The impact of privatisation on union membership and density: A Western Australian case study

Abstract

Falling membership numbers and declining union density are issues of concern for many Australian unions. Australian Bureau of Statistics figures show that between 2005 and 2008, trade union membership declined from 22.4% to 18.9% of the workforce. Studies and statistics consistently show that union membership and density are lowest in Western Australia, despite trend reversals elsewhere. Using the Western Australian branches of two ‘blue-collar’ unions – the Australian Rail, Tram and Bus Industry Union, Western Australian Branch and the Australian Manufacturing Workers’ Union, covering a range of transport, metal working, printing and manufacturing trades – as examples, this article examines whether privatisation has contributed significantly to falling trade union density and membership in this state. These unions represented large public sector workforces. In order to test the hypothesis that privatisation has adversely affected union membership and density, the article examines three areas: changing policies in the Australian Labor Party, the breaking down of union culture and changes in trade training, and concludes that privatisation is a significant factor in the recent decline of these two unions.

Introduction

For labour historians making connections between the historic past and the present, contemporary issues that are of concern to trade unions are of immense interest. Even a cursory survey of current ‘blue-collar’ trade union web sites, media releases and newsletters to their memberships will reveal perhaps half a dozen issues of particular concern to unions representing workers in the manufacturing, construction, transport and maritime industries. These include training and work safety, and the removal of jobs offshore. But underneath these concerns, less overtly canvassed but evident in the constant appeals to increase membership, lies a growing anxiety over falling numbers and the even more dramatic decline in union density in the trades they represent.¹ Davis (2010) cited Australian Bureau of Statistics (ABS) figures showing that between 2005 and 2008, trade union membership declined from 22.4% to 18.9% of the workforce. Studies and statistics have consistently shown that union membership and density are lowest in Western Australia and this is a continuing trend, despite reversals elsewhere. The Review of the Western Australian Industrial Relations System (Amendola, 2009) study found that ‘Western Australia had the lowest level of trade union membership of any state in Australia, with only 14.3% or 142,600 employees being unionised’ and that this figure had declined by 1.4% from 2007. ABS (August 2012) figures for Australian trade union membership confirm this, showing Western Australia’s as the lowest, with only 14% of the workforce unionised – a further drop of 0.3% from the 2008 figures. Davis (2010) found a corresponding fall in the membership of some manufacturing and construction unions during this period. The author’s own research has revealed that the Australian Manufacturing Workers Union’s (AMWU) federal membership fell from 135,000 in 2005 to around 100,000 at the end of 2012. In Western Australia, the union’s membership fell from 8463 in mid-2005 to 7371 in mid-2012 (Union Affiliations, 2006–2011, State Executive and State Conference).

Using as examples the Western Australian branches of two ‘blue collar’ unions – the Australian Rail, Tram and Bus Industry Union, Western Australian Branch (RTBUWA) (which includes the former Locomotive Engine Drivers, Firemen’s and Cleaners Union of Western Australia, the WALEDF&CU), and the AMWU, which now covers a wide range of metal working, printing and other manufacturing trades – this article examines whether privatisation has contributed significantly to falling trade union density and membership in this state. The RTBUWA and the AMWU are unions whose predecessors represented large public sector workforces. In order to test the hypothesis that privatisation has adversely affected union membership and density,² the article examines three factors: the Australian Labor Party’s (ALP) adoption of privatisation as a policy in the late 1980s, the breaking down of union culture and changes in trade training.

Rationale for the study

The nationalisation of industry, unionisation and apprenticeship training represent the traditional foundations of the organised labour movement in Australia. Aided by the ‘closed shop’ system that mandated union membership as a condition of hiring in many factories, the skilled trades elite of the blue-collar workforce was highly unionised, and each skilled trade union demanded a certain standard of training prior to being admitted to its membership. The shrinking proportion of the workforce occupied in manufacturing trades has doubtless contributed to the overall decline in numbers of union members in recent decades, but what has caused the fall in union members as percentage of the workforce?

While a number of factors have contributed to declining trade union membership and density,³ there is a significant literature that draws a correlation between these and the increasing privatisation of public industries. Studies in both Australia and Britain have indicated that privatisation of the industrial workforce is a significant factor in reducing union density, and at times has been used as means of weakening union power, despite this usually being denied by corporate management. In 1998, for example, British Rail’s last Chairman John Welsby said that, while ‘some people’ saw ‘breaking the power of the unions’ as an aim of privatisation, he would ‘say it was the opportunity to bring working arrangements more into line with the norms applying at the end of the twentieth century’ (Strangleman, 2004: 123–124). In his study of the privatisation of British Rail, Strangleman (2004: 124) observed that ‘though not the only reason for privatisation’, one of its main ‘advantages’ was the ‘marginalisation of organised labour through a breaking down of the collective structures of industrial relations’. Robert Griffiths, the historian of Britain’s oldest rail union, the Associated Society of Locomotive Engineers (ASLEF) concluded that

Privatisation of the railways represented a historic defeat for the people of Britain, for the labour movement and for the railway unions including ASLEF. In an era of management power, technological change and union mergers, what future could there be for one small union in such circumstances? The Associated Society of Locomotive Engineers and Firemen had become an anachronism. (Griffiths, 2005: 260)

Darlington (2009) has shown how, during the privatisation of British Rail, mass redundancies targeting older workers achieved a generational change and effectively got rid of the railway – and union – culture that might otherwise have taken two decades to remove. The membership of ASLEF’s rival railway employees’ union, the National Union of Rail, Maritime and Transport Workers (RMT) was almost halved between 1992 and 1999.

