The changing roles of trade unions in national political economies: a comparison between
Australia and the UK
Chris F. Wright, William Brown and Russell Lansbury
Introduction
Trade unions in Australia and the UK are historically closely related to the labour parties in each
country but their influence over economic policies over the years have differed quite markedly. This
paper compares the influence of the union movements on government economic policies over the
past three decades under both labour and non labour regimes. As globalisation increasingly
concentrates trade unionism within public sectors, the paper raises more general questions about
changes in union political influence in Europe and beyond.
During the 1980s and 1990s both Australia and the UK implemented market-oriented structural
reforms in response to substantial economic pressures. In the UK, the Thatcher Conservative
government introduced neo-liberal economic policies in the face of strong union opposition. Unions
experienced a major decline in power and influence, which contributed to rising economic
inequality. By contrast in Australia, the Labor government implemented liberal market regulation
complemented by ‘social wage’ provisions to protect standards of living for workers and their
families, which unions managed to negotiate in exchange for their support of economic reform. In
both countries, levels of union density declined substantially during this period and unions were
confronted by conservative governments hostile to organised labour. But the union movement in
Australia was able to successfully mobilise opposition to anti-union legislation by the Howard
coalition government and was influential in returning Labor to power in 2007.
Under both the Blair Labour government in Britain and the Rudd and Gillard Labor governments in
Australia, unions had some of their bargaining rights restored, and they managed to slow the fall in
membership density. Despite this, in neither country did the unions regain the power which they
exercised under previous labour governments. Nevertheless, the success of the Accord between the
union movement and the Labor governments in Australia contrasted with the failure of the attempt
at achieving an effective ‘social partnership’ in the UK, despite the favourable climate of the
European Union. Australian unions have retained greater influence with the current Australian Labor
government compared with British unions under the Blair Labour government. A new Accord has
not been sought by the current leadership of either the unions or the Labor Party in Australia. But
the success of the previous Accord laid the foundation for the relatively greater success of the
Australian union movement in influencing economic policy compared with their British counterparts.
Australian unions have also been more successful at retaining institutional influence within industrial
relations regulatory system.
The paper begins with a comparison between the trade union movements in Australia and the UK
during the 1980s and 1990s. During this period the governments of both countries introduced liberal
market economic reforms, but with significantly different involvement of the trade unions. The
resilience of the unions in Australia during the conservative Liberal-National coalition government is
during the next decade is then contrasted with the failure of the British unions to prosper under the
‘New Labour’ government in the UK. Finally, the contrasting fortunes of the two union movements
are compared in the most recent period when the Australian unions might have expected to achieve
1
greater influence under a reformist Labor government than they did. Nevertheless, the paper
concludes that the union movement in Australia has fared somewhat better than their British
counterparts due to their political leverage and the continuing importance of labour market
institutions such as the federal industrial relations commission
Unions and the transition to liberal economies: Similar ends, different means
Our starting point for comparing the divergent fortunes of the labour movement is the economic
crises of the late 1970s/early 1980s and the liberal market policies adopted by governments in
Australia and Britain in their aftermath. Although these crises had their origins in the recessions and
inflation, prompted by the oil shocks of the early 1970s, the presence of uncoordinated systems of
collective bargaining compounded problems of high unemployment and high inflation in a number
of countries, including Britain and Australia. In Britain, uncoordinated bargaining had its origins in
the emergence of the ‘informal system’ of workplace bargaining that had developed alongside the
‘formal system’ of industry and national collective agreements. A lack of control by unions and
employer associations over (informal) bargaining at the workplace level led to wage outcomes above
the terms of the (formal) agreements. The widespread practice of workplace union representatives
seeking to maintain ‘wage relativities’ contributed to ‘leapfrogging’, thus resulting in wage-price
spirals. Similar developments occurred in Australia, where unions pursuing wage outcomes at the
workplace which exceeded those established by occupational and industry awards produced
inflationary wage increases. The system of compulsory arbitration in Australia gave the state more
capacity to respond to these problems than in Britain, where the tradition of ‘collective laissez-faire’
was manifested in an aversion among unions and employers towards state intervention in wage
bargaining. Nevertheless, the problems of wage-led inflation and high unemployment persisted in
both countries until the early 1980s.
Both countries were also beset by industrial decline with inefficient manufacturing sectors. A legacy
of tariff protection that shielded Australian manufacturers from competition had entrenched
structural inefficiencies. A rising international demand for Australian commodities contributed to
declining for protectionism, which prompted the Whitlam government to cut all tariffs on imported
goods by 25 per cent in 1973. Australian manufacturers struggled through the 1970s against a rising
tide of cheaper, higher quality goods. Many manufacturing firms collapsed under the combined
weight of increased international competition and workers’ demands for higher wages, which
culminated in the economic recession of 1981 (Wright, Clibborn and Lansbury, 2011).
