International approaches to solving the ‘free rider’ problem in industrial relations

If union representation was a purely private transaction, with service delivered only to those who pay for it, then individual members (‘consumers,’ in this view) could decide for themselves if those services justified the payment of dues. But if the benefits provided by unions cannot be individualised and privatised, then this transactional vision of union activity breaks down. The provision of any public good inherently encounters what economists have termed the ‘free rider problem.’ If the benefits of the public good are shared universally, in ways that cannot (or should not) be limited solely to those who directly pay for it, then others can enjoy their provision without contributing financially (free riders). And if production of the public good is not then supported by resources obtained through alternative channels (other than individual voluntary payments), the good or service will not be sustainably produced in adequate quantity. In extreme cases, the production of the public good becomes unviable and ceases entirely.5Industrial relations systems around the world have approached this free rider problem in various ways. This commentary reviews the nature of the free rider problem in collective bargaining, considers its dimensions in international perspective highlighting Australia’s unique experience with industrial relations free riding, and then catalogues six broad approaches adopted in various jurisdictions to solving the problem and sustaining viable trade unions and collective bargaining.