Fair Work Act 2009 Based on the Pluralist Frame of Reference - Essay Example

? Business Table of Contents Introduction 3 Frames of Reference 4 Fair Work Act 2009 based on the pluralist frame of reference 7 Conclusion 13 Reference 15 Bibliography 16 Introduction Recent developments in the field of human resource management and industrial relations have moved managements and employees’ bargaining power down to the level of the firms. This has generated new areas of interest in the conducting of employment relations in organizations. This is not just to the level of specialist managers who generally has the responsibility of dealing with such issues but rather across the entire management of firms. Firms have also faced with a growing need for emphasizing more on the alignment between commercial objectives and employment practices in the organization. The research identifies the logics of managerial authority and also its legitimacy; and the way value systems and personal assumptions held by managers can predispose them to perceive workplace relations and characteristics of work in particular ways. The paper researches on some of the contemporary theories within the domain of such systems. It analyzes the way judgments made about the worth of these theories are shaped by the value systems and the set of assumptions that people hold towards the workplaces. The analysis works as a guide towards evaluating one’s own value systems and assumptions by application of practical theories to the real world concepts. The discussion revolves around the concepts identified by Alan Fox (1966, 1974) as a means of classifying the various assumptions that people hold towards workplaces. The three frames of references which he refers to in his arguments are the unitarist, pluralist and radical (Marxist) assumptions. The project brings forth arguments for the Fair Works Act 2009 being significantly grounded on the pluralist frame of reference. The specific clauses within the act which supports the argument are identified and put forth (Abbott, p.187-189). Frames of Reference Every individual have different manners of opinions regarding the events that they witness in their day to day lives. These opinions are largely shaped by their families, friends and also circumstances such as the jobs they carry out in their respective fields, churches and clubs that they patronize, the communities they belong to etc. Because of the fact that that works is an essential part of people’s lives, its characteristics and nature is regarded as an important social phenomenon which evokes passionate debates. These debates are popularly framed in terms of the values and assumptions that individuals use as reference points while perceiving their governance and nature of works. This has generated the term ‘frame of reference’ by Alan Fox (1966, 1974) as a way of categorizing the various opinions and propositions put forth by people towards these issues (Abbott, p.191). Fox has claimed that these frames of references capture the recent opinions which he defined with regards to the credentials of the unitarist, pluralist and Marxist approaches. The idea is to understand that two different interpret two different situations differently and arise at two different conclusions from the very same phenomenon. The meaning that Fox applied to his frames of references is that differences in values and assumptions about workplace relations, nature of works and conflicts at the workplace generate differing theoretical explanations and conclusions about the matter. The popular theories which have generated out of these are unitarist, pluralist and Marxist concepts (Abbott, p.191). The unitarist views begin from the values and assumptions which say that conflicts are not considered an inevitable characteristic of relationships between employees and managers. It is possible for conflicts to arise on periodic basis. However, such occurrences are regarded to be aberrations in relationships which are inherently tended to be cooperative. People with this perspective perceive managers and employees as having the same interests in the survival of the organizations, such that during the arousal of conflicts they would not manifest itself to the situation which could render the firm insolvent. The existence of divisions are regarded to be products of personality disorders, improper HR practices in recruitment, selections and promotions or poor communications. In order to ensure that such differences do not result in distorting the natural order of things the management teams must be cautious about eliminating the potential sources of conflicts. Thus practices of recruitments and promotions must be conducted in fair order; communications must also be conducted efficiently such that employees are rightly directed towards important areas of interests; and finally those who are tended to be conflicting in nature must be either suppressed or eliminated from the system. The unitarist view strictly regards organization as the single and main authority and disregards other sources of authority as trade unions (Bendix, p.20). The pluralist thought differs significantly from the unitarist approach in that it begins right from the assumption that they do not regard workplace conflicts as inevitable. It considers businesses as complex and social constructions comprising of different interest groups. The workforce and the management are two of these interest groups. Arising out of the basic structure of factory systems these groups invariably subscribe to two different objectives and values. Thus potential sources of conflicts are inevitable to exist at the workplace between managers and workers in areas of task allocation, rewards etc. This thought regards it crucial for organizations to bring out the grievances of the workforce and instill a culture in which the management looks for innovative ways of handling the conflicts in