HRM looks at the super-union merger recently approved by the FWC. Has much actually changed, and what strategy should HR take?

With the go ahead of the Fair Work Commission, on March 27, the Construction, Forestry, Mining and Energy Union (CFMEU), the Maritime Union of Australia (MUA) and the Textile, Clothing and Footwear Union of Australia (TCFUA) will merge into a single union.

The decision has obviously made the relevant unions happy, and relevant industry and business associations anxious.

“The combined strength of the CFMEU, MUA and TCFUA in our new union will write a new chapter in Australia’s union movement. Ordinary workers now have a powerful new force for change on their side,” says Michele O’Neil, National Secretary of the Textile Clothing and Footwear Union of Australia .

But others issued a note of warning. “Allowing the CFMEU and MUA to form a new militant ‘Super-Union’ will put the economy and jobs in jeopardy,” says Denita Wawn, CEO of Master Builders Australia.

“The MUA and CFMEU appear to share a common belief that they are above the law and are renowned for using tactics such as bullying, intimidation, and industrial thuggery on anyone who disagrees with them,” she says.

“Merging these two unions into one new, militant ‘Super-Union will see these illegal tactics become more prevalent.”

It’s undeniable that the CFMEU has run afoul of Fair Work laws. It has accrued more than $12 million in penalties for unlawful industrial conduct over the past six years.

Casting doubt

Some have argued that while the merger might seem like a sign of renewed strength for the union movement in Australia, it’s actually evidence of an underlying structural weakness. As HRM has written previously, wages are stagnant and enterprise bargaining agreements are “set to go the way of the dodo”.

In his analysis for the Sydney Morning Herald, reporter Ben Schneiders calls the deal a “charade”. He believes the union movement is at its weakest point, and that while these unions have money, they’ve used it inefficiently. He notes that “the three unions that are merging have lost nearly 20,000 members in the past five years”.

Schneiders also says that all sides have different reasons for making the merger seem like bigger news than it perhaps is. The unions want to bluster, the Coalition wants to “tie the controversial  reputation of these unions as a dead weight around Bill Shorten’s neck”, and employers can only lose if they start acting like the union movement is weak.

To Schneiders’ list you could add the media is also interested in making this a big deal, as it loves a  juicy story. Some articles have breathlessly reported the amount of money this new super-union will be able to spend on making its voice heard, stating it will have an annual revenue of nearly $150 million.

But that’s not quite as large a haul as it seems after you compare it with the money brought in by the companies union members work for. BHP had a net profit (so not revenue) of $4.2 billion in 2017, while Gina Reinhart’s Hanckock Prospecting brought in a profit of $1.1 billion.

Of course, one of a union’s powers is to impact that bottom line with strikes and similar actions, so revenue and profit amounts aren’t everything. But perhaps the declining rate of industrial action and stagnant wages say more.

The HR perspective

As for what the HR managers should do in light of this merger, there isn’t much evidence that things will be much different in terms of processes.

“Some of the media has been too sensationalist about the ramifications of this,” says Greg Bamber, the co-Director of the Australian Consortium for Research in Employment and Work, Centre for Global Business at Monash Business school.

“It’s a paradox in that unions are weaker than at any time since the early 20th century,” he says. “Even as these three unions coming together seems to strengthen the movement and possibly facilitates greater bargaining power.”

He points out that even though institutions like the Reserve Bank have called for increased wages, the IR situation has been one of the factors preventing such a thing.

Bamber also doesn’t think there’s much chance that efforts to appeal the Fair Work ruling will succeed. The employer argument that contempt and workplace contravention cases should prevent the merger have already been rejected by deputy president Val Gostencnik. There’s also doubt that there is a will to fund any appeal effort.

As for specific advice to HR and IR managers, Bamber says that preemptively becoming more more combative won’t help – as unions will only respond in kind. Instead he suggests: “You can use this as an opportunity to try and improve the bargaining relationship with unions.”