Light on the Hill: Industrial Relations Reform in Australia
'I pride myself on being a clubable man'
H M Morgan
Mr President, Distinguished Guests, Ladies and Gentlemen.
It is indeed a pleasure to be invited to give this
dinner address. The H R Nicholls Society has travelled
some distance since that memorable weekend in March
1986 a mere 15 months ago when the Society conducted
its Inaugural Seminar at the CWA residence in Melbourne.
The spur which goaded the founders of the Society into
organising that seminar was the Hancock Report, and
the disturbing prospect of legislation based on that
Report. It took nearly two years for the Minister for
Industrial Relations, having received the Report, to
progress to the stage of giving the Second Reading
Speech, which introduced the Hancock Bill to the House
of Representatives. Now, as you are all aware, the
Bill has been deferred. The prospect of a very big
row in the lead up to an election was deemed to be
inadvisable. Instead of the Bill we have an election,
and this election could well be, as the Duke of Wellington
remarked after the Battle of Waterloo, 'the nearest
run thing you ever saw in your life'.
The circumstances surrounding the deferment of the
Bill and the announcement of a double dissolution require
Let us first recall that the Democrat leader, Senator
Haines, had repeatedly committed the Democrats into
support for the Bill, except perhaps for some minor
Second, recall that an ordinary election, involving
half the Senate, would very likely have resulted in
defeat for each and every Democrat Senator.
Third, remember that this result was one which the
major parties, particularly the ALP, were very keen
to bring about.
The Hancock Bill brought together every employer organisation
in Australia at a meeting in Canberra on 26 May. This
meeting was evidence of the most extraordinary unity
ticket in Australia's industrial relations' history.
The television advertisements attacking the Bill were
scheduled to commence on 28 May. The ALP's public opinion
adviser, Rod Cameron, had told the Prime Minister that
the issue of trade union power and privilege is the
issue which, more than any other, could bring his Government
A prudent Prime Minister---hopeful one day, perhaps,
of becoming President of the International Labour Organisation;
aware that this Bill is in flagrant breach of ILO Conventions;
and aware that employers from businesses large and
small were being informed of the horrendous consequences
of the Bill---would in these circumstances have withdrawn
it, totally, as the Human Rights Bill was withdrawn.
But instead, the Bill is deferred. The coal industry
unions are being appeased with a phoney High Court
challenge to the Queensland Industrial (Commercial
Practices) Act. The Democrats have been guaranteed
five or six seats in the new Senate, and the ALP will
spend all its election time talking of the impossibility
of reducing taxes and of its proper stewardship of
The only conclusion we can draw from this circumstantial
evidence is that the Prime Minister and his Cabinet
colleagues are grimly determined, regardless of the
breadth and depth of opposition, to see this Bill become
Such determination shades into fanaticism, the fanaticism
of social engineers who seek stealthily but dramatically
to change the structure of Australian society, without
the consent of the people.
The Hancock Report, and the Bill which has been based
on it, are a quantum leap in a slow progression which
we can date from the 1897 Constitutional Convention,
where the Irish barrister, H B Higgins, narrowly persuaded
a reluctant Convention to include an industrial relations
provision in the proposed Constitution. From 1897 to
1985 is not a long time in the history of the law,
and it is about the rule of law, and about lawyers,
that I wish to comment tonight.
Higgins was a barrister at the Victorian Bar. He had
arrived in Melbourne in 1870 as the 18-year-old son
of a struggling Irish Methodist minister. He won scholarships
to the University of Melbourne; he graduated in law;
and by the time he was 35 he had made a substantial
fortune from his work at the Bar. He became a Victorian
MP, a delegate to the Constitutional Convention, a
Federal MP, a Federal Minister, a High Court judge,
and concurrently, until 1921, the President of the
How sad, but how inevitable, given the premises which
illuminated his life's work, that Higgins' heirs, Professor
Hancock, and Messrs Polites and Fitzgibbon, should
claim, in those notorious paragraphs, 10.293, 10.299
and 10.300 of their Report, that our Courts give judgments,
not according to law but according to the relative
power of the litigants. How disastrous it will be for
Australia if the Bill that has been born of that Report
becomes the law of the land, and if a so-called Court,
conceived out of the doctrine of justice based on power
and privilege, is established.
