Industrial Relations Reforming in Australia - Essay Example

Title: Name: Institution Name:   In the late 80’s and early 90’s, Australia experienced pressures to reconfigure its workplace relations arrangements so that it can conform to neo-liberal notions of flexibility in the labour market. Significant reforms were made in the late 80’s and early 90’s. A series of reforms which include the Industrial Relations Reform Act 1993 and the Industrial Relations Amendment Act (1992, 1994) were introduced by the government that was in place, that allowed a collective agreement for individual enterprise and encouraged the spread of enterprise bargaining. In Australia, this was exacerbated by financial and trade liberalization. Since early 80’s, the government realized that Australia’s industrial relations were poorly aligned with the changes that were taking place in the country’s economy. Australia government undertook radical employment relations reforms in the late 80’s and early 90’s, followed by nearly a decade of adaptive change (Birmingham, 1997). After Labor government being in power for 13 year, a coalition government was elected (comprising of National Party and Liberal Party) in the general election of 1996. This coalition government was subsequently re-elected in 1998, 2001 and in 2004, before being defeated in Labor Party in the Federal elections that took place in 2007. Labour law policy and Industrial relations were critical aspects of the Coalition’s social and political platform throughout the coalition government was in power and in pursuance of these employment reforms the coalition government introduced legislations that touches on employment relations (Birmingham, 1997). During the period that the Coalition government was in-power, a stream of legislation that deals with employment relations were introduced, with the major changes were found in its Work Choices (or Workplace Relations Amendment) Act 2005 and its Workplace Relations Act 1996. Numerous arguments has been put forward about the rationales on the legislative changes, particularly in its 2005 form, which revolutionalised Australian labour law standards. These changes include the desire to make employers and workers for making arrangements in the workplace that suited them rather than such arrangements entrenched by employment or industrial tribunals, restore managerial prerogative, the desire to reduce the complexity of workplace regulation and associated costs upon employers, the desire to increase productivity, the desire to replace adversarial workplace relations with a more co-operative system and so on. These were some argument brought forward by the government to redistribute wealth from capital to labour to a system and protect workers which was also concerned with making businesses in Australia to be competitive ones. Non-standard work has long been a feature of employment relations and Australian labour markets. In the past, non-standard work was regulated through the award system. Hence, it was difficult for businesses in Australia to access to and organization of non-standard work, historically; it was not a simple matter of businesses or employer choice. But after the passing of Workplace Relations Act 1996, this position of non-standard work was changed considerably, and in return, employers were provided with incentives that enable them to engage with workers under different arrangements for non-standard work. Empirically it has been found that non-standard work have been on the rise since early 90’s, and has continued to rise after Workplace Relations Act 1996 legislation was introduced (Birmingham 1997). These changes into industrial relations were responsible to growth in temporary employment in the Australian service sector (Waring 2003). However, between 1980 and 1990, the labor government chose to adopt an adaptive approach to reforms in the labor market, the government encouraged, rather than imposed labour market flexibility. The key measures that were set by the government in the same period were designed to promote incidence of enterprise-level bargaining (Birmingham 1997). In the past, salaries or wages of workers in Australia was determined by industrial tribunals working under arbitration powers. When the Australia government introduced enterprise bargaining there was a decline of awards as pay-setting instruments while importance of agreements or contracts increased from the early 90’s onwards (Meadows 2007). Empirical research in the post-1990 period has shown the continuation of this trend. For example, the number of workers getting their wage rates from awards has declined from 24 per cent in 1999 to 19 per cent in 2005. On the other hand, establishment of Australian Fair Pay Commission (AFPC) represented a clean break whereby for more than a century, the minimum wages was fixed by industrial tribunals in the processes that resembled the judicial proceedings. In places where there is evidence and examination of parties, the Australian Fair Pay Commission (AFPC) has been given power by the constitution to fix minimum salaries or wage, or not to amend the worker’s minimum wage or salaries according to their discretion, and in a manner of its own choosing. A comparison can be drawn between the UK Low Pay Commission (introduced by the British Labour Government in 1998) and Australian Fair Pay Commission (AFPC). The new institution that was formed by the government has been found to have the capacity of maintaining minimum wages (Birmingham 1997). Prior to 1996 minimum standards of employment, as