Labor Laws in Australia - Case Study Example

The Australian economy has witnessed radical changes with regard to the labor laws and the development of different reforms and guidelines has changed the entire working scenario. The economy witnessed different perspective like pluralist, unitarist, neo-institutional and radical perspective which has changed the entire relationship structure within the economy. It was observed during the 1970’s that males constituted as the major contributor towards job which has slowly changed with time. It was encountered that most people during that period were uneducated and were engaged mainly in agricultural and manufacturing purposes. With different developments and reforms changes were witnessed which has thereby transformed the labor markets. Today, both male and female are found to have equal job opportunities and many people within the household have employment which was not the scene in 1970. The paper thereby explores the manner in which employment relations has changed in Australia by looking into different developments and analyzing some of the different reforms which have taken place. This is supported by different perspective being used to develop employee relations. The same is followed by different examples from different areas and aspect so that the overall change in the working style can be understood. This will thereby help to develop the required fundamentals through which labor laws have undergone changes and the manner in which employment relations have changed. The labor laws in Australia have undergone changes which has thereby shifted the focus and increased the use of unitarist perspective while looking to develop employee relation (Bray, et al 2011). The Australian economy which developed labor laws by relying on the Corporation Power which falls under the Australian Constitution and has been replaced by the Fair Work System. This has been further replaced by the Fair Work Australia which works on the unitarist perspective and ensures that chances of exploiting the employees reduce (Fair Work, 2013). Employment relationship is a vital element in today’s business operations as it focuses on employer-employee relationship and manages employees to ensure smooth coordination with regards to power and legitimacy, rights and obligations desirable for both the management and employees (Borland, Dawkins, Johnson and Williams, 2000). This understanding of employment relationship is commonly known as “managerial prerogative”. “Managerial Prerogative” is an ideology which is based on unitary perspective of employment relationship and has been rightly used for management control over a large period of time. It is based on the assumption that organisations should develop a single set of values and principles focusing on objectives of all its members so that each member is treated at par and achievement of organisational goals leads to automatically fulfilment of individual member objective. When compared with the unitary system it has a different approach as the unitary system focuses on centrally controlled leadership style to which all members of the organisation has to respond and it fruitfully cuts down any antagonist movement by employees in organisation and further ensure smooth running of the business by reducing the leadership challenges to a considerable extent (Bray et al., 2011). It is due to such advantages that organisations prefer more of unitary approach of its being more rational and easily implemented in today’s modern organisational culture and environment. Concept of ‘managerial prerogative’ gives predominance power to the management group of the organisation as they are provided with the right to decide the appropriate work tasks, allocation of work among different employees, right time limits to complete the allocated tasks and desired knowledge and skills to perform the task making a complete clear identification of the pay structure. The same is clear in most of the organisations today, where the management or the employer takes the major or sole responsibility in decisions regarding working hours, pay and wage structure including organisational structure which seems to a suitable situation and correct for most of the organisations (Edwards,2003). In cases of contractual agreement between the employer and the employee, where an employee enters into a contractual treaty with the employer or rather with the organisation, the employee is under strict control and obligations to work according to the terms of contract which is mostly dominated by the employer in a biased state towards the organisation (Borland and McDonald, 2000). However, employees are provided with a certain degree of freedom and flexibility in their working style, as the management is always under a certain fear of the employee cancelling the agreement and leaving the task if the employee doesn’t find the working environment suitably fit for his or her working requirements but still the employee has to remain within the contractual agreement and strict vigilance of the employer and abide by all legal requirements (Wooden,2000). It is to be noted that since employer have a status power it provides them the flexibility and considerable amount of freedom to dictate the terms of the contract which is more inclined towards organisational interest thus affecting the interest of the employees. Historically, the situation was more favourable towards employer since the contract to work was not determined with a complete mutual understanding and dialogue between the employer the employee. It was the employer or the management of the organisation who dictated the terms. This in turn led to a complete change in the system as new labour laws were introduced and human resource department became more precise and unbiased towards the organisational structure and working environment. Trade and labour unions came to the forefront to ensure that the rights and freedom of the employees are protected to a considerable extent and a negotiation process is carried out despite the unwillingness of the employer. Thus although the management has generally tried over the years to exclude problems related to unions away from their workplaces, in reality the strength of the unions in many parts of the economy has forced management to cut down the biased structure by accommodating workers needs and demands in line with organisational objectives. However the same in no way means that the management has accepted complete dominance of the unions and have indeed tried in every turn to limit the influences of unions over employment relationship in their workplace and working environment (Bray et al., 2011). Workplace deregulation, technological changes and globalisation has given management immense opportunities and leverage to regularise working environment, skills and pay structure used by employees for their advantage in the past. With global competition and newer techniques employers have been successful to reduce both direct and indirect cost and had looked towards higher efficiency and flexibility within the organisations (Deery and DeCieri, 2001). Employee’s position has weekend and managerial prerogative can still be seen in a typical employment situation be it a contractual agreement or a fixed contract by employee to render its services to the organisation. Organisations today, aims at more tighter managerial control and better work efficiency by using modern techniques such as downsizing, delivering and higher production level. Maintain a good employment relations where needs and objectives of both the organisation and employees are