Free-Riding in Australia

Economic and Industrial
Democracy
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Free-Riding in Australia
Peter Haynes, Peter Holland, Amanda Pyman and Julian Teicher
Economic and Industrial Democracy 2008 29: 7
DOI: 10.1177/0143831X07085138
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Free-Riding in Australia
Peter Haynes
University of Auckland
Peter Holland
Monash University
Amanda Pyman
University of Kent
Julian Teicher
Monash University
Free-riding has long been a contentious issue in Australian industrial

relations. This article gauges the nature and location of free-riding in
Australian workplaces, drawing on the 2004 Australian Worker
Representation and Participation Survey. Of the 39.2 percent of
employees who could join a union in their workplace and who do
not, 51.7 percent may be characterized as deliberately free-riding.
A similar proportion of employees may be described as `passive
beneciaries', for whom the costs of membership are greater than the
benets, or for whom the net benet is not perceived to be positive.
Although free-riding is found to reduce as age and tenure increase,
and to increase with higher income, supervisory responsibilities and
full-time employment status, when free-riding is regressed against a
range of personal and workplace characteristics only tenure and
supervisory responsibilities retain signicance. In general,
instrumental motivations prevail over the ideological, personal,
organizational and worker characteristics included in this analysis.
The implications of these ndings for union renewal in the current
context are discussed.
Keywords: bargaining agency fees, free-riding, trade union membership, union joining
Introduction
Free-riding on trade unions, and bargaining fee arrangements

designed to counter or compensate for free-riding, have been a
Economic and Industrial Democracy & 2008 Uppsala University, Sweden,
Vol. 29(1): 734. DOI: 10.1177/0143831X07085138
www.sagepublications.com
Economic and Industrial Democracy 29(1)
major eld of contestation in Australian industrial relations in

recent years. As in comparable òpen shop' labour market regimes,
such as Britain and New Zealand (Bryson, 2006), and in continental
European countries where multi-employer bargaining and erga
omnes contracts are widespread (Ebbinghaus and Visser, 1999), we
report in this article that large and increasing numbers of Australian
workers take a `free ride' on union membership, gaining the benets
of union coverage without contributing to the costs of provision.1
Free-riding is important because it deprives unions of both nancial resources that could be devoted to organizing, and power
resources that could be used at the bargaining table and in the
political arena. It is typically viewed by unionists as unfair and
inequitable although some Australian union ofcials do not see
free-riding as a major problem confronting unions (Bedford,
2006). More immediately, free-riding undermines the legitimacy of
unions in the Anglo-American world where most collective bargaining is conducted at the enterprise level, recognition of unions by individual employers is critical, and unions do not enjoy the degree of
legitimacy or state support that their European counterparts enjoy
as social partners. Thus, in 2000, the Australian Council of Trade
Unions (ACTU) adopted a policy supporting àgency shop' arrangements, which required non-union employees in unionized workplaces to pay either the equivalent or a proportion of union dues
to offset the costs of representation, with a number of unions
having already negotiated agency fees into certied agreements
(Orr, 2001). However, such arrangements were opposed by others
on the grounds that they involved coercion and, by default, were a
form of compulsory unionism, therefore infringing upon an individual's freedom of association (e.g. Australian Chamber of
Commerce and Industry, 2002).
The purpose of this article is to analyse those parts of the 2004
Australian Worker Representation and Participation Survey
(AWRPS) that enable us to gauge the location and nature of freeriding in Australia, and then to evaluate the implications for
union strategy and public policy. We use a number of variables
not often included in analysis of union joining behaviour, such as
perceptions of union benets, management attitudes to unions and
various aspects of management performance, and workers' reasons
for joining or not joining unions. Our investigation of free-riding
behaviour elucidates an important element of union decline in
Australia. In practical terms, this discussion can assist Australian
Haynes et al.: Free-Riding in Australia
unions in their organizing efforts. It may also help public policymakers to evaluate the efcacy and equity of bargaining fee arrangements. We begin with a discussion of the meaning of free-riding by
drawing on prior research, and the relevant background in
Australia. The exposition then explains the method and sample
used for the survey, and reports results on the location and nature
of free-riding in Australia. The nal section discusses the implications for public policy and union strategy.
Prior Literature: Theoretical
Free-riders may be broadly dened as those who enjoy the benets

of group action without contributing to the costs. Drawing on the
theory of public goods, Olson (1965) outlined the problems that
free-riding behaviour presents for union recruitment: in the absence
of compulsory membership or excludable benets such as advice and
representation, large organizations, including unions, will not be
able to recruit `rational, self-interested individuals' in the face of
opportunities to consume the non-excludable benets of membership without incurring the pecuniary and non-pecuniary costs.
Some theorists have, however, questioned whether union benets
including the union-set wage are public goods, and by extension the
existence of a free-riding problem in union membership, suggesting that non-members may be excluded by agreement between the
union and employer parties (e.g. Orr, 1980). We may deduce a
number of reasons why this is unlikely to occur in practice. Openshop employers may choose not to exclude non-members from
union-negotiated benets, fearing that this will increase the net
benet of union membership. Unions are also aware of the risk
that excluding non-members from union-negotiated deals may
result in those non-members undercutting union members.
This suggests that unions need to develop a range of secondary,
excludable services that meet the needs of individual members, or
face demise. Some of the benets provided by unions, such as
advice and representation for individual workers who are subject
to disciplinary action, are clearly excludable. Indeed, as Crouch
(1982) points out, individualized benets such as contributory funeral benet schemes and insurance funds assisted the growth of
the early trade union movement. Booth and Chatterji (1995: 353)
nd evidence that a number of union-negotiated benets, which
10
`might be targeted to unionised workers or groups of workers', have

