Current Policy Issue: Collective Bargaining under the Fair Work Act 2009 - Literature review Example

Current Policy Issue: Collective Bargaining Under the Fair Work Act 2009(Cth) Student’s Name Course Tutor’s Name Date Introduction According to Sandford (1985, p. 4), a policy is “a set of decisions which are oriented towards a long-term purpose or to a particular problem”. Policies are coordinated mainly by politicians in an attempt to ameliorate problems that exist in the society. Policies can include government instruments such as regulations, quotas, taxes and subsidies among others (Sandford 1985). Following the above definition, this paper has identified the collective bargaining provisions in parts 2-4 of the Fair Work Act 2009 (Cth) (hereunder FW Act) as the policy issue for discussion. Unlike the past workplace relations systems that included different streams of making agreements between the employer and the employee(s), collective bargaining in the FW Act requires a single stream of making enterprise agreements, and through the requirement, it forces employees and employers to take a more collaborative approach during the negotiations. When it was first introduced, scholars such as Forsyth (2012) drew similarities between the FW Act (in relation to the collective bargaining provisions) and the National Labour Relations Act 1935 (NLRA) of the US. This paper will therefore draw the similarities and differences between the FW Act and the NLRA, determine how the two affect businesses in their respective countries, and make conclusions about which of the two is a better policy choice. This paper however recognises that Australia and the US are two different countries, whose social, cultural, political, economic and legal environments may require different policies for similar situations. As such, the determination of which of the aforementioned policies would be a better choice will be based on their usefulness in the different countries where they are used. FW Act and NLRA Parts 2-4 of the FW Act are better understood within the larger context of the Act, which states its overarching objective as the provision “of a balanced framework for cooperative and productive workplace relations that promote national economic prosperity and social inclusion for all Australians” (FW Act 2009, section 3). In section 3 (f), the Act indicates that the emphasis on collective bargaining is meant to achieve productivity and fairness, which is underpinned “by simple good faith obligations”. According to Cooper and Ellem (2008), the FW Act had a clear policy purpose intended to encourage collective bargaining. Evidently, the policy aim was a shift from past government regimes (especially from 1996 to 2007), which placed no obligations on the employer to recognise employees’ preferences as expressed in collective bargaining agreements. Additionally, FW Act recognised that individuals had a recognisable right to bargain for an agreement. Forsyth (2012, p. 211) identifies “the promotion of democratic values” as another policy objective that the Australian Labour government intended to attain through the collective bargaining provisions of the FW Act. In other words, the Labour government aimed to see the will of the majority employees prevail in workplaces, especially if they (employees) wished to bargain with the employer. Other democratic elements in the collective bargaining provision provide for the employees’ rights to representation, freedom of association, and freedom from discrimination (Rudd & Gillard 2007, p. 12). Enhancing workplace productivity is also another policy goal that parts 2-4 of the FW Act sought to attain (Forsyth 2012). Through collective bargaining for enterprise agreements, it is argued that employers and the employees would have the chance to link pay and benefits to productivity in the workplace. Additionally, employers will have a chance to indicate the financial situation of the company, thus providing a clearer indication to the employees to the need to boost productivity (Forsyth 2012). In the FW Act, the Australian government had intended collective bargaining to occur voluntarily, when employers and employees “are unable to successfully bargain together” (Forsyth 2012, p. 212). In that case, the FW Act has provisions that can compel a reluctant employer to bargain with the employees; good faith bargaining; dispute resolution under scope orders; facilitation for collective bargaining in the case of low-paid workers; and the involvement of FWA in resolving bargaining disputes. ‘Similarities and difference between the FW Act and the NLRA Several similarities exist between the FW Act and the NLRA. They include: both promote collective interests in employment relations over individual interests; both encourage collective bargaining; they promote employees’ free choice, but this also implies that the majority rule in a democracy; and both perceive collective bargaining as a way of enhancing productivity and the attainment of economic goals. Despite the above noted similarities, the major differences between the FW Act and the NLRA are evident in the paths that the different legislations set