On 15 May 1969, union leader Clarrie O’Shea was jailed for refusing to allow the industrial court access to his union’s accounts. The Tramways Union had been fined under the penal powers, the coercive sections of the Arbitration Act, for taking industrial action.
The penal powers had been used by the bosses more frequently in the lead-up to 1969, leading to bitter hostility among workers. The reaction to the jailing of O’Shea was immediate. Across the country somewhere in the order of a million workers stopped work in the following week, often in defiance of their own union officials or regional union councils.
The O’Shea strikes made the penal powers a dead letter and were a historic victory for Australian workers. However, over the last two decades, unions have faced a new regime of legal sanctions and fines. Indeed, the fines that unions now pay are, in real terms, higher than those incurred under the penal powers.
In the 12 years from 1957 to 1969, the period of the most widespread use of the penal powers, unions were fined, in today’s value, $7.9 million. The construction union is currently facing $2 million in fines for action on just one work site (Barangaroo) in just one year (2014). What was different about the penal powers era that allowed for such action to break the laws?
The court of penalties
The Australian industrial arbitration system has always been stacked against the working class, most obviously in longstanding restrictions on the right to strike. Under the first federal Conciliation and Arbitration Act, passed in 1904, all strikes and lockouts were illegal, penalised by fines of up to £1,000. Penalties were strengthened under the Chifley Labor government, when the Arbitration Court was given the power to punish contempt of its orders. In 1951, the conservative Menzies government increased the penalties substantially.
Between 1956 and 1968, unions were fined 799 times for a total of $282,410. Legal costs against the unions totalled almost as much as the fines themselves. Industrial Court judge Gallagher disclosed the core rationale for the penal provisions when he said during the 1964 national wage case: “I think that there is no such right to strike and the sooner that belief is abandoned the better for this country and the better for every working man in this country”.
There were supporters of the penal provisions within the union movement. Charlie Oliver, secretary of the New South Wales branch of the Australian Workers Union, said at the union’s 1962 convention: “We know the benefits that have come to this union from the arbitration system. We could not do without it. Take away the penal clauses and you destroy the system”.
Communists were at the forefront of the campaign against the penal powers. But while their rhetoric may have been bitterly hostile, the inaction of the Communist Party (CPA) union leaders meant that there was no serious, generalised campaign. Too often, it seems that the Communists felt that a national campaign needed the official endorsement of the ACTU. Or they believed that clever manipulation of the arbitration system or the election of the Labor Party would get around the laws.
There were some protests and publications produced in 1951, but the first sustained campaign occurred in 1963-64, after a number of strikes involving the CPA (including at General Motors Holden, Commonwealth Industrial Gases and on the docks) resulted in heavy penalties threatened or imposed. There had been a noticeable increase in the number of fines issued since 1961. In these years, the Communist-led unions called repeatedly for a mass campaign of industrial action for the repeal of the powers and for the ACTU to back it.
The period before the O’Shea strikes was characterised by growing industrial militancy and radicalisation, particularly among young workers. There were a number of aspects to this: a small but important rise in the number of strikes; growth in rank and file organisation, particularly shop committees; the general political radicalisation of society; and, in early 1968, an explosion of strikes in the metal industry.
What pushed the Communists onto the front foot was a sense of the radicalisation of rank and file unionists. This was linked to the political ferment that was growing around the Vietnam War and the student movement, and to a growing sense that workers were not receiving their fair share of the economic boom.
The number of strike days did not reflect this movement, but the number of strikes had increased to the highest level in a decade. The stoppages were shorter, often because of the threat of the penal provisions, but also because more of them were undertaken without the approval of union leaders.
This increase in rank and file organisation and militancy exploded in the metal industry in 1968, in the so-called absorption battles (caused by employers “absorbing” an award increase into existing over-award payments). Hundreds of strikes across the country occurred in late January and early February, culminating in a national 24-hour stoppage involving nearly 200,000 metal workers. The metal unions won their demands, but they suffered a price in huge fines. This bred union anger against the provisions, an anger that fused with the growing preparedness to strike and support militant measures.
It led directly to several important unions declaring that they would refuse to pay any more fines. In May 1968, the Amalgamated Engineering Union (AEU) Commonwealth Conference declared, “In light of our own members’ clearly expressed determination to fight the penal powers, this conference determines that no further or outstanding fines will be paid by the AEU and any move to forcibly collect any fines will be met with industrial action by our membership”.
