The Co-option Game: Enterprise Bargaining to Extend Bosses’ Plunder

Share with your friends


The Australian Labor Party, which has press-ganged Australian workers into an “Accord” with their bosses and tamed labour militancy through union amalgamations, has now entered them as competitors against each other via Enterprise Bargaining. The ALP couldn’t have industrially managed in the interest of capital against labour so effectively without the partnership of the Australian Council of Trade Unions. Like their social democratic counterparts and rightwing friends around the world, the ALP and the ACTU are desperately trying to keep capitalism breathing. Enterprise Bargaining is just the latest method of strapping down workers to give more blood.

ALP Prime Minister, Paul Keating, said in April 1993: “There is no economic reform more central than to complete the construction of a system of industrial relations which will enhance productivity, protect the weak and distribute fairly the awards of cooperation in the workplace.” This Accord-speak is familiar to workers after a decade of being pumped out through the bourgeois media and union journals. ALP ACTU honchos have turned terms like “productivity,” “flexibility,” “multi-skilling,” “wage restraint” and “international competitiveness” into everyday vocabulary in order to fabricate a “common sense”: that Australian capitalism is somehow independent from the global economy, Australian capitalism can recover, workers and bosses share a common interest in this recovery, workers’ wages and conditions have been responsible for the crisis, and workers’ sacrifice is the key to recovery. By now, unionists would recognise Keating’s words as code for another onslaught on their wages, conditions, jobs and rights.

Defusing militancy. In Victoria, more than a year of open class war has exposed this “common sense” as a scam. The business-driven Kennett government scrapped state awards, forcing workers once covered by them into individual or collective contracts with their bosses. This attack, combined with mass defunding of community services, swiftly turned Victoria into a flashpoint of class struggle. Working people proved repeatedly that they were prepared to defend themselves. The near-General Strike in November 1992 brought a quarter of a million onto Victorian streets, and subsequent strike rallies showed workers’ determination to defeat Kennett. The ACTU and Victorian Trades Hall Council (VTHC), terrified that events were getting out of their grip, told workers who had lost their state awards that they could be saved by transferring to federal awards. There’s no place for grassroots militancy, they said – certainly not for a political struggle which threatened to ignite resistance nationally. The ACTU and the VTHC crooned that the Keating ALP has offered an “escape hatch” from Kennett’s cruelty, offering these workers shelter under federal awards. Sure, an escape to another part of hell.

The federal ALP introduced enterprise bargaining in 1991 to replace the pre-existing centralised “wage fixing” system. Paradise, it’s not. No longer do workers get regular wage adjustments related to the Consumer Price Index (CPI). Instead, their only way of getting so-called wage “increases” is by “bargaining” with the boss, whether as an industry or workplace. Workers’ “safety net” is to be the inclusion of award standards in all agreements. What’s still enforced by this latest scheme is the fundamental relationship between capital and labour, forged by the ALP and the ACTU in the 1980s: workers must be more productive in order to get a wage rise, and only through the horse trading of their conditions. The workers themselves have been bystanders in this wheeling and dealing. Sparks of resistance have been brutally extinguished by legal sanctions and ACTU pacification.

The Keating government’s industrial relations regime is set to heavily police the worksite for the employer, including the enterprise-based bargains clinched by union brokers. Calling for more “cooperation in the workplace” and “enhanced productivity,” Keating and the ACTU intend to work the shrinking numbers in the labourforce until they drop.

Paying the penalty. The first hard-won gains to disappear with enterprise deals are penalty rates and the eight hour day. There are already examples galore. Three agreements exemplify what’s happening across all industries. The 1991 landmark enterprise agreement for the Daimaru department store in Melbourne wiped out penalty rates for its workers. Daimaru pays a higher hourly rate in exchange for its staff working all hours without extra pay. The 1992 Sheraton Towers agreement then cracked the hospitality industry. In a public relations extravaganza, ACTU President Martin Ferguson paraded beamingly around the hotel’s glitzy interior to dress up the despicable deal. For their higher hourly rate, Sheraton Towers’ employees work any hour of the day or night without compensation and take on duties outside their training and award classifications. This deal effectively broke struggle of unionists, led by hospitality workers, to defend penalty rates. It also opened the way for workers being forced to perform any tasks as directed. In a recent agreement struck with the Safeways supermarket chain, the Shop Distributive and Allied Employees Association (SDA) has extended the spread of hours worked at the ordinary pay rate and reclassified casual workers as part-time. The reclassified workers alone will lose about $100 a week, halving their wage.