In Britain, the decline in manufacturing can be linked to inadequate adjustment to increasing
competition for the recovery of the German and Japanese economies and the steady loss of
traditional empire markets. More immediately, the arrival of North Sea oil in the 1970s strongly
affected the sterling exchange rate at which Britain traded.
Although governments in Britain and Australia successfully resolved problems relating to economic
underperformance and the impact of uncoordinated bargaining on wage inflation, the process by
which they achieved this outcome differed markedly. In Britain, the Conservative governments of
Margaret Thatcher and John Major orchestrated a shift in the macroeconomic policy framework
away from Keynesian demand management towards monetarism, with inflation containment
replacing full employment as the principle economic policy objective of government (Hall, 1993). The
state retreated as an active participant in the marketplace. A new competition policy was
2
introduced, government-owned utilities and services were privatised and industries hitherto
protected from market competition were deregulated. Tripartite institutions that governed
workforce planning, industry training and minimum wage rate for workers in low-paid industries
were all abolished. Although these reforms prompted significant protest from the union movement,
this did not deter the Thatcher and Major governments, which saw unions and collective labour
market institutions as central to Britain’s economic problems. As such, unions were marginalised
from any formal dialogue on national economic matters, to such an extent that they were ‘virtually
ignored by the government’ (Taylor, 1993: 265).
A shift in trade union power also occurred at the workplace through changes to labour market
regulation in the form of prescriptive employment laws that constrained the activity of unions,
which were seen as impediments to increased labour mobility and workforce participation (Taylor,
1993). Secondary industrial action and closed shop arrangements were banned and secret ballot
procedures before industrial action could proceed were introduced. This undermined the ability of
unions to create and maintain industry-wide standards through the collective bargaining process.
National and industry-wide agreements were broken up and laws obliging government contractors
to comply with the terms of public sector collective agreements were repealed. Unions struggled to
maintain influence in many industries and workplaces as a consequence of these significant shifts in
economic and labour market regulation (Brown, 1993; Brown et al., 2009). The defeat of union
control in the nationalised coal mining industry, following an industrial dispute lasting more than a
year (or more than a decade by some measures), was emblematic of the success with which the
Conservative governments were able to cripple the power of organised labour, both politically and
industrially. As well as heralding a sea-change from ownership of the state to the private sector in
many strategically important and hitherto highly unionised industries, it also saw the demise of joint
determination of working arrangements in favour of the principle of managerial prerogative.
The Conservative’s economic and labour market reforms were effective in weakening the influence
of unions, most significantly at the workplace. The proportion of workers in the private sector
covered by collective agreements or wage councils declined from 70 per cent in 1980 to 20 per cent
in 2004, while the proportion of workers whose pay was determined by individual negotiation with
managers increased correspondingly (Brown, 2010: 254). Wage inflation consequently ceased to be
a major economic policy concern.
Similar outcomes were reached in Australia through rather different means. Upon its election to
government in 1983, the Australian Labor Party (ALP) led by Bob Hawke and subsequently by Paul
Keating entered into an agreement with the Australian Council of Trade Unions (ACTU) known as the
‘Prices and Incomes Accord’ (the Accord). The Accord involved unions agreeing to moderate their
wage demands in exchange for a ‘social wage’ provided by the federal government in the form of
universal health coverage, welfare initiatives and superannuation reform. To this end, its central
object was to reduce both unemployment and inflation by controlling wage adjustments and
allowing interest rates and fiscal policy to be more expansionary than would otherwise be possible
(Lansbury, 1985).
The Accord provided the union movement, particularly the leaders of the ACTU, with considerable
influence on key decisions affecting the Australian economy undertaken by the Hawke and Keating
governments from 1983 to 1996. For the union movement, the initial trade-off for this influence was
3
short-term wage restraint delivered through centralised indexation. National Wage Case decisions,
handed down by the Australian Industrial Relations Commission, supported wage indexation on the
condition that the union movement adhere to the commitment to ‘no extra claims’, that is, no
demand for additional wage increases except under exceptional circumstances. After the severe
economic crisis of 1985-86, however, the government and the ACTU agreed to shift to partial
indexation involving a ‘two tier’ wages system. This began a steady movement towards a more
decentralised system of wage determination which culminated in the introduction of enterprise
bargaining in 1991 (Davis and Lansbury, 1998).