The Federal Council of the Boilermakers’ and Blacksmiths’ Society resolved the following year to support any union that refused to pay the fines. The umbrella organisation of the white collar unions, the Australian Council of Salaried and Professional Associations, also advised its members not to pay any fines. And the CPA’s national committee voted to carry out a “bolder confrontation of the penal powers and the Arbitration Court”. The stage was being set for the showdown.
Meanwhile, in Western Australia, seven rank and file boilermakers showed how to win. In June 1968, they had gone on strike after one of their fellow union members had been replaced. On 11 October, the men were fined $30 each for going on strike and failing to obey an order to return to work. They were told that failure to pay the fines within 14 days would result in a 30-day jail sentence.
The boilermakers told their union that they would refuse to pay the fine “and go to gaol if necessary to assist in the campaign to highlight the situation and have the Act amended”. The Western Australian Trades and Labour Council (TLC) and a mass meeting of unionists declared their support for the men.
Within a month, the TLC was informed that an anonymous benefactor had paid the fines and the matter was dropped, although the council said it would continue to press for the amendment of the penal provisions.
A final factor leading to the O’Shea strikes was the greater willingness of the Victorian left unions, after they had broken with the right in the 1967 Melbourne Trades Hall split, to engage in action independently of the official structures of the union movement. The 27 unions became known as the Rebel Unions. Freed from the constraints of Trades Hall machinations and the dead hand of the right, they took a militant stand, particularly on issues such as the Vietnam War and conscription. The Rebel Unions agreed, early in 1969, to back Clarrie O’Shea if he was penalised.
After months of cat and mouse games in which O’Shea refused to pay all of the fines the union had accrued from industrial action, he faced justice John Kerr in court. Five thousand workers protested, declaring, “We determine that any attempt to take direct punitive action against any union funds or property or the person of any official will be met with an immediate 24-hour stoppage of work”.
When Kerr sent O’Shea to Pentridge, the Rebel Unions swung into action. In the week that O’Shea was in jail, there was an unprecedented wave of strikes. It is generally acknowledged that a million workers went out across Australia. But this figure could well downplay the actual numbers, because many of the strikes were localised (just shops, factories or ships) and unauthorised.
There has not been another point in the history of the Australian labour movement when so many workers took strike action without the authorisation of their unions, the state labour councils. The ACTU, Victorian Trades Hall Council and the NSW Trades and Labour Council all refused to coordinate action and in some cases were openly hostile.
After the penal powers
The O’Shea strikes broke the back of the penal powers. It was not the end of the issue, but the strikes robbed the employers and the industrial court judges of the confidence to use them. The McMahon government attempted to force the unions to pay back some of the outstanding fines at the end of 1971, but on two separate occasions anonymous benefactors came forward to pay the amount demanded.
The O’Shea strikes, along with the victory of the absorption battles, contributed to a sense of confidence in the working class. This confidence led almost immediately to a massive strike wave. By 1971, 30 percent of workers were involved in strike action. This strike wave won many of the basic conditions that most permanent workers still enjoy today. The share of wages as a percentage of GDP rose to its highest level ever. Four weeks’ annual leave was won. It is doubtful that the upsurge in industrial struggle that won such gains would have been possible without the defeat of the penal powers and the sense of strength it inspired.
On the face of it, a simple comparison between the O’Shea strikes and the ability to end the increasing use of strike penalties today can appear misguided. The union movement is now a very different beast, and 30 years of declining strike action, union coverage, traditions and confidence make it difficult to imagine the possibility of widespread industrial action. Besides, the O’Shea strikes took place in a period of rising militancy and the beginnings of a generalised political radicalisation in society. There was also a network of union leaders belonging to the Communist parties or the left of the Labor Party and rank and file organisations and committees, all of which are virtually non-existent today.
But there are a number of aspects that make a comparison not as foolish as first appears. The penal powers showed that the arbitration system is always stacked against the working class. The O’Shea strikes showed us that years of “boxing clever” will neither challenge the underlying unjust laws, nor create a situation where workers are more confident to take action. It is only through direct confrontation that the situation can be turned around. Surely, that is a lesson that is useful for today.