Australian workers have some decisions of their own to make about the Howard Government’s WorkChoices legislation, currently transforming the industrial landscape.
In New Zealand (NZ), workers were attacked with very similar industrial legislation in the 1990s, and the hard lessons kept coming, even after the election of a Labour government. Aussie workers may want to consider what happened in NZ when they think about the most effective way to respond to Howard’s rightwing attacks.
Unfolding disaster for NZ workers. The NZ economy and industrial relations legislation were both transformed in the late 1980s and 1990s by neoliberal governments.
Without any consultation or mandate from the public, the Labour government elected in 1984 began dismantling the welfare state and liberalising the economy in response to rising unemployment and falling profits. This deregulation of every aspect of the economy — from finance to investment, to trade and labour markets — is often referred to as “the New Zealand experiment.”
The government began selling off state assets and introduced the Labour Relations Act (1987), which required unions to have at least 1,000 members. This saw many union amalgamations and the creation of general unions, as opposed to trade or industry-based unions. The result was a loss of industry power. However, because most of the attacks were not directed at the unions themselves, union leaders stayed quiet while the economic slashing and burning went on. The Award system, which ensured minimum pay and conditions for the vast majority of workers, survived this round of attacks, but not for long.
In 1990, a National government was elected. It continued down the economic path of privatisation and attacks on workers, introducing the Employment Contracts Act (ECA) in 1991. The ECA was a dramatic legislative change that removed the word “union” from employment law.
Using the standard rhetoric of rightwing parties, the ECA gave workers “freedom of choice” and the “freedom to be an individual” by not joining a union. The employment relationship between the individual worker and the employer became central.
The ECA was the weapon by which bosses were given legislated rights to attack workers directly on the job. It stripped workers of the right and the ability to have a united workforce and a closed shop. It legalised the use of scab labour. It eroded workers’ industrial power and gave workers little ability to negotiate improved wages, terms or conditions. While the Labour Relations Act limited the right to strike, the ECA eliminated it.
Before the ECA, workers were covered by occupational and industry awards negotiated by unions. Personal grievance rights for dismissal and unfair treatment were also accessed through union membership.
But the language of the ECA compelled workers not to join unions and gave employers the right to ban unions from worksites. The ECA gave employers the right to bypass the union and enter into individual agreements with workers — in fact, the ECA removed the distinct legal status of trade unions altogether.
Race to the bottom. The impact of the ECA, in conjunction with the attacks on welfare, was immediate and devastating. In 1990, the minimum pay and conditions of over 700,000 NZ workers was determined by an award or collective agreement. By the year 2000, that number had nearly halved to around 400,000.
A letter from a supermarket checkout supervisor to the NZ Department of Labour summed up the impact of the ECA on workplaces: “As soon as the Employment Contracts Act came in, everything changed in this place and we were told — now he’d do it his way. First, he got rid of the union, and some were threatened that if they belonged to the union they would be down the road. The contracts were never negotiated. We were called in one by one and given this printed document with a place to put your signature. Some of the young ones were not allowed to take their contracts home for their parents to read. The first year all of us who already worked there got penal rates. As people left or were sacked, the new ones went onto a flat rate with no set amount — they were all getting different wages. Within a year, there was a 90% rollover of staff.”
The numbers of workers organised in unions fell dramatically from 35% to 17%. Incomes fell for part-time workers, and 90% of the population ended up worse off by 1996 than they were in 1981. From 1984 to 1998, the top 10% of households increased their income by 43%, and the bottom 50% of households decreased their income by 14%.
Since then, there has been very little rebuilding of union density despite years of “Left” governments with relatively pro-union legislation. Labour’s election promises to remove the ECA were realised, but with the award system gone, and with it union density, unions remain in a weak position.
The loss of the award system and its regulation of wages and conditions for the majority of workers had a huge impact on Maori and Pacific Island workers and their families. A government report released in 2006 shows that those on low incomes have suffered since the late ’80s, with real wage increases far below inflation rates. Particularly, Pacific Island and Maori women have suffered, leaving their families living in poverty with overcrowding, poor health and low educational achievement prevalent.
