Manajemen | Fakultas Ekonomi Universitas Maritim Raja Ali Haji 2002 19

EMPLOYER MATTERS IN 2001
LOUISE THORNTHWAITE AND PETER SHELDON*

T

he expected surge of employer militancy did not eventuate on the legislative or
industrial fronts. Employers appeared largely satisfied with the federal regulatory
framework and continued to experiment with the choices it offers. In an election year
and facing an unwilling Senate, they pulled back from their legislative crusade.
Industrially and in the courts, large, adversarial employers have been losing as often as
winning. Paradoxically, the main employer associations have more successfully navigated
the challenges of a decentralised system. They played leading roles in a number of test
cases and in defending employer interests in the face of legislative activism from Labor
state governments.
This was a year of not a few surprises. Events during 2000 had suggested that
employers had begun to really use the opportunities available to them under the
Workplace Relations Act 1996. Most operated in relative public anonymity and were
happy with their various arrangements. However, some of Australia’s largest
employers had developed a vision, as if waking from a part-forgotten dream, and
moved to realise it by more radical use of the structural opportunities that the
1996 Act allowed. The vision was of a subservient, compliant workforce largely

untouched by unions or protective regulation. In this process, they had had much
help over recent years from the ‘Workplace Relations Club’ (the Club)—that band
of radically unitarist true believers ever rotating among government departments
and ministries, employer associations, companies and consultancies. Central too
had been the ready support of a federal Coalition government with a sharply
honed sense of how to convert political correctness into facts. As these forces
coalesced during 2000, a new strategic wave of legislative agitation, litigation and
lockouts had gathered to bend and break workforces to their wills. Nevertheless,
the federal Senate had largely broken the legislative force of this wave by
repeatedly rejecting extremist Coalition (and employer) legislative proposals. As
well, the mainstream courts had proven a far less certain channel for litigation
than the Club had anticipated, in the process also weakening the force of some
lockouts.1
During 2001, once again, most employers went about their industrial relations
apparently content with the legislative framework they were working under. For
the Club’s vanguard employers however, events in 2001 and their consequences,
as well as questions of timing encouraged strategic withdrawal. As the tide ebbed,
many of those employers accepted consolidation and compromise on a number
of fronts. Governments, employers and unions all still attempted to make
*Louise Thornthwaite, School of Business and Informatics, Australian Catholic University, North Sydney,

NSW 2060, Australia. Email: L.Thornthwaite@acu.edu.au. Peter Sheldon, School of Industrial Relations
and Organisational Behaviour, University of New South Wales, Sydney 2052, Australia.

THE JOURNAL OF INDUSTRIAL RELATIONS, VOL. 44, NO. 2, JUNE 2002, 263–289

264

THE JOURNAL

OF

I N D U S T R I A L R E L AT I O N S

June 2002

decisive forays and historians may, one day, note the unlikely tale that, during
2001, in the big set piece battles that these most adversarial of employers had
unleashed, unions gained far more than they had lost. Yet, there remains a
great deal of flux. The federal government has renewed its witch hunt against
building and construction unions and a number of important cases went the

employers’ way. Away from the Club’s chosen terrain, coordination among
employers appears to have remained a winning formula in major defensive
campaigns against manufacturing unions and in lobbying state governments. If
anything, mainstream and non-partisan employer associations are looking more
useful to employers than predicted at the start of the decentralisation process.
So, how could large, extremist employers have lost ground when the system had
been so tilted in their favour?
One answer lies in unions’ demonstrated ability to slow and sometimes stop
or reverse hostile employer and governmental initiatives and to render them more
costly than they are worth to most employers. So, rather than the Club having
provided breaches in the wall for less audacious followers to widen, they have
demonstrated that such forward excursions can have uncertain and contradictory outcomes. Most employers and their associations are far more pragmatic
and tolerant than Club zealots and they know that there is much more to running a successful organisation than imposing some idealised industrial relations
nirvana. They increasingly acknowledge that they have reaped much already from
the last decade’s regulatory changes and recognise limits to more dramatic structural changes under the present system. The question then becomes why, during 2001, didn’t they maintain the intensity of their previously obsessive pitch
for ever more legislation?2
Answering this question links to another, broader reason why employer adversarialism—industrial and political—appeared to have stalled during 2001. First,
it would appear that it may have begun to meet social and political limits
created by employers’ own growing media and public unpopularity. Symbolically,
this particularly relates to senior executives of large companies, the sorts of arena

chosen for those big set pieces. As in previous years, there was a constant stream
of media information and comment regarding ever more grossly inflated managerial remuneration packages. Particularly damaging to the employer cause were
stories that juxtaposed these packages with stories of widespread forced redundancies of lowly paid employees to satisfy share market analysts and fund managers (and executive options packages). Increasingly, there were pointed questions
as to how such packages squared with corporate underachievements (and even
failures), particularly where such failures led to the loss of jobs and employee
entitlements. This had already been clearly apparent during 1999, and predictions then regarding the inevitable backlash have largely eventuated in the form
of more generalised populist distaste, Labor electoral victories, the Senate’s
obstruction of Coalition proposals, the passage of more restrictive state-level
employment legislation and a (yet halting) revival of unionism.3
The repeated Senate rejection of further New Right legislation in recent years
appears to have left employers and their representatives largely resigned to the
federal legislative status quo—itself a highly favourable situation they had helped

