Role that Governments Have Played in Developing Australia System of Employment Relations since 1980 - Case Study Example

Institution : xxxxxxxxx Title : Packaging Tutor : xxxxxxxxxx Course : xxxxxxxxxx @2012 Introduction In the past years, Australia has experienced great development in its system of employment relations. The relationship between employees and employees and employers and employees has been improved since 1980s. The development has not only harmonized the relationship among management and employees, but also between the workers, employees and the state. Therefore, the three main actors in developing system of employment relations are employers, employees and the government. In Australia, the government is the main actor in developing the system of employment relations. The central and state governments of Australia have played a great role in developing system of employment relations through formulation of laws, agreements and rules. This paper therefore seeks to evaluate the role that governments have played in developing Australia system of employment relations since 1980. For the past two decades, Australian Central and states governments have played great role in reforming system of employment relations. The governments have been concentrating a lot in workplace development so as to improve system of employment relations. The most interesting aspects of workplace development, in Australia, have been the association between changes at micro or enterprise level and macro or institutional level. The interrelationships have been improved by various political parties which have been in power since 1980. Lansbury (2000) argues that several governments, which have been in power since 1980 have played a great role in attaining both the micro and macro economic reforms. The governments such as Hawke labor government greatly assisted in the establishment of enterprise bargaining. As a way of decentralizing system of employment relations, the Hawke Labor government commenced the enterprise bargaining process through the introduction of union movement. This therefore assisted in developing system of employment relations since with the unions, employees found it easier to raise their grievances without affecting their relationship with either the employers or the state. The Hawke labor government developed systems of employment relations from centralized wage determination to managed decentralization. In the first years, when Hawke government entered into power, there was a small return to centralized wage determination. This was part of initial agreement among Australian Labor party (ALP) and Australian Council of Trade Unions (ACTU). In this period, the Hawke government claimed that the collapse of centralized system of employment relations in the previous Liberal-National Party Coalition government (the government that ruled from 1975 to 1983) resulted into economic crisis and stimulated industrial disputation. The Hawke government therefore, in this period, aimed at minimizing the likelihood of renewed price or wage that was highly experienced in periods of more decentralized bargaining. The agreement also aimed at improving the relationship between the unions and the government on matters pertaining economic and social development. However, the main focus of the accord was to minimize inflation. The accord largely highlighted that consultation was essential in transformation of industry, workplace and enterprise levels (Bamber & Lansbury, 2004). In the commission, headed by Professor Keith Hancock, the Hawke government ordered for an evaluation of system of employment relations. The commission recommended the preservation and consolidation of centralized system with major role for Australian industrial relations commission (AIRC). The preservation of centralized system was believed to assist in implementing income policies, which in turn, was to minimize unemployment and inflation levels. The Hawk government, in its first two years in power, did also disclose its aim to nurture industrial democracy and involvement of workers in management, so as to fully engage employees in making of decisions at enterprise level. In 1986, a policy was released, which stated that workers participation is a main government priority. In the policy paper, the participation of workers was also viewed by the government as an important aspect in successful response to essential challenges at the present time (Lansbury, 2000). In the mid 1980s, the time when Australia experienced balance of payment problems and other problems in an economy, the Hawke government adopted managed decentralism system and declined the centralized system. The application of full wage indexation was avoided in 1986 and instead a two-tier system was established. The two-tier system considered productivity increases at enterprise and industry levels as it maintains national wage adjustments’ system. In the national wage case, for instance, the AIRC retained an essential role, which however continued to establish framework for system of wages. The 1988 National Wage Case decision, introduced a structural efficiency principle that was designed to promote parties so as to arrive at collective agreements, such as, the establishment of multi-skilling and wide classifications of work. This therefore, resulted into a period of huge labor market flexibility while preserving old institutional system. In the second half of 1980s, a plan for change in steel industries and automobile manufacturing was established by Senator John Button, who was at that time the minister for industry. These two cases were essential in strategic industries and played a major role in development of Australian system of employment