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 careful study.

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 amendments.

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 down.

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 economy.

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 law.

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 Arbitration Court.

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 1978.

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 also summonsed.

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 destroyed.

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 to force.

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 law.

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 Commission.

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. The words

'I pride myself on being a clubable man'

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.