Australia was not immune from the wave of employee participation that swept the globe in the 1970s. Governments at national and state levels developed policies for employee participation. The South Australian Labor government of the 1970s was arguably more proactive in promoting industrial democracy in a broader sense than any other Australian government. For a short period, it led the debate in Australia on these issues and contributed to international debates. This article traces the course of the South Australian experiment, and in the light of recent theoretical developments, attempts to explain the experiment's demise.