1. Introduction *

2. Defining the Issues *

3. The History of Employee Representation in Australia Before the 1990s *

4. The Decline of Unionism and Formal Industrial Regulation in the 1990s *

5. The Failed Promise of Human Resource Management *

6. Conclusions and Implications *

Appendix 1: Number of Unions, Union Membership and Union Density *

Appendix 2: Proportion of the Workforce under Awards of Tribunals, Australia, 1989 *

Appendix 3 Trade Union Membership by Industry, August 1988 *

REFERENCES *

The ASU is pleased to support the research done by the Employment Studies Centre of the University of Newcastle into the issue of the "representation gap" for working people in Australia. We look forward to it contributing to the debate about alternative participatory responses to build a framework for all working people to not only achieve collective bargain rights but to establish the fundamental right to be informed, involved and be consulted on issues effecting their working lives. It will shortly be followed by a second paper pointing towards the possibilities of filling this "representation gap" in the Australian Workplace by a particularly Australian version of the "Works Council" model of mandated employee participation. A seminar for Labour movement supporters to debate these issues is planned for April 2001. These papers will be an important contribution to this debate.

The first paper points to the narrowing of employee representation in Australia over the past decade in particular. The dominance now of "employer prerogative" gives a lie to the rehortical position of conservative governments and Human Resource Management apologists who argue that we are now operating in an environment that encourages "empowerment", "involvement" and "participation" of employees in decisions that effect their working life. This paper points to the ugly reality that now exists in a climate of declining union density levels coupled with aggressive government and employer attacks on employee rights – whether they are members of unions or not. It is a familiar and grim picture– one of employees declining voice, declining union rights and the failed promise of Human Resource Management.

The past five years of Federal Conservative government attacks upon the rights of working people and in particular their unions has, as the paper highlights, seen:

• an unprecedented level of attacks against the rights of unions to collectively organise their members and potential members
• The stripping back of award conditions at a Federal Level (and in a number of states either the abolition of any award safety net) to such an extent so as to make it impossible for workers to effectively enforce their rights collectively.
• A decline in union density.

This story is all too well known by those in the Labour Movement. It is trumpeted around by those who are hostile to us as an indication of our imminent demise. Whilst there are forces in conservative governments and employers that seek to do the Labour Movement harm the question we need to ask us is was it not ever thus? The qualitative change in the position of some governments and employers is that there is no longer even an acceptance that unions – as the collective expression of workers seeking to enforce and advance their position in the workplace and the community – have a right to even exist. The extension of this is that employee’s rights at the workplace have been rolled back – whether unionised or not

Faced with this problem it is all too easy to seek to apportion balm to everyone else but ourselves. To simply put the problems we now face as a labour movement down to conservative hostile forces is to deny our own contribution to the problem – and equally our own power to contribute to its resolution.

A generation of union officials has grown lazy and fallen asleep at the wheel of the Australian Labour Movement when it comes to the issue of building strong workplace structures that cement collectivism as part of the culture. As a result we have run into the sidelines and dead- ends that all governments – of whatever political persuasion – have created for us. Whether it was the bureaucratization and legalization of union activity, the fixation with "best practice" and "international competitiveness", "award restructuring", amalgamations or any other number of passing phenomena in the labour movement over the past 20 years the common factor has been that we have – as a broad movement - lost our way and our ability to defend and extend their workplace rights.

The exceptions pointed to in this paper only establish the general rule that union decline has been to an extent self-inflicted. The end result is not just an issue of unions having lost power, but an even more disturbing cultural development of the de-collectivization of the Australian workplace and community and with it the loss of employees ability to "have a say" in the matters that effect their lives. We now have a situation where individual level bargaining (including sub-contracting) is close to surpassing collective bargaining (whether reflected in agreements or awards) as the primary method of employment conditions in Australia. With this the right to be heard, to speak up when you are the victim of harsh treatment, sexual harassment, discrimination or just responding to a bad management decision has become more problematic. With it have come the unprecedented levels of casualisation, over work, stress, increased hours and the triumph of employer prerogative.

The trends pointed to in this paper are but the backdrop to the choices of possible solutions confronting the labour movement. The real issue for us is to debate and work through possible solutions. The framework set up by the current ACTU leadership – in unions@work – sets the issues for labour renewal in its starkest form. A strong, active, workplace focus of rebuilding union strength is the goal. Encouraging signs of this new activism being taken up by workers points to reports of our demise having been greatly exaggerated. This paper, and those debates to come, seek to build on this renewal.

The ASU encourage all those who support the labour movement, who support the notion that workers are better and more dignified when they act collectively, to contribute to the debate seeking to build new forms of workers abilities to "have a say" in their workplaces, their industries and their futures.

Martin Foley

Branch President

Victorian Branch

Australian Services Union

Ph 03-9342-3400

Fax 03-9342-3499

Email: mfoley@meupsvic.asu.asn.au

March 2001

Over the last decade there have been dramatic changes in the system of employee representation in Australia. The decline of union membership and the narrowing scope and coverage of compulsory conciliation and arbitration in Australia have undermined the traditional collective forms of representation. The new alternative of individual bargaining promoted by governments has failed to replace the traditional system, while the much anticipated ‘empowerment’ and ‘involvement’ of employees promised by the new managerial rhetoric has not delivered. The result is a ‘representation gap’ – Australian employees have no systematic mechanism by which they can have a say in decisions, large or small, within the workplace. This is a major problem of public policy.

This paper reviews existing research in an effort to trace the development of the representation gap in Australia and to better understand its causes. This task begins in section 2 with a discussion of the broad issues at stake and the definition of some key terms. In particular, it identifies three main ‘modes’ of employee representation: trade unions and informal collective regulation; trade unions and formal industrial regulation; and management-initiated consultation.

Section 3 explores the incidence of these modes of representation in Australia before the 1990s. It shows that high levels of union membership and a comprehensive system of industrial regulation through conciliation and arbitration produced a robust system of employee representation. It is also acknowledged, however, that this traditional system was not without its faults. In particular, the opportunities for employees to have a direct say at the level of the enterprise or workplace were limited by significant variations across sectors in union membership and strength, by the centralisation of union organisation and formal regulation, by the limitations in the definition of ‘industrial matters’ and by the absence of management-initiated consultation schemes.

The decade of the 1990s, which is examined in detail in section 4, saw the demise of this traditional system and the growth of the representation gap. The main features of this demise were the rapid decline in union membership, the decentralisation of collective bargaining, the rise of individual bargaining and the reassertion of managerial prerogative. The blame for these developments is shared between unions, governments and employers: unions only belatedly recognised their neglect of members at the workplace level and their failure to recruit the rapidly growing, but largely non-union, sections of the workforce; and governments withdrew their support for compulsory and collective forms of representation and promoted voluntary and more individualised alternatives that relied heavily on employers to recognise and consult with their own employees.

Section 5 shows that Australian employers largely failed to use their new freedoms in the 1990s to give their employees a greater say at work, despite the enthusiasm for these practices professed by business associations. Irrespective of the degree to which the terms of individual contracts are genuinely bargained by the parties involved, there is no evidence that the organisations adopting individual contracts have introduced more systematic consultation and employee involvement mechanisms. More broadly, the available evidence suggests that new managerial practices of the 1990s – generically referred to as HRM – have failed to deliver the ‘empowerment’ and employee autonomy that they promised.

Section 6 draws together the main threads of the argument and briefly identifies its implications.

