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OBJECTIVES

On completion of this chapter you will be able to:

� identify the principal decisions and events throughout Australian industrialrelations history

� explain the main causes and consequences of those decisions and events� explain what lessons have been learned from this history� trace the main turning points in industrial relations theory over time� analyse the significance of the main approaches to industrial relations theory.

AN HISTORICALOVERVIEW OF THEORY

AND PRACTICE

Chapter 1A

CHAPTER 1A AN HISTORICAL OVERVIEW OF THEORY AND PRACTICE 3

A HISTORY OF INDUSTRIAL RELATIONS IN AUSTRALIA

1788–1900In the first few years of the colony of New South Wales after 1788, work was initiated andcontrolled by the government and free settlers, and could be best described as amaster–servant relationship which followed British practice. The principal feature of thelabour market was the use of convict labour by governments and private employers. Asthe colony expanded (in population and geographic terms) and other colonies were estab-lished, there was a gradual shift to employed labour. Convict labour largely came to an endwith the abolition of the transportation of convicts to Australia in 1868. After 1868, thelabour force was increasingly comprised of emancipated convicts, immigrant free settlersand Australian-born workers.

This shift meant that a direct form of regulation gave way to more bargaining but withina framework of expanding colonial regulation built on British law. The structure of theeconomy also changed with the development of trading, banking and manufacturingcompanies in the cities. This increased the diversity of the economy beyond farming andstimulated the demand for investment and labour. Waters (1982, p. 86) argues that a convictproduction period (1788–1830) gave way to a pastoralist production period from 1830 to1850, which in turn was overtaken by a craft production phase with the emergence of signif-icant mining, construction and manufacturing.

The economy experienced periods of growth and recession throughout the 19th centurywith governments sometimes making investment easier (e.g. land grants and easing obliga-tions on insolvency) but increasing legislation over conditions of employment, in part toprotect workers and to control unions. Employers were confronted with having to bid forlabour when times were good. To address labour scarcity, governments encouraged, andsometimes subsidised, immigration. So, there was government intervention in the labourmarket in various ways. In addition, the significant growth in infrastructure (roads, railways,ports, water supply and government buildings such as prisons) from the early days of thecolony not only provided a platform for private investment and production but establishedthe broad dimensions of an industrial relations system through its own systems ofemployment, pay and working conditions.

The economy, as volatile as it could be, provided an important context for industrialrelations. Also, the colony witnessed the influx of political ideas and union experience fromEurope, particularly Britain. During the 1820s and 1830s, early forms of unionism weresmall benevolent societies of specific, mainly skilled, groups of workers (e.g. boatbuilders,tailors, carpenters and joiners), which usually provided some sickness and unemploymentbenefits to members. However, there was the emergence of industrial opposition toemployers. The first recorded strike was in 1829 by compositors in the printing industry. Bythe 1850s, about 20 unions had become established and had organised campaigns toincrease wages and improve working conditions, such as by the gaining of an eight-hourworking day by the Operative Stonemasons Society in Sydney and Melbourne (Hudson1966, pp. 14–25; Turner 1983, pp. 14–26).

Following a recession during the 1840s, the discovery of gold in the 1850s stimulatedeconomic growth and was the beginning of a relatively long boom, which was characterisedby increased production (and export) of wool, coal and minerals (Wright 1995, p. 14). Withsome exceptions, the relatively strong economic growth lasted until the 1890s. This wasaccompanied by a shift in the structure of industry, in broad terms, away from sole tradersand small businesses as the predominant unit of economic activity towards companiesemploying large numbers of workers. The second half of the 19th century also witnessedthe growth of manufacturing industries in capital and large regional cities. Populationincreases resulted from national birth rates as well as immigrants, the latter bringing withthem European political ideas from the expanding factory systems and working-classcommunities, which were the platform for the formation and growth of political organisa-tions and unions. There was an increasing number of industry-employed workers, asopposed to self-employed, particularly in factories involving standardised machinery, tools,training and work methods. People were doing the same or similar work for the same wagesunder the same working conditions and this was conducive to collective organisations,particularly unions. So, the economic and population growth, structure of industry andemployment, and organisation of work were, at least in some important respects, useful, ifnot necessary building blocks for the development of industrial relations.

The Australian political landscape also changed with the addition of colonies (in thecases of Victoria and Queensland areas, which had been part of the original colony) withsimilar political systems and economies yet differences as new industries emerged indifferent parts of the country (e.g. different types of mining and agricultural production).Colonial governors were replaced by fledgling systems of parliamentary representation withpolitical parties or factions contesting the right to legislate. The right to participate inelections (as voter and candidate) extended the political systems of the colonies such thatdirect domination by one group, party or class and Britain was rendered difficult and thuslaid the foundation for a legitimised pluralist and democratic federal political system.

The significance of this for industrial relations was that it provided a series of developingregulatory frameworks within each of the colonies, each based on their economic, politicaland social systems and cultures. Despite the common heritage, sufficient diversity hademerged so that industrial relations legislation within each colony and subsequently eachstate that this patchwork framework of determining minimum wage rates, workingconditions and settling disputes, strikes and lockouts meant that six systems were well-established at the time of Federation.

