The following essay was from first year Management and Unions. It is about the decline in Union density (aka membership) in Australia in the past few decades. I have no idea what the grade, nor do I really care. I passed the subject and that is what counts.

The general social system of Australia is made up of four components, the Economic System, the Political System, the Legal system and the Industrial Relations System. Each of these components is designed to produce a particular output for society. (Carol B. Fox et. al 1995, p 14) Industrial relations is about the behavior and interaction of people at work. It is concerned with how individuals, groups, organizations and institutions make decisions that shape the employment relationship between employers and employees. (Deery, S. et. al, p 1.2) One of the key players in the Industrial Relations System are the unions, who represent the employees of a company or industry. There are many important factors that give a union power to fight against management and government, and one of these its members. (Fox et. Al 1995, p 172) According to the Australian Bureau of Statistics (ABS) union membership in Australia has been declining quite rapidly since about 1982, due to many reasons. For example, the effect of the 1983 Accord, rising unemployment, the implementation of Human Resource Management and structural changes in the labour industry. The power of unions in Australian Industrial Relations has now changed because of it’s declining membership.

The Dunlop model was established to help people have a better understanding of Industrial Relations, and to figure out why certain rules are established and how and why they change over time. Dunlop’s model states that there are five key components of and Industrial Relations system. These are 1. The actors, 2. Contexts (Environments) 3. Processes 4. Ideology and 5. The output of the system. The actors of the model are very important, as they interaction of them results in the web of rules being established. The three actors are: 1. Workers (non-managerial) and their representatives, usually trade Unions. 2. Managers and their representatives (i.e. agents of the owners of capital, the stockholders not usually active in Industrial Relations) and 3. Government. (Both levels, state and federal) These three are intertwined to make the Industrial Relations of Australia, and if one changes, it is either the effect or cause of change in another. (Carol B., Fox et. al, pp. 14-16)

There are four main levels of Industrial Relations in Australia. The first one is The national level, which determines overall level of wage increases for workers covered by awards. The second is the industry or occupation level, involving entire industries, and usually involving state tribunals. The third is company and divisional level, in which after getting an award, unions may go to the company and ask for “over-awards.” (Though these are discouraged by the government) The last level is the shop level, which is usually confined to work rules and conditions, matters of hiring, transfer, dismissal and technological change. (Strauss, G., pp. 142-143)

Union membership in Australia was still rising in the 1970’s and early 1980s, as it had been most of the 20th century because of the introduction of compulsory arbitration. (Davies, E., p 104) In 1982 this all started changing, and between 1982 and 1996 (Refer to Table 1) union Density fell by one third. One governmental cause of the decline in unions is the introduction of the Accord, which was an agreement between the Labor party and the Australian Commission of Trade Unions. (ACTU) (Davies, E, p 112) The effect of the Accord was to expand opportunities for individuals to “free ride” because now both unionists and non-unionists shared the benefits of the unions, which included 1. Stronger dismissal protection 2. More comprehensive superannuation schemes and 3. Improved occupational health standards. (Deery, S. et. al, p 7.22) Probably the most important feature of the Accord was that it included a return to centralized wage determination with wave adjustment for price movement and at longer intervals for movements in national productivity. (Davies, E, p 112) It is highly possible that the centralized wage determination lead to a decline in union membership because “it required unions to communicate with the membership and develop a strong and participatory workplace organization.” (Shawn, J. et. al, p 96) Unlike the unions of other countries, Australian unions are weak at the workplace level because they have been reliant on the arbitration system rather then entry-level bargaining to achieve their objectives. (Davies. E., p 105) It seems that the delegate’s (union Representative’s) function appears to be minimal and routine in many instances, not at all the kind of close relationship unions need to have with their members. (Peetz, D., p 35) The place of unionized workplaces that have representation at the workplace is very important, especially when it is noted that the rate of deunionization of workplaces with delegates was 2%, but those without union delegates was 12%. (“Deunionization and Union establishment”, p 28) The Accord was ended in 1996 with the defeat of the Labor party. The new Coalition government introduced the Workplace Relations Act of 1996, which basically decreased the power of the Commissions, especially concerning Awards. (Deery, S., et al, p 8.32)

The level of unemployment which is partially controlled by government also has an affect of the decline in union membership. (Fox et. al, p 173) The rate of unemployment began to become really high in the late 1980s and early 1990s, at the same time that union membership really started falling. (Refer to appendices, table one) The basic reason for this affect is that a high unemployment rate means people become discouraged from joining unions because they doubt that they can really help them. This basically means that “during periods of economic stagnation unions have traditionally found it difficult to return unemployed workers as members.” (Deery., S. et. al p 7.33) Therefore union membership could be said to be related to the business cycle in areas concerning unemployment.

