you're reading...
Australian Current Affairs

Australian industry groups and unions need oversight

Australian UnionsThrough the years, I have written quite a lot about trade unions. From an economic point of view, trade unions can operate like monopolists, given their ability to institute collective boycotts against businesses by calling on workers to strike. Were it not for a specific law, such activity would be illegal.

To be sure, economists have also noted that trade unions can give a collective voice to workers, which may improve workplace performance.

But irrespective of the net economic impact of trade unions, there is a case for regulating the governance and conduct of trade unions. This is done in Australia, although the rules are weak and enforcement is feeble. Registered trade unions have frequently breached the law but nothing has happened.

But what about employer associations? Shouldn’t they be subject to the same laws and regulatory oversight?

Of course, employer associations are not in the game of shutting down the operations of businesses and so do not inflict the same direct economic harm as trade unions. But the conduct of employer associations in Australia also has damaged the economy and the functioning of the labour market.

Most are part of the industrial relations club, living in the dark ages when the impact of a regulated labour market was offset by industry protection. Many remain deeply protectionist by disposition.

Some are essentially rackets that try to eliminate competition in respect of labour costs by advocating pattern bargaining or sticking to award coverage.

This is particularly the case in industries where firms bid for work; electrical contracting and printing are examples. By ensuring labour costs are identical across all firms, work can be shared around, safe in the knowledge that the bids will be very similar.

The records of the Fair Work Commission show that there are 71 registered employer associations compared with 45 registered trade unions.

Many are effectively branches of industry groups, separated for legal and operational reasons. For example, Clubs Australia Industrial and the NSW Farmers (Industrial) Association are simply offshoots of larger groups.

Registered employer associations must meet the same legal obligations as registered trade unions set down in the Fair Work (Registered Organisations) Act 2009. These include annual audited accounts and information related to membership, officials and elections. The rules are weak and poorly enforced. Employer associations enjoy the same benefits as trade unions, such as tax-free status and exemption from fringe benefits tax.

There is a disappointing lack of up-to-date information for trade unions and employer associations – the latest financial records are often for 2011. The Fair Work Commission undertakes its compliance role extremely poorly.

Anecdotal evidence suggests that many employer associations are struggling to retain and recruit members. This is not surprising. After all, when the system of industrial relations was highly centralised and the real argy-bargy occurred at the award and national levels, it made some sense for employers to sign up to ensure strength in numbers.

With the shift to enterprise bargaining, however, employers have little reason to be part of employer associations. Their incentives are to tailor agreements with their workers on the basis of the specific features of their operations, rather than be dragged down to the lowest common denominator, which the employer associations offer.

Some employer associations opt to be part of government processes and accept government funding. Does this compromise their principal roles representing employers?

We witnessed this danger in the formulation of the Fair Work Act, in which the Australian Industry Group was intimately involved. It was prepared to sign off on the bill, even though other associations had very many concerns and suggested amendments that were still to be considered. The capitulation of the AI Group was sufficient for the government to discontinue consultations with other employer groups, citing the AI Group’s claim that employers needed as much certainty as possible.The many glaring faults and adverse consequences of the Fair Work Act have become all too apparent across time. Ironically, the AI Group more recently has been one of the act’s most vociferous critics.

The government also realises that providing grants to employer associations is a none-too-subtle means of getting them to toe the line. Grants to educate members on new laws, for studies, for travel – there surely comes a point where grant income is so significant that an association’s independence can be called into question.

Another point to note about Australian employer associations is their dubious roles in nominating trustees of industry superannuation funds. The vast majority provide for equal numbers of union and employer association trustees. These paid gigs are very attractive for the nominated trustees. In fact, a number of individuals nominated by employer associations hold multiple trusteeships.

The role of employer associations in nominating superannuation trustees potentially raises a very serious conflict of interest. Employer associations have been known to prevent new superannuation funds from being listed as default funds in awards and agreements to protect the funds on which their nominated trustees sit.

As voluntary associations, many employer associations provide some useful functions for their members, but their strength and influence are on the wane. If they wish to secure their futures, they would be better served by asserting their independence from the government of the day and unconditionally sticking up for their members’ interests, rather than looking after their organisations.

Source: The Australian – “Industry groups need oversight, just like unions”

About Craig Hill

Teacher and Writer. Writing has been cited in New York Times, BBC, Fox News, Aljazeera, Philippines Star, South China Morning Post, National Interest, news.com.au, Wikipedia and others.



