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Ken Purdham

Bachelor of Arts History & Politics

Diploma of Professional Writing & Editing


In my view, unionism is a belief. It’s the standing together in collective strength for the good of everyone because the voice of many is more likely to be listened to than the voice of the individual. Unions are no more than people standing together in an organised way. As organisations  they provide an educated element to a cause, a technical resource and an order of working people. As such unions put forward compelling arguments that  the individual may not otherwise be able to. But it’s the standing together of the many that gives strength to the voice of the people. Without that strength, the voice more often than not, is ignored.


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The ETU and Award Restructuring

While doing some cataloguing for our ETU archive, I came across a press release by a Liberal politician taking the opportunity to stick the knife into my union because he could. That fired me up, I can tell you!


It was back in 1989 as award restructuring was being introduced by the Hawke Government. The politician was saying the ETU was replacing the BLF as the maverick union of Australia and that our actions would deepen an oncoming recession and cause unemployment to increase.


For a politician to make claims that a small union, with concerns for its members, would deepen the oncoming recession and lead to sharply increased unemployment was scurrilous. Whether the concerns of the ETU could be substantiated or not, mattered not, to me, his response was just an opportunity to attack a union.


I’d come through those times when award restructuring was imposed upon us and so, being fired up, I decided to write about it. Get this politician out of my system, as it were.


My aim was a study of award restructuring from the specific view of the electrical trades in manufacturing, using the Pilkington Australia glass manufacturing plant as an example. I looked at the broader economic and political aims that found support for and opposition to restructuring and the multi-skilling that came with it. I also looked at the results of restructuring, within the electrical trades, thirty years on and the cost to workers, including the creation of a flexible workforce which led to more and more workers becoming casualised and outsourced and downsized.


In the 1970s, the international economic model, known as Keynesianism, based on achieving full employment, was replaced by a new model of economic policy aimed at low inflation, free markets and privatization. It was termed economic liberalism, known in Australia as economic rationalism. In 1983 the Labor Party won government. The new prime minister, Bob Hawke, his Treasurer, Paul Keating, and the ACTU Secretary Bill Kelty, became a triumvirate of economic vision based on economic rationalism.


Labour costs were a huge factor in realizing that vision and to make progress on the industrial front, a prices and incomes accord was to be the solution. It was said that an accord would guarantee wage rises in return for productivity improvements and that wages would rise with prices; a wage indexation system.


However, by Accord MKIII, Treasurer, Paul Keating, responding to a deteriorating balance of payments, argued there needed to be a sacrifice from workers. The Government ended wage indexation and began to focus on what it termed ‘the structural efficiency’ of particular industries. To that end it sponsored a mission of industrial leaders to go to Europe and study the benefits of industrial workplace restructuring. That mission came back saying:


The requirements for a competitive industry mean that all workers must have skills that are transferable and adaptive. The implications of this are significant. The terms unskilled and skilled must now be considered anachronistic – they were probably never accurate and, in any event, Australia can no longer afford them… (Towards a New Metal and Engineering Industry Award; p9)


The mission report made it clear that a further reduction of labour costs meant the need for a more flexible workforce to achieve greater productivity at lower costs. Peter Morris, the Minister for Industrial relations said the mission was a landmark contribution to the industrial relations reform in Australia and that it offered a practical and far-sighted approach to implementing award changes at enterprise level. Accord Mark IV would require any wage increases to be justified with award restructuring and multi-skilling. Graham Glen, the Secretary of the Federal Department of Industrial relations said;


The Government’s economic agenda is relying on important changes in the workplace, and we intend to play our part… We aim to help make Australian industry more productive, competitive and able to contribute to the economic health of our nation. At the same time employees will enjoy expanded opportunities and improvements in the quality of their working life and standard of living… In the long run the real winners will be not only the employees but also management, the economy and the country as a whole… (‘Department of Industrial Relations Takes on a New Role’; Workplace Change; p16)


It was a mantra saying multi-skilling would make jobs more interesting, more challenging and create more opportunities for workers.


The Government then reached what it claimed was an historic agreement in the metal industry, between the MTIA and the MTFU, on 13 June 1989. It should be noted that the ETU was not in that federation of metal unions. In the agreement, the claim was for a new classification structure based on three generic streams, electrical/electronic, mechanical and fabrication, access to which would not be contingent on union membership. It also claimed that award restructuring was not a vehicle for job shedding. Any changes in employment levels should primarily be achieved through national attrition or voluntary retirement.


To the ETU that was a contradiction in terms. How could there be no job shedding but there would be a reduction in employment levels over time. The clear view of the ETU was that multi-skilling was about being able to reduce the size of the workforce while maintaining productivity.