The protagonists for the Hancock Bill have disguised
themselves in the language of the law. They have advocated
a Labour Court. The judges of the Labour Court will
be legally qualified. These phrases are designed to
soothe us into inactivity and acquiescence. We should
not be soothed. These so-called judges will also be
experienced---and here's the rub---'in industrial relations'.
What a pity the Bill does not use that ominous phrase
'industrial relations realities'. This is the phrase
that has been used by the Industrial Relations Club
to legitimise the foundation principle of the Hancock
Report, the principle that power bestows privilege
before the Courts. By using the language of the law
and the vocabulary of Courts, legal training and qualifications,
the advocates of the Hancock Bill seek to hide from
us the awful consequences of their endeavours. These
consequences are the destruction of the rule of law.
At first the law will vanish in areas traditionally
seen as industrial relations. Picket lines will become
inviolable. Membership of unions will become as obligatory
as was membership of the mediaeval church, and objectors
to trade unionism will be treated as heretics. These
consequences will flow logically and irrevocably from
the fundamental argument of the Hancock Report: the
argument which insists that justice is determined not
according to law but according to the relative power
of the litigants.
That argument is now to be put to the test. During
this election campaign and after a new government,
of whatever complexion, has been formed in Canberra,
the most fundamental attribute of the rule of law must
be branded, indelibly, into the overworked and overloaded
minds of our political leaders. That attribute, summarised
by Thomas Fuller over 300 years ago---'Be you ever so
high, the law is above you'---means that no citizen,
be he merchant, company director, Minister of the Crown,
bishop, professor, investigative journalist, or even
trade union official can use his power to challenge
the independence and integrity of our Courts. It means
that justice is dispensed according to law, not according
to the power of the disputants.
How did this fundamental principle---principle, surely,
by which H B Higgins must have felt bound---become
lost in the minds of the members of the Industrial
Relations Club? How it became lost is something only
a detailed history of that Club would reveal. But that
it has been irretrievably lost is clear from the story
of Leo Gorman and Sir John Moore, a story that I now
wish to recount.
Mr Gorman was a country fuel distributor who lived
in Seymour, Victoria. After working for many years
for Mobil Oil, and having retired in 1976, he was approached
by Esso, in 1978, to re-establish its distribution
business in Seymour. Mr Gorman agreed to the Esso proposal,
provided he would be able to use his own vehicles and
drivers in obtaining fuel from the Spotswood depot
and distribute it around the Seymour district. The
Esso managers cleared this with the TWU and the first
load of fuel was carted from Spotswood on 21 August
The following day the second load of fuel was picked
up. But on the evening of 23 August Mr Gorman's driver
wag told by a union delegate at the Spotswood terminal
that he, the driver from Seymour, was taking away their
work and this would be the last load of fuel he would
get. Mr Gorman, the next day, contacted Esso management,
only to be told that the TWU had reneged on the agreement.
He tried to resolve the issue with the union delegates
at Spotswood, but to no avail.
Mr Gorman was now in an impossible position. He had
no income, but he had to service the capital invested
in his vehicles and he had to pay the wages of his
drivers. After further discussions with Esso, Mr Gorman
realised his only hope lay in legal action under section
45D of the Trade Practices Act. In due course his solicitors
issued writs under that section against the TWU and
certain delegates at Spotswood.
On 13 September Esso's solicitors notified the Arbitration
Commission of an alleged industrial dispute. This notification
cited Esso and the TWU but did not cite Mr Gorman.
Mr Gorman and his drivers were covered by a State award:
they were outside the jurisdiction of the Commission.
On 8 November, following a stop-work meeting of the
TWU, all drivers and airport refuellers went on strike,
and Melbourne---and indeed the whole State---began
to run out of petrol. On 14 November Sir John Moore,
then President of the Arbitration Commission, presided
over a compulsory conference to which Mr Gorman, the
TWU, and Esso were summonsed to attend---and for some
unexplained reason a representative of the CAI was
At the commencement of these proceedings Sir John
Moore refused to allow Mr Gorman's barrister to remain
in the conFerence although he was permitted to wait
outside For consultation. This compulsory conFerence
went on for nine hours, not ending until 11.30 pm.
Imagine yourself in Mr Gorman's position. Your barrister
has been told to wait outside. For you to explain that
you want to leave the proceedings so as to consult
him requires some little courage. To keep on leaving
the conference in order to seek advice would be possible
only for a person with the sort of confidence born
of experience and familiarity with such situations.