such ways which yields the best results. By acknowledgement of the prevalence of multiple and competing sources of authority, the pluralist views regard organizations to deal with issues of industrial relations on a collective platform. Not only does it provide the management with institutionalizing employment rules and regulations which minimizes conflicts at the workplace but also encourages fairness in outcomes and enables the workforce to counter balance and organize the power and authority of managers through negotiation of workplace contracts. The pluralist thought thus accepts the legitimate rights of employees towards collective bargaining and allows trade unions to take action in this capacity on behalf of the workforce (Abbott, p.193). The Marxists frame of reference seems to have become redundant in the views of the breaking up of the Soviet Union and also the collapse of communism in Eastern Europe. The decline of the radical thinking in the west is also a reflection of the failure the Marxist principles. However, numerous studies from this particular school of thought continue to remain influential because they happen to be grounded on vastly different assumptions regarding the nature and causes of conflicts at the workplace. Secondly they also act as varied critiques to the last two schools of thoughts and their associated theories. Marx argues that capitalist societies are characterized by perpetual struggle between classes. This struggle arises out of the phenomenon of unequal distribution of wealth and the skewed nature of ownership of means of production. While majority of society’s wealth remains in the hands of few people or the bourgeoisie and capitalists of society, the large mass of workers or proletariat retains nothing apart from their labor to sell. The nature of capitalism forces the capitalist class to extort surplus labor from the workforce and it also indulges in ruthless competition amongst each other. This dynamic was noted by Marx as forcing capitalists to reduce the number of workers and also drive down their wages. As the workforce comprised of those who were consuming the output of their own labor, every new round of investments made gave rise to its own inherent contradictions (Abbott, p.194). Fair Work Act 2009 based on the pluralist frame of reference The Fair Works Act formulated in 2009 is a replacement of the Workplace Relations Act which effectively restores many of the rights which were taken away from workers in Work Choices. The new laws are particularly formulated for restoring the balance of the working class in Australia. The tide has been greatly in favor of the workers who were confronting with tremendous job insecurity at the workplace on account of the terrible global financial crisis and economic recession. The major areas of improvement of the rules towards workers are unfairness in dismissal from the workplace; safety net covering security of pays, number of working hours, rest breaks, rates of penalty; rights pertaining to collective bargaining of workers; industrial umpire for settling disputes; no new workplace agreements individual contracts; and finally the right to be a member of the unions and representation. The act particularly seeks to improve good faith bargaining (Sappey, Burgess, Lyons & Buultjens, n.d., p.273). This requires participating and attending meetings at regular intervals of time. It also talks in favor of disclosing of relevant and important information in timely manner and the importance of responding to proposals in timely fashion. The other essential component of the act is the need to give genuine consideration to proposals from the representatives of bargaining and also providing reasons for the various responses to the proposals. The Act particularly tries to refrain from unfair or capricious conduct which undermines the freedom of association of workers and their power to bargain collectively. It also recognizes the ability and authority of workers to bargain with other bargaining representatives at the workplace. The strongest point of the Fair Works Act of 2009 is its provision of bargaining power of workers. The good faith bargaining provisions are a lot better in terms of sophistication as compared to the previous legislative experiments at the individual as well as the state level. It has particularly tried to incorporate lessons from previous Australian experiences and also international experiences. Some of the areas in which it has tried removing loopholes and drawbacks taking instances from foreign overseas bodies such as the National Labor Relations Board (NLRB) in United States are the supporting of the facilitative powers of FWA with the hierarchy of penalties and orders. In this way the Act overcomes the enforcement powers of such bodies and has made bargaining processes more efficient, pronounced and productive. By non adoption of the requirements of bargaining to agreement conclusion in New Zealand, the legislation in Australia retains its faith and commitment to the non imposition of arbitrary outcomes or demanding concessions by the negotiating parties when bargaining has already been conducted in good faith (Business Council of Australia, n.d. p.1-2). Since the pluralist school of thought considers the bargaining power of workers as legitimate and essential for their welfare at the workplace this Act is considerably in alignment with the pluralist thoughts. The Act has played the additional role of rationalizing the basics of bargaining of workers and ensuring their provisions. The most advantageous point of this act is that it ensures that if the proposals put forward by workers are rational and based on fair grounds the results would definitely be favorable for them. Thus if the worker’s wages are lower than industrial standards and he demands a fair compensation by higher wages, this could be ensured through collective bargaining. The employer is