ABSTRACT
This article examines the evolution of power relations between the Labor Council of New South Wales and state Labor governments, culminating in the dramatic 2001 workers' compensation dispute. An emerging body of theory on peak union power and agency is surveyed and adapted to help explain the significance of the dispute in a theoretically and historically informed manner. Drawing upon archival material and interviews with key union and government sources, it is argued that the exceptionally militant actions of the Labor Council leadership during the dispute were a strategic response to a crisis in the peak union's role as an agent of political exchange between the union movement and the government. Furthermore, the Labor Council was addressing a related crisis in its role as an agent of mobilisation within the union movement. This has important implications for ties between unions and the Labor Party generally.