E M P L O Y E R M AT T E R S

IN

2001

265

create. Certainly, as discussed below, the possibility of a Labor electoral victory
in late 2001, dampened their expectations. Yet, while Prime Minister Mr John
Howard’s re-election victory may further embolden those most interested in antiunion adversarialism, discussion of industrial campaigns that backfired may prove
cautionary. In the meantime, employers are continuing to experiment with the
federal regulatory regime. On the other hand, events conspired to focus employer
association activity on state Labor government legislative matters during 2001.
This article continues by explaining employer activity in relation to federal
and state legislation. It then discusses employer choices regarding the range of
regulatory instruments available under the federal and some state systems: awards;
union and non-union enterprise agreements; and individual statutory agreements.
This leads to discussion of employer adversarialism and employer association
responses to a changing and challenging environment. Following this, we briefly
examine employers’ involvement in a number of major cases during 2001 and a
new Royal Commission whose main effects will be apparent in 2002 and 2003.
Prior to concluding, we discuss employer attitudes and behaviour in the field of
work and family policy.
As before, we have largely relied on (the sadly diminishing) industrial relations
coverage in the daily press and business periodicals; specialist periodicals (and
websites); employer association documents and interviews with prominent

association officials. Again, we have largely focused on the most influential
associations: Australian Industry Group (AI Group); Australian Chamber of
Commerce and Industry (ACCI); Australian Business Limited; Victorian
Employers’ Chamber of Commerce and Industry (VECCI); and the Business
Council of Australia. Once again, we are indebted to those officials for their time,
assistance and goodwill.4
In the face of various challenges, the re-badging of employer associations continues apace. This was the year that the NSW Employers’ Federation became
Employers First and Queensland Chamber of Commerce and Industry shed its
relatively new guise to become Commerce Queensland. Both choices are open
to a variety of interpretations. Far more significantly, 2001 was a year of very
important changes in senior personnel within the employer association world.
Some of this had to do with life and career cycles, some with the political cycle
and its effects on leading Workplace Relations Club figures. Furthermore, there
appears to be a continuing broadening of the recruiting patterns for senior positions within employer associations. Business Council chief executive, Mr David
Buckingham, resigned in April. His replacement, Ms Katie Lahey, formerly chief
executive of the NSW Chamber of Commerce, started at the Council in
September. In the meantime, Mr Colin Thatcher, the Council’s associate director (workplace relations) also left to become secretary to the Cole Royal
Commission. His replacement is Ms Maria Tarrant formerly head of RMIT
Training Pty Ltd. At the ACCI, there was similar significant change. Prior to
the election, ACCI’s industrial advocate, Mr Reg Hamilton, was elevated to

the vice presidency of the Commission. His replacement, Mr Scott Barklamb,
a former ACCI official, comes via the recently demised Court government in
Western Australia. Confirming its closeness to Coalition circles, former senior

266

THE JOURNAL

OF

I N D U S T R I A L R E L AT I O N S

June 2002

Reith staffer, Mr Peter Anderson joined ACCI as its workplace policy director
replacing Mr Brian Noakes who has retired. Significantly, too, following the
Coalition’s election victory, ACCI’s chief executive Mr Mark Paterson left to head
the federal Department of Industry.5 At Australian Business meanwhile, chief executive Mr Phillip Holt retired and was replaced in July by Mr Mark Bethwaite,
who comes from a business background. Finally at VECCI, chief executive Ms
Nicole Feely left, to be replaced by Mr Neil Coulson, a senior VECCI manager.

EMPLOYER

ASSOCIATIONS, FEDERAL POLITICS AND POLICY

Employer association surveys of their members and more informal feedback during the year showed, with the exception of the unfair dismissals question, a striking lack of urgency with regard to industrial relations matters. In fact, for
employers, tax questions and other forms of government regulation greatly overshadowed federal industrial relations matters in importance.6 This and the stalemate in the Senate have encouraged greater operational moderation to supplant
partisan stubbornness and wild ideological visions in some employer quarters.
There is a growing acceptance that to press forward relentlessly in this situation
needlessly antagonises workforces and their unions for, at best, only marginal
gains. As well, it invites retribution from unions and (potentially) Labor
Governments when the balance of power shifts, as has been the case in Victoria
with the Workers’ First faction within the manufacturing union.7 As ACCI’s Mr
Reg Hamilton tellingly put it, ‘It just seemed to the ACCI we were getting
nowhere. We were hitting our heads against a brick wall by concentrating on
issues where there were fundamental differences and not looking for solutions
on issues where we shared common ground with the unions and government’.8
The result of this re-thinking has been a string of successful joint initiatives
between ACCI, the ACTU and various governments that improve workplace and
labour market situations of both employers and employees.

