No Ticket, No Start---No More!

Keynote Address

Peter Costello

The theme for this conference is taken from signs that guard entry to most of the major building sites in our capital cities.

The message is open and brazen. It tells the world that regardless of a man's skill and regardless of his talent, he is not allowed to work on that site until he has paid for a union ticket.

Although the requirement is imposed in the name of the owner it is not done at his insistence. It is done at the insistence of those who issue the tickets, collect the fees, derive the economic benefit and provide the practical enforcement---in this case the building trade unions.

The building industry is not unique in this respect. We could focus just as easily on the metal industry, transport industry or oil industry. Indeed, in any industry where there is significant capital investment you will find potential for unions to extract a ransom. One of the first demands is always the closed shop.

Over recent years there have even been attempts to enforce a closed shop for journalists. You will recall how the Government attempted to exclude non-AJA members from a recent Budget lockup, and how the ALP announced that only AJA ticket holders would be accredited to the 1988 ALP Hobart Conference. The attempt was poorly organised and easily thwarted. Even some of our journalists dug in their heels over the matter. Robert Haupt published an open letter to the ALP National Secretary telling him why he wouldn't show his ticket. According to Haupt if this went on the next thing that would happen would be that an H R Nicholls government would insist on only non-unionists coming to its councils!

I see we have some journalists attending this conference over the weekend. I doubt if they will be asked for a non-ticket show and, for my part, I don't care whether they do or don't have tickets. I must say, however, that I am highly delighted that over the weekend some current and former union officials will be giving papers.

But I return to the building industry. The practice of 'no ticket no start' has now become highly institutionalised and no more so than in Victoria. The rules governing it have been summarised in the little green book. It is---if you like the Nicene Creed of the building industry.

What the green book says is this.

When a person seeks employment an employer must ask him for his current financial clear card and tell him to produce it before starting work. If a union official finds a person on site who cannot produce such a card, the man must be sent off the site for 24 hours, or until he can produce one whichever is the later. All members of the union to which the person without the card should belong are entitled to stop work generally for 24 hours, because a non-ticket holder has been on site. They are then entitled to full pay for the stop work, unless the employer can prove to the satisfaction of the union he was deceived by a false, forged or borrowed card.

Some of you may think this is a rather draconian procedure. But this is an improvement on the situation which prevailed prior to 1987. These are considered benign provisions in the building industry. A builder only gets the benefit of these provisions if he pays redundancy pay to his employees at the rate of $20 per week per employee!

In exchange for paying this money he obtains the benefit of this procedure. This is what is known as 'an efficiency improvement' under the Arbitration Commission's Restructuring and Efficiency Principles.

Where these 'beneficial' procedures do not apply things are far less institutionalised and civilised. Let me tell you about the experience of Mr Daryl Morley and his partner, Mr Michael Nott.

In December 1986, Mr Morley and Mr Nott were partners in a project to build the first cinema in the Victorian country town of Sale. They contracted out all the work and they acted as project managers on the site.

The local organisers of the Building Workers' Industrial Union approached Mr Morley and asked him whether he, (Mr Morley), was a member of a trade union. He said he wasn't. They asked him whether Mr Nott was. Mr Nott was not a member either. Mr Morley was then informed that under BWIU rules only one person who was not a union member was permitted on site---the Project Manager. Mr Morley explained that they had two Project Managers. This did not convince the organiser. He said only one person was allowed not to be a union member, and unless either Mr Morley or his partner joined the union, the site would be declared 'black'.

Mr Morley protested about this. He and Mr Nott owned the land and it was his view that he was entitled to enter his own land whether he paid for a union ticket or not. The organiser explained to him that this was not the way things worked in the building industry---whether he owned the land or not he could only be present while building work was going on if either he was a union member or his partner was a union member. The organisers declared the site 'black' and all work ceased. This threw Mr Morley and his partner into a financial quandary.

Their choice was either to pay a $74 six-monthly union membership fee for the privilege of working on their own land, or to face the crippling financial cost of having their site closed and the Christmas cinema season interrupted.

Builders are commonly confronted with a similar financial choice.

Let us consider this situation from the point of view of those involved.

The Builder

The builder is the hostage. On a small CBD development a builder may have finance costs of $200 million.

