Tag / Workers’ rights

Trade unionists rally against French President Emmanuel Macron's attacks on labour rights with a banner saying "Macron, puppet of the employers" (AFP)
by Admin

Eurozone’s architects opt for ‘internal devaluation’

What conditions are required for a monetary union to work?

WHAT are the necessary requirements for a common currency to actually work effectively to the benefit of all its members? Why do the dollar-zones in the US, Canada and Australia not experience the same level of crisis, divergence and stagnation as the Eurozone has been plagued with? Simply put, the institutions in place in federal states such as these allow for the smooth, timely and effective recycling of excess profits from surplus states to those experiencing deficits. They also have central banks that have a mandate to ensure full employment, as well as price stability. In comparison, following the Bundesbank model, the ECB’s mandate is solely to maintain price stability and it is not to concern itself with employment.

When a downturn or crisis hits a common currency area, it will cause an asymmetric shock unless there has been sufficient convergence in the economies of the union. Divergent economies would be affected differently by different external and internal developments. This danger was understood by the architects of the euro, but for ideological reasons they focused only on attempting to achieve convergence in government debt and deficit levels at Maastricht and ever since, instead of looking at the more important role of divergence in balance of payments between members.

In 1961, economist Robert Mundell articulated his ‘optimum currency area’ theory on how currency unions could work to overcome asymmetrical shocks. The adjustment mechanisms identified through this theory include price and wage flexibility; mobility of labour and other factors of production; financial market integration; a high degree of economic openness; the diversification of production and consumption; similar inflation rates; fiscal integration; and finally, political integration. Some of these mechanisms can be seen to work effectively in the US. The three most important factors in place in the US economy identified by Stiglitz and others are: (1) the ease of migration across states, (2) federal spending on national programmes, and (3) the fact that the US banking system is a federal and not state-based system.

If one state in the US experiences a shock, workers can easily migrate to another state in a better economic condition in order to look for work. Technically there is freedom of movement of labour in the EU, but in practice migration within the US is far easier due to the fact states share a common language, a common culture and national identity, and the same access to federal welfare programmes. National government programmes such as social security and Medicare are available across all states, which means that if one state is experiencing a downturn, the federal government will automatically recycle surpluses towards the state in trouble in the form of, for example, increased unemployment benefits. Around one-fifth of GDP is spent at the federal level in the US. The federal government can also choose to boost investment or spending in certain federal projects at the state level in order to aid economic recovery. By comparison, in the Eurozone there is very little fiscal capacity to redirect funds towards depressed states because the European budget is around one per cent of member states’ GDP. Almost all spending occurs at the member state level. US banks are also guaranteed at the federal level by the Federal Deposit Insurance Corporation, preventing capital flight from one state to another in times of crisis.

Clearly the EU lacks similar institutions. But with the exception of a common deposit insurance scheme, the creation of such adjustment mechanisms in the Eurozone is either impossible in the short-to-medium term, or completely undesirable from a left standpoint by virtue of the fact that increased economic, fiscal and political integration require unacceptable trade-offs in the ability of people to participate in the decision-making process democratically at the local and national level.

Eurozone’s architects opt for internal devaluation

Of the various adjustment mechanisms identified by optimum currency area theorists, the Eurozone’s founders have clearly focused single-mindedly on attempting to achieve ‘flexibility’ of wages. Countries inside a common currency area cannot engage in competitive devaluations by devaluing their currency to make their exports more competitive. But they can implement policies domestically to bring about an ‘internal devaluation’ – lowering their real exchange rate vis-à-vis their neighbours. The main way this takes place is by compressing or reducing wages, which causes prices to fall. Germany has consciously implemented this policy for several decades, at the expense of German workers, millions of whom are working but living in poverty. This long-term strategy was intensified in 2003 under the then social-democrat/Green coalition government, which carried out a radical and vicious reform of the labour and welfare systems entitled Agenda 2010.

The competitiveness of prices largely determines the performance of a country’s exports, and the key factor determining prices is the nominal unit labour cost (the nominal unit labour cost is the ratio of labour cost per employee to productivity – the value added per worker). Unit labour costs in Germany stopped growing in the mid-1990s. Between 1998 and 2007, the rise in unit labour costs in Germany was zero. But in the rest of the Eurozone over the same period, average wage costs mainly increased with inflation, of around 2 per cent per year. This difference greatly increased the competitiveness of German exports and reduced it for the exports of other Eurozone members. So the success of Germany’s economic model is at the expense of the rights and living standards of its workers. The Agenda 2010 strategy has been deepened under successive governments and by 2015, more than 12.5 million Germans, out of a population of 80 million, were living in poverty in Europe’s “economic powerhouse”.

The EU’s focus on structural reform, particularly labour market reform, with a view to achieving increased “flexibility” has been a constant feature of its agenda since Maastricht. This was a major element of the Jobs Strategy of 1994, and the Lisbon 2010 Agenda adopted in 2000. The Lisbon Agenda originally set out to make the EU “the most competitive and dynamic knowledge-based economy in the world” by 2010. It included an economic pillar, a social pillar and an environmental pillar. In 2005, the Lisbon Agenda was revised by the European Council and Commission. Their verdict was that the agenda was failing to achieve its goal, and so they decided to drop the social and environmental pillars and focus on the economic pillar. In 2010 the Lisbon Agenda was relaunched as a new 10-year plan, the Europe 2020 strategy – “an agenda for new skills and jobs: to modernise labour markets by facilitating labour mobility and the development of skills throughout the lifecycle with a view to increasing labour participation and better matching labour supply and demand”.

The “progress” of member states in implementing structural reforms that will facilitate downward movement on wages is monitored through the European Semester process, a yearly cycle of policy “coordination” between member states and the Commission. In spring each year, Member States submit their plans for managing public finances – including keeping debt and deficits within the Stability and Growth Pact limits – and their National Reform Programmes to achieve “smart, sustainable and inclusive growth”. These plans are then assessed by the Commission, which proposes country-specific recommendations to member states, which are discussed and adopted by the Council. Then each autumn member state governments are graciously permitted to present their draft national budgets to their respective parliaments. The Five Presidents’ Report of EU leaders of 2015 proposed the creation of National Competitiveness Authorities to advance this agenda further.

The Eurozone elites believe (or claim to believe) that if only “wage rigidities” in the member states were overcome, both unemployment and trade imbalances would disappear. If only a country’s population could be forced to work for poverty wages, there would be a job for everyone; and the resulting stagnation in domestic demand would mean prices would fall and this country’s real exchange rate, which had become misaligned and risen too high, could regain its balance. This view underpins the repeated attacks on the rights and wages of French workers, set to intensify fiercely under President Macron, as well as underpinning the EU’s overall agenda and forcing structural reforms in the member states in order to increase productivity and competitiveness – and profit, of course. The austerity imposed by the Troika was not only designed to regain market “confidence” in peripheral governments, but also to facilitate internal devaluations in member states by a form of shock therapy. Of course, this adjustment facilitates not only the reduction of trade imbalances but also a sharp increase in the amount of wealth transferred from labour to capital.

There has certainly been an internal devaluation process in the Eurozone countries, affecting primarily the peripheral economies. But as Stiglitz points out, “this has not worked – or at least not fast enough to restore the economies to full employment. In some countries such as Finland, low inflation not been enough to even restore exports of goods and services to the levels before the crisis”. An increase in exports in these countries should have boosted growth and employment. But with the exception of the hugely distorted “globalised” data from the Irish economy, this has not been the case. The restoration of trade balance that the Eurozone has experienced since the crisis has largely been due to the fact that imports fall when demand stagnates – “one can achieve a current account balance by strangulating the economy”. For the crisis countries, the reduction in their trade deficits post-crisis largely resulted from a reduction in imports and not an increase in exports.

Crucially, internal devaluations also increase the level of debt of households, firms and governments who have borrowed in euros – as the value of their income is depressed, they owe a higher proportion of their income. High levels of debt were a major factor in causing the recession, because those in debt cut back on spending on both imports and domestic goods, causing a decline in GDP. It has also contributed greatly to the lingering problem of non-performing loans burdening Eurozone banks, particularly in the crisis countries.