The debate over the response to the ECA also led to a split in the union movement in the 1990s, with the more militant unions from the construction, transport and manufacturing industries forming the Trade Union Federation (TUF). TUF has since died. It wound up voluntarily in 2000 after the re-election of a Labour government. Almost all unions have since joined or re-joined the relatively conservative and Labour Party-led Council of Trade Unions.
The anti-worker legislation imposed in NZ has left an entire generation of workers with little or no understanding of trade unionism. Isolated workers in smaller workplaces may never have experienced a union in their working lives.
In addition to this, the lack of awards has left unions fighting for site-by-site agreements. The resulting lack of industry power means that unions have been tied into the grievance model of unionism rather than an industry-wide organising approach. The social concerns of workers have more or less been abandoned by many trade unions, as they are no longer “core business” and the priority for resources is achieving worksite-by-worksite collective agreements to protect pay and conditions.
Global economic squeeze. To understand why all this happened, we have to examine the bigger picture in which the New Zealand and Australian economies operate. Attacks on workers, like the ECA and WorkChoices, are predictable, because built into the capitalist system is the tendency to return less and less profit for the capitalist class. This fall in profits drives the capitalist class to attack the working class — it’s all about the money. This is unavoidable and provides the basis for class struggle.
The ECA was the response of the NZ ruling class to the world economic crisis of falling profits. WorkChoices is the Australian response. One need only look at rates of pay for service sector workers. Cleaners in New Zealand earn NZ$10.95 per hour, which represents an increase of around 80 cents over the last 10 years. In contrast, cleaners in Australia earn a minimum of AUD$13.57 per hour with additional payments for shift work and late working hours. It is these very conditions that WorkChoices aims to strip away in Australia.
Lessons for Australian workers. It is important to understand why the union movement failed to defeat the ECA. The answer is that union leaders failed to mobilise the unionised workforce. Many leaders stood in the way of organising efforts and undermined the rank-and-file calls for a nationwide strike. Instead, they called for workers to vote National out and vote Labour in the next time around. I’m sure this is sounding familiar to Australian readers!
The New Zealand response was ultimately limited to protests and a few scattered strikes. There was a lack of rank-and-file independence from the leadership who were too closely tied to the Labour Party and its electoral strategy. The small amount of activism and mobilisation from rank-and-file union members was not the nationwide response required to stop the ECA in its tracks.
Ken Douglas — then NZ Council of Trade Unions president — advocated a partnership model as a response to the ECA. Douglas addressed a packed meeting at the Auckland Town Hall to tell the crowd he would negotiate a better piece of legislation with the National government and that strikes would make the government less likely to negotiate. Douglas, like some union leaders in Australia, claimed the country had to face “the realities of global competition.” Douglas’s approach, predictably, failed. The result was a huge loss in union membership that left NZ workers weakened and with even less ability to respond collectively in the future.
Comparing the models. The organising model provides a different approach. Advocates of this model disagree with advocates of the partnership model. But the two approaches differ in terms of tactics, rather than strategy. The strategic goal is to win a climate where the relationship between business and labour is overseen by the government, resulting in workers getting a “fair deal.” A fair deal is understood to be a bigger slice of the cake that labour creates and business expropriates.
Where the organising model differs from the partnership model is in its argument that the way for workers to get a bigger piece of pie is by being much more organised and active at the grassroots. In short, bosses need a “slap in the face” with militant action to “see the light.” They need to be “convinced” in this way, because they don’t have an immediate interest in giving workers a fair deal. In contrast, under the partnership model, unions work to help bosses improve productivity and boost profits and in return, workers get a little more.
This notion of a fair deal is based upon nostalgia for the accommodation between capital and labour, the “social contract.” This approach existed in New Zealand from the 1930s and was in place in most advanced capitalist countries by the Keynesian post World War II era. But such an accommodation was only possible because of a capitalist boom that has long since passed. Since the long boom began to decline at the beginning of the ’70s, capitalism has increasingly tried to restore profit levels by breaking down the fortress economies of nation states in a quest for cheaper labour and cheaper raw materials. This process is called globalisation, and it came to New Zealand with a vengeance in 1984, when the Labour government began its economic reforms.