Interest on those costs may run at about $100,000 per day. If an individual tradesman refuses to pay a $150 union fee, that man can cost the builder---in finance costs alone---$100,000. To him, the individual is a troublesome and quirksome inconvenience.

The Individual

He is the victim. He has to pay the money to purchase the right to work. If, for some reason, he doesn't want to do so, he becomes entirely expendable.

The Union

It is the beneficiary. Its co-operation is bought by the builder who secures a membership fee for it from the tradesman. But it is not so much the money that the union is interested in. With every ticket it issues it gets control over another worker. A worker who breaches union rules is liable to expulsion. A worker expelled from a union is unemployable on the building site. This provides a powerful incentive to stay onside with the union. Whilst the union retains control over the worker's livelihood, it retains control over him. Whilst the union retains control over him, it retains control over the builder. Power and control flow round the circle.

But there is another player in this whole arrangement. That is the government. The government is neither builder nor union. Why does it become a party to this agreement?

Questions of power and control are very dear to the heart of government. It likes to see industry running smoothly, with everyone in his proper place. But why should a government wish to deliver such power and control to unions? The unions themselves could become centres of power threatening the government itself.

I cannot develop this theme at length in this speech, but I think what we are seeing in Australia today is power sharing arrangement between government and union officials. Union leaders are being given wide power in government decision making. In return these leaders give government wide power in decision implementation. First of all, they do not use their resources to frustrate government policy. Secondly, they become internal policemen, locking in and disciplining those under their control. This is enormously useful to the government. It doesn't have to sell policies to ordinary workers whilst it has a quasi police force of union officials doing that for it, making sure that the workforce does not grow restive and making sure they implement the joint government-union decisions.

Thus, the true corporatist nature of the arrangement is revealed. Those sitting at the top of the tree share decision-making power and then go back to those placed in control under them to enforce and implement the decisions.

But I digress.

On the building site we therefore have the hostage, the victim, and the beneficiary. The hostage buys the co-operation of the beneficiary by delivering over to it and control over the victim. If we stop there we might ask ourselves what is the difference between this arrangement on Australian building sites and protection rackets as operated in New York.

The most obvious difference to me is that those profiting in Australia do not speak with a Bronx accent! Few Australians would immediately think of the extraordinary similarity between this kind of practice and an ordinary protection racket. This is because once the name 'union' is put on anything in Australia it is perceived differently, and public tolerance rises remarkably.

One of the first groups to recognise this was an organised element in Melbourne which ran an organisation called 'The Ship Painters' and Dockers' Union' in the 1970s. They couldn't believe their luck that ordinary criminal activity that would otherwise put them behind bars for years became quite respectable once it was done in the name of the trade union. So handsome was the prize of controlling this union that a war broke out in the underworld to get control of it.

The mistake made by those running The Ship Painters' and Dockers' Union was that they got too greedy. They began a practice called 'ghosting' which extorted multiple wage packets for the same person under different names. They should have stuck with extorting only the one wage packet with multiple payments inside it.

A Royal Commission was set up to enquire into the Painters' & Dockers' Union. This commission became known as 'The Costigan Commission' and finished uncovering the whole gamut of criminal activity, including tax evasion, killing and the rest.

Some may say an important difference between a protection racket and an 'industrial reality' is that the methods used in an 'industrial reality' are more subtle. The threats to the victim are not physical so much as economic.

A subtle threat does not make extortion and blackmail any the less. the law has never regarded extortion and blackmail as being limited to physical threats only. Under Section 87 of the Victorian Crimes Act 1958 blackmail is defined as follows:

'87. (1) A person is guilty of blackmail if, with a view to gain for himself or another or with intent to cause loss to another, he makes any unwarranted demand with menaces; and for this purpose a demand with menaces is unwarranted unless the person making it does so in the belief:

(a) that he has reasonable grounds for making the demand; and

(b) that the use of the menaces is proper means of reinforcing the demand.

(2) The nature of the act or omission demanded is immaterial, and it is also immaterial whether the menaces relate to action to be taken by the person making the demand.

(3) A person guilty of blackmail is guilty of an indictable offence and liable to imprisonment for a term not exceeding fourteen years.'