Perhaps symptomatic of this shift in emphasis to immediate, operational and
pragmatic matters, was the Business Council’s vacating of the field for much of
2001. Speculation was rife in industrial relations circles that the dominant
employer propagandist and shaper of longer-term policy debate had succumbed
to the realisation that the Senate’s composition closed fruitful avenues for
further change and that large employers were largely satisfied with the status
quo. Another hypothesis was that, as for most other associations, other matters
were just more pressing for Council members. From within the Council, the
explanation was that this hiatus was the result of temporary gaps left through
senior staff turnover and that the Council is gearing up for its next cycle of
policy making which will unveil new, important directions in policy advocacy.9
Whatever the truth of the matter, previous initiatives, including the overblown
and excessively self-serving ‘Managerial Leadership’, appear to have lapsed. Policy
documents of the other principal associations, ACCI, AI Group, Australian
Business and VECCI pointed towards a preference for ‘evolutionary’ legislation—
particularly to increase restrictions on unions—rather than dramatic changes.10
After almost all state and territory governments had fallen to Labor in recent
years, by the end of August it looked as though Mr Kim Beazley would also lead

E M P L O Y E R M AT T E R S

IN

2001

267

Labor to power federally by year’s end. Employer bodies seemed to have accepted
that their salad days under the Coalition were at an end and prepared accordingly. One sign was the quickening of activity on the jobs carousel among
federal and state departments, employer associations and private consultancies.
Some associations, most notably AI Group and Australian Business, have long
worked hard to maintain an open, non-partisan relationship with all main political parties. Others did not indulge in the sorts of partisanship so obvious in recent
elections. The one exception continued to be ACCI’s Paterson, who continued
to act as the Coalition’s chief cheerleader in employer association circles.
Otherwise, the federal minister, Mr Tony Abbott’s advocacy of a unitary industrial relations system continued to receive employer association support as did
his repeated intention to ease the unfair dismissal regime facing small employers. However, Howard’s electoral scare-mongering of a Labor victory bringing
trade union domination across Australia failed to move employer associations onto
the offensive. Some, like ACCI, the Business Council and AI Group made efforts
to build media and public interest in saving those elements of the 1996 Act regime
that opposition leader Beazley had targeted for change. The watchwords were

maintaining flexibility, choice and the enterprise focus.11
For its part, Labor felt so emboldened by lack of public opposition from
employer associations that it repeatedly promised that, immediately upon election, it would legislate changes to the Workplace Relations Act regime. These
included restoring union rights of entry, the abolition of Australian Workplace
Agreements (AWAs) and the Office of the Employment Advocate, and bolstering collective bargaining and the Australian Industrial Relations Commission’s
(the Commission) dispute settling role. Tellingly, although accused of excessive
policy timidity, Beazley publicly delivered this message to the Business Council,
without the Council launching a heated campaign against him in defence of the
changes that it had fostered over the previous 15 years.12 Of further significance
was Council’s own stated electoral priorities. Here, new Council chief executive,
Lahey, echoing a broader employer interest in the question, tended to reinforce
Labor’s electoral message by stressing education and training, issues to which
she returned after Howard’s victory on November 10.13
Since the election, employer associations have largely re-presented the sorts
of demands that the government had failed to have passed in the Senate. Some
of these issues include the banning of pattern bargaining, a reduction in unions’
ability to use ‘protected’ industrial action and the further erosion of unfair dismissal responsibilities for small employers. While employer associations re-affirm
the line, it is not clear to what extent this lobbying is merely symbolic.14 As well,
there are mixed feelings in employer circles regarding Abbott’s proposals to
legislate for mandatory secret ballots before strikes. Perhaps this is due to awareness of the British experience where successful ballots strengthened the determination and legitimacy of striking unions.15
Thus, it is unlikely that the government’s third term legislative agenda will
create substantial enthusiasm among employer groups if the Senate again rejects
it. Perhaps another reason they now appear less fervent about further legislative
change is that there are growing concerns among members as to the excessive

268

THE JOURNAL

OF

I N D U S T R I A L R E L AT I O N S

June 2002

legalism the Workplace Relations Act has promoted. Unions have shown unexpected adroitness at navigating the dense thicket of possible litigation that the
Act provides to ensnare them. As a dominant strategy, employers have found three
main faults with the Act’s promotion of litigation in mainstream courts. First,
unions seem to be winning at least as often as losing. Second, this litigation is
much more expensive than proceedings before the Commission. Third, for those
employers who genuinely believe in resolving issues within the enterprise,
litigation is an unwarranted, adversarial diversion and one that reduces both parties’ commitment to building enduring relationships. This is, of course, precisely
one of the main charges that the Workplace Relations Club levelled at the
Commission for so long. It is interesting that the Club’s preferred legislative
framework—one that shifts contested matters from specialist industrial tribunals
to mainstream courts—has greatly exacerbated this alleged problem.16
As a result, there is a growing feeling among employers and their representatives in unionised sectors in favour of reversing the legislative weakening of the
Commission’s dispute resolution role that occurred throughout the 1990s.
Another reason the Commission may be looking more attractive now is that the
Howard government has continued shamelessly to stack the industrial relations
‘umpire’ with senior appointments who are not only overwhelmingly from the
employer world or Coalition circles, but include a number from a Workplace
Relations Club that is a sworn enemy of unions, collective bargaining and the
Commission system.17

