'Work choices' and real choices

Yesterday 2,800 hospital orderlies, cleaners and chefs walked off the job around New Zealand, in pursuit of a collective contract that would improve their miserable pay rates.

Kirsty McCully is an Auckland district employee of the Service and Food Workers Union, and one of the architects of the union's Clean Start campaign. Here's an article Kirsty has just written for the (offline) paper of Australia's Freedom Socialist Party, in an effort to relate her experiences in the Kiwi union movement to the challenges facing Aussie unionists confronted by the Howard government's repressive 'Work Choices' legislation:

Work Choices? Voting Choices? What are the real choices for Aussie workers?

Australian workers have some decisions of their own to make about the Howard government’s “Work Choices” legislation currently transforming the industrial landscape there.

In New Zealand workers were attacked with very similar industrial legislation in the 1990s, and the hard lessons kept coming, even after the election of a Labour Government. Aussie workers may want to consider what happened in New Zealand when they ask themselves how to respond to Howard’s right wing attacks.

What happened in NZ?

The New Zealand economy and the industrial legislative environment were both transformed in the late 1980s and 1990s by neo liberal governments.

Without any consultation or mandate from the public, New Zealand’s fourth labour government, elected in 1984, began dismantling the welfare state, and de-regulating every aspect of the New Zealand economy – from finance to investment, to trade and labour markets - in what is often referred to as “the New Zealand experiment”.

In 1987 Labour government introduced the Labour Relations Act (LRA), which set 1000 member minimums for unions. The LRA saw many union amalgamations and the creation of general or combined unions as opposed to trade or industry based unions, leading to a loss in industry power. Union leaders supported the 1984-1990 Labour government. Some would say that because the attacks were not directed at the unions themselves, they kept their noses out of the economic slashing and burning going on. The Awards system, which ensured minimum pay and conditions for the vast majority of workers, did survive this attack, but not for long.

The National Government elected in 1990 continued down the path of privatisation and attacks on workers, introducing the Employment Contracts Act(ECA) in 1991. The ECA was a dramatic legislative change which removed the word "union" from employment law.

Using the standard rhetoric of right-wing parties, the ECA gave workers ‘freedom of choice’ and the ‘freedom to be an individual’ by not joining a union. The ECA stripped workers of the right and the ability to have a united workforce, a closed shop. It legalised the use of scab labour. It eroded workers’ industrial power, gave workers little ability to negotiate improved wages, terms or conditions.

Before the ECA New Zealand workers were covered by occupational and industry Awards negotiated by unions and personal grievance rights for dismissal and unfair treatment were accessed through union membership. But the language of the ECA compelled workers not to join unions and gave employers the right to ban unions from worksites. The ECA gave employers the right to bypass the union and enter into individual agreements with workers – in fact, the ECA removed the distinct legal status of trade unions altogether. Whilst the Labour Relations Act limited the right to strike, the ECA eliminated it.


So what happened?

The impact of the ECA, in conjunction with the attacks on welfare, was immediate and devastating. In 1990 the minimum pay and conditions of over 700,000 New Zealand workers was determined by an award or collective agreement. By the year 2000 that number had nearly halved to around 400,000. A letter from a supermarket checkout supervisor to the NZ Department of Labour summed up the impact of the ECA on workplaces:

"As soon as the Employment Contracts Act came in everything changed in this place and we were told - now he'd do it his way. First he got rid of the union, and some were threatened that if they belonged to the union they would be down the road. The contracts were never negotiated. We were called in one by one and given this printed document with a place to put your signature. Some of the young ones were not allowed to take their contracts home for their parents to read. The first year all of us who already worked there got penal rates. As people left or were sacked, the new ones went on to a flat rate with no set amount - they were all getting different wages. Within a year there was a 90% rollover of staff."

The numbers of workers organised in unions fell dramatically from 35% to 17%. Incomes fell for part time workers and 90% of New Zealanders ended up worse off by 1996 than they were in 1981. From 1984 to 1998 the top 10% of households increased income by 43% and the bottom 50% of households decreased income by 14%.

Since then there has been very little rebuilding of union density despite seven years of a ‘left’ Labour governments that has pushed relatively pro-union legislation through parliament. Labour’s election promises to remove the ECA may have been realised, but with the Award system gone, and with it union density, unions remain in a weak position.