The two basic forms of colonial systems were wages boards, initially in Victoria andfollowed by South Australia and Tasmania, and compulsory arbitration in Western Australiaand New South Wales. Wages boards, comprising employer and employee representatives,could set minimum wage rates. They were particularly important in mass production manu-facturing industries where hard working conditions, including long hours and a fast pace ofoutput, led to the name ‘sweating’ (Portus 1979, pp. 2–4).

The British history of arbitration is characterised by intermittent legislation to end strikesand lockouts throughout the 19th century (Hudson 1966, pp. 25–6). Portus (1979, p. 2)

INDUSTRIAL RELATIONS IN AUSTRALIA4

points out that the first compulsory arbitration Act was in 1894 in New Zealand and inAustralia it was in Western Australia in 1900. Compulsory arbitration, in theory, meant thelegally binding decision (on employers and employees) of a tribunal or court operatingunder an Act of parliament – which could establish a minimum wage rate, condition ofemployment (e.g. hours of work) and order to end an industrial dispute.

Particularly in the first two decades of the 20th century, state governments changedfrom one form to the other or combined both. Thus, for much of the 20th century (until1975 in the case of Tasmania and the ceding of industrial powers by Victoria to theCommonwealth during the 1990s) there were three broad types of systems according toDeery and Plowman (1991, p. 125): conciliation and arbitration tribunals (Queensland andWestern Australia); wages boards (Tasmania); and hybrid systems incorporating both in theother states. While hybrid systems continue at present (2008), the move to a federal systemunder the Corporations Power of the Constitution (Section 51 (20)) may see a standardisedsystem in the future where state variation is minimal.

The emergence of a widespread set of industrial relations systems was, at least in part,due to what Turner (1983) refers to as ‘the consolidation of the trade unions’ from 1851 to1900. During these years unions increased membership and industrial action, and held aseries of inter-colonial conferences.

Good economic times came to an end with depression during the 1890s, which wasaccompanied by a series of strikes. This decade was significant for the future of Australianindustrial relations, some referring to it as ‘the watershed thesis’. The strikes that had themost widespread impact tended to occur across colonial boundaries (shearing and maritime).The decade was the last where separate colonial rule was the form of government.

1900 to the presentNegotiations to design a constitution for Australia as a sovereign nation continuedthroughout the 1890s with much of the machinery of government to become housed in afederal form in which the new states (as opposed to former colonies) were to share decision-making power with future federal governments.

Initially, industrial relations was not specifically included in the proposed constitutionbut was promoted by a number of delegates to Conventions who cited the strikes as astimulus to having industrial relations included. Charles Kingston (South Australia) arguedfor a federal power to establish an industrial relations system and his ideas were influentialin the type of system created.

The Australian Constitution contained Section 51 (35), which established the power tolegislate for a federal system (i.e. the Constitution gave power to any federal government toenact legislation – initially, the Commonwealth Conciliation and Arbitration Act 1904which, despite many amendments and name changes, has remained the foundation of theAustralian system – and the legislation provided the detailed provisions for the system tobecome operational). Section 51 (35) gave power to the Commonwealth to legislate inrespect to ‘… conciliation and arbitration for the prevention and settlement of industrialdisputes extending beyond the limits of any one State’.


There were several important aspects entailed in this section of the Constitution. First,it resulted in seven systems of industrial relations: one federal and six state systems, whichmeant a division of jurisdictional power. In practice, as noted later, this meant federal andstate legislation (e.g. state workers’ compensation schemes, special federal tribunals forsome industries such as stevedoring) and awards and agreements that contained similaritiesand differences. Second, the principal outcome in terms of regulating industrial conflictwas an awards system. Third, the system was based on the proposition that conflict wouldbe regulated by a conciliation process but, where that failed, by compulsory arbitration.Fourth, decisions as to wages, working conditions and some other industrial matters wouldbe determined by a body that was intended to serve the role of regulator of the existingeconomic system without challenging its legitimacy, yet one that removed the direct powerof any federal government over industrial relations decisions.

The early years of the 20th century witnessed attempts to consolidate the system andestablish the legitimate legal basis for decisions by the court system. The system waschallenged by unions, employer groups and state governments from this period, particu-larly its constitutional power. The decisions of courts, particularly the High Court ofAustralia, and interpretations by courts, tribunals and governments as to what they andunions and employers could and could not do within the legislation resulted in a continuoussearch for practical ways to make the system work. The application of S.51 (35) meant thatindustrial disputes had to comply with a list of criteria, such as be interstate in nature andthus the need to create ‘a paper dispute’ (see p. 229; and Punch 1984, Chapters 4–6).

Deery and Plowman (1991, pp. 308–9) argue that while the arbitration system provideda means of protection of wages and conditions for employees, it is important to link it tothe Excise Tariff Act 1906, which afforded some employers protection from imports if theyprovided fair wages and conditions. Despite the short life of this Act, the industrial relationssystem adopted the principle of minimum protection and used it, in part, to determineminimum wage rates for much of the period from The Harvester Judgment (1907) to thepresent (see Chapter 11).

The Labor Party was formed in 1900 and the idea of Labourism developed. This meantthat the Labor Movement was comprised of two ‘wings’: the industrial wing, which includedunions, and the political wing, which was the Labor Party. The belief was that in furtheringthe interests of working people, when unions were unable to achieve protection and gains,representatives of working people could be elected to government to enact legislation. Therelationship between the two wings has been an uneasy alliance, particularly when Laborgovernments have been in power at state and federal levels. Unions continued to grow(total members as a percentage of total employees) from 1900 to 1929 (Martin 1980,pp. 2–9), then declined during the 1930s, rising slowly to between 50–60% for much of thesecond half of the 20th century (Deery & Plowman 1991, p. 226) until the decline fromabout 1990 (Peetz 1998, pp. 1–8).

Strike activity (working days lost) was at relatively high levels from the time statisticswere gathered in 1913 until the Great Depression (Deery & Plowman 1991, p. 54). Duringthe 1930s, it declined and remained relatively low until the late 1960s.


Following the economic restrictions imposed during the Second World War, the federalindustrial relations system seemed freed from the threats to its existence in the first half ofthe century but encountered more specific problems. These included structural changes inthe forms of emphasising conciliation, such as the use of Conciliation Commissioners, tospeed up decisions to resolve disputes (Healey 1972, Chapters 14 and 15) and theestablishment of a separate Commission from the original Arbitration Court followingthe Boilermakers’ Case (1956). The High Court decided that it was unconstitutional forone body to make a decision (e.g. determine an award) and also enforce it. This was contraryto ‘the doctrine of the separation of powers’ where arbitral and judicial functions could notbe performed by the Arbitration Court (Punch 1984, Chapter 2).

The arbitration system was also challenged in relation to its enforcement of decisions,particularly the insertion of ‘bans clauses’ in awards which were intended to prevent strikes(Sykes & Glasbeek 1972, Chapters 7 and 8; Hudson 1966, part 4). The temporary gaolingof a union official, Clarrie O’Shea, intensified this issue, which remained unresolved despiteattempts to change the system. Throughout the late 1960s and early 1970s, strike actionincreased as workers attempted to reap the gains from a long period of economic prosperityand maintain real wage increases at a time when inflation levels were increasing.

From the mid 1970s onwards, more frequent changes of government and attempts tostabilise and regulate industrial conflict moved through periods of increased governmentintervention in industrial relations as opposed to going through the established processes ofthe arbitral system (Fraser Government during the late 1970s and early 1980s), on the onehand, and increased bargained arrangements between Labor governments and theAustralian Council for Trade Unions (ACTU) – named Accords – on the other. Duringthese years, the role of ‘umpire’ that the federal industrial relations system had played since1904 was eroded and the foundation was laid for a system that was more open to theinfluence of labour, financial and product markets rather than a rules-based institutionalapproach. It was, in part, a reflection of technological and attitudinal changes occurringwithin a more diverse society, which gradually moved Australian industrial relations towardsa more market, individual and consumer focus.

A HISTORY OF INDUSTRIAL RELATIONS THEORYTo the extent that theory dealt with aspects of industrial relations, it did so largely in termsof individual disciplines such as law, politics and economics. Even with the development ofideas about society and people in sociology, psychology and anthropology, there was nocohesive theory in industrial relations as we know it today. Hence, the base disciplinesabove provided necessary ingredients for building theory but the main interest was in themas theories of law, politics, economics and so on. That said, relations between people atwork had existed in one form or another for centuries and this was usually on the basis of adistribution of power, mainly ‘givers’ and ‘takers’ of orders. That distribution of power wasgiven a more central focus during the industrial revolution in Europe because of thedevelopment of the employment relationship as opposed to family, feudal or religious


arrangements for producing goods and services. The types of goods, mainly manufacturedin factories, and the ways in which they were produced by the use of machinery at workand in communities in cities where labour markets expanded the range of skills, were alsoimportant for the foundation of industrial relations.

Theory tends to develop when practice is observed, an explanation of it is invented andconcepts are devised to assist in building an explanation of the practice, particularly thecauses, processes and consequences of it. In the case of industrial relations, the congrega-tion of perceived interests by workers (e.g. higher wages, particularly the same wage forthe same type of work) led to early forms of collective bargaining. Although not always ina formal organisational sense, this activity was important in the formation of unions. Sidneyand Beatrice Webb (1902) were significant founders of industrial relations theory becausethey identified the key methods used by unions to promote the interests of workers. Thesewere collective bargaining, mutual insurance (for providing various benefits) and legisla-tion. Thus, politics, in some form, and the law were used but it took people to observe thisand build an explanation of it and the concepts that contributed to the explanation.Flanders (1968) makes a number of points about the Webbs’ work. The emphasis was onunions, less so employers; there was increased scope for collective bargaining beyondworkshops to industry level; and union regulation could be reduced to two economicdevices: restriction of numbers of workers (e.g. through quotas of apprentices and women)and the use of the common rule, which was a uniform price (i.e. wage rates). However,Flanders (1968) was critical of the Webbs’ work as being misleading and inadequate,particularly how they treated collective bargaining. Key elements of industrial relationswere developed by the Webbs (1902) and a significant milestone reached, but there wasstill a long journey ahead.

