Principles of Employment Relationship - Coursework Example

Running Head: Principles of Employment relationship Student’s name Institution Course Professor Date Introduction Industrial relations are the systems that produce the rules of a workplace. Such rules are the product for the interaction between three key “actors” – unions/workers, employers and associated organizations and government. The trends in labor market have been remarkable. Labor force and employment changes have occurred within the industries. This however, was very uneven between industries. Agriculture and manufacturing labor force continued to decline while the services industries surged. Indeed, the number of employed persons more than doubled in some industries: including property and business services; accommodation, restaurants and cafes; cultural and entertaining services; and healthiness and community services (ABS Labour Force, Australia, 2010). According to Dunlop, labor market trends are external to employment relationship. In his work on Industrial relations, he identifies three key factors to be considered in conducting an analysis of the management-labour relationship. These are; 1. The environmental or external economic, technological, political, legal and social forces that affect employment relationships. 2. Characteristics and the interaction of key actors in the employment association: work, management, and government. 3. The rules derived from the interactions that govern the employment relationship. The employment sector of Australia is among good employment sectors in the world. This is due to its capability to absorb a greater portion of the population into it and the good employment reforms it has implemented. In 2008, with a population of 21 million citizens and GDP of over US$1 trillion the sector had around 94$ employment level. The sectors have undergone various changes. Changes in the employment sector in Australia have been largely driven by both the internal factors in Australia and the international forces. Workers and the government have been pushing for the various changes realized in the employment sector. International forces of financial crisis, globalization and the free trade system advocated by the World Bank as also caused the changes. The diverse changes in the work relations can be deliberate in the following phases. PERIOD: 1970’S 1970’s was one of the darkest periods economically in majority countries of the world. In this period, there was economic crisis that destroyed achievements that achieved over a long period. Economic depressions occurred in Australia, which meant that companies and industries had to reduce their labor force to cope with the market conditions. Unemployment rate in Australia during this period rose to 6.3%. Economic downturns meant that employers did not realize enough profits to pay all their current employees and hence their best option available at their disposal was downsizing. 1970’s so the emergence of informal direct bargains. The powers of federal government were limited over industrial relation. Since there existed no laws that govern bargaining workers and employees started new means of reaching agreements through the introduction of this informal means of negotiations. These made workers to agitate for fairer working conditions and sufficient wages. This period also saw high introduction of new machinery and computerization of various means of production and service delivery. Over-reliance in the capital-intensive means of production further worsened the availability of employment given the fact that machinery and technological advancements reduced the required number of workers is means of cost reduction. The globalization strategies also which were gaining momentum during this time was very disadvantages to the employees. Globalization led to the development of cut-throat competition among industries for the market shares. One way of being a market leader was through cost-cutting and the employment sector was the only sector whose costs could be cut. Employers hence either reduced salaries or dismissed a number of workers. This was made further difficult by the push for free market by World Bank, which was the biggest funder during this time. The government of Australia hence was constraint by the bank from offering protectionist measures to the companies or its workers. There was also preface and implementation of the report of Australian reconstruction. This report saw the involvement of unions in decision making in Australia. Unions started being formed to fight for the rights of workers, negotiate for better salaries and wages and fight for safe and healthier working conditions. This realized the effective implementation of the minimum wage laws in Australia. Nevertheless, these reforms faced very stiff competition of employers. The employers saw the formation of unions as a means of trying to direct influence their actions without looking at the general economic conditions facing them. They felt that there should be free market system in the demand and supply of labor that is an individual should only accept work when he is satisfied with the pay and working conditions and not try to influence the same. Wage indexation stopped during this period. Period: 1980’S The ruling Labor government replaced the existing Conciliation and Arbitration Act 194 with the Industrial Relations Act 1988. It also saw the change of the name of the Commonwealth Conciliation and Arbitration to Australian Industrial Relations Commission. There was also the formation of the Australian Industrial Registry to undertake administrative functions in the labor market. Towards the end of 1980s, the nature of national wage issues started to change to reflect the current economic conditions to which workers were working in. the commissions formed above in series of national wage decisions sought to encourage and provide a good framework to foster and encourage the various industrial relations parties to improve on efficiency and productivity. It was provided by the principles set out in their policies. They also provided for improvement in awarding wage and the general working conditions. Minimum salary laws were eliminated during this period as the labor government few them as excuse to employers to award little wages so long as they saw them as above the set minimum. It was also a way of fulfilling the ideologies of free trade advocated by the World Bank. The Business Council of Australia (BCA) was formed in 1983 to replace the Confederation of Australian industry (CAI) .This was because CAI was fully representing the wishes of workers effectively. INTRODUCTION of BCA saw the role of employment relations institutions in addressing economic problems growing further during the years 1983-1986. The push to have unions into employment decision-making failed due to the resistance from the political class and the employers who were promoting a great role of the market forces. Period 1990 The ruling labor party introduced various laws to take into consideration the welfare of workers. In 1993, there was the introduction of the 1993 Reform Act that introduced major changes to the employment sector. This Act provided employees for the first time the right to strike. This right did not exist before since Conciliation and Arbitration Act illegalized it which made strikes illegal and subject to penalties. The Reform act provided unions and employees immunity period from common law and secondary boycott actions that were associated with strikes. This act specified the procedures to be followed in case of a strike. This act also brought about other numerous changes to the employment sector, which include: Encouraging and facilitating workplace and enterprise bargaining and agreements. This Act gave powers to the individuals workers to be able negotiate on their behalf their salary amounts and working terms with their employers instead of only giving unions the responsibility of representing workers in bargains and