EMPLOYER

ASSOCIATIONS AND STATE-LEVEL LAW AND POLICY

Faced with some activist Labor state governments, employer associations were
particularly busy lobbying for, and increasingly against, legislative initiatives. To
do this successfully, they were particularly active in communicating with their
memberships both through modern electronic means as well as through printed
matter and through regional-level open meetings with members to exchange ideas
and information. In fact, dealing with state Labor governments has taken over
many of the resources that, within previously centralised bargaining structures,
these associations had reserved for award making and bargaining. This is particularly true for VECCI, given that Victoria’s industrial relations jurisdiction,
to the extent that it has survived the previous Kennett government, does so as
an eviscerated appendage of the federal system. However, there is also a whole
range of related legislative areas that fall within state rather than federal jurisdictions and which have been subject to recent legislative activity. Thus, during
2001, some of the main areas included workers compensation (New South Wales,
Queensland and Victoria), the unfair contracts jurisdiction for highly paid employees (NSW) and occupational health and safety—including proposed criminal
penalties for individual managers (Victoria and Queensland).18
Associations increasingly use the importance (and success) of their lobbying
in their promotional marketing for membership. As an area of representation—
rather than commercial service—it is also a defining element in associations keeping a membership rather than customer focus.19 However, lobbying, even more

E M P L O Y E R M AT T E R S

IN

2001

269

than bargaining, would appear to run the risk of ‘free riders’ particularly among
small employers to whom a Labor government is simply a less threatening wolf
at the door than strong unions.
In NSW, Australian Business and AI Group were successful in entrenching
many of their priorities in Labor’s new workers’ compensation legislation.
Employer representatives argued that the existing system was too expensive for
employers and that employers had too little control over premiums. Smaller
employers in particular felt aggrieved that inclusion in particular industry
categories and ignoring of good safety records brought them unfair premium
levels. As well there was apparently a widespread sense in employer circles that
escalating compensation payouts increasingly go to lawyers, not claimants, and
that the rehabilitation system is open to ‘rorting’.20
While associations also advanced some innovative policies, given governmental
financial constraints, the crux of the debate came down to competing economic
interests. Thus, the planned restoration of Workcover’s finances will come at the
expense of employee entitlements rather than employers’ premiums. Employer
associations managed this in the face of a prolonged, broad and very heated campaign by Labor Council and a range of unions. The process and outcome ran
against the usual closeness between Labor Council and the Labor Party machine
and says much about these associations’ capacity to influence senior Labor politicians, their advisers and senior public servants.21
On behalf of Victorian employers and their associations, VECCI and AI Group
successfully spearheaded a campaign that ended in April when the oppositiondominated Victorian Legislative Council sank Labor’s Fair Employment Bill.
Central to the Bill was the government’s intention to re-constitute a full Victorian
tribunal jurisdiction with broad regulatory powers. Among the proposed tribunal’s
main responsibilities was setting a state minimum wage for those mainly small
businesses outside the mainstream federal system and to promote consistency with
federal employment regulation. More controversially, it was also to have the power
to oversee areas of non-award employment, to lift ‘the corporate veil’ to make
managers personally liable for organisational obligations and, as in Queensland,
to ‘deem’ independent contractors to be employees.
VECCI developed a range of themes to mobilise members and lobby. Some
related to worrying extensions of government regulation. Another built on an
insistence that many Victorian small businesses be able to continue to benefit
from Kennett’s low pay, low benefits regime rather than face similar costs paid
by other Victorian employers or those elsewhere in Australia. That the Bill had
the support of a few sectoral employer associations with members covered by
the federal system is indicative of this. VECCI and AI Group admit shortcomings
in the status quo and VECCI maintains it is keen to facilitate an alternative path
for gaining a ‘balanced framework of regulation’. VECCI’s and AI Group’s solution is to have federal Coalition and Victorian Labor governments agree to bring
low paid Victorian employees more fully under the federal system.22
VECCI and AI Group are also leading Victorian employers against the
Industrial Manslaughter Bill which was introduced to state parliament in
November. This bill flows from a growing conviction among researchers as well

270

THE JOURNAL

OF

I N D U S T R I A L R E L AT I O N S

June 2002

as the union movement that current regulatory (and self-regulatory) frameworks
have proven themselves inadequate in forcing a practical occupational health and
safety consciousness into the minds of many senior company executives.23 Under
the Bill, workplace deaths or serious injuries of employees or sub-contractors
could mean employers (and their senior managers) personally face criminal
prosecutions resulting in heavy fines and gaol sentences. This legislative proposal
is creating great anxiety among employers, particularly in the construction industry, that both VECCI and AI Group have mobilised through well-attended
regional meetings.24