an important effect on union density in the absence of closed-shop
rules. Specically, they estimate the effects of unions negotiating
over physical working conditions, stafng levels, redeployment
within the establishment and formal grievance procedures for
disciplinary disputes, and also the inuence of unions on managerial
control over work organization. Booth (1985) theorizes that the
reputation effect gained from conforming to the group norm of
membership is an excludable incentive to unionize (see also
Naylor and Cripps, 1993). Our data allow us to test directly whether
these forms of excludable or private benets inuence union joining
behaviour relative to other motivations.
At the same time, unions inuence a range of non-excludable
terms and conditions of employment other than wage increases,
thereby providing a further incentive to free-ride. The scope of
joint regulation in the workplace may be considerably greater than
that dened by collective bargaining, which has been described as
but `half the story the visible part of the iceberg' (Clegg, 1976).
Recognizing this, Haynes and Boxall (2004: 49) dene a free-rider
às an employee who derives benet because their work category is
primarily regulated by a union-negotiated collective agreement,
but who does not join the union or otherwise contribute to the
costs of negotiating the prevailing agreement'. We adopt this denition in the following analysis.
However, it is likely that recipients of union-negotiated benets
members and non-members value such benets, however broadly
dened, differently (Naylor and Cripps, 1993). As a result, the net
cost or benet that they perceive themselves deriving from union
membership differs. For example, young workers may value
union-negotiated grievance procedures less highly because they are
more inclined to use exit voice strategies to advance their interests.
We follow Haynes and Boxall (2004) in describing non-union
workers who may be in a position to join a union in their workplace
as `technical free-riders', recognizing that they may not be union
members for reasons other than to receive a benet without
paying the cost. We then distinguish between those who are motivated, at least in part, by a desire to gain a benet without contributing to the cost, whom we term `calculating free-riders', and those
who are `passive beneciaries' (following Haynes and Boxall,
2004). In the US context, where union-negotiated contractual conditions are automatically passed on by law, Sobel (1995) similarly
11
distinguishes between `true free-riders', who value the benets of

their union coverage more than the cost, and ìnduced riders' who
value the benets of union coverage less than the costs of membership and who would opt out of the union job if required to pay dues.
Prior Literature: Empirical
Various studies have indirectly investigated workers' propensity to

belong to unions, using various demographic variables as proxies
for the underlying factors that affect demand (Schnabel, 2003). In
the US context, where free-riding is operationalized as non-members
covered by union-negotiated contracts, free-riding has been found to
be positively related to living in a `right-to-work' state (Davis and
Huston, 1993), living in the South (Jones, 1982; Davis and Huston,
1993), being female (Chaison and Dhavale, 1992; Davis and
Huston, 1993; Sobel, 1995; Budd and Na, 2000), educational attainment (Chaison and Dhavale, 1992; Davis and Huston, 1993; Sobel,
1995; Budd and Na, 2000), working in white-collar or service
occupations (Jones, 1982; Chaison and Dhavale, 1992; Davis and
Huston, 1993), being white (Chaison and Dhavale, 1992; Budd
and Na, 2000); and negatively related to age (Jones, 1982; Chaison
and Dhavale, 1992; Davis and Huston, 1993; Budd and Na, 2000)
and tenure (Jermier et al., 1986, 1988). Sobel (1995) also found
that free-riders are highly concentrated in the manufacturing,
retail trade and professional and related service industries, and
tend to comprise a higher proportion of never married and parttime workers, and a lower proportion of veterans. Outside the US,
Bryson (2006) found that youth, managerial responsibilities and
fewer hours worked were positively and independently associated
with free-riding in both Britain and New Zealand; but being male
was positively associated with free-riding in New Zealand only,
and shorter tenure and smaller organizational size was positively
associated with free-riding in Britain only. Goerke and Pannenberg
(2004) found support for social customs effects restricting free-riding
behaviour.
Attitudinal variables have also been included in empirical studies
of free-riding behaviour. In the US, Odewahn and Petty (1980) and
Jermier et al. (1986) found job satisfaction and perceptions of
administrative support to be positively related to free-riding behaviour in restricted samples at acceptable levels of signicance.
12
Further research by Jermier et al. (1988) found that the effect of job
satisfaction was not signicant among blue-collar workers. Bryson
(2006), on the other hand, found higher needs (derived from scales
rating managers on various aspects of employment, trust in management, etc.) and higher perceptions of union effectiveness to be negatively associated with free-riding in large-scale workforce surveys in
Britain and New Zealand.
In our cross-sectional sample, we anticipated that we would nd a
variety of employee motivations for joining and not joining where
there was a union available to join, and that a number of these
would prevail over the demographic and worker characteristics
included in our analysis.
Free-Riding in Australia: History
For Australian unions, free-riding has been, as O'Neill and Shepherd

(2003) suggest, à thorn in the side' since the 1930s. Under awardbased industrial relations regulation prior to the 1990s, unions'
role as the principal representatives of employees was seldom questioned, and registered unions enjoyed extensive union security
arrangements, including preference clauses in awards. However,
unions were unsuccessful in seeking to exclude non-members from
award coverage, where they attempted this.2 Industrial awards
bound employers in respect of all eligible employees, whether
union members or not. Unions generally acquiesced to universal
coverage, recognizing that this prevented a situation where a high
union wage premium might drive employers to opt for lower cost,
non-union labour. The award system therefore extended the benets
of collective bargaining to a large group of non-union workers,
enabling them to become free-riders.
The decline of compulsory union membership, as Peetz (1998) has
shown, was a key component of the ìnstitutional break' in the 1980s
and 1990s that allowed union density to move towards its equilibrium level (in the absence of compulsory membership), a determinant of which is the propensity to free-ride. During this period,
employers became less likely to agree to either formal or informal
closed shop arrangements, and state governments progressively outlawed union security devices in respect of employees within their
jurisdictions. This culminated in the passage of the Workplace Relations Act in 1996 (WROLA), which proscribed closed shops in the
13
federal jurisdiction. Using data from various surveys, Peetz (1998:

87) estimates that `the proportion of employees in compulsorily
unionised jobs fell from 34 percent in 1976 to 23 percent in 1988,
and from 21 percent in 1990 to a mere 11 percent in 1995'.
As union density fell within unionized workplaces and the coverage of prevailing awards remained relatively constant, so free-riding
increased. Between 1982 and 1990, using survey-based estimates,
union density in the non-agricultural workforce fell from 50.1 percent to 41.1 percent.3 Award coverage appears to have fallen at a
much slower rate among these workers, from 86 percent in 1983
to 80 percent in 1990.4 Although the data sets used do not allow a
precise comparison, it is clear that by the 1980s free-riding had
reached high levels and was increasing. In 19823, free-riding
appears to have exceeded two-fths of award coverage, rising to
around a half by 1990 (when the award coverage survey was discontinued). Using more recent ofcial survey data on union and award
coverage, Peetz (2005: 717) estimates that in 2004 `close to twofths' of those covered by registered union collective agreements
were free-riding non-members, after allowing for those members
who were unable to obtain collective agreements. This gure is
very close to the estimate for 20034 that we report later.
Australian unions have responded to free-riding in various ways.
In the 1990s, the ACTU initiated travel, legal and nancial services
in an effort to broaden the appeal of union membership (Holland,
1999). Following the success of the Electrical Trades Union (ETU)
of Victoria in having provision for a compulsory annual bargaining
fee of AUS$500 (compared to union dues of AUS$300) for nonunionists included in its negotiated agreements, the national congress of the ACTU in 2000 endorsed a policy of including bargaining
fees clauses in union-negotiated agreements (Orr, 2001). As Peetz
(2005) has argued, however, selective union-only benets have a
chequered history in Australia, and by and large, evidence of their
success is inconclusive. Furthermore, exclusive services do not prevent free-riding on the major benets obtained by unions through
collective bargaining (i.e. the terms and conditions of employment).
Following the ETU's actions, employer groups condemned
bargaining fees as a form of compulsory unionism in disguise
(Australian Chamber of Commerce and Industry, 2002); a position
supported by the federal government, which attempted to outlaw
agency fees on the grounds that they contravened the freedom of
association provisions in the WROLA. However, the Australian
14
Democrats, who held the balance of power in the Senate, opposed

the Bill. Democrat Senator Andrew Murray argued that the rendering of a service by unions that resulted in an increase in terms and
conditions for unionists and non-unionists alike was not a form of
blackmail and did not constitute a breach of the freedom of association laws (Foley, 2001). In a similar vein, the secretary of the NSW
Labor Council argued that agency fees simply represented an application of the user pays principle that was widely ascribed to in the
prevailing neoliberal policy environment promoted by the federal
Liberal-National government (Workers Online, 2002).
In October 2001, agency fees were again challenged. The Ofce of
the Employment Advocate, an agency established in part to enforce
the provisions of the WROLA, sought to have the national industrial tribunal, the Australian Industrial Relations Commission
(AIRC), remove such clauses from enterprise agreements on the
grounds that they constituted an objectionable provision under
the freedom of association provisions; that is, a form of unlawful
discrimination against non-unionists that effectively forced nonunionists to join the relevant union (Jackson and Whelan, 2001).
The AIRC rejected this argument, upholding the right of the ETU
to charge a service fee for non-unionists (already inserted in over
1100 enterprise agreements); though it did raise questions over
whether bargaining fees pertained to the employment relationship
(Shaw, 2001; Peetz, 2005). Following the ETU example, other
unions also began to insert similar bargaining fee arrangements in
agreements (Orr, 2001).
The then Minister for Workplace Relations vowed on the eve of
the 2001 federal election to amend the law to prohibit what he
described as a `compulsory union levy' (Shaw, 2001: 16). However,
before he had time to act, the Federal Court of Australia ruled that
bargaining fees were outside the scope of the employment relationship and could not be included in enterprise agreements (Electrolux
Home Products Pty Ltd v. Australian Workers Union [2001] FCA
1600). The re-elected Liberal-National government succeeded in
having the Workplace Relations Amendment (Prohibition of Compulsory Union Fees) Act 2003 (Cth.) passed, outlawing compulsory
union fees in certied agreements (Riley, 2004; Peetz, 2005). The
High Court subsequently conrmed such fees to be invalid because
they did not directly pertain to the employment relationship
(Electrolux Home Products Pty Ltd v. Australian Workers Union
[2004] HCA 40 [2 September 2004]).
15
Data and Method
The data used in this article are drawn from the AWRPS 2004. This
surveyed 1000 Australian workers' responses and attitudes to workplace participation and involvement, unions, management and
unionmanagement relations. It was based on the Worker Representation and Participation Survey developed by Freeman and
Rogers (1999) in the US, the British Workplace Representation
and Participation Survey (Diamond and Freeman, 2001) and the
New Zealand Worker Representation and Participation Survey
(Haynes et al., 2003). The questions were adapted to conform to
the institutional and demographic contexts in Australia.
Respondents were surveyed nationally using computer-assisted
telephone interviewing (CATI) techniques between October 2003
and March 2004. Potential respondents were selected from the residential telephone directory using random-digit dialling. The sample
was limited to Australian residents in paid employment of more than
10 hours per week who had left secondary school. The sample was
stratied by Australian state/territory to reect the geographical distribution of the population as reported in the Australian Bureau of
Statistics (ABS) Census of Population and Housing 2001. Of those
for whom eligibility could be established, 3335 refused to participate, resulting in a response rate of 23.1 percent.5
Of the respondents, 60 percent were female and the mean age
of the sample was 41.5 years (SD 11.41). The mean number of
hours worked per week was 36.5 (SD 12.19), with 67 percent of
respondents engaged in full-time work (dened as 35 hours or more
per week). The majority of respondents were non-manual workers
(81 percent) and were born in Australia (78 percent). Just under half
of the sample (46 percent) reported that they worked in organizations with 500 or more employees. The mean number of years
worked for their current employer was 8.46 (SD 8.02).
Our sample overestimates women and non-manual workers, particularly professionals, but is otherwise broadly representative of the
Australian population in terms of demographic characteristics.6
However, there is overrepresentation in some industries, with a
large concentration in the health and education sectors (34 percent
compared with 17 percent ABS Census data). Because of the skew
across industries, the data used for descriptive statistics (only) were
weighted by industry-based ABS Census data (2001), in order to
compensate for sample non-response bias.
16
In the following section, we present descriptive statistics to

