What has come to be known as the ‘dependency’ theory of Australian trade-union development is associated with William Howard, whose work draws on the experience of the Commonwealth Court of Conciliation and Arbitration (the Court) under its second president, Henry Bournes Higgins. Central to this theory is that unions had no need to organize at the workplace as they acquired ‘de facto recognition’ in their dealings with employers once registered under arbitration legislation. This paper explores two related assumptions that underpin Howard’s thesis. First is that under arbitration the role of Australian unions was limited to facilitating the Court’s dispute-settling function; the second, a corollary of the first, relates specifically to the benefits accruing to unions and their members upon registration under the Act. Both removed the need for unions to develop strong workplace organization and be responsive to members’ needs; hence Howard’s description of Australian unions as ‘cogs in the bureaucratic machine’. The paper concludes that there is merit in the second assumption but not the first, given the collaborative relationship that developed between Higgins and Australian unions.