The loss of the awards system and its regulation of wages and conditions for the majority of workers had a huge impact on Maori and Pacific Island workers and their families. A government report released this year shows that those on low incomes have suffered since the late 80s with real wage increases far below inflation rates. Particularly, Pacific Island and Maori women have suffered , leaving their families in poverty living conditions with overcrowding, poor health and low educational achievement prevalent.

The debate over the response to the ECA also led to a split in the union movement in the 1990s with the more militant unions from the construction, transport and manufacturing industries forming the Trade Union Federation (TUF). TUF has since died (winding up voluntarily in 2000 after the re-election of a Labour Government) and almost all unions have since joined or re-joined the relatively conservative and Labour Party led Council of Trade Unions.

The anti-worker legislation imposed in New Zealand has left an entire generation of workers with little or no understanding of trade unionism. Isolated workers in smaller workplaces may never have experienced a union in their working lives. There has been an institutionalisation of the lack of participation of workers in their working lives.

In addition to this, the lack of Awards has left unions fighting for site-by-site agreements. The resulting lack of industry power means that unions have been tied into the grievance model of unionism rather than a bigger-picture or industry wide organising approach. The societal concerns of workers have more or less been abandoned by many trade unions, as they are no longer ‘core business’ and the priority for resources is achieving collective agreements to protect pay and conditions.

Why did it happen?

Well, the bigger picture analysis is one about the system under which the New Zealand and Australian economies operate. Attacks on workers like the ECA and Work Choices are predictable because the capitalist system continues to return less and less profit for the capitalist class. This fall in profits, drives the capitalist class, to attack the working class – it’s all about the money. This is the unavoidable basis of class struggle.

The ECA in NZ was secondary to the world economic crisis of falling profits for capitalism. Work Choices is the Australian response. One need only look at rates of pay for service sector workers – Cleaners in New Zealand earn $10.95 per hour – representing an increase of around 80 cents over the last 10 years – while cleaners in Australia earn a minimum of $13.57 per hour, with additional payments for shift work and late working hours. These are the conditions Work Choices seeks to strip away in Australia.

What did NZ unions do?

The answer is, not enough. Union leaders failed to mobilise the unionised workforce in New Zealand. Many leaders stood in the way of organising efforts and the rank and file call for a nationwide strike , calling instead for the workers to vote National out and Labour in the next time around (is this sounding familiar Aussies?)

The New Zealand response was ultimately limited to protests and a few scattered strikes. There was a lack of rank and file independence from the leadership who were too closely tied to the Labour Party and its electoral strategy. The small amount of activism and mobilization from rank and file union members was not the nationwide response required to stop the ECA in its tracks.

Ken Douglas – then NZ Council of Trade Unions president - used the partnership model as a response to the ECA. Douglas addressed a packed meeting at the Auckland Town Hall to tell the crowd he would negotiate a better piece of legislation with National and that strikes would make the government less likely to negotiate. Douglas, like some in Australia, claimed that New Zealand had to face “the realities of global competition”. Douglas’s approach, predictably, failed, and the resulting huge losses in union membership and left NZ workers weak and with even less ability to respond collectively in the future.

So what are the alternatives?

The organising model provides a different approach. The organising model disagrees with the partnership model not about strategy but about tactics. The strategic goal is a relationship between business and labour, overseen by the government, in which workers get a 'fair deal', i.e. a slice of the cake that labour creates and business expropriates. The organising model differs from the partnership model in the sense that it says that workers have to be prepared to be much more organised and active at the grassroots to win a 'fair deal'. Bosses have to have their arms twisted - they don't have an immediate interest in giving workers a fair deal, as Ken Douglas argued when he claimed that unions could help bosses improve productivity and thus boost profits (an argument still used by many NZ trade unions). The bosses need a 'slap in the face' with militant action to 'see the light'.

This notion of a fair deal is based upon nostalgia for the accommodation between capital and labour - the 'social contract' - which existed in the wealthy countries during the 'Keynesian era' after World War Two (or from the mid-30s in New Zealand). But such an accommodation was only possible because of a boom which has long since passed. Since the long boom began to peter out at the beginning of the '70s capitalism has increasingly tried to restore profit levels by breaking down the fortress economies of nation states in a quest for cheaper labour and cheaper raw materials. This process is called globalisation, and it came to New Zealand with a vengeance in 1984, when the Labour government began its economic reforms.

