Australian Council of Trade Unions and Minimum Wage - Case Study Example

Reward Management Name: Course: Tutor: Institution: Date: The submission of the Australian Council of Trade Unions has revealed a number of issues regarding its approach to contemporary reward management. One of the issues revealed in its introductory pages (pp. 1-24) is the commitment to be relevant and authoritative in ensuring that the Minimum Wage Panel discharges its statutory obligations (Perkins & Shortland, 2006). The Panel, for example, is obligated to establish and maintain the wages safety net for employees by ensuring that the wages are constantly reviewed (ACTU, 2010). One of the most significant principles of contemporary reward management is that it focuses on relevance and on the importance of reviews on minimum wages being relevant to the prevailing conditions of the community (Wright, 2004). This has been provided in the submission whereby the ACTU provides that modern awards should be maintained at a level that will make them a relevant safety net for employees and a relevant benchmark to add force to enterprise bargaining. This is apparent when it appeals to the Fair Work Australia Minimum Wage Panel to increase minimum wages in modern awards as well as minimum wage orders by $27.00 a week. The rest of the submission has been dedicated towards showing how the increase is justified and reasonable, starting with illustrations of how the economy in the nation has steadily recovered from the economic downturn (ACTU, 2010). The appeal of the ACTU to the Minimum Wage panel of Fair Work Australia to end the 2-year wage freeze that minimum wage reliant workers in Australia have experienced since 2008 is an important function that reveals its commitment for the good of the employee. The ACTU has also provided various recommendations to the Fair Work Act with regard to providing fair and a valuable safety net of minimum wages and conditions; the fair Work Act should time and again adjust the safety net so as to be relevant to the community changes and expectations. This, according to the ACTU, can be achieved through the annual minimum wages adjustment as well as the four year term reviews of the award adjustment (ACTU, 2010). Further, the ACTU has provided candid figures with regard to conditions of Australian employees, such as for example, the fact that 16.5 percent of employees are award only employees. This means that they cannot bargain with their employer, hence relying on the wage adjustments decisions made by the Fair Work Australian Minimum Wage Panel to meet their needs. This does not only reveal the obligation of the ACTU in meeting the plight of employees, a recognition role of trade unions (Blyton & Jenkins, 2009), but also emphasizes the importance of the decisions made by the Fair Work Australia Minimum Wage panel in meeting the needs of employees (ACTU, 2010). Importantly, the ACTU has gone into depths of explaining the conditions and challenges that face minimum wage workers in the review, which is very critical in contemporary reward management (Heneman, 2002). For example very many workers face numerous challenges because they remain low paid for substantial lengths of time, ultimately facing cost pressures. Worth noting is that a modest increase in award minimum wages will have an insignificant inflationary impact. By extensively demonstrating how increases in minimum wages amounting to $ 27.00 per week are justified and reasonable, the ACTU has revealed the essence of its role as a stakeholders’ entity whose objectives are in line with principles of contemporary reward management (ACTU, 2010). One of the first and most important issues revealed by the submission of the Australian Chamber of Commerce and Industry (ACCI) is its commitment towards delivering relevant and up to date views and decisions concerning Australian business in both the employed and the under-employed. This is revealed by taking into consideration of the legislative framework set up by the Fair Work Act 2009 (the Act), as well as its implications. The ACCI submission has also taken into consideration of various economic issues that Australia is currently facing, (these issues are actually the main content of the ACCI submission) fulfilling one of the most important principles of contemporary reward management (ACCI, 2010). Importantly, the ACCI submission has emphasized the significance of the 2009 Minimum Wage decision, having supported the decision made by Fair Work Australia at the time of the feasibility of Australian businesses and the protection of jobs for employees in Australia. This was fundamental in responding to the global financial crisis in an effective way that helped maintain numerous jobs for Australian employees (ACCI, 2010). The function played by the 2010 review in establishing future understandings about the laws and objectives of Fair Work is also very important in contemporary reward management (White & Drucker). In addition, the ACCI has taken into consideration the adjustment of the rates of Modern Award and has recommended that the Minimum Wage Panel should provide efficient time between the time of the Decision and when it is intended to be put into operation. The benefits of this recommendation are that it will ensure that any increases are efficiently implemented and more importantly, employees will be absolutely certain when adjusting their payrolls so as to factor the increases to their minimum wages. This is indeed according to principles of contemporary reward management (ACCI, 2010). An additional significant recommendation by the ACCI is that the outcome of the 2010 Annual Review should be in form of a tiered increase, because this will considerably accord with the function of minimum wages as an armament for the employees receiving low pay. This is because of benefits of a tiered approach since the Act provides that the tribunal should consider protecting the low income earners, there is no reason which should make the Act increase pay scales to workers whop are high income earners (ACCI, 2010). The strategic aim of contemporary reward management is to come up with and put into practice the reward policies, processes as well as practices that are needed to ensure that the business goals and objectives of organizations are achieved with regard to meeting the needs of employees (Armstrong et al, 2007). The decision of Fair Work Australia has fairly reflected the various views contained in the submissions of the Australian Council of Trade Unions and the Australian Chamber of Commerce and Industry. Firstly, it has taken into consideration the submission of the Australian Council of Trade Unions (ACTU) that the Panel should increase minimum wages, in modern awards as well as minimum wage orders, by $27.00 a week, and the ACCI’s submission that the Panel should fund the increase of not in excess of $12.50 per week for employees that earn up to the C10 tradesperson categorization rate of $637.60 per week; and the submission that the Panel should grant an increase of $10.50 per week for employees that earn up to the C10 trade rate (FWA,2010). It is essential to note that in its response to the submission of the ACTU and the ACCI, the Panel has also effectively responded to the requirements of modern reward management because of recognizing the significance of award modernisation. The Panel give their word that they will take into account a number of relevant considerations, one of them being that the GDP per hour worked increased by 16 percent and by 20 percent in the market sector, compared with the growth in the real value of FMW that saw a growth of 2.4 percent. Worth noting is that with regard to productivity growth and increasing community living standards, maintaining the real value of award wages was not efficient enough to maintain relative living standards, a relevant consideration that greatly meets the requirements of contemporary reward management (FWA,2010). References Australian Council of Trade Unions (pp. 1-24, pp. 185-188) Annual Wage Review 2009–10 Retrieved October 21, 2010: Australian Chamber of Commerce and Industry (pp. 1-26). Annual Wage Review 2009–10 Retrieved October 21: Armstrong, M, Murlis, H. & Hay Group (2007) Reward management: a handbook of remuneration strategy and practice, London: Kogan Page Publishers. Blyton, P. & Jenkins, R. (2007) Key Concepts in Work. London: SAGE. Fair Work Australia (FWA) Decision Fair Work Act 2009 decision of the Minimum Wage Panel Retrieved October 21: Heneman, R. L. (2002) Strategic reward management: design, implementation, and evaluation. New York: IAP. Perkins, S. J. & Shortland, S. M. (2006) Strategic international human resource management: choices and consequences in multinational people management. London: Kogan Page Publishers. White, G & Druker, J. (2000) Reward management: a critical text. Routledge studies in employment relations. London: Routledge. Wright, A. (2004) Reward management in context. London: CIPD Publishing. Read More