Enterprise bargains in manufacturing and building are setting up the 12-hour shift as a normal working day. This trend, combined with the scrapping of penalty rates, is spreading into other unstable industries. An enterprise deal steamrolled by the management of Bonds underwear factory in New South Wales is forcing its workers to work 11.5 hours a day, or up to 48 hours a week without penalty rates.

Demobilised by over 10 years of “consensus” and court-imposed industrial peace, workers have been allowed no say or room to move within the Accord rules. Workers are accepting these deals, because they feel they have no choice. Bond told its 60 employees that if they didn’t agree to the conditions, the factory would close. Last year, Gazal Productions similarly coerced its 145 workers into an enterprise deal which dictated that they work part-time for five months per year and surrender holiday and sick-leave entitlements. “Annualisation” of wages and “flexibility” of rostered days off are other sleights of hand by which employers steal their workers’ penalty, overtime, holiday and other entitlements. On the face of it, workers see their “choice” as being the handing over of these award conditions or standing in the Social Security queues for the rest of their lives.

Predictably, women workers are principal victims of this “restructured economy.” The Australian Bureau of Statistics (ABS) reported in October this year that since the introduction of enterprise bargaining, women’s pay has dropped from 84.6% to 83.8% of men’s full-time earnings (which have also fallen). More than half of all employed women are still in two occupational groups – clerks (30%) and sales and personal services workers (24%) – and two industry groups – community services (30%) and wholesale and retail trade (23%). These points of production are the hardest hit in capital’s desperate rampage. Women make up 75% of the part-time workforce. Of the 1.3 million women in part-time jobs, 26% want to (ie need to) work more hours. These are the workers most brutalised by enterprise bargaining. They represent the most exploited workers – including young, Aboriginal and migrant – in the labour force.

These statistics practically duplicate those for New Zealand women under the 1991 Employment Contract Act which replaced the national award system with individual, site and enterprise contracts. Already trapped in the lowest paid jobs, NZ women have experienced the worst ravages of the wage cutting contract system. Thirty-six percent of employed women work part-time. They make up 73% of the workforce. Small workplaces, which employ mainly women, have imposed contracts which penalise absence through illness with dismissal and allow the boss to deduct pay up to 17% as a “disciplinary measure.” As with women in all capitalist countries, these conditions which working class women endure in New Zealand signal the misery of the most oppressed: Maori and Pacific Islanders and young people.

What’s so striking about enterprise bargaining is its resemblance to the contract schemes of the Kennett government in Victoria and the Bolger government in Aotearoa/New Zealand. Workers bargaining away their wages, conditions and jobs in order to become more productive for their capitalist bosses makes these rackets barely distinguishable. To a worker living with the effects – either at the worksite or on the Social Security queue – there’s no difference at all. Keating’s industrial strategy works hand in glove with those of Kennett. The only reason the union heavies prefer Keating’s system and not the others is that they are a party to the ALP one. (Even then, the ACTU had to threaten to sever their partnership with the ALP when the Keating government attempted to encompass the non-unionised workforce in enterprise bargaining, removing from unions their right to negotiate and approve all deals.) Kennett has abolished unions’ right to represent their members. This distinction underlies the sickening union movement slogan, “United we bargain. Divided we beg.”

Capitalism’s terminal illness. Contrary to the Accord propaganda, Australia is not an economic island. Like its “Social Contract” predecessors, enterprise bargaining can only be understood in its international context.

Capitalism isn’t a network of independent national economies. The saying, “When Wall Street sneezes, the world catches a cold,” correctly characterises capitalism as a global system of interdependent economies which, since the end of World War I, has been centred in the American boardrooms and stock exchange. That the United States is now the biggest debtor in the world signals that capitalism is in a critical condition. It’s been sick for a long time – throughout the lifespan of most workers. Starved of markets and debilitated by its contradictions, it doesn’t have long to live. And the contradictions are many.

Capitalist production requires workers. Their labour produces the goods and services, whose market value must exceed their wages and the owner’s other production costs. Workers’ productivity thus creates bosses’ profit. But workers are also consumers. Those whose wages are too low or who can’t sell their labour at all can’t buy. Over-production then becomes a crisis for capitalism, which it can’t resolve.