Australian studies have also demonstrated strong connections between privatisation of industries and loss of union density in the workforce. In a paper discussing the ‘winners’ and ‘losers’ in the Australian privatisation process by the end of the 1990s, economist Roger Wettenhall found trade unions to be among the ‘losers’. He wrote that the ‘combination of political, economic and social forces’ that had resulted in a ‘rapid increase in the number of Australians holding shares (and winning the financial benefits that come with them)’ had also produced ‘significantly higher unemployment levels’ and ‘a weakening of trade unions which have long protected worker interests’ (Wettenhall, n.d.: 152). Like Strangleman and Darlington, Wettenhall (n.d.) made a clear connection between the strengthening of the private sector and the weakening of trade unions, claiming that, ‘weakening them [unions] is one of the reasons for privatizing’ (p. 152). Peetz (1998: 70) argues that the shift of employment from the public to the private sector accounts for 22% of the decline in union density that occurred between 1982 and 1990.

ABS Labour Market surveys (ABS, 2010, 2012a, 2012b) appear to support an argument that this trend continues, with figures showing that while union density stood at 22.7% of the national workforce in 2009, it varied from 46% in the public sector to just 14% in the private sector. Figures for August 2012 indicate that union density in the public sector had dropped a further 3% to 43%, while remaining steady at 14% in the private sector. It is logical to conclude from these statistics that the more the private sector takes over industry, the more union membership and density will dwindle. It is a far cry from the days of the ‘closed shop’, where both employers and employees accepted mandatory union membership, albeit sometimes grudgingly. The article will now address each of the three factors mentioned above which, it is argued, either facilitated the shift from public to private industry in Western Australia, or resulted from it, to the detriment of the unions in this study.

Changes to ALP policy

Historically, from colonial times until the 1970s, Australia had a large public sector compared with other Western democracies (Wettenhall, n.d.: 144). Just to take one example for comparison, although the British Railways were developed and run by private companies from their commencement in the mid-1800s until 1945, Australian railways, with few exceptions, were always government owned, because only the colonial governments could raise the necessary investment to fund the extensive railway networks that served small, unprofitable populations.⁴ Privatising state-owned factories and transport systems was not on the agenda of either side of politics until the 1980s, when swift changes occurred. Wettenhall (n.d: 144) dated the beginning of the ‘dramatic change’ to privatisation from the latter years of the Fraser Liberal/National Party government (1975–1983). For 60 years, from 1921 until 1981, the nationalisation of industry was an important element of the ALP’s ‘socialist objective’; both were abandoned at the 1981 National Conference (Oliver, 2003: 293–340). Inevitably, the privatisation of public assets in Australia was influenced by international events, especially the commitment by the Thatcher and Major Conservative governments in Britain, during the 1980s and 1990s, to privatise state industries and public utilities, such as railways, telecommunications, electricity, gas and water – a strategy continued by New Labour, after Tony Blair’s 1997 election victory (Chadwick and Heffernan, 2003: 8).

The ideological shift signalled by the abandoning of Labor’s socialist objective intensified during the Hawke and Keating Labor administrations (1983–1991 and 1991–1996). Henceforth, influenced by international events and political expediency, both sides of politics embraced economic rationalism, apparently accepting that microeconomic reform was needed to improve the Australian economy (King, 2003). At first, the Hawke government was ambivalent about privatising assets, probably because some Cabinet members were strongly opposed to the idea. Soon after the ALP was elected to government in April 1983, the Federal Expenditure Review Committee met to discuss capital injections for Qantas and Australian Airlines. The Finance Minister, Senator Peter Walsh, believed that either the airlines should be allowed to increase their borrowings, but be required to pay interest at market rates, thus pressuring them to ‘maximise their performance’, or they should be sold. Hawke, however, ended the debate by stating flatly, ‘That is an option which is available to our political opponents, but is not available to us’, and the airlines received further government funding (Walsh, 1995: 106). But in 1987, this policy was reversed with Hawke announcing plans to sell Australian Airlines, Qantas, the Commonwealth Bank, Telecom, Australia Post and the Overseas Telecommunications Commission. Economist Stephen King has argued that this reversal of policy arose from the government’s ‘requirement for fiscal rectitude’ (King, 2003: 3). The stance adopted by both of Hawke’s Finance Ministers, Walsh and Willis, appears to support this conclusion. But, although some Parliamentary Labor Party members, including Hawke, now saw privatisation as being determined more by ‘whether [a business efficiently] delivers the goods and services required by the public’ than by ideology (Walsh, 1995: 107), they failed to persuade the union movement of the efficacy of privatisation – and with good reason.

