industrial assignment

7/28/2019 Industrial Assignment

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ADVANCED STUDIES IN INDUSTRIAL RELATIONS

HRM523

ASSESSMENT NO.2

TOPIC:

What contribution can industrial relations (or employment relations as it is

now commonly known) at the workplace level make to the sustainability of

Australian businesses?

ZEESHAN ALI

11496404

INSTRUCTOR: THOMAS DENIGAN

DATE: 04/10/2012

INTRODUCTION:

ZEESHAN ALI (11496404) Page 1


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Almost every Australian is affected directly or indirectly by industrial relations. The

groundwork of the employment relations is linked with the employee and employer at

the workplace. The association between these two parties and the interaction between

them gives the foundation for the industrial relations practice (Alexander, Lewer &

Gahan, 2008). Everybody who is creating or making income or engaged in any

organization and management of employees is gripped by the employment relation

practices. The (BCA 1989, P.5) Business Council of Australia stated that industrial

relations believes employees and employers are intrinsically at loggerheads, and that ,

in the interest of public, the result of the interaction between them and relationship at

work place should be standardize and legalized, both have to protect and avoid

disrupting the economy. Employment relations can be defined, the study of the rule-

making process and the rules which organize and regulate the relations of employee

and employer (Bray, Waring & Cooper, 2011). Organizations, public, small, large or

private control and manage their industrial relations affects their performance Relations

(Alexander & Lewer,1990). Good industrial relations results in good economic

performance of the country. It is simple that Australian`s economic performance relies

on the competence to fabricate good Industrial Relations (Alexander &

Lewer,1990).Employee, employer, management, trade unions, governments readily

admit the significance of industrial relations. There are discrepancies exists as to whatactually built good industrial relations and how can it be achieved. However, these

differences and interests are balanced and guided by the Australian Constitution and

by its ideology. Industrial relations are constructed in a way that it keep the interest of

all the parties involved in industrial relations i-e employee, employers, trade unions, and

governments. In this assignment, Australian Industrial relations has been discussed,

the affect of industrial relations in Australia and its outcomes is discussed, that how the

industrial relations affect the life of people and economy of Australia and what has been

achieved till yet through industrial relations. Plus there is a comparison between three

English spoken language countries i-e UK, New Zealand and Australia. The emergence

of small business enterprise is also discussed and the impact of neolibralism on

Australian Business.



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In Broader sense, Industrial relations also known as employment relations cover all

relationships that an enterprise sustain and retain with different sectors of the society i-

e customers, employees, employers, state and public have link with the enterprise. The

term industrial relations is defined variously. J.T Dunlop (1985) defined it as the difficult

and complex relationship among the managers, workers and government bodies.

Yoder (1990),defined industrial relation as the management process dealing with

union(s) with a sight to negotiate and subsequently control, organize and monitor

collective bargaining agreement or labor contract. Industrial relations include

relationship between employer and employee, working condition, wages, collective

relations, collective bargaining, role of the state, and employee representative and

employer representative organizations. These relationships are multifarious and

multidimensional undeveloped on economic, social, psychological, occupational, social

political and legal levels.

To understand Industrial Relations of Australia, it is essential to identify the basic role

performed by the constitution, the Commonwealth Act of Australia Constitution Act

(Creighton and Stewart, 2005). Creighton and Stewart (2005) stated that the

constitution is a very significance power of Australian Industrial relations. Until the 20 th

Century, the Industrial relations in Australia were bound by the centralized arbitral

system. Since 1993, Commonwealth governments have been depending on the other

power base in the constitution to legislate in comparative to industrial relations

(Stewart, 2009). In 2009, the commonwealth parliament revoked the current industrial

relations law, the Workplace Relations Act 1996 and substitutes it with a new law

industrial relations statue called the Fair Work Act 2009, which establish some national

employment standards valid to all the national system employees. The FW act also

endow with a structure of collective bargaining at the level of the individual enterprise.