Capital must expand in order to survive. It needs markets. But opportunities for investment have been drying up since the 1960s. The relief which World War II gave to the severely depressed international economy of the 1930s didn’t last very long. By the 1960s, post-war reconstruction of housing and industry was completed, and consumer demands were met. Revolutions dotting the globe further diminished investment prospects. Economies exploited and pillaged by capitalist imperialism – plus a domestic economy wracked by workers’ inability to buy – offer no markets, and therefore no joy, for capital.

This crisis has manifested itself since the early 1970s. But business can’t give up the quest for expansion, or it will die. The owners must therefore spend more on raw materials, technology and other production costs. The only costs they can reduce is labour – either by cutting wages or employing fewer workers to do more work. This cost-cutting has meant the replacement of labour with technology. But machinery can’t produce profit: only waged labour can. Technology merely accelerates workers’ capacity to produce the commodities for market. Under such circumstances, machinery constitutes a cost, which the business owner can’t rectify or sustain.

Since the 1970s, industries in advanced capitalist countries have moved operations offshore to exploited economies where labour is cheap, unionism is suppressed and laws favour investors. Australian companies have thus shifted principally to countries in the Asia Pacific.

Military spending became an addiction for the US capitalists. But the huge deficit it created is a drain which capitalism can’t plug up. Efforts to reduce it have triggered unemployment and recession. Chronic price rises and inflation dominate American economic and social life. The sneeze from Wall Street has deteriorated into a life-threatening condition. Capitalism won’t recover.

No worker in the world is immune from this paradox of capitalism, as capitalists turn their problems into ours.

In Australia, the Accord has given only short-term relief to capital. An ABS study in December 1992 found that by 1989-90, wages and salaries made up only 64% of market sector income, compared with 74% in the mid 1970s. The share going to profits and capital expanded in this period from 26% to 36%. Bourgeois economists ET Phillip and DJ Spiers (Journal of Industrial Relations, March 1990) credit the Accord for keeping wages down 10% below what they would have been without this Social Contract. According to Phil Raskall, coordinator of a social and economic inequality study at the University of New South Wales (Green Left Weekly, 17 October 1993), the top 10% got substantially richer while the bottom 50% lost out considerably. In the 1990s, says Raskall, the rapid rise in unemployment and the labour market shift from full-time to part-time and casual employment have found the poor facing sharper loss while the top layer get richer through their dividends. The wealth of the bottom 50% has halved in the last five to six years.

The grim picture promises to get worse for working people. In its report, Impediments to Regional Industry Adjustment, the federal government’s Industry Commission recommends the abolition of awards (which Keating had flagged months ago), an end to the compulsory role of unions in employer-employee negotiations and equally ominous ideas for Social Security policy. The IC argues that business costs must cut further in order to deliver incentives to invest. Workers, both in and out of a job, are about to experience more vicious attacks on their conditions. Unions are about to be busted – by the ALP. Enterprise bargaining is a vital link in this chain.

Workers in the United States face similar impoverishment. From 1973 to 1992, real wages dropped 19%. During the 1980s, annual incomes for the richest 20% rose 14.7%; for the poorest 20%, they fell 3.6%. Nine hundred thousand factory jobs have disappeared since January 1991. In the first six months of 1993, 60% of new jobs were part-time (Freedom Socialist, December 1993 – February 1994). Enterprise bargaining, a cornerstone of US labour relations since the 1950s, delivered these results.

“International competitiveness” = Universal misery. “International competitiveness” is the buzz term stinging workers’ ears around the world. It’s a basic tenet of enterprise bargaining. Democrats, Republicans and labour movement bureaucrats in the United States tell workers that the solution is to “make America more competitive.” Sound familiar? ACTU Secretary Bill Kelty, who says he hates the words “class struggle,” joins his business and parliamentary buddies in offering up the same solution for Australia.

International competitiveness can’t possibly serve the interest of any worker, anywhere. The experience of North American workers under the 1988 Free Trade Agreement (FTA) between Canada and the United States tells us why, as will the social and economic effects on the working classes of those countries and Mexico under North American Free Trade Agreement (NAFTA). Canadian workers join American workers in common misery. Since the FTA’s implementation, 1.6 million Canadian jobs have gone. Canada’s manufacturing sector has shrunk 28% as businesses move to where labour is cheaper in southern US or Mexico. Permanent unemployment is above 14%. Living costs are soaring. US businesses claim that Canada’s universal healthcare system gives Canadian companies an unfair advantage. Free abortion, AIDS services and pre- and post-natal care are therefore under threat. NAFTA will reduce the conditions and wages of workers in all three countries to the lowest common denominator, those of Mexican workers. Social and ecological standards, already plummeting since the FTA, will nosedive even more (Freedom Socialist, December 1993 – February 1994).