Prior to winning the 1983 election, the ALP had negotiated the Prices and Incomes Accord (later known as ‘the Accord’) with the Australian Council of Trade Unions (ACTU). In return for lifting the wages freeze imposed by the Fraser government, and increasing government spending on education and welfare, trade unions agreed to moderate their demands for wage increases, and thus minimise inflation. The Accord had a precedent in the Social Contract agreed between the Labour government of Jim Callaghan and the Trades Union Congress in Britain in the mid-1970s, but was more durable, lasting until the Labor government lost the 1996 election (Willis, 2003: 142). Despite its creators, Hawke and ACTU Secretary Bill Kelty, continuing to insist even today ( Sydney Morning Herald, 2013; The Australian, 2013) that it was the solution necessary for ‘a bitter period’ when unemployment and inflation both stood at around 10%, the Accord had its critics, initially limited to ‘Left organisations outside the Labor and the Communist Parties’ and ‘a minority of right-wing commentators’. Since the mid-1980s, however, critics have included ‘mainstream social democratic’ thinkers such as Stilwell, Singleton and Ewer et al., who argued that while the idea was sound, the fault lay in the implementation (cited in Bramble, n.d.). Militant unions, such as the AMWU, which had originally supported the Accord, later saw it as serving the interests of capital, rather than unionists, and felt betrayed by its outcomes (Crosby, 2005: 46–48).

Meanwhile, in Western Australia, the switch to a ‘new look’ ALP was achieved after a leadership coup, which saw former railway worker Ron Davies ousted in favour of right winger Brian Burke, who subsequently led the Party to victory in the 1983 state election a month before Federal Labor’s win. Ever since the sundering of the political and industrial arms of the Western Australian Branch of the ALP and the foundation of an independent Trades and Labor Council of Western Australia (TLCWA) in 1963, the relationship between the Party and the unions had been fraught with tensions (TLCWA, various years). Throughout the 1970s and 1980s, the Party appeared to be distancing itself from the unions that had once provided the vast majority of its membership. Since the 1970s – as Australia’s highly unionised manufacturing base began its decline – the perceived wisdom for bolstering the ALP’s membership and maintaining a viable alternative government was to look for recruits in new places, such as the branches of unaffiliated, white-collar unions, or interest groups involving women, youth, immigrants and Indigenous Australians. Burke and his cabinet personified ‘new look Labor’ – young, middle-class, educated professionals (Oliver, 2003: 257–300).

Burke adopted a ‘presidential’ style of leadership. His administration increased its executive powers by creating a new Department of Premier and Cabinet, which coordinated and monitored the implementation and review of government policy, gave the Premier much greater control over Cabinet submissions, and streamlined the process of introducing and developing policy, while significantly reducing the control previously exercised by the Party’s State Executive (Oliver, 2003: 297–298, 304–305). This meant that the new government was able to make many policy decisions without having to convince (or even consult) the State Executive.

The government also established an active role for the state in economic planning. This was not a return to the ‘nationalisation of industry’ platform that Federal Labor had abandoned at its 1981 National Conference; rather, it was seen as a new cooperative arrangement between government and the private sector. During the mineral boom, under non-Labor administrations, much of the state’s wealth had gone to investors in the eastern states or overseas. In seeking to stop this ‘drain’, the state government was not merely echoing what had been an old refrain in Western Australia, but it entered new territory by implementing policies for generating wealth within the public sector. To this end, the Burke administration set up such bodies as the Western Australian Development Corporation, which purchased companies from major entrepreneurs – for example, Alan Bond, head of Bond Corporation – but (somewhat curiously) included those same corporation heads as Directors of the new state corporations (Graham, 1996: 70). The government’s appointment of entrepreneurs from the private sector to manage its assets was controversial, and would have devastating consequences for the ALP in Western Australia.⁵ The Burke government’s policies marked a new direction that boded ill for supporters of government-owned industries, and those who believed that it was a government’s function to provide facilities for its people.

The government and the TLCWA signed an Accord-style agreement, formalised as the Western Australian Tripartite Labour Consultative Council Act, 1983 , the three partners being government, industry and unions. The TLCWA Executive, however, was never enthusiastic and later claimed that while the union movement had cooperated, the government had neither formally endorsed nor honoured the Tripartite Agreement (Trades and Labour Council, 1986). Conditions of the agreement included re-writing the Industrial Arbitration Act and establishing an Occupational Health and Safety Commission. Like the Accord, the Tripartite Consultative Council was criticised for silencing union opposition, and for not being ‘consultative’. The government’s refusal to consult was in evidence when, without involving the relevant unions, it retrenched 323 civil servants, closed the Public Works Department Architectural Division, cut wages and salaries and restructured or sold off a number of state assets – ostensibly to meet a AUD274 million shortfall left by the previous administration. These actions provoked a wave of industrial conflict that resulted in Western Australia averaging 420 workdays lost per 1000 workers, compared with a national average of 234 per 1000 (Black, 1984: 433; Oliver, 2003: 332–334). By 1984, the Civil Service Journal was accusing the state Labor government of launching a ‘vicious and unrelenting onslaught’ against its members (Rock, 1990: 65). Thus, Western Australian public servants – a sector of the workforce where union density was, and remains, high – experienced from a Labor administration the kind of mass axing that Federal public servants later underwent in the early days of the Howard administration.

