Capitalism’s coronavirus crisis and its impact on workers’ bargaining power

The swiftness and scale of the impact of – and response – to the spread of coronavirus has huge ramifications for economic activity in the global capitalist system. In turn, just as night follows day, this also has huge ramifications for the workplace bargaining power of workers in the defence and advancement of their terms and conditions of employment.

In Australia, as elsewhere, the challenge to workers now could scarcely be greater after three decades of neoliberalism bearing down on them in the form of (in)human resource management and anti-union governments. Even the global financial crisis of 2008–2009 gave workers little respite – indeed, neoliberalism was, paradoxically, strengthened and emboldened as there appeared to be no mainstream alternative to it. Now the country is facing a crisis in which the worst is yet to come, for Australia is several weeks behind the European epicentres of the likes of Italy and Spain.

With the first mass layoffs, redundancies and pay cuts now taking place, it would be easy to think that the depression of economic activity would necessarily weaken workers’ already fragile bargaining power at work. The dislocation and disruption to the normal rhythm of workplace bargaining will add to this. However, things might not always be quite as simple and straightforward as they first seem.

It’s easy to see that in the airline industry, and tourism, entertainment and hospitality, for example, workers are very much on the backfoot due to the collapse in demand, either through consumer behaviour or state-imposed restrictions. So, these workers are less able to resist employers’ terms for dealing with the impact of the crisis upon company profitability, much less advance their normal bargaining demands. Indeed, some of them have simply lost their jobs.

The case of Qantas – whose workforce was hit with mass layoffs and forced ‘donations’ of leave entitlement – is only the biggest and most obvious here, made more egregious by the fact that the company was bailed out by the government a few days earlier. There are others in the same industry in Australia, like Singapore Airlines, taking equally draconian and unfair measures. Virgin Australia has imposed wage cuts  by compelling workers to take leave without pay and to use their entitlements.

The carnage in hospitality, tourism and entertainment is predicated to be huge. Security staff at an arts venue in Hobart have been sacked. Most recently, AFL players have ‘agreed’ to a 50% cuts in wages until the end of May. Even though there are cases of bosses taking pay cuts – but not enforced leave – their ability to withstand these shortfalls in income is exponentially greater than those of their workers.

This sense of the scale of economic devastation being wreaked on workers is only increased by the inadequate response of the Australian government. The Australian Council of Trade Unions (ACTU) has called for a comprehensive package of measures to keep workers in work and on full pay, and was not overly impressed by the government’s response on the grounds that they exempted some of the most vulnerable workers. Although the offer by the Boris Johnson-led Conservative government in Britain a couple of days earlier was more generous than the Australian government’s, the two packages are not entirely dissimilar. Both fail to more fully and effectively support vulnerable workers like the self-employed, gig workers and contract workers. Zero hours workers will be exactly that in many cases now.

Some workers are able to take collective action at this time. For example, teachers in Queensland have threatened to strike to shutdown schools if the government does not, and the Community and Public Sector Union has won paid leave for casual staff with the virus. Meanwhile, workers in food retailing have stood up and called for protection from violence at the hands of the public as panic buying spreads. However, these actions are defensive measures to try to protect the workers and others from the effects of the virus by demanding proper protection in terms of public health. They are not offensive strikes seeking to raise terms and conditions but stop them from getting worse.

There are groups of workers for which the goods and services they provide are now in greater demand than ever before. The most obvious ones are warehousing and delivery of products bought online, food retailers, internet and broadband services for residential properties, laboratory testing and respirator and hygiene-product manufacturing. For example, unions within Telstra welcomed the company’s decision to pause its planned job cuts for the next six months, hire 1,000 more temporary workers, and extend home working. There is also increased demand for Centrelink welfare services, and it can be anticipated that there will be a big rise in the demand for the services of Deliveroo and Uber Eats. So, although the chances of infection will be heightened with the increased public contact, workers such as those who deliver cooked meals should be a stronger bargaining position than ever to make good on their demands for decent terms and conditions of employment.

The question then is: are these types of workers in a position to take advantage of this new opportunity? Whilst collective – namely, union – organisation is necessary to do so, it is not sufficient, because the challenges these workers face is this: are they willing and able to withstand a backlash of criticism and abuse if they are accused of trying to exploit the situation by advancing their own vested interests or even hampering the effectiveness of a response to the virus? Employers – for their own cynical reasons – will be the first to accuse them of this and run to the media to make sure as many know about their accusation as possible.

This was the case with laboratory test workers in New Zealand (where there is yet to be a major outbreak). So, it will take brave and self-confident workers to withstand this barrage. Moreover, the reduced inability to physically associate on picket lines and on demonstrations – whether by law, public policy or common sense – also needs to be factored in. Cyber-picketing, where workers can disrupt a business by placing pre-orders for goods and services and then withdrawing from paying for them or just crowding out or overwhelming its website for online sales, would be one way around this for some but not all workers.  

Although the unions’ primary role is bargaining in the industrial arena, they can augment their political voice by showing that they can act as guardians of the health and safety of their members and for public health in general by demanding employers properly fund counter-measures and fully and sensitively apply these – as the ACTU has done. This is because workers know better than anyone else how to do their jobs safely and effectively. For unions, it would mean showing that they can exercise the ‘sword of justice’ for wider numbers of citizens than just their own members’ sectional interests.

But this is all about the present and for the foreseeable future. What happens when the virus has peaked, begins to recede and some kind of normality returns? Will there be any lasting effects?

If the global financial crash of 2008–2009 is any guide, then it will take a long time for some groups of workers to regain any bargaining strength they might have had due to economic growth being weak and fitful. Defensive battles to claw back what was lost will still be the order of the day for a long time to come. But the global financial crash looks like mere child’s play compared to the depression wreaked by the coronavirus crisis. While capital may not be exactly strengthened by it either, labour could be an awful lot weaker still. Some employers may find the experience of homeworking brings benefits and that cost savings outweigh the challenges to control and coordinate their workers. This continued homeworking would disrupt the unions’ ability to organise (notwithstanding the use of social media platforms like WhatsApp). In the end, groups of workers with temporarily enhanced bargaining power may find this power evaporates all too soon. They’ll need to take robust steps to try to ensure it does not.


Image: Lynn Friedman

Gregor Gall

Gregor Gall is visiting professor of industrial relations at the University of Leeds. He is currently writing a book for Manchester University Press called The Punk Rock Politics of Joe Strummer. It will be published in 2022 to commemorate the twentieth anniversary of Strummer’s death on 22 December 2002.

More by Gregor Gall ›

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