Mark Bray is Professor of Employment Studies, Head of the School of Management and Deputy Director of the Employment Studies Centre at the University of Newcastle. He holds a BEc (Honours) from the University of Sydney, a MA from the University of Warwick in England and a PhD from the University of New South Wales. He has published widely on industrial relations policy and trade unions in Australia and on comparative industrial relations.

Stéphane Le Queux is a Lecturer in the School of Management and a Research Associate of the Employment Studies Centre at the University of Newcastle. He holds a BCom from Poitiers University in France, a MSc from Sherbrooke University in Canada and a PhD from Laval University in Canada. He is a specialist on European industrial relations, but he has also published on issues like young people and trade unions and high performance production systems.

Duncan Macdonald is Director of the Employment Studies Centre at the University of Newcastle. He holds a BCom, a MCom and a PhD from the University of New South Wales. He is a specialist on public sector industrial relations, but has also published widely on trade unions, workplace industrial relations and industrial relations theory.

Peter Waring is a Lecturer in the School of Management and a Research Associate of the Employment Studies Centre at the University of Newcastle. He holds a BCom (Honours) and a PhD from the University of Newcastle. His PhD thesis examines individualism and collectivism in employment relations in the coal industry, a topic on which he has already published widely. He has also published on the topics of bargaining structures and unfair dismissal.

There is increasing recognition around the developed world of a decline in employee representation at the workplace or, put another way, there is an increasing ‘representation gap’ (Towers, 1997). The size of the gap and its rate of increase vary across countries, affected as they are by the history of union membership, the coverage of collective agreements and the institutional/legal support given to employee representation. In the Nordic countries, for example, the rate of increase has been significantly lower because they have retained high levels of union membership in the face of adverse circumstances, while in others, such as in the USA, slower rates are more a result of a lower base of representation than anything more positive for workers. In the UK and the USA, it has been found that not only has union membership declined, but the coverage of collective agreements – in terms of both the numbers of employees and the issues addressed – has diminished to levels not seen since the Great Depression (Towers, 1997: 63-64). This contrasts with many European countries that have seen greater institutional stability and continued representation of employee interests.

The main task of this paper is to assess the fate of employee representation in Australia. The next section of the paper will briefly explore some of the conceptual issues involved in this task, in particular identifying three main ‘modes’ of employee representation. Section 3 examines the historical incidence of these three representational modes in Australia in the long period leading to the 1990s, arguing that despite a widespread perception that Australian employees were well represented, the reality was quite different. Section 4 focuses more specifically on the decade of the 1990s, demonstrating that this brief period saw savage decline in union membership, significant changes in the formal system of industrial regulation and growing incidence of individualisation, resulting in a further decline in employee representation. The penultimate section (ie. section 5) shows how the rhetoric of conservative governments and managers, which promised increased employee ‘empowerment’ and consultation through the implementation of concepts like ‘Human Resource Management’, failed to deliver. The inevitable conclusion (summarised in section 6) is that at the beginning of the new millennium Australian employees have little opportunity to ‘have a say’ at work.

How do employees ‘have a say’ at work? How do they participate in and contribute to decisions at work affecting their pay, working conditions, job tasks and training – to name just a few of the issues? These are the apparently simple questions that lie at the heart of employee representation, but they are surprisingly complex. They are complicated by the enormous diversity of work situations, but just as importantly, confusion arises through misunderstandings over the nature of the employment relationship and a lack of conceptual clarity. Defining the issues therefore must start with a brief discussion of the employment relationship in general terms.

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The legal, and essentially historical, basis of the employment relationship is the contract of employment. Under the common law, all employers who engage an employee to undertake work on their behalf and all employees who accept an offer to work on someone else’s behalf create a contract of employment. The underlying ‘voluntarist’ assumptions of Australian law, derived as they were from Britain, are that the parties to that contract – that is, the employer and the employee – can determine the terms of the contract as they see fit. Logically, and legally, this seems to suggest that employees have the same right as employers to determine all aspects of the employment relationship.

The reality, of course, is very different. Three features of the employment relationship, as defined by the common law, mean that most employees have considerably less say than employers:

• Unequal market power: Given that the terms of the employment contract are supposed to be determined by a market exchange, the party with the greatest bargaining power will have a stronger role in determining the terms of the contract. In most cases, an employer who almost by definition holds capital, will have more market power than an individual employee, who works solely for wages.
• Uneven legal authority: Once the market exchange is completed and the contract of employment is created, the employer has the legal right to ‘direct’ or ‘control’ how employees will perform their work. As any legal textbook shows, the ‘control test’ is the defining feature of the employment relationship. This means that an employee has a legal obligation to accept reasonable directions of the employer, and the employees thereby has little capacity to ‘have a say’ over many issues that are deemed to be part of the employer's' legal prerogatives.
• Indeterminancy of the relationship: Employment is an on-going relationship rather than an instantaneous market exchange and many aspects of the relationship – many terms of the employment contract – cannot be anticipated or documented at the time of the formation of the initial contract of employment. Given the greater legal authority of the employer in the employment relationship, it is the employer rather than the employee who will be able to determine many of the unresolved issues.

These three factors suggest that, in general terms and in the absence of additional legal instruments, the common law of contract gives the employer substantially greater power to determine the terms of the employment relationship than it gives the employee. This position, however, must be qualified by several points:

• Whilst employees are generally less powerful, the diversity of the employment relationship means that there are many specific situations where they may gain strong market power. Some employers may be financially vulnerable or some employees may have scarce skills that are vital to the operations of the employer, resulting in employees haveing a greater say over many issues at work.
• There are many non-legal mechanisms by which employees may influence what happens at work, including an array of processes focusing on individual employees – from off-hand conversations over morning tea and discussions on the job to contributions to formal production meetings – and a range of collective mechanisms, the most common of which is the influence of trade unions.
• There are many additional legal instruments – from the many ‘implied’ contractual terms developed by the courts to the interventions of parliaments through legislation – that have developed to ensure that the law of employment is far more complex than the simple picture described above and that employees are afforded a greater say at work over many issues.

The enormous diversity of work situations and employment relationships means that the plethora of methods by which individual employees can ‘have a say’ over work issues – from the formal negotiation of contracts of employment to more informal personal relationships at work – cannot be a central focus of this paper.

Rather, this paper is exclusively concerned with more collective or ‘institutionalised’ channels of influence. Indeed, the point of departure for this paper is the recognition of three main collective or institutionalised mechanisms in Australia through which employees can participate in decisions at work – three ‘modes of representation’:

• trade unions and formal industrial regulation,
• trade unions and informal collective regulation, and
• management-initiated consultation schemes.

This section begins by tracing the impact of two modes of representation (namely, trade unions and formal industrial regulation) on the widespread perception in Australia that employees had, by the end of the 1980s, achieved significant employee representation. This perception is then challenged by focusing on the uneven coverage of unionism and regulation, on the centralisation of unionism and regulation, on the limited range of issues subject to union challenge and formal regulation and, finally, on the absence of the third mode of regulation (namely, management-initiated consultation).

Through most of the 20^th century, Australia had internationally high levels of trade union membership. More than half of all Australian employees were members of trade unions by the 1920s and this level of membership continued, with periodic ebbs and flows, until the 1980s (see Appendix 1). As late as 1986, 46 per cent of employees were still unionised.

Union membership meant that many Australian employees were able to increase their bargaining power in the labour market. By acting collectively, they could command higher wages and better working conditions than they might otherwise have received if they had bargained with their employer as individuals. Union membership also gave many employees protection from arbitrary treatment in the workplace as well as an institutionalised mechanism by which they could present their opinions to their employer.