describe the incidence of free-riding in Australia and the reasons
stated for not joining the union where a union is available. We
then estimate binary and multinomial logistic regression models in
order to analyse the independent effects of potential explanatory
variables for technical, calculating and passive free-riding. The variables used in the analysis include those personal (gender, age, formal
education and income), positional (tenure, occupation, supervisory
responsibilities and hours of work) and workplace (industry, organizational size) factors found to be signicant in previous studies of
free-riding behaviour. In addition, our data set allows us to include
items designed to measure respondents' `needs' at work, their political ideology, perceived managerial attitudes to unions and perceived
value of the workplace union, in order to test the inuence of these
factors on free-riding behaviour. All variables included in the multivariate analysis are described in detail in the Appendix.
Free-Riding in Australia: Findings
Incidence of Free-Riding in Australia

Of those questioned by AWRPS who had the opportunity to join a
union at their workplace, 60.8 percent had done so. The remaining
39.2 percent may be regarded as `technical free-riders' in Haynes
and Boxall's (2004) terminology. Similarly, Peetz (2005: 717),
using statistics based on the ABS Survey of Employee Earnings
and Hours conducted in May 2004, found that ìt is likely that
close to two fths of workers gaining the benets of union-registered
collective agreements are not union members'.
Motivations for Free-Riding

At the outset, we note that the level of technical free-riding in
Australian workplaces results from factors within the control of
unions, as well as from any propensity to free-ride on the part of
individual workers. Our survey shows that poor union organization
at workplace level is a major factor in non-membership in unionized
workplaces. Of those who knew whether they had been asked to join
17
a union, 50.0 percent reported that they had not been (1.6 percent
did not know or did not answer), while 25.5 percent of non-members
in unionized workplaces stated that they were very or fairly likely to
join the union at their workplace if asked.
The AWRPS asked non-members in unionized workplaces how
strongly they agreed with six reasons that people don't join unions
(see Table 1). We found a high level of `calculating free-riding'
among such respondents, with 51.7 percent saying that there is `no
point in joining since I get all the benets anyway' as a reason for
not joining. Substantial proportions, 55.6 percent and 48.9 percent
respectively, nominated the level of membership fees or `the union
does not achieve anything I value' as reasons for not joining.7 For
the former, it would appear that the costs of membership are greater
than the benets, and the latter may also be clearly identied as
`passive beneciaries', in the sense that they do not receive, in
their perception at least, a net benet from being in a unionized
workplace. The same is arguably true of the smaller proportion of
non-members (22.1 percent) who reported that `people doing my
job don't join trade unions'.
The proportion that expresses an ideological opposition to membership (Ì don't believe in unions') is notably smaller (19.2 percent)
than those who believe membership to be a poor bargain. A larger
proportion of non-members (48.1 percent) agreed that ùnions do
not cooperate enough for the good of the workplace' as a reason
for not joining unions. This is consistent with a strong preference
among AWRPS respondents for cooperative relations between
employers and unions (Teicher et al., 2007). Overall, a very high proportion of non-members nominated multiple reasons for not joining.
Taken together, these ndings suggest that many employees refrain
from union membership after balancing the costs and benets of
belonging, taking into account monetary costs, the costs of conict
and various types of benets delivered by the union. At most, we
may surmise, that half of those who are technically free-riding are
consciously avoiding paying for a benet because they are able to,
but many of these non-members may also perceive such benets to
be less than the costs of membership, or value them very little:
62.3 percent of those agreeing to some extent that there is no
point joining their union because they get all the benets anyway,
also agreed to some extent that the union did not achieve anything
that they valued.

18
821
231
131
131
921
521
5.1
2.4
9.0
8.0
2.5
8.0
3.12
0.91
7.61
5.12
6.8
3.41
0.71
4.7
7.9
6.51
3.3
6.91
eergA
)%(
ylgnortS
eergA
1.13
8.11
0.24
3.33
8.81
0.63
eergasiD ron
0.92
7.75
8.03
7.82
0.46
4.92
eergA rehtieN
)%(
)%(
)%(
eergasiD
)%(
ylgnortS
eergasiD
1 ELBAT
.52 Q SPRWA :ecruoS
hguone etarepooc ton od snoinU

snoinu ni eveileb t'nod I
yawyna steneb eht lla teg I
eulav I gnihtyna eveihca ton seod noinU
snoinu nioj t'nod boj ym gniod elpoeP
evisnepxe oot/hgih oot eeF
nioJ ot elbigilE ereW yehT noinU a nioJ ot ton snoisiceD 'seeyolpmE nailartsuA gnicneunI srotcaF
19
Location of Free-Riding
Table 2 shows the level of technical free-riding according to a range
of personal and positional characteristics. Technical free-riders are
disproportionately female, younger, Australian-born, less wellpaid, in part-time employment and have shorter tenure. Technical
free-riding is also found to vary by industry, being lowest in manufacturing, mining, utilities and construction, and higher for public
and private sector services. Free-riding varies by occupation, with
the highest levels among the intermediate and elementary clerical,
sales and service workers and the lowest levels in the labouring,
associate professional and trades categories. However, only the
differences for age, tenure, income and employment status are statistically signicant (p > :05).
TABLE 2
Technical Free-Riding by Selected Individual and Job Characteristics
(%)
Gender
Females
Males
42.9
34.5
Age
Up to 24 years
2534 years
3544 years
45 years and over
Weekly income
Up to AUS$299
$300$499
$500$699
$700$999
$1000 and over
Country of birth
Born in Australia
Born in main English-speaking countries
Born elsewhere
Table 2 about here
51.4
45.1
43.6
31.3
53.3
52.4
36.4
44.7
28.8
40.7
31.1
36.4
Signicance
.071
.020
.003
.426
continued on next page
20
TABLE 2 (continued)
(%)
Occupation
Managers and administrators

