Fair Workplace Australia - Attaining a Balance between Employer and Employee Needs - Case Study Example

Analysis of Fair Workplace Australia (FWA) in reference to attaining a balance between employer and Employee needs. Customer Inserts His/Her Name Customer Inserts Grade Course Customer Inserts Tutor’s Name 15, 09, 2010 Outline Abstract. Introduction Current context Collective enterprise bargaining Individual flexibility Freedom of association Conclusion . Abstract. The Rudd & Gillard’s Forward with Fairness was meant to provide a balance between equity and fairness (for employees) and flexibility and efficiency (for business). Three aspects; collective enterprise bargain, individual flexibility and freedom of association are critically examined to ascertain where the balance of power in Australia’s industrial relation systems tilts to. The analysis are based on the premise of ‘getting the balance right’ promoted by Rudd and Gillard government. Introduction Australian’s workplace relations have over a span of two election cycles seen considerable changes. The industrial relation systems have shifted from Howard’s Work choices to Rudd & Gillard’s Forward with Fairness. The Labor party was elected into government on a promise to restore sanity in Australia’s industrial relations. Under the Forward with Fairness tag, Rudd and Gillard’s government was to overhaul Howard’s ‘unfair’ industrial relations policies and replace them with ‘fairer’ industrial systems that guarantee flexibility and greater realization of Australia’s economic potential (Rudd 2007). The year 2009 saw the Labor party enact Fair Work Act 2009 that established the Fair Work Australia (FWA) and Fair Work Ombudsman. This new policy framework was aimed at establishing a ‘balance’ between the concerns of the business community and the needs of the employees (Rudd 2007). This paper is going to critical examine the Forward with Fairness policy framework fronted by Rudd &Gillard government to ascertain whether they provide a balance between the equity and fairness (for the Employee) and flexibility and efficiency (for the employer). The paper will specifically examine a provision in the current act that appears to deliver the flexibility and fairness as envisioned by the Labor government. Thesis Statement: The industrial relations system in Australia should provide a balance between equity and fairness (for employees) and flexibility and efficiency (for business Current context In 2008, the Labor government enacted the Transition with Forward with Fairness Act 2008 to manage the transition to the Fair Work Act 2009 from the Workplace Relations Act 1996. According to Rudd & Gillard (2007) this ‘sensible’ transitional arrangements were aimed at easing the shift from the existing workplace agreements under AWAs and other individual employment agreements to the new paradigm. The act re-established and modernised the awards as a ‘safety net’. Under the act, individuals and business were given a five year transition period to phase off the existing agreements and negotiate new terms under FWA. Estimates provided by Labor places the proportion of workplace agreement under AWAs to be at 5%. Currently, a significant portion of establishments are caught up in transition. In the year 2009, the Fair work Act of 2009 was created. Among some of the objects contained in the act are: Introduction of individual flexibility clause in every award, strengthening of enterprise collective bargain, establishment of 10 National Employment Standards and common law agreements for highly paid employees. However it remains to be seen whether these new laws will further fairness and flexibility and drive the nation productivity to its capacity (DEEWR 2009). Substantive arguments on the current framework are whether they appear to foster the spirit and letter of international human rights and labour laws. Australia is member to a number of convections concerning industrial relations and human rights. The act is envisioned to strike a balance between the needs of the industry while protecting the rights of the employee without compromising its position in the international stage (DEEWR 2009). To attain this ‘balance’, parties to an agreement should have equal leverage during and after the negotiation. The ‘balance’ however has always tilted towards the employer. For example, according to Peetz (2006) during the 80s and 90s, employers attempted to either fight or marginalise trade unions. The era of Work Choices, ushered greater power for employers who always achieved what they wanted. Under FWA the right to a collective enterprise bargain is recognised as one instrument that will offer employers and employees flexibility. The act also allows for individual agreements as a way of protecting the rights of the individual to join, associate with any organization of their own choosing. Of greater importance is the role and position of unions under FWA. In reference to ILO (2006), Committee of Freedom of Association (CFA) under the ILO recognises the rights of unions to ‘seek to improve the living and working conditions’ of its members. Collective enterprise bargaining under FWA The FWA provides clear regulation on what is mandatory, impermissible or unlawful for collective enterprises bargaining. A closer scrutiny of FWA exposes the role of unions in the collective bargaining process. In a clear deviation from the AWAs, the act does not trash the role of unions in the right to bargain. The act also goes ahead to allow enterprise-wide bargaining, while also providing for multi-employer bargaining mechanisms under limited circumstances and outlawing industry pattern bargaining (DEEWR 2009). This appears to be in conformity with the ILO provisions that encourage enterprise level bargaining. According to Rudd &Gillard (2007), the collective enterprise bargaining mechanism will contain a clause that allows employees to make ‘greenfields’ agreement with the employer on an individual level. The procedural components of FWA allow the employer, the employee or their representative to initiate negotiation without prior notice. The negotiation may continue when the employee has been notified about his/her rights to appoint a bargaining representative. The bargaining representatives need not to be a registered organization (Read 2009). A unionised employee is allowed to appoint an ‘outside’ bargaining representative other than the union which in this case is their default bargaining representative. The implication here is that the strength of a union and the need to join a union is diminished. Another aspect that is captured in the act is the position of the union in the negotiation process. The union is no longer a party in the negotiation but comes in as a bargaining representative. Agreements will be made between the employer and the employee (DEEWR 2009). Read (2009) noted that introduction of mandatory flexibility plan on enterprise bargaining is seen to undermine enterprise bargaining mechanism. If employers can substitute terms negotiated under the collective enterprise bargaining with individual flexibility plans then the substance of the collective agreements are jeopardised. The FWA appears to offer remedies through a requirement that any agreement reached should not undermine safety net (Rudd & Gillard 2007). This solution is one-sided and does not take into account the quality of collective agreements. Another concept captured in the act is the right of the employee to exclude unions in the negotiation. Under the previous acts, union were a times seen to forcefully involve themselves in the negotiations without invitation by its members. Business and employees can now choose to negotiate together on terms that are considered to be mutually beneficial. The arrangement can be on the basis of improving productivity (Rudd & Gillard 2007). While such arrangement presents growth opportunities to the country and to the individuals, the success of such arrangements relies on good faith between the parties. Individual flexibility The FWA requirement that every agreement or modern award should contain a mandatory flexibility clause makes the act most attractive to ‘greenfields’ enthusiast. An individual flexibility arrangement allows individuals to enter into agreements with the employer other than those captured in the enterprise agreements or award (DEEWR 2009). Should any of such agreements fail to include the flexibility clause a ‘model’ clause will be used. However, questions arise on whether such flexibility clauses will be beneficial to individuals. The Labor party appreciated the fact that individuals can secure better arrangements with their employers directly. As stated earlier, to get the ‘balance right’, individual workers should have equal leverage during negotiation with the employer. In real life, such a situation is elusive. The FWA guarantees that arrangements should be genuinely entered by both parties in writing and should not contain elements which are not permissible or unlawful. In the absence of a counterchecking mechanism, Read (2009) consider s that such ‘genuine’ arrangements will not guarantee an employee being better off in the overall sense. There is no reason to believe that employer militancy will change in regard to handling arrangements with individual workers. As seen in the way employers have trying to alienate unions in matters industrial relations, there is little hope that non-collective agreements will stand the fairness test (Peetz 2006). The individual flexibility term has been the subject of court cases currently with employers rushing to substitute the negotiated flexibility term with the ‘model’ flexibility terms. The bait here is that, the model flexibility terms present numerous opportunities to employers to gain leverage during negotiations for individual arrangements in the absence of collective voice. Whereas many socio-economic factors are pushing individual workers to enter into individual arrangements with their employers, it remains to be seen whether the good faith intended by ‘flexibility clause’ will leave the employee better off overall in the long run. The freedom of association under FWA The current statistics provided by the ABS indicate that the proportion of unionised employees in the year 2009 stood at 19.5%. Over the years, membership in trade union has been generally declining (ABS 2009). Individualism has gained considerable prominence among employees. Onions are thought to present the greatest benefits under the collective bargaining in a way that no other party can achieve. The future of unions and by extension collective bargains relies on continuous nourishment through new membership and legislation (Peetz 2006). ILO (2006) recognises the right to collective bargain as a part of realising freedom of association. FWA has been taunted to protect and promote freedom of association. Australia is party to several international human rights laws, conventions and treaties that recognizes the right to collective bargain as one fundamental aspect of freedom of association. The ILO, International Covenant on Civil and Political Rights (ICCPR) and International Covenant on Economic Social and Cultural Rights (ICESCR) contain treaties that support collective bargaining as an aspect of freedom of association (ILO 2006). The country has in the past found itself on the wrong side regarding legislations that appear to undermine the principle of freedom of association. The analysis above is sufficient to warrant an examination of FWAs provision to discern whether they promote free of association. At the core of freedom of association is the ability of a union to organise collective activity aimed at providing it a reasonable voice to its members (Read 2009). As stated earlier, the proportion of unionised workers in the country is declining. The Howard government used this as a justification to promote greater individualism thereby driving the figures lower. A legislative environment that promotes collective agreements and separately provides for individual agreement will eventually undermine collective bargaining and by extension freedom of association (Peetz 2006). Unitarist always front the argument that freedom of association is an individual right enjoyed and exercised by an individual. This argument is aimed at scattering collectivism that present greater leverage to its members in a negotiation. According to Quinn (2004), a legislative framework that promotes voluntary unionism is always accompanied by efforts to curtail the power of collectivism while leaving the privileges of the employer intact. A closer scrutiny of FWA discloses a dichotomy, oxymoric dissonance when it comes to securing the freedom of association and by extension the right to bargain for employees. The act appears, at the face of it, to promote freedom of association but goes ahead to mandate a clause that allows derogation of the very agreements reached on under collective bargaining. Under FWA, any agreements arrived at through collective enterprise bargaining or awards should contain a mandatory flexibility clause that allows individuals to make further individual arrangements with the employer. The employee is required to notify the union that they wish to make individual arrangements with the employer. The union will not be involved in this negotiation though they can seek to be covered when the deal has been arrived at (DEEWR 2009). The role of unions in the negotiations has been significantly altered under the current act. The act stripped the position of union as party to negotiation and replaced it ‘a bargaining representative’ status. A union member can choose not to be represented by the union in the negotiation. The agreements negotiated by the union in their appointed or default capacity as bargaining representative under collective enterprise bargaining will be enjoyed by union members and non-members alike. This provision appears to encourage free rider problem. There is no incentive to join a union since non-members have equal benefits under the negotiated package without having to enrol as a member. The act also outlaws negotiation fees charged on non-members for the services offered by the union. The quality of representation is determined by the resources available to support qualified personnel involved in negotiation. As noted by Read (2009), freedom of association does not involve merely securing a union membership card. The quality of representation is paramount in realisation of the full fruits of freedom of association. According to Peetz (2006), such individual contracts give rise to diminishing value of joining unions therefore leading low enrolments. If unions are fronted as the most effective means of organising collective activity, then their position under FWA has been jeopardised. It is however safe to say that the current act offers improved environment for realisation of freedom of association more than its predecessor. Conclusion The Forward with Fairness promoted by Rudd & Gillard is by far better than the Work Choices fronted by their predecessor when it comes to securing a balance between the needs of the employee and the expectations of the employer. The act tries to address pertinent issues that have been the centre of contention among many interest groups. In an effort to ‘get the balance right’, FWA almost paradoxically created a free market kind of legislation that allows employee and employers to manoeuvre around act and undermine the spirit and letter envisioned by the act. Collective bargaining arrangements provides a foundation for realisation of freedom of association but such freedoms are almost limited by the mandatory flexibility clauses that have potential of tilting the balance of power to the employer. A closer scrutiny reveals that the employer emerged the biggest winner in the current environment because of the choices at their disposal. The individual flexibility clause can be beneficial to individual if it’s an upward flexibility meant to leave the employee better off overall. Read More