bound to provide him with fair wages. This is largely in accordance with the pluralist approach which considers bargaining power of workers as an essential component in the organization which he can use to his advantage and avoid getting exploited or subjugated at the workplace (Business Council of Australia, p.1-2). The Fair Works Act has multiple areas grounded on the pluralist thinking. This is particularly with regards to the strategic thinking generated by Dunlop (1985). The changes or advancement made in the fair Works Act 2009 in Australia over the previous legislations is a reflection of the contemporary changes in the manner in which industrial relations were being perceived in organizations. The first change which is noted in the strategic choice theory based on pluralist thoughts is the determination of the ways in which managers’ deal with issues related to industrial relations in the organizations. The important feature of the act is that it recognizes the interrelationship between decisions and activities across the different levels of the system of industrial relations. Consequently a decision undertaken at the strategic level regarding the introduction of technologically enhanced capital equipments would certainly result in ramifications in areas of collective bargaining for the future levels of training and manning. It would also have ramifications with regards to workplace relations in case the jobs are required to be reorganized or the manning levels are to be altered. The Act recognizes the effects of the strategic decisions of the management on the different actors in the system. For instance strategic decisions undertaken by the government on the macroeconomic policy settings and structures would have a direct influence or impact on the long term investment strategy of the company. This is particularly if the company regards that such changes would have an impact on the bank rates. In case it is felt that the rates would rise and consequently diminish the existing manning levels then it would have a direct impact on the future employment strategies of the organization, its human resource management strategies, collective bargaining positions and also the conduct and nature of industrial relations at the workplace. The immediate consequences of changes in manning levels or reorganization of work structures is that it tends to trigger workforce downsizing or optimizing which consequently reflects through dismissal of employees from employment which can be both on fair as well as on unfair grounds. The Act forms a strong ground favorable towards employees by disallowing employers from removing them based on invalid grounds. Some of the components which are highlighted by the Act and which identifies dismissal of employees is provided below. For instance dismissals can be regarded as unfair if it was based on unfair grounds with regards to the person’s conduct or capacity, or even when the person was not notified about the reason before. The Act considers whether the person was provided with any opportunity to respond to that particular reason or whether the person was allowed to have a support person for assisting him in any discussion with regards to the dismissal. It considers the fact whether the size of the enterprise would be likely to have any potential impact on the processes and procedures of dismissal of the employee. Additionally the Fair Work Act 2009 also considers lack of dedicated specialists or expertise in the field of human resource management has played a role in the procedures involved in the employee’s dismissal from the organization (Anonymous, 2009, p.20-21). The Fair Work Act 2009 strongly establishes clear rules and obligations with regards to enterprise bargaining in organizations. This is in accordance to the pluralist thinking which not only legitimates the rights of employees for collective bargaining but also allows trade unions to act accordingly on their behalf (Sappey, Burgess, Lyons & Buultjens, n.d., p.298). Based on such grounds the act clearly establishes rules and regulations about the processes in enterprise bargaining and the way in which it must occur. It highlights on the content of the enterprise bargaining and the way in which the agreement made must be approved. The emphasis is on the promotion of harmonious, cooperative and productive workplace relations for monitoring, enquiring, investigating and enforcing compliances with the relevant workplace laws (Australian Government, 2009, p.1). Collective bargaining and good faith bargaining are regarded to be inextricably connected with each other. All of the developed nations of the world have endorsed on the aspect of collective bargaining grounded on regulation of terms and conditions of employment and have also tried to establish them in good faith (Anonymous-a, 2009, p.1). As in alignment with the pluralist thought which tries to establish rational means of minimizing workplace conflicts as much as possible and also through the use of negotiation of workplace contracts, the Fair Works Act 2009 also tries to bring about fairness in the workplace relations system on the basis of negotiation of employment contracts at the enterprise level. In order to make the process of collective bargaining effective, the legislation strictly calls for the need for negotiation in good faith. The ways of achieving fairness in the system is laid down elaborately; however, the objective of productivity enhancement is not yet very clear (Sappey, Burgess, Lyons & Buultjens, n.d., p.261). The Fair Works Act 2009 particularly settles the rate of pay of an employee under the enterprise agreement. A worker cannot be paid a wage rate less than the pay rate under the Federal Minimum Wage or the Australian Pay and Classification Scale. In case of distortion of payments from the employment agreement which is made with the workers, they have a right to bargain against