Compare and Contrast the Government Reforms in Australian Employment Relations since 1993 - Essay Example

Compare and Contrast the Government Reforms in Australian Employment Relations since 1993 Introduction The past two decades have witnessed numerous employment related reforms in Australia. A number of innovations and new approaches have been introduced to emphasize the significance of teams, skills, knowledge and performance of workers and this has caused major changes in the language of employment relations with new terms of ‘high commitment’, ‘high involvement’ and ‘high performance’ (Lansbury, 2000). Unfair dismissal and termination of employment, award-based compulsory arbitration and enhancement of enterprise bargaining are some of the areas directly affected by the employment relation reforms in 1993 (Bahrami, 1996, p. 339). The reforms have made significant impacts on the growth in the knowledge and service sectors of the economy, the shift towards more precarious works, deregulation, competitiveness and individualism and emergence of normative HRM with performance orientation as well (Burgess, 2008, p. 19). This piece of research paper is an attempt to compare and contrast the government reforms in Australian employment relations since 1993 and to address the impacts of these changes to the employees, unions, managements and employer association. Based on reviewing of relevant literatures and academic references, this paper finds the significant changes in the employment relations in Australia and its impacts on various groups. Major reforms in the Employment Relation in Australia The employment and industrial relation in Australia has long been part of one of the development and successive arbitral model, but in the nineties, these have been challenged, modified and reshaped in to an enterprise-focused system. The main reforms to promote the enterprise-focused system has been enhanced by the 1993 Reforms Act that in turn has become a fundamental move to dismantle many key coordinating and generalizing systems and tendencies that were evident in the early arbitral model. The Workplace Relations Act of 1996 has been another step in abandoning the ideas and relationships of the arbitral model and has put efforts to reinforce the enterprise and non-union focused employment relation in Australia (Gardner and Palmer, 1997, p. 44). Murray (2002) emphasized that employment relation reforms can enhance increased employee participation in workplace practices. The reforms can also help the companies solve real business problems, reduction in product development cycles, better customer focus etc. the development of information system and computer technologies have made it necessary that changes in employment relation would help companies solve difficulties and risks associated with workplace practices (p. 128- 130). Reforms and innovations in workplace relation, especially when it is with the collaboration of management, workers and unions seem to be long lasting. The Workplace Relation reforms in Australia have been found to be both collaborative with management and unions and being forced on the parties due to particular crisis (Lansbury, 2000, p. 30). Enterprise Bargaining system The employment relation in Australia has been undergoing significant changes from being a tribunal and central award system to a mere enterprise-based agreement. An enterprise based system is more likely to facilitate a work environment that can meet specific requirements of the enterprise as well as its employees (Bahrami, 1996, p. 337) and this has been one of the principle assumptions behind the shift of employment relation of Australia from tribunal and central award system to the enterprise based system. The basic difference between the conciliation and arbitration model which was in place prior 1990s and the enterprise bargaining is mainly the status of unions. In the conciliation and arbitration model, the unions have enjoyed monopoly power and rights of representation as a quid pro quo for statutory control, but in the enterprise bargaining model, the unions faced competition (Gollan, 2002, p. 165). There were basically two forms of agreements, certified agreements and enterprise flexible agreement. In both of these agreements, unions have been guaranteed key roles as they were joint regulators of the agreement (Gollan, 2002, p. 165). The enterprise bargaining system, under which wages are to be set at enterprise level rather than workplace basis, has been first advocated by ACTU and CAI in 1991. In 1992, the Industrial Relations Act of 1998 was amended in order to facilitate bargaining at workplace level and also to make certification easier for the concerned parties. The Accord Putting Jobs First was formulated in 1993 to address the major social and economic issues related to Australia’s employment relation and to facilitate enterprise bargaining system (Bahrami, 1996, p. 338). In 1993, the Labor government introduced further reforms in order to extend enterprise bargaining with the 1993 Industrial Relation Reform Act, being based on conventions and recommendations of International Labor Organization to strengthen the employment protection and grant a wider range of entitlements (Lansbury, 2000). The Industrial Relation Reform, which was enacted by Keating Labor Government in 1993, amended the Industrial Relation Act of 1988 and these changes reshaped the industrial relation landscape, mainly by introducing a great deal of flexibility by making the primary focus on enterprise bargaining (Gollan, 2002, p. 165). Even though the process of enterprise bargaining has been first begun in 1980s (Lansbury, 2000), the 1993 Industrial relation reforms have effected the revision and enhancement of the enterprise bargaining provisions of the existing legislation (Bahrami, 1996, p. 338). The labor Government believed that legislative reforms were necessary to strengthen the trends to productivity gains and enterprise bargaining. One of the basic objects of this reforms was to prevent and settle industrial disputes by encouraging agreements between major groups involved and to determine matters concerned to the employer-employee relation (Gardner and Palmer, 1997, 209). According to Riley and Sheldon (2008), the Australian employment relation has recently embraced single enterprise collective bargaining system as a means for fixing wages and