Industrial Relations in Australia - Example

Industrial relations are the ways and manner in which the interaction between the owner of the business and the workers that contribute to the business takes place. In any given economic or political scenario, the level of development is measured by the ability of the system to provide the variables involved with a set of rules that could govern smoothly the conduct of these very industrial relations (Bell, 2000). It would therefore seem that a stabilized set of these relationships would contribute to the success of the business and hence the overall success of the country. Given the fact that industrial relations and their evolution take place in a given scenario of particular settings there can be no one way to identify a standard or universally accepted measuring stick, that could guide one’s conclusions on the subject of the factors and choices that could lead to affecting the correct policy decisions on part of the government for the regulation of these relations (Labor Industrial Policy, 2004). The factors that an Industrial Relations Policy need to regulate are: 1. Pay rates 2. Working Hours and Conditions 3. Leaves and Holidays granted 4. The Training and professional growth of employees. 5. Organizational reform 6. Introduction of new technologies in production and at the workplace and the implications that this would have on the man power and the labor assocuaed with the organization. Interestingly enough the regulators of the factors governing the conduct of these relations in their day to day working bare not decided upon by either of the two interested parties but by a third force-the state. There are different states that function governed by different governments that function based on different ideologies. A party that is sympathetic to the communist way of thinking for example will always seek the institutionalization of principles that would help the laborers. The two essential types of states in the context of the relevant discussion here are the state working on the laissez-faire principle and the state that is communist. The environment that these states function in along with the nature of their ideologies are all governing factors in the ultimate formulation of a policy that would manifest itself in the shape of laws that regulate industrial relations. These policies regulate not just the relationships between the industry and the workers as represented by worker’s unions but also function as the regulators for the overall conduction of the labour market. To put the matter in context one could state with a certain amount of freedom that the industrial relations policies are infact policies that would regulate the manner in which the labor operates, the rights that are available to the laborers vis-à-vis the rights of the business- the essential conflict between the interests of the industry and the labour form the crux of the Industrial Relations policy formulation. One can identify a few basic points that would be essential in an IR policy of the state for it to be called fair or workable. First and foremost there has been an identification on the part of many experts that the IR policy should aim at the creation of a system that would help in the promotion of fiscal growth and output by creating more jobs and a proper system of resource allocation and utilization. In the laissez faire way of thinking, labour is seen as a commodity to be bought and sold in the market place-given the fact that the modern state claims to be a welfare outfit, this ideology cannot be accepted in practice. The idea is to raise the claims of labor and change it from being a commodity to human resources. There is thus a need for a set of policies that look at output governance and aim at the balancing of Economic need against the needs of the society and the workers for protection and growth. especially given the fact that the market that the vagaries of the laissez faire market are in fact imperfect. Norms of fairness are a feature of most labour markets and need to be recognised in the interest of long term economic efficiency. in the modern case scenario, any given Industrial policy choice that is made by the government would also need to ensure that it provides for sufficient protection to the workers against unfair dismissal and discrimination under the aegis of the ILO Convention 158). The point that an IR policy needs to be based on is that it should highlight essentially the common interests and the meeting grounds between workers and the employers instead of choosing to focus on the differences. Ideally, the minimization of employee-employer difference needs to be the main focus of a relevant IR policy. Generally, individual employees have weaker economic power than do employers. Individual employees, who in most cases have a lesser vantage point and a smaller bargaining power need to be protected from arbitrary treatment by big industry and vice versa, legislation should not place unfair advantage with the trade unions and other such bodies- there need to be limits on industrial action. Unionism and effective collective bargaining. can be encouraged but not at the cost of industry effectiveness or output-unreasonable demands should not be met with. Finally, there should be machinery to mediate by compulsory conciliation and arbitration in industrial disputes. Australia as a country has a history