The Royal Commission into Trade Union Corruption (RCTUC) was $25 million well spent in the eyes of the Federal Coalition government.
The primary purpose of the Commission was to keep the issue of union corruption in the newspaper headlines in order to tarnish the reputation of unions.
Prime Minister Malcolm Turnbull may use the Commissions’ recommendations as a possible trigger for a double dissolution election. The recommendations call for heavier policing of union officials who break Australia’s extreme anti-union labour laws, as well as higher civil penalties for the officials themselves.
The Commission decided against recommending deregistration of the Construction, Forestry, Mining and Energy Union (CFMEU). This unions’ impending merger with the Maritime Union of Australia (MUA) posed legal difficulties for deregistration. Greater fines and state control over this relatively effective union is a safer bet than banning the union outright and forcing it into a battle of survival. The CFMEU has a proud history and tradition of industrial militancy that the government does not wish to unleash.
The Federal government also wants to reintroduce the Australian Building and Construction Commission (ABCC), the FBI-style body bestowed with extreme powers to combat effective trade unionism in the construction industry.
The more politically conscious layers of the working class see right through this biased legal charade. Commissioner Dyson Heydon is a cartoon-character conservative with well documented Liberal Party links. His Commission expressly ignored the corruption and systematic underpaying of wages and superannuation by construction companies and focussed only on the actions of unions.
This bias of the Commission and the legal system in general was seen when lethal negligence by construction company Grocon resulted in the deaths of three pedestrians. The company received only a small fine and no criminal charges were laid.
In contrast, CFMEU officials in Victoria were arrested by dozens of police officer in front of their families. They were charged with blackmail for undertaking long standing and non-violent negotiating tactics to benefit their members. The use of this serious charge is a dangerous precedent.
Unions in decline
Surveys consistently show the vast majority of working people support penalty rates and the other workplace protections that unions have traditionally fought for and won. Over the last few decades many of our unions have turned away from protecting and improving our workplace conditions and instead see themselves as vehicles to garner influence in the Labour Party. This has seen a reduction in membership to just 17% of the workforce. This shift to the right has opened the door to some dodgy practices and corruption in some unions.
It should come as no surprise that the Labor Right controlled unions have been the worst perpetrators. The Mafia-style fleecing of members money by Health Services Union of Australia (HSU) ex-President Kathy Jackson is the clearest example. Jackson has been ordered to repay $1.4 million of union members’ money she had misappropriated.
Rank-and-file HSU members had been complaining about Jackson’s corruption for years yet no-one listened. Now that it suits the government’s interests to taint all unions with Jacksons crimes the daggers have come out.
The other form of corruption that infects Labor Right unions involves the selling off of union members’ wages and conditions in return for cash donations from bosses. This money pays for union tickets to boost numbers and as a result the unions garner more influence in the Labor Party. When current Labor Party leader Bill Shorten-led the Australian Workers Union (AWU) the union accepted a $100,000 bribe from the construction company John Holland. In return the union promised industrial peace and halved the number of rostered days off for workers.
These disgraceful tactics are a product of the corporatisation of unions since the Accord years of 1983-96. In this era unions signed up to a Federal Labor government deal that guaranteed annual below-inflation wage rises in return for an end to militant industrial action. As a result of this deal internal union activism and delegate structures collapsed in many unions. Without strong rank-and-rile structures there was no longer any democratic check on the union leaders.
Some unions resisted this process and maintained industrial strength. The CFMEU is the best example and that’s why they were the real target of RCTUC.
Unlike the allegations against the Labor Right unions, the charges against the CFMEU (with minor exceptions) related to them being too bold and too militant, not too corrupt. In this case the bosses and their politicians want to weaken Australia’s strongest union to bring it into line with the moribund majority in the rest of the union movement.
The power of construction
Construction is a key industry in Australia with sales of $327 billion (21% of GDP) and an overall contribution representing 7.6% of GDP. One in every eleven Australian workers works in construction – a record high both here and in any advanced capitalist country.