Shortly after the Burke administration was elected to its second term in 1986, the TLCWA Executive signalled an end to the Tripartite Agreement by passing a resolution expressing its ‘abhorrence’ of and rejecting a government decision to ‘reduce the working conditions of wage and salary earners’ (TLCWA, 1986). It accused the Burke government of ‘harass[ing], threaten[ing] and fin[ing] militant unions’ while favouring ‘compliant’ unions (Graham, 1994: 43). By late 1985, many unions saw the privatisation of the public sector and the deregulation of the labour market as central to the state government’s agenda. This belief sparked a series of anti-privatisation campaigns in the latter 1980s, begun by individual unions but soon led by the TLCWA (Oliver, 2013b: 180–191). While these campaigns targeted the state government, they took place in the context of the Federal government’s previously mentioned announcement of the sale of public assets such as Qantas, Telstra and the Commonwealth Bank.

Despite moving away from its traditional support base and policies, the ALP was struggling to find satisfactory alternatives. In 1992, while on a visit to Perth, Federal ALP President Barry Jones had stated bluntly that unless the Party recruited a new generation of supporters, ‘the ALP as we know it will go out of existence’ (Labor Voice, September–October, 1992: 4). The problem was exacerbated by the devastating 1996 Federal election loss in which not only swinging voters and the non-unionised deserted Labor, but also its ‘heartland’ – the blue-collar, unionised voters. Following the defeat, in a revealing Australian Broadcasting Commission (ABC) Four Corners documentary (ABC, 1997), former Foreign Minister Gareth Evans declared that ‘everything Labor stands for is now open for discussion’.

But Labor remained reluctant to admit that this ideological shift had already occurred with the wholesale of adoption of policies and programmes that the Party would once have eschewed. For example, while former Treasurer Ralph Willis later admitted that privatisation was ‘predominantly for budgetary enhancement’ and partially to overcome difficulties, such as low productivity, he judged Hawke’s economic achievements as ‘extraordinary’, resulting in the economy being ‘much stronger and more productive’. Without the government’s ‘structural reforms’ (including privatisation), Willis (2003) concluded that the Australian economy would ‘still be stuck in the old uncompetitive, industrially combative, low-productivity, protectionist model’ and ‘the trade unions would be sharing a much smaller pie than the new globalised model can deliver’ (p. 153).

While there may, indeed, be some justification for his argument that the Australian government’s large-scale abandonment of the public sector, leaving many unions to face a hostile, privatised environment, was the only viable course of action in hard economic times, it is interesting to note Steven High’s argument regarding similar situations in the United States and Canada (High and Lewis, 2007: 4). High posits the theory that unionisation has remained much stronger in Canada, despite ‘massive job losses’ because of combined government and union action that saved many of Canada’s manufacturing industries from closing. He also argues that Canadian unions were in a much stronger position than their American counterparts because in the early 1980s they had succeeded in forcing governments to legislate ‘mandatory advance notice of mass layoffs, severance pay, preferential hiring rights, pension reinsurance and job placement’, but also because they were able to cast factory closures as a struggle of ‘Canadian workers’ against ‘American bosses’ as many factories were owned by US companies. Of most interest here, however, is High’s contention that the government’s intervention to prevent major steel and paper mills closing, together with ‘a long history of state intervention in [the] economy’ saved many jobs and also assisted in maintaining a strong union presence – unlike in the United States (High and Lewis, 2007: 5–6). As this article goes to press, a debate is occurring here about whether it is the Australian government’s responsibility to subsidise the local car industry in order to save thousands of jobs in Victoria and South Australia (Carr, 2013; see also The Age/National Times, 2013).

The breakdown of union culture

British studies of a range of industries have found that privatisation is often preceded by a dramatic reduction of the workforce by forced or voluntary redundancies, and the concurrent loss of trade union influence. The new privatised industry then is able to institute poorer conditions and lower wages. Of most relevance to this article is Darlington’s previously mentioned study of the mass redundancies that occurred prior to the privatisation of British Rail in the late 1990s (Darlington, 2009: 16ff; Taylor and Cooper, 2008). A similar ‘clearing out’ of ageing workers who subscribed to the ‘redundant’ union culture occurred in some Western Australian industries in preparation for privatisation. In the years before privatisation, between 1980 and the beginning of 1993, under both Labor and Liberal governments, Westrail more than halved its staff from 10,000 to 4800, thus drastically affecting a number of the unions representing rail employees, including the AMWU, the WALEDF&CU and the Australian Railways Union (ARU) (Elliott, 2006: 238, 245).

It is worth noting that 3 years before the election of the Howard government – described by Muir and Peetz (2010: 216) as ‘the most aggressively anti-union government in a century’ – the Liberal-National Coalition government of Richard Court had come to power in Western Australia. Apart from closing major publicly owned facilities including the Government Railway Workshops at Midland, and the Robb Jetty Meat Works, and cutting staff at Bank West, the State Government Insurance Commission and the State Electricity Commission, the government legislated a series of ‘industrial reforms’ to weaken the industrial relations system, which served as a model for the Howard government’s industrial relations policy from 1996. During the 1990s, according to Bailey et al. (2000), union density in the public sector in Western Australia fell faster than in any other Australian state. In the first 6 years of the Liberal-National administration (1993–1999), the State Teachers’ Union reported ‘a 15% drop in membership’, while the Community and Public Sector Union/Civil Service Association membership ‘declined by 40%’. Only the Australian Nursing Federation showed a reverse of that trend, with membership increasing by 3% (Bailey et al., 2000: 103–104).