of trade unionism and collective workers’ unrest. Infact the very beginning of industry in Australia witnessed the beginning of the trade union movement (industrial Relations in Australia, 2008). The best example to demonstrate the power that Australian trade unions have wielded is the fact that Australia was the first country in the world to have demarcated hours as 8 hours a day in 1856. The Constitutional Convention of 1898 placed the power of Industrial Relations and the regulating policies with the Federal government of Australia. This also meant that there would be a uniformity in the conduct of IR policies throughout the country. The 1904 Conciliation and Arbitration Act modified this further by stating that although the federal government would be responsible for overall policy formulation, states could have separate strictures. Without delving deeper into the details of the subsequent developments, one can state that these are the two basics coupled with the intense trade union movements of the 1880s and the 1890s that have set the tone for the regulation of IR in Australia. Meanwhile, there was also the institution of awards- ratified agreements between labour and capital. Awards were given mostly with respect to wages and conditions made at both Federal and at State level, depending on location of enterprise. One can now analyse in some details the changes the have come about in the institutionalization of IR policies in Australia. there have been considerable structural changes that have been made, over the past three decades given the fact that the economy does not function in isolation any more; there are distinctive influences from the global trends, beside this the trade union movement has seen a structural slowing down process as the number of laborers have diminished to almost one-third of its former strength. the manner in which the federal industrial relations system are operated have also seen change with the onslaught of market deregulation and the removal of protectionist policies on the part of the government on businesses- both big and small so that the businesses found the space and freedom they needed to grow through the implementation of the latest technologies. The idea has been to empower businesses sufficiently so that they can compete in the international market. the changes became visible from the later part of 1980s under the Hawke government. The idea has been impetus to faster productivity driven economic growth. This does not however means in any way that the trade union movement is dead or that there is no longer an attempt on part of the government to protect the rights of the workers. There has been a conscious attempt on part of the government to fulfill the demands of the micro as well as macroeconomic objectives. Accordingly, the Australian Industrial Relations Commission (AIRC) has also modified opinions, by the institution of a centrally managed system of decentralization and the extraction of responsibilities from trade unions involved in each award and agreement to adhere to the wage fixing principles and to cooperate with employers to improve work practices. The Keating government's 1993 Industrial Relations Reform Act gave statutory encouragement to enterprise collective bargaining, setting rules for collective bargaining. The right to strike was protected within limits dictated by the effect of industrial action on the economy, but only on interest matters pursuant to the making of collective agreement. Disputes on rights matters should be resolved through grievance processes, industrial action on such disputes being subject to penal sanctions. One of the most recent and the most relevant pieces of legislation and policy choices that seek to regulate the workings of industrial relations is the Rudd government’s proposed Fair Work Act, 2009. There are many sections and consequentially many implications that the act will have in the long run but for the purpose of discussion, we will limit ourselves to the discussion of the section on unfair dismissals and the justifications based on operational needs for businesses. Fair Work Act: The primary focus of the Act is in ensuring that the workers and the employees get a fair measure of the rights due to them and that there is no scope on part of the employer to cite incorrect reasons for their dismissal, ensuring that there is a certain level of protection against arbitrary treatment that is afforded to the employee vis-à-vis the powers of the employer. There are a few basic factors that the Act places under consideration while making a case for unfair dismissals. These need to in essence justify that the dismissal was harsh and unjust in their nature and implementation. Primarily, there needs to be a genuine reason present of the dismissal of an employee. This in turn needs to satisfy the conditions of a problem in relation to the person’s capacity or conduct (Robinson, 2009). This is inclusive of the manner of relation that he has with employees and its related safety and fairness of conduct. The person being terminated needs to be notified of the reason and be given a chance to respond to that reason. There should not be an unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to the dismissal (Arup, 2006). The size of the employer’s business is placed under consideration at the time of dismissal and in case this has been one of the predominant