Union Organising and Labour Market Rules: Two Sides of the Same Coin

by Jim Stanford

International evidence is clear that there is a strong, positive correlation between a country’s protection of labour freedoms, and the organising success and economic influence of unions. Improvements in basic labour rights and freedoms tend to be associated with increases in union membership (as a share of total employment). And stronger union membership, in turn, is associated with broader collective bargaining coverage, less poverty among working people, and less inequality.

Australia has a poor record of protecting basic worker and labour rights and freedoms: including rights to assembly, rights to organise, rights to due process, and rights to strike. According to the World Economic Forum (a generally business-friendly international policy organisation), Australia ranks 5th last among OECD countries in protecting worker rights.

A new study from the Centre for Future Work documents the correlation between workers’ rights and union organising – and shows they are two sides of the same coin. And that correlation between workers’ rights and the success of unions suggests that unions in Australia will need to continue their campaign to “Change the Rules” of Australia’s labour market (including improving basic rights for workers to organise, bargain collectively, and take industrial action). Winning better legal and regulatory protections for workers seems essential to workers’ ability to build stable, influential unions, and use those unions to improve their lives.

Australian trade unions are contemplating the after-effects of the Coalition’s surprising victory in the 2019 federal election. The union movement and other social advocates built a successful public campaign to “change the rules” of Australia’s labour market – including lifting the minimum wage (to a living wage level), preserving other labour market protections (like penalty rates), limiting the spread of insecure work, and strengthening collective bargaining freedoms. The Coalition government is not sympathetic to that agenda; and though it barely discussed labour policy issues during the campaign, it may now try to shift labour policies even further in favour of employers.

However, despite an unreceptive political climate for advocating labour reforms with the present federal government, the evidence presented in this report suggests that the broad campaign for an expansion of both labour market rights and union capacity should continue. The efforts of Australian unions and their allies since 2017 have been effective in strengthening public awareness of labour market injustices, and building support for obvious remedies. They have even led to incremental changes in policies by governments and institutions at all levels (even including, to a modest extent, the Commonwealth government). Most importantly, the international evidence is clear that eventually winning changes in the rules of labour market and industrial relations will be essential, as a complement (not a substitute) for unions’ continuing efforts to expand membership, extend collective bargaining, and lift wages.

This analysis suggests that Australia faces a dual challenge: improving protection of workers’ basic rights and freedoms, and strengthening workers’ collective ability (given those rights and freedoms) to achieve better economic outcomes (like wage increases and job security). International evidence is also clear that societies in which the benefits of economic growth are shared more broadly across working and middle-income households demonstrate better economic and social outcomes. Rebuilding the labour practices and institutions necessary for more inclusive and stable prosperity will require progress along both of those tracks: greater respect for basic labour rights, and stronger unions and collective bargaining systems.

Full report