There is little doubt that on the building site a union organiser with a view to gain for himself or another (the union) makes demands (the closed shop) with menaces (or we'll close your site down). The menaces do not have to be physical. The only question as to whether the crime would be made out is whether the demand is unwarranted. A demand is unwarranted unless the person making it believes he has reasonable grounds for making it, and that the promised menaces are proper means of reinforcing the demand.

In a trial for blackmail the arbiter of whether a person had reasonable grounds for making the demand would be the jury---12 men good and true. It is here that community standards would apply. This is a nice legal teaser which invites us to ask whether, according to community standards, the demand that each and every person entering a building site purchase a union ticket, is a reasonable one. The question is one of manners and morals. I address it with not inconsiderable trepidation, seeing, as I do, the of great theological learning before me. In situations like this I am fond of quoting Robert Bolt:

'I know what's legal, not what's right, and I'll stick to what's legal'.

I take my first refuge in statistics.

Do Australians consider the demand for a closed shop reasonable?

1. Roy Morgan Research Centre

Data collected by the Roy Morgan Research Centre between 1942 and 1986 on the question: 'Should membership of trade unions be compulsory or voluntary?' discloses the following:

	1942-	1986
	52% voluntary	83% voluntary
	36% compulsory	14% compulsory
	12% undecided	3% undecided

Public support for voluntary unionism has consistently increased between 1942 and 1986.

77% of trade union members in 1986 thought union membership should be voluntary. In the light of these figures we may ask from where does the mandate for the closed shop come?



2. International Standards

Australia is party to various international covenants by which it proclaims to the world fundamental inalienable human rights it is determined to uphold.

Such rights are contained in the UN Declaration on Human Rights 1948, Article 20:

'Every one has the right to freedom of peaceful assembly and association. No one may be compelled to belong to an association.'

Similar sentiments are expressed in Article 22 of the International Covenant on Civil and Political Rights.

The Bills of Rights which have been proposed by the Hawke Government would all rest, constitutionally, on these international covenants. Strangely enough, our Bills of Rights have not included the right of freedom of association. This is a right habitually abused in modern Australia. Its omission from prepared Bills of Rights is very significant and I cannot believe it was other than deliberate.



3. On what basis do those who justify it consider it reasonable?

Recently I was speaking at a Graduate Seminar at Melbourne University, when I was castigated by a union official who maintained that by defending the rights of workers not to join unions I was doing no more than defending scabs and parasites. You will agree the mixed metaphor of scabs and parasites conjures up truly a ghastly picture.

The argument is that only a parasite would derive benefit from a union without paying for it. An after-dinner speech is not the time for a detailed discussion on these sorts of images.

I will answer this point, however, by taking another example. I compare the trade union movement with the RSL although I confess this is not an analogy which immediately commends itself.

Over the years the RSL has done a lot of work to obtain and improve benefits payable to servicemen. It has a colourful leadership.

The benefits it secures are available to all ex-servicemen, not just RSL members, and some ex-servicemen derive their sole income from these benefits. Could it not be said that all those ex-servicemen who benefit from the work of the RSL should have to join it and pay its levies?

Not so long ago the Vicar of St John's Anglican Church in Toorak resigned from the League. The resignation occurred with some fanfare because he resigned in protest about the actions of the colourful Mr Bruce Ruxton.

Even though he resigned from the RSL, I believe the Vicar is still entitled to the benefit of any increases in ex-servicemen's benefits that might be awarded in the future, or might be awarded because of the League's efforts.

Yet I did not hear any one call the Vicar a scab or a parasite. All I heard was much commendation for a courageous stand on a matter of principle.

I doubt whether even Mr Ruxton would deny the Vicar his right to make a protest in this way. Yet many deny the right to ordinary men and women to make a protest about leadership they find equally galling, and having denied them that right enforce it with an iron rod by putting them out of work.

Freedom is such a frightening thing for many people. Some say if you let ordinary workers exercise freedom there will be mass union resignations, and the world will stop tomorrow.

I do not think so. I think those unions which do a good job will attract members on their merits. Why is this issue important?

Some say people should not kick up a fuss about this issue, they say there is only a small number of malcontents and their rights are not important enough to stand in the way of the collective interests of other faithful union members.