The ALP governments of this period also embarked upon sweeping economic reforms that went well
beyond incomes and labour market policy. Market regulations were liberalised extensively in order
to improve economic performance, which resulted in the floating of the Australian dollar, the
deregulation of financial markets and the banking sector, the privatisation of public assets and a
competition policy being introduced. Trade barriers were further reduced, significantly but
gradually. To cushion to impact of increased competition, the government introduced assistance
programs and ‘industry plans’ to facilitate their transition towards more productive and competitive
business models.
The period from the early 1980s to the mid-1990s saw the establishment of a liberal market policy
paradigm (Hall, 1993) in both countries, as economic and labour market reform heralded the shift
award from regulations aimed at protecting the position of local producers and workers towards one
aimed at exposing these actors to greater market pressure in order to improve their competitive
standing in a more integrated international economic environment. Superficially at least, the
transitions of the two countries towards this new paradigm were quite similar, at least in the sphere
of the labour market. Liberal policies that ushered greater competition into product markets and the
decentralisation of wage determination undermined the influence of unions at the workplace level.
Union membership levels in both countries declined precipitously. Wage inflation and
uncoordinated bargaining became less of a problem. But these similarities disguise some importance
differences with respect to labour market outcomes, particularly for workers, and the institutional
standing of trade unions, which was severely weakened in Britain but remained reasonably strong in
Australia. To properly understand this, we need to look at the period since the mid-1990s.
The institutional strength of organised labour in the new economic orthodoxy
The mid-1990s represented a turning point in the influence of unions in both countries. In Australia,
the election in 1996 of the centre-right Liberal-National (‘Coalition’) government of John Howard,
which remained in office until 2007, marked an end to the Accord and the privileged involvement it
afforded unions over public policymaking. In Britain, the 18-year reign of the Conservative party
came to a close with the period of ‘New Labour’ government from 1997 to 2010 under the
leadership of Tony Blair and Gordon Brown. The changed political landscape saw a hostile
government seeking to marginalise the union movement from policymaking and at the workplace in
Australia, and the ascent of a government with more benign attitudes towards organised labour in
Britain. However, the institutional position of unions remained relatively unchanged in both
countries. The Australian union movement maintained an important role in the employment
relations landscape via the award system and managed to defeat the Howard government’s
4
attempts to weaken it industrially and politically. A number of key reforms to improve the standing
of workers failed to disguise the ambivalence of New Labour governments in Britain.
John Howard’s statement that “the goals of meaningful reforms, more jobs and better higher wages,
cannot be achieved unless the union monopoly over the bargaining processes in our industrial
relations system is dismantled” best captures the Howard government’s philosophy towards
employment relations (Cooper et al., 2009: 341). To this end, it secured the passage of the
Workplace Relations Act soon after coming to power, which operated from 1997 to 2005. The Act
affirmed the shift towards enterprise bargaining ushered by the Accord, but sought to weaken the
involvement of unions and industrial tribunals in this process. This was achieved by introducing
provision for the use of individual contracts and promoting non-union enterprise bargaining.
Although the status of occupational and industry awards were weakened, in order to encourage
more enterprise bargaining, the award and industrial tribunal system remained prominent features
of the employment relations system. And unions retained substantial capacity to be involved in the
bargaining process, despite the limitations on union industrial action and the prohibition on union
preference (Cooper et al., 2009).
The Howard government’s objectives to decentralise and individualise the employment relationship
more comprehensively were thwarted by the bicameral nature of the Commonwealth Parliament.
The Coalition had a majority in the House of Representatives but was forced to modify more
extreme elements in order to secure the passage of the Workplace Relations Act through the
Senate. Such constraints were removed when the Coalition won a majority in both houses during the
2004 election, which allowed it to pass the more radical ‘Work Choices’ legislation the following year
unencumbered by the views of other parties. Work Choices imposed major restrictions upon union
activity and involvement in wage setting and workplace negotiations. Furthermore, it permitted
employers to use individual contracts to undercut the minimum standards of awards (which were
also weakened by the legislation), further eroded the power of industrial tribunals and abolished
unfair dismissal laws for any business employing 100 or fewer employees (Peetz and Bailey, 2010).
These reforms represented a serious threat to the union movement and its members. The ACTU
responded by coordinating a campaign to mobilise electoral opposition to the Coalition and the
Work Choices legislation at the 2007 election. The strategy, which relied upon a strong media
campaign and local community organising in marginal electorates, proved to be highly successful: an
analysis of post-election polling shows the union campaign to be the decisive factor behind ALP’s
defeat of the Coalition (Wilson and Spies-Butcher, 2011).