This is an excerpt from the economic discussion document launched by MEP Matt Carthy on October 27, entitled The Future of the Eurozone. Download the full document for a referenced version of Chapter Five, above.

 

by Admin

Social dumping and the revision of the Posting of Workers Directive

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The current proposal from the European Commission to revise the Posting of Workers Directive will not establish ‘equal pay for equal work in the same place’ nor effectively combat social dumping, and it needs to be significantly strengthened in order to have any impact.

The European Commission adopted a proposal for a Directive amending the 1996 ‘Directive on the posting of workers in the framework of the provision of services’ (Posted Workers Directive) on 8 March 2016. This ‘targeted revision’ of the PWD was announced as part of the Labour Mobility Package in the Commission’s Work Programme for 2016. The other two items in the Labour Mobility Package are a Communication on labour mobility and the revision of the Regulation on social security coordination – and the latter has now been postponed until after the British referendum on EU membership scheduled for 23 June 2016.

The Commission proposal for a Directive amending the PWD was referred to the European Parliament’s Employment and Social Affairs Committee. Since then, the ’yellow card’ procedure has been invoked by certain Member States against the revision of the PWD.

The stated goal of the 1996 PWD, which came into force in 1999, was to combat social dumping and prevent distortions of competition in the context of expanded European integration and increased posting of workers. Its central principle was that the pay and working conditions in effect in a Member State should be applicable both to local and posted workers.

The limitations of the original PWD, together with a very narrow interpretation of the rights it conferred by the European Court of Justice (ECJ), combined to make sure that the PWD only provided posted workers with a legal right to the basic minimum rights and conditions, and was largely ineffectual as a measure to combat social dumping.

Campaigns, in particular by the ETUC, for a revision of the PWD in light of the ECJ rulings were long ignored by the Commission, which eventually proposed an Enforcement Directive containing only marginal improvements to reduce abuse of posted workers in 2014. The deadline for the transposition of the Enforcement Directive by Member States is 18 June 2016.

A push in 2014 by several Member States for a revision of the PWD to establish the principle of ‘equal pay for equal work in the same place’ led to the current Commission proposal for a Directive amending the PWD.

Yellow card procedure invoked

By 10 May 2016 – the deadline for the ‘subsidiarity’ check by Member State parliaments on the Commission’s legislative proposal to amend the PWD – enough Member States had objected to the proposal on the grounds of subsidiarity for the ‘yellow card’ procedure to be invoked.

Under the yellow card system introduced as a protocol to the Lisbon Treaty, each Member State parliament can review draft EU legislation within eight weeks of receiving a proposal and produce a “reasoned opinion” objecting to the draft legislative act if it is believed the proposal breaches the principle of subsidiarity.

One-third of the total votes (at least 19 out of the total 56) is the threshold required to invoke the yellow card. In this case 11 Member States cast 22 votes for a review of the proposal. These were: Bulgaria, Croatia, Czech Republic, Denmark, Estonia, Hungary, Latvia, Lithuania, Poland, Romania and Slovakia. Five of these states also claimed the proposal was in breach of the principle of proportionality. Their submissions can be read here.

The Commission as the author of the draft legislation is now required to review the proposal, after which it may proceed to maintain, amend or withdraw the draft, and it must provide reasons for its decision. The EP’s rules of procedure mean it cannot move forward with the proposal until the author has stated “how it intends to proceed”. There is no time limit on the review.

Posted workers and social dumping

A ‘posted’ worker is one sent by his/her employer to work for that employer on a temporary basis in an undertaking the employer has established in another Member State.  The Commission claims that these are citizens “providing a service” in another Member State, and that they do not integrate into the labour market of the host state. A posted worker is paid by the company they were recruited by in their home state, and their social security contributions continue to be paid to their home state.

According to the Commission’s 2014 figures, there are more than 1.9 million posted workers in the EU, up by 10% from 2013 and up by 44% since 2010. Germany, France and Belgium were the top three destination states, receiving more than half of all posted workers, with EU-15 Member States the destination for 86% of all posted workers.

Poland, Germany and France are the top three states posting workers to other Member States. Construction accounts for more than 40% of all postings. There are three cross-border situations that the PWD covers: subcontracting, intra-corporate transfers and posting of temporary agency workers.

There is not an agreed definition of social dumping in the EU institutions but Eurofound (2012) defines it as “a practice involving the export of goods from a country with weak or poorly enforced labour standards, where the exporter’s costs are artificially lower than its competitors in countries with higher standards, hence representing an unfair advantage in international trade”. An alternative definition from the ETUI (2014) defines it as “the practice, undertaken by self-interested market participants, of undermining or evading existing social regulations with the aim of gaining a short-term advantage over their competitors”.

The tendency is for companies to use posted workers for labour-intensive jobs in low value chains, particularly in construction and transport, and for the company to pay only the minimum rate of pay legally required in the host Member State (or to illegally avoid observance of the host state’s labour laws and standards). As well as wage dumping, companies reduce other working conditions to make savings and require employees to pay high charges, for example for housing.

Concerns over the use of posted workers for social dumping within the European market became a political issue in the late 1980s and early 1990s as cross-border service provision expanded following the incorporation of Greece, Spain and Portugal. The first major ruling issued by the ECJ on the rights of posted workers versus the right to provide services was Rush Portuguesa, in which a Portuguese company posted workers to France under Portuguese pay and conditions, and was challenged by the French government for doing so without its authorisation.

The court ruled that the Company had the right to post its own workers to France under the ‘freedom to provide services’ contained in the Treaty of Rome, but also that France had the right to enforce the application of French labour laws.

Posted Workers Directive

The 1996 Directive was introduced as a result of the public debate and concerns of trade unions and some Member States regarding unfair competition on wages and working conditions arising from the posting of workers. It established a set of regulations aimed at ensuring minimum protection in destination Member States. Specifically, it guarantees the application of the host Member State’s statutory and regulatory provisions relating to:

*maximum work periods and minimum rest periods;
*minimum paid annual holidays;
*the minimum rates of pay, including overtime rates (excluding supplementary occupational retirement pension schemes);
*the conditions of hiring-out of workers, in particular the supply of workers by temporary employment undertakings;
*health, safety and hygiene at work;
*protective measures with regard to the terms and conditions of employment of pregnant women or women who have recently given birth, of children and of young people; and
*equality of treatment between men and women and other provisions on non-discrimination.

There are exceptions to the right to these minimum provisions for postings lasting less than a month, for the crew of merchant ships, for staff involved in the initial assembly, and where the amount of work to be done is “not significant”. The “temporary” nature of the posting was not defined by a time limit in the Directive.

In the construction sector “collective agreements or arbitration awards which have been declared universally applicable” must also be applied.

Interpretation of PWD as a maximum directive

While the 1990 Rush Portuguesa ruling suggested EEC members could actually extend all employment laws and regulations to posted workers, the ‘minimum’ rights outlined in the PWD and subsequent rulings by the ECJ in the 2000s enabled companies to exploit “the difference between minimum and standard levels of protection”.

The court has held that host Member States cannot require posting employers to comply with standards that go beyond the terms of the PWD – ie, posting employers cannot be required to pay wages at rates higher than the legal minimum, and cannot be required to adhere to standards not included in the minimum list of provisions above. It has also held that the right of workers and union to take collective action, including the right to strike, is subject to the right to freedom to provide services and freedom of establishment.

Some of the most significant cases include:

Laval: In 2004, Latvian firm Laval posted Latvian construction workers to Sweden and refused to acknowledge the existing collective agreement with the Swedish Building Workers’ Union. As Sweden had a well-functioning collective bargaining and agreement system and did not have an across-the-board minimum wage bound in law, Laval claimed that it was not obliged to pay the rates collectively agreed in the building sector.

The Swedish building union took collective industrial action. Laval claimed to the ECJ that it was being discriminated against on the grounds of nationality and that the Swedish union was infringing upon its right to provide services.

The court found that companies or “service providers” from another EU state are obliged to abide by the host agreement but collective action must be “proportional”. This means that the ECJ believes workers do have the right to take industrial action – but only when the minimum wage or conditions of the host country, or the minimum working conditions set out in the Posting of Workers Directive are being breached by the employer. The Laval case is viewed as the moment the PWD switched from being viewed as a minimum to a maximum directive.