Professionals
Associate professionals
Tradespersons and related workers
Advanced clerical and service workers
Intermediate clerical and service workers
Intermediate production and transport workers
Labourers and related workers
Elementary clerical and service workers
Educational achievement
Some secondary schooling

Year 12 certicate
Technical or TAFE certicate
Tertiary diploma
University bachelors degree
Postgraduate qualication
Organizational tenure
1 year
25 years
610 years
1120 years
More than 20 years
Employment status
Full-time
Part-time
40.0
37.9
36.8
31.9
45.5
39.6
64.2
51.5
34.0
20.8
30.4
35.2
48.5
Supervisory responsibilities
Yes
No
Industry
36.4
37.7
32.4
33.9
40.0
56.4
40.6
43.1
27.3
Agriculture, forestry and shing

Manufacturing, mining, utilities and construction
Private services
Public sector
65.4
52.5
37.5
34.1
40.8
40.2
Signicance
.214
.842
>.001>
.010
.003
.742
Source: AWRPS.
Notes: Excludes `don't know' responses. Signicance is the exact probability, twosided, for Pearson's chi-square. N varies between 447 and 450.
21
The Correlates of Free-Riding

The independent effects of potential explanatory variables for
technical, calculating and passive free-riding were estimated using
logistic regression. Non-members who stated that they were fairly
or very likely to join the workplace union if asked were excluded
from the analysis.8 The rst model employs binary logistic regression to predict non-membership or technical free-riding (Table 3,
column 1). It has a statistically signicant likelihood ratio chisquare (2 25 113:844, p < :001), meets the HosmerLemshow
test for goodness of t (2 8 10:069, p :260) and improves
the correct classication rate from an initial 67.6 percent to 79.8 percent. Of the personal and job characteristics, only supervisory
responsibilities and tenure were found to have a signicant effect
on free-riding behaviour at the .05 level, respondents with supervisory responsibilities ( p :006) or tenure of 10 or more years
( p :022) being much less likely to be free-riding than those without
supervisory responsibilities or with fewer than two years' tenure.
Organizational size and union instrumentality (the extent to which
the respondent believes that they would be better or worse off
with no union in their workplace) were also found to have a signicant effect on free-riding behaviour, with those in larger organizations ( p :038) or stating that the loss of their union would make
no difference ( p < :001), leave them better off ( p :006) or that
they did not know ( p :031) being more likely to be free-riding.
In particular, the effects of lower perceived benets from union presence were marked; seeing the absence of the union as making no difference raises the odds of free-riding 12-fold compared to those that
believe that they would be worse off, controlling for other variables
in the model. On the other hand, political ideology, as measured on a
leftright scale, the index of `needs' and management attitudes to
unions were found to have no independent effect on free-riding,
contrary to the ndings reported in the UK and New Zealand by
Bryson (2006).
Non-members were then disaggregated into calculating free-riders
and passive beneciaries (i.e. those agreeing that `there is no point
joining since I get all the benets anyway' and all other nonmembers, respectively) and a trichotomous logistic model, identically specied to that for non-members as a whole, estimated
(Table 3, columns 2 and 3). This model meets the Pearson chisquare test for goodness of t (2 524 651:872, p < :001). The
22
TABLE 3
Estimated Effects (Odds Ratios) of Independent Variables on Free-Riding
Independent Variable
Model 2
Model 1
Constant
Gender
Age
Highest formal education
(ref: completed secondary)
Post-secondary qualication
Income (ref: <AUS$300 p.w.)
$300499 p.w.
$500699 p.w.
$700999 p.w.
$1000+ p.w.
Occupation (ref: professionals and
managers)
Intermediate clerical, sales and service
Unskilled occupations
Tenure (ref: <2 years)
24 years
59 years
10 years
Supervisory responsibilities
Hours of work
Industry (ref: manufacturing)
Private services
Public services
Organizational size (log)
Needs index
Political ideology
Mgmt attitude to unions (ref: in favour
of unions)
Neutral
Opposed
Don't know
Technical
Calculating
Passive
Free-Riders
Free-Riders
Beneciaries
2.546
0.652
0.983
0.804
0.960
0.553
0.997
0.893
0.421
1.834
1.120
0.508
0.961
0.597
2.167
2.060
4.255
2.583
0.646
0.181
0.315
0.211
0.818
0.445
0.719
0.428
1.067
0.525
0.828
0.424
0.256*
0.360**
0.999
1.096
0.682
0.201*
0.413
0.942
0.625
0.232*
0.243*
0.329**
1.043
0.551
0.878
1.149*
0.904
0.956
0.220
0.703
1.169
0.828
0.950
1.291
1.188
1.131
0.952
0.972
1.640
1.181
2.018
2.752
1.637
6.545*
1.310
0.983
1.077

Perceived union instrumentality
(ref: worse off if no union)
No difference
Better off
Don't know
N
Nagelkerke R2
2 log likelihood
23
12.082*** 16.611*** 10.228***

7.882**
5.338
9.192**
6.130*
11.818*
1.874
287
239
243
.457
.481
247.706
349.299
Notes: * p < :05, ** p < :01, *** p < :001.
results reveal some differences between the two groups. Supervisory

responsibilities ( p :011) were negatively associated with the likelihood of being a passive beneciary, but not with the likelihood of
being a calculating free-rider at the .05 level of signicance. On the
other hand, uncertainty about managerial attitudes in the workplace
to unions was positively associated with the likelihood of technical
free-riding ( p :018), but not with the likelihood of being a passive
beneciary. Having job tenure of more than 10 years is found to be
negatively associated with being both a calculating free-rider
( p :039) and a passive beneciary ( p :032). Job tenure of ve
to nine years is negatively associated with being a passive beneciary, compared to having fewer than two years' tenure. Lower
levels of union instrumentality increase the likelihood of both:
compared to those who value their workplace union, those saying
that having no union in their workplace would make no difference
are more likely to be technical free-riders ( p < :001) or passive
beneciaries ( p < :001). Those employees saying that they would
be better off with a union are more likely to be passive beneciaries
( p :008) and those who are uncertain are more likely to be technical free-riders ( p :015).
Discussion
Our ndings underscore the point that, among those Australian