reasons, then the reason stands justified. Finally in case there has been an absence of a proper process of human resource management and the presence of HRM professionals in the organization of the employer from which the employee is being removed, would in most cases have a result on the bearing of the case itself. The exact nuances of the Fair Work Act, 2009 stand in the reflection of these general principles. The Act removes the exception for employers whose workforce is 100 or less that was included in the Workplace Act. The Fair Work Act also is also requisite of a consultation with employees in cases where decisions are made for the removal of a number equal to or higher than 15 for solely technological reasons. (Relevant Work Place Act articles 660, 668-671). The Act has potentially wide application given the fact that even if a high income employee is exempt from the application of a modern award, the person may still be entitled to protection from unfair dismissal because he or she continues to be covered (S 48(1)) by the relevant modern award even though it no longer applies. A dismissal is unfair if it is harsh, unjust or unreasonable in the same way that it has been defined in the Workplace Relations Act, s 387 (Forsyth, 2008). However, a dismissal would not be considered unfair or unjust in case the employer complies with the Small Business Fair Dismissal Code when the employee in question is being terminated. The Act also states that a dismissal is not unfair if there is genuine redundancy-s385. However the employer must comply with any consultation obligations in an applicable award or enterprise agreement and there must be no reasonable opportunity for the employee to be redeployed. The Act stands in direct confrontation with s463(8) of the Workplace Relations Act, 1996. The act provides that there are grounds for removal in case the job or the organization in question has for all genuine intents and purposes outgrown the skills and services that are provided by the employee in question (Bell, 2005). This according to the act provides genuine grounds for termination as an employee who is no longer capable enough in offering his services to the organization or is incapable of actual growth support would become a liability the act states that the termination of employment is not unfair in case of proven redundancy. Redundancy in fact is a lot easier to prove or disapprove than the provisions of operational causes that were cited in the Work Place Relations Act, 1996. On can identify certain sections of problems in the proposed judgment that existed in the Work Relations Act as well, given the fact that the economy is still not completely out of recession and the fact that entrepreneurs everywhere are looking to shed flab from their organizations (Termination of Employment, 2009). The fact that there needs to be a clause protecting operational needs and demands of a business are well accepted but there are considerations for worker rights here that need to be considered as well. The government policy at present seems to be the appeasement of the laborers but the kind of support that they seem to be extending seems to be a little over the top given the fact that labor protection should not for all ideal purposes be the basic consideration in the functioning of a particular business. The concept of redundancy is easy to prove, but it will in the longer term, incxfease the burden base for the smaller enterprises, because for the larger businesses the burden of proof is relatively easy to deal with (labor’s IR Policy, 2007). Moreover, the new policy formulations do not satisfy the demands of the labor movement in completion either by virtue of the fact that there are still no out right protection clauses and the adherence with the prescribed standards of the ILO are still at a minimum. The two sections therefore need to be removed and made a lot wider in their jurisdiction if they are to demonstrate an impact on the situation of Industrial Relations in the country as a whole. The fact that in the absence of such a review the wrong policy choices can snowball in to a major crisis is made evident by the labor strikes and demands that were made against the infamous s463(8). Reference: Labor Industrial Policy, 2004, accessed September 17, 2009, < http://www.actu.asn.au/public/news/1075874449_26307.html> Termination of Employment, APSC Release, accessed September 9, 2009,   Fair Work Act, accessed September 9, 2009,   Robinson A, Workplace Relations, accessed September 9, 2009,     Fair Work Act, 2009, accessed September 9, 2009, Labor’s IR Policy Revealed, 2007, accessed September 17, 2009, < http://www.smartcompany.com.au/legal/labors-ir-policy-revealed.html> Industrial Relations in Australia, 2008, accessed September 17, 2009, < http://www.eng.usyd.edu.au/current-students/InnoManage/ENGG4005/lectures/IR.pdf> Bell I, 2005, The Unemployment crisis in Australia: Which way out?, pub, Cambridge University Press pp147-150 Forsyth A, 2008, Australian Deregulation of Economic Dismissals, pub, Sydney Law Review, Vol. 30, pp 506-536  Adams M, 2001, Australian Essential Management Law, pub, Rutledge Cavendish, pp63-70  Arup C, 2006, Labor Law and Labor Market Regulation: Essays on the Construction, pub, The Federation Press, pp665-667 Forsyth A, 2008, Australian Deregulation of Economic Dismissals, pub, Sydney Law Review, Vol. 30, pp 506-536 Read More