Australian Trade Unions as Shareholder Activists: The Rocky Path Towards Corporate Democracy
Sydney Law School Research Paper No. 06/06
Sydney Law Review, Vol. 28, No. 2, pp. 227-258, June 2006
33 Pages Posted: 1 Jun 2006
Abstract
Australian trade unions have begun to participate in company meetings as shareholder activists. This paper examines this union shareholder activism which occurs through the use of the '100 shareholder rule' under the Corporations Act 2001 (Cth). Australian trade unions have used this statutory rule to address the common concerns of workers and shareholders such as the work safety performance of corporations. The shareholder action by the Transport Workers' Union at the 2003 Boral AGM is used as an illustrative example of union shareholder activism. The paper also examines the broader issues of the causes, justifications and reactions to union shareholder activism in Australia. In light of the withdrawal of consultation with trade unions by way of labour law mechanisms, particularly the individualisation and union exclusion that has marked Australian workplace relations in recent years, shareholder activism is an important avenue for trade unions to pursue their concerns. Consequently, this article argues for maintaining the '100 shareholder rule' (part of which is under threat by federal government proposals) particularly so that it can continue to be used by worker shareholder groups. Two theories of the corporation - the director-centred stakeholder theory and the democratic theory - are considered as theoretical devices to justify union shareholder activism. It is argued that whilst both theories may have some merit in this context, the democratic theory provides the best foundation for union shareholder activism.
Keywords: Corporate governance, corporate theory, shareholders, employees, enterprise bargaining, industrial democracy, workers, employee participation, labour law, corporate law
JEL Classification: D70, G30, G34, J24, J38, J44, J51, J53, K22, K31
Suggested Citation: Suggested Citation