Enterprise bargaining, concocted by the ALP and ACTU, is just another thumb screw for Australian workers. Pitting Australian workers against each other and against our super-exploited sisters and brothers overseas is guaranteed to intensify the social and industrial pain. It won’t even work for capital in the long run, as Stephen King recently warned readers of the Australian economic Review. He says that removing penalty rates in exchange for a higher base rate – “a key element is many enterprise deals” – might give a company a competitive edge in the market share. But, he says, “if all firms remove penalty rates, the resulting expansion in supply may drive down prices, reduce company profits, and, in the extreme, lead to the failure of some enterprises and the unemployment of their workers.” King is no Marxist, but he affirms the Marxist analysis of enterprise bargaining as one of capitalism’s last gasps. Capitalism is collapsing under its contradictions.

In a pathetic — and vain — resuscitation attempt, the Australian union movement and the ALP are now pushing for a 1% job levy to create employment. Effectively, workers are to subsidise bosses hiring more workers – most likely for part-time and casual work. Meanwhile, the Communications Workers Union (CWU), which covers Telecom workers, is proposing a cut in working hours, from a 73.5 hour, nine-day fortnight to a 32 hour, four-day week. However, this call for a shorter working week doesn’t incorporate the demand that workers’ take-home pay not be reduced. That the shaking of capitalism’s feeble foundations isn’t being instigated by the union movement bureaucracy is no surprise. Their job is to hold together this oppressive system, not bury it.

Organise! The challenge is coming from rank-and-file unionists. Forced by their officials to be the standard bearers for the Accord, Australian metal workers are leading the charge of unionists against it. At two delegates’ meeting on November 24th, Metal Trades Federation of Unions (MTFU) delegates acted on rank-and-file pressure to reject the Accord’s “multi-skilling,” which has deskilled metal workers, and enterprise bargaining, which has sold off their conditions. They explicitly rejected the link between wage increases and productivity. In the recent election of the Public Sector Union’s (PSU) Australian Capital Territory (ACT) branch, the membership resoundingly voiced their rejection of enterprise bargaining and the union’s lack of democracy. The new leadership they voted in, PSU Challenge, stood on policies including the return to public service-wide negotiation for pay to replace agency-based enterprise bargaining, opposition to the Accord and endorsement of a shorter week without loss of pay.

These are encouraging developments, which must escalate throughout the union movement. Unionists, shackled by their movement misleaders, are getting ready to break free. The necessity to do so is certainly there.

Competition, which is the essence of capitalism, isn’t the answer for workers. Cooperation through socialism is. Australian workers must solidarise with workers in the Asia Pacific, the United States and across the globe in a united struggle for our solution.

In Australia, working people must wage an uncompromising fight around these demands:

  • Defend jobs and create full employment by shortening the working week, with no cut in pay
  • Nationalise healthcare, utilities and other major and industries
  • Open the borders; full citizenship rights for workers from other countries
  • A living minimum wage for all
  • Restoration of, and increases in, penalty rates, overtime, sickness, holiday and parental leave and all other entitlements historically won by workers
  • Full compensation for injured workers, at least equivalent to the injured worker’s full wage, to last the duration of the injury.

These are demands which capitalism can’t deliver. Only socialism can.

The ALP can no longer masquerade as a party of the working class. It plays the treacherous role of a middle caste which objectively acts in opposition to its labour base. Class collaboration has steered the ALP firmly into the camp of capital, whose interests the party slavishly serves. The ALP and ACTU bureaucracies have teamed their resources to deliver workers’ heads to the business bosses at every front of the class war. Trotsky appropriately characterised such bodies as capital’s lieutenants.

Australian working people must therefore turn elsewhere for revolutionary leadership through which they can organise around these demands – and win them through socialist revolution. That leadership is internationalist and socialist feminist, whose program links together and fights around the global struggles of those most oppressed by capitalism and recognises that the vanguard is stepping forward from these ranks. These are the workers who have never been granted privileges by capitalism: women, people who are Aboriginal, of colour, disabled, young and older, lesbian and gay. They have the most to lose from defeat and the most to win from victory. As the worldwide class struggle escalates, the Freedom Socialist Party is expanding and advancing in the critical hot spots. Join us.

Share with your friends