There is thus a sharp contrast between the experiences of the Thatcher and Major governments and
the Howard government in their respective attempts to use legal means to weaken the workplace
power of unions. As well as being unable to consolidate support for its Work Choices reforms, the
Howard government also largely failed in its attempts to cripple unions in strategically important
industrial sectors, particularly stevedoring, which was the site of the most significant industrial
dispute during its period of office. The Howard government’s encouragement of a key maritime
employer to replace a highly organised and militant workforce with a compliant non-unionised one
was frustrated by a highly effective response from the unions and, more importantly, an
unfavourable ruling against the employer’s action by the High Court (Dabscheck, 2000; Griffin and
Svensen, 1999). To this end, it was unable to replicate the Thatcher government’s successful
5
confrontation of the mining unions, a strategic victory that undermined the morale of the union
movement as a whole.
If the anti-union philosophies of Margaret Thatcher failed to become accepted as orthodoxy in
Australia, this was not the case in Britain. Although unions and the Labour Party had consistently
shared social democratic views towards the importance of unions for protecting labour standards
and the necessity of state intervention in the marketplace, the period of New Labour governments
from 1997 to 2010 represented a departure from this tradition. The introduction of safety nets to
provide some protection to the vulnerable was the main adjustment that the Blair and Brown
governments made to the economic and labour market policies of the Thatcher and Major
governments. Despite the requests of the union movement, New Labour refused to repeal the
Conservatives’ employment reforms of his predecessors, notably the restrictions on closed shops,
secondary industrial action and multi-employer collective bargaining, all of which had once served to
enhance union power (Davies and Freedland, 2007).
The Blair and Brown governments also rebuked the TUC’s request for a ‘social partnership’ model
involving unions and employers in the making of government policy. This model “no longer had any
relevance” (Wickham-Jones, 2000: 2). Blair told unions that they would not be given a “special or
privileged place within the Labour Party”; they were seen as the relic of an antiquated model of
employment relations, and a potential hindrance on Britain’s shift towards a modern and
internationalised economy (Taylor, 2001: 245).
New Labour governments were willing to accept some role for collective representation at the
workplace, which gave unions greater capacity to represent workers, but not to regulate wages and
conditions. Statutory recognition laws modelled on the US Wagner Act and the new representation
rights were introduced for workers to be accompanied during disciplinary and grievance hearings
and to information and consultation over various workplace matters. Unions were also given a
stronger and formalised role in the delivery of workplace training. New Labour was more supportive
of laws to strengthen the rights of individual workers. A range of new employment rights were
incorporated into British law from European Union law, including working time regulation, parental
leave and greater protections for part-time and fixed-contract workers. The introduction of a
National Minimum Wage in 1999, the greatest advance for workers’ rights under New Labour, was a
reform that the union movement had championed since the late 1980s. The Low Pay Commission,
the tripartite body established to advise the government on the minimum wage rate, was one of the
few bodies created by New Labour consistent with the social partnership model that the TUC
advocated.
The contemporary strength of unions and influence in the labour market
Compared to the early 1980s, the influence of unions in Australia and Britain at the workplace and
over public policy has diminished. But as recent developments reflect, this applies more to Britain
than to Australia, where the institutional standing of unions remains stronger by comparison. The
influence of unions over the policies of the ALP governments of Kevin Rudd and Julia Gillard since
2007 does not match the influence they wielded during the Accord years. They are no longer
formally consulted by the government in its formal deliberations in budget formulations, for
example, and the ACTU is not represented on the Board of the Reserve Bank, as was the case under
the Hawke and Keating governments. Nevertheless, after being effectively excluded from
6
government policymaking during the Howard years, Australian unions have reasserted their
influence under the Rudd and Gillard governments. They have been key actors in several important
policy areas, including industry policy, where they were closely involved in devising an assistance
package for automotive manufacturing, which despite problems remains an important strategic
sector for the Australian economy.
Unions also played an influential role in the formulation of the Rudd and Gillard governments’ labour
market reforms. After pledging from opposition to repeal the Howard government’s Work Choices
legislation, the Rudd government introduced the Fair Work Act in 2009. The ACTU was closely
involved in negotiations with government and business over the legislation, and was influential over
key provisions such as the abolition of individual contracts. The Act contained numerous other
provisions favourable to unions and workers, such a stronger award system, the requirement that all
enterprise agreements to be ‘better off overall’ than awards, an obligation on the parties to bargain
‘in good faith’, workers having their rights to unfair dismissal rights restored, a strengthened role for
‘bargaining agents’ in workplace negotiations and scope for multi-employer bargaining in low paid
sectors (Cooper, 2010: 265-268). There was dissatisfaction from certain quarters of the union
movement regarding other aspects of the Fair Work Act, such as continued limits on issues such the
contents of enterprise bargaining agreements, union right of workplace entry, and industrial action
(Peetz and Bailey, 2010). While the Fair Work Act may not completely reflect the labour movement’s
policy preferences, unions have nevertheless influenced other aspects of recent employment
reforms. The introduction of statutory paid maternity leave, reforms to government procurement
policy, the creation of the Road Safety Remuneration Tribunal and government support for equal
remuneration for workers in the childcare and social and community service sectors are all largely a
consequence of union lobbying (Kaine and Wright, 2013).
