The Accord: a class collaboration project that weakened unions

December 3, 2020
Nurses walk out of the Echuca hospital in 1986. Photo: Australian Nurses and Midwives Federation

The federal government might have been surprised that the Australian Council of Trade Union leadership was willing to discuss its workplace relations agenda. Prime Minister Scott Morrison’s working groups of business and union representatives started meeting in late June and finished in September.

But this approach is not new for the Australian labour movement: in the 1980s and 1990s, “consensus” politics and tripartite discussions supported Bob Hawke and Paul Keating Labor governments’ Accord with the Australian Council of Trade Unions (ACTU).

The Accord’s supporters promoted it as a comprehensive and equitable policy for a Labor government and the unions. Suppressing “sectional” — in other words, workers’ — demands was supposed to lead to non-inflationary, job-creating economic growth at a time when the capitalist economy was flagging.

The 1970s “stagflation” — a combination of inflation and rising unemployment — prompted Malcolm Fraser’s Coalition government to pursue “monetarist” measures, supposed to reduce inflation and bring new investment.

The policy framework for the proposed ALP-ACTU agreement was broad, but “wage justice”, tax and social security reform and the maintenance of real wages “over time” were central.

Agreement was possible, chiefly under the guidance of the Labor Party-led unions and the Communist Party of Australia (CPA) leaders of the then-Australian Metal Workers Union (AMWU). Their argument was that unions needed to support working-class economic intervention for the “progressive parts” of the Accord.

Laurie Carmichael, AMWU assistant national secretary and a key CPA figure at the time, was important in this.

The AMWU had spearheaded successful wage campaigns through centralised wage fixing. In 1981, however, the union settled a 35-hour week national campaign by agreeing to a 38-hour week and a pay rise. Importantly, it also accepted a “no-strike” provision, in favour of pursuing improvements in the “social wage” and industry policy.

The AMWU published a series of pamphlets, including the 1982 publication Australia on the Rack, in which it decried the problems of Australian manufacturing and talked up its new political orientation as a solution to the jobs’ crisis.

But its solutions ceded ground to the right and involved a social contract, imposed from the top, with an incoming Labor government and then negotiated with the bosses. As the Accord progressed, the collaboration with employers became increasingly direct.

Around 1986-87, the ACTU abandoned the idea that there would be wage rises without “productivity” trade-offs. At first, trade-offs were touted as “structural efficiency”. But, in truth, they were mostly work intensification. The same bargaining processes fragmented union campaigns along enterprise lines.

According to the ACTU’s Australia Reconstructed 1987 report, the social contract now aimed for international economic competitiveness: unions were not to worry about wages and conditions, but industrial regeneration. By 1990, workers were being told to accept a wage freeze to pay for their own retirement, through superannuation. With enterprise bargaining beginning in 1992, the previously described “new right” policy of individual enterprise negotiation of wages and conditions was accepted.

Workers were being conditioned to no longer believe they had the power to take action to determine their own wages. Instead, they should accept the employer’s agenda of “flexibility”, while the unions were subject to market discipline and the ACTU supported Labor’s free-market policies.


In government, Labor started to privatise many of the key federal public sector’s corporations, such as the Commonwealth Bank and Qantas, and re-regulate the rest of the economy, especially finance, to suit corporate interests.

Despite this, between 1990–1992, Australia went through its worst post-war recession, from which unemployment has never returned to below 5% and employment has become highly precarious.

The government’s main counter-claim to its critics at the time was that the Accord improved the “social wage”, especially through the re-introduction of public health insurance (Medicare) and greater welfare payments for the children for lower-paid workers.

However, taxes were cut for companies and for those in the top marginal rate. Meanwhile, grants to the states, which provided most public health care and education, were cut almost in half. Free university education was abandoned in favour of the Higher Education Contribution Scheme, and welfare payments were made more conditional.

