The ‘White Australia’ policy is associated with the Immigration Restriction Act in 1901 and the exclusion of ‘coloured’ labour from Australia. After 1901, however, union lobbying turned against the remaining ‘coloured’ residents in Australia, demanding that they be excluded from employment. In 1911, in a new phase of the policy, ‘white’ unionists were granted preference of employment. Although ‘White Australia’ continued as the dominant ideology of Labor unionists, there was a growing reluctance to accept this extreme form of discrimination against ‘coloured’ residents. This paper examines union racism at a local level, focusing on the period from 1911 to 1937. The relationship between North Australian Workers’ Union and the ‘coloured’ waterside workers of Port Darwin is used to demonstrate how union attitudes were challenged, not only by left-wing ideology, but by their personal experiences within the local multi-ethnic community.