Perhaps more importantly, trade unions became the exclusive channel by which employees could participate in the formal instruments of industrial regulation. The most conspicuous examples of such regulation in Australia were the compulsory arbitration systems, which developed in all states and at federal level from the turn of the 20^th century onwards (Mitchell & Macintyre 1989). The various courts and tribunals set up under these arbitration systems were originally established to settle industrial disputes between employers and trade unions, but they subsequently came to perform a much wider regulatory role. The decisions of these tribunals were embodied in ‘awards’, which specified legally-binding minimum standards for wages and working conditions. In addition, in most jurisdictions, collective agreements negotiated between employers and trade unions could be ‘ratified’ and ‘registered’ by these tribunals, thereby gaining the legal status of an award. In the absence of these processes, these collective agreements would not have been legally-binding on the parties (Creighton & Stewart, 2000). As Appendix 2 shows, by the 1980s, the vast majority of Australian employees – almost 85 per cent – had many of the substantive terms of their employment regulated by awards and registered collective agreements. Awards also cemented many procedures (such as grievance procedures, consultation over occupational health and safety etc) by which employees could discuss or negotiate certain issues with their employers.

Beyond the systems of compulsory arbitration, Australian parliaments had by the 1980s established a range of additional mechanisms by which employees could ‘have a say’ on specific aspects of their employment. The most prominent of these were laws governing occupational health and safety (OH&S) that were enacted at state and territory level between 1972 and 1989 (see Quinlan 1996). Many of these laws compelled employers to establish joint consultative committees with their employees to address workplace health and safety issues within the workplace. In fact, some authorities claimed that these OH&S committees became the most prevalent participatory device in Australian workplaces, allowing managers to tap worker’s extensive knowledge of the workplace and encouraging employees to make suggestions to improve the safety of workplace (Quinlan 1996).

Other legal initiatives, albeit exploiting very different institutional mechanisms, were the various anti-discrimination and equal employment opportunity laws passed during the 1970s and 1980s. Most of these operated by granting individual employees who claimed to have been disadvantaged the right to undertake legal proceedings after the event, the threat of such action being an incentive for employers to consider the representations of employees. However, federal affirmative action legislation passed in 1986 operated differently. It compelled all employers with over 100 employees to develop and implement ‘affirmative action programs’, and required employers to ‘consult with employees, particularly women employees, and with trade unions having members affected the proposal’ (Forsyth 2000: 3).

This extensive and inter-connected set of institutionalised mechanisms for employee representation in Australia – comprising trade unions, compulsory arbitration, occupational health and safety and anti-discrimination measures – was by the end of the 1980s widely perceived to have produced what was almost a ‘workers’ paradise’ in Australia. Indeed, some critics argued that employees, but especially trade unions, had too much power and that formal industrial regulation was too extensive. At first, such arguments were mostly associated with arch conservative politicians and radical employers identified as members of the ‘New Right’ (see, for example, Dabscheck 1989), but they were increasingly taken up by more mainstream employer associations and political parties (Sheldon & Thornthwaite 1999).

The apparent success of the Australian system in entrenching employee representation, however, can easily be exaggerated. For example, despite the impressive aggregate statistics on union membership and the powerful reputation of the Australian union movement, there were wide variations in union membership and strength across industries, companies, occupations and geographical locations. As Appendix 3 shows, some industries had very low union density. In 1988, when aggregate statistics showed union density at 46 per cent of all employees and some industries had over three-quarters of all employees unionised, other industries (like agriculture, wholesale and retail trade, financial services, and recreation and personal services) had density rates below 30 per cent.

The first national survey in Australia of workplace industrial relations, conducted in 1989-1990, also showed that many workplaces either had no union members or, if they had union members, the union was virtually inactive within that workplace (Callus et al. 1991). For example, ‘57 per cent of all workplaces with 5 employees or more have no union members and a further 34 per cent of workplaces which were unionised to some degree had no workplace delegates to represent employees’ (Callus, 1991: 48). The lowest levels of unionised workplaces mostly occurred amongst those with the smallest employment numbers and those in the sameindustries mentioned above as having low union density.

These variations in union membership and strength meant that the impact of trade unionism was far from comprehensive. Indeed, there were many sectors of employment in Australia where unions did not provide employees with a real opportunity to represent their interests within the workplace.

It can also be argued that Australian employees often had only a very indirect say at work because the processes of decision-making occurred beyond the workplace. In other words, despite the high levels of union membership and the wide coverage of industrial regulation before the 1990s, the bulk of union activity and the focus of most formal regulation was centralised at the national, industry or occupational levels, leaving employees little opportunity to ‘have a say’ within their own companies or workplaces.

It has long been recognised that Australian unions were not very well organised at the workplace level (Hince 1967; Rimmer 1989a). The locus of power within unions was the full-time officials and branch-level committees, while few Australian unions gave resources to workplace organisation or integrated workplace representatives into union decision-making processes. Indeed, most union officials actively opposed any role for workplace representatives beyond that of collecting union dues or acting as a ‘watch dog’ for breaches of awards or agreements. There are some significant exceptions, such as large manufacturing plants (in the public sector before WW2, but increasingly in the private sector thereafter), the mines, the waterfront and other transport sectors (Rimmer 1989a; Benson 1991), but they remained unusual and union workplace delegates were generally forced to play a highly defensive role – enforcing demarcation lines and restrictive work practices, and opposing technological change and incentive wage schemes – rather than more positive and co-operative interventions by unions in concert with employers (Bray 1994, see also Ford & Tilley 1986).

Similarly, the focus of most formal industrial regulation was highly centralised. The compulsory arbitration systems gave virtually no formal recognition to union workplace representatives (Hince 1967). While many jurisdictions allowed for single-employer awards and agreements, most awards in Australia were multi-employer, seeking to regulate wages and working conditions across an industry or an occupation (Rimmer 1989b). Certainly most employees were covered by such awards. The tendency in the 1970s and mid-1980s towards highly centralised incomes policies, in which wage increases were limited to those granted in National Wage Cases and innovations at workplace level were constrained, reinforced this aspect of the Australian system.

Some levels of the union movement began to change policies towards workplace representation in the 1980s. The ACTU, for example, began to embrace ‘industrial democracy’ in the 1970s and advocated it more strongly in the mid-1980s. It secured a joint statement with employer associations supporting voluntary employee participation schemes at a workplace level, which included recognition of workplace delegates as the legitimate spokespersons of employees (Lansbury 1980; Davis 1986; Rimmer 1989a). However, as discussed in more detail in section 3.5 below, the unions did not win any legislation compelling employee participation and few participatory schemes were introduced voluntarily by employers.

The ACTU also came to accept the need for unions to encourage greater productivity and economic efficiency, and used its Accord relationship with the federal Labor government to develop wages systems (such as the ‘two-tiered’ system between 1986 and 1987, and ‘award restructuring’ between 1987 and 1991) which granted wage increases in return for changed working arrangements at the workplace (Bray 1994). These new wage determination arrangements necessarily required union input into decision-making at a workplace level and represented a rare attempt to use the formal system of industrial regulation to grant employees a say at the workplace level.

However, the ACTU’s enthusiasm for stronger workplace representation and productivity bargaining at the workplace was not always shared by affiliated unions and lower-level union officials, who remained sceptical. Furthermore, many unions had the workplace organisational structures to implement these arrangements effectively, as was discovered in studies of the progress of award restructuring (see, for example, Rimmer & Verevis 1990).