negotiations. This allowed workplace agreements negotiated in non-unionized workstations This Act also provided for the provisions of protecting wages and conditions of employment through awards. The awards were seen as a way of ensuring workers enjoys their fruits of hard work and living comfortable lives. It provided for framework of rights and responsibilities for the parties involved in industrial relations to be consistent to the less centralized system of employment sector. There was an introduction of a specialist labor court known as the Industrial Relations Court of Australia. This court took over the functions that were previously done by the Industrial Division of the Federal court. This court had the mandate of ensuring those who participated in any kind of discrimination measures in the employment sector punished. After the end of 13years rule of the Labor party in 1996, the Liberal-National Coalition came into place. The new govern introduced new labor laws through the introduction the Workplace Relations Act of 1996. This Act limited the powers of the Australian industrial Relations commission and introduced in history the possibility of registering individual contracts. The Act further introduced the following changes into the employment sector to guide the stakeholders in the sector: maintaining but relaxing the award system to provide a safety and enforceable minimum wages and conditions. This ensured existence of minimum set of wages in the economy and therefore reducing underpayment of workers. It provided for effective choice and flexibility in reaching both collective and individual agreements between workers and employers. Workers individually or in a group were allowed by this law to negotiate freely with their employers and the outcomes of the negotiations were binding to both sides. This ensured greater employee choice about representation and removing unwanted unions involvement in the bargaining process. The act also replaced the unfair dismissals provision that existed with a good system of dismissals based on a ‘fair go all round’. This two acts greatly so the improvements in employment relations in Australia during 1990’s. This change goes in line with the contingency theory of management. This theory advocates for the consideration of both the internal and external factors that influence the profitability of an organization. By following government regulations and fulfilling workers needs the profitability of the various companies and industries improved. Period: 2000s This period has witnessed drastic changes in the employment sector. The unemployment rate has drastically reduced during this period. In fact by the year 2007 before the economic crisis the level of unemployment was 5% but the world economic crisis so it going up. It rose from 4.3% in mid-2008 to 5.3in mid-2009.There have been the introduction non-standard forms of employment to replace the much popular permanent employment. This however is a form of unemployment since these workers work for few hours. Part time jobs have become the fastest growing employment area (Burgess and Campbell 1998). The formulation of the Workers Choice Act of 2005 is one of the great achievements in the employment sector during this decade. It brought about drastic changes to the industrial relations in Australia. Key objectives were to create a single national system of labor market regulation, expansion of Australian workplace agreements (AWAs) that could replace awards, increased restrictions on union activities and a reduced role for the Australian Industrial Relations Commission. It established Australian Fair Pay commission, which tasked with establishing and adjusting minimum rates of pay, exemption from unfair dismissal laws for small to medium sized businesses with fewer than 100 employees, the introduction of five new minimum employment conditions among other responsibilities. The government further introduced the Fair Works Act 2009. This act had very useful recommendations and improvements to the relationships in the employment sector. It had the following recommendations among others: 1) Establishment of the Fair Work Australia (FWA) as the new employment regulator hence replacing six existing bodies including the Australian Industrial Relations Commission. This was to ensure there is a centralized means of coordinating this sector. 2) Unfair dismissal protection was broadened to cover all workers in enterprises with fewer than fifteen full time equivalent positions. 3) Ten new National Employment Standards (NES) were established to set minimum conditions for all workers covered by the national system. The NES included provisions for annual leave, personal leave, flexible work arrangements for parents, notice of termination and redundancy pay. 4) Individual statutory agreements such as AWAs were abolished but individual common law contracts of employment were permitted. 5) FWA is empowered to settle disputes between parties where there is protracted industrial action, which is causing damage to people or the economy. 6) A new system of 'modern awards' was introduced to provide further safety net for most employees. 7) Employers and unions were required to bargain in good faith, although parties were not required to reach an agreement. However, FWA was permitted to make a workplace determination where a party ignores a good faith bargaining order. 8) No difference is made involving union and non-union agreements However, an agreement now requires the approval of employees. A union that has acted as a bargaining agent during negotiations may apply to FWA to be covered by the agreement. The proposals of the Act greatly improved the relationships among the parties involved in the employment sector. The works so their working conditions, salaries and their relationships improved. . The issue of wage control was solved since the Act allowed for good faith bargaining in wage negotiation. It also reduced the conflict of unnecessary and unfair dismissal of employees. This meant that the workers could now be assured of fairness in the workplace. The dynamism in the economic and political environment has also seen the change in employee relations. Today they have been great improvements in the labour and employment relationship in the entire Australian economy. Both the public sector and the private sector workers enjoy both their human rights and employment rights at the workplace. Constitutional stipulations are totally followed. Gender is not an issue in the sector in fact the number employed women is more than that of men. There have been applications of the universalism theory. This theory takes into consideration the needs of all the stakeholders in the industry. All the stakeholders in the industry are involved in the realisation of the various gains and changes in the employment relations in the Australian employment sector. This has seen all parties benefitting. The workers are the once who have largely benefitted from the changes. Conclusion The employment sector in the Australian economy has grown both in the size of the number of employees it can absorb and the general employment relations between the parties involved. Expansion in the labor market has seen the unemployment levels drop to below 7% in most of the recent years. The various changes introduced to the sector have led to enjoyment good working relations between employees and employers and increase in labor force productivity. Whereas there have been many changes in the labor market there have been little collaboration between employers and the government in realizing them. Employers have been largely the reason for not achieving much in good time. Some employers even continue to frustrate the full implementation of these changes. There should be a good collaboration between the various parties in formulation and implementation of the changes. Reference Australia, g. o. (2010). Australian Fair Work Act 2009. North Ryde: CCH Australia Limited. 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