Why Australians who refuse to join a trade union could be forced to pay a penalty

Australians who refuse to join a trade union could be forced to pay a fee of hundreds of dollars if they benefit from a wage rise they didn’t fight for.

Closed shops, where bosses can only hire union members, have been illegal since 1996 under laws introduced by former Liberal prime minister John Howard’s government.

But with Labor back in power, trade unions are lobbying hard to boost their finances with just 14 per cent of workers belonging to a union.

Young Australians are even less likely to join a trade union, with just five per cent of those aged 15 to 19 belonging, rising to six per cent for those aged 20 to 24, Australian Bureau of Statistics data showed.  

Unions NSW secretary Mark Morey wants the federal government to change industrial relations laws so non-unionised staff have to pay a fee if they benefit from a collective enterprise bargaining agreement negotiated by a trade union.

‘Under this proposal, a charge on free riders would be capped at 70 per cent of yearly union dues and only payable if the benefit to the worker from the enterprise agreement is higher than this amount,’ Unions NSW said in its report Jobs Worth Fighting For: Five Ideas to Reform Australian Workplaces.

The Media Entertainment and Arts Alliance charges average-income workers $755 a year in fees.

Should Unions NSW get its way, a worker benefiting from a union-negotiated collective agreement would have to pay $528 possibly every four years – the nominal expiry time between enterprise arrangements.

They would only be able to get around this if they negotiated an individual contract with their employer.

Little more than a third, or 35.1 per cent, of all Australian employees were covered by an enterprise agreement in May 2021.  

Unions NSW is participating in Prime Minister Anthony Albanese’s Jobs and Skills Summit taking place at Parliament House in Canberra from September 1 to 2.

It has released analysis showing 30.7 per cent of private sector workers benefited from enterprise agreements with just 9.5 per cent contributing union dues.

But with Labor back in power, trade unions are lobbying hard with just 14 per cent of workers belonging to a union in 2020 with even fewer young people (Sydney waitress, pictured) joining

Unions NSW argued the U.S., Canada and New Zealand had laws allowing unions to charge fees to free riders.

‘This free riding must stop,’ it said.

‘It is unfair to union members whose dues make these negotiations possible and give them the strength needed to bargain for good outcomes. 

‘It also creates perverse economic outcomes that have fuelled Australia’s wage growth crisis.’

Despite unemployment in July falling to a 48-year low of 3.4 per cent, wages in the year to June grew by just 2.6 per cent.

This was less than half the 6.1 per cent inflation rate, the highest since 1990 without the one-off effect of the GST introduction in 2000 and 2001.

Wages were centrally fixed during the 1980s as Bob Hawke’s Labor government negotiated a series of Prices and Incomes Accords with the Australian Council of Trade Unions to keep a lid on double-digit inflation.

But during the past three decades, union member has plummeted from 39.6 per cent in 1992 to 14.3 per cent in 2020.

This coincided with Paul Keating’s Labor government in 1993 introducing enterprise bargaining at the workplace which effectively replaced industry-wide bargaining.

The ACTU has, since 2000, been fighting to make ‘free riders’ pay for wage increases unions had negotiated.