Implementation of a New Regulatory System in the Australian Labor Market - Term Paper Example

? Industrial Relation Introduction The labour market of Australia has changed to a great extent in the context of employment relations (Sutherland, 2008). The Work & Employment Relationship shifted from centralisation to decentralisation in the regulations of such employment relations (Benett, 1995; Sappey et al., 2006a). There was a change from the awarding and collective negotiation agreements to the individual contracts in employment. Previously there existed a long tradition of the centralised regulation related to wages by means of awards or agreements in Australia Industrial Relations Commission including both industry and national levels. Presently there has been a gradual decrease in the scope of the commission jurisdiction to interfere in the award related matters. In the present time there has been encouragement of the individualised agreement in between the employers and the employees at enterprise level (Gardner and Palmer, 1997). The study will be reflecting the transitional phase of the changing labour market when there has been a shift of the regulatory system from Work Choices Legislation to Fair Work Act. The study will be depicting the changes in the work environment in Australia gradually along with the changes in the employment relations (Cole, 2007; Stewart, 2009; Balnave, Brown, Maconachie and Stone, 2009). Work Choices Legislation The Work Choices legislation of Howard Government has come into existence in the year 2006 (Federation Press, 2006; Sappey et al., 2006b). The legislation has made various substantial changes related to the rules and regulations of the employment conditions as well as industrial relations. It is actually the Workplace Relations act 1996, later amended as Workplace relations Amendment Act 2005 which involved various controversial amendments related to the Workplace relations Act 1996 (Australian Government, 2005). The Work Choices Legislation was passed by the Howard Government in the year 2005. It was specially designed for improving the employment levels as well as the national economic performance by providing unfair dismissal laws to the companies which are under certain size. The laws were made in order to ensure that none of the workers are being disadvantageous due to the amendments made in the legislation consequently promoting the efficiency of the workers (AFPC, 2006). The legislation required submission of the certified agreements by workers directly in the Workplace Authority instead of passing through Australian Industrial Relations Commission. It has also compromised the ability of the workforce to legally undergo strikes where they would be asked to bargain for the previous guaranteed conditions but without any collective representation and also restraining the trade union activities and the recruitments on work sites (Baird, Ellem and Page, 2006). The Work Choices was one of the most concerning issues in the year 2007 during the federal election as the Australian Labour Party (ALP’s) was demanding the abolition of the legislation. Kevin Rudd, leading the party, won the election which resulted in the beginning of the biggest issue related to the abolition of the legislation. The reforms in the legislation mainly included the following steps: It offered to the employers’ higher flexibility in their business or employment terms and conditions where they were allowed to employ the workers with different workplace agreements which are underpinned under the statutory minimum conditions instead of rewards. It reduced the role of the Australian Industrial Relations Commission (i.e. AIRC) in the determination of various employment conditions and solution of the industrial disputes. One of the main objectives of the reforms in this legislation was to restrict the entry of Union in the workplaces. It made attempts to reduce the exposure of the employers to the unfair dismissal claims. This act has implemented the objective set by the government which focussed on moving towards one single national structure of rules and regulation. This step has been taken by the expansion of the federal system to the areas covering trading, different foreign and financial corporations. The Work Choice Act precluded the employers from being a subject to the State employment laws or State Awards and Agreements. But the main problem with the Amendment Act is that it did not simplify the amended legislation. The Amendment Act is much more complex and includes less intelligence than before. The legislation contains new terminologies which features a new agency named as the Australian Fair pay Commission to go along with the Building & Construction Commission in Australia. This was specially established by the ‘Building and Construction Industry Improvement Act’ in the year 2005. Fair Work Act The Fair Work Act (FW Act) 2005 has set out different requirements which the businesses including the small businesses should be aware of in order to continue their operations. The Act was commenced on 1st July 2009 