out to achieve its goals. In Australia (under FW Act), a union does not need an elaborate certification or recognition as is the case in the US as indicated hereunder. FW Act part 2-4 indicate that representatives for both the employer and the employees can bargain the enterprise agreements, and by so doing, does not make any mention to unions. The representatives on either side can be an association, a consultant or a lawyer. Technically, this means that enterprise agreements under the FW Act are made between the employer and the employees. A Union can only become a party to an enterprise agreement if it notifies FWA of its wish to be covered, and if it has previously represented its members as a bargaining representative. . In the US however, there is a requirement for the National Labour Relations Board (NLRB) to conduct an election to determine whether a union enjoys majority support, and only then (i.e. when NLRB determines that a Union is endorsed by majority employees) is the union certified (Gould 2004, pp. 45-47). Alternatively, unions can organise campaigns to obtain voluntary recognition from employers, in which case they would not need to go through the NLRB elections (Estlund 2010; Gould 2008). The problem with the latter alternative is that employers may refuse to acknowledge/recognise the union. Should the recognition be denied, the union would then need to file a petition with the NLRB. The petition should however be supported by proof that 30% of all employees in a specific workplace or bargaining unit support the union (Estlund 2010). Based on the Challenges that unions face in their attempt to gain certification and recognition, the certification process has been blamed for contributing to the “bargaining decline in the private sector” (Adams 1999, p. 97). It has also been argued that with employers well aware of the difficulties that unions face while trying to gain certification, they are better positioned to oppose labour unionism, and may even be indirectly lobbying the opposition against union recognition (Gall 2010). Another difference is that the FW Act has a pluralistic approach to employee representation in the collective bargaining rights. Creighton (2010) specifically observes that an Australian employer may have to deal with multiple employee representatives covering diverse parts of the workforce. On the other hand, employers in the US are obliged to bargain with unions that have been certified by the NLRB, with the resulting agreement applying to unionised as well as the non-union employees as indicated by Gould (2004). Should the bargaining reach an impasse, the FW Act has provisions that allow the employer to table the offer to employees who cast their votes to determine whether they will take up the offer or not. In the US however, when the union and the employer reach an impasse, the employer can implement the final offer as indicated in the impasse doctrine. Analysis (Effect on FW Act and NLRA on business) and conclusion According to Nienhueser and Hossfeld (2011), the legal and regulatory system in each country lays the framework in which trust between the employee and employer exist. A closely negotiated agreement like in the case of Australia would be expected to enhance trust between employees and employers, while a not-so-closely negotiated agreement like in the case of the US would make the trust levels between employees and employers lower. The latter observation is evident in Bronfenbrenner’s (2009, p. 9) observation of the US situation indicating that “for years fewer and fewer workers have tried to use the NLRA, and fewer have been successful...” In other words, the US workers may have lost trust in NLRA’s ability to facilitate bargaining agreements. Additionally, Forsyth (2012, p. 222) observes that “prioritisation of the competing objectives of individual rights and employee free choice has undermined the attainment of collective interests” in the US. In Australia on the other hand, the FW Act although facing initial resistance from some employers is largely perceived as a policy instrument that advances the workers bargaining power. In future however (and assuming that no major changes will be made to it), it is highly likely that it would increase the trust levels between employees and employers owing to the proximity of collective bargaining processes as suggested by Nienhueser and Hossfied (2011). As indicated by Hayter (2011, p. 1), collective bargaining agreements can “facilitate commitment to improve work organisation, skills and productivity in return for employment security and a share in gains”. In view of the aforementioned therefore, it can be argued that the FW Act part 2-4 is a better policy framework than NLRA because it appears to have the potential to enhance collective bargaining in Australia – something that the NLRA has failed to do in the US. This paper however wishes to acknowledge that the success of the FW Act is highly dependent on the Australians’ socio-cultural orientation that according to Brody (2010) is more receptive to collective bargaining rights than the US society. 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