During the first half of the 20th century, and while governments enacted legislation toestablish and develop industrial relations systems and unions expanded, there was alsoincreasing interest in management and work itself. The writings of Taylor, Mayo and otherpractitioners, researchers and theorists broadened the base upon which industrial relationscould build theory.

By the time theorists began to connect different disciplines such as sociology, economics,law and psychology in workplace and industry settings during the 1950s and 1960s, anumber of problems became apparent. Concepts were not universal, there were nofounding fathers, such as Adam Smith in economics and Freud in psychology, and therewas no methodology of industrial relations. The persistent reality is that industrial relationshas had to borrow much of its foundation from other disciplines and apply their concepts,theories and methodologies to industrial relations.

The other persistent issue is the temptation to develop theory that was aimed atexplaining and solving particular problems (e.g. major strikes in essential industries;designing a system that included individual bargaining that was acceptable practice toemployers, employees and unions). To the extent that theory was successful and theproblem disappeared, so did the theory. Theory is supposed to have the power to explainacross different settings – in this case, workplaces, industries and societies – and over time.


To design a general theory, it appeared that industrial relations would need to have a broadframework that could include all the main disciplines: economics, law, sociology, politics,psychology, history, engineering and anthropology. This was to avoid a bias of using onediscipline to explain industrial relations because, however diverse the definitions of it were,conflict and bargaining were seen as important elements and these had dimensions thatcould best be addressed by using several disciplines rather than just one. So, for example,economists were interested in the employment, profit and inflation aspects of bargaining,while sociologists were interested in the process and the power of unions and employers.

This was the scene for the influential theoretical development in industrial relationstheory: systems theory. This derived from the sociologist, Talcott Parsons, who was mainlyinterested in what held societies together. Parsons saw societies as systems that weresupposed to be structured and functioned in ways that were akin to machines (see Parsons& Smelser 1956). He argued that societies should be comprised of sub-systems (economic,political, legal and cultural) and it was these, and the interchanges between them, thatmade societies work. That is to say, it was necessary for each part to contribute to the func-tioning of the whole.

In 1958, the influential Harvard economist, John Dunlop, who played a significant rolein prices and incomes policies of the Nixon administration in the USA, took the systemsapproach and applied it to industrial relations, designing what came to be seen as ‘a generalsystem of industrial relations’. He argued that industrial relations constituted a separatesub-system. Dunlop argued that rules were the key to explaining why industrial relationssystems differed and why rules changed when the system was put under pressure to change.He said ‘… the establishment and administration of these rules is the major concern oroutput of the industrial relations subsystem of industrial society’ (Dunlop 1958, p. 13).There were six main factors:

� Actors. These were hierarchies of managers (and their representatives, employer asso-ciations), workers (and their representatives, mainly unions) and specialised governmentagencies.

� Rules. This was a network including unilateral management decisions, laws made bygovernments, voluntary agreements between employers and unions, and customs andpractices within groups of workers. Rules were important because they were the outputof the system.

� Ideology. Dunlop saw that a commonly held set of beliefs and ideas was necessary forbinding the system together. Even where these were not identical, there needed to besufficient compatibility so that there was tolerance of difference and therefore anaccepted role for each actor.

The other factors made up the context of the system.

� Technology. This influenced the type of product and production process, and types ofskills and knowledge. It was applied at the societal level and workplace levels. Dunlopargued that similar technology in different societies can lead to similar sets of rules.


� Market and budgetary constraints. These constituted the economic influence onmanagement, which affected key sources of conflict such as employment and wagelevels.

� Locus and distribution of power. This meant the access to resources to be used tobenefit the interests of groups.

The main criticisms of systems theory are listed below.

� It is too general to be able to explain specific cases (e.g. strikes, workplace bargaining).Furthermore, it does not have a research base that enables it to demonstrate how thedifferent factors operate.

� The approach is inherently conservative because it does not account for change. Howdoes change occur if everything routinely performs its allocated function?

� It emphasises the methods of conflict resolution rather than the causes and processes ofconflict.

� It is value-biased while pretending to be objective.� It is conceptually weak. Blain and Gennard (1970) argue that the notions of rules and

ideology are obscure and that it is ambiguous because it is a research tool as well asbeing a phenomenon requiring investigation and explanation.

The most significant outcome of Dunlop’s theory during the 1960s was the emphasis onrules. This led Flanders (1968) to define industrial relations as a ‘… study of the institu-tions of job regulation’. He made two distinctions in relation to rules. First, he argued thatthere were procedural rules that defined the status of the parties and the relations betweenthem (e.g. whether unions are protected as legitimate bargaining agents). This has come tobe seen as a set of ‘rules of the game’ and is contrasted with substantive rules, which dealwith bargaining over specific aspects of industrial relations such as wages and workingconditions. The second distinction is between rules of internal job regulation, that is, rulesdeveloped within workplaces between managers and workers, and external rules, which arethose developed by, and sometimes imposed by, actors outside the workplace. He arguedthat agreed rules that establish the legitimate rights of the parties to bargain were crucialto any system.