workers who have been asked to join their workplace union, it is
lack of perceived benet that explains much of their free-riding
behaviour, rather than any widespread ideological antipathy
towards unions. Pragmatism rules, not ideology. In this respect,
24
our ndings reect those of a closely comparable New Zealand

study, which found that perceptions of union performance directly
and strongly predicted union belonging, but the association between
ideology and union belonging in unionized workplaces was weak
(Boxall et al., 2007). Furthermore, studies in Britain (Charlwood,
2002) and the US (Fiorito, 2003) have found perceived union instrumentality to have the largest effect on union belonging behaviour.
Personal and job characteristics play little part in free-riding behaviour, with the exception of tenure and supervisory responsibilities.
Indeed, these effects appear to be relatively weak, especially for
supervisory responsibilities, which are associated with free-riding
for passive beneciaries only. The effects of organizational size on
free-riding are as predicted by theory, possibly reecting the reduced
potency of the social coercion factor in larger workplaces.
It is notable that age loses its signicance as an explanatory factor
when other variables are controlled for. Again, the nding that it is
tenure rather than age that has an independent affect on free-riding
is consistent with the ndings of a related New Zealand survey
(Boxall et al., 2007). It is also consistent with the ndings of a
number of surveys that younger workers' attitudes to unions and
union belonging are, if anything, more positive than older workers'
(Bryson et al., 2005; Haynes et al., 2005). It may be that workers who
have longer tenure, regardless of their age, feel that they gain greater
returns in their current employment from their job- and organization-specic skills than they would obtain elsewhere in the labour
market, and so place a higher value on those excludable benets
of union membership that act as `job insurance'. We also found
that the absence of sources of dissatisfaction at work, as measured
by the needs index, is not an independent driver of free-riding in
Australia. It may be that, as found in the US and elsewhere (Fiorito,
2003; Boxall et al., 2007), poor perceptions of union performance
mediate job dissatisfaction and union belonging.
It also appears that perceptions of the value of union presence
may be more important for both calculating free-riders and passive
beneciaries than any other factors. The differences between the two
groups' motivations in free-riding appear to be of a lower order.
Among calculating free-riders, those who are uncertain about their
managers' attitudes to unions are more likely to be free-riding
than those reporting a favourable attitude on their managers' part,
possibly due to the effect of the greater perceived risk attached to
25
union membership on the highly instrumental calculus underpinning

the decisions of this group. Passive beneciaries are less likely to be
free-riding if they have supervisory responsibilities, a result that is
difcult to explain.
Conclusion
This article has analysed the nature and location of free-riding in

Australian workplaces. Our analysis reveals that large numbers of
Australian workers who have the opportunity to be members of
their union do not join. We estimate this gure to be 39.2 percent
of those in unionized workplaces. Understanding the determinants
of this non-membership is important, not least because free-riding
undermines the role of unions and constrains renewal efforts,
which are both more critical and more difcult under the hostile
legislative environment now facing Australian unions.
We nd that workers' motivations for not joining where there is a
union present in the workplace are quite complex. The complexity of
the reasons workers give for not joining the on-site union may reect
two key issues: rst the heterogeneity of workers, some of whom
may benet more from union activities than others, and second,
the heterogeneity of unions, some of which appear more effective
than others in delivering both collective and private incentive
goods to workers. The patterns of free-riding revealed by crosstabulating non-membership with various personal and job characteristics appear to reect systematic variation in access to effective
union representation. Thus, when independent effects are estimated, instrumentality prevails over the worker and organizational
characteristics included in our analysis, with the exception of organizational tenure and organizational size, and, for passive beneciaries, supervisory responsibilities all of which have somewhat
weaker effects. Also important from a union renewal perspective,
our ndings highlight ineffective workplace organization as a
major factor in explaining non-membership and, in turn, the high
incidence of free-riding.
Given the importance of instrumental motivation revealed by this
study, and the critical role workplace union representatives have
been found to play in recruiting new members (Waddington and
Whitson, 1997), Australian unions have little alternative than to
26
redouble their efforts to improve their workplace organization. Our

ndings suggest that this strategy must be focused in two distinct
ways. First and foremost, grassroots organizing must be employed
to ensure that non-members are indeed asked and given the opportunity to join. Second, grassroots organizing and activism must be
deployed to convince and demonstrate to employees that the workplace union can make a difference to their well-being, and that the
costs of joining are worthwhile. As Cregan (2005) has argued, a
core challenge of successful organizing by Australian unions is the
achievement of a transformation of workers' attitudes to union
membership and its benets, through the building of collectivist
instincts. This conclusion supports the approach of some
Australian trade unionists that free-riding, as a problem, is secondary to improving union effectiveness through the application of the
òrganizing model' (Bedford, 2006).
Unfortunately for Australian unions in the short-term, this task
will be more difcult under the recently enacted Workplace Relations Amendment (Work Choices) Act 20005 (Cth.). Widely interpreted as an employer's charter (Stewart, 2006), this legislation
further restricts and marginalizes union bargaining, representation
and organizing rights (Forsyth and Sutherland, 2006). As a result,
the challenge for unions is not only to convince employees of the
benets of joining, but to access them in the rst place. To the
extent that Australian unions draw on core reserves of support in
partially and well-organized workplaces, this task may be made
easier. Unions, however, will need to look beyond these opportunities, embracing the full range of renewal strategies and tactics
open to them to overcome high levels of free-riding. A key plank
of an overarching renewal strategy, in an increasingly restrictive
environment, will be convincing non-members that equitable and
sustainable employment relationships are built around joint regulation, and that unions have a key role to play in the form and nature
of that regulation.
Our ndings are necessarily preliminary. Our study does not
adequately address the impact of social custom on free-riding behaviour, and further research into free-riding in Australia must therefore carefully gauge the independent and interaction effects of social
custom. This requires, as Goerke and Pannenberg (2004) suggest,
better measures or proxies of social custom in the workplace
environment.
27
25.1
17.01
dradnatS
noitaiveD
95.
27.3
07.
67.24
24.
03.
bnaeM
gnidoC/noitpircseD
'?od ot tahw seeyolpme rehto llet ro seeyolpme rehto fo krow eht eganam
ro esivrepus uoy od ,boj )niam( ruoy fo trap laicfo na sA` :deksa erew stnednopseR
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noitcudorp etaidemretni ,ecivres dna lacirelc etaidemretni ,ecivres dna lacirelc decnavda
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.elam 1 ;elamef 0
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gninioj tniop on si erehT` ot 'eerga ylgnorts` ro 'eerga` rewsna ton did 1 ;rebmem 0
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ecnis gninioj tniop on si erehT` ot 'eerga ylgnorts` ro 'eerga` derewsna 1 ;rebmem 0
.rebmem-non 1 ;rebmem 0
XIDNEPPA
asisylanA noissergeR ni desU selbairaV fo snoitanalpxE dna scitsitatS evitpircseD
seitilibisnopser
yrosivrepuS
erunet boJ
noitapuccO
noitacudE
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redneG
yraiceneb evissaP
gnidir-eerf gnitaluclaC
pihsrebmem noinU
elbairaV