Viking: In order to cut costs, the Finnish shipping company Viking Line attempted to re-flag its ships as Estonian and operate out of Estonia. When two Finnish maritime unions organised a blockade of Viking Line, Viking took its case to the ECJ: again, the claim was that the company’s right to freedom of movement was being restricted by the industrial action of the workers. In December 2007, while the court found that collective action to protect posted workers from exploitation was legal, the unions had restricted Viking Line’s right of establishment.

Rüffert: German company Objekt und Bauregie employed a Polish sub-contractor to employ Polish building workers, posted to Germany, on less than half the minimum wage agreed by German trade unions and employer associations. In 2008, the ECJ ruled that O&B should not be bound by the local Lower Saxony law that states public building contractors must abide by the existing collective agreements.

The court found that while member states may impose minimum pay rates on foreign companies posting workers in their state, the local law restricted the “freedom to provide services” and was not justified by the aim of protecting the workers because workers in the private sector were not covered by such protections.

In essence, this ruling prevents above-minimum wages and conditions being included in public tender contracts, conflicting with ILO Convention 94, which takes the approach that  public procurement contracts should not be used to exert downward pressure on wages or conditions.

Luxembourg: The European Commission took Luxembourg to the ECJ claiming that by imposing its labour law provisions – especially the mandatory indexation of wages – on all workers, including posted workers, the Luxembourg government was going beyond what was allowed under the PWD. The Luxembourg government argued that the application of these laws to posted workers was in the interests of ‘public policy’.

The court held that for public policy reasons to justify enforcing above-minimum standards, such standards must be “crucial for the protection of the political, social or economic order (in such a way) as to require compliance by all persons present on the national territory, regardless of their nationality”.

However, in February 2015 the ETUC welcomed the ruling in Sähköalojen ammattiliitto ry, which diverged from Laval and found that a host Member State can require posting companies to pay holiday allowances, daily flat-rate allowances to compensate workers for posting, and compensation for travelling time, on equal terms as local workers; and that if binding collective agreements set different pay levels for different groups of employees, these should be considered as being in line with the PWD.

Impact of ECJ’s PWD case law on right to take collective action

Overall the case law (with the exception of the more recent Sähköalojen ruling) highlights the following problems with the PWD in relation to collective action:

The right to take collective industrial action, including the right to strike, is not in fact guaranteed in the EU as it is subject to “Community law and national laws and practices”, which means it can be restricted.

The right to take collective action to prevent the exploitation of posted workers by foreign service providers is subject to the company’s right to freedom of movement and establishment under the EU Services Directive – a right which the ECJ has repeatedly and consistently upheld as being superior to workers’ rights. The Court now says that the freedom of establishment “may be relied on by a private undertaking against a trade union or an association of trade unions”. This means employers can take unions to court for any collective action by arguing it is violating their economic freedoms.

The collective action of workers and unions taken against posting companies is only deemed legitimate if it is “proportional” – that is, in defence of the most basic minimum conditions agreed on by EU bodies or set in law by the host country. The higher-than-average conditions that may be included in public sector agreements are an infringement of the right to establishment.

Enforcement Directive 2014

In response to calls for a revision of the PWD in light of the ECJ jurisprudence, the Commission claimed up until 2014 that such a revision was not necessary due to the introduction of Better Law-Making and REFIT, and that an Enforcement Directive on the PWD would resolve outstanding issues. The deadline for transposition of the Enforcement Directive is 18 June 2016.

The Enforcement Directive:

*lists criteria characterising the existence of a genuine link between the employer and the Member State of establishment (to combat ‘letterbox companies’)
*defines Member States’ responsibilities to verify compliance with the rules on posting of workers
*lists national control measures that the Member States may apply when monitoring compliance with the working conditions applicable to posted workers
*sets requirements for posting companies to facilitate transparency of information and inspections
*empowers trade unions and other parties to lodge complaints and take legal and/or administrative action against the employers of posted workers, if their rights are not respected
*ensures the application of administrative penalties and fines across the Member States if the requirements of EU law on posting are not respected.

The Enforcement Directive partially addresses a key problem with the application of the PWD in relation to subcontractors by introducing joint liability on the main contractor. This will set out who can be held liable for payment of wages, but does not determine what the wage of posted workers within a subcontracting chain should be.

The fundamental problems with the design of the PWD and its interpretation by the ECJ that have been outlined above were not addressed in the Enforcement Directive, which limited its scope to addressing fraud, circumvention of rules, and exchange of information between the Member States.

Commission’s new proposal has many limitations

In 2014, a group of Member States led by France campaigned for a revision of the PWD. Austria, Belgium, France, Germany, Luxembourg, the Netherlands and Sweden  signed a joint letter to the Commission calling for such a revision in order to establish in EU law the principle of ‘equal pay for equal work in the same place’, a demand supported by the ETUC and most European trade union federations. In response to this pressure, the Commission brought forward its proposal for a targeted revision of the 1996 Directive in March.

In doing so, the Commission finally admitted the existence of social dumping in the EU and its relationship with the PWD. In its Impact Assessment on the new proposal for a Directive amending the PWD, the Commission admits: “The 1996 Posting of Workers Directive establishes a structural differentiation of wage rules applying to posted and local workers which is the institutional source of an un-level playing field between posting and local companies, as well as of segmentation in the labour market,” and states that “the existing Directive has an in-built structural wage gap between posted and local workers”.

The key aspects of its proposal are:

*The ‘limited time’ a posted worker counts as a posted worker is defined as being 24 months or less, after which s/he will be covered by the labour law of the host state.
*The same rules on remuneration will apply to local and posted workers – but only if these are set by law or by universally applicable collective agreements.
*The rules set by universally applicable collective agreements become mandatory for posted workers in all economic sectors.
*Within sub-contracting chains, Member States will have the option to apply to posted workers the same rules on remuneration that are binding on the main contractor and even if these rules result from collective agreements that are not universally applicable.
*The principle of equal treatment with local temporary agency workers will also be applied to posted temporary agency workers, aligning the current legislation on domestic temporary agency work.

The key limitation of the Commission’s proposed revision is that it will not establish equal pay for equal work in the same place. The ‘same rules’ on remuneration will apply only when the standard is enshrined in law or in a universally applicable collective agreement, which is some Member States excludes the vast majority of collective agreements.

The two-year period before assimilation into the local labour market means most posted workers will be excluded as 90 per cent of posted workers are posted for less than 24 months at an average of 4 months.

It does not address the conflict between the right to take collective action and the right to freedom to provide services.

It also does not address the tension on the role of public procurement contracts between the Rüffert  case, the Public Procurement Directive  and ILO Convention  94, which states that conditions  under  public procurement contracts should not be less favourable than those established  for  the  same  work  in  the  same  area  by  collective agreement  or  similar  instrument.

The proposal does not make the general contractor liability at all stages of the subcontracting chain binding, and it does not require adequate proof of a pre-existing labour relationship before posting providing a service of similar nature.

All of these issues should be addressed through the process of revising the PWD in order to ensure it actually finally becomes an effective instrument to combat social dumping.

by Admin

TURC: Political theatre that’s fallen flat

The timing of the release of the interim findings of the Abbott Government’s Royal Commission into Trade Union Governance and Corruption demonstrated that even the Government now realises the Commission has failed to land a significant blow against the Australian trade union movement. Commissioner John Dyson Heydon’s interim report was released to little media fanfare on December 19, the Friday before Christmas.

The Commission’s interim report is a product of the highly political terms of reference written by the Abbott government, and of the biased approach of Commissioner Heydon and Counsel Assisting Jeremy Stoljar. Yet it still fails to paint a picture of anything nearing widespread corruption in the trade union movement.

The two relevant stories dominating the media prior to the announcement of the Royal Commission were allegations about former prime minister Julia Gillard’s role in the establishment of an Australian Workers Union slush fund more than two decades ago, and the corruption in the Health Services Union East Branch revealed by “whistleblower” Kathy Jackson, national secretary.