  1. Pingback: Australia’s hopes high of locking in Japanese free trade agreement | Craig Hill - March 5, 2013

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

If you liked what you just read, click "Subscribe" to become a follower of the Craig Hill site. You will receive an email each time a new post is published.

Join 17,663 other followers

An archive of all my old posts

Follow me on Twitter

Most Recent Posts Post on My Blog About China: China News

Chinese drones now almost a daily appearance over Taiwan

Chinese drones now almost a daily appearance over Taiwan

The Chinese military has intensified its drone incursions into the skies above Taiwan with almost daily flights of combat and reconnaissance unmanned aerial vehicles (UAVs). Taiwan’s Defense Ministry said a People’s Liberation Army (PLA) TB-001 drone was spotted crossing the median line of the Taiwan Strait, the de facto boundary between the island and China’s […]

India says disengagement along disputed area with China to be completed by September 12

India says disengagement along disputed area with China to be completed by September 12

India’s foreign ministry said on Friday that disengagement along a disputed border area with China will be completed by Sept. 12. Both countries began disengaging from the Gogra-Hot Springs border area in the western Himalayas on Thursday, over two years after clashes at the frontier strained diplomatic ties. The disengagement comes ahead of a meeting […]

How to make EVs without China’s supply chain

How to make EVs without China’s supply chain

Two electrifying moves in recent weeks have the potential to ignite electric vehicle demand in the United States. First, Congress passed the Inflation Reduction Act, expanding federal tax rebates for EV purchases. Then California approved rules to ban the sale of new gasoline-powered cars by 2035. The Inflation Reduction Act extends the Obama-era EV tax […]

Anti-India forces: Techniques and agendas exposed

Anti-India forces: Techniques and agendas exposed

In the post-cold war era, India has moved from a policy of non-alignment to a policy of multi-alignment. This means that India has friendly relations with almost all-powerful and developing nations. Today India is carving out a unique path for itself. Such an approach provides prominence and exposes India to the harmful behind-curtain activities by […]

Taiwan’s Kinmen serves as a reminder of China’s aggression

Taiwan’s Kinmen serves as a reminder of China’s aggression

Taiwan’s frontline island of Kinmen was once again in the headlines when President Tsai Ing-wen paid tribute this week to the soldiers and civilians who “operated in solidarity and safeguarded Taiwan” 64 years ago. On Aug. 23, 1958 mainland Chinese troops attacked Kinmen in a key battle that marked the beginning of the Second Taiwan […]

Terrorism: The glue that holds China and Pakistan together 

Terrorism: The glue that holds China and Pakistan together 

The father of communism, Karl Marx, once famously said — “We have no compassion, and we ask no compassion from you. When our turn comes, we shall not make excuses for the terror”. This statement summarises how terrorism and communism go hand in hand. Maoist China alone destroyed between 44.5 to 72 million lives. During […]

‘New normal’ across the Taiwan Strait as China threat looms ever closer

‘New normal’ across the Taiwan Strait as China threat looms ever closer

China is attempting to establish a “new normal” across the Taiwan Strait, eroding self-ruled Taiwan’s territorial control and increasing the threat of a strike with each military sortie, officials and analysts say. Beijing has ramped up military maneuvers in the 110-mile (180-kilometer) wide stretch of water that separates Taiwan from mainland China — and the […]

When Beijing was burning, Xi was playing personal games 

When Beijing was burning, Xi was playing personal games 

A great fire destroyed Rome for six days in the summer of AD 64. Famous Roman historian of that time, Tacitus, recorded that 70 percent of the city was destroyed and half of the city’s residents were displaced. Roman ruler Nero was accused of being indifferent, ineffective, and careless. The end result of this neglect […]

China would re-educate Taiwan in event of reunification

China would re-educate Taiwan in event of reunification

Once China achieves its professed goal of establishing control over Taiwan, a process of “re-education” of the island’s population would follow, according to China’s Ambassador to France Lu Shaye. The ambassador was speaking on French television channel BFM TV on Wednesday night, when he said a majority of the Taiwanese population actually wanted to be […]

Sri Lanka’s economic crisis is a political sabotage

Sri Lanka’s economic crisis is a political sabotage

Sri Lanka’s present state confirms the famous statement: “Insanity is doing the same thing repeatedly and expecting different results.” Sri Lankans have been repeating the mistakes of choosing the politicians Rajapaksas again and again. It is confirmed that there were unaccounted payments that the Chinese were liberal with during project negotiations with the island nation. They were paid […]

%d bloggers like this: