Role of Unions in the Australian System of Employee Relations - Coursework Example

Role of unions in Australian system of Employee Relations Name: Tutor: Course: Date: Introduction The aim of this essay is to assess the role of trade unions in the Australian system of Employment relations. Trade unions according to the Australian federal system are created for the purposes of protecting or furthering the interests of its members, and should be free of improper influence or control by the employer. The union should have more than 50 members who are employees. The unions occupy a space in the industrial relations system and are a crucial entity in collective labor relations (Clegg, 2006). Newer forms of employee participation and representation have brought additional dimensions to the picture of labor relations. Many countries have separate legislations governing private and public sector employers with rights and protection of employees varying significantly. It is undeniable that trade unions in Australian labor relations systems has created the much needed revolutionary transformation to protect and represent the rights of workers. The presence of trade unions has also driven the federal government to shift the locus of power to the national scale and develop more power as vested in the Australian constitution (Bell, 2001). The state has been able to undertake a range of legislation relating to governance of corporations or firms, strengthening the scope and depth of control issues on industrial relations and employment practices. It also assisted in rescaling the practices of regulation to the workplace, enterprise and individual workers. Australian labor relations History of Australian labor relations and Trade Unions Trade unions in Australia emerged from the major strikes of 1890s due to bitter struggles between organized labor and capital causing distress and widespread dislocation. The colonial society became disenchanted in its economic and social fabric to a point that a requirement was made for unions and employers to submit competing claims for an independent third party to undertake arbitration. The first decade in the 20th century saw all the Australian states establish industrial tribunals. The Conciliation and Arbitration Act of 1904 allowed for the registration of organizations of employers and employee unions (Briggs, 2004). The legislation contained explicit references to basic wage and its provisions, intervention of Commonwealth Attorney General on hours and basic wage and provision for Conciliation commissioners to aid in reaching agreements. In 1973, the Act was amended to provide for the Commonwealth Conciliation and Arbitration Commission to handle arbitration and conciliation issues while the Commonwealth Industrial Court exercised judicial power (Commonwealth of Australia 1985). In 1988, the Industrial Relations Act was passed to establish the Australian Industrial Relations Commission, Australian Industrial Registry, Provision for dual appointments, Designated Presidential Member and provisions for demarcation disputes and agreements. Major policy thrusts followed when the Industrial Relations Reform Act 1993 and Workplace Relations Act 1996 came into form. The Australian parliament later passed the Work Choices Act 2005 by amending that of 1996 to accommodate simplicity and flexibility of the national industrial relations system. According to Creighton (2000) dispute resolution remained a core function but the role of the commission was changed. There are more than 46 trade unions in Australia today under the umbrella of Australian Council of Trade Unions (ACTU). The national body undertakes major test cases, award modernization process and national wage cases. Demarcation disputes among unions are also handled by this state body. The Australian unions dipped in 1930s to 40% and rose to 65% in the 50s. Union density again ramped in the 90s to 49% and to less than 20% in 2007. In 2007, the union density in the public sector was 44% and 15% in the private sector. According to Macken (2002), the reasons for the decline were varied and complex, but it was largely due to the rapid growth of service sector and contraction of manufacturing employment. There has been a remarkable growth in non-standard forms of employment as full time employment declines. Other factors include internal union policies, strong anti-union sentiments from employers and removal of institutional arrangements owing to the centralized system of arbitration (Gardner & Palmer, 2007). Role of Trade Unions in the Australian Industrial Relations system The ACTU has been the main confederation for non-manual and manual unions since 1927 and covers about 95% of all the unionized workers. In response to the Work Choices Act ACTU organized ‘Your rights at Work’ campaign which was successful. Plowman (189) argues that the exercise of trade union freedoms is inextricably bound with the flourishing democratic institutions. To reverse union decline, the ACTU has focused strategies on engaging in social/community movements and focusing on independence from the state. Reorientation and internal reforms are more diverse and greater membership especially in women participation (Plowman 1989). Australian labor law dissents from the systems of worker representation exhibited in European countries. Trade union delegates may represent the workers at the workplace level. Employers are necessitated to consult with trade unions when thinking of undertaking some form of redundancy. For instance, this happens when cases where an employer opts to terminate the contract of at least 15 employees on grounds of technological, economic or structural nature. The employer is mandated when under these circumstances to consult with the trade unions to avoid terminations and mitigate on the adversities of such terminations (Thornton 1990). The terms of certified agreements also provide for employer and employee representatives to observe the dispute settlement procedures. Pursuant to an agreement according to the Workplace survey of 1995 shows that 40% of the workers had consultative committees which were not party to arrangements for a certified agreement negotiations. According to the Superannuation Industry (Supervision) Act 1993 (Cth) pt 9, trade unions enjoy representation on superannuation funds regulated by the government by being on the boards. Employer representatives and trade unions have should have equal number of votes on the board (Thornton 1990). Occupational health and safety is regulated by state laws and requires the establishment of safety and health committees at the workplace in which case the union is given a privileged position during creation. Trade unions in Australian labor relations system promote freedom of association and collective bargaining. The unions sets, monitors and enforces awards which regulates the working conditions and terms for a large sector of society (Nolan, 1997). In bargaining collective agreements with employers, the unions are provided with the necessary benefits and rights to ensure security and ability to function as labor power. However, the Howard coalition government posed a threat to unions by stripping their financial security through prohibition of bargaining service fees. Consequently, the union had less to offer members in an environment epitomized by decentralization, diminishing membership incentives and individualized bargaining system. Trade unions are capable of securing suitable resources from subscription of members, and posses legal entitlements to allow for engagement is certain activities (Plowman 1989). The unions have been instrumental as industrial instruments and play huge roles in bargaining agreements, preference clauses, closed shop arrangements and compulsory deduction of bargaining services from non-members. On the contrary, the security of unions has been weakened since the introduction of Work Choices Act 2005, which was felt to provide unions with a new platform to re-assert their relevance. The present work environment prioritizes managerial prerogatives ahead of worker’s rights (Briggs, 2004). Union membership has been decreasing since 2005, due to diversity of workforce coupled with female presence and increased casualisation. Australia is a party to Protection of the Right to Organize and ILO (International Labor Organization) Convention 87 regarding freedom of Association. The convention provides for employers and their workers to join an organization of their choice. The nature of business and employment has radically changed from those realized six decades ago. Unions capabilities are being challenged by globalization and technological innovation though ILO still believes unions have a huge role in maintaining social justice, peace and decent work. Under the Work Relations Act 1996, the Howard government allowed included anti-victimization provisions, but ironically objected the outsourcing plans and corporate restructuring by employers (Lansbury & Wailes 2011). The unions under WRA were able to engage employers from relating with employees under a ‘prohibited reason’. For example, the cases of Patrick Waterfront and Greater Dandelong were disputes limiting actions of corporate restructure. These protected the workers under ‘prohibited reason’ from termination arguing that they were entitled to the payback of an industrial instrument. On the same vein, the BHP Iron Ore Case prompted the Australian workers union after interlocutory injunction to advance a similar line of argument but lost at full trial. The perception of the court is that the unions still play a role at the workplace besides collective bargaining, but the magnitude of union membership has dropped. This reflects badly on the presence and response of the nature of unions. Unions in Australia are now vibrant in protecting and requiring the prohibited reason to engage in the conduct (Macken 2002). The right to engage in collective bargaining and strong unions strengthen and protect the weak voices. The unions mitigate those trapped in poverty and social disadvantage. According to Australian Journal of Labor Law (2012) the unions are the pillars of collective bargaining to drive economic gains of its members especially those sharing trends, common work tasks and priorities. The unions necessitated the paradigm change to decentralization of industrial regulations. This was a move from industry-based awards and enhances enterprise level bargaining. The Work Choices Act promoted individualistic approaches which weakened the security and role of unions. The office of Employment Advocate preferred Australian Workplaces Agreements, which became popular among employers as they were unilaterally set and promoted ‘take or leave’ basis (Senate Economics Reference Committee 1999). This development weakened the collective bargaining capacity of unions. Resources and internal structure of unions are still rooted in the industrial-based past, making them ill-equipped to engage in collective bargaining at enterprise levels, which are governed by individual flexibility terms. The level of bargaining remains collective hence protecting the right of freedom of association and promoting the roles of unions (Pittard & McCallum 1995). Unions own the bargaining ideals through free exercise of bargaining power hence enhancing collective bargaining where non-union agreements are bound to fail. For instance, in the Boeing case, and that of TWU v DHL where they were required to recognize unions as bargaining representatives and promote the wishes of workers. The unions may not force an employer to agree but draw negotiations and considerations to the proposals. Unions take protected industrial action having recognized, that employers and employees are not engaging on negotiations on equal grounds. McCallum et al. (2004) opines that the unions have to fight with the laws that require restrictions on strikes like frequency, duration and nature of prohibited action. The secret ballot established was meant to circumvent the overzealous union leaders and delay industrial actions hence weakening the role of unions. Trade unions and strikes The conciliation and arbitration processes were aimed at rendering strikes unnecessary, since the historic system was of the opinion that conciliation would be exhausted, once arbitration has taken place. Lee and Sheldon (1997) note that the right to strike was illegal under the conciliation and arbitration system, until the Australian workers received a protected right to strike in 1993. The average working days lost in every 1000 employees through disputes were halved in the 80s and 90s to the Prices and Incomes Accord and also from the changes in the macro-economic conditions. After 1993, the unions received a go ahead to only strike within a bargaining period where the industrial regulatory body could determine disputes or intervene where the parties had no chance of settlement, no acting in good faith or interventions were due to public interest (McCallum, 2005). In traditionally unionized industries, most employers initiated industrial actions in an attempt to introduce non-union collective arrangements after the year 2000. The Work Choices reforms of 2005 also weakened the role of unions by eroding the power of Australian Industrial Relations Commission (AIRC) hence forcefully removing its arbiter power. Under the Fair Work Australia, the Fair Work Act 2009 mandated that it intervenes in the case of intractable or a breakdown in negotiations among parties or where the negotiations are likely to cause huge economic harm to the parties involved. Trade unions and issues of wage determination and diversity The federal tribunals have since 1907 been setting the minimum wage with the dominant mechanism dubbed the Prices and Incomes Accord. The Accord allows the ACTU and the government to provide a joint submission to the National Wage Case. In most of the instances, the Australian Industrial Relations Commission (AIRC) accepts recommendations and gives them effect by introducing wage principles (Kelly, 2005). There was a trade-off in the Accord given that the unions promised not to make extra claims on wage bargaining in the hope of broadening industrial policies and increasing the social wage. The Accord and its role on the wage policy ended with the election of Howard’s Liberal government. The responsibility of setting minimum wage under the Work Choices was transferred to the Australian Fair Pay Commission. Currently, the minimum wages are determined by Fair Work Australia which is under the Minimum Wages Panel. The role of unions has been on the decline due to unemployment and working hours. In the last decade, there were labor shortages and full employment though unemployment rose from 4.3% to 5.3% from mid-2008 to mid-2009. The government responded by increasing its spending to prevent unemployment and underemployment rates from escalating (Hunter, 1992). Working hours have since increased since one in every five workers is working for more than 50 hours in a week. The workers under the Fair Work Act 2009 facilitated workers with flexible working arrangements forcing employers to respond to the request. Unions have facilitated gender equality at work with women now comprising 48% of the Australian workforce. Their wages were lower than those of male colleagues with employment concentrated on low paid work areas. The government showed that the gender pay gap was 16% in 2007 with variations in industry sectors and states (Australian Bureau of Statistics, 2000). The test cases in AIRC were successful in advancing pay equity but again stalled after the Work Choices. The legislations having an input of unions prompted the removal of prove for discrimination on gender pay, and facilitated the equal remuneration ‘equal or comparable value’. Positive outcomes on women results from the new low-paid bargaining stream. Conclusion The aim of the essay was to establish the role of trade unions in the Australian system of employee relations. It has been established that these unions under the umbrella of ACTU have had fundamental strides in advancing employee rights with regard to occupational safety and health. They have also improved employees remuneration and benefits through collective bargaining (Lansbury & Wailes 2011). All the stakeholders in the sector of industrial labor relations have been able to reach agreement as government departments and labor representatives. It is also acceptable to say that the path of unions and their struggles to have a fair collective bargain, as well as air workers plight, has not been without hurdles. Unions have increased workers participation in industrial disputes and helped address wage gap arising from discrimination (Deery & Mitchell 2009). Declining unionism has unfortunately reduced the level of employee consultation. These have created more debate on the role of unions, collective bargaining and other forms of employee representation in Australia. The power of the union has declined due to structural and legislative changes causing a decline in union density and increased enterprise bargaining. Reference list Australian Bureau of Statistics 2000, Employee Earnings and Hours: Australia. ABS Catalogue 6306.0. Australian Journal of Labor Law, 2012, Journal of Industrial Relations, Labor and Industry, Journal of Occupational Health and Safety-Australia and New Zealand. Bell S 2001, Unequal Partner: Trade Unions and Industry Policy under the Hawke Government. Labour & Industry, 4(1): 119–35. Briggs C 2004, The end of a cycle? 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