Australian Workplace Agreement, Female Workers and Enterprise Bargaining - Case Study Example

The Author’s Name] [The Professor’s Name] [The Course Title] [Date] The Workplace Relations Act Changes in the labour law and management practices have led a trend towards individualism and union exclusion (Waring, 291-318). A main influence of this trend was the Australian Workplace Relations Act 1996. This was a major move made by the federal government to shift towards less collectivised unions. Since the introduction of the WR Act, the number of industrial disputes has dropped to record low levels, and the nature of industrial action has become less dramatic. Enterprise Bargaining The growth of individualised employment has left little scope for collective arrangements and assuming little need for collective bargaining (Guest & Hoque, 112-20). Before the rise of individualised contracts, disputes were mostly handled by the unions and the employers. The union would organise activities such as strikes and lockouts in attempt to improve work pay and conditions. These types of extreme industrial actions are costly in both human and economic terms (Hyman, 89; Leo, 102). Now employees are cutting out the third party and engaging in non-union agreements directly with the employer. Enterprise agreements have gained much significance over the past decade as employment relations have come to focus more at the local workplace level (Macdonald, 1-25). The rise of human resource management has seen a greater focus on individualising tasks and decentralising the management approach. These factors create the potential for greater diversity in employment benefits, and may lead to an improvement in employment conditions (Champ, 46; Macdonald et al., 1-25). Benefits can include various forms of parenting leave and caring leave, salary packaging, bereavement leave, career break scheme, work from home/telecommuting and a range of other benefits (Champ, 46) . Australian Workplace Agreement (AWA) An AWA is a printed agreement between an employer and an employee about the requisites and terms of service. AWAs can be negotiated with a group of employees but must be signed by each employee who agrees to the term of the AWA (Gollan, 44). Once an AWA is in operation, it totally displaces any existing award or collective bargaining agreement. Although the AWA sounds good in theory, many have argued the practicality of it. The employment Advocate will endorse an AWA if it passes a 'no disadvantage' test. The 'no disadvantage' assessment is measured against the applicable award, and not the current applicable industrial means such as an enterprise bargaining agreement. As pointed out by Richards (Richards, 15-16), since the introduction of the WR Act in 1996, federal awards have been reduced to a basic set of wages and conditions known as a 'safety net'. Thus, an AWA can therefore contain significantly less wages and conditions than the prevailing collective agreement, but still pass the 'no disadvantage' test. Harley and Milner (Harley & Milner, 17-19) suggests that policies like the AWA can help employees achieve better working environment and wage conditions. However, the process needs to be undertaken with care, as there are many cases where newly-introduced agreements are not as effective and well as the participants had hoped. Richards (15-16) stated that 27% of the AWAs under examination contained no provision for a wage increase during the life of the agreement. Although there is a disagreement in whether AWA can benefit employees, there seem to be a consensus that AWA can benefit the employer. According to Waring (Waring, 291-318), individual contracts encourage maximisation of individual effort because they do not permit the individual's contributions to be obscured by the collective. In the late 1980s and the early 1990s, collective bargaining was seen as rather abhorrent by employers as it encouraged employees to slow work progress during bargaining rounds. By placing individual contracts, employers can look forward to an increase in productivity and more commitment by employees (Harley & Milner, 17-19; Loundes, Tseng, & Wooden, 245). Richards (15-16) also agrees that the employers do profit from AWAs as they are seen as tools to reduce labour costs, and how organisational efficiencies are often gained at the expense of the individual employee. Female Workers and Enterprise Bargaining The labour force participation rates and employment share for women workers has expanded continuously over the past three decades in Australia (Strachan & Burgess, 1-14). Nevertheless, the increasing presence of women in the workforce has not removed their relative disadvantage, with issues of pay equity, career plans and benefit access being just as important as today as they were 30 years ago.(Wooden, 14-16) The position of centralised wage determination and awards has gradually been superseded by enterprise based bargaining since the late 1980s. Many women feel that unions no longer effectively address issues that women face in the workplace (Frenkel, 149-61; Harbridge & Thickett, 75-90; Leo, 102; Macdonald et al., 1-25; Strachan & Burgess, 1-14). The advantage of an individual contract allows the employee to tailor what benefits she wants to better balance work and family life. However, recent studies are showing how enterprise bargaining can make most women workers more precarious, rather than enhance the position of women employees. There has been a relatively small decline in union memberships for women as oppose to men. However, it is important to note that union membership has not particularly appealed to women in the first place. A large component of the growth in female employment is part-time and casual jobs. As mentioned earlier, part-time and casual employees are not entitled to some benefits from unions, such as wage increases. The union wage effect was also found to be substantially larger for men than women (Wooden, 1-19). This portrayed the unions as ineffective when bargaining on behalf of women workers. Enterprise bargaining has the potential to act as a medium for transforming the employment conditions of many women workers as it moves beyond award systems that are largely associated with male full-time permanent employment. For women workers, areas of potential include training, childcare, maternity