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U.S. and Australia’s Tale of 2 Labour Laws

As long back as 2008, both the United States and Australia were grappling with labour law reforms.

In America, it was the Employee Free Choice Act (EFCA) put forth by the AFL-CIO and endorsed by the Democrats.

In Australia, after a decade in the minority, the Labour Party under the leadership of Kevin Rudd was back in power and bent on dismantling the anti-union program of its neoliberal predecessor. Labour’s alternative was still a work in progress, but it already had a name, Fair Work Australia.

David Brody follows the events in both counties to their conclusion and tells a tale about two labour regimes — giving the Australian version, and in a more narrative form, the American version.

The two countries, as products of Anglo-Saxon colonization, are cousins, and if one looks only at America’s trans-Mississippi West, more like mirror images, with parallel histories of frontiers, of indigenous peoples decimated, of gold rushes, distance from the core, hyper-urbanization. Even so, it is not commonalities, but you find differences to explore. And, in truth, it would be hard to find two countries so similar yet different in their approaches to industrial justice.

Evolution and shaping of laws in Australia from 1901:

For Australia, the starting point is 1901, when the six colonies federated into the Commonwealth. Intertwined with this historic event was the decision to hammer out a national labour policy. What better time to settle the endemic class strife that had afflicted colonial Australia? The country could afford to be generous, with one of the highest per capita incomes in the world then.

The emergence of Labour Party:

There was an emergent Labour Party to be placated, and, for its foes, a significant quid pro quo: protection of Australia’s budding industries. It seemed natural, with considerable precedent already in place, for Australians long accustomed by colonial rule to an interventionist state to embrace the Conciliation and Arbitration Act of 1904.

Court of Conciliation and Arbitration and Trade Unions take prominence

Strikes would not be tolerated. Instead, labour disputes would be settled by a Court of Conciliation and Arbitration empowered to hand down compulsory awards. Trade union representation was built into the system so that the quest for union “recognition” that so bedevilled American unions was simply off the table. Unions applied to the Court, and once “registered,” represented the workers who, in the Court’s judgment, fell within their jurisdictions. In 1907, in the landmark Harvester decision, the Court laid down the principle that awards should assure workers a standard of living reasonable for “a human being in a civilized community,” establishing a living wage as the final building block in Australia’s system of state-regulated labour relations.

Australia’s federal–state structure comes into life

Over time, this system took on a life of its own. Australia’s federal-state structure, in which federal authority was less clearly demarcated than in the United States, made for many complications but ensured that most Australian workers would be covered at one level or the other. It followed, since registered unions were in some measure creatures of the state, that the state would oversee their internal conduct. After the Second World War, communist/anti-Communist conflict so polluted internal union politics that the Commonwealth itself began generally to run union elections, using the very same electoral commission that ran the parliamentary elections. It similarly followed that union growth should be encouraged, hence near-universal provisions for union preference or compulsory membership. But little in the Australian system prompted unions to develop a shop-floor presence, with the result that the workplace was a realm dominated by shop stewards who were a law unto themselves.

Evolution and shaping of laws in the U.S.:

The American counterpart, the National Labour Relations Act, came comparatively late in American history, in the throes of the Great Depression, and after an individualistic ethos had deeply embedded itself in the nation’s labour jurisprudence.

The American state was probably unique in never regarding unions as illegitimate or unauthorized organizations. The freedom of workers meant they enjoyed the same rights of voluntary association as anyone else.

Reform ideas flowed back and forth, it was then that the New York Senator Robert F. Wagner pulled off, as renewed labour strife buffeted the New Deal, when he wrote the National Labour Relations Act of 1935.

The Wagner Act was defined by workers’ rights, but with freedom of association, not individual liberty, at the centre, and—a key innovation—freedom of association linked to a right to collective bargaining.

Afterwards, collective bargaining took hold and soon became a hallmark of the booming post-war economy. At its height in the mid-1950s, organized labour represented eighteen million workers, a third of the labour force. It was also Australia’s peak moment: 59 per cent of the labour force belonged to unions in 1954.

Both movements, however, were comparably successful, in terms both of material returns and of political/economic clout. But they had arrived there by different routes, one leading to industrial awards, the other to union contracts.

The law that Wagner crafted in the shadow of the Supreme Court can be likened to a mini-constitution, subject on a vast array of questions to interpretation by the NLRB and, ultimately, by the federal courts.

Between Australia and America, of course, the processes of de-unionization differed.

In the United States, the switch was either on or off. Either a union was the bargaining agent or it was nothing. In practice, turning the switch off— decertifying a union—was comparatively rare. Employers found it easier to close union plants and then fight like the devil, with the law at their backs, to operate elsewhere union-free.

In Australia, with its awards system, the metaphor was not America’s on/off switch, but something like a commercial solvent, in which the union presence is at first intense; then dims; and, at many sites, disappears as the changing law, culminating in Work Choices, eroded state-mandated union functions, eliminated compulsory or preferential membership, and gave employers the means to erase the union presence.

Yet despite these stark differences and somewhat different timing, the outcomes were virtually identical. In both countries, union densities fell by roughly two-thirds from their mid-1950s peaks, down by 2007 to 20 per cent in Australia and 12.5 per cent in the United States.

Consider now the proposals themselves. The Employee Free Choice Act was drafted by the AFL-CIO, given a legislative dry run after the Democratic congressional successes in 2006, and reintroduced, without change, following Barack Obama’s victory in 2008.

Fair Work Australia was a far more ambitious affair. It was a government bill, presided over by the deputy prime minister, and given a full-dress inquiry. The ACTU, employer groups, and even the states and territories (in hopes they might agree to a uniform system across all jurisdictions) participated. It took a full year, but what emerged was a comprehensive reworking of Australian labour law.

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