Fair Work Act 2009 - Industrial Relations - Assignment Example

Running Header: Fair Work Act 2009 Student’s Name: Instructor’s Name: Course Code Date of Submission: Fair Work Act 2009 Introduction Industrial relations show a collective relationship between the organisational management and its workers. Industrial relations also involve a collection of various aspects such as trade unions, collective bargaining, and how workers participate in increasing organisational output. It could also mean settlement of grievances among workers and the interpretation of labour laws meant to protect workers welfare. Cooper (2009, pp. 261-274) describes that industrial relations is seen to affect the economic and the social goals of an organisation and in order to achieve this goals, management should ensure that workers well being is effectively maintained. Industrial relations encompass all the factors that influence individuals’ behaviour at work. Baird and Williamson (2009) shows some of these factors include institution, character, methods and contents. Some of these institutions come with power and authority and this tends to change the culture of the organisation and the employees belief. The above study assesses the role, functions and future of Fair Work Australia in the Australian industrial relations system. The Australian modern and competitive economy is supported by a flexible workplace system. The system links productivity to remuneration. It also promotes innovation and efficiency gains in individual workplaces. With the system, workers are able to negotiate a flexible agreement and the industries are also able to respond competitively to global challenges. Main body The principles of employment relations include factors that link the employer and employee or unions. Sheldon (2008) shows that some of the values include treating workers with dignity and respect, conducting employee relations with honesty and being straightforward which involve having a constructive manner. Employee relations show that every employee is important as they contribute to the overall success of the business operation. The other principle is that employees should be shown how to conduct various activities in the business and once they fail management should be blamed for ineffective training. Employee relations principles also state that the goals of the business should be communicated to every employee and their performance should be analysed to assess whether they are working towards achieving these goals. This means that there should be a continuous feedback for development. It is also necessary to inform employees on matters concerning standards, policy, procedures, work conditions, benefits and compensation. After informing employees, their views and concerned should be listened to avoid disputes (Baird and Williamson 2009). It is necessary for employers to recognise better performers and therefore employers have the responsibility to praise. Every party in business also has a responsibility to help fellow partners as this involves working together for a common purpose. It also involves being mutually supportive. Employers should ensure they empower their employees through contributions and in making the working environment interesting, challenging and rewarding. This is achieved by involving employees in decision making for continual process improvement. The final principle is that it is necessary to make the workplace pleasant and enjoyable. This motivates employees and reduces problems created by inappropriate and inconsistent treatment by managers. In the implementation of the above principles and policies, the business management ensures that they maintain their company resources which include maintaining a good relationship with the employees as this improves industrial relations (Sheldon 2008). According to Cooper (2009), Employees ensure that the hindrances to improvement are addresses by having a personal conversation with team members and listening to every issue. The issues and concerns raised should be solved immediately and in the most effective manner in order to avoid major issues in the future. Managers should also be in a position of asking themselves whether their employees are achieving the desired expectations of the business and whether they have the potential to achieve these goals. Finally, managers should be able to gauge how much the employees have improved since the previous appraisal or the value they have added to their development since the manager started supervising. Industrial relations have a major impact on the performance of employees and employers. There has to be a new direction of the development of the concept of power as applied in employees’ relations. To solve the problem of power imbalance, the imperfections in product and labour markets should be reduced. Cooper (2009) describes that these include barriers to entry into the labour market, restrictions on worker mobility, rigidity in wage fixing and finally the information asymmetry. Management should ensure that these factors are effectively managed as they affect the balance of power between employees and employers. Workers should be involved in decision making process to reduce information asymmetry. Management should also set a flexible wage rate system which should be according to the economic status of the state. According to Alexandra (2011) adverse movements experienced in 1970s in terms of trade together with oil price shocks greatly weakened Australian economy capacity to sustain the rising living standards without incurring chronic balance of payments problems. This led to the introduction of a range of reforms for the enhancement of the competitiveness of Australian industries in the international markets. The government introduced various reforms which included reduction of tariffs, floating of the Australian dollar and abolition of foreign exchange controls therefore increasing foreign competition. As a result of the increased competitive