Let me tell you about a man who lives in Melbourne. His name is Mr Frank Marett. Mr Marett has been a member of the Amalgamated Metal Workers' Union for most of his working life. He was employed by a multi national owned oil company in Victoria, for about 12 years until 1986. He is a man of strong religious convictions.

In 1985 men working at the oil refinery decided to strike a levy for the purposes of supporting the campaign of the Electrical Trades' Union against the South-East Queensland Electricity Board. The levy was $10 per week.

When Mr Marett was asked to pay the levy, he asked for a receipt so he could ascertain where the money was going. Those collecting the levy refused to issue receipts. Mr Marett was told various stories about where the money would go, and on one occasion he was told it would support the families of those on strike. Mr Marett took the view that welfare was a matter for the Church, a God-given responsibility that he was obliged to support by giving 10% of his income to the Church to which he belonged. 10% of his income was considerably more than $10 per week. He also had heard that the money might be used to try to bring down the Queensland Government. He believed that all lawful authority was given by God, and governments should not be brought down except through the lawful process of the ballot box. Consequently, he refused to pay the levy.

The matter was taken up with the management by his fellow unionists. The management concluded that there was the possibility that industrial action would occur if Mr Marett continued to work in the factory.

If such action occurred the company could lose $2 million. So the company removed Mr Marett from the workplace. They told him to sit in an aluminium hut approximately 8 feet by 12 feet. There was no furniture in the hut, but Mr Marett was allowed to bring in a chair to sit on. He was not given any work and he was given no desk to work on. He had no telephone. He was told he should not leave the hut except for meal breaks. Employees were told not to speak to him. Mr Marett was left in that hut for over 41Ú2 months, except for a five-week period when he was given work off the factory floor, because he refused to pay the levy. After 41Ú2 months the company dismissed him. Mr Marett's wife had recently given birth to their sixth child. When he was dismissed the family lost its sole bread winner.

This is a summary of facts which were found by the Equal Opportunity Board of Victoria. The company felt it was a hostage in the situation. On the one hand it had the possibility of a $2 million loss. On the other hand it had the troublesome Mr Marett. The company conceded it did not think of the third alternative---to convince unionists in the plant not to insist on extracting the payment from Mr Marett. Towards the end of his sojourn in what can probably be described as 'solitary confinement', someone offered to pay the money on Mr Marett's behalf. This offer was rejected. Those collecting the levy insisted that the money must be seen coming from the hands of Mr Marett himself.

From Mr Marett's point of view the issue was a matter of religious principle. From the unionists' point of view the issue was a question of power. From the company's point of view the issue was a question of expedience. It was expedient that one man should suffer for the good of many others. You will recall that this was the justification given for the death sentence imposed on Christ.

St John's Gospel, Chapter XVIII Verse 14:

' ... it was expedient that one man should die for the people.'

Since the foundation of Christendom, there has been a revulsion to that principle; a revulsion that has underpinned the system of British justice. The basis of our legal system is founded on the moral premise that it is better for ten guilty men to go free than for one innocent man to suffer. As a result, we quite rightly insist on hedging the criminal process around with all sorts of civil liberties which offenders might take advantage of, but from which the innocent take protection.

If we were to look at such matters in purely numerical terms, the good of the majority might occasionally be served by punishing an isolated innocent or two. But this is repugnant to our system of law and public morality.

Our society does not tolerate suppressing the basic human rights of an individual in order to accommodate collective interests. We realise that once one man's individual rights are compromised the freedom of all others is compromised too.

This is why we should not tolerate the abuse of civil rights in the workplace in the all so-brazen proclamation 'no ticket no start'. It proclaims an abuse that should not be tolerated, and it plants a seed that permeates and corrupts our industrial system in so many other ways. It indicates that we have compromised an important civil right at the behest of powerful collective interests. The former editor of the New Statesman, Paul Johnson, resigned from the British Labour Party because he perceived it had drifted into the ideology of collectivism. In an article entitled,

'Farewell to the Labour Party' he wrote:

'... in a system of belief where conscience is collectivised there is no dependable barrier along the highway which ultimately may lead to Auschwitz and Gulag. I do not intend to travel even one miserable inch along that fearful road.'

Nor do I.