The continued exclusion of most employees – and many union members – within the formal wage bargaining system reflected the larger absence of employee involvement in management decisions over workplace change. For example, the AWIRS survey, conducted in 1989-1990, reported:

Using the same data source, Green (1991) went on to lament the even more problematic absence of on-going channels for employee involvement:

The reasons why Australian unions and formal industrial regulation were centralised are no doubt complex, but beyond the role of union themselves, which has already been discussed, two factors are vital. First, Australian employers were notoriously reluctant to recognise unions at the workplace level and to negotiate with union delegates. For example, in 1970 Professor Walker concluded:

Similarly, Quinlan’s (1986) case study of management strategies at BHP before the early 1980's found that managers used strict adherence to the award and a steadfast refusal to negotiate directly with unions to retain managerial prerogatives. This strategy was referred to by Chris Wright as ‘constitutionalism’ (Wright, 1995: 108). He found ‘constitutionalism’ widespread amongst Australian employers in the post-war years as employers attempted to come to terms with the shift in power towards employees and their unions.

Second, there was no legal mechanism by which Australian unions could force employers to recognise them (or by which employees could force employers to consult with them) at a workplace level. Unlike other countries where such mechanisms existed, the only mechanism open to unions to force any recognition was notifying an industrial dispute to the relevant arbitration tribunal and, as will be detailed below, the definition of ‘industrial matter’ meant that for many years a wide range of workplace issues was beyond the jurisdiction of the tribunals.

Despite the apparent strength of Australian unions and the extensive coverage of formal industrial regulation, many employment issues of great interest to employees were excluded from formal regulation and frequently from informal collective negotiations. This had two causes: the law and the policies of arbitration tribunals. With respect to the former, the federal arbitration tribunal was restricted by the wording of the Constitution to intervening only in disputes over ‘industrial matters’. The meaning of ‘industrial matters’ was complex due to conflicting judgments, but before 1983 there appeared to be a significant range of issues that were not considered to fall within this category because they were part of the ‘functions of management’ (Brooks 1982: 213; also 604).

As for the policies of the tribunals, they historically avoided interferring in managerial prerogatives. Professor Walker, writing in 1970, recognised these policies when he observed:

In 1980, a senior Deputy President of the Australian Industrial Relations Commission, Joe Isaac (who was formerly Professor of Economics at Melbourne and Monash Universities), presented a similar account of how, despite its strong capacity to protect the interests of employees in matters of wages and working conditions, the compulsory arbitration system in Australia failed to give employees a say on a range of issues which had been held to be managerial ‘rights’ or ‘prerogatives’, such as those relating to ‘the planning and organisation of work: how, what, how much and when work is to be done; who is to do it, who has the right to hire, fire, promote and fire, the technological accompliment of labour, the labour skill requirements of work and the manner of acquisition of such skills’ (Isaac 1980: 35). This deep limitation on employee representation, he argued, came from both the narrow legal interpretation of the term ‘industrial matters’ in the Australian Constitution and the unwillingness of arbitrators to introduce award clauses that challenged managerial prerogatives as well as from ‘general community attitudes on the question of management rights’ (ibid: 48; see also Ludeke 1991).

While these factors limited the impact of formal regulation, some employees in those industries (listed above) with strong union organisation at the workplace level did challenge management. An early study of ‘restrictive work practices’ by Cruise (1957) highlighted union-imposed rules in industries like metal manufacturing, stevedoring, coal mining and metals mining. One of the most powerful trade unions, Australian Federation of Pilots, was outside the mainstream union tradition but it forced domestic airlines to concede much of its managerial autonomy – concessions that lay at the heart of the major dispute of 1989 (Bray & Wailes 1999). More conventional areas, like power stations, also saw strong unions that challenged management (Benson 1991). However, despite the impact they made on managerial and public perceptions of union power, these examples remained the exception and the formal regulatory system restricted rather than encouraged employee participation in decision making.

Some changes occurred in this area from the mid-1980s. Several decisions of the High Court redefined the meaning of ‘industrial matter’ and thereby widened the capacity of arbitration tribunals to include in awards issues like the right of employees to be notified when technological change is introduced and some aspects of the allocation of labour within the enterprise (Ludeke 1991). Ludeke argues that legislative developments, especially at a state level, also reduced management’s discretion over issues such as occupational health and safety, notice of redundancies and protection from unfair dismissal.

The broader objectives and the greater interest of the union movement (or at least the ‘top’ levels of the union movement) in production during the Accord years also led to them seeking a greater say over issues that had previously been considered managerial prerogatives (Bray 1994). The focus of the award restructuring agenda, for example, on training and skills encouraged union workplace representatives to negotiate with employers over the task content of jobs, access to training and career ladders. Unions also sought, and in some circumstances gained, involvement in broader matters of industry planning.

However, as shown below in section 4.4, this trend in the 1980s (which extended briefly in the early 1990s) towards arbitration tribunals, unions and employees becoming involved in a wider range of workplace issues slowed dramatically and was ultimately reversed later in the 1990s.

Apart from the collective activism of trade unions and the limited intervention of formal industrial regulation, there was little evidence before the 1990s that Australian employers had voluntarily given employees a say at work in any systematic fashion.

During the 1970s, in the context of tight labour markets, consultants and state agencies promoted ‘employee participation’ and ‘organisational development’ (Wright 1995). Some employer associations (such as the Confederation of Australian Industry) developed policies that signalled broad support for employee participation, while the notion of greater employee involvement was promoted by a small number of individual employers. However, beyond limited initiatives by some state governments, the reported examples of action by employers towards this end were few and they were narrow in the opportunities they gave to employees (Lansbury 1980). Wright’s review of the period concluded:

The propensity of managers at workplace and company levels to provide employee involvement had not improved much by the mid-1980s. On the basis of ten research projects across a number of industries, Ford and Tilley (1986) concluded:

This disinclination of Australian managers to consult employees was also evident in the AWIRS data of 1989-90. In the context of the low incidence of formal consultation committees cited above, there were major differences amongst workplaces. These committees operated in 44 per cent of large workplaces with active unions, but in only 6 per cent of workplaces with weak or non-existent unions. Green (1991) quite correctly interpreted this as a failure of managers to involve their employees unless the threat of unionism was present.

However, the 1980s did bring a more considered position from several of the major organisations representing Australian employers. Responding to the greater interest of unions in ‘industrial democracy’ and the (limited) support the unions received from the Hawke Labor government, employer associations expressed some support for giving employees a greater say at work. However, two consistent themes in the approach of employer associations were (Davis & Lansbury 1986):

• strong opposition to any suggestion that unions should be the exclusive instrument of employee participation.
• insistence that the promotion of employee participation be voluntary, thus opposing compulsory schemes based on legislation.

Most important for the long-term, the Business Council of Australia began to argue in 1985 that the best prospect for employee involvement lay in the new management styles – ‘a more participative human resource oriented approach aimed at tapping employees’ creativity rather than treating them as extensions of machines’. Such styles – that were not just desirable but necessary for productive and effective organisations in the new business environment. The BCA’s major report in 1989 argued that cutting edge companies, which deserve emulation, were adopting managerial practices that included (BCA 1989: 12):

• ‘Increasing the channels through which employees are involved in their work, including open, frequent communications, task forces, suggestion schemes, surveys and discussion groups’ and
• ‘Developing processes by which employees’ concerns can be dealt with directly in enterprises through respected and effective channels: for example, on job security, promotion, evaluation and performance assessment.’