environment, the labour market institutions had to significantly change. This resulted to industrial relations arrangements that gave primacy to bargaining at the enterprise and workplace level. This therefore changed the centrally-determined pay and working various arrangements. Significant changes have therefore been introduced since 1990 to Australia’s workplace relations law for example maintaining a strong safety net for employees and at the same time providing flexibility and choice for employers and employees at the workplace level. Cooper and Ellem (2009, pp. 284-305) describes that in 2008, the government of Australia implemented transitional measures meant for phasing out key provisions in the existing laws of 2005. Some of the measures introduced included preventing the making of a new Australian Workplace Agreements (AWAs) so as to provide individual transitional employment agreement. This was to be given to new employees and employers who were already in the AWAs for about two years. The measures also introduced a no-disadvantage test for collective agreements. The national workplace system was established in 2006 and was based on the corporations’ power of the constitution. This power is in such a way that it gave permission to the Australian government to make laws regarding foreign companies, trading and other financial institutions. The system currently involves all employees included in businesses. The government still continues to regulate areas which include occupational health and safety, working hours, worker’s compensation and long service leave. This is effectively managed in order to deliver uniform national workplace relations system that involves all employees and especially from the private sector and unincorporated businesses. The Australian Fair Pay and conditions standard had set out a statutory minimum terms and conditions of employment which would apply under the national workplace relations system. Some of the minimum entitlements included the minimum rates of pay and casual loadings, the maximum hours which were 38 hours per week and four weeks of paid annual leave. Other entitlements include ten days of paid personal leave and 52 weeks of unpaid parental leave. The minimum wages for employees was established by the Australian Pay and Classification Scales which was part of the Australian Fair Pay and Conditions Standard. This stated the expected pay for every classified employee and it sets and adjusts the Federal minimum wage. AFPC had the responsibility of setting and adjusting the minimum wage for workers including trainees, apprentices, casual workers and juniors. The responsibility was however handed over to the Fair Work Australia after 2010. The Australian workplace relations system also involves awards and award modernisation. Awards are said to be legally binging tools that set out the minimum terms and conditions for employment in a particular business or occupation. The awards were set out by the AIRC and involve working hours, public holidays, allowances, overtimes, annual leaves and penalty rates. Modern awards which include safety net protections for employees are expected after the implementation of new workplace system of Fair Work Australia which will be involved in setting, reviewing and adjusting awards (Fair Work Act 2009). Workplace agreement is also a factor under the workplace relations system in Australia. This involves the provision of transitional arrangements for employers who use AWAs. This was however changed by FWA which introduced a system of statutory National Employment Standards and modern simple and flexible awards. The system was set up in order to protect employees to avoid any individual statutory employment agreement. FWA also introduced collective and individual transitional employment agreement after linking with the Workplace Authority. Workplace Relations Act also recognises the role of unions and employer organisations. This involves the freedom of association which ensures that an employer can not terminate any employee since they are members of a union. The Workplace Relations Act also gives the circumstances that give union officials the right of entry into workplaces. It also empowers AIRC to control the abuses associated with the right of entry system. The workplace relations system also shows that an employer may engage in protected industrial action. It also states that employees are not to be held liable for protected industrial action and it is protected under certain statutory acts. One is that industrial action is taken before claims of negotiation of a collective agreement. The Act also has safeguards that protect against disputes between unions that may damage business operations. 1. What is Fair Work Australia? Fair Work Australia (FWA) is an industrial relations institution formed by the Federal ALP government’s Fair Work Act of 2009. The institution started it operation on 1 July 2009. FWA was formed in order to review modern award minimum wages and to formulate the National Minimum Wage Order. It was also formed to make one or more determinations varying between modern awards set or in revoking modern award minimum wages. 2. What does Fair Work Australia do? The functions of FWA include setting and varying modern awards in Australia in order to protect employees. FWA also fixes the minimum wage, resolves dispute between employees and employers and also provides approval of enterprise agreements and handling claims for unfair dismissal of workers. FWA is a successor institution after the Australian Industrial Relations Commission. It however performs functions that were previously carried out by the Workplace Authority and the Australian Fair Pay commission (Alexandra 2011). 