In the day-to-day lives of most Australians, trade unions have never been so irrelevant.

Union membership has more than halved over the past decade. A mere 18% of the nation’s workers now belong to a union — a figure that will keep plummeting if the collateral damage inflicted by the Health Services Union scandal is as bad as many trade union leaders fear.

No union leader today could dream of matching the heady heights of influence achieved by then-ACTU president Bob Hawke in the 1970s when he forced Frank Sinatra to apologise for insulting Australian journalists by launching a 114 union-strong strike. Or former ACTU secretary Bill Kelty when he co-engineered both the Prices and Incomes Accord and the superannuation regime with Paul Keating in the 1980s.

And yet — when it comes to policy outcomes, political muscle and industrial clout — the men and women featured on our Union Heavies list continue to hold their own among the nation’s most powerful people.

Julia Gillard’s rise to power, the re-regulation of the Labor market under the Fair Work Act, and the rise of a new generation of pragmatic, co-operative leaders have all helped bring unions back to the centre of political and economic life.

Trade union leaders negotiate wages and conditions with employers. They organise strikes. They wield influence over policy and pre-selections through their links to the ALP. And, in an often-overlooked aspect of their power, they control where hundreds of billions of dollars is invested through industry superannuation funds.

As Joe de Bruyn, national secretary of the nation’s biggest union, the Shop Distributive and Allied Employees’ Association, told The Power Index: “You have far more impact as a union leader than being a member of parliament — absolutely, especially at a union like ours. We have a big impact on a significant sector of the workforce.”

What makes a union leader powerful?

  • Size. The most powerful union leaders have large memberships and cover key employers in major sectors of the economy.
  • Structure. In some unions, power is concentrated in state branches; in others the federal bodies dominate. In recent times, the growing centralisation of power and authority in Canberra has, as a rule, empowered national union bosses.
  • Political muscle. Affiliation to the Labor Party is seen by most unions as an important way to advance their agenda. Votes on the ALP conference floor give you clout, as does having union loyalists in the parliament.
  • Personality. Union leaders increasingly rely on persuasion and negotiation for influence, rather than intimidation. The most effective operators are listened to by governments, use the media to influence debate and build effective alliances with other leaders.

Labor and the unions

Unions formed the Labor Party and continue to exert considerable influence over the way it operates. Unions control 50% of the votes at party conferences; more when you take into account the branches they dominate. They also provide most of the party’s funds, via fees levied on their members, and stump up extra cash for elections.

A career as a union official is still your best bet if you want to become a Labor MP. By The Power Index‘s reckoning, 40% of Labor’s lower house MPs (including Craig Thomson) are former trade union officials. In the Senate, it’s a stunning — some would say disturbing — 80%.

The largest unions are on the right, and that’s the faction that dominates the Labor Party. The most powerful right-wing unions are the Australian Workers’ Union, the Shop, Distributive and Allied Employees’ Association, the Transport Workers’ Union and the National Union of Workers. The most powerful left-wing unions are United Voice (formerly the Liquor, Hospitality and Miscellaneous Workers Union), the Australian Manufacturing Workers Union and the Construction, Forestry, Mining and Energy Union.

Not all unions, it’s important to note, are affiliated to the ALP. Two of the country’s three biggest unions, the Australian Nursing Federation and the Australian Education Union, are not tied to Labor and the Victorian branch of the Electrical Trades Union recently severed its Labor links.

Unions under Gillard

Gillard’s rise to power has been a godsend for the union movement. While Kevin Rudd could barely bring himself to say the u-word publicly, the new PM, a former industrial lawyer, is a true believer. It was Gillard who crafted the Fair Work Act, which has given union officials better rights of entry to workplaces, scrapped individual agreements and enshrined collective bargaining, the unions’ preferred model, at the centre of our IR system.

Since becoming prime minister, Gillard has continued to deliver for the unions. She has brought union leaders into the tent through forums such as the Climate Change Roundtable and ticked off an extraordinary amount of union-friendly policy. Over the past year alone, the government has abolished the Australian Building and Construction Commission, created a tribunal setting pay rates and conditions for truckies, supported the Australian Services Union’s pay claim for community sector workers, overhauled the shipping industry, passed new anti-dumping laws and doled out manufacturing industry handouts.

That’s not to say our Union Heavies have been given everything they’ve wanted, or that they haven’t had to lobby hard to get their way. But they’re likely to look back on the Gillard era as a golden age if the Coalition sweeps to power at the next election.

Unions were systematically excluded from policy-making in the Howard years, and insiders expect it to be the same under Tony Abbott. “We’re going into the winter of discontent,” one senior union official told us. “The sun is going to set soon and we’ll be in different times.”

*See the 15 contenders for the Union Heavies list at The Power Index