Global Trends in Industrial Relations and Their Significance to Australia - Case Study Example

Global trends in industrial relations and their significance to Australia Introduction The rise of industrial relations was witnessed in the developing countries of Europe with the onset of the industrial revolution in the 19th century. Since then, the subject of industrial relations has undergone many changes in response to the environmental, political and socio-economic changes that have occurred in different countries. The situation in Australia is complex. Global forces such as the world recession that started in the late 70s and the rise of globalisation have had a major impact on the way industrial relations in the country is organised. Also, changes in the management of human resources, changes in legislation and increased use of information and communication technology have necessitated changes in unionisation, labour standards and collective bargaining in Australia. This essay highlights some of the important trends in industrial relations in different regions of the world and examines how they can influence the future of industrial relations in Australia. The essay is organised into three sections. In the first section, a brief historical development of industrial relations in provided. The second section examines global changes in industrial relations in the world. The third section summarises the essay and shows how the future of industrial relations in Australia can be managed using lessons from global trends. Historical developments in industrial relations The concept of modern industrial relations has its roots in the developments in labour relations that followed the industrial revolution of the 19th century in Europe (Wooden 2000, p. 18). Studies in the sciences of human behaviour as well as in industrial management heavily influenced these early developments in industrial relations. This led to the great developments in labour union movements that characterised labour relations in Europe in the 20th century (Wooden 2000, p.19). According to Kaufman (2004, p. 34), modern industrial relations is an offshoot of the human relations theory. Inclusion of a human resource approach in managing labour relations meant that workers could no longer be regarded as separate and isolated individuals working for in a scientifically managed environment (Ackers 2000, p. 33). It is this approach that led to the pluralistic view of industrial relations, in which organizations recognise the existence of a balance of power between two organised interests. This means that for the two interests to coexist peacefully there must be a degree of trust, mutual respect and a practical mechanism of addressing disputes resulting from conflicting interests (Hall 2006, p. 34). It is observed that the development of the pluralistic view of industrial relations in the world varied from country to country and, as a result of this, was heavily influenced by different ideological, political and economic factors prevalent in different regions of the world (Bloch 2000, p. 26). For instance, labour relations in Europe in general, and Britain in particular, has been characterised by four different factors whose impact has been felt at different times. In the period before the 1970s, industrial relations in Britain took the form of the traditional system or voluntarism. This was an arrangement that was characterised by collective bargaining between employees and employers with the main intention of avoiding possible conflict between the two groups (Ackers 2000, p. 35). Following the rise of industrial action as a result of the power of labour unions, the Donovan Commission was set up to recommend ways in which industrial relations in Britain could be reformed. This formed the second phase of industrial relations which was characterised by continuation of voluntarism but under the guidance of reinforced rules for collective bargaining agreements (Bloch 2000, p. 28). Beginning from the 80s, industrial relations in Britain was influenced by the need to curb the power of trade unions for the benefit of the nation. With the influence of other global forces such as globalisation, industrial relations in European countries adopted stiff regulatory approaches towards managing industrial relations (Ackers 2000, p. 37). This has led to the current trend of interventionism and democratisation of trade unions in different countries in Europe (Hall 2006, p. 78). It is important to note that since different regions of the world experienced different factors in differing degrees of intensity and time, global development of industrial relations does not follow a specific sequence but rather varies from region to region as well as between different countries in a specific region. This means that developments in industrial relations in different countries are shaped by specific country factors like the way the finances of a country are managed, control systems over property rights, the labour system, the education system and lastly, how labour is represented in the country (Hall 2006, p. 48). The current state of industrial relations in the world is a product of the impact of four important factors: globalisation, the global economic crisis, unprecedented technological advancements and the rise of dominance of western democracy (Lyons & Smith 2008, p. 8; Schnabel 2013, p. 258; Lewin, Keefe & Kochan 2012, p. 751). Since globalisation promotes liberalisation and integration of international linkages in global finance, markets and transportation, its development affects industrial relations in two ways. First, the increasing flow of labour and international capital in different countries has resulted in adoption of industrial relations policies that seek to curb the activities of labour unions (Kaufman 2004, p. 98). Also, labour opposition is now viewed as an impediment to foreign investments which are necessitated by globalisation (Schnabel 2013, p. 256). On the other hand, application of the concepts of pluralism and flexibility to industrial relations, as a result of dominance of western democracy, has led to a situation where membership to labour unions is voluntary in many countries. Competition, accountability and transparency are now regarded as central themes which enable efficiency in the management of industrial relations (Lewin, Keefe & Kochan 2012, p. 761). Separately, with the rise of technological advancement, industrial relations has changed in different ways. For instance, changes in the way work is designed, organised and carried out mean that industrial relations is faced with new challenges in dealing with redundancy, retrenchment and knowledge gaps among workers. Also, with increasing use of technology, industrial relations has to deal with issues of increasing individualism in work arrangements and how this affects unionism in the current times (Lyons & Smith 2008, p. 12). Global trends in industrial relations Industrial relations issues in the world are changing rapidly. Although these changes are not uniform in all the regions of the world, their occurrence has generally centred around four areas which form the contemporary issues in industrial relations. These are: the balance of power between unions and managements of organizations; trust between unions, management and governments; issues to do with control at the places of work; and lastly, why employment relationships develop the way they do (International Confederation of Trade Unions 2002, p. 3). Several major changes in industrial relations have occurred