Peter Morris announced reforms to help relieve persistent skills shortages in the metal and electrical trades. The reforms involved streamlining the process for recognizing trades skills in the two industries. What that meant was short course training to enable cross-trade skilling. (‘Tapping New Skills’; Workplace Change; p4)


The ETU Argued that while there was a skills shortage across Australia it was caused by employers failing to train enough skilled workers in the early 1980s. There was no shortage of teenagers wanting an apprenticeship or other training. The ETU opposed any quick-fix training to do electrical/electronic work because it would inevitably lead to disaster. The ETU said;


…it supports restructuring provided that it improves the skills and pay of electrical/electronic workers. This union would not support restructuring if it meant trading wage increases for the deskilling of the workforce…’ Electrical skills are second to none as it is. There was no evidence around the world to show our system is inferior. There is a shortage of skilled labour as a result of employers failing to train people. This multi-skilling model is a quick fix the ETU is opposed to. (‘Award Restructuring: Skills Trade-off for a Quick Buck?’; p2)


The metal workers weren’t of the same mind. They were losing their skills to changing technology while the electrical trades skills were growing with technological change. The mechanical trades saw multi-skilling as an opportunity to pick up electrical skills to consolidate their trade, while the electrical trades saw it as deskilling and job losses in their environment.


Advancements in electrical technologies had already caused classifications of electronic and instrument control to merge which the ETU understood and accepted. As an example, throughout the 1980s, management at the Pilkington Australia glass manufacturing plant had encouraged and supported their electrical tradespeople to do further studies in instrument, electronic and computer control technologies. In that workplace three classifications were originally needed; a special class electrician, and instrument and controls electrician and an electronics technician. By the time accord Mark 1V came about their skills and training was second to none but their classifications had already merged from three to two. There was no longer an instrument and controls electrician. Technological evolution was, in effect, already electrically multi-skilling them.


The ETU understood that Award Restructuring was going to happen but it was not about to let the fate of the electrical tradespeople it represented be dictated to by others. The fight was not going to be about preventing award restructuring but influencing it to minimize the adverse effects on electrical trades. Government restructuring, however, wanted to multi-skill across electrical, mechanical and fabrication trades and to the ETU that meant the destruction of electrical career paths they had long fought for and established.


The effect of the workplace restructuring plan was to allow employers to have any tradesperson do a short course in electrical theory and then perform limited electrical work. The ETU argued that short courses could not prepare them to safely and competently install, fault find and repair electrical/electronic equipment. It said;


How many dead or badly burnt workers and destroyed equipment will it take to prove our point… If the MTIA plan was to go ahead, the level of skill in all trades would fall. It would produce tradespeople partly trained in a number of trades but without any depth in any. The old ‘Jack of all trades, master of none’.


Only a certain amount can be learnt in a given time, such as in a four-year apprenticeship. Being taught part of two or three trades during an apprenticeship must cause the depth of training in all of those trades to be less than if only one trade is taught. (‘Award Restructuring: Skills Trade-off for a Quick Buck?’; P4)


That was not how the Government wanted it to be seen. The sales pitch from the Minister for Industrial Relations said;


I’ve been most encouraged when visiting workplaces and talking to the people on the shop floor, to find among employers and employees a clear understanding of what this Government is aiming to achieve through award restructuring… (Making Change Work for People’; Workplace Change; p3)


He hadn’t visited the Pilkington Australia glass plant. If he had, he would not have been so encouraged.  To the tradespeople there, simple logic said that if a fitter could do electrical work and an electrician could to mechanical work then an employer could, at least in part, drop off some of those tradespeople and expect the others to pick up the slack. It gave the company the ability to downsize. Common sense said that cost cutting and budgetary requirements wouldn’t wait for people to leave or retire. Acceptance of multi-skilling across electrical/mechanical trades was not going to be readily accepted, certainly at that worksite.


The European Mission report warned, award restructuring and associated changes in classifications and career paths would succeed or fail depending on how well they were implemented at the plant or local level. The new award, therefore, included an agreed provision which required each plant or enterprise to establish an appropriate consultative procedure for the implementation of award restructuring.