FW act begin a dynamic role for trade unions, after the restriction to perform inAustralian workplaces by the Workplace Relation Act 1996. FW act provides

empowerment to the federal industrial tribunal to help and guide the bargaining parties,

if necessary. The main principle parties in industrial relation are employees and

employers. Bray (2005) argues that at certain times the relation among these two



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parties can have disagreements, when the needs and interests of both parties resist or

oppose each other, and sometimes relationship can be collaborative in that both of the

parties work together for their mutual benefits. Most of the employee organizations are

known as unions, some of them are also known as federations or associations.

Employee organizations are registered with FW act 2009. They have certain rights

under the FW act 2009, related to the safety and protection of their members` industrial

interests. Mostly, these organizations linked or belong to two peak organizations,

Northern Territory Trades and Labor Council, known as Unions NT and through the

National bodies, the Australian Council of Trade Unions (ACTU). ACTU role is critical

and important. It plays role in national wages case, the award modernization, relation

major test cases, and play key role when unions do not agree with each other about

their representational rights in relation to particular groups of employees. There are

also employer organizations which represent the interest of employers from the major

groups. During the centralized arbitral system, employer organizations were very

active. Though they can still represent employers in FW act, but their role has more of a

lobbying the government and backing for the interest of employers. Chamber of

Commerce and Territory construction Association are the two peak groups.

There are two main industrial processes in Australia. First process is about the

regulation of employment relationship, which includes the policies for such as salary

and conditions are set down. Employment relationship contains four sub-processes,

which are state regulations, individual common law contacts, the direct implementation

of managerial prerogative, and collective bargaining (Bray and Waring 2006). The

second process links with the dispute resolution. Bray (2005) stated that dispute in any

form are inherent aspect of employment relationship.

The trends in Australian Industrial Relations have some similarities and differences with

other countries. If we compare it with UK and New Zealand, the trend between 1980s

and 1990s has been a lot similar. Beggs and Chapman (1987) argued that mostly the

effect has been of the Accord in promoting a smeared development in levels of

industrial disputation of Australia. All the three countries have a fair intensity of

unionization and laws which supported collectivism of the employment relationship and



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accorded unique benefits to trade unions as workers` representatives. Industrial

relations history of all the three countries shows that there has been a shift towards

enterprise-based bargaining. In UK there was evident trend towards decentralization of

ay determination towards the aggressive labor market. The plant level bargaining is

very common in UK. In case of New Zealand and Australia, the transformation in the

role of the reward system has been a main attribute of their shift in the direction of

enterprise-based bargaining. It was a rapid change in New Zealand, while in Australia

the shift has been a slow process slower from national and sectoral bargaining to

enterprise-based bargaining and not much persuasive. In UK increased cost and

difficulties of recruiting and retaining members produced enormous amount of change

in union activities. MetCalf (1994) stated that there has been a financial decline in the

trade union movement in UK. Gardner (1995) stated that after the enactment of ECA in

New Zealand there has been a downfall in the financial position of unions In Australia,

the rationalization of unions was primarily the results of a union-initiated policies,

supported briefly by supportive legislation. UK initiated the first transformation of

industrial relations institution with the Thacher Conservative Government election. In

New Zealand with the ECA 1991, there had been some large changes in Industrial

Relations institution, contains the establishment of certification elections to identify

union representation and elimination of compulsory unionism. They accelerated thereward system being put an end to and trade unions lose all legal privileges. ECA is

linked with the declined number of unions and members. The case of Australia is

somehow different. The elected federal government was favorably inclined to the trade

union movements for most of the past fifteen year, and opposed to commence

unreceptive legislation. However, the process of change occurred, incorporated a very

long experiment with income policy and corporatism. The final result has been a scale

of decentralization of pay determination, especially covering larger, unionized

enterprises. A good amount fraction of the workforce remains covered by the award

system. The more recent change has built-in the provision for individual bargaining.

Nonetheless, the technicalities of the system of enforced attribution lingered, in contrast

to the situation in New Zealand.



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New Zealand is on a faster-track, also relatively deregulated, UK is on a slow-track, but

now relatively de-regulated, and Australia is on a slow-track, partially deregulated,

despite the differences between them, and differences in the labor market productivity

of the three countries rebel definitive conclusions. After the ECA the unemployment in

New Zealand is still significantly lower than Australia. In UK the unemployment

remained stubborn high.