The sustained campaign led by Liberal politicians and the Murdoch press to implicate Gillard in wrongdoing as a solicitor in 1992 fizzled out and Counsel Assisting’s final submissions to the Commission published on October 31 stated that she “did not commit any crime and was not aware of any criminality” on the part of her former boyfriend, Bruce Wilson, and his then AWU colleague Ralph Blewitt.

In contrast, court actions during 2014 have revealed that Jackson – described as a “hero” by Abbott in 2012 and initially viewed by the Commission as its star witness – is the subject of litigation brought by the HSU, which is seeking to recover $1.4 million she allegedly stole from the union between 2004 and 2010. The Commissioner quietly averted his gaze in his interim report, and Jackson is mentioned on just six of its more than 1,800 pages.

Body count unimpressive

This approach of a Royal Commission avoiding making findings on issues that are the subject of ongoing court action is sound, and is supported by both the Commission’s terms of reference and High Court precedent, but it has not been used consistently. Heydon has produced detailed findings, including recommendations that prosecuting authorities “consider” criminal charges, in several cases involving officials from the Construction, Forestry, Mining and Energy Union that are before the courts.

The Commissioner in his interim report retreated somewhat from Stoljar’s bald statements in his final submissions that officials had “committed criminal offences” after receiving spirited responses from the CFMEU and other unions which pointed out that the Commission did not have the power to make findings of guilt.

The Commission was constituted 13 March 2014. After 76 days of hearings, 687 notices to produce, 239 witness appearances and $53 million of public money, the results must be disheartening, to say the least, to the Abbott government.

Aside from the already known existence of corruption among a number of officials in the HSU East Branch, and the Wilson-Blewitt AWU slush fund affair, it has failed to uncover systemic – or even any other significant cases of – corrupt self-enrichment by union officials at the expense of union members. Stoljar conceded in his final submissions that allegations of CFMEU officials in New South Wales and Queensland receiving or seeking bribes were “unsubstantiated”.

“The body count has been so low some in the media room took to joking about being assigned to cover [the New South Wales Independent Commission Against Corruption], where it reached double digits with 12 state or federal Liberal MPs who have resigned or stood aside,” journalist for Thomson Reuters’ industrial relations news service Paul Karp wrote on November 11.

Karp also commented on the failure to land any blows against Transport Workers Union national secretary Tony Sheldon over a union fund used in political and union campaigns. Unable to recommend that any charges should be laid, Stoljar “was reduced to observing that his conduct evinces a ‘culture of entitlement’ among the fund directors. If it was their money in their fund, perhaps they were entitled to think it could be used by them for their benefit.”

There are several cases where Heydon recommends prosecuting authorities consider charging individuals, but in almost all instances, these cases relate to industrial action.

The interim report does not make recommendations for policy reform; however, Stoljar’s submissions indicate the Commission will recommend attacks on industry superannuation funds and attempts to further regulate industrial relations by corporations law and criminal law. [These anticipated policy recommendations will be the subject of a future article in this series.]

Stage managing

Leaving aside for the moment the approach of the Commission and the content of its case studies, it’s worth taking a look back at the highlights of the political theatre of the past year that has been orchestrated by the Abbott government and the officers of the Commission itself.

From the start, Murdoch’s Herald-Sun newspaper appears to have been granted special access to the office of the Commission. A major leak in relation to the subject and content of private hearings and future public hearings in July went to several outlets, including the Herald-Sun and the Age.

On 3 July 2014, the day the CFMEU’s counsel was informed that hearings the following week would include a case study in Melbourne being the Pentridge Prison site”, the Herald-Sun said there would be “an explosive video and claims of corruption, death threats and intimidation” aired in the Commission the following week.

The following day, the Age uploaded video and audio recordings as part of its allegations around the Pentridge site. The same day, 4 July 2014, the Age also ran allegations it said were from private hearings.

The CFMEU wrote to the chief executive officer of the Commission, Jane Fitzgerald, saying: “These events suggest that not only the subject of next week’s Commission hearings but the evidence itself has been leaked to the media.” The union called on the office of the Commission to ask the Australian Federal Police to “investigate whether anyone from the Commission has been involved in the leaking of material to the media”.

Fitzgerald, and then Heydon, simply dismissed out of hand the allegation that officers of the Commission had been involved in a leak and refused to have the matter investigated internally or independently.

When a female lawyer working for the Commission was physically assaulted and injured in a car park on 18 September 2014, the Herald-Sun ran the story the following morning including the line: “The commission released a statement last night exclusively to the Herald-Sun”. The attack was random and unrelated to any aspect of the Commission, and the Herald-Sun did not explicitly claim there was a connection, though it mentioned the CFMEU and “bikies” in the article. But why is a royal commission providing selective briefings and “exclusive statements” to a favoured media outlet instead of issuing a general press release?

In July 2014, the ACTU was leaked a copy of a ‘scoping questionnaire’ that had been sent to all federal government departments and agencies by the Attorney General’s department asking them to disclose all contact with any union over the previous 10 years. ACTU Assistant Secretary Tim Lyons wrote in Working Life on 29 July 2014, “Although it’s notionally about the royal commission into unions, it goes well beyond the Commission’s terms of reference and seems to imply that any consultation with unions on public policy matters, and even negotiating a workplace agreement with unions representing public servants is somehow illegitimate”.

Those who said the union movement’s claim that the royal commission was a politically motivated witch-hunt was exaggerated should have been forced to think twice after the Attorney General department’s demand.

Then on 8 October 2014, Attorney General George Brandis announced that the Heydon royal commission would be extended by a year, and its terms of reference widened. Brandis said this was in response to the letter he received from Heydon reporting on his progress the previous week. But Heydon had clearly stated: “This letter is neither an application to widen the terms of reference nor an application to extend the reporting date.”

Brandis pushed out the reporting date by a year from December 2014 to December 2015. He boosted the Commission’s budget from $53 million to $61 million.

Clearly another year of mud-slinging against the union movement will give the deeply unpopular Abbott government a better chance of winning public support for its plan to make major reforms to the workplace relations system following the Productivity Commission’s review of the Fair Work Act which began in December. It means the Commissioner’s final report will be released in the lead-up to the 2016 federal elections.

The federal opposition pointed out that Brandis had taken just five days to respond to Heydon’s letter, but more than two months to respond to Justice Peter McLellan’s July actual request for an extension in the Royal Commission into Institutional Responses to Child Sexual Abuse.

Brandis confirmed during Senate Estimates that “the government made the decision to extend the Royal Commission”.

Election stunts

Then there was joint police task force into union-related crime that got announced twice – once by the Attorney General’s department in February 2014, and once more for luck on 31 October 2014, shortly before the Victorian state election.

Opposition leader Bill Shorten had proposed creating a “multi-jurisdictional taskforce” in February 2014. The CFMEU has written to the police commissioners of Victoria and NSW several times since January 2014 pledging the union’s full cooperation with the police in any investigation into criminal activity in the building industry.

But the theme of the Victorian state election, a contest in which the first-term Napthine government was struggling, was set.

The Victorian Police Commissioner Ken Lay was informed the night before the 31 October announcement, by email, that then Victorian Premier Denis Napthine and Abbott would be holding a press conference in the morning about the joint police task force.

That evening Tom Iggulden reported on the ABC News: “The Herald-Sun was, however, kept in the loop. Details of the taskforce unknown to the [police] commissioner were splashed across the News Limited outlet this morning.” The front page headline read, “Cops hunt union rats”.

The task force would include up to 30 Victorian and federal police officers who would investigate allegations aired by the Heydon Commission, and report back to the Commission.

Question Time in the federal parliament was dominated by feverish claims in the weeks leading up to the Victorian vote, with federal justice minister Michael Keenan saying on 26 November that “Voters in Victoria need to be aware that a vote for Labor on Saturday is literally a vote for the CFMEU to have a seat at the cabinet table.” Education minister Christopher Pyne claimed the day before that “[Victorians] do not want the bikies back running Victoria. A vote for Labor on Saturday is a vote for the CFMEU and John Setka.”

All of which of course made the Liberal loss of government, ensured by a grass-roots campaign by trade union activists led by Victorian Trades Hall Council, all the sweeter.