leave, career paths and the configuration of working hours and flexible employment arrangements (Harbridge & Thickett, 75-90; Leo, 102; Strachan & Burgess, 1-14). Nevertheless, enterprise bargaining has been characterised by a lack of innovative clauses which address specific workplace and worker needs. Flexible working time is the major area of change achieved through the enterprise bargaining process. “Over 70 per cent of agreements contain clauses that deal with changing working times and arrangements” (ACIRRT, p40) One of the options for flexibility is when a worker is expected to work on average 40 hours per week over the specified period. The effect of this is that a worker can work for 20 hours in some weeks and 60 hours in another. “The result of this is that many employees have a longer and less predictable working week compared to a decade ago” (Robertson, 19-25). As there are no concrete hours to go by (e.g. the standard 9am to 5pm Monday to Friday), employees who do work overtime do not get paid extra. The rhetoric of enterprise bargaining emphasised that workplace bargaining would allow employees and employers to achieve employment arrangements which were suited to particular workplace needs (Champ, 46; Gollan, 44; Leo, 102). Yet despite this focus on solutions to specific workplace issues, there has been little inclusion of clauses which deal with any aspect of equal opportunity or child care in enterprise agreements (Harbridge & Thickett, 75-90; Strachan & Burgess, 1-14). In the context of extended and less predictable working hours for many female employees, the lack of clauses which address child care issues indicates more difficulties in combining work and family responsibilities for many workers. The proposed changes by the Howard government in 2005 with regard to Industrial Relations have caused extensive controversy. These amendments to Australian Labour Law are the most dramatic for almost a century and are set to entirely re-shape the relations between employer and employee, causing many diverse and strong views on the issue. A key feature of the change is that the Government has used its constitutional power to regulate business corporations as the basis of its single, national industrial relations system. This means that 85% of workers are now under the arrangements of the Federal government and has left State industrial relations systems with the minority of workers. A major alteration to the workplace laws is the simplification of industrial awards. For almost a century there have been thousands of different awards, with conditions specific to particular jobs and the industry of the employee. These are set to be minimised with a simpler standard of award wages. This aspect of the changes is known as award rationalisation and it is planned that the previous number of awards, around 4000, will be reduced to only 100. A new body has also been formed, called the Australian Fair Pay Commission, which is in charge of setting minimum adult wages and award rates. It is expected that this new organisation won't increase award wages at the same rate, nor to the extent of the Safety Net of previous years. The Australian Fair Pay Commission will also provide uniform minimum standards for annual leave, personal leave, and maximum ordinary hours of work and minimum wages. Although awards still provide minimum wages, other conditions can now be eliminated from workplace agreements. These include guaranteed penalty rates, overtime and redundancy pay. Due to this, employers are more likely to shift workers from awards onto workplace agreements, which will give employers greater flexibility. Another major aspect which has been changed with these new laws is the scrapping of the 'no disadvantage test'. This means that certified agreements between employer and employee have given somewhat more bargaining power to the employer. The idea of a 'no disadvantage test' has been in place since the Keating government of 1993 and has required that collective agreements and AWAs do not reduce the take home pay of employees. The change now means that when a negotiation between employers and employees takes place, the employer can potentially remove provisions such as entitlements of redundancy pay, penalty rates and overtime conditions effectively making the employee in a worse financial situation. This could not happen in the past, as it would not comply with the 'no disadvantage test'. Also, the maximum term of an enterprise agreement has become 5 years, it is lodged with the Employment Advocate, and these agreements no longer need formal approval before they come into effect. It is believed that with the changes, there will be a very high increase in employees going from collective agreements, to an Australian Workplace Agreement (AWA). Currently around 3% of workers are under individual contracts with the formal industrial relations system, and the Treasurer Peter Costello would like to see this number increase in the near future. AWAs will become more popular because they are more attractive for employers. This is the case because with the abolished 'no disadvantage test', many award conditions can be traded off, and an employer can make signing this workplace agreement a requirement for employment, therefore not giving much of an option to the employee to negotiate. Something that will affect around two-thirds of employees due to the Industrial Relations changes is the removal of employment protection laws. 