spread the gospel. The further off the better.

In Britain, contrariwise, the extraordinary response of the Parliament to trade union organisation and agitation, was to grant the new charismatic movement immunity from the law. In I906 the Campbell Bannerman Government passed the Trade Disputes Act which gave the Trade Unions immunity from tort.

F. E. Smith, later Lord Birkenhead, during the debate on this Bill, said, in what was his second speech in the House of Commons:

'We are asked to permit a hundred men to go round to the house of a man who wishes to exercise the common law right of this country to sell his labour where he chooses, and to 'advise' him or 'peacefully persuade' him not to work. If peaceful persuasion is the real object, why are a hundred men required to do it ...
Every honest man knows why trade unions insist on the right to a strong numerical picket, It is because they rely for their objects neither on peacefulness nor persuasion. Those whom they picket cannot be peacefully persuaded. They understand with great precision their own objects, and their own interests, and they are not in the least likely to be persuaded by the representatives of trade unions, with different objects and different interests. But, though arguments may never persuade them, numbers may easily intimidate them. And it is just because argument has failed, and intimidation has succeeded, that the Labour Party insists upon its right to a picket unlimited in respect of numbers'.

It is important to note that the Tories, who had a majority in the House of Lords, could have killed the Bill. But the Tory leadership was as unwilling to antagonise the emerging power of labour as the Liberals were anxious to placate it. The Tories of 1906 were not Thatcherites.

As Weber has so clearly described, charismatic movements whether led by St. Francis of Assisi, or Karl Marx, or Lenin, are profoundly hostile to the institution that is, sui generis, anti-charismatic, that is the family.

An incident from the British coal miners' strike of 1984 illustrates this fundamental hostility. A father and son worked together in a mine that was the life blood of, what was always referred to in the British intellectual press as, a close knit village community. The father decided, after nine or more months of fruitless unemployment, that he'd had enough and was going to accept the British Coal Board's offer of a return to work on generous terms.

His son called him a scab, and refused to let him see his grandchildren or give them birthday presents.

The bonds that reach across the generations were thus broken in a particularly humiliating way.

This poignant incident illustrates the power of charismatic leadership and its ability to disrupt and defy the most fundamental human relationships, those between father and son, between grandparents and grandchildren.

The family is not the only institution to which trade unions are hostile.

From the early part of the nineteenth century governments have been suspicious of trade unions, regarding them as rivals challenging the sovereignty of the state. Lloyd George, as Prime Minister in 1921, and faced with the prospect of a general strike triggered by the miners' union, demanded that union's leaders if they were prepared to assume responsibility for the State, since what they were doing constituted an open challenge to the authority of the government. In 1921, because of the totally erratic behaviour of the miners' leaders, the threatened general strike did not eventuate, and in 1926, when it did, Lloyd George had long since been replaced by Stanley Baldwin.

In Australia there have been some notable instances of direct confrontation between the unions and the State. It was the Chifley Government that put troops into the coal mines in 1949; as fundamental a use of the power of the State as could be envisaged.

The 1984 British miners' strike was an open and direct assault on the legitimacy of the Thatcher government, and the clashes between pickets and police took on the aspect of open insurrection, if not civil war.

In Victoria the continuing saga of the Builders' Labourers' Federation is noteworthy in that both union and government see the contest as a struggle between protagonists of comparable weight. The government, elected by all the citizens, its legitimacy beyond question, feels it necessary to go to the most extra-ordinary lengths to compel employers to collaborate with it in its campaign to bring this union within the aegis of the law.

The continuing resolve of the Victorian government to uphold the sovereignty of the State of Victoria contrasts with the crucial recommendation of the Hancock committee.

The power of Australian trade unions is so great, so that committee argued, that the new Labour Court proposed in their recommendations will have exclusive jurisdiction in industrial matters, but will have no power to impose sanctions, except on employers.

A government that passed legislation setting up a court in line with the Hancock recommendations would be a government that was compromising its sovereignty to an extraordinary degree. I do not think the electorate will countenance such a diminution in the prestige and authority of the State, and I do not think the Hawke Government will seek to go down that path. If it does seek to do so there is going to be a fearful row.

There have been many instances of trade unions seeking to take over the execution, if not the responsibility, of the most important prerogative of the State, the conduct of relations with foreign powers.

