There appears to be a major disconnect between the public view of greater industrial unrest and what’s happening in the workplace, where many employers and unions are working together to forge co-operative relationships

When the global financial crisis hit Australia in 2009, General Motors lost an export order that made up about a third of its production.

Combined with a drop in local sales the loss could have spelled disaster. But the carmaker averted a crisis after the company and unions agreed on innovative measures that would see it through the hiatus.

“Our hourly people took a pay cut of between 25 and 40 per cent to protect our capability, and protect our brand and see us through the 2009 period,” says Mark Polglaze, executive director of human resources at Holden. “They understood where we were at and we came up with a creative solution that was a good outcome.”

That such an agreement was possible shows how much relations between management and the union have improved from what Polglaze describes as the “strained” relationship of a decade earlier.

Holden is one of many employers reaping the rewards of investing in its relationship with the unions, through losing fewer days to industrial action and making changes to work practices easier to negotiate.

Newspaper headlines paint a picture of growing industrial unrest in Australia, giving air to complaints from some employers that unions are taking advantage of the Labor government’s Fair Work Act to increase their power and militancy.

But Professor John Buchanan of the University of Sydney Business School says that while there are some well-known exceptions, most workplaces are reasonably harmonious. “There’s a major disconnect between the narratives that are propagated in the public realm and what’s actually going on in workplaces,” he says.

Buchanan says the rise of what he calls “employer militancy” or “management fundamentalism” is the cause of antagonism where it exists in workplaces. “Union strategy hasn’t become more aggressive. Union policy if anything has become more accommodating over the years. What has changed is employer attitude and strategy,” he says.

The majority of employers are trying to forge co-operative relationships with unions, Buchanan says.

“Most employers are really reasonable, really decent people. They’ve got a hard job, with the exchange rate where it is at the moment. It’s a nightmare trying to run a workplace in a trade-exposed sector,” he says. “They’re actually getting on and dealing with the real problems in the workplace instead of pursuing ideological campaigns against independent representation in the workforce.”

It’s no accident that relations between unions and management have improved at Holden, where about 3500 of its 4500 employees are in various manufacturing, engineering and trades unions.

“We worked hard to repair relationships, to share information in a more open and constructive way, to get union organisers and union representatives who were on our payroll — shop stewards and people like that — more engaged in our business,” says Polglaze.

The starting point, says Polglaze, is to acknowledge that unions have a role to play. “Another big piece is, once you do respect the other party’s role, you are able to share information, get them involved in the business, get them involved in the challenge that we face and get a more co-operative and problem-solving approach to issues that we’ve got,” says Polglaze.

This is particularly apt for a business like Holden, which is grappling with the effect of the surging Australian dollar on the manufacturing and exporting sectors. “The unions understand the business and we’ve worked to solve some pretty significant business issues we’ve faced and got some outcomes in our enterprise agreements that are pretty significant.”

The improved relationship allowed Holden to reduce shifts and alter shift times at its Adelaide plant — previously a fraught
exercise — in just six weeks.

Nigel Ward, a principal at Australian Business Lawyers, says for businesses with an existing relationship with the unions, wage negotiations and bargaining can be a fruitful exercise. “Those persons involved in
bargaining know each other, they get together — they don’t want to burn the long-term relationship for this two-year agreement. They sit around the table and they act pretty reasonably with each other,” he says.

But he says businesses and unions that don’t have such strong relationships are exploiting the provisions in the Fair Work Act, stipulating both sides must bargain in good faith. “People behave more transactionally with each other. Almost from the outset you might see unions writing letters, alleging that somebody is in some way infringing the good-faith bargaining principles,” he says.

This can present difficulties for HR managers as they try to engage with their employees and to create a good workplace culture. “They’re layering on top of that every two or three years these very difficult experiences that can damage that culture and that direct engagement,” says Ward. HR managers are struggling with how to manage what can be a difficult bargaining round while at the same time maintaining good relationships with their employees.

Ward says HR managers need to plan bargaining better — and not just bargaining tactics — before they go into negotiations. “You want to be very careful about thinking bargaining per se is a legal exercise. It’s not; it’s still a matter of practice rather than the law,” he says.

Just as Holden invests in its relationship with unions and union delegates, it also invests in preparing for enterprise bargaining rounds. “The way to manage a good bargaining outcome is not to expect that you’ll turn up on day one and people will say ‘That’s a great idea’ and agree with you,” says Polglaze. “We’d spent at least 12 months planting the seeds of the things that are important to us, the direction the business is going and the challenges, so that when it came to actually bargain there were no surprises.”

In the end, it all comes down to investing enough time to ensure the relationship between management and the union remains sound and productive, says Polglaze.
“None of this is by accident. It’s structured, it’s locked into both of our calendars and both sides work through mechanisms to make sure we’re working on what we need to.” HRm

Christopher Niesche is a freelance business journalist.

This is an edited version of the article that was first published in the September edition of AHRI’s monthly magazine HRmonthly. AHRI members can read the full article on the AHRI website.