In the process of closing the Midland Government Railway Workshops in March 1994, Westrail (formerly the Western Australian Government Railways), shed a further 1100 jobs over 2 years (West Australian, 23 December 1993). But even prior to this, between 1991 and 1994, approximately 1250 WALEDF&CU members took voluntary redundancy, reducing the union’s membership to 814. By 1998, it numbered 360. During this period, the Union was involved in a series of on–off amalgamation discussions with the RTBU. The reduction in membership between 1994 and 1998 was partly caused by members who wanted to amalgamate changing their union, but this is unlikely to have accounted for the membership being more than halved (WALEDF&CU, 1994, 1998).

Further railway job losses came after State Transport Minister Eric Charlton’s 1995 announcement of the introduction of the ‘Right Track’ programme to modernise Westrail. Although he said that there would be ‘no sackings’, Charlton revealed that there would be a further 1345 jobs lost over 3 years, as a result of outsourcing services that had previously been carried out by Westrail, such as locomotive and track maintenance and telecommunications – a move that was expected to create only 700 jobs in the private sector (WALEDF&CU, 1995). In summary, three issues are significant here: that Westrail had shed three-quarters of its workforce between 1980 and 1995, that the government envisaged that fewer than half of the last 1345 jobs to be lost would be filled in shifting services to the private sector, and that these jobs were likely to be non-unionised.

Technological change, too, has impacted significantly upon the nature of blue-collar work. Evidence suggests that where the introduction of technology has led to a de-skilling of the workforce, a decline in demand for training and increased employee dissatisfaction often result, creating greater worker mobility between jobs, and a subsequent breaking down of the type of strong workplace identity that once reinforced loyalty to one’s trade union. Nowhere is this more evident than in the railways, as exemplified by Tim Strangleman’s (2004) story of a British train driver, which, he tells us, is ‘a metaphor for what has occurred in the UK rail industry over the last two decades’ (p. 2):

In the early 1960s, Clive Groome began work cleaning steam engines … in south London for the then nationalised British Railways. Dirty but important work, being a cleaner acted as an introduction to the world of railway employment. Groome gradually climbed his way up the promotional ladder, rooted in a seniority system, as countless generations of railway servants had before him, to the point where he became a driver … During the 1980s, he left the industry because of his increasing disquiet at the levels of monotony, which he believed were dangerous, and the ever greater management interference in the job of a driver. (p. 1, my emphasis)

Australian footplate staff had the same career structure as their British counterparts. Although there was no apprenticeship equivalent to that served by other skilled tradespeople, such as boilermakers, fitters and turners, drivers all began their careers as either an engine cleaner or a call boy, whose task (in the days before wrist watches and clocks were common household items) was to walk or cycle to the homes of footplate staff on early shifts and wake them by tapping on the window with a pole. Cleaners were promoted to firemen and eventually to the first of five classes of locomotive driver. With the advent of diesel and electric engines, the fireman became the driver’s assistant. In 1983, the WALEDF&CU threatened to call a demarcation dispute when the Railways Department attempted to promote other railway staff, such as guards, to driver positions (WALEDF&CU, 1983). But all that has changed. Evidence from interviews that this author undertook in 2012–2013 with older enginemen either retired or on the verge of retirement, suggests that union membership is now much less common among metropolitan train crews in Perth, and the promotion structure has been destroyed. Drivers often come from other walks of life, including police officers and prison or security guards, who were not ‘brought up’ in the ‘railway culture’ as were lads who joined the railways at 16. Trained as engine drivers in a few weeks and possibly regarding this as just the next job rather than a permanent position, they do not see a need to join the union, and are reluctant to pay the union dues. An aggressive culture of anti-unionism exhibited by private rail owners also intimidates some potential unionists. In particular, American companies such as Genesee & Wyoming Inc. Australia (GWA, n.d.) have displayed hostility towards unions, with one driver claiming that the company set out to destroy the RTBU.⁶ So far, it has not succeeded, with union membership achieving the right to continued union representation early in the 21st century (RTBU, n.d.).

A union culture has continued to exist among ore train drivers. The only unionised section of the mine site workforce, Rio Tinto drivers – who are almost all the Construction, Forestry, Mining and Energy Union (CFMEU) members under a collective agreement – work under extremely difficult conditions. They have little advance knowledge of what each shift will entail, whether they will be driving in the yard or undertaking long journeys, or how long their shifts will be. They are constantly recorded and monitored. Yet even in this environment, a railway culture has begun to flourish. Drivers speak of ‘feeling the train’ and ‘not tormenting the train’. This knowledge, gained from experience of driving on particular tracks, is what they are now expected to feed into a computerised system so that the trains can be automated; Rio Tinto will no longer require drivers on their mainline ore trains. The automated system will be controlled from an office in Perth, 1500 km from the mine site. In order to achieve this, the company requires its current drivers to do themselves out of a job by teaching the track to an automated system that is scheduled to replace them in 2014 (Ellem, 2013). Ironically, although they may not realise it, Rio Tinto is hijacking a time-honoured practice of locomotive engine drivers, in which a new driver would travel with an experienced driver to ‘learn the road’. Indeed, the union insisted on this practice prior to a driver operating an unfamiliar stretch of line. Rio Tinto’s CEO says ‘mining is about data’ – by inference, it is nothing about people (Ellem, 2013).