relations. The two cases promoted Australian economy and ensured employment of several workers. In this period, Australian industries obtained high degrees of tariff protection for many years but with time, they became ineffective and were plagued by bad industrial relations. Plans, however, were established by the government to slowly minimize tariffs while establishing major structural transformations and developing the industries. This therefore entailed a strong degree of association between the unions, employers and the government. The government of the labor party greatly participated in developing system of employment relations. It developed Australian system of employment relations to coordinated flexibility. The need to transform system of employment relations was stimulated by constant complains by the Business Council of Australia (BCA), concerning the over-regulation of labor market. The BCA claimed that in order to attain and maintain enhanced competitiveness, it was essential to establish enterprise-based bargaining that is more comprehensive and that either include or does not include union participation. The Business Council of Australia further argued that enterprise bargaining will increase the relationship between management and employees (Blanpain, & Bamber, 2010). The labor government, after its re-election in 1993, played a great role in developing system of employment relations by extending enterprise bargaining. Fairbrother & Rainnie (2006) argue that after the re-election of labor government, further reforms were established so as to extend enterprise bargaining with the Industrial Relations Reform act 1993. Even though, several parts of the Act relied on International Labor Organization (ILO) agreements and recommendations, which makes employment protection powerful and grants a broad range of minimum entitlements, it also incorporated clauses that assisted employers in developing accords with their workers without union involvement. The government of labor party also participated in developing system of employment relations through making of a formal agreement with the union movement. In the accord, the unions accepted to slow down wage demands so as to minimize inflation while the government agreed to make several economic and social changes pertaining employment. The labor government played a role in reforming the labor market. It participated in decentralization of system of employment relations. Lansbury (2000) argue that under the government of labor party, the system of employment relations was highly transformed from centralized system, which was grounded on compulsory arbitration managed by Australian industrial Relations Commission (AIRC) and tribunals of the state, to a highly decentralized system of bargaining at enterprise level. The government also played a role in developing system of employment relations by making labor market more flexible. The flexibility in the labor market was introduced in early 1990s, where the labor government allowed non-union agreements within the workplace (Fairbrother & Rainnie, 2006). Even though this move seemed to be controversial, it paved way for several workplace transformations that ensured the relationship between employees, employers and the state is harmonized. This therefore improved the system of employment relations in Australia. The introduction of non-union agreements such Enterprise Flexibility Agreements (EFAs) was greatly opposed by Unions. The unions argued that EFAs encouraged employers who are willing to dodge Unions to promote a move towards individual employment’s contracts. This kind of fear was experienced in 1995, among Rio Tinto, a large mining company, and Unions at Weipa in northern Australia. Even though the employer, in this case, was found to breach the contract, it however introduced pattern for further disputes within the maritime and mining disputes throughout the years, which were arranged to interfere with the bargaining strength of the unions through urging employees to comply with the individual contracts that employers are providing. The fears led to introduction another non-union agreement, which was referred to as Australian Workplace Agreements (AWAs). The agreement was however fully established by the conservative coalition government. The conservative Liberal-National Party Coalition government, which was voted in power in 1996, played a role in developing Australian system of employment relations. The coalition government introduced fragmented flexibility system. It undertook crucial policy on employment reforms, which caused the relationships with the union movement to be turbulent. Under conservative Liberal-National Party Coalition government, employment transformation was highly controlled by employers’ unilateral acts rather than via unions associations. Blanpain & Bamber (2010) argues that even though the conservative government promised to decontrol markets for labor, its legislation established several laws that controlled Australian industrial relations than in the past. The conservative government argued that the legislation developed several jobs and made the regulation very simple in centralized unitary employment relations system. The coalition government therefore supported individual development rather than collective arrangements for change within the workplace. This government involved in developing individual relationship between employees and employers. Under this move, employees learnt how to raise their demands without going through unions. Employers on the hand learnt how to peacefully attend on grievances of each employee, thus developing system of employment relations. The main aim of coalition government has been to transform the