28
39.2
82.1
noitaiveD
dradnatS
52.2
07.3
bnaeM
gnidoC/noitpircseD
.secivres cilbup )4(

;secivres etavirp )3( ;seitilitu ,gninim ,gnirutcafunam )2( ;gnihs ,yrtserof ,erutlucirga )1(
.deyolpme saw mhtiragol larutan ehT '?saesrevo dna ailartsuA ni

htob seeyolpme diap gnidulcni ,reyolpme ruoy rof krow elpoep ynam woh yletamixorppa
,nwo ruoy tsuj ton ,setis krow dna snoitacol sti lla gnidulcnI` :deksa erew stnednopseR
.+0001$ 5 ;999007$ 4 ;996005$ 3 ;994003$ 2 ;003$SUA < 1
.wonk t'nod )4( ;ffo retteb )3( ;ecnereffid

on )2( ;ffo esrow )1( :dezirogetaC .retteb tol a 5 ot esrow tol a 1 morf elacs
tniop-ev a no erew srewsnA '?ecnereffid on ekam ti dluow ro ,noinu on saw ereht fi ffo
esrow ro retteb eb dluow yllanosrep uoy taht kniht uoy oD` :deksa erew stnednopseR
'.wonk t'nod )4( ?snoinu ot desoppo ro )3( ;snoinu tuoba lartuen )2(
;snoinu fo ruovaf ni )1( . . . era sreganam ruoy yas uoy dluoW` :deksa erew stnednopseR
tuoba gnidnatsrednu era ereh sreganam` :'ecalpkrow tneserp ]rieht[ ta gnikrow` tuoba
stnemetats eht htiw deergasid stnednopser emit hcae dedda osla saw tniop A .'sesaercni
yap riaf gnivig` ro 'elbayojne dna gnitseretni krow gnikam` ,'seeyolpme htiw ytirohtua
dna rewop erahs ot ssengnilliw` ,'seeyolpme rof nrecnoc` ,'segnahc desoporp htiw
etad ot pu enoyreve gnipeek` ,'ssenisub eht fo egdelwonk dna gnidnatsrednu` ,'seeyolpme
lla rof seitinutroppo lauqe gnitomorp` rof edarg F ro D a tnemeganam dedrawa
tnednopser a emit hcae dengissa saw tniop enO .)6002( nosyrB yb dnalaeZ weN dna
KU eht ni ruoivaheb gnidir-eerf htiw etaicossa ot dnuof dna depoleved elacs yrammuS
elbairaV
rotces yrtsudnI
ezis lanoitazinagrO
emocni ylkeew xat-erP
ytilatnemurtsni
noinu deviecreP
snoinu ot edutitta
tnemeganam deviecreP
xedni sdeeN
)deunitnoc( XIDNEPPA
29
30.1
58.71
01.2
ygoloedi lacitiloP
ytilatnemurtsni
noinu deviecreP
.1 gnirocs noitroporp eht swohs nmuloc siht ni erug eht ,selbairav suomotohcid roF b
.sisylana evitpircsed eht ni desu esoht morf reffid erofereht selbairav
eseht rof scitsitats evitpircsed eht dna sisylana noisserger eht morf dedulcxe erew deksa fi noinu a nioj ot ecnereferp a gnitats stnednopseR a :setoN
.dethgiew SPRWA :ecruoS
77.3
.'ecnereffid on
ekam dluow` gnitacidni )3( evitanretla lartuen eht htiw ,)retteb tol a 5 ,esrow tol a 1(
elacs tniop-ev a no erew srewsnA '?ecnereffid on ekam ti dluow ro ,noinu on saw ereht fi
ffo esrow ro retteb eb dluow yllanosrep uoy taht kniht uoy oD` :deksa erew stnednopseR
.547. si elacs eht fo
tneicfeoc ytilibailer ahpla hcabnorC ehT .denialpxe ecnairav latot eht fo tnecrep 2.05 rof
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,sisylana stnenopmoc lapicnirp gnisU .sweiv gniw-tfel erom gnitacidni serocs rewol htiw
,52 ot 8 morf si serocs elbissop fo egnar ehT .eergasid ylgnorts 5 ,eerga ylgnorts 1
:elacs tniop-ev a no erew srewsnA '?roop eht ot hcir eht morf htlaew etubirtsider
dluohs tnemnrevoG )5( ;htlaew s'noitan eht fo erahs riaf a teg t'nod elpoep gnikrow
yranidrO )4( ;roop eht rof rehtona dna hcir eht rof wal eno si erehT )3( ;seeyolpme
fo esnepxe eht ta srenwo steneb ssenisub giB )2( ;seeyolpme fo retteb eht teg ot seirt
syawla tnemeganaM )1( stnemetats gniwollof eht htiw eergasid ro eerga uoy od ylgnorts
woH` :ot srewsna eht morf devired ecitsuj evitubirtsid ot sedutitta fo elacs yrammuS
.178. si elacs eht fo tneicfeoc ytilibailer ahpla hcabnorC ehT .denialpxe ecnairav latot
eht fo tnecrep 8.93 rof gnitnuocca 2.5 fo eulavnegiE na htiw rotcaf elgnis a otno daol
ot dnuof erew smeti 31 lla ,sisylana stnenopmoc lapicnirp gnisU .'efil krow ro boj ym no
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em ot sesimorp rieht peek ot reyolpme ym tsurt I` ,'doog era tnemeganam dna seeyolpme
neewteb snoitaler ,lareneg ni` ,'ecalpkrow siht ni eruces si boj ym` ,'slliks rieht poleved
ot degaruocne era ereh gnikrow elpoep` ,'seitilibisnopser ylimaf teem ot gnivah seeyolpme
30