working conditions above the safety net. From the policy and speech of concerned authorities, it was clear that there wont be any return to the industry-wide conciliation and arbitration of disputes (p. 55). Nolan (1998) argued that the enterprise bargaining of Australia indicated that around 50 percent of the workforce has been experiencing work intensification (p. 240). Hunt and Provis (1995) argued that the system of bargaining in place prior to the Industrial relation reforms of 1993 was more likely to be associated with greater inequality in wage dispersion and relatively less bargaining power of the disadvantaged groups. A workplace bargaining survey has shown that full time employees are more likely to receive wage increases than female and part time employees. A far more percentage of men were covered by negotiated agreements than women (24 % men, but only 15% women and similarly a far greater percentage of full time employees (23%) were covered than part time employee (9%) (p. 55-56). Based on the survey, they also argued that collective bargaining which was in place prior to industrial relation reforms of 1993 was more likely to occur in male dominated industries like mining, supply, transport, energy and same time relatively less likely in female dominated sectors like retail, finance and recreation (Hunt and Provis, 1995, p. 56). Unfair Dismissal and Termination of Employment One of the major areas affected by Industrial Relation Reforms Act of 1993 was unfair dismissal and termination of employment. The Industrial Relation Act of 1993 gives greater power and roles to the employees as an employer cannot terminate employment without giving a prescribed period of notice. The act asks employers not to terminate an not performing well, or less productive than what is expected of him, he must be given an opportunity to defend himself so that he will be able to put forth his misunderstandings or mistakes (Bahrami, 1996, p. 339). In the case of the termination of the employment due to economic, technical or structural changes, the employer is legally required to submit prior notice to the Commonwealth Employment Service, including the issues and reasons behind the decision of employment termination. The notice should also include the number of employees who are likely to be affected by the decision and the duration of termination or dismissal of employment. In 1994, the termination provision contained in the Industrial relation reform has been further amended and has limited unfair dismissal terms and rules to those employees who were employed under federal or state award or those whose basic pay was not more than $60,000 per annum (Bahrami, 1996, p. 339). The industrial relation reforms act of 1993 has been heavily drawn on the terms of termination and unfair dismissal of employment contained in the International Labor Organization Convention and a very key provision in this amended industrial relation act was that an employer should not terminate an employee unless there was a valid reasons for doing so. A reason was deemed to be invalid when the termination was ‘harsh, unjust or unreasonable’. The employee must be provided with an opportunity to defend himself against the allegations in the case of termination due to performance or conduct (Forsyth and Stewart, 2009, p. 208, Gardner and Palmer, 1997, p. 158). After the unfair dismissal legislative breakthrough, the Workplace Relation Act 1996 chose to continue with unfair dismissal provisions as being contained in the earlier acts with some changes that reduced the original scopes (Gardner and Palmer, 1997, p. 158). Industrial Relation System with distinct award and bargaining streams The Industrial Relation Reforms of 1993 has formed an industrial system with a distinct award and bargaining stream. The main purpose of forming this system was to set a ‘safety net’ for the bargaining system and also to facilitate fair pay and better working conditions to those employees who were not covered by workplace agreements. The award safety net is established to provide secure and consistent minimum wages and conditions (Bahrami, 1996, p. 339). In 1993, Prime Minister Keating argued that the enterprise level agreements would in the long run eventually replace the award system. When some unions objected to this statement, Prime Minister Keating clarified that existing award would be continued to provide a safety net of minimum wages and workplace conditions, mainly for those workers who were in the weak bargaining section (Lansbury and Niland, 1994, p. 558) The Industrial relation reforms act of 1993 did not abolish the award system which was in practice till then but rather the reforms act intended to make the award a safety net that would in turn strengthen the enterprise agreements. This also will facilitate minimum protection to those employees who are unable to access the enterprise arrangements. The reforms held in 1996 have further reduced the significance of award system, and according to this updated law, the award may deal with only 20 designated subjects (Nolan, 1998, p. 58). The new Industrial Reforms Act in 1993 has created a separate enterprise system to serve main vehicle for changes to wages and conditions and it was to ensure that employees are never disadvantaged. Allan, Brosnan and Walsh (1999) found that, during this time, there was high degree of consensus among relevant groups like unions, federal government and some employer groups on the need to make further reforms of bargaining structures and shift the industrial relation focus to the workplace level (p. 830). Review of the legislative scheme for the regulation and dealing with industrial action Another main area affected by Industrial Relation Reforms of 1993 was the reviewing of legislative scheme for the regulation and dealing with industrial actions. The Industrial Relation Reforms act allows an employer to engage in industrial action during the negotiation to support or advance claims for the industrial disputes. The power of ordering, suspending and terminating the bargaining period belongs to the Commission. According to the Reforms Act, if there is harm to the social life, individual safety of health, or well being of the population, or the industrial action may cause damages to the economy as a whole, the Commission is entitled to suspend the bargaining period (Bahrami, 1996, p. 340). Impacts of