Also in Britain during the 1960s, Fox (1966) argued that there were two perspectives ofindustrial relations. Unitarism referred to there being one source of loyalty and authority,namely management. Pluralism referred to the inevitability of different interests betweenemployers and employees and that ways had to be found to regulate these when theyresulted in conflict. This distinction is important for two reasons. First, it established theproposition that there could be different theoretical approaches to industrial relations ratherthan one. Hence, the idea that there could be a general theory with one generally acceptedideology was challenged. Second, the emphasis on pluralism was compatible with industrialrelations systems, particularly outside the workplace. This is the mainstream foundation forall industrial relations systems at national (and sometimes state, local and industry) levels.


However, it remains at odds with advocates of unitarist approaches within workplaces. (Forthe features of unitarist and pluralist approaches and the contrasts between them, seeChapter 1.)

Pluralism was developed throughout the 1960s and 1970s by emphasising ‘agreednormative codes’ rather than relying on sanctions such as gaoling union officials. Fox andFlanders (1969) argued that the spread of strikes in Britain could not be explained byexcessive union power but rather by a breakdown of social regulation, which led to aweakening of norms (unwritten and accepted codes of values and behaviour in society).The system had become fragmented into a large number of unrelated and divergent mini-systems, each with its own normative order (industries and workplaces) but there was nooverall normative order that was understood and accepted. This was referred to as a stateof anomie, a concept earlier used by the sociologist Emile Durkheim. This meant that therules of the game had been undermined. Fox and Flanders (1969) contended that industrialrelations institutions had to be reformed to integrate the proliferating range of mini-systems.

Despite the influence of pluralism as a theoretical perspective of institutional industrialrelations, and particularly industrial relations systems at national and industry levels, therewere a number of criticisms, which are briefly outlined below.

� The emphasis on rules is unrealistic given the extensive bargaining over core aspects ofindustrial relations, namely wages and working conditions, rather than abstract andlegalistic notions of rules and the ‘political’ role of unions. In any case, rules arefrequently changed and tend to favour some people over others rather than being purein their fair treatment of and opportunity for all.

� There needed to be some active opposition in order to permit change but the theorydid not address what constituted enough disorder and the forms of it.

� Fox (1975) later argued that by concentrating on the different and competing interest ofemployers, managers, workers and unions do not adequately consider the influences ofpower, status and wealth imbalances in society. This is an argument that managementholds the dominant resources, the legitimate positions – an ‘invisible power’ that is rarelyused and the means by which its authority can become accepted via the media andeducation system, which can ensure that compromise comes to be viewed as fair andchallenge futile, and sets the agenda so that unions only ‘bargain at the margins’. Again,the theory reflected the times, particularly the emergence of unofficial strikes (those notapproved by union officials), wage increases outside established bargaining structuresand processes (‘wage drift’), and a shift in the power of decision-making away fromunion officials and towards shop stewards (workplace union delegates).

Some critics tended to emphasise the inability of pluralism to deal with conflict andcould never do so unless more account was taken of the inequalities in the wider societyand its structures (see the radical section in Chapter 1).

Although not recognised at the time, the theoretical move towards workplace industrialrelations, as opposed to national and industry levels, opened the way for inclusion of factorsthat operated within workplaces rather than outside them. To some extent, this marked a


move away from a search for a general theory and towards an interest in the diversity ofworkplace industrial relations, particularly through an expansion of research into individualworkplaces. This included management (particularly management strategy), humanresource management and labour process theory.

First, some criticisms of pluralism revolved around the inclusion of more psychology-based theories (e.g. behavioural analysis of organisations and a consideration of interpersonalrelations). However, while this opened the way for management as a factor in industrialrelations theory to shift theory itself towards psychology as the principal discipline, theinclusion of management was also the basis for critically evaluating the use of strategy froman industrial relations perspective in which psychology was not the principal discipline but amore general approach that was consistent with a multidisciplinary theoretical base. In thissense, the study of industrial relations was multidisciplinary and so was the study ofmanagement (see p. 13).

Second, a major shift in the basis for theory–building developed throughout the 1980sand culminated in the identification of the distinction between interests and rules(associated with pluralism) and cultures (Provis 1996). While this shift in practice wasconsistent with the emergence of management as a factor in industrial relations, it alsopointed to the challenge to industrial relations by human resource management. There canbe no doubt that this was a contest of different beliefs that underpinned theory (seeChapter 2).

Third, labour process theory and the wider focus on the organisation of work (see p. 12and Chapter 5) have generated extensive research and theoretical debate. While at onelevel it may be removed from the traditional focus on institutional industrial relations, it islinked to it through bargaining, conflict and aspects of the employment relationship. This isparticularly the case with how industrial relations and human resource management haveaddressed working time, including its relation to other conditions of employment such astraining and outside factors such as the division of working and non-working time (work–lifebalance). This is important for industrial relations theory because of the inclusion of ‘newactors’ such as churches, community groups and consumers because they have eitherattempted to or have influenced the decisions of industrial relations ‘old’ Dunlopian actors(e.g. the role of the established Christian churches in opposing the Coalition WorkChoiceslegislation prior to the 2007 Federal election). Such links aside, labour process theory hasbeen the subject of debate and change since Braverman’s (1974) work and has beenimportant in drawing attention to work itself, particularly various systems of control.