As unions’ ability to defend incomes fell, so too did their membership. Union density — the proportion of members in the workforce — fell from 50% to 40% between 1982 and 1992, but then to 33% in just three years. By 1999, it was around 25%.

Unions’ collective power was slipping away, with wage cuts and delayed pay increases in each new agreement, or “mark” under the Accord.

Accords I and II had wages indexed to inflation, but no catch-up for past losses and discounts. Accords III and IV included some flat pay increases, but cut real pay above minimum levels and began award reviews which reduced working conditions. Accord V ramped up “award restructuring” and Accords VI and VII introduced enterprise bargaining.

In the 1980s wages fell, especially in awards, typically by between 17-29%. Workers tried to make up the difference with longer working hours and with women entering the workforce in larger numbers.

The fall in income was accompanied by an increase in inequality. Workers on the highest 20% of wages were not affected, but the remaining 80% took a hit, creating a “disappearing middle” in their incomes, with abject poverty among the lowest paid prevented only by adding in the new family payments.

Rights declining

Union rights continued to decline. Employers managed to sue some unions over their industrial action and much of the movement backed the government’s opposition to the Builder’s Labourers Federation (BLF) and the domestic airline pilots association, which had been willing to take industrial action, the latter in 1989.

Forced amalgamations, described as “strategic unionism”, became a means for some officials to live with the decline in union membership.

The decline in unionism, or reduced “reach”, can be partly explained by the near-end of compulsory unionism. More important for the decline in union power was the loss of delegate networks. Two large-scale Australian Workplace Industrial Relations Surveys, conducted in 1989-1990 and 1995, showed that the number of delegates compared with the number of employees fell by more than 12% in the period between the two surveys.

The Accord had an impact on workers’ motivation to become delegates — a sense of collective responsibility — because it tended to cut across solidarity with fellow workers, muted opposition to bosses and weakened individual unions’ capacity to take initiatives. The lack of struggle also weakened opportunities for new union leadership talent to emerge.

However, opportunities to resist and, perhaps turn this situation around, did exist in the labour movement. Shop committees and other union workplace-level structures did allow for planning for collective action, which employers tried to weaken.

The Accord introduced two new features that undermined this element of union democracy and unions’ class independence.

First, union hierarchies wanted shop committees to restrain industrial action and encourage industrial restructuring. If delegates thought otherwise, union officials would undertake “agreement without consultation” with the delegates.

Secondly, the emphasis on reaching a consensus brought into question the unions’ independence from employers in the workplace. When employers ran anti-union campaigns, such as in the South East Queensland Electricity Board dispute, at Robe River in West Australia and at Associated Pulp and Paper Mills in north-west Tasmania, union responses were limited to legal action.

Otherwise, consultation with employers was pushed, which led to the withering of famed delegate groups, including at the Ford Broadmeadows plant in Melbourne and Sydney’s Eveleigh railyards, and in the military production factories such as the naval dockyards at Williamstown in Melbourne and Cockatoo Island in Sydney, and the Ammunition Factory in Melbourne. These shop committees could not form a strategic opposition to the framework the Accord set up.

Wages push

However, between 1986 and 1990, there were militant upsurges around wages. At the end of 1986, 14,000 nurses, mainly women, struck in Victoria for 50 days to successfully secure equal pay and for a professional status at work. The ACTU opposed the strike because, it said, the strike was “beyond the limits of the … Accord”.

As the nurses’ strike began, however, the opposition to award reviews was weakening. The metalworkers union had called for modifications to the trade-off proposal, with its Victorian secretary John Halfpenny suggesting that unions should resume industrial action. The plumbers’ union, which had decided it needed a wages’ campaign and to take a “stand against the Accord” was fined, defeated and forced to retreat by 1987.

This followed the de-recognition of the BLF in the ACT, New South Wales and Victoria. Some other unions cooperated with the government to scoop up new members from the crushed union. Only a later reform in the Building Workers Industrial Union saved some of the former Builders’ Labourers as union militants.

