MGT 4330 Industrial RelationsChapter 8 Australia and New Zealand

Australia-FactsPopulation: 23 million (estimate 2013)GDP: $1.542 trillion(12th)GDP per capita: $65,642 (5th)75% total work force employed in

services and 20% in manufacturing and construction.

Mining and agriculture are the two main industries in Australia’s economy. But these industries employing a mere 5% of the total workforce

Australia-LegislationSince 1901 Australia has been a federation –

a system of government with a central federal government and six regional ‘State governments’

Commonwealth Constitution limited parliament’s right to make laws on conciliation and arbitration of IR disputes extending beyond the limit of any on State.

Commonwealth’s power only apply to a handful of industries, such as shearing and maritime.

Federal regulated employment and State regulated employment 50:50

Australia-Legislation (cont’d)The Conciliation and Arbitration Act 1904

established the conciliation and arbitration system which operated until 1988. The system was technically limited to industrial disputes beyond the borders of regional states

However, the practice of unions serving logs of claim on employers from different states (artificially creating an ‘interstate’ dispute) meant that it became the main avenue for dispute settlement and award negotiation – most disputes were settled by negotiation not arbitration

Fair Work Act (FWA) 2009There is no legislation that mandates works

councils

Australia-ActorsHigh Court of Australia provide

guidelines for “fair and reasonable” minimum weekly wage. Unions negotiate with employers based on this guidelines.

From 1986-1996 the dominant mechanism for setting the wage was through a social compact called the Prices and Incomes Accord (‘the Accord’)

Now minimum wages are set by a Minimum Wages Panel under Fair Work Australia

Australia-Actors (cont’d) Union density 40% during the 1930s and then rising

again to a peak of 65% in 1953 Union density decline from 1992-2002 (See P. 127)

◦ Even in industries that were traditionally highly unionized, such as mining and manufacturing.

◦ High density (electricity, gas, and water supply)◦ Low density (Agriculture)

Union density is much higher in the public sector (44% in 2007) than in the private sector (15% in 2007)

Australian Council of Trade Unions (ACTU) 1927◦ Before 1990s, Union co-operation in setting national wage

level◦ After 1990s, enterprise-level bargaining play main role

Employers have constructed a complex web of industry-level associations.◦ AIG, ACCI, BCA

Australia-IR conflictSystem of conciliation and arbitration is

designed to eliminate unnecessary strikes. Thus, most of IR conflict are resolved by arbitration.

Striking was illegal until 1930.Workers could strike during a designated

‘bargaining period’ and the industrial regulatory body could intervene and determine disputes if the parties were not acting in good faith, if there was little chance of settlement or if intervention was in the public interest

Australia-IR conflict (cont’d)The strike rate continued to decline

during the 1990s and after 2000.Employers attempted to introduce non-

union collective agreements.High unemployment rate: 5.3% (2009)About 20% employees work more than

50 hours per week. By law, workers can request ‘flexible

working arrangements’ but employers have no obligation other than having to respond to the request

New Zealand-FactsPopulation: 4.45 million (estimate

2013)GDP: $161 billionGDP per capita: $36,648 Economy  

◦Greatly dependents on international trade with Australia, EU, US, etc.

◦Strongly focused on tourism and primary industries such as agriculture.

Most business-friendly country in the world (world bank 2005)

New Zealand-LegislationThe logic of New Zealand’s

arbitration system was an exchange of concessions to trade unions and constraints upon them.

◦Registered Unions secure exclusive rights to represent workers

◦Award apply to all employers of workers covered by the award.

◦The state responsible for the enforcement of the award.

New Zealand-Actors New Zealand Council of Trade

Unions (NZCTU) formed in 1987Freedom for employers and

employees in their choice both of bargaining agents and bargaining unit.

Slow decline in trade union density

New Zealand-Actors (cont’d)The Employment Contracts Act of 1991

("the ECA") promoted individualism in employment relationships at the expense of collectivism.

Employers can make an offer of employment to a prospective employee that includes a trial period of up to 90 days. Trial periods are voluntary, and must be agreed in writing and negotiated in good faith as part of the employment agreement.