and it included newly created unfair dismissal laws as well as ‘Small Business Fair Dismissal Code’ (Fair Work Ombudsman, 2013.) which reflects the requirement of the employers as well as the employees to bargain during the establishment of new enterprise agreements keeping good faith on each other. The guideline explains The safety related to minimum employment conditions. The obligation of bargaining at good faith in the enterprise level. Newly created unfair dismissal laws included in the small businesses. The need of safety for the employees and obligations for the employers. According to the guidelines in this Act, the small businesses should be aware of the key aspects mentioned in the FW Act. The objectives of this Act are: 1. Providing different workplace relation laws which make the businesses more flexible by promoting the economic growth and productivity related to the future economic prosperity of the Australians (Office of Legislative Drafting and Publishing, 2009). 2. Ensuring the guaranteed safety of fair minimum terms & conditions by means of the National Economic Standards (NES), national orders related to the minimum wage terms and conditions. 3. Ensuring the fact that the guaranteed safety of the fair and enforceable terms and conditions associated with the minimum wage orders is not influenced by the legislative individual employment agreements and also that such type of agreements do not take part in the fair workplace relation systems. 4. Providing assistance to the employees for balancing their work along with the family responsibilities by offering them with flexible employment agreements. 5. Enabling the fairness, transparency, representation of work and preventing discrimination on any ground by offeri8ng recognition to the ‘right to the freedom of association’ and the ‘right to be rep-resented’. These rights protect the employees against unfair treatment or discriminations. 6. Achievement of the fairness and productivity in the business by means of collective bargaining at the enterprise level which is underpinned by bargaining obligations in good faith and transparent rules governing the industrial actions. 7. Acknowledgement of special circumstances associated with the small and medium businesses. National Employment standards (provided by Fair Work Act 2009) These are the standards provided by the Fair Work Act 2009. Under these standards it have been stated that the national system employers should be providing a minimum of ten entitlements to the full time as well as the part time employees. However some of the entitlements are not applicable in case of the casual employees. Parental leave entitlements as well as rules related to the notice of termination are applicable for all the employees. Working Hours The standard working hours in a week for the full time employees is 38 hours. Right of requesting for flexible arrangements In cases when the employees have provided service for a continuous period of more than 12 months, ‘the right for parents’ provide these employees the right to request for flexible arrangements until their child reaches to the school age. In case of disabled child the right is given to the parent until his/her child reaches the age of eighteen years. The flexible working arrangements generally include changes in the working hours, changes in the working patterns as well as the changes in the working locations. Parental Leave When the employees have provided continuous service of minimum 12 months (excluding some of the casual employees) then these employees have the right to have unpaid parental leave just after the birth or the adoption of child by any employee. This leave entitlement has been extended to all the employees rather than just the national system employees. Annual Leave Four weeks of the paid annual leave is provided to the employees excepting some of the casual workers. In case of certain shift worker, grant of four weeks of paid annual leave is extended to five weeks. Paid annual leave can be taken at the time when agreed both by the employer and employee. The refusal of annual leave by any employee is also allowed if the employee feels that it is reasonable in doing so. Personal Leave and Compassionate leave Ten days of paid personal leave for all the full time employees (non casual) is allowed. The part time employees get the proportion of paid personal leave based on the number of hours they have worked. All the employees are only allowed to take two unpaid carer’s leave in case of each permissible occasion. Two days of paid compassionate leave in case of every permissible occasion is allowed. The casual employees are entitled to only two days unpaid leave in this circumstance. Some other leaves available to the workers are public holidays, long service leave, community service leave etc. Thus these standards provide the right to the employees to enjoy various rights in return of their hard work and commitment towards any organization. Unitarism and Pluralism According to the Australian Government and the large industry groups, the Work Choices Act 2005 