Throughout the 1980s, an alternative macro theoretical perspective was developed.Neo-corporatism, and the wider growth of post-Fordism, allowed for a role for industrialrelations institutions, particularly governments and national unions and their peak councils.To some extent, the idea was to develop theory that provided a model for includingunions at a policy level and workers at a workplace practice level. Albeit without stronglinks to neo-corporatism, this approach also emphasised the enhancement of opportunitiesthrough training and education, partly brought about by providing a basis for increasingproductivity and then mechanisms for redistributing the gains to workers. This was a


legitimate theoretical approach, which was distinct from pluralism, but as with all theoreti-cal perspectives it attempted to be a theory for explanation and a model for practice. This isa goal that at best is difficult to sustain.

Throughout the 1990s and to the time of writing, there has been a return to the largertheoretical questions in industrial relations. Much of this literature has identified a declinein the strength of theory, the fragmentation and narrowness of research and the limitedcapability of theory to inform and influence policy and practice. To some extent, there wasa concern for the future of industrial relations practice, particularly the weakening of insti-tutions such as unions and government agencies providing protection and regulation (e.g.the Australian Industrial Relations Commission), and emphasis on how these can be revived(e.g. Carter’s 2001 summary of the US union movement literature).

Recently, attempts have been made to reformulate industrial relations theory by takingaccount of changes since the 1970s. These include the expansion of market forces, particu-larly internationally, which have become increasingly powerful in pressuring governmentsand business to adapt to changing markets rather than operate in accordance with institu-tions that have regulated industrial relations. To some extent, this wider change has beenaccompanied by changes in attitudes to work and life choices and approaches to moreflexible and individualistic employment and bargaining practices.

One significant difference is the distinction between the focus on core industrialrelations, particularly the institutions with political and economic roles such as collectivebargaining, on the one hand, and the strengthening of the wider social context where family,community and increased individual choices spread beyond class, workplace and institu-tion, on the other (e.g. see Piore & Safford’s 2006 discussion of the shift in US industrialrelations). This latter view has become the basis for searching for a new theoreticalfoundation for industrial relations. Acker’s (2002) neo-pluralism recasts the 1970s form byadding values to interests, moral communities and social institutions to unions, and stake-holding to control.

The significance of Dunlop’s work has emerged in industrial relations theory with theidentification of ‘new actors’ (Heery & Frege 2006). ‘New actors’ may be consumers,management consultants, churches and community groups promoting employment.Bellemare (2000) used a study of public transport commuters to develop a framework thatextended Dunlop’s (1958) systems theory. These ‘new actors’ (who may be individuals,groups or institutions) can directly and indirectly influence industrial relations processesand outcomes. They exert influence along two dimensions: instrumental, including to theextent that they can operate at one or more of three levels (shop floor, organisation andsociety) and act continuously; and outcomes including attaining objectives, producingtransformations in an industrial relations system and having its outlook accepted by otheractors. In devising this approach, Bellemare (2000) has permitted the explanation ofindustrial relations to move to a fourth and non-institutional set of actors within a systemstheory approach.

Wailes, Ramia and Lansbury (2003) develop a comparative theoretical approach withdevelopments in institutionalism (common pressures on countries can lead to different


economic and political policy outcomes because of institutional and organisational differ-ences – so the type of bargaining system varies because of cultural and institutional factors)and interests (the interests of particular groups such as tariff-protected manufacturers andservice providers in international markets differ and in this way tend to dominate policy-making rather than the institutional factors). The implication for industrial relations is acontrast between the power of institutions to regulate relations between parties (such asunions and employers in an industrial relations system) as opposed to the power ofthe parties to operate the system to their advantage in a more competitive environment.They use research into the Australian and New Zealand industrial relations systems throughthe 1980s and 1990s to develop a platform for an integrated approach (institutional andinterest-based).

The rise of human resource management and the emphasis on high performanceworkplaces has presented industrial relations with a challenge to its traditional theoreticalperspectives, particularly pluralism. Kelly (1998) identifies a number of issues that makeindustrial relations distinct from the managerial and neo-pluralist approaches. His emphasisis on the power relations between the state, workers and management and their interests.Developing industrial relations theory that is distinct from managerial approaches andconcessions to them in theory, particularly the role of ethics and justice, provides an alter-native and more traditional industrial relations theoretical platform for explanation.

New approaches emerge, are debated and tested. The differences in theory continue tobe underpinned by differences in belief and influenced by practice. The search for industrialrelations theory changes because industrial relations itself changes. The expansion ofproduct, financial and labour markets across national boundaries has influenced debates onindustrial relations theory. However, it is clear that some of the early theoretical perspec-tives, and the concepts within them, and the fact that they have been drawn from otherdisciplines continue to provide a basis for generating explanations and for improving policyand practice. Despite criticism of systems theory, pluralism and institutionalism remainpersistent theoretical perspectives. The employment relationship, unionism and bargainingin institutional frameworks are thus still at the heart of contemporary industrial relationstheory. Management, human resource management and the organisation of work are thesubject of integration in various ways but tend to be seen as secondary to mainstream theory.The wider contexts of political, economic and social influence also remain important fortheoretical development in industrial relations to bridge it to power in society and beyondindustrial relations within any workplace.