Again, however, these were considered managerial practices, not matters for joint regulation with unions. This rejection of the role of unions is only implicit in the above quotations, but it was far more explicit in the BCA’s statement on employee participation:

This advocacy in the 1980s of employee participation directed and controlled by management closely paralleled the growth of Human Resource Management (HRM) theories. Beginning in the USA early in the decade, especially at the Harvard Business School, these ideas were rapidly transmitted throughout the English-speaking world by consultants, management education schools and multi-national corporations. Researchers such as Walton (1985), for example, propagated the notion that a firm’s human resources should be nurtured and developed to provide the firm with a competitive advantage. More particularly, Walton argued that dispensing with traditional control techniques and adopting approaches which sought the commitment of employees would, inter alia, lead to superior firm performance. This HRM philosophy drew extensively from the work of the Human Relations school of management, which emerged from experiments conducted by Australian-born Harvard Professor, Elton Mayo, between 1924 and 1952. The most famous and controversial of these experiments were carried out by Mayo and his colleagues at Western Electric’s Hawthorn assembly plant outside of Chicago in the United States. The Human Relations school can be differentiated from other schools of management thought through its emphasis on the social work group within organisations.

In the 1980s, the diffusion and adoption of HRM ideas and practices, informed by human relations theory, mirrored Western anxiety over the competitive threat posed by imports and new plants owned by foreign producers. For some commentators (Kochan et al 1986; Oliver and Wilkinson 1989), HRM’s emphasis on the benefits of team-based work organisation and other forms of employee participation came as a response to the challenge posed by Japanese competition (particularly to American industry). The perceived success of the Japanese model of labour relations sparked renewed interest around the world in participative practices. As Ouchi (1981) explained, the threat of the Japanese challenge to American industry forced US management theorists to examine Japanese labour relations. They found that the Japanese ‘team mentality’ was a contributor to their economic success. Moving to team-based work organisation also had favourable financial implications, as firms were able to dispense with supervisory and middle management layers. Moreover, employee involvement through work teams was viewed as being consistent with improving quality and customer responsiveness. Underpinning these participatory arrangements was the oft-quoted HRM buzzword of ‘empowerment’, which tended to be used loosely and to convey a positive and somewhat ‘upbeat’ rationale for managements’ change initiatives.

Thus, the promise of both theoretical HRM and the new managerial rhetoric was for the mutual benefit of employees and management, including the ‘empowerment’ of employees within the workplace. Despite the rhetoric, however, the reality of the 1980s was that management initiated consultation schemes were little more widespread than they had been in the 1970s. Employers won the policy war and the federal Labor government refused to implement any compulsory schemes to promote industrial democracy, while so that there was little evidence of increased employee participation in decision-making beyond isolated cases. A more detailed assessment of the impact of HRM on employee representation, however, must await section 4.4.

This historical section has shown that in many ways trade unions and formal industrial regulation in Australia gave employees somesay in influence over work-related decision-making before the 1990s. However, the widely accepted belief that the Australian system was a ‘workers’ paradise’ that gave employees (or, more commonly, trade unions) too much power over management must be questioned. In particular, the wide variations in union strength, the centralisation of unions and regulation, the limitations on the issues addressed, the recalcitrance of most Australian employers in incorporating unions into decision-making and employers failure to voluntarily involve their employees meant that most Australian employees had relatively little say at work. A significant factor in explaining this state of affairs was the lack in Australia of a legal mechanism to ensure that all employees had an institutionalised opportunity to ‘have a say’ on many important issues at work.

The 1990s saw dramatic changes in Australia’s industrial relations system, many of which profoundly (and adversely) affected the capacity of employees to have a say at work. Most importantly, the two main institutionalised mechanisms which gave Australian employees a say at work – namely, unions and formal industrial regulation – declined in coverage and significance. The extent to which the third mechanism – namely, management-initiated consultation schemes – rose to fill the representational gap was reviewed in section 3.5.

The 1990s saw the first decrease in the total number of union members in Australia for decades – in 1990, there were 2.7 million members compared with 1.9 million in 1999 (see Appendix 1). Similarly, the union density – the percentage of all employees who are union members – fell dramatically from 41 per cent in 1990 to 26 per cent in 1999. Compared to other developed economies, Australia could no longer be considered a highly unionised country.

The contours of union decline can be seen by disaggregating the union membership statistics. Female membership actually fell slightly less than that of males over recent years, although women continue to join unions less than men (23.4% compared to 27.7%). Union membership in 1999 was far lower amongst part-time workers than full-timers (17.5% compared to 29%), while the figures for casual employees were significantly lower than that for permanents (10.7% compared to 31.1%). Some industries were especially poorly unionised – service industries (such as hospitality or wholesale trade) were amongst the lowest, both around 10%, compared with the strongest industries (like the electricity, gas and water supply, and communication services), with respectively 50% and 48%. The public sector still constitutes a large pool for trade unions, as 50% of public sector and 19.6% of private sector employees were members of a trade union. Finally, youth (15-24 years of age) forms 20% of the labour market but only 12.5% of the trade union membership (ABS 1999: 42).

At the workplace level, AWIRS95 showed that 26% of workplaces with 20 or more employees had no union members present in 1995. Of those where a union member was present, in only 52% was there a delegate (Morehead, et al 1997: Table A7.1b). If smaller workplaces were included, the percentages for union membership and delegate presence would be much smaller and since that survey was conducted union membership has continued to fall significantly.

Clearly, in little more than a decade the pattern of union membership in Australia has changed dramatically. From the picture of strong, but uneven, union density described in section 3.1 above, the Australian union movement has declined by over one third in aggregate membership, leaving major sections of the Australian workforce without the opportunity to use a union to represent their interests at work. Perhaps most significantly, it is the areas of employment growth – the private services, women, part-time and casual labour – that have the lowest levels of union membership.

Central to trends in the early to mid-1990s was the decentralisation of collective bargaining and union organisation in Australia. In contrast to the largely centralised patterns of formal industrial regulation in previous decades, the 1990s saw the emergence and entrenchment of enterprise bargaining as the prime form of formal industrial regulation. Logic would suggest that, unlike awards, which continued to be made at fairly centralised levels of decision-making, enterprise bargaining would give employees at the workplace level a greater and more direct say than before in the determination of their terms and conditions because the site of decision-making is closer to them.

The law also attempted to ensure a greater say for employees. Legislative amendments by the Labor government to the federal act in 1992 and 1993, for example, were designed to promote enterprise bargaining and to ensure that such bargaining involved consultation with employees. The 1992 law imposed an obligation on unions whose members were covered by any agreement to consult with those members, while the 1993 legislation went even further, requiring parties to an agreement (union or non-union) to show that they had taken reasonable steps to consult with employees during the negotiation of the agreement; this included informing employees and explaining the proposed terms of the agreement and particular obligations about consultation with specific groups of employees, like women and young people. Finally, certification of enterprise agreements by the AIRC was contingent upon the parties including clauses that established ‘a process for the parties to the agreement to consult with each other about matters involving changes to the organisation or performance of work’ under the agreement (Forsyth 2000, Mitchell et al. 1997). These provisions represented a highly novel attempt to use the law to give employees a say in collective bargaining at an enterprise or workplace level.

Around the same time, unions themselves seem to have realised the difficulties created by their previously centralised forms of organisation and they began to focus greater efforts on building stronger workplace organisation. In a context in which enterprise bargaining is the central method for increasing wages and negotiating working conditions, there were few alternatives! The massive fragmentation of bargaining meant that full-time union officials could not cope with the many demands of enterprise bargaining, especially at a time of declining membership and decreasing finances. As well, unions began to recognise that a lack of attention to the workplace might have been a cause of their declining memberships (Evatt Foundation 1995, ACTU 1999). Consequently, from the early 1990s, unions began to focus greater attention and more resources to recruiting and to more effectively organising at a workplace level (see, for example, Briggs 1999).