Unions have experienced less success in influencing the policies of recent governments in Britain.
The current government, a coalition of the Conservatives and Liberal Democrats led by David
Cameron, have expressed tacit support for more intervention in the market to support strategic
sectors, such as manufacturing. This is consistent with policies long advocated by the TUC that were
studiously ignored by governments in the three decades preceding the financial crisis. The union
movement has been one of the loudest and most consistent opponents of Britain’s liberal model of
market regulation, which critics claim was a direct cause of the crisis (Engelen et al., 2011). But aside
from tokenistic support for greater economic diversification and union involvement in workplace
skills delivery, the Cameron government has continued and sought to extend this model of market
regulation, much to the labour movement’s chagrin. The Cameron government has overturned some
key New Labour initiatives supported by the unions, by abolishing the Two-Tier Code that
maintained public sector employment standards among government contractors, dismantling
Regional Development Agencies that supported regional investment, removing funding to support
the modernisation of trade unions administration, and reducing government spending on public
services. The government has also made it harder to workers to lodge unfair dismissal claims and
sought to weaken collective bargaining in the public sector, which essentially remains the last area
of the labour market where unions retain a reasonable degree of organisation.
In sum, although the transition towards a more liberal economy and labour market has weakened
the position of unions, at the workplace and at the national level, the labour movement retains
much greater political influence and industrial power in Australia than in Britain. These divergent
7
fortunes appear to have influenced labour market outcomes. In both countries, roughly every
second worker was a member of a union in the early 1980s; this has declined to 26 per cent in
Britain (14 per cent in the private sector) and 18 per cent in Australia (13 per cent in the private
sector). These figures disguise the influence of unions over wages and employment standards: while
collective bargaining applies to only 31 per cent of British workers, 45 per cent of Australian workers
are covered by a collective agreement, and a further 16 per cent exclusively by an award. Thus, six
out of every 10 Australian workers have their pay and conditions determined by instruments
negotiated by unions, compared to three out of every 10 British workers. Moreover, all Australian
employees enjoy access to a generous system of superannuation to assist them in retirement, which
was a signature entitlement that unions negotiated during the Accord in exchange for wage
moderation. Equivalent retirement pension schemes are only widely available to public sector
workers in Britain and are being rapidly eroded even there. Prior to the 1980s, both countries had
relatively equal levels of income inequality and low rates of workers in low-paid employment in
international terms. By most measures, average wealth is now notably higher in Australia than in
Britain, and income inequality has increased substantially more in Britain. Although the earnings
share of national income is roughly equivalent, it has declined at a much steeper rate in Britain.
While these outcomes are affected by a large range of factors, they are strongly influenced by the
processes of pay determination, which generally produce more favourable outcomes for workers if
unions are involved in these processes. The continued (tacit) incorporation of unions in award
determination and in the enterprise bargaining process in Australia has allowed workers to gain
generally more favourable outcomes in terms of wages and workplace conditions than in Britain,
where the regulatory framework makes it difficult for unions to establish new collective bargaining
arrangements. Although the proportion of Australian workers covered by awards and enterprise
agreements has declined from 96% to 61% since the mid-1980s this decline is less dramatic than in
Britain, where the proportion of workers covered by collectively negotiated instruments (i.e.
collective agreements and wage councils) fell from 80% to 31% over the same period.
Explaining the divergent fortunes of unions in Australia and Britain
Given the strikingly similar economic development towards a liberal framework of market
regulation, there are several factors that can help to explain why unions in Australia have managed
to retain a stronger position in the employment relations system than their British counterparts.
These factors include the political leverage of the union movement, the influence of unions in
economic policy making, the structure and interests of the unions and employers and the strength of
the labour market institutions in each country. For the purposes of this paper, the focus is placed on
two inter-related factors. First, there was the success of the accord between the unions and the
Hawke-Keating Labor governments in Australia, compared with the failure of the unions in the UK to
achieve a social contract with successive Labour governments. Second, the Australian unions have
had superior political leverage with Labor governments compared with their counterparts in the UK.
This has paid dividends for the Australian unions not only in terms of their influence on labour
market policies but also in relation to broader social and economic decisions by Labor governments.