SUMMARYA history of industrial relations in Australia

� From 1788 to 1850, the colonies moved from direct regulation of labour to early formsof bargaining as the dominance of convict labour was replaced by free labour throughimmigration and emancipation.


� British law and institutions were the early models for regulation of labour markets,including bargaining and unions.

� There was expansion of the private sector, following the dominance of the public sectorin building infrastructure (e.g. roads, ports, government buildings), including pastoraland manufacturing industry.

� Unions were mainly skill-based and tended to emerge from a benevolent society model.

� Economic, political and social diversity between the colonies led to differences inindustrial relations systems.

� Good economic times following the gold rushes allowed a consolidation of unions,particularly as manufacturing industry expanded.

� Industrial relations was influenced by experiments and ideas in compulsory arbitration,particularly in the light of the depression and strikes during the 1890s.

� The Commonwealth Constitution included Section 51 (35), which gives federal govern-ments the power to enact legislation to regulate industrial relations. However, the poweris shared with the states, giving Australia seven systems.

� The Conciliation and Arbitration Act 1904 established the primacy of awards inprotecting and improving wages and working conditions.

� The system had to invent devices to comply with the Constitution to make it work inpractice (e.g. ‘paper disputes’).

� There have been frequent amendments to the principal legislation since 1904(e.g. Conciliation Committees and ‘bans clauses’ in awards).

� The levels of industrial conflict have varied since Federation and are presently atrelatively low levels.

� Union membership increased and then declined since Federation.� The constitutional base of the industrial relations system has changed from regulating

industrial disputes (s. 51 (35)) to regulating corporations (s.51 (20)).

A history of industrial relations theory

� Industrial relations tends to be linked to practice (e.g. factory work) and focused onsolving problems (e.g. poor working conditions and strikes).

� Governments enacted legislation to regulate industrial relations, often incorporatingcollective bargaining and unions, so these became important common features ofindustrial relations theory.

� Sidney and Beatrice Webb saw unions as important in promoting worker interests byusing collective bargaining, mutual insurance and legislation.

� Industrial relations theory emerged from single disciplines (e.g. law, economics andpolitics) to address the different dimensions of industrial relations. This establishedindustrial relations as multidisciplinary in nature.

� Systems theory was used by Dunlop in the 1950s to attempt to design a general theoryof industrial relations.


� Criticisms of systems theory were generated during the 1960s but rules survived as thekey foundation stone for industrial relations theory, particularly the significance of(formal) ‘rules of the game’ and an agreed (informal) normative order.

� Fox argued that there are two perspectives of industrial relations, unitarism andpluralism, which is contrary to the search for one general theory.

� There was criticism of the emphasis on pluralism as the main perspective.� During the late 1970s and 1980s, there was a tendency to move away from broad theory

towards workplace research. � During the 1980s, there was increased emphasis on workplace, as opposed to institu-

tional, approaches such as management strategy and labour process theory.� During the 1990s, human resource management and industrial relations were the

subject of debate, with emphasis on why and how they were different and how theycould be integrated.

� Also during the 1990s and to the present, there have been attempts to re-establishstronger explanatory power in industrial relations theory (i.e. beyond workplace andindustry levels).

� Recent theoretical work has been based on earlier work but attempted to modify orextend it (e.g. the identification and analysis of ‘new actors’, the distinction betweeninstitutions and interests and neo-pluralism). There have been attempts to integrateapproaches but industrial relations theory remains dispersed.

TUTORIAL QUESTIONS1. Compare the powers of federal governments under Sections 51 (35) and 51 (20) of the

Australian Constitution.2. Identify the main changes to the federal system from 1904 to the present and explain

why these and not others were important.3. Why did industrial conflict increase during the 1960s and 1970s and how did federal

governments respond?4. Identify the methods used by federal governments since 1904 to regulate industrial

conflict, particularly strikes, and explain why these methods were often changed.5. What should be the relationship between any government and any industrial relations

‘umpire’ (i.e. industrial tribunals and courts)?6. What are the main arguments for and against compulsory arbitration in Australia?7. Why is it often argued or assumed that industrial relations theory is influenced by

practice? How does this differ from the disciplines from which industrial relations isdrawn (e.g. politics, economics and sociology)?


8. Compare the ‘old’ (i.e. Dunlop’s) systems theory and the ‘new’ (i.e. Bellemare’s).9. Compare the ‘old’ pluralism (i.e. Fox’s) and the ‘new’ (i.e. Ackers’).

10. To what extent can a case be made for trying to design a better explanation of industrialrelations within theories?

RESEARCH AND CLASS DISCUSSION TASKS1. Design a system of industrial relations for Australia to operate from 1900 (i.e. the most

important powers in relation to unions, employers, bargaining and conflict, particularlystrikes and lock-outs). Base the system on the history of industrial relations up to 1900.

2. Visit a selected number of employer association and union websites and assess howtheir policies towards the current industrial relations system have been influenced byhistory. Put forward your assessments to others in the group. Consider the argumentsthat history has had a significant influence or little.

3. Develop a group response to the following proposition: Describe the circumstances inany country in which industrial relations would not exist.

4. Design a theory that would explain the main dimensions of the current Australianindustrial relations system, namely types of bargaining, protected minimum conditionsof employment, methods of resolving conflict and forms of employment flexibility.

