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Monday, 18 August 2003
Page: 18784

Ms JULIE BISHOP (8:05 PM) —It is generally accepted that the first responsibility of any properly constituted government is to ensure that those from whom it has been delegated its sovereignty are protected from the trespasses of others. Thus, such a government is expected to enforce rigorously the protection of individual citizens and their property from violence or theft. As the common law evolved within the English tradition and as it was interdependently interpreted in Australia the particulars of these protections grew and changed, yet the central norms remained the same.

The significant, perhaps even profound, change that did come in the late 19th century in response to the growing consolidation of work forces was the increased commonality of labour experience, in what would come to be termed the Fordist economy after the American industrialist, and demands for improved economic and political circumstances from workers—particularly in Britain, which lagged behind the Australian colonies and Commonwealth in terms of political reform. The response was the legal recognition of, and special privileges extended to, trade union organisations.

Originally, such organisations, employing as they did the implied threat and sometimes explicit action of disruption, were deemed to be conspiracies in restraint of trade under English common law. This was the situation for much of the 19th century until, in 1871, Benjamin Disraeli's Tory government legalised trade union membership. Four years later a minimal form of picketing was recognised in legislation. Nonetheless, trade union organisations were still unable to act in what would be construed a modern fashion—accountable as they remained for economic losses occasioned by employers whom they had targeted. It was not until the passage of the 1906 Trade Disputes Act that such legal privilege was extended to unions in the United Kingdom.

Of course the Australian experience has been somewhat different. Within the colonies there was an earlier recognition of the legitimacy of trade union association and, in a somewhat restrained sense, industrial action. Unions and their actions were effectively institutionalised by the Commonwealth Constitution in section 51(xxxv) and in practice by the Commonwealth Arbitration Court, later the Conciliation and Arbitration Commission, now the Industrial Relations Commission.

Nevertheless, the British and Australian experiences produced similar critiques. By the extension of this legal privilege, trade unions were granted a legal position superior to almost all other non-governmental entities, including individuals. And to accommodate a leftist critique, the unions themselves were necessarily institutionalised internally and externally. Essential freedoms—for example, freedom of association—were clearly circumscribed. Furthermore, by making the damage occasioned by union action effectively injudicable, a breach developed between grievance and consequence, casting into doubt the fundamental protection I have already cited.

In more recent years we have seen, in response to the macroeconomic consequences of industrial militancy, a growing willingness of governments to wind back those privileges from the dangerous peak reached in the 1970s. What is more, the reaction has not simply been governmental. Individuals have abandoned the union movement in droves. In Australia, since the early 1980s, union membership levels have fallen from almost 60 per cent of the workforce to under 30 per cent. In the private sector the collapse has been particularly spectacular and now plumbs less than one in five workers. The only refuge for trade unionism has remained the bureaucracy where the monopoly position of labour and the divorce from customer demands have kept membership over 45 per cent.

The growth in small businesses, the increasing awareness on the part of employees that their fortune rides with that of their employer and—on the part of employers—that employee wellbeing is essential to profitability, the post-industrial nature of much work and so forth have all played their parts in this phenomenon. But so too has the public distaste for industrial militancy. There seemed for a time in the West to be a perversely inverse relationship between conditions and militancy. As pay and conditions improved, the shrill cries of exploitation grew louder from union cheerleaders—and of course Robert Michels' Iron Law of Oligarchy seemed to kick in. This states that in any organisation the permanent officials will gradually obtain such influence that its day-to-day program will increasingly reflect their interests rather than its own stated philosophy—that is, union officials recognised that their inherent personal and professional interests were in disputation and consequent resolution, rather than in avoiding disputation in the first place. This was of course disastrous for employer and employee alike. As Wolfgang Kasper noted in Building Prosperity:

[A] free labour market based on simple universal law, induces workers and employers to keep sorting out small conflicts as they arise. They do so to keep the work relationship productive. Resort to judicial adjudication or formal law enforcement is likely to be rare. On the whole, however, universal laws avert conflicts before they arise and lay down standard solutions; law enforcement settles disputes along known predictable lines without recourse to violence. By contrast an organised labour market is managed by those who have to prove their worth in conflict. They thrive on industrial relations confrontations.