laid down in legislation and awards, were non-derogable, but these regulations were changed when the government introduced the Workplace Relations Act in 1996 which reduced the number of mandated standards through the process of “award simplification” and at same time it facilitated the avoidance of many minimum standards by agreement between the parties involved. In 2005 amendments were done in the Work Choices, which minimum standards legislations were introduced, additionally, introduction of legislations that makes it easier for parties to negotiate sub-minima employment conditions. The public policy in Australia supports the idea of a workplace environment that is free of discrimination based on gender, race, age, disabilities, marital status, sexual preference, religious beliefs, cultural and ethnic background. The government has put in place statutory legislation that protects workers from being fired or dismissed unfairly from their employment. The government has put in place legislation and workplace policies and procedures that will help to prevent and deal with discrimination against employees (Birmingham 1997). These measures have been put in place to protect the basic rights of employees to a discrimination-free workplace. Sometimes, people have been found to be cruel to one another in the workplace so all forms of discriminations or harassment in the workplace is unacceptable. Even ‘jokes’ such as ‘having a bit of fun’ or name calling can be considered discrimination, harassment or bullying by victim. For example, prior to the passing of the Anti-Discrimination Act 1977 legislation, groups such as migrants, women and indigenous (Torres Strait Islanders and Aboriginals) people were often discriminated against in the workplace or kept out of jobs. In ordinary circumstances, workers are protected from termination of work judged as ‘unjust, unreasonable or unfair’ by the Workplace Relations Act 1996. The Work Choices (Workplace Relations Amendment) Act 2005 has introduced amendments to unfair dismissal laws in the Workplace Relations Act 1996. Basically, those businesses that have employed not more than one hundred works are exempted from unfair dismissal. This means that such businesses can terminate a workers contract on the basis of ‘genuine operational’ grounds. Workers’ compensation law in Australia is governed by statutes in every state. Different jurisdictions have different workers’ compensation law but key features are consistent. A worker will be entitled to receive benefits or compensation when he/she suffers and accidental personal injury or occupational disease arising out of employment. Such benefits may include wage-loss or cash benefits, career and medical rehabilitation benefits. The Australian government has enacted provision that provide security for employees who are disabled by disease or injury (Meadows 2007). Return to work legislation requires companies to attempt to re-employ a disable employee provided is within 12 months when the accident occurred or disease onset. But the return to work obligations cannot apply if it is not practicable to provide duties or an employee has been dismissed from work on the grounds of willful or serious misconduct (McCallum 2008). The Fair Work Act 2009 has replaced institutions that the Labor Party and the union movement have seen as significant important in providing a fair and balanced employment relations system. The government has managed to replace the Australian Industrial Relations Commission with Fair Work Act, which was in charge of industrial relations for many decades. In addition, The Fair Work Act 2009 have a provision that removes arbitration in resolving disputes except in special circumstances, and with an agreement that exclude a worker earning more than AUD 100,000 from award coverage. This Act represents a change from Labor’s past industrial relations platform (McCallum 2008). For the union movements in Australia, the Fair Work Act 2009 gives more powers for the unions to influence wage or salary negotiations and have a greater presence at the workplace, including non-union workers, and this has been made possible through increased union rights to entry and union access to workers or employee records. Unions have more influence through increased rights in the bargaining process (Meadows 2007). For example, an employee who is in a union has a right to take part in the bargaining process, thus this has reduced the ability of organizations to negotiate a totally non-union agreement. Another important provision about this act and for the unions is the reemergence of modern awards that can be used as a benchmark for collective bargaining. Additionally, the review of minimum terms and conditions after every four years has increased the input for unions in the process of wage or salary determination. Under the Act, if an organization refuses to negotiate with its workers, a union can ask FWA to compel the organization to bargain with its workers in good faith. Other provision in the Fair Work Act 2009 is that it has increased the scope for arbitration by FWA, mainly for low paid employees who are not properly defined under the Fair Work Act 2009 (Australian Labor Party 2007). Under the Fair Work Act 2009, an enterprise agreement between employees and employer cannot be made unless approved by a majority of workers voting (Committee 2009). This could mean a simple majority of those voting at enterprise or workplace to approve an agreement. In the provision, the Fair Work Act 2009 doesn’t state the minimum number of