inculcated in the long and short term objectives of the business will ensure that disputes if any emerges will be solved easily without much affect to the smooth running of the business. This will reduce the number of strikes, lock outs and others having an adverse affect on the business. It will act as a method through which employees will be motivated towards their work and a higher level of commitment can be achieved (Edwards, 2003). The role of managers is of prime importance to build a good employment relation, managers have to understand that a better employment relation will positively contribute to the growth and success of organisation and managers has to seriously change their biased attitude and dominance strategy to achieve efficiency in the working environment. This will bring out the best in employees as high morale rate will be ensured through this process (Hodgson, 2006). One of the best practice of human resource management (HRM) is the high-commitment management or high performance/high-involvement work system. They are so called because they are aimed to increase the workplace productivity. The system aims a complete process where recruitment is done in an unbiased manner to select highly committed and flexible people, intense training is provided with job security and promotions along with incentive schemes. Direct communication system is build and focus is on team work (Beggs and Chapman, 2008). It is clear that high performance work systems are composed of policies, practices and strategies which continuously aim at developing employment relation to gain additional labour effort and including suggestions from employees in important decision making process. If an organisation with constant efforts can develop such a system it will definitely lead to improve financial performances of the organisation with greater labour productivity, lower staff turnover and an overall development of the organisation with a better workplace to work for and ensure higher returns and growths with fulfilment of both individual and organisational goals and objectives (Beggs and Chapman, 2008) Organisations are constantly looking for how such system can be implemented and researchers have proposed elements to achieve the same. For example, Pfeffer (1998) has identified seven practises of successful organisation which are as follows: selective recruitment, employment security, extensive training, learning and development, team work, performance related compensation, reduction of status differential, and information sharing and employee involvement. However, many researchers have contradicted and have argued that there is no specific bundle of HRM policies and practices that can be implemented by every organisation and achieve guaranteed improved performance (Loundes, 2000). To achieve high performance work system, it is of prime importance that employees understand and contribute with their best efforts to achieve organisational goal. This can be achieved to a considerable extent if employees are made to perceive that are able to contribute towards organisational objectives and have choices available before them. However it is to be noted that involvement holds the key factor than participation to achieve the high performance work system. Employee participation follows a pluralist approach as it provides the employees with choice and opportunity to either get involved or not to get involved which ultimately leads to increased control. Employee involvement on the other hand is more inclined towards a unitarist approach which aims at higher commitment towards organisational goal and ultimately leads to better control over business (Marchington et al., 1992). Greater involvement may lead to higher commitment of employees and thus ensure better performance of the organisation. However, critics argue the fact that increased performance through discretionary efforts may lead to greater job related stress and poor work/life balance. Indeed it has been argued that high performance work system along with modern management techniques and strategies will lead to higher control over employees and further ensure better performance of the organisation on an overall basis. Australian economy today follows Fair Work Australia System which has indeed fulfilled the gaps which existed in previous reforms and better rules had been developed which ensure higher contribution from employees and reduces the chances of exploitation of employees to a considerable extent (Fair Work, 2013). Recently Fair Work Australia has laid down rule which ensures that employees whether on hired, part time or full time contractual basis will be paid at par further thus ensuring improved living status and lower conflicts in organisations with higher growth and better workplaces to work for. Organisations on an overall basis has been benefitted greatly from it and it has indeed provided a code and direction to the organisations which it needs to follow to ensure lesser problems and higher performance in future years to come. The overall basis thereby focuses on ensuring that strong and better industrial relations are developed which will focus on improving the entire process of developing relations. This will help to ensure that the economy will be able to find out the correct perspective through which developments and achievements of the goals in the future increases. This will thereby improve the entire relationship within the industry and will create an arena through which better developments can be ascertained. References Beggs, J. and Chapman, B. 2008. Immigrant wage adjustment in Australia: Crosssection and time-series estimates. Economic Record, 64, 161-167 Borland, J. 2005. Employment and income in Australia – Does the neighbourhood dimension matter? Australian Bulletin of Labour, 21, 281-293 Borland, J., Dawkins, P., Johnson D. and Williams, R. 2000. Returns to investment in higher education. Economics of Higher Education Research Program Report no.1, Melbourne Institute, University of Melbourne Borland, J. and McDonald, I. 2000. Labour market models of unemployment. Working paper no.15/00, Melbourne Institute, University of Melbourne Campbell, I. and Burgess, J. 2001. A new estimate of casual employment. Australian Bulletin of Labour, 27, 85-108 Cass, B. 2002. Employment time and family time: The intersection of labour market transformation and family responsibility in Australia. pages 142-162 in R. Callus and R. Lansbury (eds.) Working Futures ( Melbourne, Federation Press). Daly, A. and Hunter, B. 2001. Incentives to work: Replacement ratios and the cost of job loss among Indigenous Australians. Australian Economic Review, 32, 219- 236. Dawkins, P., Gregg, P. and Scutella, R. 2002. The growth of jobless households in Australia. Australian Economic Review, 35, 133-154 Deery, S. and DeCieri, H. 2001. The determinants of trade union membership in Australia. British Journal of Industrial Relations, 29, 59-73 Edwards, P.K. 2003. ‘The challenging but promising future of industrial relations: developing theory and method in context-sensitive research. Industrial Relations Journal 36 (4), 264–282 Fair Work, 2013. Review of Fair Work Act. Business Council of Australia, Australia Gregory, R., McMahon, P. and Whittingham, B. 2005. Women in the Australian Labour Force: Trends, Causes and Consequences. Journal of Labor Economics, 3, S293-S309. Heath, A. 2000. Youth education decisions and job-search behaviour in Australia. unpublished Ph.D thesis, London School of Economics Wooden, M. 2000. The changing skill composition of labour demand. Australian Bulletin of Labour, 26, 191-198 Read More