Nevertheless, even in a free society with a mutually rewarding and flexible labour market there will be occasions on which industrial disputes will be brought before courts or tribunals—for example, the Federal Court or the Industrial Relations Commission.

In those circumstances we should aim to import the norms of good behaviour that we have endeavoured to cultivate in the wider labour market. Yet too often these hearings are given over to political theatre—Michels' `Iron Law' lives! Those who make their living from disputation and intimidation thrive on this disruption and damage. Thus the Workplace Relations Act 1996 provides for the protection of the Industrial Relations Commission from such behaviour, through the contempt provisions included in section 299. This section creates offences for the purpose of protecting the commission's integrity.

As the minister outlined in his second reading speech on this bill, that means `there are offences of interrupting proceedings or using words calculated to improperly influence members of the commission and witnesses'. To achieve this end paragraph (1)(e) of the section makes it an offence to do any act or thing in relation to the commission that would be a contempt of court if the commission were a court. This provision is necessary given that tribunals and commissions are not granted, through the common law, the same contempt protections as courts. In short, paragraph 299(1)(e) is, as the minister noted, `a deemed contempt provision'.

However there is a hitch—a hitch identified by the government, which late last year gave a commitment to reforming the relevant statute. There is a great difficulty in translating the constantly evolving and changing terms of court-made contempt law to the commission—a conclusion also reached by the Australian Law Reform Commission. For the proper working of the law, and the safeguarding of our workplace relations, the IRC requires specific statutory provisions for dealing with contempt offences, provisions geared for the commission's particular circumstances.

This bill establishes four specific contempt offences, the maximum penalty for which is 12 months jail or a fine of $6,600 for individuals or $33,000 for an organisation. The offences are as follows: firstly, engaging in conduct contravening a commission order—that is, disobedience contempt; secondly, publishing a false allegation of misconduct affecting the commission—that is, scandalising; thirdly, inducing another person to give false evidence to the commission—that is, interference with proceedings; and, fourthly, giving false evidence—that is, perjury.

All offences are serious and have the potential to undermine the commission, its proceedings and the law more generally. They are thus dealt with harshly but fairly. For example, the second offence—publishing a false allegation of misconduct affecting the commission—will require proof that an allegation is, first, false and, second, adversely affects public confidence in the commission. Other contempt offences provided for in the Crimes Act and the Criminal Code will continue to apply, and their interoperability with the act is ensured in the bill.

There is opposition to these reforms. As Burke wrote in Observations on a Late Publication on the Present State of the Nation in 1769, anticipating the opposition's argument by some 234 years:

It is a general popular error to imagine the loudest complainers for the public to be the most anxious for its welfare.

This bill ensures procedural fairness and civility in the tribunal responsible for the adjudication of workplace relations in this country. Surely such a legislative measure is to the benefit of all participants in workplace relations with a genuine interest in seeing justice done. Perhaps the union movement and its parliamentary wing across the chamber might also take on board the insights of this author:

Whereas in its origins unionism was a force for economic change and progress, it has now fallen into the habit of opposing change in its contribution to most issues. In Australia there is little evidence to suggest that the leadership of the union movement has adapted successfully to the demands of the new economy ... Unless unions can demonstrate their effectiveness in the small-scale, virtual workplace of the new economy, then their membership coverage will continue to retreat to the public sector and the routine production workplaces of the old economy. The danger for the relevance of political Labor lies in the way in which this narrow base of unionism might foster a concentration of employment strategies on capital intensive manufacturing industries at the expense of the growth potential of the services sector.

Is that a quote from the Minister for Employment and Workplace Relations perhaps? No, that quote comes from page 85 of Mark Latham's book Civilising Global Capital: New Thinking for Australian Labor published in 1998. The other danger is that the Left's industrial rump and the parliamentary rump, including the author of that 1998 passage, will eschew reform for the ambitions and commiserations of reactionary and perpetual opposition. I commend this bill to the House.