3. Why was Fair Work Australia established? According to Alexandra (2011) FWA was formed in order to protect and enhance industrial relations. It is therefore the national workplace relations tribunal established by the labour government. It is an independent body that carries out certain roles such as organisation of safety net of minimum wage and it also sets up the employment conditions. The institution also ensures enterprise bargaining, carries out industrial actions, dispute resolution and assists in advice in termination of employment. FWA Act formed the system for regulation in order to create a more national system for regulating industrial relations in Australia. The Fair Work Act covers all the employees in Australia. This has therefore mage all the states to refer their powers to the commonwealth except the Western Australia. 4. Does Fair Work Australia perform the same roles and have the same functions as the Australian Industrial Relations Commission and the Australian Fair Pay Commission played and performed in the Australian industrial relations system? FWA has taken all the roles of Australian Industrial Relations Commission (AIRC) for example in dealing with the set up of minimum wage of employees and in the regulation of the award system. FWA promotes bargaining under utmost good faith between the employees and the employers. FWA performs as previously performed under the Australian Industrial Relations system, FWA acts under the power of trade unions to represent workers in their contract negotiation periods. FWA uses collective bargaining which regulates the terms under which employees hire workers and it also protects the future treatment of future employees. This system of collective bargaining acts as a voice mechanism among employees, employers and trade unions where the parties are free to express their objectives surrounding the nature of their work (Sheldon 2008, 235-248). The new regulations introduced by FWA emphasized on the need for enterprise based bargaining. This role is better than what has been used by the AIRC and the Australian Fair Pay Commission. FWA also outlaw pattern bargaining and removes the difference between union and non-union agreements. Sheldon (2008, pp. 235-28) explains that AIRC has been responsible for hearing national wage cases and setting of award wage and conditions in light with the living wage since 1907. There have however been submissions from stakeholders such as from employees’ advocates, Australian Council of Social Service and the Australian Council of Trade Unions. This therefore led to the government to take the wage setting function from AIRC by legislating minimum requirements to the standards of five matters. The government therefore creates its own body to carry out the setting of minimum award wages and the body was the Australian Fair Pay Commission (AFPC). The FWA also performs AIRC role of hearing unfair dismissal and unlawful termination of work (Fair Work Act 2009). 5. What is the future for Fair Work Australia in the Australian industrial relations system? Will it be abolished when there is a change of federal government? FWA rules that agreement-covered employees should be excluded from multi-enterprise negotiations which are under the Fair Work Act 2009. This Act allows workers identified as low-paid to request bargaining assistance from the FWA tribunal. This shows that in future, every worker will be paid the minimum wage as set by the institution. FWA however has not explicitly ruled out authorising negotiations with employers with enterprise agreements in future. This therefore shows that future decisions on low-paid determination applications will clarify the ultimate interpretation of the provisions. The aspects of legislation therefore has caused trouble on employers who may introduce industry wide bargaining which is above enterprise bargaining. These employers hope that the future applications will include employers already covered by an enterprise agreement. Cooper and Ellem (2009, pp. 284-305) shows though the decisions for the formation of FWA are reasonable in various respects, the organisers did not critically interpret the provisions for the explanation of the narrow scope for future low-paid determination applications. These decisions therefore may lead the industrial relations backwards to the previous system of industry-wide arbitration in future. This also shows that more time is needed to assess the influence of the new bargaining framework of FWA and therefore the future of bargaining in Australia will be tested after some few years to give proper feedback. Conclusion Fair Work Australia uses corporations’ power to ensure that it is applied in all Australian employees. It also abolished individual statutory contracts for example the AWAs in order to effectively manage collective bargaining. As the new national industrial relations regulator, it replaced all the roles of AIRC of setting the minimum wages which was also carried out by AFPC under workplace relations Act 2005. The FWA therefore marks a significant change in the nature of bargaining arrangements within the Australian perspective. This is because bargaining is based at the enterprise level. The good faith bargaining also shows the necessary behaviours of bargaining parties in negotiations. This framework therefore results to encouraging greater equality bargaining though the extent of this change is not known. References Alexandra, M. 2011, Fair Work Australia excludes agreement workers from multi-enterprise bargaining, viewed 13 August 2011, Baird, M &Williamson, S 2009, Women, work and industrial relations in 2008, Journal of Industrial Relations, vol. 51, no.3. Cooper, R & Ellem, B 2009, Fair work and the re-regulation of collective bargaining, Australian Journal of Labour Law, vol. 22, no. 3, pp. 284-305. Cooper, R 2009, The 'new' industrial relations and international economic crisis, Australia in 2009. Journal of Industrial Relations, vol. 52, no. 3. pp. 261-274. Fair Work Act 2009, Section 65: Requests for Flexible Working Arrangements. Sheldon, P 2008, What collective bargaining future for Australia? Lessons from international experience, Remaking Australian Industrial Relations, pp. 235-248. Read More