in different regions of the world. For instance, industrial relations in the United States and Canada is considered to have experienced the greatest degree of changes in terms of labour laws, unionisation and collective bargaining agreements (Kaufman 2004, p. 197). Changes in industrial relations in the United States and Canada have occurred as a result of similarities between the industrial relations in the two countries in terms of the main actors in area, the nature of collective bargaining in both countries and industrial conflicts (Chelliah & Netto 2006, p. 489). With increased use of employee choice, there has been a sharp decline in unionisation in the private sector (Ackers 2000, p. 39).This has been in line with changes in other aspects of industrial relations in both countries which include the rise in majoritarianism, increasing decentralisation, changes in the bargaining power and the development of exclusive representation in unions for workers (Davis & Lansbury 2000, p. 8). According to Golan and Lewin (2012, p. 178), industrial relations in the United States and Canada has been influenced by different trends over the course of time. First, there has been a significant decline in the number of employees represented by unions in both countries. This is more prevalent in the private sector than in the public one. Second, the level of open industrial conflicts in both countries is low (Golan & Lewin 2012, p. 181). With the increased use of arbitration and other alternative methods of dispute resolution, overt industrial action has declined in both countries. Third, with changes in workplace arrangements, there is an increasing level of general satisfaction among workers in both countries (Lewin, Keefe & Kochan 2012, p. 766). With increased communication at the place of work, improved relationships between management and workers and an increasing sense of achievement in the workplace, many workers in both countries are experiencing a sense of job satisfaction in general (Edwards 2003, p. 538). Lastly, with the decline of the unionised sector in both countries, there are changes in the numbers and flexibility of workplace arrangements (Edwards 2003, p. 539). This is represented with increased flexibility in working hours and the rise of independent contractors in the private sectors of both countries. Apart from the United States and Canada, changes in industrial relations have occurred in other regions of the world. For instance, Gollan (2004, p. 48), observes that industrial relations in India has undergone several changes resulting from the socio-economic developments occurring in the country in particular, as well as in the entire Asian continent in general. Recent changes in industrial relations in India have occurred in the following areas: collective agreements, participation of workers in management and alignments in the labour policies of the country (Davis & Lansbury 2000, p. 18). With decentralised collective bargaining, the ability of unions to paralyse work through large scale industrial action has been reduced. This trend in which labour unions have lost their bargaining power has been experienced in industrial relations in different countries in Asia; including Malaysia, the Philippines and Bangladesh (International Confederation of Free Trade Unions 2002, p. 54). Further, there has been an increasing practice of involving workers in the management of organisations. This has been achieved through arrangements such inclusion in decision making processes, profit-sharing arrangements and other incentive schemes under the changing labour management relations (Davis & Lansbury 2000, p. 22). With regards to reforming the industrial relations policy, India has experienced changes in terms of developing a framework that aligns the relations between employees and the management of organisations (Kaufman 2004, p. 256). What lessons should Australia learn? The state of industrial relations in Australia is complex. According to Gollan (2004, p. 49), there have been significant changes in industrial relations in the country which have been influenced by a number of factors. Declining power of unions, the passage of radical amendments to legislations governing industrial relations issues in the country, new management strategies and the declining influence of arbitration tribunals are some of the major factors that have altered the practice of industrial relations in Australia (Edwards 2003, p. 542). These changes in industrial relations have occurred throughout the history of industrial relations in the country. Schnabel (2013, p. 270), observes that employment relations in many sectors in Australia, for instance the health sector, remain decentralised despite many attempts by the federal government to decentralise them. According to Davis and Lansbury (2000, p. 32), industrial relations in Australia has been characterised by an influx of “neo-liberal” philosophies. This has resulted in specific trends such as minimal government intervention in industrial relations issues, a shrinking public sector, individual contracting, decline in unionisation and managerial prerogative (Lyons & Smith 2008, p. 17). There are several lessons which Australia can take from global trends in industrial relations. First, there is need to realise that industrial relations policy is driven by the preferences of employers. This means that the attitudes of employers towards labour unions should be taken into consideration as the primary factor in developing policies, as opposed to problems resulting from employee dissatisfaction. Second, there is need to treat individual and collective agreements as complements rather than as substitutes. This means that the future legislations should seek to include individual and collective-based agreements as parts that define labour relations together rather than seeking to override one aspect as was the case with the Work Choices legislation (Lyons & Smith 2008, p. 19). Third, there is need to address issues to do with employee satisfaction in the workplaces. Global trends have indicated that although the general levels of employee job satisfaction have risen in the recent past across the world, other issues such as increased responsibility without a matching rise in pay remain common across all regions of the world. The Australian industrial relations system should, therefore, seek to address the specific needs of the workers as well as utilise the strength of labour unions, despite the fact that they are declining in numerical strength. Conclusion This article has examined changes in industrial relations in Britain, the United States, Canada and India, as they represent different regions of the world. In general, trends in global industrial relations have been characterised by the following: dependence on legislative arrangements as a way of conducting industrial relations, a highly regulated environment for trade unions with declining membership and an increase in individual employee agreements with employers. For the case of Australia, these trends in industrial relations in different countries provide a model for developing the industrial relations system for the future. This is based on the fact that since the changes occurring in Australia are similar to a large extent to what is happening in the other countries, improvements in the system will be based on combining models that take into account both international and domestic competitive forces. References Ackers, P 2000, ‘Back to basics? 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