Effective Employment Relationship Management - a Main Pillar of a High Performing Workforce - Literature review Example

Labour Relations Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Name Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Course Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Lecture Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Date Introduction Changes in the labour market have a huge effect on the productivity of a national economy. Recently, Australia has undergone a number of changes in its labour market. According to Balnave, Brown and Maconachie (2009) among the problems affecting the Australian labour market include a huge inequality in wages, increasing fragmentation of working hours and the rise of non-standard forms of work. Coupled with the fact that Australia working population is aging, these factors are leading to low skill formation and declining labour supply especially of skilled labour. This paper discusses the recent changes in the Australian Labor market from a demographic, legislative and a trade union perspective. Secondly, it analyzes the issues that these changes raise in Australian workplaces in term of labor relations. Demographic Changes Like other OECD countries, Australia is facing the problem of an ageing population. Australia fertility rate has remained while life expectancy increases significantly. In 2010 the proportion of the Australian population that was considered old had risen to 14 per cent of the Australian population. Another part of the population that is dependant has been falling progressively with time. According to Shah and Burke (2006), the Australian Bureau of Statistics by 2056 the older population will be more than a quarter of the Australian population (Fulton et al 2012). By 2102, the portion of aging Australian will be approaching a third of the Australian population. Another marked change in Australian demographics is the participation of women in labor. Women in Australia are increasingly participating in work and spend more and more time in education more than ever before. This trend in women's employment has seen a remarkable decrease in formation of couples (Heery 2013). As both parents in the marriage pursue careers they have to live separately automatically turning their families into single parent families. The number of people entering into marital unions in Australia has continued to decline over time. According to Shah and Burke (2006), the marriage rate in Australia is lower than it has ever been in history. In 1971, 65 per cent of Australians aged 16 and above were in registered marriages but by 2006 this number had fallen to lower than 50 per cent of the Australian population (Tyers and Shi 2012). Australians are also marrying much later in life than ever before. In 1971 the median age for marriage was 23.4 years for men and 21.1 years for women while in 2008 it was 29.6 and 27.7 years respectively. In contrast unregistered marriages referred to as cohabitation has been on the increase. Cohabitation has risen from 6 per cent in 1986 to 15 per cent in 2006. The rate of divorce has also picked up significantly in the Australian population. According to Edwards (2009) the Family Law Act 1975 allows for no fault divorce is responsible for this unprecented rise in divorce rates. The legislation allows “ no fault” divorce provided it is preceded by 12 months of separation. Every year divorces make over 50,000 children aged below 18 single-parent children. One of the most significant changes in the Australian labor market is increasing in culturally diverse people. More than ever before, the Australian population consists of individuals from different cultures. Ethnic diversification in Australia has been increasing since the end of World War II. More and more people from non-English countries are immigrating to Australia more than ever before. According to Lewis, Harris and Cox (2007), 31 per cent of Australian migrant arrivals were from the UK and Ireland before 1991, but this number fell to 12 per cent afterwards. Arrivals from Asia increased from 18 percent level before 1991 to 42 per cent level afterwards. According to Fine and Mitchell (2007), Asian immigrants are younger and about 41 per cent of the Asian population is in the 25-45 age group compared to 28 per cent among other immigrants. According to Fine and Mitchell (2007), the proportion of the Australian population from different parts of the world is likely to increase. Although, people from other cultures adapt and integrate with the dominant local culture, they still hold their own in their interaction with others in the workplace. In contrast, the proportion of the population that can be referred to as indigenous has decreased significantly. Indigenous Australian makes less that 2.3 per cent of the Australian population, but their cultural difference is important aspects for consideration while dealing with labor relations. According to Heery (2013) indigenous Australian has a particularly strong attachment to the land and its Flora and Fauna. Indigenous Australians tend to have more children per family than other groups in the Australian population. Indigenous Australians also live in remote and regional parts of the country. Of particular concern to labor relations is the social, economic and health wellbeing of Indigenous Australians which are far below those of other Australians. These social and demographic changes show reflect some of the major changes in Australian society that may influence labor force productivity