The success of the accord versus the failure of the social contract in relation to economic and social
policies of governments
8
The contrasting success with which governments responded to the stagflation crisis of the late 1970s
and early 1980s is one factor that helps to explain the divergent fortunes of unions. In Britain, the
failure of incomes policy was caused in part by the incapacity of the TUC to gain support for wage
moderation among its affiliates. The problems of uncoordinated bargaining by shop stewards,
especially over ‘piecework’ or performance-based payments, had emerged in the 1960s but
intensified following escalating inflation in the mid-1970s, which compelled unions to seek wage
increases in line with price increases. The Wilson and Callaghan Labour governments tried to bring
these pressures under control through an incomes policy called the Social Contract, through which
the TUC exchanged legislative concessions to enhance recognition, as well as both collective and
individual rights, for wage moderation among its affiliates. The Social Contract was unable to fulfil its
objectives because the TUC’s affiliates were unable to control the shop stewards from negotiating
wage outcomes with local management in excess of national benchmarks. Incomes policy collapsed
in spectacular fashion in the winter of 1978-79, when public service workers across Britain went on
strike to recover their relative pay position which they had lost because they had followed the rules
of pay restraint which the private sector and nationalised industries had successfully ignored.
Whereas the Conservative government of Edward Heath had unsuccessfully encouraged unions to
reform their structures to improve bargaining coordination, Thatcher sought to radically reform
employment relations, and consequently Britain’s economic problems, by using legal and economic
reform to marginalise unions.
Unlike Thatcher, who saw unions as beyond reform and sought to confront their power, the Hawke
government resolved Australia’s stagflation crisis by cooperating with unions. Like their British
counterparts, prior to 1983 Australian unions had contributed to price inflation by seeking higher
wages without coordinating their bargaining strategies. It dawned upon union leaders such as Bill
Kelty and Laurie Carmichael that this strategy was ultimately self-defeating, because higher wage
outcomes were simply causing prices to further escalate, and in some cases sending employers out
of business. The lessons learned from the British experience were instructive for the development of
a different approach in Australia. Ralph Willis, who as a senior ALP parliamentarian and former ACTU
official was one of the Accord’s chief architects, was directly influenced by the failure of Britain’s
incomes policy and, in particular, the role of uncoordinated union activity played in its downfall.
Whereas the main benefit that British unions accrued from the Social Contract was greater
involvement for the TUC in a relatively narrow range of legal concessions to assist trade unions, the
Accord went much further by exchanging wage moderation in return for ambitious ‘social wage’
provisions. The benefits of the social wage were, in the long term, considerably greater than the
costs of wage moderation. This gave workers and the ACTU’s affiliates a much greater stake in the
maintaining their commitment to the Accord compared to the British situation, where the benefits
of policy input accrued from involvement in incomes policy was more intangible to unions and
workers, and seemingly incomparable to the costs of wage moderation. Thus the key difference
between the Australian and British experience stems from the design of incomes policy: giving
unions and workers a greater stake in Accord provided them with an incentive to keep it together,
whereas the lack of such a trade-off gave their British counterparts less incentive to adhere to the
Social Contract even if their slight control of fragmented bargaining had permitted it.
Involvement in the Accord gave unions the capacity to be involved in other areas of economic
policymaking, such as industry policy, which arguably led to better outcomes for workers in the
manufacturing sector in Australia. Believing that Britain’s manufacturers were unable to remain
9
competitive in a more open market economy, the sector was allowed to decline under the Thatcher
government and its successors. While manufacturing decline is also a feature of recent economic
development in Australia, the Hawke government and its successors have implemented policies
designed to support the manufacturing sector, which have essentially averted its complete collapse.
The most successful of these policies was the industry plans of 1985-92, which involved a tripartite
model of policymaking incorporating union and employer input, and which largely succeeded at
improving the efficiency and quality standards of local producers and allowed the sector to remain
viable, at least in the short-term.
The Political Leverage of the Union Movements in Australia and the UK
A factor relevant to the divergent fortunes of British and Australian unions is the timing of their
electoral cycles: if a conservative government had been in office in Australia and had a Labour
government maintained power in Britain during the key decade of the 1980s, the outcomes may
have been rather different. Furthermore, the nature of parliamentary democracy, party politics and
political ideology are important political factors explaining why conservative governments have been
more successful at marginalising and weakening unions in Britain than in Australia. The majoritarian
nature of Westminster democracy and a model of policy-making dominated by a select number of
key central ministries and senior ministers typically results in UK governments with power akin to
‘elected dictatorships’ (Burch and Holliday, 2004: 2-3). As well as allowing governments to pass
legislation with minimal constraint or need to compromise with other parties, it also reduces their
need to involve organised interests in the policymaking process for the purposes of sustaining
broader community support for reform (Greenwood and Traxler, 2007: 323-324). This system
allowed the Thatcher government to pass legislation weakening the power of unions with little need
to regard the opposing views of other parties or the labour movement. By contrast, the difficulties
that Australian governments face in securing majorities in both houses of parliament requires them
to negotiate with other parties, as was the case with the Workplace Relations Act, which the Howard
government was forced to modify substantially in order to gain sufficient parliamentary support.
