Defeating capital's campaign to reduce cost of labour

Tim Gooden, secretary of the Geelong Trades Hall Council, at a protest in Melbourne.

Today, there are 55 workers still camping outside Carlton & United Breweries (CUB) in Melbourne, 16 weeks after they were sacked when their employer lost the maintenance contract for the brewery.

Most of these workers were directly employed by CUB until their jobs were outsourced in 2009. There was a hard fought campaign to keep the positions permanent but, in the end, the workers were forced to settle for contracts with no loss of income or conditions. Supposedly it was a “win/win”.

This tactic by employers to outsource and then seek cheaper and cheaper contracts is not isolated. But why is it happening and can it be changed?

The underlying pressure for companies to increase their profits every year is a fundamental driver of the capitalist system. The ongoing contradiction of sharing the wealth versus ever increasing profits is at the heart of employers developing tactics to reduce their labour cost.

Enterprise bargaining

This is not new of course. The employers’ campaign has been in full swing ever since the move away from an annual national wage case to the enterprise bargaining system of productivity trade offs for a pay increase.

The 1987 second tier increase marked a turning point in Australian industrial relations with full enterprise bargaining being introduced by the Paul Keating government in 1993.

If you look back over recent decades you can see the major successful campaigns that employers have pushed for and essentially won.

In the ’80s we had the Accord: basically, it was an agreement between unions, government and employers to cap wages and little else. Individual contracting began to grow and become the dominant employment instrument in the domestic building industry — so much so that today you cannot get a job without an Australian Business Number in that industry.  

Pyramid contracting was also a feature of this period. This was where employers attempted to reduce their liabilities by contracting down work to another contractor who would then contract down to another and so on. The failure of this system led to the collapse of several prominent government infrastructure projects and a royal commission that recommended outlawing pyramid contracting.

In the ’90s, labour hire companies grew. These were initially resisted but are now largely accepted and indeed sometimes even unionised with good EBAs. Labour hire in all industries contributes to the increase in precarious work. By the time of the Patricks dispute with the MUA in 1998, labour hire was here to stay.

Labour hire

The ACTU-commissioned report by Brian Howe highlighted the fact that up to 65% of Australians do not have permanent ongoing work. One of the consequences of labour hire is the punitive tactic of not hiring out workers who raise issues of safety or conditions — eventually starving those workers into submission.

From 1990 to the early 2000s employers took up the outsourcing of workers with great enthusiasm. Capital was encouraged by the federal government’s privatisation of services like the Commonwealth Employment Service, Qantas, ANL shipping, the airports corporation and of course the big one, Telecom, to name a few.

Some unions tried to stem the flood, the most famous at the time being the Skilled 6 who were prosecuted for trying to save jobs at Johnson Tiles. This resulted in the jailing of Australian Manufacturing Workers Union state secretary Craig Johnston.

Also during this period the John Howard government amended the Migration Act to allow in temporary workers from overseas. Initially it was limited to some sectors of agriculture but it quickly turned into what we know today as the 457 visa system.

This has become the ultimate exploitation system for the bosses to recruit workers from overseas and hold deportation over their heads. The number of temporary visas has grown each year since and today there are 450,000 people working in Australia with no security of employment.

There were some victories of course; the defeat of Howard’s AWA individual contracts was a major setback for capital. The campaign that forced the Kevin Rudd government to drop AWAs from the employment laws shows that capital can be pushed back.

This decade, the bosses have a new weapon: cheap non-union EBAs, which use a loophole being exploited by CUB, Viva Energy and Woods Group on the offshore oil rigs.

This involves getting a couple of workers in another state to vote on an agreement with substandard conditions and wages. It is then registered nationally so it can be applied to whole workforces in other states. So far this tactic seems to be successful and unless there is a massive backlash from the union movement to change the law, it is set to become the norm in Australia.

Small gains

Solutions are possible and Howe’s report on precarious work offered some campaign priorities for unions to focus on. Some small gains have occurred, like the recent win for casual workers who are now entitled to redundancy payments in the event of being sacked — cold comfort if you do not have a job, but nevertheless a gain.

This year the Victorian government commissioned an inquiry into labour hire. The report has been handed to government but is yet to be made public. It is hoped the report will recommend the establishment of a licensing or registration system for the labour hire industry. This would curb unlawful employment practices through an audit process or inspection regime.

However, the employers are arguing that the states do not have the power to enforce employment laws and given the federal government’s recent willingness to intervene in the Country Fire Authority dispute in Victoria, it is possible this could torpedo Victoria’s attempt to improve the situation for workers in labour hire.

So where does this leave us as unionists and workers?

The ACTU is currently conducting reviews of the unions to set new directions at the congress meeting next year. Some things being considered include amalgamation of resources, sharing data and rationalising national union offices. These things may be practical and necessary but it would not be enough to stop capital’s insatiable drive to lower wages. Without a discussion and a plan to oppose capital’s accumulation of wealth, all the reforming and rebranding will be a pointless exercise.

Recruiting youth

We need to consider first that one third of the Australian “baby boomer” workforce, including many solid unionists, will retire in the next five years. The union movement needs to recruit and mobilise 200,000 workers per year just to maintain current density levels. To grow we need to recruit 300,000 new members a year. Therefore we need to be relevant to young workers and show them how to win campaigns. This needs to be the ultimate focus.

We need to encourage progressive trade unions to get together and genuinely analyse the current situation. What would it really take to get most workers back into permanent work on wages and conditions higher than the award?

Forcing capital to share the wealth around with workers is not a new concept. However most union leaders today have not discussed this together or may not even see this as the primary task. We must work towards developing independent fighting unions that politically put members first. We need to organise national industrial campaigns that inspire and involve young workers.

We can no longer wait for politicians to come up with the answers — they will side with capital every time. The bosses have their plans and they are implementing them. Where is our plan? How will unions have this discussion and involve members.

This is not the whole answer but it is the first step to rebuilding the union movement, working class power and putting the neoliberals back in their box.

[Tim Gooden is secretary of the Geelong Trades Hall Council and a national council member of the Socialist Alliance.]

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