Compared to the rest of the economy in this post-mining boom period, the industry is less stagnant with apartment construction booming (although apartment construction approval rates have recently dropped). This is fuelled by speculation in the industry thanks to generous tax concessions for property owners and rapid population growth in the major east coast cities. One industry magazine described high rise residential building approvals as “going gangbusters”.
This is has led to an uneasy and unofficial truce in the building industry between bosses and the construction unions. Employers, especially in Victoria, still grudgingly except a strong union presence in the industry, including on-site fulltime union delegates on commercial construction jobs.
However, there are signs of corrosion of hard-won wages and conditions. For example, many finishing trade employers (eg tiling, plastering and painting companies) sign an Enterprise Bargaining Agreement (EBA) with the CFMEU and make their workers join the union. However,in reality, these employers pay their workers a pay rate well below what they should be getting according to the EBA, forcing some to work as individual contractors. This is a cancer that will spread throughout the industry if not stamped out by the union.
For as long as the property market demands more high rise apartments it is likely the construction bosses will continue to agree to most of the CFMEU’s EBA demands, including annual pay rises of 6% and some other improvements.
However, it is likely that the current construction “gangbusters” anomaly will end in the next couple of years and this will give new impetus for the bosses to attack union-won wages and conditions in the sector.
As with other economic upturns, the property boom has overwhelmingly benefitted the bosses. An Electrical Trades Union (ETU) commissioned report undertaken by the Australia Institute showed that, across the country, the construction industry increased its productivity by 11%, the highest of any industry. Gross Operating Surplus as a return on capital is at 107% for construction, the highest of any industry and a figure five times higher than the average of all industries in Australia.
However when you separate out Victoria, where the construction unions are strongest, the picture is different. A recent Deloitte survey commissioned by the Master Builders Association showed that 43% of construction workers covered by EBA wages and conditions are in Victoria, where only 25% of the population live. Bucking the national trend, the labour share of income in construction in Victoria has actually increased from about 61% in 2003 to 80% now. Nationally the share dropped from 59% to 58% over the same period.
In any circumstance in which workers are receiving a decent chunk of the pie, bosses are going to eventually try to claw those profits back. This is a process in which the Royal Commission was employed to isolate and demonise Australia’s most successful union. A recent front page headline in the Herald Sun announced “WE CAN SMASH THEM”, leaving nothing to the imagination.
How can we fight back?
The strategy of the Victorian CFMEU leadership right now is to use its substantial financial reserves to pay the massive fines it’s receiving – $13 million over the last four years. It is also pumping millions of dollars into Labor and the Greens in the hope that a new government will take the heat off them.
Relying on these parties will not save our skins, as evidenced by the fact the Gillard Labor government kept the previous ABCC alive in all but name. A Shorten Labor government keen to appease big business would prove to be no friend of the CFMEU.
The future of our movement – the defence of our unions with proud traditions of struggle and the cleaning up of our unions that have been overrun by Labor Right crooks – depends on breaking from illusions in the Labor Party. We need to re-establish and revitalising the rank-and-rile structures of the past that won us the gains and conditions that are now being lost.
In other words, we need to rebuild our unions as democratic, active and militant organisation at the forefront of fighting for social change in Australia.
In construction, the first step must be to ensure that all union members get the benefits of the EBA. Too many workers are on lower rates of pay. Many of these workers are Chinese, Afghani and from other non-English speaking backgrounds. The union, while it still has the industrial strength, must wage a tough industrial campaign to ensure every member gets what they are entitled to. Such a campaign is totally winnable and will lead to greater class unity to push back other attacks.
Linking the fight against the exploitation of these mostly migrant workers to broader social issues like opposition to racism would quickly repair the union’s image in the eyes of many working class people.
Working class people must wage a fight now to protect what we have and fight for more. We are losing not only our wages and conditions, but our public education, healthcare and transport too. Linking the fight in the workplace to broader social questions will only strengthen to power of working people to shape the world we live in. The union militancy of the past, often led by socialists, needs to be revived now more than ever.
By Stephen Jolly