When the Coalition achieved the rare feat of securing a majority in both houses in 2004, which
allowed it to pass an uncompromised version of its Work Choices legislation, the union movement
was able to mobilise sufficient extra-parliamentary support at the subsequent election to overturn
the legislation.
This case points to the importance of party politics in shaping the influence of unions in Australia
and Britain. While unions in both countries maintain a formal relationship with their respective
labour parties, unions have been able to utilise this relationship more effectively in recent times in
Australia compared to Britain, where Labour governments have more readily sought to demonstrate
their independence from the labour movement. The close relations between the ACTU and the
Hawke-Keating governments were unprecedented: Bob Hawke and senior government ministers had
backgrounds in the trade union movement and ACTU Secretary Bill Kelty was widely referred to as a
member of Cabinet in all but name. While union-government relations have not been as strong
during the Rudd and Gillard premierships, the links are nevertheless strong. Several senior
government ministers have worked as officials or leaders of unions prior to entering parliament, and
Julia Gillard has maintained a strong relationship with the labour movement and openly supported
several of its campaigns. By contrast, the New Labour governments saw union as an electoral and
economic liability. Tony Blair associated organised labour with the economic problems of the 1970s,
10
a legacy that had supposedly hampered the party’s electoral prospects for a generation, and
believed unions to be an irrelevant force in the context of Britain’s shift towards a more liberal and
service-based economy. New Labour went to greater length to enlist the support of business groups,
both for policy development and for fundraising purposes (Taylor, 2007).
The contrasting attitudes of political leaders towards trade unions since the 1980s signify the
importance of ideology. The laissez-faire tradition of British capitalism made it easier for
Conservative governments in Britain to assert the need to restrict union activity in the name of
protecting the sanctity of the free markets. Although unions had managed to gain an established
position in the British economy between the 1940s and the 1970s, this was in the context of
employment relations being governed by a system of ‘collective laissez-faire’, whereby employers
would negotiate with unions on a voluntary basis and without any legal obligations to maintain
bargaining arrangements. While free market views have also been influential in Australia, these have
competed with a strong tradition of egalitarianism that has traditionally resonated strongly in the
sphere of employment relations, as is evident in the design and objectives of the compulsory
arbitration system to protect the welfare of workers as well as allowing efficiency for business. The
primacy of the egalitarian tradition came under scrutiny in the 1980s and thereafter, as both Labor
and Coalition governments implemented business-friendly reforms to labour market regulation.
Nevertheless, the notion of fairness continued to resonate, as is apparent in the negative reaction to
the Work Choices legislation and incorporation of this notion into the title of its replacement, the
Fair Work Act. Australian unions have been successful at invoking the importance of equity in
defending their role in the employment relations system and in mobilising against attempts to
deregulate the labour market.
Conclusion
This paper has compared the changing roles of trade unions in the political economies of Australia
and the UK over the past thirty years. During the 1980s, and for much of the 1990s, the Conservative
government in the UK, under the leadership of Prime Ministers Thatcher and Major, introduced
legislation which restricted the activities of unions and reduced their influence on economic and
social policies. In Australia, during this period, the Labor government led by Prime Ministers Hawke
and Keating, also embarked on sweeping economic reforms but included unions in the policy process
through the Accord. While union density declined in both countries, the unions were involved in
industrial relations changes which included the transition from a centralised wage determination
system to a more decentralised one.
From the late 1980s to the latter part of the 2000s, the ‘New Labour’ government, led by Prime
Ministers Blair and Brown, provided the opportunity for unions to rebuild their strength. However,
which the government introduced some union-friendly legislation and established a Low Pay
Commission, it reject a broader social partnership with the unions and excluded them from any
major influence in policy making. In Australia, during this period, unions were subjected to hostile
legislation of the Liberal National Coalition government led by Prime Minister Howard. However, the
union movement mounted a successful political campaign that led to the defeat of the Howard
government and the return of a Labor government.
The Australian union movement did not regain the influence on policy under the Rudd or Gillard-led
Labor governments that it enjoyed during the Accord era of the Hawke and Keating governments.
11
Yet the unions did gain the benefits of legislative reforms which restored the primacy of collective
bargaining and strengthened the role of the federal industrial tribunal. While the British unions have
maintained a high membership density than their Australian counterparts, the current ConservativeLiberal Democrat Coalition government has overturned union-friendly legislation by the previous
Labour government and have weakened collective bargaining in the public sector where unions have
their greatest coverage. Hence the unions in both countries face an uncertain future as they
experience a continual decline in their membership density as well as erosion of their influence on
economic and social policies of government.