employees which are allowed to vote for it to be valid (McCallum 2008). For example, if the few employees voted and if 50 percent plus one among the workers is in favor of the agreement, then the agreement will be valid. Another provision that has received little attention in the Fair Work Act 2009 is the green light that has been given to multi-workers or multi-employees agreements (Meadows 2007). This agreement has been in place since the formulation of enterprise bargaining introduced by the Labor government in the early 90’s. However, there many hurdles that in way of multi-employees agreements. For example, multi-employees agreements were only approved when they were in the interest of the public. These restrictions were removed by the Fair Work Act 2009 (McCallum 2008). Importantly, the provisions in the Fair Work Act 2009 would encourage workers in the service sector such as construction and transport to take wages or salaries out of competition by making industry level deals and having these deals processed as a multi-worker or multi-employer ‘enterprise’ agreements. Another reform that has been introduced which the government committed itself prior to the 2004 election, is the introduction of Independent Contractors Act, which was designed by the labour government to enhance and protect the freedom to contract and to encourage independent contractors (Committee 2009). The main problem of this reform is that some of the employers may take an advantage of this legislation to establish contractor arrangements that are bogus with some of their workers (McCallum 2008). On the other hand, the government has put in place measures and civil penalties for organizations that intentionally avoid employer responsibilities through setting up bogus contracting arrangements. It was a key theme for the Prime Minister’s speech in May 2005 that the reform package (Meadows 2007). In those reforms, workers will be given choices whether to remain in already existing award system or to enter into workplace agreements. These choices has ensured employees and employers to agree freely on terms and conditions that best suit their mutual needs when it comes to an agreement (Australian Labor Party 2007). The Labour government has simplified the country’s unfair dismissal laws. Many reforms have been made in the Fair Work Act. As mentioned earlier, employees are not allowed to dismiss workers unfairly within the first 6 months of employment. As stated in the Forward with fairness, under Fair Work Act 2009, all Australian workers have been covered by unfair dismissal provisions. However, those companies that have employees that are less than 15 must be employed for not less than one year before they are eligible for unfair dismissal protection, while those workers that are employed in large organizations or companies or firms are supposed to wait for six months before they are eligible for unfair dismissal protection (McCallum 2008). The reforms made in various legislations have changed the shape and structures of trade unions in Australia over the past decade or so. Currently, membership in the trade union has decreased since the introduction of government reforms in the early 80’s and, recently, these memberships stood at just 30.2 percent (Australian Labor Party 2007). These changes have been contributed by the growth of casual employment and part-time, changes in the industrial composition of workers, changes in management strategy, decline in the incidence of compulsory unionism and decline of public sector employment (Committee 2009). However, government legislations have help in the facilitation of changes in the Australia’s trade union structures. In the past, structures in trade unions used to represent or reflect occupational and craft distinctions, hence large number of trade unions used to exist with an average trade union having few number of members that are spread across many companies (Committee 2009). For a company perspective, such arrangement was highly inefficient since many organizations were dealing with more than one trade union. Additionally, trade union structures that were on occupational basis, as distinct from an enterprise or industry basis, cannot take into account the problems of individual enterprise when bargaining. From the perspective of the ACTU, larger and fewer unions are needed in Australia because of economies of scale in order to eliminate inter-union rivalries and conflict that was there in the traditional craft, and because of economies of scale in provision of services (Australian Labor Party 2007). Reference List Australian Labor Party (ALP). (2007). Forward with fairness: Labor’s plan for fairer and more productive Australian workplaces, April. Birmingham, A. (1997) ‘A Guide to the Workplace Relations Act 1996’, Australian Bulletin of Labour, 23(1): 33-47 McCallum, R. (2008). FairWork Act to bring stability after 20 years of constant IR change. Workplace Express,24 November. Meadows, P. (2007). A review of the economic impact of employment relations services delivered by ACAS. London: National Institute of Economic and Social Research, November.Senate Employment, Workplace Relations and Education Legislation Committee. (2009). Fair Work Bill 2008 (Provisions), 27 February. Canberra: SEWRELC. Senate Standing Committee on Education, Employment andWorkplace Relations. 2009. Public Hearing on the FairWork Bill 2009, Sydney, 18 February. Canberra: SSCEEWR. Stewart, Andrew. 2009. Bill should include drop-dead date for old IR instruments. Workplace Express, 14 April. Read More