Interference and breaking down of jobs into repetitive, easily controlled and quantified tasks and tasks that do not require much skill are modern corporate management tactics with an origin on the assembly lines of the early 20th century. It was a strategy that was attempted by management, and strongly resisted by the unionised workforce at the Government Railway Workshops in the mid-20th century. And in due course, the Workshops were deemed to be ‘inefficient’ and closed. It is not coincidental, therefore, that the advent of privatisation, which has brought corporate management styles to industry, is concurrent with the decline of union and employee power, the dwindling of union membership, job losses, de-skilling and decreased training opportunities.

The impact of privatisation on training opportunities

The closure of the Railway Workshops had a substantial negative impact upon the Western Australian economy, with heavy engineering contracts going interstate or overseas, and many training opportunities for industrial apprentices disappearing (Elliott, 2006: 235–258). Consequently, a major provider of trained skilled tradespeople who had been the backbone of the AMWU and its predecessor unions, such as the Amalgamated Engineers, ceased to exist. Other public facilities that offered apprenticeship training, such as the State Electricity Commission, were also dismantled and privatised. Apprenticeship training became reliant upon the private employer’s capacity or inclination to offer it. From the 1990s, only the largest private businesses had the capacity to offer more than a few apprenticeships, and many, in the opinion of union officials, were not interested in doing so. Another aspect of apprenticeship training was that it brought boys into contact with men who were, for the most part, committed unionists. Former East Perth Power Station employee, Neil Byrne, recalled as a young apprentice listening to the tradesmen discussing the pros and cons of the 1952 metal workers’ strike centred at the Government Railway Workshops. Although the Power Station employees were not on strike, there was considerable debate among the workers about the rights and wrongs of the situation. The members of two militant unions operating at the Power Station, the Amalgamated Engineers and the Boilermakers (both predecessors of the AMWU) made a token gesture of staying away from work 1 day in each pay cycle in solidarity with their Workshops comrades. Apprentices would sometimes attend the meetings and hear arguments for and against maintaining the strike. ‘And the tradesmen would say, “but you don’t want to join the union until you are out of your apprenticeship”, which in my view now, was wrong’ (N Byrne, interviewed by Denise Pringle. 15 May 2006, transcript 23–24). While not all workers were as committed to the union as Byrne, who later became an AMWU official, most did not question the need to join once they completed their apprenticeship.

The current, ongoing shortage of skilled Australian workers and the stop-gap measures being applied, such as 457 visas, indicate that neither the state nor Federal governments are prioritising training, and that private enterprises either lack the capacity or the incentives to train workers. Those who do offer any formal training are unlikely to provide their employees with full trade training, which is increasingly seen by employers as being the responsibility of the employee, not themselves (Oliver, 2007: 165–168). Shorter traineeships have become an attractive and affordable option to many employers and employees.

Kapuscinski (2001: 7) states that major aspects of the changes in the Australian training system in the decade 1986–1997 included the considerable increase in young people commencing traineeships, to a point where they exceeded apprenticeships for the first time in firm-based training. In that period, the percentage of trainees had risen from less than 1% to 46% of ‘total firm-based trainee stocks’. These findings – together with others from the National Centre for Vocational Education Research (NCVER) showing that between 2001 and 2005, the number of hours of employer-sponsored training had fallen by 15% for permanent and 27% for casual employees (Richardson and Liu, n.d: n.p) – indicate a trend of shortened, specific and limited skills training on the individual factory floor, and a decreased employer contribution to the overall cost. Possibly, this trend indicates a demand by private employers for limited, but specialised, training for their employees.

The burgeoning of traineeships in recent decades has provided a much greater range of choice in available training, but also some confusion about what constituted a traineeship and what an apprenticeship, and the differences between them. Kapuscinski (2001: 3) defined apprenticeships as a (normally) 4-year, structured form of indentured training, whereby apprentices are taught according to a pre-determined format or plan, are subject to monitoring by their employer and upon completion become qualified tradespersons in a recognised trade. Traineeships, on the other hand, ‘are specialised contracts of training … [lasting about] 12 months’. They

… combine work and formal training in a mix dependent on [the] trainee’s educational attainment and trade competence and allow employers to train people according to current industry requirements so that upon completion trainees receive recognised qualifications.

Two studies undertaken in the later 1990s (by Dockery et al., 1997 and May, 1999 respectively) undertook to answer questions about the cost of training apprentices and the effectiveness of the new methods of assessment. Dockery et al. (1997), using 59 case studies of Australian firms employing apprentices, found that, while many employers demonstrated ‘altruistic motives’ in accepting and training apprentices, thereby incurring a considerable expense to the firm, the outlay on training could be considerably less in larger firms where ‘economies of scale’ operated, or where an apprentice was trained in work of a ‘lower skill content or less variety’ or there was a lower level of supervision (pp. 255–274).

Dockery et al. (1997) also considered the matter of incentive, asking, ‘Why do profit maximising firms continue to provide apprenticeship training?’ (p. 270). Furthermore, ‘What other benefits do they receive from investing in apprenticeship training and how are these accrued by the firm?’ The researchers were unable to answer this question satisfactorily, but suggested that in the future, firms might not be so willing to foot the training bill and might instead ‘push for the public to bear more of the costs of apprenticeship training’. Dockery et al. (1997) observed that the positive findings of the study regarding the willingness of employers to pay and train apprentices, the lack of support for any reduction in apprentices’ wages, and, in particular, the apparently altruistic motives of employers who trained apprentices and did not retain them in the firm were to some extent biased by the absence in their study of any business which did not train apprentices (p. 269).

Dockery et al. (1997) commended the proposed New Apprenticeships System (NAS), as it was designed to reduce the cost burden to employers and introduce ‘greater flexibility’ into the training structure (pp. 270–271). Yet when Roger May (1999) examined the New Apprenticeship Training and Assessment System (NATAS) and the Module System operating in Western Australia in his 1999 doctoral thesis, he found problems with the ways that apprentices’ competencies were assessed by the new training schemes. May concluded that there were discrepancies in both schemes between ‘broad competency standards’ offered in Technical and Further Education (TAFE) courses and the ‘specific standards of individual organisations’, and that this variation caused confusion. It was a perception of some managers, at least, that the problem arose partly from the conflicting aims of education and industry. May (1999) found that

Industry was concerned with the rapid acquisition of skills and knowledge where time equated with money … [whilst] the education culture was [to impart] a broad knowledge base to the student where time involved was less critical. (p. 268)

Consequently, May (1999: 252 ff) advocated the need for greater consultation between the education provider and the individual employer, and in particular, adequate training for shop floor assessors who were expected to test the competencies of apprentices to a national standard.

Another problem has been the attrition rate of apprentices. Statistics produced by the Western Australian government’s Department of Training and Workforce Development show that, from 2010 to 2012, only about half of the people commencing apprenticeships completed them (Government of Western Australia, 2013). Doubtless, there are many reasons why apprentices or trainees fail to complete their courses. These may include finding that the course did not suit their needs, inability to meet fees or the demands of the employer. The high dropout rate appears to indicate that, as a means of fulfilling industry’s requirements for skilled employees, the current system is much less viable than the more regimented apprenticeship system of yesteryear, but that discussion is outside the scope of this article.

The 21st century

Economists have expressed varied opinions about the advantages of privatisation. As early as the mid-1990s, King (2003: 16) warned that for privatisation to enjoy ‘long-term success’ in Australia, ‘the pressure for competitive reform must be maintained’. Otherwise, ‘we are likely to see a privatisation agenda run increasingly for short term revenue and political gains’. Wettenhall (n.d.: 145) argued that while privatisation brought advantages to some sections of the community, it equally disadvantaged others, and McKenzie (2007: 1–25) asserted that the main reason for privatisation, promoting investment in the economy, was not realised – at least not to the extent anticipated. Elsewhere it has been claimed that while ‘privatisation is rarely popular with electorates’, overall, the outcomes had been generally satisfactory and there were ‘no credible Australian voices in favour of any re-nationalisations’ (‘Privatisation in Australia’, Wettenhall, n.d.). Apart from Wettenhall, however, none of these sources examined the impact of privatisation on unions.

Not surprisingly, trade union officials are among the harshest critics of privatisation. In 2009, the RTBU condemned the process both in Australia and abroad. In Queensland, the union was fighting attempts to sell off parts of Queensland Rail. National Secretary Phil Kessey, cited in an article titled ‘Off the rails’ in the Australian Rail Tram and Bus Worker (Anon, 2009), believed that ‘privatisation of rail operations and assets invariably leads to bad long-term economic outcomes for tax payers’ because ‘time and again we see private rail operators walking away from their responsibilities to properly run and maintain railways’ (p. 10). A report on activities around Australia showed that in three states, and nationally, the Union was struggling to protect jobs and maintain conditions against private rail companies, while in Tasmania, the state was about to resume control of the rail network following Pacific National’s withdrawal. Similarly, the journal reported that in 2008 the New Zealand Labour government bought back rail and ferry services that had been sold to private consortium Tranz Rail in 1993, and then sold on the Australian company Toll Holdings. The purchase cost New Zealand taxpayers AUD665 million. Kessey commented that ‘this is another risk governments take when selling off infrastructure’ (Australian Rail Tram and Bus Worker, 2009: 10).

An unattributed feature article in the same issue of Australian Rail Tram and Bus Worker listed a series of failures by private rail companies across Australia including Western Australia’s private freight operation WestNet demanding AUD50 million from the state government to keep grain lines open. The article also commented on the situation in Britain, where government-owned British Rail was split into over 100 companies covering telecommunications, infrastructure and rolling stock, at the cost of safety and service, to the extent that

British rail has become the most expensive in Europe while attracting record taxpayer subsides. Customer service and the manufacture of rolling stock have declined, while fares have increased … A series of serious accidents in the post-privatisation period killed 48 and injured 820 people, drastically undermining confidence in rail safety. ( Australian Rail Tram and Bus Worker, 2009: 10)

Although ABS (2010) figures for May 2010 showed a slight reversal of the decline in union density across Australia, with Western Australian union density rising to 17%, Davis (2010) indicated varying results regarding union capacity to recruit new members. While the membership of some unions increased, others continued to decline, with the AMWU, in particular, losing members not only during the period of individual Australian Workplace Agreements, but between the 2007 change of government and the end of 2009.⁷ The AMWU’s federal membership fell from 135,000 in 2005 to around 100,000 at the end of 2012. In Western Australia, the union’s membership fell from 8463 in mid-2005 to 7371 in mid-2012. The RTBU has reversed the decline in its federal membership since 2009 – but only after numbers had plummeted from 50,000 nationwide in 1993 to 35,000 at the beginning of the 21st century (Davis, 2010: n.p.). But in Western Australia, where there are only a few hundred members, between 2004 and 2011, membership continued to decline from 659 to 211 (Union Affiliations, 2006–2011). Thus, although some unions have been able to halt and even reverse the decline in their membership as a result of more favourable industrial laws, others have not yet been able to do so.

A significant factor in the AMWU’s numeric decline is the number of manufacturing jobs that have gone overseas in the past decade. In a 2006 address to the National Press Club, Heather Ridout, the CEO of Australian Industry Group, stated that 30,000 jobs were lost in the manufacturing industry in 2005 ( Workplace Info, 2006). She said that 15% of Australia’s manufacturing industry was overseas based and that was predicted to rise to 25% in the next 3 years (Ridout, 2006). In March 2013, with this trend showing no sign of decreasing, AMWU national secretary Paul Bastian called for companies such as Telstra, which benefit from millions of dollars of public money and government contracts, to be compelled to employ Australian workers instead of going offshore in order to boost their profits by employing overseas workers under poor wages and conditions ( The Age/National Times, 2013). So far, there appears to be no stemming of the offshore flow of manufacturing jobs, and the AMWU faces the ongoing prospect of losing members, despite a pro-active programme of amalgamations that has seen it absorb workers in ship building, food and confectionery, printing, technical and vehicle building as well as metal working and engineering trades (Oliver, 2013a: 58–70).

Conclusion

This article has examined two Western Australian unions – the AMWU and the RTBU/WALEDF&CU – to assess the impact of privatisation on union membership and density. It has argued that the privatisation of the workforce has been a significant factor in reducing union membership and union density, and has been used as means of weakening union power. In order to test this argument, three factors were examined: the impact of changing ALP policy, the decline of union culture and reduced training opportunities. Although the selling off of the public sector and the expansion of private enterprise were facilitated by both Liberal and Labor governments, it was a particularly marked change of policy for the ALP, heralded by rescinding the socialist objective in the 1981 Federal conference. The privatisation policy of the late 1980s resulted in the trade union movement deserting the ALP en masse at the ballot box in 1996 as a form of protest, and possibly never returning to the extent that was taken for granted in the past. But the sundering of the industrial union base from the ALP has been a two-way process. In trying to escape the tired old media adage that the Party is ‘run by union bosses’ and appeal to a more diverse electorate, the ‘new’ ALP has distanced itself from trade unions, to the extent of blaming Federal and Western Australian electoral defeats in 2013 on the public rejecting the perceived trade union connection.

The evidence presented also indicates that privatisation in the two Western Australian unions was preceded by massive job losses and a resulting decline in union membership and density, but also a loss of union culture. This was particularly marked in the railways, once known for a very strong identity. The closure of large public facilities such as the Government Railway Workshops and the State Electricity Commission also resulted in reduced training opportunities for tradespeople. Formerly, a trade apprenticeship was not merely an entry to a trade but also to the relevant union. This connection has been broken by semi-training as well as high job mobility.

While some might regard such changes as a progressive step – breaking out of a elitist (and often sexist) mould and granting more and wider opportunities to female and older trainees, evidence suggests that privatising public instrumentalities has not always yielded the anticipated benefits of efficiency, prosperity and productivity. In reality, privatisation has resulted in the breaking up of public facilities into separate, privately owned and sometimes competing companies whose aim is profit and who generally do not offer a service (such as training young workers) once it becomes unprofitable to do so. WestNet’s demands for the state government to subsidise them to transport grain from country districts is just one example of this hard-nosed attitude. Ironically, the breaking up of public instrumentalities into multiple private companies, far from creating greater efficiency and productivity, has at times resulted in the opposite effect, as indicated by the previously mentioned fate of British Rail, and outcomes in this part of the world. But despite private rail systems failing in New Zealand and Tasmania, obliging and state and national governments to buy back transport systems that, with hindsight, should never have been sold in the first place, there seems little prospect of the Australian Federal Government (whether Liberal or Labor) reversing the privatisation process. Both Union and ABS figures indicate that union density may be increasing slightly in the private as well as the public sector since 2007, although there are some discrepancies. While there have been positive signs for unions following the abandoning of the Work Choices (2005) industrial relations regime post 2007, the further change of Federal government in 2013 may herald another period in which unions and their members are under siege.