And lastly, the timing of the release of the terms of reference for the Productivity Commission’s review of the Fair Work Act – delayed since March 2014 and announced on the Friday before Christmas, minus Abbott, and just a few hours after Heydon’s interim report was released – was the final act in a year of politically motivated and orchestrated stunts relating to this royal commission.

Despite the combined efforts of the government and the Commission itself, it’s fallen flat. But then, the Abbott government has given it another year to do better.

by Admin

Media role in TURC: Giving credit where it’s due

Since 2011, the Liberals have viewed ‘union corruption’ as both their ticket to power and as a central tool in their attempt to condition the Australian public for their industrial relations agenda.

It’s easy to forget the ferocity of the Liberal campaign against then federal Labor MP and former leading Health Services Union official Craig Thomson that was unleashed in 2011. The opposition bayed for blood and fostered a media frenzy over allegations of his corrupt behaviour as a union official in the belief that the minority Labor government, which then held power in the federal parliament by a single seat, would fall.

Liberal strategists saw the opportunity to tarnish then prime minister Julia Gillard with the same brush of ‘union corruption’ by dusting off old rumours about legal advice she was alleged to have provided in connection with the Australian Workers’ Union slush fund. Weak as the evidence was, and tenuous as the ‘union corruption’ link was, it would have to do.

Still apprehensive about the united and effective Your Rights at Work campaign that forced the Howard Liberal government from power in 2007, the AWU and HSU scandals combined did not quite amount to the ammunition the Abbott government needed to mount a full-scale attack on the trade union movement immediately following his election in September 2013.

Fairfax & ABC’s ‘joint investigation’

But the ABC and Fairfax Media stepped in to provide the government with the justification it needed to broaden its promised judicial inquiry into the AWU into a fully-fledged royal commission which targeted five trade unions and demanded the last seven years’ worth of financial, contractual and personnel records from every branch of the named unions.

A joint investigation by the ABC’s 7.30 Report and Fairfax Media resulted in a series of stories being published and aired on January 28 and 29, 2014, which alleged widespread criminality, intimidation and corruption in the construction industry. Dramatic CCTV footage of Comanchero bikies apparently trying to collect a debt from the Master Builders Association’s Trevor Evans at his home opened the 7.30 Report. The reporter failed to explain how this incident was connected with construction workers or their union.

Since January last year, the 7.30 Report in particular has provided a platform to anyone with a grievance against the Construction, Forestry, Mining and Energy Union (CFMEU). This has ranged from disgruntled union officials to dodgy builders, from organised crime figures with scores to settle to the head of the Fair Work Building Industry Inspectorate (FWBC), Nigel Hadgkiss.

The central allegation reported in Fairfax Media in January last year was: “Union officials have formed corrupt relationships with organised crime figures, receiving kickbacks in exchange for arranging lucrative contracts in the construction industry.” The ABC alleged “systemic bribery” of union officials. The investigation claimed that six Victorian CFMEU officials had received bribes.

Victorian organiser Danny Berardi resigned from his position when journalists provided evidence that he had accepted free renovation work in exchange for helping two companies get contracts. However, aside from Berardi, no other details or names were provided: “For legal reasons specific details cannot be aired,” the ABC said.

The 7.30 Report ran a story on 28 January featuring an interview with CFMEU NSW official Brian Fitzpatrick who alleged that there were links between NSW union officials and companies run by alleged crime figure George Alex.

The following night it ran a story featuring an interview with Victorian builder Andrew Zaf, who claimed he had provided $10,000 in roofing material to CFMEU Victorian Secretary John Setka, then a union organiser, in the mid-1990s. He also claimed he had written a cheque for $10,000-$12,000 to pay for Sinn Féin leader Gerry Adams to visit Australia. Against footage of Adams’s 1999 visit, reporter Nick McKenzie said: “When the union brought Irish republican leader to Australia, Zaf was asked to chip in.”

Widening the scope

The ABC and Fairfax both claimed credit for the government’s move to establish the Heydon Royal Commission into Trade Union Governance and Corruption, which was announced less than a fortnight after their joint investigation. “The scope of the inquiry was dramatically widened into a royal commission after extensive reports in Fairfax Media,” Fairfax journalists wrote in a subsequent article.

In the same edition of the 7.30 Report on 29 January that featured Andrew Zaf, host Leigh Sales later interviewed Treasurer Joe Hockey and helpfully opened with: “The revelations of union corruption have given the Abbott Government ammunition to argue both the case for more union oversight and for an inquiry into corruption.” Then, to Hockey: “Do you think that a royal commission into union corruption is warranted?”

He replied: “Well certainly we promised before the election to have a judicial review, but there is mounting evidence now that there are systemic problems in the union movement that need to be fully exposed and addressed.”

Later in the year, businessperson Jim Byrnes starred in an episode of the 7.30 Report in which he claimed he had seen his rival George Alex pass an envelope, which conveniently had “$3,000” written on it, to NSW CFMEU organiser Darren Greenfield at a meeting. Byrnes’s is to date the only “eyewitness” account of a union official accepting a bribe. Greenfield denies ever having been in any meeting together with Byrnes in his life.

Discredited

The royal commission itself has since shown many of the claims made by the ABC and Fairfax to be either totally false or unsubstantiated.

There’s a big difference between widespread corruption in the construction industry and widespread corruption in the construction union.

CFMEU leaders said they were in full agreement with the view that organised crime was rife in the industry, and that they had been pressing for years for the police and the corporate regulator, Australian Securities and Investments Commission (ASIC), to investigate criminal activity. It also pointed out that the union plays “no part in deciding whether particular labour hire companies got contracts on construction projects,” nor is it “in a position to check the property, or other interests or connections of employers and managers of companies”.

Before the Fitzpatrick allegations about CFMEU officials in NSW collaborating with George Alex were publicly aired, the claim was already the subject of an internal union investigation and the NSW branch of the union had recovered $250,000 in unpaid workers’ entitlements from Alex companies.

As the CFMEU legal team wrote in their response to the final submissions of Jeremy Stoljar, Counsel Assisting the Commission, “The investigation into allegations made by Mr Fitzpatrick about the relationship between the NSW Branch and the Alex Companies is ongoing. The most serious of the allegations arising from that investigation, that officers of the NSW branch received cash bribes, was, as Counsel Assisting submits, unsubstantiated. There was insufficient evidence. A similar allegation by [Lis-Con boss Eoin] O’Neill that officers in the Queensland branch sought cash payments is also described as unsubstantiated.”

Jim Byrnes, who later repeated his allegations before the Commission following his September appearance on the 7.30 Report, admitted on air that he had fallen out with Alex and said: “I’d like to see him in prison. Cause I’d like, I’d like him to have someone just lean over his shoulder and whisper my name in his ear.” Byrnes served time in jail for supplying heroin and assault before acting as an adviser to notoriously corrupt and bankrupted businessman Alan Bond, and has been banned by ASIC twice from managing companies.

An allegation – reported as fact by the Herald Sun in August 2014 and repeated by Victorian Police Assistant Commissioner Stephen Fontana to the Heydon Royal Commission in September 2014 – that one of the Comancheros collecting a debt in the 7.30 Report’s January 2014 footage, Norm Meyer, was a CFMEU official, was categorically denied by the union.

Fontana claimed in the Commission that he had police intelligence that showed several “union officials” were “members of outlaw motorcycle gangs”.

In a cross-examination by CFMEU counsel John Agius, which really ought to be immortalised in song, Fontana admitted that by “union officials” he meant “union official”, specifically Norm Meyer, and by “police intelligence” he meant a photo of a union rally he had seen in the Herald Sun.

After Agius informed him that not only was Meyer not a union official, he had not even been a financial member of the union for the previous two years, Fontana admitted: “I got that wrong. I apologise.” Pressed further by Agius who asked, “So there’s no intelligence or evidence that any union officials of the CFMEU are members of an outlaw motorcycle gang?,” Fontana replied, “Not to my knowledge.”

