Industrial Relations Society of WA

 
INDUSTRIAL RELATIONS SOCIETY OF WESTERN AUSTRALIA THIRTIETH ANNUAL CONVENTION

Busselton

19-21 October 2001

JON LONG & NERIDA AITKEN, presented by JON LONG, Clayton Utz, Lawyers

Jon Long, Partner, Perth Office

Jon has practiced in the workplace relations area for the last 15 years having worked initially in the trade union movement, as an advisor to government, and currently as a partner in the national law firm of Clayton Utz.

PART 1

INTRODUCTION: DEFINING COLLECTIVISM AND INDIVIDUALISM

The flyer for this Convention indicates that the purpose of this session is to discuss the pros and cons of individualism and collectivism. While this is a catchy topic sure to arouse your interest with the promise of some bloodletting, I would like to take the discussion a little further. But first, a disclaimer. I suspect that Toni Lucev has the easier topic to argue in favour of today, given that individualism represents the primary direction of industrial relations in Australia. Australian business wouldn't be sticking with it if it wasn't delivering the results they were looking for. However, there remains something to be said for collectivism. For the purposes of this paper, the position I will be arguing is as follows:

· the preference for individualism is not necessarily a result of some failing of collective industrial relations but in response to a wider social and economic trend;

· "collectivism" does not necessarily mean "unionism" or "unions";

· “collectivism" is not mutually exclusive from "individualism", as some typically "individualistic" practices have collective elements to it; and

· individualism is not necessarily a "one size fits all" arrangement for employers.

Before we start talking "isms", we need to define the key concepts.

INDIVIDUALISM

· the putting of private or individual concerns above the common or collective interests;

· a theory that nothing exists but the individual self; or

· the principle that all actions are performed for the advantage of the individual.

COLLECTIVISM

Principle of control by people as a whole. (The Macquarie Dictionary, 3rd Edition)

The above definitions are useful to get a broad feeling for the concepts. However, in order to examine the outcomes of individualism and collectivism we need to make a further distinction between the "substantive" and "procedural" aspects of both (Brown 1999). "Substantive" refers to the actual content of the employment agreements while "procedural" relates to the manner in which agreements are negotiated or finalised.

THE HISTORY OF COLLECTIVISM IN WA

Western Australia has had a longstanding 90-year exclusive history of industrial collectivism, commencing with the Industrial Conciliation and Arbitration Act 1900, an Act based on the New Zealand legislation in operation at the time. I don't propose to give a line by line account of the Industrial Conciliation and Arbitration Act 1900 or the subsequent legislation, the Industrial Arbitration Act 19I2 because it is beyond the scope of our discussion today and it is probably not the sort of thing you want to listen to, first thing in the morning following the Convention dinner!

However, it is important to note that within the Industrial Arbitration Act 19I2 a clear distinction was made between Ate standing of a union and an individual worker. This is not really surprising because even today, in the Industrial Relations Act 1979 the distinction still exists. Bu. interesting is some of the reasons given for the distinction. For example, in Re Coastal District Clerks Union ((1914) 13 W.A.A.R), Justice Burnside said:

"The legislature desiring that industrial peace should prevail considered that there was more safety in a multitude of opinion than in the opinions of the individuals and so authorised the aggregation of individuals into unions and entrusted the settlement of disputes to these persons subject where necessary to the intervention of the Court. It apparently approves the substitution of collective bargaining for individual bargaining and confers upon unions the exclusive privilege of approaching the Court."

Clear emphasis was placed on the need to maintain industrial peace, and this may in part be explained by the types of industries that were prevalent in W.A at the time, mining and agriculture - two industries which were highly unionised. But this quote also says something about the prevailing social mores - the emphasis on the collective. Its seems there was implicit acceptance that it was better, or more "safe" to consider the opinions of the majority rather than the opinions of a few and the only way of doing that at the time was through a union. It also seems that there was an assumption that there was commonality of interest amongst the workers and that the unions could effectively represent its members various interests.

Western Australia's history of exclusive collectivism continued until the Workplace Agreement Act I993 (WA). So what was the impetus for the change? It appears that the impetus for change arose not so much from the inadequacy of collective behaviour but rather, in response to a worldwide trend towards neoliberal economic theory and changing social mores.