Notes
The authors thank, without implicating, Brian Cooper and Alan Lee for assistance
with the data set and statistical analysis, and David Peetz, Alex Bryson and the
EID referees for comments on an earlier draft.
1. The term òpen shop' implies the absence of any compulsion towards union
membership. `Closed shop' is used in the present discussion to refer to both preand post-entry closed shops.
2. For example: Metal Trades' Employers' Association v. Amalgamated Engineering
Union 1935 54 CLR 387 (see O'Neill and Shepherd, 2003).
3. Australian Bureau of Statistics (1983, 1990); adjusted to exclude agricultural,
forestry, shing and hunting workers to enhance comparability with award coverage
estimates.
4. Australian Bureau of Statistics (1985, 1991).
5. Hearing or language problems prevented a further 221 calls from proceeding to
the point where eligibility could be established.
6. Census gures indicate 45 percent of employed Australians are female and
70 percent work in non-manual occupations.
7. Cregan (2005) also found that a cohort of uncommitted workers believed that
the costs of being a member were too great.
8. The ndings were not altered when those who indicated a preference to join the
union if asked were included. These models are available from the rst author on
request.
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33
Peter Haynes
lectures at the University of Auckland

Business School, University of Auckland,
New Zealand. His research interests include
worker representation and participation,
union strategy, high-performance work
systems and service sector HRM. He is coeditor with Richard Freeman and Peter
Boxall of What Workers Say: Employee
Voice in the Anglo-American Workplace
(Cornell University Press, 2007).

Peter Holland
is a senior lecturer in human resource

management and employee relations in the
Department of Management, and Deputy
Director of the Australian Centre for
Research in Employment and Work
(ACREW) at Monash University, Australia.
His current research interests include
strategic unionism, monitoring and
surveillance in the workplace, new patterns of
work and offshoring. He has published six
books and numerous journal articles on a
variety of human resource management and
employee relations topics.
Amanda Pyman
is a lecturer in industrial relations and human

resource management at the Kent Business
School, University of Kent. She has
published widely in industrial relations
journals. Her current research interests are
employee voice and worker representation,
union strategy, campaigning and renewal,
Internet recruitment and privacy and
surveillance in the workplace.
34

Julian Teicher
is director of the Graduate School of Business

at Monash University, Australia. His
research interests are in industrial and
workplace relations and public policy. His
publications cover employee participation,
bargaining and dispute resolution, industrial
relations legislation, occupational health and
safety, equal opportunity and diversity
management, skill formation, privatization,
outsourcing and governance.

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Economic and Industrial

>> Version of Record - Jan 25, 2008

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Free-riding has long been a contentious issue in Australian industrial

Free-riding on trade unions, and bargaining fee arrangements

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Economic and Industrial Democracy 29(1)

major eld of contestation in Australian industrial relations in

Haynes et al.: Free-Riding in Australia

Free-riders may be broadly dened as those who enjoy the benets

Economic and Industrial Democracy 29(1)

`might be targeted to unionised workers or groups of workers', have

Haynes et al.: Free-Riding in Australia

distinguishes between `true free-riders', who value the benets of

Various studies have indirectly investigated workers' propensity to

Economic and Industrial Democracy 29(1)

For Australian unions, free-riding has been, as O'Neill and Shepherd

Haynes et al.: Free-Riding in Australia

federal jurisdiction. Using data from various surveys, Peetz (1998:

Economic and Industrial Democracy 29(1)

Democrats, who held the balance of power in the Senate, opposed

Haynes et al.: Free-Riding in Australia

Data and Method

Economic and Industrial Democracy 29(1)

In the following section, we present descriptive statistics to

Incidence of Free-Riding in Australia

Motivations for Free-Riding

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Haynes et al.: Free-Riding in Australia

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Economic and Industrial Democracy 29(1)

.52 Q SPRWA :ecruoS

hguone etarepooc ton od snoinU

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Haynes et al.: Free-Riding in Australia

Table 2 about here

continued on next page

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Economic and Industrial Democracy 29(1)

Managers and administrators

Some secondary schooling

Agriculture, forestry and shing

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Haynes et al.: Free-Riding in Australia

The Correlates of Free-Riding

Economic and Industrial Democracy 29(1)

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Haynes et al.: Free-Riding in Australia

12.082*** 16.611*** 10.228***

Notes: * p < :05, ** p < :01, *** p < :001.

results reveal some differences between the two groups. Supervisory

Our ndings underscore the point that, among those Australian

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Economic and Industrial Democracy 29(1)

our ndings reect those of a closely comparable New Zealand

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Haynes et al.: Free-Riding in Australia

union membership on the highly instrumental calculus underpinning

This article has analysed the nature and location of free-riding in

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Economic and Industrial Democracy 29(1)

redouble their efforts to improve their workplace organization. Our

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12.082* 16.611* 10.228***

Notes: * p < :05, p < :01, * p < :001.