In some respects, these developments contributed to employees gaining a greater say. Enterprise bargaining, for example, did produce greater involvement by union workplace representatives and employees in the negotiation process. Full-time union officials continued to negotiate many enterprise agreements, but union workplace delegates and rank and file employees seem to have become more involved. The Commonwealth Department of Industrial Relations, for example, used its own surveys and AWIRS95 to argue that between 1994 and 1995 collective bargaining was undertaken increasingly within workplaces, with union delegates being more likely to be involved (DIR 1996: 81-4). However, around half of all workplaces still did not involve delegates. Full-time union officials were still involved more frequently than delegates and the respective contributions of the two groups to negotiations were not revealed.

There are at least three reasons why the decentralisation of formal bargaining arrangements and of union activity have not effectively delivered greater involvement in workplace decision-making for the bulk of Australian employees. First, the novel legal sanctions encouraging employee consultation as part of enterprise bargaining largely failed. The AIRC, for example, does not appear to have strictly enforced the consultation provisions of the legislation during the period between 1993 and 1996 and many enterprise agreements were certified without the consent of employees (Mitchell et al. 1997). Then, the newly elected Liberal/National government, led by John Howard, chose to dramatically reduce the scope of consultation provisions in their 1996 Workplace Relations Act:

Second, not all unions nor all union officials supported a decentralisation of decision-making power within unions. In some cases, ‘pattern’ or ‘model’ bargaining was understandably promoted as an alternative to traditional centralised bargaining structures in industries where employment was fragmented and/or workplace delegates did not have the skills or bargaining power to confront management. In other less laudable cases, full-time officials were reluctant to change their traditional modes of operation because they perceived that it would lessen their authority or even challenge their position within the union.

Third, even those unions seeking to build delegate power mostly lacked the power to force employers to bargain at their desired level. This reflected not only the absence of specific legal sanctions to encourage or compel consultation at the workplace level, but also a range of more general forces that hamstrung unions. During the early to mid 1990s, increased competition in product markets, high levels of unemployment and the growing insecurity of employment amongst those who retained their jobs made it difficult for unions to challenge management. One result of this combination of factors was that even in those companies and industries where unions were traditionally well organised, unions became the subject of increasingly aggressive attacks from employers; these difficulties being well illustrated by events manufacturing (for example, on the APPM dispute in 1992, see Thompson 1992) and mining (on CRA/Rio Tinto, see Timo 1998).

More generally, the result was that the substantive content of bargaining was dominated by management; unions were simply less able to influence management decisions. In reviewing events of 1996, for example, Callus argued:

The position of unions was even worse after the election of the Howard Liberal government in 1996. The new federal government was extremely anti-union and its Workplace Relations Act withdrew a wide range of legal provisions that had previously allowed or supported union activity unions (see, for example, Lee & Peetz 1998). One of the consequences of this new legislative regime was a new round of employer attacks on trade unionism in areas where unions were not only previously strong but, ironically given their views on ‘democracy’, where union delegates played an important part in union organisation and bargaining activity, like stevedoring (for example, Dabscheck 1998) and coal-mining (Waring 2000).

As well as withdrawing support for unions and promoting further decentralisation of collective bargaining, the Howard government’s Workplace Relations Act of 1996 also introduced individual bargaining in the form of Australian Workplace Agreements (AWAs). For the first time since the origins of the compulsory arbitration system at the turn of the 20^th century, individual employees who were normally covered by an award or collective agreement could negotiate individual contracts whose terms could override those of a relevant award or collective agreement, subject of course to a ‘no disadvantage’ test (Bray & Waring 1998, Waring 1999).

The government’s stated aims of this individual bargaining were to end the traditional ‘monopoly’ held by unions in representing employees and to allow employers to directly negotiate with their employees without the ‘interference’ of third parties, like the arbitration tribunals. In introducing the Workplace Relations Bill, for example, Minister Reith claimed:

Instead, the government advocated a system, which they argued was delivered by the Workplace Relations Act, in which employers, and especially employees, had a ‘choice’ over which bargaining instruments to use (as discussed above) and over who should represent them in bargaining (see Bray & Waring 1999). This choice, the government argued, would free employees from the clutches of full-time union officials, who acted according to their own vested interests rather than the interests of employees. They also assumed that this choice would permit natural cooperation between employers and employees to flourish. The Treasurer, Peter Costello, claimed in parliament that:

By the 30 November 2000, over 139,891 AWAs had been registered with the Employment Advocate covering employees in 2,663 companies. This represented over 1.5 per cent of the total workforce (OEA 2000).

Did the growth of these individual contracts give the employees affected a greater say at work? This is an important but highly contentious question. As the preceding discussion suggests, advocates for AWAs argued that individual arrangements induce a closer relationship between management and employees, which permits the parties to build ‘high trust’ relationships. Phraseology such as ‘closer, high trust relationship’ is suggestive of a relationship that enables both parties to best communicate their interests and develop empathy for each other’s position. Third parties such as trade unions and industrial tribunals were correspondingly viewed not only as barriers to this kind of working relationship but as institutions that adversely corrupted the natural close proximity of an individual relationship. Hence, the advocates for individual contracts such as AWAs argue that employee voice and involvement are enhanced through individual agreements and not diminished.

In assessing these claims, there are two separate but related issues. First, there is the question of whether employees’ interests are effectively represented when AWAs are drafted. In other words, are AWAs bargained over, or at the very least, are employees consulted about the terms and conditions contained in AWAs? Second, there is the question of whether AWAs are associated with a greater investment by managers in employee voice and involvement mechanisms beyond the content of the individual contract itself?

On the first question relating to procedural issues, there is some conflicting evidence. Waring (2000), for example, discovered in three case studies in the coal mining industry that AWAs were not bargained, but were unilaterally offered by management and either accepted or rejected by employees. Wider incidence of this approach was also supported by early survey evidence in 1998, which suggested that approximately 92% of employees covered by AWAs did not appoint a bargaining agent to negotiate on their behalf (see Waring 1999). While this may infer that employees simply negotiated AWAs without the assistance of an agent, a more plausible explanation – which is supported by the New Zealand experience (see McAndrew and Ballard 1995) – indicates that AWAs are rarely bargained over. As well, evidence presented to the Federal Court in duress cases indicates that AWAs are often being offered on a ‘take-it-or-leave’ basis (Van Barneveld 2000).

In contrast to these findings, Gollan’s recent survey of 500 Australian organisations with registered AWAs discovered that the majority of employers (65 per cent) held discussions with their employees before commencing the drafting of their AWAs (Gollan 2000). In 59 per cent of all cases, changes to the proposed AWAs followed these discussions, leading Gollan to argue that the evidence demonstrates a degree of employee consultation and influence when drafting AWAs. Yet Gollan’s survey says little about the quality of such consultation or the extent of influence exerted by individual employees. Moreover, the evidence does not support a causal relationship between reported employee consultation and subsequent changes made to AWAs, which might have indicated that actual bargaining had taken place. It is important to acknowledge that Gollan’s findings are the result of a survey of managers who, understandably, may have an interest in overstating the extent of discussions held with employees over AWAs. Finally, an alternative interpretation of the survey results shows that 35 per cent of AWAs involved no input at all from employees and 41 per cent saw no change in the AWAs after the first presentation by management!