In the spirit of that advice, the Engineering Manager of the Pilkington glass plant consulted with his workforce and proposed changes to a number of work practices. Fitters should be able to change electrical solenoid coils and heating elements, electricians should be able to change motor gearboxes and all tradesmen should be able to weld or paint. To this end he met with representatives of the various trades as electrician John Ravaillion remembered;


It was a bit of a stoogy action. We went into meetings, of which I was part, and they’d say, ‘If you finish a job and it needs a dab, we’d like you to paint it. And the stock answer was yes, well, we will paint it but only if the painter approves. We won’t do him out of his job. If he says it’s his job well then it is his job. (By The Banks of a Glass River p122)

However, the greatest electrical trades concern from restructuring, and not only from within the glass plant, was that of electrical licensing. There was a desire from employers to allow non-electrical trades and, therefore, none electrical licensed tradespeople, the ability to perform limited electrical work. The MTIA said;


… without compromising safety or the public interest, licensing arrangements, of themselves, should not be impediments to cross-skilling…   Training in skills which go across more than one technical stream e.g., a craftsperson whose core skills lie in the mechanical technical stream may undertake training in the electrical stream…   (Award Restructuring: Skills Trade-Off For A Quick Buck; 1989)


The ETU claim was that electrical licensing laws limit who can do electrical work and were introduced to protect the safety of all workers and the public. The MTIA said that the laws should not stop their plan to have all trades do electrical work while the ETU opposed the licensing laws being ignored or watered down to suit employers.


At the glass plant the electricians pointed out to the fitters that any electrical license comes with the responsibility for working with the stuff that kills. The electricians could see the mechanical trades were not comfortable with that level responsibility and made sure the fitters appreciated the gravity of getting it wrong and the personal liabilities that would follow. The reason for an electrical license is because working with a technology that kills requires a legal level of competency not just a mate showing you how to do it.


The electricians also asked the fitters to consider that if it came down to reducing the workforce numbers, would the company keep a fitter who can change an electrical solenoid coil or an electrician with a full electrical license and all his skills of instrument and computer control who could replace the motor-gearbox and then rewire it? The push for award restructuring and multi-skilling was not so easy to come to terms with.


The AMWU National Research Officer Chris Lloyd revealed most workers didn’t understand the accord process but knew it was bad. He admitted that there was a real danger of unions destroying what was left of their credibility with the members. While, according to Brewer & Boyle this;


…alienated the rank and file from the union officials who were involved in protracted negotiations “at the top” to negotiate improving employers’ profitability. When the shop floor was consulted, more often than not, it was to identify more workers’ conditions that could be traded off. (Hard Labor; p9)


Then, as if to emphasize its considered support for award restructuring, the ETU agreed to support a new restructured Electrical Contracting Award along with the Electrical Contractors Association. It would become crucial to electrical workers within manufacturing particularly those at the Pilkington glass plant.


In the new Contacting Industry Award, an electrical worker grading system would remove electrical demarcations within the industry, in that if a worker had got the skills, he could do the job thereby removing all old classifications of electrical/instrument/electronics. The new award ranked the grades from electrical grade 1 to10, the highest grade demanding an appropriate Associate Diploma or industry skills qualification and a grade 5 being the basic apprenticed ‘A’ grade electrician. The term ‘broadbanding’ was adopted, which meant the grouping together of a number of classifications with similar skills and award rate wages into one single classification.


However, while that restructuring argued individual workers would no longer be called task specific workers, which define narrow job functions, workers themselves would not give up their identities so easily. Multi skilling would not be able to cope with the need for specialists and so an ‘A’ grade electricians, instrument technicians, and electronic tradesmen would always be identified, within that broadbanding, by their specialist skills. It did mean, however, that even with specialist identities those three classifications could operate as one and, therefore, give the opportunities to reduce the workforce numbers.


With the new Electrical Contracting Award in place, the Government notion that award restructuring was not a vehicle for job shedding was then demolished, at least out at the Pilkington glass plant. The Engineering Manager, placed in an impossible budgetary position by his corporate superiors, believed that the tradespeople had gone through so much change already that they were, at best, only going to move a little bit more. He needed a catalyst to manage his budgetary limitations and break the culture. He could see no other way than to outsource and reduce numbers, saying;


It was purely budgetary. This is how much money you are going to get and you need to achieve these outcomes – and it wasn’t enough. It was as simple as that…


He said of his tradespeople;


…virtually all of them were long-term employees and they’d given their availability and support to Pilkington’s over a number of years, sometimes in very difficult circumstances… so to take them out and away from Pilkington’s where I knew pretty well all of them wanted to be, was going to be major…(‘By the Banks of a Glass River; p13-34)


Pilkington Australia handpicked those electrical tradespeople it wanted to keep and their employment at the glass plant became a condition of the contract to the companies to which they were being outsourced. Beyond that, those tradespeople who still remained did so under the supervision of Pilkington Australia and not their new employers. In effect, and as the electrical tradespeople saw it, Pilkington Australia no longer wanted them, just their skills. They had become labour hire under the control of their previous employer.


