28 Feb 2025Pay dispute between rail workers and transport authorities
The dynamics of industrial relations have much in common with the game of poker. Successful players can conceal their thoughts from opponents and bluff them into misreading the strengths and weaknesses of a hand.
Over the past few months, NSW transport authorities, and the transport unions, have been locked in a struggle; ostensibly about the pay of transport workers, but in fact rather more complex than that.
Despite the seriousness of the struggle for the people of Sydney and the NSW economy, it can be hard to avoid the conclusion that this is a game such as poker, or chess; with one player trying to outwit the other.
World of industrial relations impenetrable to the uninitiated
The morning I started to write this item, I heard the Secretary of the Rail Tram & Bus Union, and the Minister for Transport, both saying that the dispute crippling Sydney public transport could be “over by the end of the day” if the opposing party would give proper consideration to the settlement offer made; and “come to the bargaining table”. The average citizen could be forgiven for thinking the parties were not actually discussing the same thing.
What this shows is that “industrial relations” – now a somewhat unfashionable term, but still generally understood to refer to dealings between employers and organised labour – is typically impenetrable to those outside of the bargaining room, or to members of the “industrial relations club” – a term of disparagement applied by critics to those involved on both sides of the contest.
This item does not pretend to be a scholarly account of this often byzantine world, but is instead intended to shed a bit of light on the evolution of the system – if it can be called that – which has led, in the first weeks of 2025, to the bedevilment of Sydney commuters.
Trade unions and the beginning of organised labour
Organised labour – the trade union – was a product of the Industrial Revolution. Arguably it might be traced back to the fourteenth century Peasants’ Revolt, but for the purposes of this discussion we can look to the passage, in the latter part of the nineteenth century, of legislation recognising the concept of a trade union.
Prior to this time, employees who withdrew their labour from employers as a means of exerting pressure for the improvement of wages and conditions could be sued for “tortious interference with contractual relations” – meaning wrongful interference (in a civil, rather than a criminal, sense) with the contracts under which workers supplied their labour to the bosses.
The stimulus for legislative protection related to improvements sought in conditions rather than pay: for elimination of the high rates of injury and death in many British industries.
Shearers’ Strike of 1891 and emergence of industrial umpire
Risks of this kind were less in Australia, but the crippling shearing industry strikes of the 1890s here were an important element of the crucible in which the Australian industrial relations system was shaped after Federation, involving a judicial “umpire” really quite unlike anything else in the world at the time.
Since Federation, Australia has had industrial “umpires” – meaning judicial or quasi-judicial bodies with the power to make orders binding on employees, employers and trade unions.
Most have operated at state or territory level but, since the mid-1990s, the great bulk of issues and disputes have been under Federal regulation, in the shape and form of the Fair Work Commission and Federal courts exercising that jurisdiction.
Industrial action – worker strikes and union strike funds
The original form of industrial action was the strike. The weapon at the disposal of the workers was the ability to seriously disrupt the employer’s business, or maybe even to make it completely grind to a halt.
The vulnerability of the workers, however, was that because they weren’t working, they weren’t getting paid either. Rather incredibly from today’s perspective, the 1890s shearing strikes went on for months.
In far more modern times, some bigger unions have strike funds, out of which striking workers can be paid to allow the strike, and thus the pressure on the employer, to persist. However the strike fund is, obviously, not the best way of enabling unions to apply and sustain, long-term pressure on employers.
Worker strikes have generally been illegal
Generally speaking, strikes have been against the law, by reason of the legislation under which industrial relations courts and tribunals have been established, and the rights and obligations of employees and employers prescribed.
However, the power to impose penalties on both sides (although largely unions) has been little used, because the main game has always been about unions getting what they wanted, and employers getting their businesses and other undertakings back on track.
However some forms of industrial action are now lawful.
“Protected” action an exception to normal illegality of strikes
The regime established by the Fair Work Act, however, provides for “protected” industrial action. (A strike is obviously “industrial action”, but other forms of disruption including, importantly, selective work bans, also constitute “industrial action”.)
In effect, the notion of “protected” industrial action is an exception from the general rule that strikes or other withdrawal of labour is unlawful. Very broadly speaking, industrial action may be “protected” if its main purpose, in the context of enterprise bargaining, is to persuade an employer which has not been “bargaining in good faith” to commence, or resume, negotiation.
What’s going on in Sydney at the moment (although at the time of publication there has been a brief lull in hostilities) is happening in the enterprise agreement context. However, the dynamics of the intricate industrial action cat-and-mouse game long pre-date enterprise bargaining, so we need to rewind the clock quite a bit – in fact back again to the nineteenth century, when the common law as it applied to employment was being developed.
The rule against stand-down
The common law had a very simple and straightforward approach to the rights of employees to be paid.
If an employee had, by entering an employment contract with an employer, agreed to work exclusively for that employer, that entailed agreement to forgo the right to earn money from other sources.