Fontana then conceded under questioning that no CFMEU official had ever been charged with blackmail, corruption or drug crimes despite his opening claims that he believed union officials were involved in these crimes. This didn’t stop the Herald Sun from running an utterly dishonest editorial on 20 September 2014 in which Fontana’s initial claims, but not his retractions, were reported. It was titled, “Muzzle union things now”.

And as for Andrew Zaf, he has emerged as the most thoroughly discredited witness to appear before the Commission yet, with the exception of Kathy Jackson. The trip by Gerry Adams to Australia that Zaf referred to was organised independently by Irish solidarity organisations, not by the CFMEU, and the international air fares were purchased by Sinn Féin’s Belfast office.

Zaf had claimed in January that he paid for the trip that occurred in 1999; before the Commission on 17 September 2014 he said his records from ANZ Bank show he had written a cheque for $10,000 in 1997, and moments later he said he wrote this cheque prior to 1994. It’s on the public record that Adams was denied an entry visa to Australia until 1999, after the Good Friday Agreement was signed in 1998.

In July Zaf told the Commission he had “no personal enemies” only to be threatened by Hells Angels over a disputed debt four days later. In his September appearance Zaf was forced to deny having pulled a gun on then CFMEU organiser Maurice Hill in 1994. Evidence was produced showing the Victorian Trades Hall Council had passed a motion condemning the incident at the time.

Finally, in November, Slater and Gordon lawyers acting for the CFMEU wrote to the Commission enclosing a statement from Victorian Trades Hall Council Secretary Luke Hilakari that included information about Zaf from a former associate that challenged the evidence he had provided to the Commission. Heydon agreed to omit any reference to Zaf’s allegations from his interim report.

Shoddy and unsubstantiated 

So what was actually demonstrated by the ABC-Fairfax joint investigation was that motorcycle gangs and organised crime figures are involved in the construction industry, and that one junior CFMEU official acted corruptly and immediately resigned after the union leadership was made aware of this. Hardly a justification for a royal commission into the entire trade union movement.

Generally when a media outlet claims it cannot publish specific details or name names for “legal reasons”, that means it doesn’t have the evidence to back up an allegation that could withstand a defamation suit. Given the dubious quality of the “whistleblowers” the ABC and Fairfax are relying on for these “specific details”, and the unbelievably woeful fact-checking of the journalists, you’ll forgive me for looking at their entire investigation with a healthy amount of skepticism.

These sensationalist, poorly researched and unsubstantiated articles, which were enthusiastically seized upon by the Abbott government to launch the Heydon royal commission, should be a source of embarrassment to the ABC and Fairfax Media, not a source of pride.

by Admin

TURC: Abbott’s glaring double standards

Prime Minister Tony Abbott, right, and Employment Minister Eric Abetz

Prime Minister Tony Abbott, right, and Employment Minister Eric Abetz

Releasing the interim report of the Royal Commission into Trade Union Governance and Corruption on December 19, Employment Minister Eric Abetz said the findings showed the decision to hold a royal commission into unions had been “vindicated”. But if almost every substantial case examined by the Heydon Commission was already making its way through the legal system, surely that suggests the system was working. A royal commission is a tool the executive arm of government can effectively employ when there is a serious failure by the existing regulatory system.

Counsel for the CFMEU in the Commission, John Agius, pointed out in his oral submission to the Heydon Commission in November that the role of a royal commission “traditionally and [which] ought still to be the case is one of using its coercive powers to discover evidence that might not otherwise be available to investigative bodies”.

In December 2013, three months after his election, Liberal PM Tony Abbott announced a royal commission into the former Labor government’s home insulation scheme in which four installers died, and announced the Heydon royal commission into unions in February 2014. Kevin Rudd is the target of the first and Julia Gillard one of the key targets of the latter.

Even former Liberal PM John Howard publicly reprimanded Abbott over the blatantly political use, or misuse, of the royal commission as an instrument of government in a September 2014 Channel 7 TV interview, pointing out there had already been a coronial investigation into the home insulation scheme.

“I’m uneasy about the idea of having royal commissions or inquiries into essentially a political decision on which the public has already delivered a verdict… I don’t think you should ever begin to go down the American path of using the law for narrow targeted political purposes,” Howard said.

Admittedly, this was a bit rich coming from the man who had established the Cole Royal Commission into the building unions that cost taxpayers $60 million and did not result in a single prosecution of a union official. As the Australian Congress of Trade Unions (ACTU) has repeatedly pointed out, every Liberal government in power since 1972 has held a royal commission into trade unions.

Systemic failures?

There are several areas of Australian corporate and political life that are plagued by systemic failures and which the public would benefit from an inquiry with coercive investigative powers being held. Two examples here will suffice.

The Abbott government’s political mantra since coming to power has been that there is a need to drastically cut public spending in the healthcare, education, welfare and community sectors in order to repair the federal budget deficit. But a report released in September 2014 by the United Voice union and Tax Justice Network Australia revealed that of the ASX 200 companies, almost one-third pay less than 10% tax when the statutory rate is 30%, and 57% have subsidiaries in tax haven jurisdictions. This systemic tax avoidance by major companies results in the loss to the public purse of $8.4 billion in revenue each year, the report estimates.

This report was followed in November 2014 by the revelation that dozens of Australian corporations including Lend Lease, AMP and the Macquarie Group were among the 343 companies who struck deals with Luxembourg to shift profits through tax havens and used accounting giant PriceWaterhouse Coopers to drastically cut the amount of tax they paid – in some cases reducing it to almost nothing.

But not only has the Abbott government avoided ordering a royal commission, or any kind of inquiry, into what is clearly a systemic problem that has massive implications for the Australian public – it has dropped its pledge to take any action on tax avoidance whatsoever.

In November 2013, Treasurer Joe Hockey declared that the government would not legislate the former Gillard government’s plan to reduce tax minimisation by abolishing the loophole of generous deductions being available under sections 25-90 of the Tax Assessment Act 1997. Its abolition would have boosted public revenue by around $600 million. Hockey said in the 2013-2014 Mid-Year Economic and Fiscal Outlook (MYEFO) report that this would place “unreasonable compliance costs” on such companies, and pledged to “introduce a targeted anti‑avoidance provision after detailed consultation with stakeholders” instead. But in the 2014-2015 MYEFO report announced in November, the Treasurer quietly dropped even this watered-down pledge to tackle tax avoidance and minimisation.

Of course, the most glaring double standard of all when it comes to the use of a royal commission is the Abbott government’s failure to establish one into the systemic failures of corporate regulator the Australian Securities and Investments Commission (ASIC), particularly in relation to its investigation of the actions of the Commonwealth Bank’s financial planning subsidiary CBFL during 2006-2010.

More than a thousand CBFL customers lost millions of dollars during the global financial crisis after their bonus-seeking advisers invested their money in high-risk products without their clients’ permission. The Commonwealth Bank’s attempted cover-up and the ASIC’s incompetence on all fronts was the subject of a five-month inquiry by a Senate Committee that reported in June 2014 – specifically recommending that a royal commission be held into the ASIC’s failures. The Abbott government rejected the recommendation.

“Still, it’s only shareholders’ wealth at stake in corporate regulation — wealth that, while worth $1.5 trillion in market capitalisation, is obviously a lower priority for the government than union membership fees and assets, which perhaps total a couple of hundred million dollars,” Crikey journalist Bernard Keane commented on February 10 last year. “If unions were indeed regulated just like businesses, as many in the Coalition (and the Institute of Public Affairs) want, crooked union officials would be over the moon at the prospect of getting to keep their bribes and avoid jail.”

Political cover

The fact that Howard’s hated Work Choices reforms remained so politically toxic six years after he was booted from office meant that Abbott – under pressure from business groups to impose restrictions on collective bargaining and union power, cut penalty rates and much more – made an election promise that the Productivity Commission would review the Labor government’s Fair Work Act that replaced Work Choices within the Coalition’s first six months of government. Any proposals for change arising from the review, he said, would be brought to the electorate in the 2016 elections before being implemented.

The draft terms of reference of the Productivity Commission’s ‘Workplace Relations Framework Review’ were leaked in March last year, and it was initially due to report in April 2015. But the government delayed the announcement of the very same terms of reference for nine months, making a weak excuse about having a lot on its plate, and conveniently waiting until four state elections were over.