In a world in which trade union coverage is likely to diminish further in many countries, but where
there are growing concerns about the social and political consequences of increasing inequality,
there are deeper implications. There is a growing need for institutions that can uphold broad
principles of equality despite the swinging pendulum of power between economic interest groups.
The involvement of trade unions, based in the lives of working people, in some continuing mediating
body, is likely to be an important component of this.
12
References
Brown, W. (1993). The Contraction of Collective Bargaining in Britain. British Journal of Industrial
Relations. 31(2), pp. 189-200.
Brown, W. (2010). Negotiation and Collective Bargaining. In T. Colling and M. Terry (eds.), Industrial
Relations: Theory and Practice, 3rd Edition. John Wiley and Sons, Chichester, pp. 255-274.
Brown, W., A. Bryson and J. Forth (2009). Competition and Retreat from Collective Bargaining. In W.
Brown, A. Bryson, J. Forth and K. Whitfield (eds.), The Evolution of the Modern Workplace,
Cambridge University Press, Cambridge, pp. 22-47.
Burch, M. and I. Holliday (2004). The Blair Government and the Core Executive. Government and
Opposition, 39(1), pp. 1-21
Cooper, R. (2010). The ‘New’ Industrial Relations and International Economic Crisis: Australia in
2009. Journal of Industrial Relations, 52(3), pp. 261-274.
Cooper, R., B. Ellem, C. Briggs and D. van den Broek (2009). Anti-Unionism, Employer Strategy and
the Australian State, 1996-2005. Labour Studies Journal, 34(3), pp. 339-362.
Dabscheck, B. (2000). The Australian Waterfront Dispute and Theories of the State. Journal of
Industrial Relations, 42(4), pp. 497-516.
Davies, P. and M. Freedland (2007). Towards a Flexible Labour Market: Labour Legislation and
Regulation since the 1990s, Oxford University Press, Oxford.
Davis, E.M. and R.D. Lansbury (1998). Employment Relations in Australia. In G.J. Bamber and R.D.
Lansbury (eds.), International and Comparative Employment Relations: A Study of Industrialised
Market Economies. Sage, London, pp. 110-143.
Engelen, E., I. Ertürk, J. Froud, S. Johal, A. Leaver, M. Moran, A. Nilsson and K. Williams (2011). After
the Great Complacence: Financial Crisis and the Politics, Oxford University Press, Oxford.
Greenwood, J. and F. Traxler (2007). United Kingdom. In F. Traxler and G. Huemer (eds.), Handbook
of Business Interest Associations, Firm Size and Governance: A Comparative Analytical Approach,
Routledge, Abingdon, pp. 315-347
Griffin, G. and S. Svensen (1999). Industrial Relations and the 1998 Waterfront Dispute. International
Employment Relations Review, 5(2), pp. 63-77.
Hall, P.A. (1993). Policy Paradigms, Social Learning, and the State: The Case of Economic
Policymaking in Britain. Comparative Politics, 25(3), pp. 275-296.
Kaine, S. and C.F. Wright (2013). ‘Conceptualising CSR in the Context of the Shifting Contours of
Australian Employment Regulation. Labour and Industry, 23(1), pp. 54-68.
Lansbury, R.D. (1985). The Accord: A New Experiment in Australian Industrial Relations. Labour and
Society, 10(2), pp. 223-235.
13
Peetz, D. and J. Bailey (2010). Neoliberal Evolution and Union Responses in Australia. Paper
presented at the International Sociological Association World Congress, Göteborg, 14 July.
Taylor, R. (1993). The Trade Union Question in British Politics: Government and Unions since 1945,
Blackwell, Oxford.
Taylor, R. (2001). Employment Relations Policy. In A. Seldon (ed.), The Blair Effect: The Blair
Government 1997-2001, Little, Brown and Company, London, pp. 245-269.
Taylor, R. (2007). New Labour, New Capitalism. In A. Seldon (ed.), Blair’s Britain, Cambridge
University Press, Cambridge, pp. 214-240.
Wickham-Jones, M. (2000). New Labour in the Global Economy: Partisan Politics and the Social
Democratic Model. British Journal of Politics and International Relations, 2(1), pp. 1-25.
Wilson, S. and B. Spies Butcher (2011). When Labour Makes a Difference: Union Mobilization and the
2007 Federal Election in Australia. British Journal of Industrial Relations, 49(s2), pp. s306-s331.
Wright, C.F., S. Clibborn and R.D. Lansbury (2011). Becoming an Endangered Species? The Future
Viability of Australian Automotive Manufacturing. International Journal of Automotive Technology
and Management, 11(2), pp. 172-188.
14