By now, a relatively broad range of unionists were becoming more critical of the trade-offs and having discussions about how to try to secure real wage increases. This was highlighted by the heading off of a public transport strike in Victoria in the middle of 1988 when the state government and Halfpenny, who had become Secretary at the Victorian Trades Hall Council, managed to settle the dispute.

However, this opposition culminated in 1989-90, when domestic airline pilots, whose union, the Australian Federation of Air Pilots, had never been involved in the Accord negotiations, sought direct negotiations with employers and a 29% pay increase to restore their real incomes.

During the six-month-long dispute, the government supported the airline companies and deployed the military to defeat the pilots. The pilots’ defeat then isolated the transport and manufacturing workers who had been talking about a wages’ campaign.

At every step, the ACTU and large unions worked to crush opposition to the Accord.

Meanwhile, the Accord’s opponents lacked a political project to give them some independence from the Labor Party, except perhaps the nurses’ union before Victorian secretary Irene Bolger and others who had led the 50-day strike were ousted from their positions.

For union opposition to the Accord to have succeeded, it would have had to have been much broader, and taken up the Accord’s politics as class-collaboration between workers and employers.

Opposition to the Accord came most broadly from unions that criticised the ACTU’s lack of consultation before each new version was presented to them. Some unions, such as the plumbers and those in the food industry, which supported collective bargaining and the idea that members should direct their unions, admitted they didn’t take the Accord too seriously, thinking they could work around it. They were not consistent opponents, and largely remained affiliated to the Labor Party.

Many Western Australian unionists were opposed to the Accord. But they largely focussed their efforts on the state’s arbitration system, not believing they could have an impact on national union discussions.

A few unions and some union activists associated with small left parties opposed the Accord. A Social Rights Campaign, initiated by the Socialist Party of Australia and the Socialist Workers Party in 1983–84, did try to mobilise broader union support to break with the Accord. But activists found it difficult to extend influence beyond particular workplaces.

The Australian Federation of United Locomotive Engineers, the train drivers’ union, consistently stated its opposition to the Accord, and backed the pilots in their pay dispute.

In Melbourne, the tramways union dramatically struck in early 1990, leaving trams stationary in the streets, in what then-secretary Monica Harte described as a “whole new political development”. Yet the majority of the union officials and members also accepted a trade-off of pay rises for eradicating tram conductors’ jobs.

The historically left-led coalminers’ union, in a key raw materials industry, was in a more strategic position to lead opposition to the Accord. After two years of accepting deals, the union turned towards mobilising opposition.

Paddy Gorman, the editor of Common Cause, the Mineworkers’ Federation journal, canvassed how it would oppose job cuts and criticised the CPA and left union leaders for their “abandonment of class analysis and class struggle”. But the union took many months to get to strike action, only to eventually lose the dispute.

Perhaps the idea of achieving a consensus in industrial relations had appealed to many workers, but the experience of the Accord could not, because class politics had not disappeared.

Still, the Accord continued because there was no serious alternative on offer. There were opportunities to oppose the Accord within the unions, but they were not coordinated.

In the 1970s, as Gorman pointed out in a two-part interview with Direct Action in October-November 1987, the organised left in the unions — formed from militants in the ALP and various communist parties — had given them some degree of political unity. But the Accord ended that and a new party left had not been built.

There were other successful, although limited, challenges to the Accord. From 1993 onwards, some union officials put effort into developing industry bargaining, rather than enterprise bargaining.

There were also efforts made to create new parties to the left of the ALP, based on radicalising social movements and unionists moving away from Labor. This began with the Nuclear Disarmament Party in the 1984–85, the formation of the state-based Green parties and efforts by socialists to achieve greater unity.

[Jonathan Strauss completed a PhD thesis The Accord and working-class consciousness: the politics of workers under the Hawke and Keating governments at James Cook University in Queensland.]

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