and participation in Australia. In the next section, the paper discusses the legislative changes that have changed the landscape of the Australian labor market. Legislative Changes One of the most significant changes in Australian labor laws was brought about by the Workplace Relations Amendment (Work Choices) Act 2005. The Act introduced the Australian fair pay and conditions standards which were later superseded in the Fair Work Act 2009 by the National Employment Standard. Under the standard, employers had to meet or exceed certain work and pay conditions for their employees. Provisions of the National Employment Standard Working hours Under the National employment standard employees were guaranteed a maximum of 38 ordinary hours of work per week (Charlesworth and Heron 2012). This provision automatically limited the number of hours an employee could work. However, it has a provision that allows employers to request employees to work for additional hours if the additional hours could be considered reasonable. The employee could still refuse to work for the additional hours if they were not reasonable. Annual Leave All part-time and full time employees covered by the Work Choices Legislation were entitled to an annual leave (Rinaldi, Lambropoulos and Millar 2012). Basically, workers are entitled to four weeks of paid annual leave, excluding casual workers. Personal / carer’s leave and compassionate leave – For each year of continuous service, an Australian worker is entitled to 10 days paid personal (sick) / carer’s leave and 2 days unpaid carer’s leave (Rinaldi, Lambropoulos and Millar 2012). A worker can also take 2 days of compassionate leave if a family member dies, or is seriously sick or injured. An employee can take personal leave anytime as long as they provide evidence to the employer pertaining to the reason for taking the leave. Unlike, other personal leave entitlement, casual employees can also take 2 days of unpaid carer’s leave. Parental Leave - maternity, paternity and adoption Under the National employment standard every Australian worker is entitled up to 12 of unpaid parental leave (Rinaldi, Lambropoulos and Millar 2012). Parental leave is occasioned by the birth or adoption of a child. Working Arrangement Flexibility Employers are under obligation to grant requests for flexible working arrangements for workers who have children under the age of 18 (Rinaldi, Lambropoulos and Millar 2012). Under this entitlement flexible working arrangement can be reduction in hours of work including starting time and the finishing times, splitting of work into shifts or change in location of work. To make a flexible work arrangement a worker must have worked continuously for 12 months. Casual workers can also request flexible working arrangements if they have worked regularly for 12 months. Fair work Information Statement At the commencement of employment an employer is supposed to give his workers Fair Work Information Statement. This statement contains information on the workers’ rights and obligations that could lead to the termination of his employ (Rinaldi, Lambropoulos and Millar 2012). Community service leave Employees have the right to take 10 days of community service leave if they are serving as jurors (Rinaldi, Lambropoulos and Millar 2012). Public Holidays Workers are entitled to a paid holiday leave unless it is reasonable to require them to work. Notice of termination and redundancy pay  In case it becomes necessary to terminate the services of an employee an employer is required to give due notice to the employer and pay them a redundant pay of up to 16 weeks (Rinaldi, Lambropoulos and Millar 2012). Due notice should occur within 4 weeks of termination. Australian Workplace Agreement One of the other major changes brought about by the 2009 legislative reform is the end of the Australian Workplace Agreement. Under the old labor regime AWA allowed employees to reach agreement on working conditions and remuneration at the individual level (Cooper and Todd 2012). It is no longer possible to lodge an AWA meaning workers can only negotiate an agreement at the enterprise level or collectively in a trade union. For a long time, AWA has been in the middle of a controversy over their role in advancing the interests of employers over those of employees. With this decline employers face a much harder time while dealing with employers. Changes in Union Density According to data from the Australian Bureau of Statistics the decline in membership of trade unions is more pronounced in Australia than in other western economies. According to the union estimates 57.2 per cent of Australian workers were unionized in 1982 but by 1990 this number had declined to 54 per cent of unionized workers. However, the union estimates are influenced by the optimistic figures for trade unionism. Official ABS statistic puts the union figures in 1982 at 48.2 which also declined to 40.5 per cent in 1990 (Cooper and Ellem 2008). These earlier declines in trade union membership pale in comparison with recent trends which have led to less than a quarter of employed individuals being unionized. Government policy has contributed to the decline as Conservative governments that were in power ignored trade unions or enacted legislation that discouraged union membership. Ideological views about unions The approval of trade unions among the masses may also lead to a decrease or increase in propensity to unionize. This effect has been shown in Australia as union memberships reduce with declining public