Unions’ corrupting power
In most countries, it is unions versus the big end of town. Have you noticed though, how in Australia, unions are the big end of town? How do you explain their dominance despite their tiny membership?
It helps an awful lot that the (ex- union lawyer) prime minister is accustomed to taking instruction from union secretaries. It helps again that two-thirds of the federal ministry are ex-union officials or lawyers. But then that is no surprise, it is after all, the over-arching imperative of unions to represent working people and there is no better way of doing this than getting their own elected to parliament so that they can pass laws favourable to themselves.
Unions control the big industry superannuation funds. The savings of almost five million people comprise more than 17 per cent of all superannuation assets in Australia.
At the coal face, the same union official that makes agreements with employers to push employees into the union super fund knows that one day, they have a good chance of sitting on the board of that fund.
In the construction industry, a large builder seeking capital is just as likely to seek it from the industry fund as from a bank. Think about what that might mean for the company and the other resulting deals they will have to then make with the union that controls that fund and you start to find new meaning to the words “cosy club”.
Unions have their chosen law firms too, known as “union firms”; those like Maurice Blackburn and Slater & Gordon. These firms are large and closely identify with their union clientele. Links between big law firms and policy makers are also strong.
Industrial relations lawyers and consultants will tell you it is now more lucrative to work for unions and employees than for business. Not only is there more money to be had in pursuing unfair dismissal and adverse action claims than in defending them, it is far easier.
To defend a claim, you have to have facts and get your act together.
Years ago, unions abhorred lawyers and preferred to sort things out in the workplace using industrial muscle. Now that dwindling membership has meant the industrial muscle has atrophied, legal muscle is an essential part of the standard union armoury for exerting pressure on employers.
Unions have deep pockets; small and medium business cannot match their spending power and so law firms are emerging as enforcers for union dominance and might.
In the past few years, unions have shed many previous activities; their role as the “industrial police” has been replaced by the Workplace Ombudsman, who does a far better job. Unionists now have more time to focus on organising in the workplace through collective bargaining; the core activity enshrined in the Fair Work Act. Collective bargaining lets unions raise funds in many ways.
When collective agreements made with employers provide income protection insurance for staff and allow only union-preferred contractors to be used, you can be sure significant income flows back to the union. Often, unions will force employers to have staff “trained” in safety and other matters through union-owned companies. Gone are the days when membership income provided the sole income stream to unions.
Unions appear to be wealthier now because they are; many have alternative income streams, investments, businesses and property. More recently, unions have benefited from government grants for training and education. They are more cashed up now.
There is nothing wrong with unions having assets, wealth and power as they are an important feature of a free and democratic society. The problem is the regulations are sadly lacking; the local girl guides chapter is run by a person who has more financial accountability than a union official. There is no transparency in the kickback deals gained by collective agreements.
Do unions have more money and power than business? Maybe not, but they are better organised and have the advantage of an environment with almost no regulation.
The community wonders whether Craig Thomson’s alleged behaviour is an isolated incident. Sadly, in the current regulatory framework, it is naïve to expect it to be anything but run of the mill but it is hardly the big issue. People who aren’t in unions should not worry about what union money is spent on. Rather they should turn their attention to where the union money comes from and why.
grace.collier@adelhelm.com.au
In most countries, it is unions versus the big end of town. Have you noticed though, how in Australia, unions are the big end of town? How do you explain their dominance despite their tiny membership?
It helps an awful lot that the (ex- union lawyer) prime minister is accustomed to taking instruction from union secretaries. It helps again that two-thirds of the federal ministry are ex-union officials or lawyers. But then that is no surprise, it is after all, the over-arching imperative of unions to represent working people and there is no better way of doing this than getting their own elected to parliament so that they can pass laws favourable to themselves.
Unions control the big industry superannuation funds. The savings of almost five million people comprise more than 17 per cent of all superannuation assets in Australia.
At the coal face, the same union official that makes agreements with employers to push employees into the union super fund knows that one day, they have a good chance of sitting on the board of that fund.
In the construction industry, a large builder seeking capital is just as likely to seek it from the industry fund as from a bank. Think about what that might mean for the company and the other resulting deals they will have to then make with the union that controls that fund and you start to find new meaning to the words “cosy club”.
Unions have their chosen law firms too, known as “union firms”; those like Maurice Blackburn and Slater & Gordon. These firms are large and closely identify with their union clientele. Links between big law firms and policy makers are also strong.
Industrial relations lawyers and consultants will tell you it is now more lucrative to work for unions and employees than for business. Not only is there more money to be had in pursuing unfair dismissal and adverse action claims than in defending them, it is far easier.
To defend a claim, you have to have facts and get your act together.
Years ago, unions abhorred lawyers and preferred to sort things out in the workplace using industrial muscle. Now that dwindling membership has meant the industrial muscle has atrophied, legal muscle is an essential part of the standard union armoury for exerting pressure on employers.
Unions have deep pockets; small and medium business cannot match their spending power and so law firms are emerging as enforcers for union dominance and might.
In the past few years, unions have shed many previous activities; their role as the “industrial police” has been replaced by the Workplace Ombudsman, who does a far better job. Unionists now have more time to focus on organising in the workplace through collective bargaining; the core activity enshrined in the Fair Work Act. Collective bargaining lets unions raise funds in many ways.
When collective agreements made with employers provide income protection insurance for staff and allow only union-preferred contractors to be used, you can be sure significant income flows back to the union. Often, unions will force employers to have staff “trained” in safety and other matters through union-owned companies. Gone are the days when membership income provided the sole income stream to unions.
Unions appear to be wealthier now because they are; many have alternative income streams, investments, businesses and property. More recently, unions have benefited from government grants for training and education. They are more cashed up now.
There is nothing wrong with unions having assets, wealth and power as they are an important feature of a free and democratic society. The problem is the regulations are sadly lacking; the local girl guides chapter is run by a person who has more financial accountability than a union official. There is no transparency in the kickback deals gained by collective agreements.
Do unions have more money and power than business? Maybe not, but they are better organised and have the advantage of an environment with almost no regulation.
The community wonders whether Craig Thomson’s alleged behaviour is an isolated incident. Sadly, in the current regulatory framework, it is naïve to expect it to be anything but run of the mill but it is hardly the big issue. People who aren’t in unions should not worry about what union money is spent on. Rather they should turn their attention to where the union money comes from and why.
Grace Collier is the principal consultant with Adelhelm and Associates.
The Australian Financial Review