it. This is also in accordance to the pluralist thought which highlights on the fact that employees and employers can work together to resolve any conflicting issues at the workplace. Any disputes with regards to pays, rewards and remunerations must be settled on a collective basis between the employer and employees (Sappey, Burgess, Lyons & Buultjens, n.d., p.337). According to the pluralist thought employees and management constitutes of two different groups which have their won interest and objectives. Arising out the basic nature or characteristics of the factory system these two groups invariable subscribe to their own values and objectives. In the very same way, in the present factory system employers have concern over their costs of production of which wages constitute a primary component, while the workers have concerns over the pays they receive from their employer. The Fair Works Act 2009 tries to bridge the gap and eliminate conflicts in this context in the determination of wages. It tries to settle at a common platform where each groups’ objectives as per the pluralist thoughts are satisfied or maintained. In this context it is important to highlight the difference between nominal wage rates and the take home pay. Take home way is the amount of the money that the worker receives after deduction of taxes and other payments from his nominal wage and which represents the money which the worker can spend. Very often it is seen that take home pay depends largely on the bargaining arrangements made between the employee and the employer. This is taken into consideration by the Fair Works Act 2009, which seeks to remove biasness from the system with regards to bargaining arrangements of take home pays of workers. It is ensured that such arrangements are not biased towards employers such that workers fail to get adequately paid for their services. Thus it can be said that the aspect of wage settlement by the Fair Works Act 2009 is dependant largely on the pluralist thoughts (Sappey, Burgess, Lyons & Buultjens, n.d., p.317). Aspects such as working conditions mandated in the Fair Works Act 2009 are also a reflection of its association with the pluralist school of thought. While the pluralist frame of reference brings forth the importance of emergence and understanding of employee grievances and bringing them to the surface, the act similarly makes adequate mandates for employers to providing them with fair working conditions based on some of the key areas of grievances of workers. For instances, workers are tended to be over exploited and deliver extra hours of services by employers. This comprises of one of their major grievances related with working conditions. The Act has fixed the number of hours of work at 38 in a week which must not be exceed over 152 hours in 28 consecutive days. In addition a worker must not be made to work for more than 10 hours in a single day (Sappey, Burgess, Lyons & Buultjens, n.d., p.353). The system also permits awards and agreements to be structured in accordance to the work associated with the industry or the occupation. This in turn allows the ordinary pay rates to be associated with the work classification. In consistency with the labor market, this structure is hierarchical and also consistent with the industrial relations system. It also allows greater precision and accuracy. The work classification structure helps to remove many causes of employee grievances with regards to responsibilities and skills to a considerable extent. The is particularly true as the work classification structure forms the basis of rationality of pay differences as per skills, responsibilities, qualifications or even managerial objectives. This way the Act has effectively catered to removing the industrial relations issues related to employee grievances based on the pluralist thoughts effectively (Sappey, Burgess, Lyons & Buultjens, n.d., p.357). Conclusion The analysis reveals the fact that the Fair Works act 2009 is based on multiple grounds on the pluralistic thoughts. This is particularly with regards to the settlement of minimum wages of workers such that any overtime service delivered by the worker is to be compensated adequately. The very fact that the pluralist frame of reference seeks to bring forth the reasons of employee grievances and resolve them collectively between employers and employees reflects from the fact that the Act encourages good faith bargaining between employers and employees. The Act also resolves the chances of employee grievances with regards to working conditions, pays and remunerations, skills and responsibilities. It removes biasness from the industrial relations system as much as possible through the use of good faith bargaining, which forms the key component of the pluralist thought process. Reference Abbott, K. (2006). A Review of Employment Relations Theories and Their Application. [Pdf]. Available at: http://businessperspectives.org/journals_free/ppm/2006/PPM_EN_2006_01_Abbott.pdf. [Accessed on August 08, 2012]. Anonymous. (2009). Overview – Fair Work Act 2009. Australian Government. Anonymous-a. (2009). Embedding Workplace Collaboration Good Faith. Bargaining Business Council of Australia. Australian Government. (2009). About the Fair Work Ombudsman. Copyright Fair Work Ombudsman. Bendix, S. (2006). The Basics of Labour Relations. Juta and Company Ltd. Business Council of Australia. (No Date). Embedding Workplace Collaboration Good Faith Bargaining. Melbourne: Business Council of Australia. Fact sheet. (2009). Fair Work Act 2009: better rights for working Australians and their families. 2009. Australia: Australian Council of Trade Union. Sappey, R., Burgess, J., Lyons, M. & Buultjens, J. (No Date). Industrial Relations in Australia: Work and Workplaces. Bibliography Morgan, G. (2006). Images of Organization. SAGE. Rees, W. D., & Porter, C. (2008). 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