EMPLOYEE

ENTITLEMENTS

The issue of employee entitlements in cases of corporate insolvency reared its
head almost continuously during the year, in the process throwing the spotlight
on employers and their associations which, in response, contributed to sometimes heated debate on the subject. The question of how governments and
employers would protect employee entitlements had carried over from the previous year, when a series of industrial disputes and confrontations had impelled
the federal Coalition government to legislate a safety net for employees caught
in the web of corporate collapses. A string of much publicised corporate failures
in 2001, in which employee entitlements typically appeared vulnerable, fuelled
ongoing union and government activity on the issue. Among the most prominent of these were the corporate collapses of Ansett, One-Tel and HIH Insurance.
When it became insolvent, Ansett owed approximately $686 million in workers’
entitlements to its 16 000 employees. Also heightening the interest in the issue
of employee entitlements was a series of staffing contractions in the public
sector and banking and finance industry as well as other large firms, including
Patrick Stevedores, Westpac, Coles-Myer, Optus, Amcor, Gate Gourmet, and
Qantas.
Compounding the public relations problem for employers, however, was the
publicity the media gave to the bonuses and severance payments that firms paid
many senior executives during the year. During 2001, there was growing public
disquiet concerning the ‘huge payouts’ to executives, particularly in situations of
corporate failure, and a growing attention to the failure of companies to link performance to payment systems in such as way as to penalise executives for nonperformance. Perhaps the most spectacular instances, due to the short tenure of
the executives concerned, were the almost $5 million of entitlements that Ansett
paid its executive, Mr Geoff Toomey, after six months’ employment and Lend
Lease’s payment of $15 million to one executive with one year’s service, Ms S.
Pressler, in a year that the firm delivered a 95% drop in net profit. In addition,
the co-founders of One-Tel, Mr Jodie Rich and Mr Brad Keeling, each received
$6.9 million in bonus payments on top of their $500 000 salaries.25
AI Group argued that the size of the problem concerning employee entitlements had been overstated, particularly given that the federal government’s
legislated scheme had significantly reduced levels of employee hardship. Citing
a government research report, AI Group maintained that, in its first 12 months

E M P L O Y E R M AT T E R S

IN

2001

271

of operation, the scheme had paid $3.1 million to 1650 former employees of 104
insolvent firms, and that this represented 60 per cent of outstanding wages, annual
leave, pay in lieu of notice, long service and redundancy entitlements to these
workers. AI Group also stressed that in the vast majority of cases, insolvent firms
do not leave employees’ entitlements unpaid, and that 99.9 per cent of entitlements are paid in full.26
Employer groups remained firmly opposed to any legislative measures that
would rank employee entitlements, including annual leave, long service leave,
sick leave and redundancy payments, ahead of other creditors in insolvency situations.27 There was also some disquiet within employer circles about legislated
entitlement schemes being fully taxpayer-funded, with some VECCI councillors
moderating their support for the federal government’s scheme due to their conviction that this was not an appropriate burden to pass fully to taxpayers.28
However, employers faced a vocal union movement seeking improved protections, on the basis that the new statutory provisions failed to compensate many
employees fully for lost entitlements.29 In response to continued union pressure
on the issue, AI Group lobbied the federal government for a scheme that would
guarantee entitlements at least to the level of award safety net provisions.
State Labor governments roundly opposed the federal government’s subsequent
proposal for a scheme that, while incorporating AI Group’s suggestions, also
required amendments to the Corporations Act. 30
For AI Group, the most pressing question regarding employee entitlements
came through the industrial, not the parliamentary, sphere. It devoted massive
resources to combating Manusafe, a mechanism through which manufacturing
unions also sought to prosecute their ‘Campaign 2001’ for an industry-wide
bargaining structure, a process they had begun a year earlier with ‘Campaign
2000’.31 Manusafe itself is a trust fund to protect employee entitlements that
six manufacturing unions sought to establish, partly through the enterprise
bargaining process.32 Describing Manusafe as ‘a flawed proposal deserving of
the strongest condemnation’, AI Group urged members to reject any union
attempts to negotiate on the trust fund. In doing this, the association pointed
out that rather than just being about protecting entitlements, Manusafe
would essentially become a vehicle for portable employee entitlements across
the industry. Under the union proposal, employers would contribute 1.5 per cent
of each employees’ weekly wage to the fund for long service leave, and other
amounts for other entitlements.33 Calculating that the scheme would draw
$8 billion out of the manufacturing sector, AI Group argued that with Manusafe,
employers’ labour costs would explode, and that this would badly affect their cash
flow, for a potentially insecure scheme over which they may have very little control. Key disputes involving negotiations on Manusafe included MainTrain and
a Sydney car components manufacturer, Tristar. While these employers did not
agree to the Manusafe proposal, ultimately they did agree to continue to fund
existing bank/insurance bond schemes to protect employee entitlements. In the
case of Tristar, the controlling Arrowquest Group had sought to discontinue the
existing scheme and, in MainTrain’s case, employee entitlements were improved
as a result of the collective bargaining.34