THE IMPETUS FOR INDIVIDUALISM

It needs to be recognised that the push for individualism in industrial relations has not occurred in a vacuum. There are four (4) main factors can be used to explain the appearance of individualism in industrial relations theory and practice:

Social Changes

There has been a shift in the social mores of citizens in modem industrial societies, away forn a collectivist orientation towards a more individualist orientation. his shift has placed greater emphasis on self?interest and personal development. The reasons for this shift are varied. Some commentators attribute it to increased affluence. This in turn has promoted greater self interest including the further acquisition of material possessions at the expense of common values - the "me" generation (Giddens 1998 p 35). Ego, it would seem is no longer a dirty word, while others argue that increased affluence has caused primary economic needs to be supplanted by concerns with quality of life and opportunities for self-expression.

Economic Changes

Individualism is often equated to laissez faire economics, but I would argue, more specifically, that individualism relates to neoliberal economic theory. In the case of Australia, neoliberal economic theory really came to the fore after the deregulation of the financial markets and the floating of the Australian dollar which caused an increase in Australia's vulnerability to international competition. In 1985 the Hancock Report recommended that parties be able to come to an arrangement that would operate to the exclusion of awards.

As a result there has been a shift along the spectrum, at one end "pure collectivism" and at the other end "pure individualism". As companies improve productivity and efficiency they continue to look at new ways to improve productivity and efficiency - the next best thing. It is worth remembering that not too long ago enterprise-based negotiation was touted as a desirable objective for Australian companies. For example, the Business Council of Australia in its July 1989 Report stated:

"In brief, the Council's overriding objective is to create an industrial relations environment where people can work together more effectively and with greatest satisfaction; where the highest possible productivity becomes the goal for all; and where healthy enterprise performance provides the best outcomes for employers and employees alike. The Council believes that these objectives will best be served by a fundamental re~orientation of the system away from one largely focused outside the enterprise and adversarial in nature and towards one which is centred in the enterprise, develops a high degree of mutual trust and interest, and strengthens the direct relationships between employers and employees. "

The Business Council of Australia no longer pursues this position. So where did enterprise-based collectivism go wrong? It is more likely the case that enterprise-based collectivism did not go wrong. Rather, a move towards more individualistic arrangements was seen as the next best thing.

The Development of Human Resource Management

The rhetoric and language of human resource management has helped to facilitate the individualisation of employment relations by seeking to build a corporate culture of individual responsibility and "enlightened" self interest (Deery & Mitchell). Therefore, as human resource management has expanded and become more legitimate as a theory, so too have individualist values become more pervasive.

Political/Legal Changes

Governments have played a significant role in encouraging and facilitating the development of individualisation and so it is not surprising that it was not until the election of the Coalition state government in I993 that the first truly individual agreements, state workplace agreements, became available. Therefore, it needs to be recognised that promotion of individualism in Australia has been in part assisted by the dominance of the Coalition at both the state and federal levels. But, as we have seen this year, governments do come and go and it is individual arrangements which are most likely to be affected by the change of government.

COLLECTIVISM: THE ARGUMENT

So why do we have various modes of employee representation if individualism is the way to go? The rationale for employee representation, whether it is union or non-union, is two fold - productivity and equity (Gollan, Markey & Ross). The perceived benefits of employee representation include improved communication and information sharing, effective dispute resolution; enhanced employee bargaining power; fair and just decision-making; and improved morale and social cohesion (Gollan, Markey & Ross).

The Australian Workplace Industrial Relations Survey (AWIRS 1995) indicated that employers commonly had multiple motives for the introduction of joint consultative committees, with the improvement of communication and improvement of workplace efficiency or productivity ranking the highest (Gollan, Markey & Ross). Such collective agreements give employees a "voice". There is a good argument that where collective consultative arrangements are absent in the workplace, the "voice" often becomes lost, causing employees to exercise their "voice" through the exit option. Not a good option for employers given that low retention rates have become a major problem in many Australian industries.

Achieving an alignment of interests this way between the employer and the employees can be a powerful tool to ensuring greater organisational commitment by promoting mutual respect and responsibility.

And if productivity and equity don't interest you, it is interesting to note that overseas studies suggest that it can affect the bottom line - money. Research in Britain and in the United States suggest that the adoption of "best practice" human resources practices which include some form of employee representation have been responsible for improved market capitalisation of up to 15% (Fenton-O'Creevy, Wood and Callerot 1998 p. 9).

FORMS OF "COLLECTIVISM"

Perhaps an obvious but important point to note is that collectivism does not necessarily mean “unionism" or "unions", even though the rhetoric often used to justify individualism is to remove the perceived inefficiencies associated with union agreements or to increase managerial prerogative. If these are the arguments to justify individualism, I suggest they ape not specific enough and that they ignore the reality of collectivism.