Now that New Zealand's economy is dominated by highly mobile foreign capital and the scope of the state has been greatly reduced the old prerequisites for an old-fashioned Keynesian social contract no longer exist. You can't just vote for Labour and asks them to be nice. Attempts by unions to pressure the government to revive elements of the fortress economy have met with dismal failure. The Maritime Workers’ ‘cabotage’ campaign, for example, tried to twist the government's arm to intervene and give a break to Kiwi shipping companies. But those shipping companies are so economically irrelevant in the midst of an economy dominated by foreign capital that the government gave the campaign no attention. A similar campaign to prevent the dismantling of manufacturing tariffs was also unsuccessful.

Does this mean that the project of trying to win left-wing reforms - the strengthening of the welfare state, the protection of jobs from globalisation, and so on - is out of date? One often hears this from sections of the far left. However, people join unions and take action because they want to improve their lives, not necessarily because they want revolution. The left still has to fight for the bread and butter issues - the 'fair deal' - but it needs a militant grassroots strategy as well as militant grassroots tactics. The organising model is a big advance over the partnership model, but it too needs to give way to what is sometimes called a 'class struggle model' of unionism.

Where the organising model of unionism uses militant tactics to 'snap' government and businesses out of their misconceptions and make them see they should be nice to workers, the class struggle model assumes that in the era of globalisation business and the government will always be hostile and always want to backslide on any concessions they give. It follows, then, that unions have to stand apart from business and the government and always maintain a militant posture.

The class struggle model of unionism also holds that in the era of globalisation the main allies of unions are workers in other countries, and it is therefore militantly internationalist, making its campaigns international wherever possible. Examples of class struggle unionism can be found in the National Organisation of Workers (UNT) in Venezuela and the Bolivian Workers Centre (COB).

So where does this leave Australian workers?

I have heard the view expressed that the Awards system is “outdated anyway” so we may as well concede and learn to fight in a different way. This makes no sense to me. The Awards system represents years of hard fought victories by workers who have come before us. Conceding from day one is not an option in my opinion. It’s our responsibility to fight back, for them, and for future generations of workers.

Will a partnership approach work in Australia? The NZCTU/Ken Douglas style partnership model as a response to Work Choices will fail, just as it failed in NZ. The ACTU’s PR campaign, and the rhetoric coming from trade union leaders – makes it clear that this is the approach taken up by the ACTU.

Greg Combet’s statement at the November 30th mobilizations that “It has [been] confirmed that the only way to get rid of John Howard's industrial relations laws is to vote against the Government” clearly shows the path the ACTU is walking. The shifting slogans: “Workers Rights, Worth Fighting For” which has miraculously morphed into “Workers Rights, Worth Voting For” makes it all the more clear. Yet Labour won’t be able to “fix things up” when they’re elected, just as they couldn’t in New Zealand. When Labour was re-elected in 1999, they introduced the Employment Relations Act (ERA) which became law in 2000, but the ERA preserved many of the features of the National Party’s ECA.

The organising model is a positive alternative to this, but there are limits to the organising model in the era of globalisation. The organising model needs to be expanded into a class struggle model in order to get the best results.

How about Workers Rights: Worth Striking For?

Displays of anger are great, but only if they build to action which hits the government and the class imposing these reforms on workers where it hurts – i.e. in their pockets. General strikes and mass protest actions still happen worldwide. And they win. The recent back down by the French government over its youth unemployment law came after millions of students and union members took to the streets.

The biggest lesson we have to learn in New Zealand is how to take decisive action over the issues affecting us, and how to win. Kiwi workers who have suffered under attacks like Work Choices hope that Aussie workers learn from our unfortunate lessons – lessons we’re still experiencing in the form of low union density, low pay rates, a real lack of industrial power and people living in poverty in a prosperous country.

Stick together Aussies. Build your courage, your confidence and your strength. Build your rank and file movements. Retain the ability to take action even when union leaders say they’ve got your back. Take political action, or your right to do so will be taken away by John Howard and his wealthy mates. Don’t let what is rightfully yours be stolen.