was based on the unitaristic philosophy. According to the Labour party and the Australian Council of Trade Unions this legislation will result in weakening of the democratic rights of the employees, and failure in the enhancement of productivity and employment. On the other hand the Fair Work Act 2009 promotes pluralism. According to the Australian Council of Trade Union and the Labour party this act is a good replacement of the Work Choices Legislation. Comparison between the Work Choices Legislation and the Fair Work Act This portion will compare the two acts and conclude which one has been more effective for the Australians. In the year 2007, the Australians had Coalition Government under the Work Choices Legislation. During this time, the unemployment percentage was only 4.5 percent and more than 2,76,000 jobs were created. The work choices legislation restricted the entry of Union politics within the working of an organization. This increased the employment opportunities in Australia during this period (O’Brien, Deniss and Burgess, 2006). However, the Unions and the ALP’s felt threatened due to the regulations unde5r this act and they decided to spend all their financial as well as non financial resources in proving that the Work choices act is a scary act and needs to be removed. Their attempt to create a scary image of this act in the mind of the public was successful. Finally after the removal of the Work Choices Act, the fair Work Act came into existence. Under this act there has been an increase in various adverse circumstances including the Unions forcing to increase the wages, parliamentarians forcing to increment their raises, taxes becoming high for medium and high income employees, cost of living reaching to such a level which is beyond imagination, electricity increasing to almost 600 percent in the last five years. These situations resulted in the employers closing their businesses at an alarming rate and the businesses also finding it highly unsustainable to be continued in Australia. In the present situation the unemployment has reached in between 5.2c percent to 5.8 percent and the job creation is almost stopped. Presently under the Fair work Act, jobs are being lost at a higher rate instead of new job creation. The government took measures for reducing the unemployment by increasing the size of the public services size. But there were some wrong decisions taken by the government related to tax increase, green programme funding, infrastructure and the money spent in the overseas countries which resulted in the increase of debt to an amount of $ 230,278,230,500. Thus the present situation is highly reflecting the significance of new policies which can help the country to recover from the present financially distressed condition. Moreover the entire transition period starting from the phase of Work Choices Legislation to the phase of Fair Work act reflects the significance of the Work Choices Legislation which regulated the country in an effective manner. Conclusion The essay deals with the transitional phase in the employment relations in the Australian labour market from the period of governance of work Choices Legislation to the period of Fair Work Act. It also revealed the present scenario of the country in terms of the debt condition of the nation. The importance of implementation of a new regulatory system for improving the present scenario is a necessary step to be taken by the nation. Reference list AFPC, 2006. About the commission. [online] Available at: [Accessed 31 July 2013]. Australian Government, 2005. Work Choices: A new workplace relations system, Canberra. Baird, M., Ellem, B. and Page, A. 2006. Human resource management: Work Choices update. Sydney: Thomson. Balnave, N., Brown, J., Maconachie, G. and Stone, R. 2009. Employment relations in Australia. Milton: Wiley. Benett, L., 1995. Making labour law in Australia- Industrial relations, politics and law. Sydney: Law Book Company. Cole, K., 2007. Workplace relations in Australia, Sydney: Pearson. Fair Work Ombudsman, 2013. Best practice guide small business & the Fair Work Act. [pdf] Available at: [Accessed 31 July 2013]. Federation Press, 2006. The Work Choices Legislation: An overview. [pdf] Available at: [Accessed 31 July 2013]. Gardner, M. and Palmer, G. 1997. Employment relations. Melbourne: Macmillan. O’Brien, M., Deniss, R. and Burgess, J. 2006. The Australian Labour market in 2005. Journal of Industrial Relations, 48(3), pp. 305-18. Office of Legislative Drafting and Publishing, 2009. Fair Work Act 2009. Canberra: Attorney-General’s Department. Sappey, R., Burgess, J., Lyons, M and Buultjens, J. 2006a. Industrial relations in Australia. Sydney: Pearson. Sappey, R., Burgess, J., Lyons, M and Buultjens, J. 2006b. The new federal workplace relations system. Sydney: Pearsons Education. Stewart, A., 2009. Stewart’s guide to employment law. Sydney: Federation Press. Sutherland, C., 2008. First steps forward (with fairness): a preliminary examination of the transition legislation. Australian Journal of Labour Law, 21(2), pp. 137–63. Read More