On relations with South Africa, on the export of uranium, on the maintenance and provisioning of the naval vessels of allied powers, they have sought and in some cases successfully sought, to impose a particular policy on the government; not through argument, or public advocacy, but through strikes or threats of strikes.

The use of 'industrial action' in order to impose a particular foreign policy on the government is a very dear example of contested sovereignty. The arguments used to justify this conduct are, consequently, of very great interest.

The most authoritative exposition of the legitimacy of the exercise of trade union power, and in this case, it was argued in relation to issues of 'economic management' rather than foreign policy, was given by Simon Crean in his address to the MTIA seminar 'Wrong Way Go Back' on 21st October last. The President of the ACTU was, in this context, discussing and defending 'the Accord.' He said:

'What is wrong with the Trade Union Movement exercising its collective responsibility, in terms of a genuine partnership in this country? Given we directly represent 2.6 million members, together with those dependent upon them, it is not an insignificant group in the community.'

The important words here are 'collective', 'partnership' and 'direct representation.'

By 'partnership' we can take it that Mr Crean means partnership with the government. What he is arguing for is 'co-sovereignty' or duumviracy, on the basis of direct representation of 2.6 million people and their dependants.

Let us, for the sake of argument, assume that his claim of direct representation is valid, and that, as President of the ACTU, Mr Crean does exercise plenipotential authority for 2.6 million people and their dependants. It follows, then, that those people enjoy, in effect dual citizenship. They can, directly or indirectly, vote for Mr Crean as their plenipotentiary, in his role of President of the ACTU, and at the same time vote for Mr Hawke as Prime Minister of the Commonwealth, and assume that the two men will act, in partnership, on their behalf.

Now duumvirates don't last. It is the essential quality of sovereignty that it is unshared. That the trade unions are, again, seeking to usurp the sovereignty of the Crown and Parliament is evident in a speech made last November by Mr Peter Duncan, Member for Makin, in the House of Representatives. Mr Duncan argued for repeal of Sections 45 D and E of the Trade Practices Act,, because, and I quote:

'These sections not only prevent the trade union movement from supporting other unions, but also prevent it from supporting other community movements.'
'There can be no direct trade union action of support of the Daintree campaign, there can be no trade union action in support of consumer protection, there can be no trade union in action tn support of moves against anti-social developments, whilst Sections 45D and E remain in force'. (Hansard 19.11.85 p.3093)

It has been made clear, through other channels, that this year there will be another attempt to repeal these vital sections of that fundamental Act. The business community has been told that major government interests regard repeal of Sections 45D and E as essential.

These sections of the Trade Practices Act merely codify ancient parts of the English Common Law under which it became every Englishman's birthright, and by extension, every Australian's birthright, that he should be able to conduct his business or commercial activities without intimidation by criminal gangs.

If the Commonwealth Government should seek again, to give legal immunity to people engaging in activities that would, under all other circumstances, be called criminal conspiracy, let me make it crystal clear that there is going to be a very big row. And, once again, as with the Hancock proposals for a Labour Court, I do not believe that the Australian people will tolerate the attack on the sovereignty of the Commonwealth of Australia, which would be implicit in repeal of Sections 45D and E of the Trade Practices Act.

If one section of the community demands, and obtains, the legal privilege of organising coercion and intimidation against whomsoever it chooses, then other groups in the community, who may well believe, and with good reason believe, that their livelihoods and property are at stake, will feel justified in banding together to protect themselves.

What the trade union leaders are saying to the rest of the Australian community in their attacks on the Court decisions relating to Mudginberri; in their demands for repeal of Sections 45D and E; in their insistence, as in the Accord, on obtaining immunity from tort; is, to use Lincoln's aphorism 'You shall work, and we shall eat '.

The rest of the Australian community, and this includes the greater part of those who find themselves, willy nilly, counted as members of trade unions, are becoming uneasy at the implications of this position.

These considerations lead me to my final point. Union power in Australia is, I am convinced, a pale shadow of its nineteenth century charismatic origins. Australians owe allegiance to their country, an allegiance which is gladly and willingly accepted. They are today, as they have always been, deeply committed to their families. But the fundamental nature of trade unionism, its subversive challenge to the authority of the State, its jealous dislike and hostility of the family, is increasingly recognised and intuitively understood by more and more Australians, as the polls published by the Hancock committee show so clearly.

Trade union power in Australia, and in Britain, is based on a residue of legal privilege. It is that legal privilege which has to be whittled away.