In some ways, the topic of this discussion is like trying to debate how long a piece of string is. Collectivism comes in different forms and differing degrees. For example, apart from trade unions, “collectivism" can take any of the following forms:

· “non union" collective agreements, for example s 170LK certified agreements under the Workplace Relations Act 1996 (Cth).

· enterprise unions.

· work councils.

· workplace representative committees.

Non-Union Certified Agreements

Non-union certified agreements, as provided for in section 170LK of the Workplace Relations Act 1996 (Cth) represent a type of procedural collectivism because the reality is that the content of such agreements do not necessarily involve "substantive" collectivism. All that is required in the Workplace Relations Act 1996 (Cth) is that there has been consultation and a valid majority of he employees agree to the content of the agreement. However, there is no requirement for there to have been genuine negotiations between an employer and its employees. This point is made in recognition of the fact that employers exercise power not only in terms of the outcomes from any "negotiation" but also to determine what gets negotiated in the first place. That is, even with a s170LK certified agreement, Australian employers are still likely to have a fair amount of managerial prerogative.

Enterprise Unions

Enterprise unions are common in a number of countries, in particular in Japan and South Korea. While there is provision for enterprise unions in the Workplace Relations Act 1996 (Cth) (section 188(1)(c)), it is not something that has been readily taken up in Australia. There have only been a handful of applications for registration and one registered enterprise union has passed muster ? the Ansett Pilots Association. This is not a surprising result when you have a look at the requirements that have to be met prior to the registration of an enterprise agreement. More specifically, the broad range of agreements available under the Workplace Relations Act 1996 (Cth) has meant that there is little incentive for an enterprise association to seek registration when it can still assist its members to secure a non?union agreement or even an Australian Workplace Agreement.

Work Councils

I am informed by my co-author that work councils, like leg warmers, were fashionable in the 1980s as "employee participation" became somewhat of a buzz word - but unlike leg warmers, employee participation could still make a comeback.

Work councils have been adopted in numerous Scandinavian countries, Germany, South Korea and Taiwan. In the case of Germany, work councils have played a significant role in German enterprises by enhancing consultation and discussion on work issues, (eg. rostering arrangements) but traditionally work councils have not been involved in collective bargaining. Companies are therefore able to implement procedural individualism by offering individual agreements and also implement substantive collectivism by creating a work council to be involved in the discussion on a range of issues - the breadth of the issues would of course remain within the managerial prerogative of the employer.

In addition to work councils, there are also consultative councils. For example, in Germany, labour laws require workers and community representatives to sit together with shareholders on the supervisory board, the board above the board of management of corporations, to make policy-related decisions. Further, the European Union has adopted a consultation directive which requires large European employers with employees in two or more countries to establish a consultative council. Clearly, key European states have seen a need for ongoing and targeted collective arrangements.

But this is not to suggest that employee consultation is a new thing for Australia. Many companies have implemented employee consultative measures. even where the workplace could otherwise be characterised as "individualistic". It appears these companies recognise that such collective measures can be used to increase both productivity and employee satisfaction. Recent evidence from a study of non-union and lightly unionised workplaces by Campling and Gollan (1999) suggests that satisfaction with management and employee commitment are improved by greater participation and involvement of employees. However, it is also apparent from the research that a lack of a readily defined collective structure in a non or lightly unionised workplace produces greater focus on management's ability to implement change processes. This in turn often requires a significant amount of management time and resources to develop a culture that promotes positive organisational change.

To illustrate employee participation in a non-unionised workplace, I use the example of Thomas Tanks. A large company involved in the business of building military tanks and armoured personnel carriers. This example is based on a real company; but as they say on TV, the names have been changed to protect the innocent.

Thomas Tanks has decided to employ all of its workers on individual agreements only, but in order to communicate with its employees, it has established an employee representative committee consisting of representatives from each of its sections. The committee will meet with management on a needs basis, (but at least once a month), and the types of issues they discuss vary between negotiating a new individual agreement, the interpretation of specific clauses in the individual agreement and any planned restructuring. The details of such discussions are then fed back to the rest of the employees by the employee representatives in section meetings and the employee representatives then deliver the employees' responses to management at committee meetings.

So how would you describe this arrangement? In some respects it is clearly individualistic because it offers individual agreements, but the manner in which the agreements are drafted and negotiated could also be described as being collective. Which leads me to my next point viz: to discuss some of common misconceptions concerning individualised work practices.

END OF PART 1