Now that New Zealand’s economy is dominated by highly mobile foreign capital and the role of the State has been greatly reduced, the prerequisites for an old-fashioned Keynesian social contract no longer exist. This economic shift means it is no longer possible to just vote for Labour and then make appeals for Labour in government to be nice. Attempts by unions to pressure the government to revive elements of the fortress economy have met with dismal failure. The Maritime Workers’ cabotage campaign, for example, tried to twist the government’s arm to intervene and give a break to Kiwi shipping companies. But those shipping companies are so economically irrelevant in the midst of an economy dominated by foreign capital that the government gave the campaign no attention. A similar union campaign to prevent the dismantling of manufacturing tariffs was also unsuccessful.
But this does not mean that campaigning to win leftwing reforms — the strengthening of the welfare state or protecting jobs in a global marketplace — is out of date. Some groups on the revolutionary Left abstain from such campaigns. They do not understand the importance that campaigns to win reforms have in radicalising people. Most workers join unions and take action because they want to improve their lives, not necessarily because they want revolution. So it is vital that the Left takes up the fight for the bread and butter issues. At the same time, it needs to advocate a militant grassroots strategy and tactics and point to the limitations of the current system to provide what workers want and need. The organising model is a big advance over the partnership model, but it too needs to be superseded by a class struggle model of unionism.
The organising model of unionism uses militant tactics to “snap” government and business out of their complacency and make the ruling class see that in the immediate term it needs to be a bit nicer to workers. In contrast, the class struggle model starts from the assumption that, in the era of globalisation, business and government will always be hostile and will always want to backslide on any concessions they are forced to give. It follows, then, that unions have to act independently from business and government and always maintain a militant posture.
The class struggle model of unionism is also based on the premise that in the era of globalisation, the primary allies unionists have are workers in other countries. Class struggle unionism is therefore avowedly internationalist. Examples of class struggle unionism can be found in the National Organisation of Workers (UNT) in Venezuela and the Bolivian Workers Centre (COB).
Where to for Australian workers? Some union leaders put the view that the award system is “outdated anyway,” so we may as well concede this and learn to fight a different way. Such concessions fail to appreciate that the award system represents years of hard-fought victories by earlier generations of workers. Giving up from day one should not be an option! It’s our responsibility to fight back for the generations who won these conditions, for ourselves and for future generations of workers.
A partnership approach to the campaign against WorkChoices will not work in Australia. The NZCTU headed by Ken Douglas adopted this approach when faced with a comparable challenge, and it failed. As a response to WorkChoices, it will also fail. The recent rhetoric coming from Australian trade union leaders shows that the Australian movement is on track to repeat the mistakes made in NZ.
Look at what Greg Combet is now telling workers. During the November 30th mobilisations he argued, “It has [been] confirmed that the only way to get rid of John Howard’s industrial relations laws is to vote against the government.” The morphing of the slogan, “Your rights at work, worth fighting for” into “Your rights at work, worth voting for” makes the union leadership’s preferred strategy clear. Yet the NZ experience showed that Labour won’t be able to “fix things up” when they’re elected. When Labour was re-elected in NZ in 1999, they introduced the Employment Relations Act (ERA) that became law in 2000. The ERA preserved many of the features of the National Party’s ECA.
The organising model is a positive alternative to seeing a Labour Government as the saviour, but this has limits in the era of globalisation. The organising model needs to develop into a class struggle model in order to win what working people want and need.
Your rights at work are worth striking for. Displays of anger are great, but only if they ultimately build to become actions that hit the government and the ruling class where it hurts — the bottom line. General strikes and mass protest actions are happening in other parts of the world. And they win. The recent backdown by the French government over its youth unemployment law came after millions of students and union members shut won campuses and walked off thew job to the streets.
The biggest lesson we have to learn in Neq Zealand is how to take decisive action over the issues affecting us, and how to win. Kiwi workers who have suffered under attacks like WorkChoices hope that Aussie workers learn from the unfortunate lessons from what went wrong in NZ. Despite a Labour government, we are still experiencing low union density, low pay rates, a real lack of industrial power and working people living in a prosperous country.
Stick together, Aussie. Build your courage, your confidence and your strength. Organise your rand-and-file movements. Fight for the union democracy. Retain the ability to take action even when union leaders say you shouldn’t. Take political action, or your right to do so will be taken away by John Howard and his wealthy mates. Don’t let what ius rightfully yours be stolen!