'Unfair Dismissal' laws have been abolished for all businesses with less than 101 employees, creating a less secure working environment. This means that people under this category cannot complain about losing their job, and can be sacked at any time at the digression of their employer. The only grounds for complaints are if there is a breach of the anti-discrimination laws, and this becomes known as 'unlawful dismissal'. With these significant changes made by the government, more power and flexibility has been given to the employer. The government's main aim in introducing these new workplace relations laws was to deregulate the labour market and simplify rules relating to pay and conditions of employees. The Howard government believes that by allowing employers a freer hand in determining wages and conditions for workers, such as through individual contracts, there will be an increase in job creation, encouragement of investment, a lift in productivity and higher wages. With more flexibility given to employers, more jobs may be created and there is room for growth with potential re-structuring, as employers are not restricted by various employment protection laws. Currently, the Howard government is defending its new policy formulation, as it has come under severe criticism from the opposition and other interest and lobby groups. Nevertheless, they remain strong in their stance and have a firm belief that the new laws will keep the Australian economy strong, and maintain one of the lowest unemployment rates in recent Australian history. Conclusions The decrease in unions is the result of the shifting paradigm of the relationships between organizations and unions. Enterprise bargaining and legislations such as the Australia Workplace Agreements (AWA) have caste out the need for third party interference when it comes to negotiating workplace arrangements such as wages and conditions. AWAs were perceived by employers and employees to achieve flexibilities in the workplace not otherwise reachable under collective bargaining. Empirical studies refutes arguments that the increased prominence of enterprise bargaining has contributed to balancing work and family life, improvements in distribution of income and addressing specific workplace needs. This can be clearly noted in the case of women workers and enterprise bargaining. The working hours for many female employees have extended and become less predictable. Income for the amount of hours worked can also be decreased as there is no extra pay for working over-time. And also the lack of clauses in enterprise bargaining that does address specific needs of female employees. Despite the increasing incidence of individual contracts and enterprise bargaining, collective bargaining should also remain as a mode of establishing wages and conditions in Australia. In order to stop the decline of union memberships, trade unions need to adopt innovative tactics to counter the strategy of individualism. Unions need to ensure that their policies are still relevant to employees and employers in the changing paradigms of workplace relations and needs. As the Industrial Relations laws are so significant and controversial, there are differing views and opinions on the subject. Business groups such as the 'Employers First' organisation and 'The Business Council of Australia' believe strongly in the new reforms, and possibly believe more reforms are required. They take the point of view from employers, and will obviously seek to have the most flexible and beneficial conditions available for employers around the country. The Institute of Public Affairs takes the same stance on the issue. They are keen believers in a free market economy and political and economic freedom. This think tank believes that Kim Beazley's commitment to eliminate Australian Workplace Agreements threatens the essence of workplace reform over the past two decades and is a major political backwards step. The Industrial Relations laws have caused significant controversy, as a large proportion of Australian workers are affected. It is clear that more power and flexibility has been given to the employer rather than employee, and due to this there has been major public and political debate. These changes have re-shaped the entire Industrial Relations system and it is a core issue leading into the next federal election. Over the last decade, Australian industrial relations have become less collectivised. This can be seen in the decline in union membership and the expansion of employees taking up individual contracts. Employment relations have come to focus more at the workplace level and the rise of human resource management has seen a greater focus on individualising work and mechanisms used to regulate work. Enterprise bargaining and policies such as AWAs are excluding the need for unions to interfere. Although these factors create the potential for greater diversity in employment benefits, they may also lead to deterioration in employment wages and conditions. Works Cited Australian Centre for Industrial Relations Research and Teaching (ACIRRT) (1998) Agreements Database and Monitor (ADAMN). ACIRRT, University of Sydney Champ, S. (2003). Employment benefits in Enterprise Agreements: An Overview. Australian Bulletin of Labour, 29(1), 46. Frenkel, S. (2002). Workplace relations: Past, Present and Future. Australian Journal of Management, 27, 149-161. Gollan, P. (2004). Formalised Individual Agreements in Australia. Employee Relations, 26(1/2), 44. Guest, D., & Hoque, K. (2002). Human Resource Management and Industrial Relations. Oxford: Oxford University Press. 112-20 Harbridge, R., & Thickett, G. (2003). Gender and enterprise bargaining in New ZealandL Revisiting the equity issue. New Zealand Journal of Industrial Relations, 28(1), 75-90. Harley, G., & Milner, A. (1994). The Ins and Outs of Enterprise Bargaining. Australian Accountant, 64(8), 17-19. Hyman, R. (1989). Strikes. London: Macmillan. p89 Leo, T. (2000). Beyond Unions and Collective Bargaining. Working USA, 3(5), 102. Loundes, J., Tseng, Y.-P., & Wooden, M. (2003). Enterprise Bargaining and Productivity in Australia: What do we Know? Economic Record, 79(245), 245. Macdonald, D., Campbell, I., & Burgess, J. (2001). Ten Years of Enterprise Bargaining in Australia: An Introduction. Labour and Industry, 12(1), 1-25. Rama, M. (2003). Globalization and the Labour Market. The World Bank Research Observer, 18(2), 159. Richards, D. (2005). Are AWAs better? Australian Nursing Journal, 12(6), 15-16. Robertson, R. (1992). Enterprise Bargaining: Implications for Women. Work & People, 14(2), 19-25. Strachan, G., & Burgess, J. (1998). Towards a New Deal for Women Workers in Australia? Growing Employment Share, Enterprise Bargaining and the "family friendly" Workplace. Equal Opportunities International, 17(8), 1-14. Waring, P. (2004). The Rise of Individualism in Australian Industrial Relations. New Zealand Journal of Industrial Relations, 24(3), 291-318. Wooden, M. (2000). Industrial Relations Reform. Review- Institute of Public Affairs, 52(3), 14-16. Wooden, M. (2001). Union Wage Effects in the Presence of Enterprise Bargaining. Economic Record, 77(236), 1-19. Read More