The Engineering Manager cut his maintenance workforce by more than half and the two remaining electrical streams were multi-skilled to one. Willing to pay a high price for peace, those electrical tradespeople he wanted to keep would be recognized at the highest of grade 8 to 10 classifications.


The reality of the situation was that throughout their time working for Pilkington Australia, those electrical tradespeople had, with the support of the company, continued to develop their skills through study and practice in order to keep up with the changing technology required of their jobs. They had studied microprocessor fundamentals and applications, Programable Logic Control technology, inverter motor control and instrument control systems. Those who stayed at the glass plant would continue to study as the technology moved on ahead of them. The grades recognized by the Engineering Manager, while generous, were also justified.


But there was more angst to come. The Engineering manager had already said his drastic decision to outsource was, in part, to change the culture of the workplace and so to that end he instructed his Pilkington supervisors to treat the tradespeople differently; no more like family. When the first of the shift electricians walked back into the workplace as a contractor, his supervisor said, ‘When you see an engine that needs a top up of oil then we expect you to top it up.’ When the electrician said no, he was told; ‘If you won’t do it then we’ll get someone who will.’


The Engineering Manager had said his workforce wasn’t militant, but he and his supervisors knew that pushing multi-skilling across trades was something the workers would turn militant over. In fact, multi-skilling would never cross electrical/mechanical trades at the glass plant. At best each of the trades would make and paint their own brackets but fitters would never change solenoid coils and electricians would never fit motor-gearboxes.


However, award restructuring and multi-skilling changed the industrial environment forever. The outsourcing of the trades people at Pilkington Australia was a beginning and it became common practice across many manufacturing businesses. As in the glass factory, contracts would be set for a period, typically three years, after which, new contracts would be negotiated either with the same contractor or another contractor but always driven by budgetary requirements. When contracts changed, the core group of tradespeople would travel with the contract except for, usually, a cut in numbers and the ability to use casual workers as top up labour.


In shear economic terms the accord system, culminating in award restructuring reduced labour costs significantly. In 1990 Paul Keating boasted that the Accords had reduced real unit labour costs by 14% (Hard Labor; p12) However, throughout the accord period, the real value of wages had dropped by between 17% and 28% while Labor politicians argued that had been offset by the social wage; i.e., health, education housing etc. (Hard Labor; p14)


A more flexible workforce had created a cost cutting strategy. It led to a core group labour force becoming smaller and smaller, and top up casual labour used make up the short fall in those busier times. With the introduction of casual work becoming common across, not only the manufacturing, but in all industries the costs of employees could be drastically reduced.


In years to come industrial landscape would be dominated by part time or casual positions, labour hire arrangements, and organizations hiring independent workers for short-term commitments. What would become known as a ‘GIG Economy’ would be the result. The term "gig" coming from a slang word for a job that lasts a specified period of time.


The claims by the Hawke Government that; ‘We aim to help make Australian industry more productive, competitive and able to contribute to the economic health of our nation’ may have been achieved, but the argument that; ‘employees will enjoy expanded opportunities and improvements in the quality of their working life and standard of living…’ is still up for debate.


References:


1. Award Restructuring: Skills Trade-off for a Quick Buck?’; Brochure from the ETU National office to members; 1989

2. Electrical Contracting Industry: Making Sense of Award Restructuring; ETU National/NECA; 1990

3. Metal Industry Restructuring; ETU Shop Stewards Meeting; 1988

4. Metal Industry Restructure: The ETU Position; ETU National leaflet;1989

5. MTIA Proposals for a Compact with Metal Unions; Metal Trades Industry Association/Metal Industries Association, South Australia; 1989

6. Purdham Ken; A Century of Struggle; Hyland House; Nth Melbourne; 2002

7. Purdham Ken; By the Banks of a Glass River; K Purdham; Emerald; 2008

8. Pat Brewer/Peter Boyle; Hard Labor: Lessons of the Accord Experience; New Course Publications; Sydney, 1996

9. State of Accord: Statement of Accord by the Australian Labor Party and the Australian Council of Trade Unions Regarding Economic Policy; ACTU; 1983

10. Towards a New Metal and Engineering Industry Award: A Report of the DIR, MTFU and MTIA mission to UK, Sweden, and West Germany; Australian Government, MTFU, MTIA; 1988

11. Workplace Change: Award Restructuring the Way Ahead; Issue No. 3 (‘Department of Industrial Relations Takes on a New Role’; Australian Government; Canberra; July 1989






ACTU:  Australian Coucil of Trade Unions

AMWU: Amalgamated Metal Workers Union

ETU:  Electrical Trades Union

MTFU:  Metal Trades Federation of Unions

MTIA:  Metal Trades Association of Australia