272

THE JOURNAL

OF

I N D U S T R I A L R E L AT I O N S

June 2002

Determined to contain union action, communications manufacturer Transfield
gained a Commission ruling from Justice Munro in August that unions could
not take protected industrial action in pursuit of demands for payments into
Manusafe. When a Full Bench of the Commission effectively overturned Munro’s
decision in November, AI Group continued its vociferous rejection of the proposal. Just as it had led manufacturing employers’ defence and counter-attacks
against manufacturing unions’ ‘Campaign 2000’, so AI Group worked intensely
with its members, before tribunals and in the media to stymie Manusafe and
Campaign 2001. Once again, it claims an overwhelming success by pointing to
the unions’ failure in instituting an industry framework agreement. However, AI
Group also concedes that as a result of the Manusafe campaign, employees
retained protections they might otherwise have lost.35

EMPLOYERS

AND CHOICES OF WORKFORCE REGULATION

Once again, employer associations reported no dramatic change in employer
choices regarding agreement making. There is continuing strong support for the
continuation of an enterprise bargaining regime, particularly among the larger
organisations that use it most. Despite association rhetoric demonising pattern
bargaining, employers in some sectors would prefer to use it. The most obvious
are the large construction companies that AI Group/Australian Constructors’
Association represent. They would like project level agreements. As well, small
companies, for example in the private health care sector, are also thinking in terms
of multi-employer agreements.36
As Professor David Plowman points out, the typical concentration on the numbers of any one instrument at the expense of others overlooks how much, in the
Australian system, employees may be subject to two or more such instruments,
particularly where certain types of agreement—collective or individual—
regulate one or very few questions (such as annual leave loadings) in ways that
supplement broader instruments. Employer association feedback suggests continuing modest growth in non-union enterprise agreements but apparently
through movements away from other non-union options as well as from union
bargaining. There is also evidence of employer dissatisfaction with experiments
with non-union enterprise bargaining as a union avoidance strategy given their
unhappy surprises with mandatory employee ballots. At the same time, unions
have been gaining agreements in new areas so the picture remains very fluid. The
use of AWAs continued to be a very minor phenomenon—a ‘side show’ according to one employer representative—and still mostly confined to niche groups
such as managerial and professional employees and for entry level employees
forced to accept them as a condition of employment, a situation that Dr Paul
Gollan’s research for the Office of the Employment Advocate confirms.37
In fact, Plowman suggests that the situation for AWA propagandists is even
bleaker than official figures suggest. First he estimates that systematic double
counting means that these figures massively overstate the penetration of AWAs.
Second, he suggests there has been a ‘limited take up [in] sectors where unions
are not capable of influencing whether or not employees enter into AWAs’.

E M P L O Y E R M AT T E R S

IN

2001

273

According to Gollan’s survey, this clustering of AWA adoption is relatively
heaviest in the following industries: communications services; finance and insurance; mining; and electricity, gas and water supply.38

EMPLOYER

ADVERSARIALISM

If for the second successive year, AI Group led manufacturing employers in their
successful rejection of aggressive union attempts to re-establish an industry framework and attendant substantive gains, the picture was very different for many of
the large companies that were attempting adversarial strategies on their own.
During the year, a number of major employers foundered in their attempts to
destroy union representation and force widespread adoption of AWAs. It was also
a year when other employers used much tougher bargaining strategies and
tactics with unions. Among larger employers with an ideological disposition to
individualising employment relations, the crucial sectors have been mining,
telecommunications, meat processing, the public sector and, increasingly, banking. Space constraints do not allow a full treatment of all of those we discussed
in greater length in previous years.39 Thus, below, we provide a fuller explanation of two of the major companies involved in adversarial relations, BHP and
Qantas, followed by a very brief overview of a number of other significant
disputes.
Never far from the limelight, in 2001, BHP continued its struggle to convert
its workforce to individual contracts. While BHP has formulated a sophisticated
strategy to win ‘the hearts and minds of workers’ through ‘hug and tug’ organisational development sessions, telemarketing, television advertisements and
various other cultural change exercises, it has not been able to avoid completely
the industrial relations system. A series of industrial disputes at BHP worksites
across the country has continued to stall its achievement of its industrial relations objectives. The BHP decision in March to merge with the British-South
African firm, Billiton, further exacerbated tensions as it sparked fears of redundancy and retrenchment at BHP workplaces across the country.40
In January, BHP had a victory in the Federal Court which ruled that the company had acted legally in offering individual contracts to its employees at its West
Australian iron ore mines, and in refusing to renegotiate an improved collective
wage agreement with unions. For a year, an injunction had prevented BHP from
signing up any further employees to individual contracts until the union’s case
had been heard in court. Following this decision, BHP initially faced the threat
of a union appeal, but in February this threat dissipated when the ACTU abandoned its challenge in the Federal Court, deciding to pursue industrial action
instead.41
Since then, however, BHP has gained few converts to individual contracts in
the Pilbara. Almost half the workforce remains employed under collective agreements, despite the company offering an incentive program that includes a pay
increase of up to $20 000, a 6 per cent superannuation increase and a sick leave
payout worth between $10 000 and $80 000. Union members have resisted
pamphlets sent to their homes, videos, telemarketing calls, letters, individual