The contribution of Industrial Relations in Australia cannot be denied. It has largely

improved the economy of Australia, and the life standards of the people of Australia.

The market sector contain twelve industries which are agriculture, mining, fishing,

accommodation, retail, cafes and restaurants, transport, storage, wholesale, forestry,

electricity , gas and water, finance and insurance and recreational, has been developed

through industrial relations, accounts for 65% of the GDP. Excluded industries like

health, education, government administration, and defense are also well developed but

they are not profitable industries though they play important role in the development of

organization.

Industrial Relations influence productivity draw from an assumption that they

manipulate the behavior of means of capital, managers and workers. It may be occur

because industrial relations have the aptitude to influence the ability of management tomanage, because they influence the intensity of antagonism and cooperation in the

workplace, and for the reason of that term on which labor is employed, persuade the

innovation and investment decision of business formation .Doucouliagos, and Laroche

(2003) stated that trade unions unpleasant the affect of productivity by cementing

restrictive labor practices and exaggerate them and us attitudes. Trade unions may

compel firms to agree to disorganized personnel firing and hiring practices, and restrain

the pace of work, working hours and skill formation) but contrary unions have a good

effect on productivity as well. They support and maintain the workplace resolution and

complex matters that might becomes the root cause in productivity-diminishing

behavior. Unions increase productivity by providing workers with a resource of

expressing discontent as an substitute to exiting up by creating up communication

sources between employees and employers, and also by bringing on managers to



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modify and subsitute methods of production and acquire more efficient policies

(Freeman,1976; Freeman and Medoff,1984). Increase in the growth of productivity

involves the cooperation and involvement of the workers. It is possible when the

employment relationships are characterized by trust and where workers believe and

consider they have a secured and protected venture in the long-run success of their

employers (Buchele and Christiansen 1999).

In Australia, Louca (2003), originate that between1984-1985 and 2000-01, Queensland

recorded highest rate 1.6 per cent per year, when the national growth rate of multifactor

productivity was 1.2 percent per year, followed by NSW 1.2 per cent, South Australia

1.1 per cent, Victoria 1.0 per cent and Tasmania 0.3 per cent. Generally in labor

productivity there was similar growth rates (Nguyen, Smith and Meyer-Boehm, 2003).

There was high growth rate in Western Australia. Nguyen 2003 attributed that the high

growth rate in labor productivity is due to the mining industry. Human capital is equated

by the attainment of education.

Population with education and high skilled may be helpful and contributing to high

income and productivity, but workers with high qualification are also attracted towards

to a state with high income and productivity and have population in tune to the benefits

of education and acquisition of skills. Drac, foster and Green (2003) stated that Victoriaand NSW has highly qualified population and degree completion rate is high as

compare to other states of Australia. They argue that NSW has the highest capital

human stock. Hancock and Hsieh (2006) found out that an increase in average

qualification level in Southern Australia during1994-95 and 2003-04 increased the labor

quality by 2.4 per cent. Retaining workers where their skills are not efficiently utilized

tend to decrease average productivity. Interstate migration helps to boost average

productivity.

Peetz (2006) argued that Australian Workplace Agreements has not much contribution

in productivity, though they have contributed to profits. Furthermore, he stated that

AWAs have not yielded productivity results like to those of union collective bargaining

or awards. In a study of BCA by Fry, Jarvis and Loundes (2002), they studied 282



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organizations and found out that collective bargaining coverage was linked with higher

productivity as argued by the firms by themselves. The higher growth in productivity in

the episode considered by BCA is associated to labor productivity, rather than multi-

factor productivity. Peetz stated that AWAs are the fraction of a low road approach to

employment relations, as employers are supported to minimize or reduce cost of labor.

Such methodology is less beneficial to productivity increase than a high road

approach where the employment and workplace conditions are more encouraging to

the workers serve as an enticement to, skills development and training and innovations.