Trade unions display a curious inconsistency on this
matter of legal representation in the Arbitration Commission.
In cases like this one, they invariably object to others
having legal representation, yet they not infrequently
engage counsel themselves. Mr Gorman had no experience
of proceedings in an industrial relations tribunal.
He was left without legal assistance to face a cohort
of experienced industrial relations realists, including
the President, Sir John Moore, Mr Ivan Hodgson of the
TWU, the Esso industrial relations people, and representatives
of the CAI.
Mr Gorman still recalls CAI's present Director-General
approaching him and urging him to compromise, on the
grounds that it was costing everyone else $8 millions
per day. So after nine hours of what we can euphemistically
call 'discussions', he agreed to withdraw the writs
that he had lodged with the Federal Court. In an account
of these proceedings that was published on 23 November
1978, Mr Gorman said he had been under the sort of
pressure that few men ever had to undergo. That statement
of Leo Gorman's is a savage indictment of the proceedings
presided over by Sir John Moore.
Let me quote from this account, written by David Elias,
and published in 'The Australian'. As far as I am aware,
its accuracy has never been challenged by Sir John
Moore, or indeed by anyone:
'Overwhelmed by the awesomeness
of the occasion and tired from a long day of argument
and discussion Mr Gorman heard Sir John tell him he
faced the possibility of being banned from ever again
working in the transport industry. It was well into
the night when Sir John prefaced his remarks by saying
it was not intended as a threat but...
He then told Mr Gorman that if he carried on with
his Federal Court writs against the TWU and its officers
he had every chance of winning the case in law.
However he faced the risk of a transport union black
ban throughout Australia which would mean he ever would
be able to enter a transport depot for the rest of
his life.. .
While the Federal Government was outwardly supporting
Mr Gorman with threats of de-registration against the
union the CAI was piling on the pressure to get the
dispute resolved. The CAI's lawyers were also in Sir
John's conference impressing on the Commission and
Mr Gorman the need for a solution at all costs. It
was a question of what was the most important---the
legal rights of one small country businessman trying
to keep his business afloat, or the interests of a
nation about to grind to a halt.
Sir John's remarks indicated that he had chosen the
national interest while being aware that the strictly
judicial Federal Court would not be swayed off its
slow course of justice no matter what sort of chaos
reigned across the country.
The result could well cost Mr Gorman his business'.
David Elias's last comment was accurate. Leo Gorman
withdrew his writ and put himself in the hands of a
commissioner nominated by Sir John Moore. That commissioner,
contrary to the predictions of those who knew him well,
recommended a solution totally in favour of the TWU.
Leo Gorman's business then had to be wound up. To use
David Elias' phrase, a phrase no doubt picked up from
the industrial relations realists who took part in
that compulsory conference, the 'national interest'
was served, and an individual had his lawful interests
The proper meaning of that term 'national interest'
became clearer a week later. On 22 November 1978, a
Melbourne courier company, Allied Messengers, sought
an injunction against the TWU and Ansett Airlines and
TAA. The TWU had admitted that it had blackbanned the
company to force its owner drivers to join the union.
Allied Messengers claimed that union bans at the air
terminals were costing it 40 per cent of its business.
Mr Justice Smithers of the Federal Court, in dealing
with this case, said:
'No union member had any complaint about wages and
conditions, and in that sense it was not an industrial
dispute at all. It was quite clear the union had blackbanned
Allied Messengers in an endeavour to force its 80 owner
drivers to join the union. Nobody has any objection
to people persuading people to join unions. In this
case persuasion has either not been tried or has been
tried and failed. As a result the union has resorted
It was intolerable that people could be prevented
from receiving the natural benefit of the law because
others threatened to take action in defiance of the
It seems to me we are faced with a real situation
in which if people do not respect the law---or the
law is not enforced by the proper authorities---we
are headed for a state of chaos, where the law of the
strongest will govern.
The fact that half the country may go on strike---
can the law stop because of that?
One of the parties in this case has I think 150,000
members and is not lacking in strength. What are we
to do? Administer the law or give it away? I think
I know what to do'.
The outcome of that application for an injunction
was predictable from the Judge's remarks. An interlocutory
injunction was granted over the weekend of 25-26 November.
The next week both TAA and Ansett undertook to instruct
their employees to handle Allied Messengers' parcels.
The TWU would give no such undertaking, so the Court
enjoined the TWU to cease blackbanning the company.