Australian employment relations from collectivist traditions, with powerful unions and arbitration approach, to a more fragmented approach of individual bargaining among workers and employers. The Workplace Relations Act 1996 indicated a crucial decentralization of industrial relations to enterprise level, with wider scope for non-union accords and diminution of AIRC functions. Some of the clauses were however softened by the Australian Democrats. The democrats also declined the government proposals to change the Act in 1999 and 2000 (Bamber, 2010). An essential element of Workplace Relations Act 1996, which is entailed in new Australian Workplace Agreements (AWAs), seeks to encourage employers to involve in either an individual contract or non-union agreement with their workers. These agreements have played some roles in controlling wages and conditions, thus promoting system of employment relations in Australia. The agreements have also proved to be essential political symbol and part of government plan to promote individualized, non-union forms of controlling employment. Current analysis pertaining non-union agreements, such as AWAs, has shown that several strategies are being employed by employers in unions that are not very strong and workplaces that are non-unionized so as to attain enhanced productivity and performance levels. Some companies have implemented refined human resources system by concentrating on high quality results, while others have majorly concentrated on costs minimization (Townsend & Wilkinson, 2011). An attempt to attain improvement in system of employment relations, through fragmented flexibility system, is well depicted in Patrick Stevedores case. Patrick Stevedores Company tried to attain radical workplace transformation, by not involving the Unions. The established view of the organization was that, dockworkers are overpaid and that their union (The Maritime Union of Australia) enjoys sole supply of labor on the waterfront. The company also had a view that the union encourages restrictive practices. In April 1998, after disputing severally with the Union, Patrick opted to appoint an administrator and remove financial assistance from its subsidiary labor hire organizations. Patrick was hopeful that it will do away with its debts and retrench its one thousand four hundred employees. New organizations were contracted to replace former Patrick workers with non-union labor. The government, for along time, has encouraged Patrick to take a strong step against Maritime Union of Australia. It also introduced a levy on the moving cargo at the docks so as to collect one hundred and sixty one million dollars to finance redundancies (Lansbury & Bamber, 1998). Another case that depicted development of system of employment relations is the Colgate Palmolive case. Colgate Palmolive is a company that involves in manufacturing of detergents and toothpaste. It attained employment relations improvement at its sites through establishment of high commitment work system. The strategy of employment relations improvement at Colgate incorporated transforming the manner in which work is done within the plants. The strategy also entailed establishment of new types of accord with the workers and the unions. Colgate established several current work systems that incorporated a flat organization arrangement, teamwork, knowledge-based pay and learning and training systems. The main of objective of the company was to closely link workers with the company’s objectives, thus improving the productivity and minimizing the costs. Conclusion From the discussion, it is clear that governments, since 1980, played a great role in developing Australian employment relations. The governments such as Hawke labor government greatly assisted in the establishment of enterprise bargaining. As a way of decentralizing system of employment relations, the Hawke Labor government commenced the enterprise bargaining process through the introduction of union movement. The labor government also played a great role in developing system of employment relations by extending enterprise bargaining. It developed Australian system of employment relations to coordinated flexibility. The labor government also participated in developing employment relations through making of a formal agreement with the union movement. It is also evident from the discussion that the conservative Liberal-National Party Coalition government developed Australian system of employment relations to fragmented flexibility system. The coalition government undertook crucial policy on employment reforms, which caused the relationships with the union movement to be turbulent. The main aim of coalition government has been to transform the Australian employment relations from collectivist traditions, with powerful unions and arbitration approach, to a more fragmented approach of individual bargaining among workers and employers. References Bamber, G., & Lansbury, R., 2004, International and Comparative Employment Relations: Globalisation and the Developed Market Economies, SAGE. Blanpain, R., & Bamber, G., 2010, Regulating Employment Relations, Work and Labour Laws: International Comparisons Between Key Countries. Kluwer Law International. Fairbrother, P., & Rainnie, A., 2006, Globalisation, State And Labour. McGraw Hill Professional. Lansbury, R., 2000, Workplace change and employment relations reform in Australia: prospects for new social partnership? University of Sydney. Lansbury, R., & Bamber, G., 1998, the end of Institutional Industrial Relations in Australia? Perspectives on Work, 2 (1) 26-30. Townsend, K., & Wilkinson, A., 2011, Research Handbook on the Future of Work and Employment Relations. Edward Elgar Publishing. Read More