274

THE JOURNAL

OF

I N D U S T R I A L R E L AT I O N S

June 2002

meetings and television advertisements. Finally, in November, BHP Billiton’s vow
that its workers in the Pilbara would only receive a wage rise if they accepted
non-union arrangements, proved hollow when the Western Australian Industrial
Relations Commission awarded a 20 per cent wage increase to those workers who
had refused to sign individual contracts. The president of BHP’s iron ore
division, Mr. G. Hunt described the decision as ‘not ideal’ but, at the same time,
cast it as a victory in terms of the increased flexibility in working arrangements
that would nonetheless follow.42
Outside the Pilbara, BHP’s workplaces have been anything but quiet. In March,
BHP’s long-running wage negotiations at its Queensland coal mines collapsed
as unions commenced a week-long strike. Charging that the industrial action was
motivated by the unions’ commitment to an ACTU-backed corporate campaign
challenging BHP over its individual contracting strategy, BHP twice resorted to
the Supreme Court to gain injunctions against union pickets. Regardless of
any more general union campaign against BHP, however, union fears of individual contracting at BHP’s Queensland mines were not unrealistic, given that
a BHP spokesman had said, in January, that, at the collieries, he ‘would not
rule out its resorting to Pilbara-style individual agreements if resolution proved
elusive’. 43
In May, a dispute erupted at BHP’s Port Kembla steelworks over the introduction of individual contracts. BHP had announced its intention to appoint a
contractor, Serco, to run the protective services department. Serco planned to
employ 50 of the 75 existing staff on individual contracts. To the workers who
were currently earning $40 000 to $60 000, Serco offered contracts that included
wages of $30 000 to $33 000. To the 4000 steelworkers, this appeared to be a BHP
move to cut labour costs and introduce individual contacts by stealth, and hence,
a test case for the entire workforce at the plant. Ultimately, after a three-day
strike and a Commission recommendation that BHP consider delaying the outsourcing, Serco agreed to negotiate a collective agreement to cover its new
employees. 44
Another company that has taken a deliberately tough, adversarial stand in enterprise bargaining is Qantas. In early 2001, despite announcing record revenue,
Qantas sought a wage freeze in its negotiations with the National Union of
Workers and the Transport Workers’ Union. At about the same time, Qantas
indicated that it was contemplating redesigning various services, and perhaps contracting some out, a move that would lead to job reductions in the airline. The
company also signaled its intention to reduce the airline’s Australian labour content to about 80 per cent and to cut the number of flights on some routes. Qantas
then intensified workforce fears when it sent 75 managers to the Philippines for
training in forklift operation, stowage and baggage handling so that Qantas could
staff those functions in the case of a strike.45
Qantas’s campaign was not successful initially in persuading workers to accept
the wage freeze. Following the New York terrorist attack of September 11, however, Qantas used the subsequent decline in international tourism as the basis
for seeking a 12 to 18 months’, across-the-board wage freeze from its 33 000
employees. Nonetheless, and before unions had conceded to its demands, Qantas

E M P L O Y E R M AT T E R S

IN

2001

275

was soon recording record profits, following the collapse of its domestic rival,
Ansett. Rather than receding from its tough bargaining stance at that point, however, Qantas used its new position as a virtual monopoly employer to press ever
more strongly for the wage freeze. The firm was looking for ways to cement its
commercial supremacy and its enterprise bargaining negotiations provided an
ideal avenue for cost cutting, particularly as employees had no viable alternative
domestic employer to which to turn. At the same time, the firm played down its
profit growth, given that ‘nothing is more sure to enrage a workforce being asked
to make sacrifices, work harder and negatively adjust its conditions, than the smell
of double-digit profit increases’.46 Qantas pilots and domestic flight attendants
soon accepted the wage freeze and other trade-offs. For them, there were no other
employment options, at least not within the country. Qantas found maintenance
and clerical staff less obliging. Buoyed by the acceptance of a wage freeze by
pilots and flight attendants, and to intensify pressure on these other workforce
pockets, in mid-November Qantas used the media to announce plans to eliminate up to 2000 jobs before the end of the year. Qantas’s Mr Geoff Dixon, made
the announcement just four days before 4000 workers were due to embark on a
two-day strike over enterprise bargaining negotiations. Fears of job insecurity
soon led Qantas staff to abandon their planned industrial action and agree to the
wage freeze in return for postponement of the planned outsourcing. 47
During the year, one of the Workplace Relations Club’s leading sites of experimentation, the Commonwealth Bank, abandoned its attempt to force its whole
workforce of 28 000 out of unionised collective bargaining and onto AWAs. By
agreeing to sign a union agreement it thus ended a long-running and bitter dispute it had created. A similar outcome occurred for another protracted dispute,
at Stellar Call Centres. Stellar is a vehicle through which its co-owner (and other
site of Club experimentation), Telstra, had sought to weaken and cheapen its own
workforce. Here management agreed to become party to the first award in the
contract call centre industry. Workplace union activists and full-time officials managed to have a fiercely and actively anti-union management abandon the existing individual contracts regime. Unionised employees also appeared to be gaining
successes against determined employer attempts to strip back wages and conditions. Sunshine Sugar’s lockout of sugarworkers backfired on management in
northern NSW when employees were able to win industrially. Even employees
at O’Connor’s meatworks in Melbourne appeared to have won back something
through the legal system after a three-year dispute that included a nine-month
lockout and apparent strong, if covert, federal government support for the company.48 These are all telling defeats, particularly as they have created deep workforce distrust and bitterness towards respective employers.