Management, the third key actor in Industrial Relations, can also affect the decline in union membership. There are many ways of doing this, and one of them is to implement policies which seek to substitute or suppress unions. (Deery, S. et. al, p 7.25) An example of this happening is when companies implement a policy of Human Resource Management. (HRM) (Deery, S., et. al, p 7.25) If HRM policies are actually implemented they attempt to eliminate the perceived need for unions by incorporating services traditionally provided by unions while maintaining management prerogatives. An example of this happening in the service sector can be seen by the HR policies that the Metway bank of Australia has implemented. The bank “reviewed the entire range of ‘employee relations’ to develop greater staff commitment and accountability for the performance of the company.” The main changes it implemented involved the following: a system where managers were in charge of recruitment and selection, an action planning process where managers became responsible for their individual employees, and the creation of a staff association. The staff association was apparently the idea of the employees, but was implemented and paid for by the management because they felt that it would help communications with the employees. The management successfully got the union out of the way, even though some employees were very probably still members of them. The unions involved has strong objections to the staff association and the concept of voluntary agreements that excluded union involvement, and actually took their case through complex legal proceedings, but were unsuccessful. The employees themselves seemed slightly confused, but overall support for the staff association ran at about 80% of employees. (Gardner and Palmer, pp. 306-312)

“Empirical evidence suggests that employees join unions for instrumental rather than ideological reasons, and that as a consequence, the significance of unions lies largely in their resolution of issues arising directly out of the employment relationship.” (Deery, S. et. al, p 7.16) There are of course very simple reasons for a person not to join a union, which are not related to Dunlop’s model, but are instead the personal choice of employees that affect the decline in union membership. Some of these are: 1. Price of union membership 2. Individual’s interests or preferences 3. Relative attraction of the alternatives. (Deery, S. et. al, p 7.16) Basically, there has been a change in the population of unions, because some people believe they cause more problems then they solve, especially Australian’s who believe that unions are too powerful. (Deery, S. et. al, p 7.33)

As can be seen in table one (Refer to Appendices) female membership in unions has always been less then that of males. The reason for this is that unions have for many years treated woman as second class members, and the result of this is that less woman have refused to enter unions, and therefore are getting lower hourly wages and fewer benefits then men. (Shawn, J. et. al, p 96) Also it must be noted that there is a difference in occupational structure between men and woman. (Refer to Table 2) Union membership would be higher if females had the same distribution of employment between full-time and part-time jobs and between major occupation groups as males did. (Peetz, David, p 183) Another reason as to why female unionization rates are lower then men is because of gender specific tastes for union representation. Woman less favorably disposed towards unions because they feel their specific needs are not being addressed. (Deery, S. et. al, p 7.20) Another category that has lack of representation in unions of Australia is the youth. Few unions actually have youth committees. (Shawn, J. et. al, p 96) In recent years the ACTU has launched a campaign to increase union membership among young people. They have found the best way to achieve this is for union organizers (i.e. Shop stewards) to be from the same age group as the employees it is seeking to recruit to unions. (Fox et. al, p 176)

One other cause that is not directly related to the Industrial Relations system is the structural change in the labour market. This means that there has been a decline in employment in the manufacturing sector. (Davies, E., p 104) Unions have a higher penetration rate and longer history in the blue collar areas such as mining, building and metal manufacturing. (Shawn, J. et. al, p 94) This decline is because there has been an increase in the service sector, also known as the white collar sector, causing an increase in the amount of part-time/casual workers as well as the number of people who are self employed. This is bad for unions because many part time and casual workers lack any affinity with unions, and they do not have a commitment to a career in a particular industry and therefore have less of a need to join a union. (Shawn, J. et. al, p 95) Also, unions do not always encourage the membership of part time/casual workers because they involve a high organizational cost. (Deery, S. et. al, pp. 7.19-7.20)

The affects of declining membership size is mainly due to the loss in power of unions, but there are also many other affects, which in turn aid in decreasing the membership numbers again. For example, there is a large industry with one main union which most of the employees of this industry are members of. Due to many reasons, the membership numbers begin to fall. This in turn causes cutbacks in staff of the union, and in a decrease in the union organizing effort and therefore in services provided to the members. (“Deunionization and Union Establishment”, p 21) More members become less and less dissatisfied with the union and begin to leave, therefore increasing the number of members leaving. It is a vicious circle, and one that many unions are facing right now, as they fight to increase their number of members.

“Unions feel that the failure to prove the relevance of Unionism will result in diminished membership and reduced influence.” (Davies, E., p 123) They have to prove to members that they are needed, and that they can help make working conditions better for all employees. This has become a hard to reach target for Australian unions because of the structure of Australian Industrial Relations, which with the fading out of arbitration is giving more opportunities for both government and management to step in and take the power that unions once had. There are also other external factors that are affecting the decline in union membership, and these are mainly due to structural changes in the labour market, and a lack in female and youth representation in the unions. The outcome for unions in Australia is not looking very bright at the moment, and if they wish to increase their union membership they are going to have to have a lot closer workplace relations with the employees, especially those of the steadily increasing service industry.