approval. Public approval comes in the form of; sympathy for strikes, concerns about the power of trade unions and their role in the general economy. In recent times the ideological differences between the trade unions and the general public has widened. When the workers of Qantas went on strike and paralyzed the airlines operation, the public was unsympathetic to their cause. More than 70 per cent believe that Australian trade unions posses too much power. Issues Raised for Employment Relations The changes in demographic bring around a number of issues to labour relations in contemporary Australia. Organizations have to negotiate with older workers and may have to keep older workers in employ to take advantage of their skills. To deal with the aged workforce employers will have to develop more customized work arrangements to fit the older workforce (Leibold and Voelpel 2007). Flexibility is needed to plan for the increasingly older workforce to ensure they are protected and their seniority respected in the workplace. Having observed the increasing presence of Multi-ethnic employees in Australian workplaces it is important to integrate them and take advantage of their diversity in Australian workplaces. Industrial relations with people from culturally diverse background is a major challenge. For example some groups may have religious holidays that interfere with their normal working routine. Employers have to learn how to accommodate the special needs that come with employees from diverse backgrounds. According to Fine and Mitchell (2007) a lot of benefits accrue from employing a culturally diverse background than it is envisioned on recruitment. Legislative changes in the Australian Labor landscape give workers more power in any negotiation with employees. The ten entitlements under the National Employment Standard give Australian workers unprecedented rights. In their labor relations policies each organization has to factor in the different leave arrangement guaranteed to workers by the standard. In an organization which requires workers to work for more than 38 hours a week, they have to negotiate with their workers to make sure they agree to work for extra hours. The power to hire and fire workers is one of the tools used by employers to control the conduct of employers. However, the NES provides that employment can only be terminated for good reasons only (Heery 2013). All dealings with employees must be gentle to ensure they did not result in termination where organization could end up paying redundant salaries for employees they have fired. Cleary, the labor laws makes the firing of employees a lesser attractive option for disciplining errant employees. The modern business environment is very competitive and unforgiving for companies that are inefficient. This competitive environment has led to management of companies changing the way they relate to employees. Traditionally, management made use of indirect or direct threats to employees to obstruct them from joining trade unions. However, this has changed in modern human resource management that recognizes the employee as an important stakeholder in the organization. In new organization especially those which are foreign owned unionization is discouraged by management but the power of employees under present legislation remains strong. To avoid labor disputes most modern organization offers employee additional incentives. These incentives may include greater job security, enhanced job satisfaction; more channels to voice their grievances’, therefore reducing the need to join trade unions (Edwards 2009). Conclusion It is clear that the Australian Labor landscape has changed significantly, and employee power has become more pronounced under current legislation. Creativity is needed on the part of employers if they are to be able to retain a strong workforce. With Australian employees having more power to choose between options and request for flexible working arrangements. Those in charge of labor relations will have to make sure that they provide portable and flexible working conditions. The way work hours are planned will greatly influence future employee-employer relations. To add value work arrangements will also be more predictable. Management will need to become more responsive to the needs of employees. Collaboration, consultation and adaptation will become important skills in management and leadership. Creative problem-solving and balancing of work and life will become essential skills in the workplace. The pace of decision making in organizations will have to be faster and the decisions more competent. Actions will also have to be decisive and issues efficiently and quickly resolved. Effective employment relationship management is the main pillar of a high performing and efficient workforce. The ultimate goal of employment relations is to ensure that the workplace is conducive enough to ensure optimum productivity. With more people reaching retirement age conducive relations with the aged workforce must take precedent in the workplace. The recent changes in the Australian workplace should not go unnoticed by any organizations that need to survive the competitive landscape. Organizations also need to recognize that a skilled workforce is not readily available and they have to come up with effective strategies to attract and retain this workforce. Employee perspectives of the labor issues should be taken into consideration while repositioning labor relations strategies. 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