Peetz states that 86 per cent of employees are registered under the certified

agreements which provide the cover for training, and 34 per cent of AWAs have

substance associated to training. In the wider sense, industrial relations cover all such

relationships that a business enterprise maintains with various sections of the society

such as workers, state, customers and public who come into its contact.

Webster and Loundes (2002) describe the causes influencing the employer-union and

employer-employee relationship in larger businesses in Australia, identifying that more

cooperative relations were frequently considered to be beneficial in high productivity.

Furthermore, their finding includes that unions having lower densities-fewer union

members relative to total staff were linked with more cooperative relations between

employees and employers.

In Australia there has been a lot of focus by the Industrial relations of Australia. The

small business covers 95 per cent of total non-agricultural private sector businesses.

These businesses employed 48 per cent of workers (ABS 1999). Recently, there has

been rise in employment shift towards small business, contributing more to employment

(Australian Bureau of Industry Economics, 1992). It is not easy task to accurately

measure or determined the level of formalized individual and enterprise bargaining in

Australia. Despite the changes in legislative, large numbers of businesses prefer to

remain within the centralized system. It is assumed that policy makers and government

understand the needs of small business better than their owners (Callus, 1991).

T he Pe rc en t age of S m all B u s in e s s b y I ndu s t r y C a te g o r y ( S ou rc e: A B S 1999)



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Industry Category Percentage of SmallBusiness in Category

Mining 87.9Manufacturing 91.5

Construction 99.0Wholesale trade 90.4Retail trade 97.0Accommodation, Cafs & Restaurants 88.1Transport and Storage 97.7Finance and Insurance 94.1Property and Business Services 97.6Education 91.1Health 95.3Cultural and Recreational Services 95.9Personal and Other Services 98.5

There were new fundamental changes in Australia legal and political structure during

1999 and 2000s. This was the foundation laid down for the neo-liberalism. Neoliberal

is a term used to promote free market capitalist economy. More privatization took place

during neo-liberalism and the economy became much wider in access to commodities,

technology, and increasing the speed of development (1999). In November 2007, Julia

Gillard and Kevin Rudd, created a new approach, which was much closer to the union

movement and their major legislative initiative (Fair Work Act) and gave support to

collective bargaining and union (Bray, Waring & Cooper, 2011). Neoliberalism

increased employment opportunities, and decrease the members of union by creating

more part-time and casual job opportunities. It enhances business opportunities in

Australia and lead to the growth in economy and development of Australia. Managerial

prerogratives have stretched with each successive development in employment

relations regulations (Bray and Waring, 2011). Australian represents high manifestation

of the neo-liberal agenda. The federal government has embarked a program to

decollectivize the workforce, assist individual agreement making, and strengthen

managerial prerogative.

Undoubtedly, the future of industrial relations will bring increase and novel regulatory

challenges as the nature of employment at work place continue to evolve. Regulators



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will be test by the corporate restructuring, globalization, and the growth in non-standard

forms of employment. McCullam (2006) has put emphasis on the need for labor law to

encourage industrial citizenship. Industrial relations is evolving in order to contribute in

effective way in the development of Australia and it keep evolving with the changes

occurs in the external and internal environment.

CONCLUSION:

The industrial relations of Australia has been evolved with time and changes occur in

the environment. Though there are many pros and cons of industrial relation evolution

till now but it cannot be denied that industrial relations has contributed immensely in thebusiness sector of Australia, plus it has improved the life of people in Australia, and for

both employer and employee. The role of industrial relations currently are set for long-

term. The Australian Industrial relations are more decentralized now. Globalization and

neo-liberal system has evolved the industrial relation in Australia and its contribution.

The state, unions, employers and employees are interlinked with each other to work

cooperatively and gain their mutual interest, which contribute to the state in effective

way. The industrial relation will keep evolving with the changes in environment, like

wise its contribution will also changes, but its objective will always be in the favor of

positive contribution to the state. The current policy is contributing more towards

capitalism and to decrease the impact of union in organization. The current scenario of

industrial relations is more focused on the small business enterprise which helps in

contribution towards more employment and economy of the state.

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