5. Conduct a search for an industrial relations system in a country other than Australia.Select or design a theory that best explains the system.

6. How can a theory explain the key influences in industrial relations, particularlyregulation through institutions and market power.

REFERENCESA history of industrial relations in AustraliaDeery, S. J. & Plowman, D. H. 1991, Australian industrial relations, 2nd edn, McGraw-Hill, Sydney.

Healey, B. 1972, Federal arbitration in Australia, Georgian House, Melbourne.

Hudson, J. 1966, Penal colony to penal powers, Amalgamated Engineering Union, Sydney.

Martin, R. 1980, Trade unions in Australia, 2nd edn, Pelican Books, Ringwood, Victoria.

Peetz, D. 1998, Unions in a contrary world, Cambridge University Press, Cambridge, United Kingdom.

Portus, J. H. 1979, Australian compulsory arbitration, 2nd edn, The Law Book Company, Sydney.

Punch, P. 1984, Guidebook to Australian industrial law, 4th edn, CCH Australia, Sydney.

Sykes, E. I. & Glasbeek, H. J. 1972, Labour law in Australia, Butterworths, Sydney.

Turner, I. 1983, In union is strength, 3rd edn, Nelson, Melbourne.

Waters, M. 1982, Strikes in Australia, George Allen & Unwin, Sydney.

Wright, C. 1995, The management of labour, Oxford University Press, Melbourne.


A History of industrial relations theoryAckers, P. 2002, ‘Reframing employment relations: the case for neo-pluralism’, Industrial relations journal,

vol. 33, no. 1, pp. 2–19.

Bellemare, G. 2000, ‘End users: actors in the industrial relations system?’ British journal of industrialrelations, vol. 38, no. 3, pp. 383–405.

Blain, A. N. J. & Gennard, J. 1970, ‘Industrial relations theory – a critical review’, British journal ofindustrial relations, vol. 8, no. 3, pp. 389–407.

Braverman, H. 1974, ‘Labor and monopoly capital’, Monthly review press, New York.

Carter, B. 2001, ‘Lessons from America: changes in the US trade union movement’, Work, employmentand society, vol. 15, no. 1, pp. 185–94.

Dunlop, J. T. 1958, Industrial relations systems, Southern Illinois University Press, Carbondale, Illinois.

Flanders, A. 1968, ‘Collective bargaining: a theoretical analysis’ in Flanders, A. 1975, Management andunions, Faber and Faber, London, pp. 213–40.

Fox, A. 1966, Industrial sociology and industrial relations, HMSO, London.

Fox, A. 1975, ‘Industrial relations: a social critique of pluralist ideology’ in Barrett. B, Rhodes, E. &Beishon, J. (eds), Industrial relations and the wider society, Collier Macmillan, London, pp. 302–24.

Fox, A. & Flanders, A. 1969, ‘The reform of collective bargaining: from Donovan to Durkheim’, Britishjournal of industrial relations, vol. 7, no. 2, pp. 151–80.

Heery, E. & Frege, C. 2006, ‘New actors in industrial relations’, British journal of industrial relations,vol. 44, no. 4, pp. 601–4.

Kelly, J. 1998, Rethinking industrial relations: mobilization, collectivism and long waves, Routledge, London.

Parsons, T. & Smelser, S. J. 1956, Economy and society, Routledge and Kegan Paul, London.

Piore, M. J. & Safford, S. 2006, ‘Changing regimes of workplace governance, shifting axes of social mobilization,and the challenge to industrial relations theory’, Industrial relations, vol. 45, no. 3, pp. 299–325.

Provis, C. 1996, ‘Unitarism, pluralism, interests and values’, British journal of industrial relations, vol. 34,no. 4, pp. 473–95.

Wailes, N., Ramia, G. & Lansbury, R. D. 2003, ‘Interests, institutions and industrial relations’, Britishjournal of industrial relations, vol. 41, no. 4, pp. 617–37.

Webb, S. & B. 1902, Industrial democracy, volumes 1 and 2, Longmans Green & Co., London.

RESOURCESSuggested reading

A HISTORY OF INDUSTRIAL RELATIONS IN AUSTRALIADeery, S. J. & Plowman, D. H. 1991, Australian industrial relations, 3rd edn, McGraw-Hill, Sydney,

Chapter 10.

Healey, B. 1972, Federal arbitration in Australia, Georgian House, Melbourne.

Turner, I. 1983, In unions is strength, 3rd edn, Nelson, Melbourne.


A HISTORY OF INDUSTRIAL RELATIONS THEORYAckers, P. 2002, ‘Reframing employment relations: the case for neo-pluralism’, Industrial relations journal,

vol. 33, no. 1, pp. 2–19.

Heery, E. & Frege, C. 2006, ‘New actors in industrial relations’, British journal of industrial relations,vol. 44, no. 4, pp. 601–4.

Kochan, T. A. 2000, ‘On the paradigm guiding industrial relations theory and research’, Industrial andlabor relations review, vol. 53, no. 4, pp. 704–11.

Useful websitesAustralian Industrial Relations Commission http://www.airc.gov.au

Western Australian Industrial Relations Commission http://www.wairc.wa.gov.au


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