With respect to whether AWAs are associated with extensive communication, consultation and involvement beyond the terms of the AWA itself, the evidence is clearer. Using data from AWIRS 1995, Deery and Walsh (1999) [see also section 5 below for a more thorough discussion of this study] have discovered that Australian employers with a majority of their non-managerial workforce on individual contracts do not invest in elaborate communication and involvement mechanisms. This suggests that these workplaces are akin to those in Britain described by Sissons (1993) as ‘bleak houses’ or Guest (1995) as ‘black holes’, where firms ignore progressive people management practices and where employee voice is effectively silenced.

On balance, it seems that the growth of individual contracts, especially AWAs, is associated with a broadening of the representation gap. Whilst advocates for AWAs claim that their use may induce a closer, more trusting relationship, the evidence (admittedly slender at this stage) suggests that the development of AWAs themselves involves only limited consultation as opposed to meaningful negotiation. Moreover, where individual contracts are the primary industrial instrument in Australian workplaces, managers seem reluctant to provide employees with a means to speak and be heard at work.

In the 1980s and early 1990s, there were some grounds (admittedly contestable) for arguing that the workplace issues subject to unilateral management decision – management prerogatives – were being reduced through innovative decisions by the courts, new legislation and developments in the formal system of industrial regulation [see above, section 3.4]. The further growth in the unfair dismissal provisions at federal level in 1993 might have strengthened this perception. However, developments during the rest of the 1990s spelt the end to even the perception of declining managerial prerogatives.

There are three ways in which this reassertion of managerial prerogative was manifest. First, while there was little diminution to individual employment rights, there is a strong basis to believe that these rights became more difficult to enforce, thus relieving management of some pressure. Laws on equal opportunity and discrimination, for example, were not wound back during the 1990s and there were even some areas, like maternity leave and its translation into parental leave, where individual rights were expanded (Strachan & Jamieson 1999). Affirmative action survived less well, and there was a significant downgrading at federal level in the substance and in the consultative requirements on employers (Forsyth 2000). Almost all of these rights, however, require individuals to initiate legal or administrative proceedings and the harsh labour market conditions of the 1990s made this more difficult for employees who wished to avoid unemployment.

Second, there was a significant narrowing in the federal system of industrial regulation through what was euphemistically called ‘award simplification’. This process, which was introduced under the Workplace Relations Act of 1996, was designed to limit awards to just twenty ‘allowable matters’ (Bray & Waring 1998), resulting in many issues previously included in awards – including various consultation clauses, union security provisions, seniority rights etc – being jettisoned. The pronounced objective of award simplification was increased flexibility rather than a reduction in the scope of formal regulation because it was argued that the issues that dropped out of awards would be replaced with enterprise-specific provisions in enterprise agreements. However, while it is hypothetically possible that strong unions could actually expand the range of issues contained in enterprise agreements, the vast majority of employees will not be able to realise this opportunity and the overall result will undoubtedly be a significant increase in managerial prerogative.

Third, as discussed above in section 4.2, the weakening of union power during the 1990s reduced their capacity to challenge management at the workplace. In other words, the narrowing scope of formal regulation did not see a corresponding widening of agendas in more informal forms of collective bargaining.

The dramatic decline in union membership and the narrowing of the formal system of industrial regulation during the 1990s reduced the capacity of these regulatory modes to deliver employee representation. At the same time, the constellation of forces that combined to reduce the power of the union movement undermined the ability of unions to challenge management. As a result, workplace change was almost completely open to unilateral determination by management. The question is whether management worked with and consulted employees (rather than unions) when exercising its determination, as the theories of HRM and rhetoric of Australian employers suggested.

Like their counterparts in many other western industrialised nations, Australian managers in the late 1980s and early 1990s were seduced by the promise of HRM (see above, section 3.5). This promise was one of mutual gains: they believed that sophisticated HRM practices not only led to superior firm performance but also to enhanced employee voice and autonomy.

To some extent, the enthusiasm of HRM advocates has been supported by recent research into the relationship between certain managerial practices and the economic performance of enterprises. In the North-American literature, these managerial practices have been referred to as ‘high performance work systems’ (HPWS), but another version focuses on the ‘high road’ employment strategy (Whitfield 2000). The managerial practices included in HPWS include: autonomous work teams, socio-technical systems, open systems planning and new plant designs (Farias and Varma 1998), while ‘high performance working’ have been defined by the OECD as ‘flatter, non-hierarchical structures, where reliance is not on management control but on teamwork and autonomy, based on high levels of trust, communication and involvement’ (ILO 2000)

This research has produced significant and growing evidence (both case study and large survey) of an association between firms with sophisticated work practices (HPWS) and high economic performance (see Applebaum and Batt 1994; Kling 1995; Jarboe and Yudken 1997). In other words, enterprises adopting HPWS practices were more likely to enjoy better productivity, higher quality and improved profits. While there is still no conclusive causal relationship between these practices and the superior outcomes (Goddard and Delaney 2000), the findings certainly help to explain management interest in such practices over the last decade.

Given the stated enthusiasm for HRM and its apparent importance in the economic performance of enterprises, have Australian managers actually adopted HRM (or HPWS) practices? The first step in answering this question is to recognise that there is little doubt that during the 1990s the approach of many Australian organisations towards their employees changed significantly. In some ways, this was a culmination of developments that can be traced back to earlier decades. But in other ways, these new strategies and practices flowed from economic imperatives, ideological conditions and legal opportunities unique to the 1990s.

One aspect of these significant changes concerns management itself. According to Wright’s extensive and longitudinal research, there has been a growing professionalisation of IR/HRM management since the 1970s. Company personnel (later HRM) policies have become more formalised and sophisticated, ‘Personnel’ managers and later ‘Human Resource’ managers have become better educated and they have come to occupy increasingly more senior positions within companies and to play a more significant role in the development by executive management of company planning (Wright 1995). Correspondingly, Australian companies have developed a more ‘strategic’ approach to the management of their employees.

This approach has included a greater focus by employers on ‘internal’ relations between employers and employees and a corresponding rejection of ‘external’ influences, such as unions and tribunals (see Buchanan & Callus 1993). Moreover, this greater focus on internal relations has coincided with new flatter, more decentralised organisational structures, which in turn have provided the impetus for new forms of work organisation, such as quality circles, teams and other direct and indirect forms of employee participation (Wright 1995: Chapter 6).

Australian managements have also sought to develop internal mechanisms designed to improve communication between employers and employees (see Wright 1995: 141-6; Kitay & Lansbury 1997; Benson 2000). In Australia, Kramar’s (1999) study of human resource management practices in 334 organisations, points to increased use of management-sponsored mechanisms of communication during the 1990s. For instance, she found that 60 per cent of all firms surveyed had increased their use of team briefings and other direct and indirect forms of communication. Communication, however, tends to be a top-down exercise rather than a form of employee representation.

More promising findings related to consultative committees. Kramar’s study also found that three-quarters of all firms surveyed had joint consultative committees and that four out of ten of these committees had been established in the period 1993-1996 (p. 30). This represented a substantial increase in the extent of joint consultation cited in Green (1991) discussed previously. Harley et al. (2000) confirmed this trend in their comparative study of the British and Australian experience of employee direct participation, but they argued that such mechanisms were not associated with enhanced employee discretion. Indeed, Harley et al. (2000) contend that their findings ‘provide support for critical assessments of employee involvement and suggest that those who pin their hopes for employee emancipation to employee direct participation are likely to be sorely disappointed’ (p. 52).