EMPLOYER

ASSOCIATIONS AND THE CHANGING BARGAINING

LANDSCAPE

Associations once again reported that they remained agnostic on choices of instruments and advised members (or clients) to link their choices to business requirements. Nevertheless, perusal of marketing material for their fee-paying services
suggests some predisposition to selling consultancies for AWAs. Certainly ACCI,

276

THE JOURNAL

OF

I N D U S T R I A L R E L AT I O N S

June 2002

which has remained closely aligned with Coalition policy and politics, has been
pushing for greater access to AWAs, again misrepresenting its own research consultancy evidence to do so.49
AI Group, Australian Business and VECCI have encouraged members to see
enterprise bargaining as more than an industrial relations exercise but one, as
suggested by strategic human resource management theory, directly linked to
business strategy.50 While this can provide further fee-paying business for
associations involved, it can also involve peculiar permutations in relation to nonunion agreement making. For example, there is now ample evidence that while
servicing employer members (or clients) in negotiations, part of their brief involves
associations also playing many roles usually the province of unions or other
employee bodies. Thus, the association may provide ‘independent’ information
and advice to the company’s employees as to their legal rights and responsibilities
in the agreement making process. It may also provide them with ‘independent’
training in bargaining, communication, drafting and reporting.51 Just how independent this can be is obvious. Without impugning the professionalism of association operatives involved, this represents a frightening conflict of interests, a
distortion of the concept of ‘choice’ for employees regarding their freedom to
associate and to bargain, and a fitting commentary on the ideological assumptions of the Workplace Relations Act.
Overall, decentralisation of bargaining and proliferation of its forms have continued to be a two-edged sword for associations. Together with the rise in individual legal rights, they have forced associations to diversify services (or
products) to members, in the process losing economies of scale. At the same time,
these broader trends have weakened the impulses to membership among large
and small companies. This places growing cost and revenue pressures on associations that they are meeting in several ways. One is to seek growth and revenue
by dramatically widening the scope of association activities. This may mean
expanding the meaning of what membership brings or shifting emphasis away
from a membership to a client-based orientation. Thus, growth can come through
increasing membership, attracting commercial clients or both. Depending on the
organisational model chosen and centrality of services provided, it may translate
into providing a wider range of services on a high fee basis, fees supplementary
to lower membership dues, or a full fee basis for non-member clients.
Interviews with association officials and perusal of print and web-based documents suggest an essential continuity of previous years’ patterns. Australian
Business remains the association that has moved furthest in defining itself as a
business services company that provides services for fees. Yet even so, its 2000
survey of members showed that some 83 per cent viewed industrial relations as
being the major reason for membership.52 AI Group continues to stress the benefits of membership and its traditional representational strengths, particularly given
the majority of its members face tough unions. Where Australian Business has
greatly expanded its service offerings well away from industrial relations, AI Group
continues to focus on industrial relations and related activities together with a
small suite of carefully selected other matters. VECCI remains poised somewhere
between Australian Business and AI Group, offering a range of services but, at

E M P L O Y E R M AT T E R S

IN

2001

277

the behest of its small firm membership base, increasingly re-focusing on industrial relations matters.53
Amalgamations and mergers have, in recent years, been another response to
the challenges employer associations face. Yet another route for revenue generation is the growing tendency for larger, broader and better-resourced associations to become service providers for smaller, narrower associations. These
services can be part of a contract for service between the associations or
may involve forms of membership affiliation—directly or through individual companies as members.54
Other factors that have contributed to dramatically declining union membership over the last 15 years also threaten employer associations. One is the changing composition of the economy and the rise in service sector employment at
the expense of manufacturing. This has meant that, like unions, the broadly-based
employer associations have had to expand their recruitment, representative and
service horizons towards emerging areas of employment. Here they have been
able to gain from employer difficulties with, for example, unfair dismissal cases,
but also from challenges that unions’ recruitment drives and bargaining initiatives pose. Tourism and hospitality, financial services, call centres and information and communications technolo