The claim that Coalition politicians have been repeating for years – that labour productivity has been consistently declining as a result of the Fair Work Act, while at the same time Australia is experiencing a “wages explosion” – don’t stand up to a moment’s scrutiny. Australian Bureau of Statistics data shows that labour productivity has increased by 8% from March 2011 to March 2014. But wage growth was at 2.6% in the year to September 2014, barely passing the inflation rate of 2.3%.

The facts are undermining the conservatives’ traditional economic justification for their ideological agenda. Something more is needed. Just as the so-called Commission of Audit (October 2013 – March 2014) was used by the Abbott Government as an attempt to provide political cover for its first budget, which provoked still-lingering outrage among the Australian people last May, the government lives in hope that the union royal commission will provide justification for its main game – the implementation of the anti-worker reforms that will inevitably come from the Productivity Commission review. The more mud that is slung at the union movement, the weaker the potential resistance to these reforms will be.

If anyone had any doubt that this was the government’s strategy, it has surely been dispelled by now. Abetz announced the publication of the interim report by the Heydon royal commission on the morning of 19 December 2014. The same afternoon, Hockey finally announced the terms of reference for the Productivity Commission’s review, ensuring that if it was covered by the media at all it would inevitably be reported in the same breath as the term “union corruption”.

by Admin

Dublin Lockout: The Risen People

Bloody Sunday baton charge

Bloody Sunday baton charge

Published in the CFMEU WA Branch Journal in September 2013

Irish trade unionists are marking the centenary of the 1913 Dublin Lockout, the most significant labour dispute in Irish history. Led by ‘Big Jim’ Larkin, the people of Dublin’s slums fought a five-month battle with the city’s major employers over the right to union recognition. It was a fight that affected 20,000 workers and their 80,000 family members, and included deadly street battles with police.

The Lockout, which began in August 1913, was no spontaneous dispute. It was a conscious attempt by businessman and media magnate William Martin Murphy to nip the growing power of the newly formed ITGWU in the bud. The Irish Transport and General Workers Union was formed by Larkin in 1909 and by 1913 it had won several improvements for members across Ireland.

Ireland in the first two decades of the 20th century was experiencing major political upheaval, with suffragettes, radical nationalists and republicans organising powerful movements for change. With brutal working and living conditions, the radicalisation among working people that took place in Dublin during this period – led by Larkin and fellow socialist and trade unionist James Connolly – was little wonder.

Slum city

Dublin in 1913 was a city of slums – of impoverished people living in squalor in over-crowded tenement housing. Shortly after the Lockout began in August 1913, two overcrowded four-storey tenements on Church Street collapsed, killing seven people.

An inquiry into the disaster reported on housing conditions in the city the following year, stating that of the 400,000 residents of Dublin, almost 90,000 lived in tenements in the city centre, with 80% of these families living in a single room. The Church St disaster inquiry reported that: “We have visited one house that we found to be occupied by 98 persons, another by 74 and a third by 73.”

Overcrowding, malnutrition and poor sanitation meant disease thrived, with the most dreaded being the deadly tuberculosis. A Census in 1911 found that Dublin had a mortality rate as high as Calcutta’s, and that one in five deaths that year was of a child under the age of one.

Larkin forms ‘One Big Union’

Dublin lacked an industrial base and its workers were mainly unskilled and employed on a casual basis. Around 50,000 people depended on work on the docks, in transport, the building trade and a limited number of factories and workshops.

Labourers could be replaced at a moment’s notice from a pool of thousands, many from the countryside, who carried with them the recent memory of the Famine. There was a readiness to work for any wage and in any conditions. Unemployment was 20%, and workers were often paid their wages in pubs.

This was the city into which Larkin arrived in 1909. Born in Liverpool, Larkin joined the National Union of Dock Labourers (NUDL) in England. He led the successful dockers’ and carters’ strike in Belfast in 1907 – during which the display of Protestant and Catholic working-class unity shook the Belfast establishment. Larkin fell out with the NUDL leadership in 1908 and set up the ITGWU in 1909. By 1913, the ITGWU operated out of Liberty Hall in Dublin with a membership of around 10,000, and The Irish Worker, launched in 1911, had a circulation of 90,000.

Larkin was a charismatic and powerful orator who was fiercely loved by Dublin’s working people. A syndicalist, Larkin was especially adept at using the ‘sympathetic strike’ to win better conditions for workers. The sympathetic strike was when workers acted in solidarity with striking workers by refusing to deal with companies whose employees were on strike, and the tactic was effectively used by the ITGWU between 1909 and 1913 in Cork, Derry and Wexford.

One major employer who was paying close attention to the ITGWU’s success was businessman William Martin Murphy. Murphy owned the Irish Independent newspaper, Clery’s Department Store, the Imperial Hotel and the Dublin United Tramways Company, among other interests. In 1911, Murphy formed the Dublin Employers’ Federation which drew together more than 400 bosses into a powerful organisation intent on smashing the ITGWU.

‘Your union or your job’

Murphy fired the first shot in the dispute in 1913 by sacking around 40 workers in the Irish Independent after literally offering them the choice: “Your union or your job”. In July he forbade transport workers in the Tramways Company from being ITGWU members. He warned his staff a strike would fail, saying company leaders would have three meals a day regardless of the outcome, but “I don’t know if the men who go out can count on this”.

In a planned challenge to the ITGWU, on 21 August more than 100 workers at the Tramways Company received a dismissal notice. As large numbers travelled to the Dublin Horse Show on 26 August, drivers and conductors stopped the city’s trams and walked off. Larkin called on workers in other companies owned by Murphy or dealing with him to join the strike in solidarity. James Connolly, then ITGWU secretary in Belfast, was brought to Dublin to help run the strike.

On 31 August, Larkin addressed a banned demonstration on Sackville St – now O’Connell St – from the balcony of Murphy’s Imperial Hotel. Connolly and other leaders had already been arrested, and Larkin too was immediately. The Dublin Metropolitan Police baton-charged the crowd so violently that the day became known as Bloody Sunday – the first of three ‘Bloody Sundays’ in Ireland in the 20th century.

Two men – James Nolan and John Byrne – had their skulls fractured by police batons and later died. An ITGWU representative from Dun Laoghaire, James Byrne, died in November following a hunger strike in Mountjoy jail. Another striker, 16-year-old Alice Brady, was shot dead by a scab as she returned to her home with a donated food box.

Tension between the police and workers rose, with police smashing up the tenements by night. Rioting and street battles with police took place across the city throughout the Lockout, leading Connolly to found the Irish Citizen Army (ICA) as a workers’ self-defence organisation. At a time when women in Ireland were still fighting for the vote, the ICA accepted women as full and equal members.

As thousands of workers were attending the funeral of James Nolan on September 3, the Dublin Employers Federation met and issued the “pledge” document – which employees would be forced to sign or face immediate dismissal – and the strike became a lockout.

The pledge read:

I hereby undertake to carry out all instructions given to me by or on behalf of my employers, and further, I agree to immediately resign my membership of the ITGWU (if a member) and I further undertake that I will not join or in any way support this union.

Thousands of workers refused to sign – including many who were not ITGWU members. Rosie Hackett, a co-founder of the Irish Women Workers Union in 1911 with Delia Larkin, Constance Markievicz and others, organised women in Jacobs’ factory in support of the strike. Other major bosses joined the Lockout and by the end of September, 20,000 workers were locked out for refusing to sign the pledge.

Hunger sets in

The ITGWU paid strike wages but it wasn’t enough and hunger and desperation set in. Soup kitchens were run from Liberty Hall, union headquarters. The British Trade Union Congress voted in September to provide food and material assistance, with more than £150,000 donated from unions in Britain, the US and Australia. On 28 September a ship arrived from Britain with 60,000 ‘family boxes’ of food for the striking workers, which provided a vital morale boost.

James Larkin

James Larkin

Larkin spent several brief periods in jail for sedition and incitement, and between these periods he spent time in England in September and November trying to organise support. Connolly continued the organisation of the strike at home. While sympathetic strikes took place in several English cities, the British trade union leadership failed to call a general strike as advocated by Larkin and Connolly.