There is even some Australian evidence which suggests that employers themselves are re-evaluating employee participation and teamwork in the workplace. According to Fisher et al.’s (1999: 509) survey of the Australian Human Resources Institute’s members, ‘worker participation and teamwork’ ranked second last (out of ten issues) when members were asked to identify what they believed would be the most significant changes in human resource management in the next five years. This leads Fisher et al. to contend that worker participation and teamwork may not be high priorities for Australian human resource managers in the years to come.

As discussed above in section 3.5, a related concept that underpinned the growth of interest in participatory arrangements was of ‘empowerment’. This HRM buzzword tended to be used loosely and to convey a positive and somewhat ‘upbeat’ rationale for managements’ change initiatives. At face value, ‘empowerment’ seemed to suggest that managers would share some of their power with employees by providing them with increased autonomy. However, case study and survey research have revealed that the reality of empowerment programs and practices have rarely matched the rhetoric associated with their introduction. Waring (1998), for example, found in a study of two large Australian employers, that despite repeated references to the notion of empowerment and the re-organisation of employees into work teams, employees had very little authority to make workplace decisions without the prior consent of management. Similarly, Van de Broek’s (1997) study of one Australian organisation found that the introduction of ‘empowerment’ practices was, in reality, designed to entrench management’s power and make redundant employee access to independent representation. These case study findings have recently been supported by Harley’s (1999) analysis of AWIRS 95 data. Harley (1999) discovered that despite considerable enthusiasm for ‘empowerment’, the data suggest that autonomy is still positively correlated with senior positions within organisational hierarchies. In other words, unless Australians occupy senior management positions they are unlikely to have much control over their work or have an ability to have a say, notwithstanding the ‘empowerment’ hype. This finding leads Harley (1999) to argue that ‘empowerment’ is little more than a myth in Australian workplaces. Wilkinson’s (1998: 516) review of the international experience goes further by arguing that, ‘Paradoxically, empowerment as currently practised has been less empowering than employee participation of earlier times’.

The general underlying problem with HRM ‘voice’ mechanisms such as empowerment programs, quality circles, consultative committees, suggestion schemes and open door policies has been identified by leading international researchers such as Freeman and Medoff (1984) and Miller and Mulvey (1989). According to the former, these management-sponsored participatory arrangements have rarely been successful. The problem confronting these ‘engineered’ voice mechanisms, as Miller and Mulvey (1989:4) argue, is that their successful operation would require management to ‘…surrender a measure of their authority to the workforce…which they are seldom willing to do’. Freeman and Medoff (1984) colourfully argue that this problem ‘is akin to that of operating a democratic parliament in a monarchical or dictatorial regime. As long as the dictator or monarch has the final word, the parliament cannot truly function’ (cited in Mulvey and Miller, 1989:4).

Aside from management’s general reluctance to share some of their power with employees, a well regarded British scholar, Legge (1989), has identified another reason for the failure of HRM to provide employees with meaningful consultation and participation. She points to contradictions within the normative model of HRM, highlighting in particular HRM’s individualist orientation coupled with its promotion of team-based work organisation. For example, HRM’s promotion of individualised payment systems is likely to be incompatible with team working. Moreover, the use of individual contracts may be inconsistent with efforts to promote group-based problem solving.

Taking a slightly different approach to Legge’s research, Deery & Walsh (1999) have found empirical support for the suggestion that the use of individual contracts may be inconsistent with participatory and communication mechanisms. They found that while firms with a majority of their non-managerial workforce on individual contracts (individualisers) were sophisticated and strategic in their approach, their policies and practices resembled ‘hard’ HRM rather than its ‘soft’ counterpart. In other words, the extensive use of performance-related pay systems and staff appraisals were not accompanied by ‘high-trust’, ‘high employee-involvement’ strategies:

Moreover, Deery and Walsh argue that the individualisers’ approach:

In summary, although the underlying philosophy of HRM and associated practices have proved popular with Australian management, there is little evidence to suggest that HRM has established effective internal mechanisms to provide workers with a genuine means to speak and be heard at work. The available evidence suggests that despite the rhetoric of HRM, its promise to provide employees with a greater say has remained unrealised. These experiences lead to the conclusion that workplace representation or voice channels are unlikely to ever be effective so long as they are sponsored by management alone.

At the beginning of the new millennium, there can be no doubt that there is a significant ‘representation gap’ in Australian workplaces. This gap was smaller in the decades before the 1990s, although the opportunities for employees to have a say at work were not as great as many believed. It was, however, the 1990s that saw the substantial widening of the gap.

Central to this development has been the role of the state in providing – or not providing, as the case may be – the legal framework for employee representation. The compulsory arbitration system that dominated Australian industrial relations for most of the 20^th century delivered to employees a guaranteed, albeit indirect, voice in regulating their wages and working conditions. It also encouraged trade unions that were able to give a stronger form of representation to many sections of the workforce. However, the centralisation of the arbitration system and the limited range of issues it addressed did not facilitate a direct role for employees to have a say at work. There was no legal mechanism in Australia that compelled employers to discuss issues – let alone negotiate those issues – with their employees at a workplace level. This traditional system generally suited Australian managers and trade union leaders, although for very different reasons.

There was a brief period during the late 1980s and early 1990s when this story changed. The award restructuring system under the Accord sought to gradually decentralise the collective bargaining system and to focus the wage determination system on productivity improvements at a workplace level. In the early years of enterprise bargaining, new legislation required collective agreements negotiated at a workplace level to be discussed and accepted by employees before they were certified. Some sections of management and unions endeavored to embrace this experiment by devolving negotiations to workplace representatives and consulting employees – giving employees a greater say! However, the legacy of history was substantial and the legal mechanism (and/or its implementation) was flawed.

Later in the 1990s, in new economic circumstances and in response to new employer demands, governments with new ideas more radically ‘reformed’ the traditional arbitration system, dramatically narrowing the scope of formal regulation and withdrawing support for trade unions as the only, or even most important, collective mechanism of employee representation. In its place, there emerged a more decentralised collective bargaining system and new individualised mechanisms that relied more heavily on managers and their employees to voluntarily develop forms of representation and voice.

Unsurprisingly in the new environment, union membership declined savagely (although it could hardly be said that legislative change was the only cause of this decline) and the narrowing of the formal system of industrial regulation meant that the traditional channels of employee voice were diminished. The rise of individual bargaining within the formal system did little to fill the gap. Irrespective of the degree to which the terms of individual contracts are genuinely bargained by the parties involved, there is little evidence that the organisations embracing individual contracts have introduced more systematic consultation and employee involvement mechanisms. More broadly, the available evidence suggests that new managerial practices of the 1990s – generically referred to as HRM – have failed to deliver the ‘empowerment’ and employee autonomy that they promised.

The representation gap is, then, the result of a complex historical evolution, in which unions, employers and governments all have a hand. More important, however, is that this representation gap be recognised as a major and urgent public policy issue. Employees in Australia deserve a greater say at work.

Note: May not add to 100 due to rounding.

Source: Australian Bureau of Statistics, Incidence of Awards, Catalogue no. 6315.0

Percentage of all employees

unionised in industry

Industry Males Females Persons

Agriculture, forestry, fishing 13 11 13

Mining 67 19 63

Manufacturing 52 38 48

Electricity, gas and water 82 62 80

Construction 52 11 47

Wholesale and retail trade 21 26 23

Transport and storage 69 35 62

Communication 84 55 76

Finance, property and business services 28 27 28

Public administration and defence 68 48 61

Community services 56 45 49

Recreation, personal and other services 27 26 26

TOTAL 46 35 42

Source: Australian Bureau of Statistics, Trade Union Members, Australia, June 1989.

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Benson, J. (1991) Unions at the Workplace, Oxford University Press, Melbourne.

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