This meant the employee had to be ready, willing and able to work, but if it just so happened that the employer didn’t have any work to be done, that did not relieve the employer of the obligation to pay the employee.
Selective strikes to reduce pressure on union strike funds
Fast forward a hundred years and this apparently uncontroversial rule was put to good use by ingenious unions.
If they targeted a key pinch point in operations and took out on strike only the workers in that specific area, the whole organisation ground to a halt.
Even though the majority of workers were “ready, willing and able” to work (and therefore still entitled to be paid), they had nothing to do because the handful of workers in the pinch point area were on strike.
This tactic left the disruptive effect in place, but greatly reduced the strain on the union’s strike fund.
Centralised operations and seasonal factors give unions degree of bargaining power
This taught employers the dangers of key centralised hubs, for example the warehouse distribution operations of Davids Holdings and Redfern Mail Exchange.
Indeed, centralised operations were chinks in the armour independently of the rule against stand-down. For a number of years the centralisation of HSC marking allowed the NSW Teachers Federation to pressure the government for pay increases for markers, under threat that results would be unavailable in time for university entry processes.
Of course, picking a vulnerable target at a time of seasonal demand is a great Australian union tradition – beer strikes at Christmas, petrol strikes at holiday times and the like, although these are, for reasons beyond the scope of this article, thankfully infrequent.
The response on the employer side of the equation was to apply for amendment to Awards, allowing for stand-down of willing workers who were left without work to do, when the reason for this was that other workers were on strike; thus overriding the common law.
Selective work bans as a means of exerting pressure on employers
The other means for a union to exert sustained pressure while minimising loss of income for its members has been the selective work ban. This is what we have seen in play in the 2024-2025 transport dispute.
The notion of the selective work ban involves union members refusing to carry out some relatively minor (or at least apparently so) parts of their jobs.
An obvious example in the public transport context is simply a refusal to collect fares: popular with the public; harmful to government revenue; and without disruption to transport services.
Of course, collection of public transport fares does not now depend greatly on human beings and, whether for this or other reasons, does not appear to be among the selective work bans presently being imposed by the RTBU and other rail unions.
The rationale of the selective work ban is that an employer can hardly treat a worker as being on strike who is doing most of the things required by the job, so that the disruptive effect is achieved, without impact on workers’ pay packets.
The employers’ response to this tactic was a “no work as directed, no pay” direction.
This needs to be spelled out clearly, but says in effect to the employee: “You are not entitled to decide which bits of your job you will do, and which you won’t. You must carry out all the requirements of your job, or you won’t be paid anything”.
Although little used in recent times, references to its possible use have recently emerged.
Binding rulings by third party umpire out of vogue by end of 20th century
Last, comment on the present rail transport dispute would be incomplete without reference to the enterprise bargaining context in which the dispute plays out.
While the regulation of pay and conditions by a third-party “umpire” able to make binding rulings was, at the start of the twentieth century, widely regarded as admirable, by the latter part of the century it was regarded as being undesirable.
One part of the argument was that it should not be for judges in courtrooms to make orders about what was best for workers, or the businesses that employed them.
Another part was that the setting of wages had been strongly focused on the inherent requirements of the work and thus the skill of workers, thus mandating equivalence of pay for, say, an electrician working in a major manufacturing corporation with one working in a small rural shearing shed.
These terms and conditions of employment were embodied in enforceable “Awards” which bound employers, and the workers for which they worked, no matter where and in what kind of business or organisation.
Emergence of enterprise bargaining
Disquiet about this system ultimately resulted in a major change of focus, so that pay and conditions in an enterprise (a global term describing any business or organisation providing goods or services) would be settled by negotiation: “bargaining” between the employer and the employees and their unions.
A resulting agreement (actually an “enterprise agreement”, although the term “enterprise bargaining agreement” or “EBA” is commonly used) would be subject only to certification by the Fair Work Commission that the employees had not been taken advantage of.
This is termed the “no disadvantage” test, and the test is satisfied if the employees covered by the enterprise agreement are no worse off than they would be if their terms and conditions of employment were set by the Award which would apply in the absence of an enterprise agreement.
Rail transport dispute and enterprise bargaining
The link to the 2024-2025 rail transport dispute is that the live issues about demands for pay increases occur in the context of enterprise bargaining, and the claimed savings and efficiencies supposedly being offered by the relevant unions as offsets for pay increases.
This item does not pretend, in any way, to be an analysis of the dispute which prompted its writing.
Instead, the saturation publicity prompted me, as someone who has spent much of my career tangling with the industrial relations system, to wonder how many people understand media references to “EBA”, “selective work bans”, “protected action”, “good faith bargaining” and the like.
To say nothing of claims by both sides that the other side isn’t playing fair.
Instead, the intention is to shed some light – if only a little – on aspects of the arcane world of Australian industrial relations.