The TWU's blackbans immediately came to an end. All
that was required to lift the veil on the intimidation
implicit in the industrial relations realities of Sir
John Moore's compulsory conference was the steadiness
of a real judge proclaiming his duty of upholding the
law. The repeated appeals by the industrial relations
realists to the so-called national interest were nothing
more than desperate attempts to hide the nakedness,
and lawlessness, of their position.
Within the space of a week, then, we can see two different
judges at work, two different theories of law being
applied, two opposed institutions in operation. Sir
Reginald Smithers had the institutional framework and
doctrine of the rule of law to uphold him in his duty.
Sir John Moore, contrariwise, had an entirely different
institutional framework surrounding him. One has to
be careful in making statements where reputations are
involved. But let me say this. In the Leo Gorman case
an individual citizen was confronted by the combined
weight of the industrial relations establishment. He
was denied legal representation. He was persuaded to
withdraw the writs he had lodged with the Federal Court.
Sir John Moore presided over these proceedings. Sir
John Moore appointed the commissioner who decided in
favour of the TWU. This commissioner said, in the course
of his decision:
'In the light of the circumstances I have outlined
it would be lacking in industrial reality and be contrary
to public interest for Mr Gorman to continue to seek
to collect product from Spotswood with his vehicle
operated by his own employees. . .
In the special and unique circumstances of this case
I recommend that the Seymour agency be supplied by
the delivery of all products from the Spotswood depot
in Esso owned vehicles driven by Esso employees'.
Sir John Moore was cited by his long-time friend and
former ACTU advocate, the Minister for Industrial Relations,
in the Second Reading Speech given prior to the withdrawal
of the Bill. Let me quote the Minister:
'A new Australian Labour Court will be created to
replace the present Industrial Division of the Federal
Court. The legislation will enable presidential members
of the Industrial Relations Commission to hold separate
and concurrent appointments to the Labour Court and
The establishment of the two new bodies has been strongly
supported by both union and employer organisations
and accords with the recommendations of Sir John Moore'
When we consider the way in which Sir John Moore treated
Leo Gorman; when we contrast the statements of Mr Justice
Smithers with those of Sir John Moore; when the Minister
tells the House that the principle of concurrent appointments
to the Labour Court and the Industrial Relations Commission
was recommended by Sir John Moore---then we realise
why this Labour Court must never be allowed to be born.
Earlier I said that if this Bill becomes law, the
consequences will first become evident in those areas
of life that have come to be regarded as belonging
to industrial relations. But power based on privilege
knows no limitation.
Samuel Johnson, writing of Cardinal Wolsey, said
Turned by his nod the stream of honour flows,
His smile alone security bestows:
Still to new heights his restless wishes tow'r,
Claim leads to claim, and pow'r advances pow'r;
Till conquest unresisted ceased to please,
And rights submitted left him none to seize.
If the unions are to be placed above the reach of
the real Courts; if this Labour Court, conceived on
the strength of the argument that justice is to be
dispensed on a weighing of the relative power of the
disputants, is to have sole jurisdiction in industrial
relations matters;---then the inevitable logic of justice
based on power will soon take effect. Industrial relations
will expand. The unions have already claimed authority
in foreign affairs. They interrupt, with impunity,
the flow of taxation receipts to the Government. They
have demanded consultation in investment decisions.
They seek to control all superannuation funds. But
all this will be seen as merely a base for further
expansion. The boycott and the picket line will become
less evident. The mere threat will be as effective
as the actuality. Claim will lead to claim. Power will
advance to yet more power. The state will have created
a rival whose power will match its own.
Let me conclude by explaining the title of this address.
are those of Samuel Johnson. He was comparing himself
with Sir John Hawkins, who had been an original member
of the famous club which met every Monday night at
the Turk's Head in Soho from 1764 on. Hawkins had attacked
Edmund Burke so rudely that he was treated with disdain
the next time he came to the club and he never came
again. He was, as Johnson said, 'a most unclubable
man'. That club included within its members some of
the most illustrious names in the history of English
letters and membership of it became one of the most
sought after prizes in English society. I look forward
to the day when the H R Nicholls Society enjoys a similar
prestige to that famous club. When that happens we
will no longer have to concern ourselves with the depredations
of that other club whose members have figured so prominently
in my remarks tonight. Let us busy ourselves to achieve
this great ambition.