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  Issue No 84 Official Organ of LaborNet 16 February 2001  

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Legal

Why the Freeloaders Should Pay


Michael Costa explains why service fees are not only fair - they are economically rational.

 
 

This week's decision upholding the legality of service fees for non-union members focuses on a dilemma for trade unions - how do we make the 'freeloaders' pay for our work.

In an era when the value of unionism is being questioned, the issue has never been as stark: an increasing number of workers are benefiting from the hard work trade unions and their members put into increasing wages and conditions without having to pay a cent.

For those who haven't been involved in the process, winning a pay rise is not something that comes easy - especially since the end of the Accord period when minimum wages automatically flowed through to anyone. Today, pay rises have to be won directly at the workplace - and, not surprisingly, pay rises are not something bosses tend to give away lightly.

A typical wage rise requires months of work: meetings with the workforce to find out what they want, long meetings with tight-fisted management, often days of appearances in the commission or court, arguing the case. All this activity is carried out by trade union officials funded by their members' fees.

Unfortunately, things sometimes need to go even further, members of the trade union will exercise the only power at their disposal - their collective strength - by imposing bans or going on strike to reinforce their wage claim. In these instances, trade union members will bear a direct cost through wages foregone while they undertake industrial action.

When, at the end of this process, they return to work with a hard-won pay rise, they are often annoyed to find a number of their colleagues who have not joined the trade union, not contributed to the effort to get the pay rise and sometimes actively undermined the campaign by working through the strike action, also counting the extra money in their pay packets.

It is an obviously unfair situation, but what is to be done?

In the past unions have flirted with the idea of 'members only' pay rises, that is, the wage increase a trade union negotiated would only flow through to their members. This approach had superficial appeal - but one fatal flaw. Over time, it would create two wage tiers in each industry: the higher paid trade unionist and the lower-paid non-member. One does not need an economics degree to work out that this would have the effect of pricing the higher paid union member out of the market.

The alternate approach, which has been floated in more recent times, has been the notion of a service fee - such as the one the Australian Industrial Relations Commission upheld this week. The beauty of it is that it relies on the classic economic rationalist principle of 'users-pay' - a principle that employers and conservative governments regard as fundamental when it suits them.

Where a person chooses not to belong to a trade union, they will be levied a fee for the 'service' they have received: that is, the work that goes into winning a pay rise and maintaining the enterprise agreement. The fee will be more symbolic than anything - a few dollars each week - far less than the pay rise the non-member will have been given for free.

Critics say this amounts to compulsory unionism. Wrong. The non-members does not have to join anything, just pay for a service they benefit from. For non-members to argue they are exercising their freedom not to join a union is to cloud the issue. There is no 'freedom' not to pay taxation', there is no 'freedom' not to pay council rates and nor should there be a 'freedom' to benefit from pay rises and improved conditions without contributing to the costs involved."

They also claim it is undemocratic. Wrong: Service fees would only be imposed by a vote of the majority of workers during the enterprise bargaining process. For the agreement to pass, this would also require the support of the employer - an increasing number of whom recognize that union workplaces are more harmonious and productive environments and, therefore, contribute to business success.

Please print this article and distribute at your workplace


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*   View entire issue - print all of the articles!

*   Issue 84 contents

In this issue
Features
*  Interview: Life After Wartime
After ten years representing the interests of the labour movement in Parliament, Jeff Shaw is back at the bar. And loving it.
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*  Legal: Why the Freeloaders Should Pay
Michael Costa explains why service fees are not only fair - they are economically rational.
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*  Organising: Young Activists Bask in Union Summer
Sydney students have spent three weeks of their summer holidays experiencing on-the-ground work with unions.
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*  Unions: Things Are Looking Up On The Dock
After six years as a call centre worker, Marios Ellas has joined the union movement. Here's his first impressions.
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*  History: Trades Hall � The Royal Connection
Republic, who needs it when we have the Trades Hall decreed by Royal Imprimatur? So tug your forelock as work commences to restore the building.
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*  International: Greetings from Hong Kong
Chan Wai-Keung from the Hong Kong Confederation of Trade Unions outlined the challenges facing Hong Kong workers.
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*  Politics: One Nation - The Old Labor Link
The resurgence in One Nation in the WA election has the pundits again reaching for the tea-leaves. But are they pouring from the wrong pot?
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*  Review: Elect the Ambassador
Labor frontbencher Duncan Kerr unveils his vision for a new international democracy.
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*  Satire: Man Buys Big Issue for the Articles
A Melbourne businessman claims his recent purchase of the "Big Issue" was due to his interest in the magazine's editorial content.
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News
»  Young Workers: The Wage Gypsies
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»  Union Members Tell Scabs: Sing for Your Supper
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»  Genetic Advances Spark New Privacy Issues
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»  Wentworth Twenty Emerge Victorious
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»  Racing Radio Makes Way for Workers� Voice
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»  Another Major Centre Takes Union Call
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»  Transport Passes Key Issue for Young Workers
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»  Shier Calls the Cops! - Fear and Loathing at the ABC
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»  BHP Contracts Battle Goes Back to the Coalface
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»  Newcastle Mill to be Union Project
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»  Government Must Lead on Casual Leave
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»  Della Ends Discrimination on Leave Entitlements
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»  Rural Safety Campaign Pays Off
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»  Mom Always Said � Don�t Break a Picket
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Columns
»  The Soapbox
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»  Sport
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»  Trades Hall
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»  Tool Shed
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Letters to the editor
»  Aceh activist in Sydney
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»  Save Ningaloo Reef From The Developers
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