the Reforms on Employees The Industrial Relation Reforms Act of 1993 has profoundly affected the enterprise bargaining, by enhancing and revising the provisions of it that were in place prior to the Act. The Enterprise bargaining is an employment relation system in which terms and conditions are negotiated between management and union representatives at each business unit of the company, more specifically at enterprise level. Gennard and Judge (2005) emphasized that enterprise bargaining has the attraction to the ability of the management to respond in a more flexible way to the employee relation policies by taking care of pay, incentives and other relevant conditions related to the requirements of employees (p. 221). Employees in non-unionized workplaces were relatively playing fewer roles in workplace bargaining than workers in unionized workplaces. It is also found that employees in the non-unionized workplaces were found to have involved in the bargaining process through mere discussion of the agreement at meeting they attended. A survey results showed that only 27% of the employees responded that they had voted in decision making process compared to 44% of employees at a unionized workplace. The employees in a non-unionized workplace were found that they had not been consulted in the bargaining process than the employees who are at unionized workplaces (Campling and Gollan, 1999, p. 56). The award safety net system has been established in order to provide secure and consistent minimum wages to the employees, mainly for those employees who were in the weak bargaining sections. The Industrial Relation Reforms Act 1993 has further brought significant provisions to give greater power and rights to the employees to defend against unfair dismissal and termination of employment. This has provided greater security of employment for those employees who were in award-free areas (Brooks and McCallum, 1994, p. 35) and has given more rights to the employees to defend in cases when they are dismissed or terminated for no valid reasons. The act has excluded award free workers who earn more than $60,000 per year. Impacts of the Reforms on Unions and Management The trade unions in Australia have been restricting the supply of labor by policies like opposing the importation of convicts and immigration of nonwhites etc. But in recent years, due to the intense economic pressure, the volatile world markets have pushed employers to follow deregulation of the work. The industrial relation reforms act 1993 and other legislative attempts have caused union movements to become more weakened (Bahrami, 1996, p. 330). Enterprise level non-union agreements have been facilitated by Industrial Relation Reforms Act 1993 and employer and managements have been provided further opportunities to negotiate more flexible employment related condition and terms with their workers. There was a continuing drop in the union membership mainly caused by structural changes in the workplace and workforce and same time with a reasonable growth in part-time works, service sectors and female employment (Bahrami, 1996, p. 330). When the Industrial Relation Reforms Act 1993 has enhanced the enterprise bargaining system, it has eventually removed the power that trade unions have until then enjoyed as monopoly to be represented of workers as quid pro quo for statutory control. The trade unions faced competition under the enterprise bargaining system. Impacts of the Reforms on Employer Associations The major functions of employer’s association in Australia have been controlling of accommodating of trade unions, defending capitalism, protecting the industries and promoting the productivity etc (Bahrami, 1996, p. 331). The Industrial Relation Reforms Act 1993 has caused shift from centralized arbitration system to a decentralized enterprise-based industrial relation system. Enterprise bargaining was one of the major steps that the Act has affected. The employer association in Australia has been largely believing that the recent shift from centralized arbitration to the enterprise based industrial relation system due to the industrial relation reform of 1993 would be more encouraging the productivity and efficiency (Bahrami, 1996, p. 331). All the three types of employer association, namely, State industry association, regional umbrella organization and national industry and umbrella organizations, have been aiming to defend managerial privileges and also to minimize workplace disparities and disruption among employee and unions (Bahrami, 1996, p. 331). Conclusion The Industrial Relation Reforms Act 1993 has brought significant innovations and changes in the history of employment relation of Australia. The 1993 Act has reformed unfair dismissal and termination provisions from the earlier legislations and enhanced award based compulsory arbitration. The 1993 Reforms Act also has enhanced enterprise bargaining and industrial relation with distinct award and bargaining streams. The main influences of these reforms include greater power to employees to defend the issues related to the unfair dismissal and termination of employment and a shift from the tribunal and central arbitration system to the enterprise based industrial relation system. This paper has compared and contrasted significant reforms that have been brought by the Industrial Relation Reforms of 1993. The paper has presented a detailed study on the reforms in the employment relation of Australia in 1993 and has addressed how these reforms impact several groups like employees, employers, employer association and trade unions etc. References Allan C, Brosnan P and Walsh P, 1999, Human resource strategies, workplace reform and industrial restructuring in Australia and New Zealand, The International Journal of Human Resource Management, Routledge Bahrami, B, 1996, Australian Labor Relations, Recent Developments, Australian Labor Relations Brooks A and McCallum R C, 1994, Employment security, University of Sydney. Australian Centre for Industrial Relations Research and Teaching, Federation Press, Annandale Burgess J, 2008, New Employment Actors: Developments from Australia, Illustrated edition, Peter Lang Campling J T and Gollan P, 1999, Bargained out: negotiations without Unions in Australia, Australia. Dept. of Housing and Regional Development, University of Sydney. 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