Conferences took place between workers, bosses and a union delegation to try to resolve the dispute, but failed as a result of the employers’ refusal to recognise the ITGWU. The workers faced the full force of the police, backed up by the military, as well as a fierce campaign of vilification of “Larkinism” by the clergy and media.

A hollow victory

Hunger spread as winter deepened, and there was simply not enough resources to sustain so many workers and their families, who were beginning to starve. By January the striking workers had lost all hope and began to file back to work, with the ITGWU deciding on 18 January to end the strike. The union advised workers to return to work without signing the document if possible, but in most cases it wasn’t.

But Murphy’s victory was hollow. He believed he had smashed the ITGWU but within a short period workers who had signed the pledge never to join the ITGWU did just that. The union did not have official recognition but employers were not willing to risk another lockout of union members and by 1920 the ITGWU had 100,000 members, 10 times more than in 1913. The attempt to destroy trade unionism in Ireland had clearly failed.

The Lockout was a defining point in Irish history and is rightly commemorated as such 100 years later. Poet Austin Clarke wrote that Larkin’s name endures, “scrawled in rage by Dublin’s poor”. This roar of the city’s impoverished workers meant the brutal conditions they endured could no longer be ignored and began to change.

Crucially, the fight put up by these workers meant that at this turbulent point in Irish history, the working class had a political voice – a voice that influenced middle-class nationalists such as Pádraig Pearse, who together with Connolly led the Easter Rising against British rule in Ireland in 1916. Both were executed within weeks of the Rising.

Unfinished business

In O’Connell St today stands a monument to Larkin with his famous phrase from the Lockout period engraved in the stone: “The great appear great because we are on our knees. Let us rise.”

The question of union recognition remains unresolved in Ireland today, which is one of only three EU states that lacks a legislated right to collective bargaining. Poverty, unemployment and emigration have soared after five years of austerity, and the injustice of the massive public debt undertaken by the government’s bailout of corrupt banks is bitterly felt. Austerity is not working for workers and their families right across Europe, and the Murphys of today should take note.

The centenary commemorations of the Lockout during the current crisis are helping a new generation understand the meaning of the central slogan used by the striking workers in 1913 – that ‘an injury to one is an injury to all’ – as they organise to defend hard-won working and social conditions.

by Admin

Lisbon Treaty — dumping social Europe

Irish Ferries

Published in An Phoblacht on 5 June 2008

THE Executive Council of the Irish Congress of Trade Unions, which represents more than 600,000 workers, has voted to support the campaign for a ‘Yes’ vote on the Lisbon Treaty referendum. Leaders of ICTU, including its president, David Begg, have claimed that the treaty will be a step forward for workers’ rights as the Charter of Fundamental Rights seemingly enshrines the right to strike. Some of the individual unions affiliated to the ICTU are calling for a ‘No’ vote, including Unite, one of Congress’s largest affiliates. The Technical, Engineering and Electrical Union (TEEU) is recommending its 45,000 members vote ‘No’, and the Services, Industrial, Professional and Technical Union (SIPTU), representing more than 200,000 workers, has said it will not support the Lisbon Treaty unless the Irish Government commits to legislating for collective bargaining for workers.

No right to strike

Even a cursory glance at the text of the treaty shows the claim that it provides new protection for workers’ rights to be false.

While Article 28 states that workers may “take collective action to defend their interests, including strike action”, it immediately qualifies this “fundamental right” by explaining that “the limits for the exercise of collective action, including strike action, come under national laws and practices”.

The British Government is clearly satisfied that the treaty’s charter does not grant the right to strike. The British Trade Unionists Against the EU Constitution pamphlet, The Big EU Con Trick, quotes a British Foreign Office spokesperson as saying explicitly: “The charter doesn’t create any new rights. We spent a very long time looking at this, in particular the disputed article. It does not create the right to strike.”

Lisbon pits the “fundamental right” of workers to take collective action against the apparently even more fundamental right of capital to unrestricted movement, unbound by the national industrial laws, agreements and standards of the host countries.

Conflicting rights of employers and workers will be ruled on by a strengthened European Court of Justice (ECJ). The European Trade Union Confederation has described several recent ECJ rulings as “an open invitation to social dumping”, launching a race to the bottom for workers’ wages, conditions and rights.

Race to the bottom

Some of the recent ECJ rulings on disputes include:

The Rüffert Case

German company Objekt und Bauregie employed a Polish sub-contractor to employ Polish building workers, posted to Germany, on less than half the minimum wage agreed by German trade unions and employer associations.

On 3 April, the ECJ ruled that O&B should not be bound by the local Lower Saxony law that states public building contractors must abide by the existing collective agreements. The court found that while member states may impose minimum pay rates on foreign companies posting workers in their state, the local law restricted the “freedom to provide services” and was not justified by the aim of protecting the workers because workers in the private sector were not covered by such protections! In essence, this ruling outlaws above-minimum wages and conditions being included in public tender contracts.

The Laval Case

In 2004, Latvian firm Laval posted Latvian construction workers to Sweden and refused to acknowledge the existing collective agreement with the Swedish Building Workers’ Union.

As Sweden has a well-functioning collective bargaining and agreement system and does not have an across-the-board minimum wage bound in law, Laval claimed that it was not obliged to pay the rates collectively agreed in the building sector.

The Swedish building union took collective action. Laval claimed to the ECJ that it was being discriminated against on the grounds of nationality and that the Swedish union was infringing upon its right to provide services.

The court found that companies or “service providers” from another EU state are obliged to abide by the host agreement but collective action must be “proportional”. This means that the ECJ believes workers do have the right to take industrial action… but only when the minimum wage or conditions of the host country, or the minimum working conditions set out in the Posting of Workers Directive are being breached by the employer.

The Viking Case

In order to cut costs, the Finnish shipping company Viking Line attempted to re-flag its ships as Estonian and operate out of Estonia.

When two Finnish maritime unions organised a blockade of Viking Line, Viking took its case to the ECJ: again, the claim was that the company’s right to freedom of movement was being restricted by the industrial action of the workers. And again, in December 2007, while the court found that collective action to protect posted workers from exploitation was legal, the unions had restricted Viking Line’s right of establishment.

Lip service to workers’ rights

In all of these cases where the ECJ has taken into account the proposed Charter of Fundamental Rights, the court has paid lip service to workers’ rights and found in favour of the company.

Three things are clear from these cases and from the text of the Lisbon Treaty:

1) The right to take collective industrial action is not guaranteed as it is subject to member states’ national laws;

2) The right to take collective action to prevent the exploitation of posted workers by foreign service providers is subject to the company’s right to freedom of movement and establishment under the EU Services Directive – a right which the ECJ has repeatedly and consistently upheld as being superior to workers’ rights;

3) The collective action of workers and unions taken against foreign service providers is only deemed legitimate if it is “proportional” – that is, in defence of the most basic minimum conditions agreed on by EU bodies or set in law by the host country. What happens if workers want to take collective action in order to improve their conditions? The pattern will emerge where the minimum standards become the maximum. The higher-than-average conditions that may be included in public sector agreements are an infringement of the right to establishment.

Breaking union power

These ECJ rulings, combined with the provisions for privatisation and the removal of “distortions” from the market contained in Lisbon, are a recipe for the equalisation downwards of the working and living standards of the people of Europe while the corporations that played a key role in drafting Lisbon increase their profit-making capacity.

The recent failure of the EU to establish directives to protect agency workers and maritime workers from social dumping practices and exploitation, which Sinn Féin MEPs have campaigned for, and the EU Commission’s Green Paper, Modernising Labour Law to Meet the Challenges of the 21st Century, are further evidence of the anti-worker push from Brussels.

Among other things, Lisbon aims to create the legal basis and power to enforce the process of rendering trade unions in Europe powerless by allowing employers to avoid the collective bargaining process established in each country. The result will be the continuing and unchallenged severe exploitation of Eastern European workers and increased job displacement, de-unionisation and falling conditions in the West, with public services fought for and won through generations of struggle throughout Europe being put up for sale.

It’s in the interests of all the working people of Europe for Irish workers and trade unionists to vote ‘No’ to Lisbon on 12 June.