This is a sample essay entitled “How have changes to the national employment relation system in the last 10 years impacted on workplace relations today?”. This was given to me by another student. Both marked HD from Monash University in Victoria, Australia. On this essay you will see how the national employment system changes in the last ten years and how it affects our employment system today. The total word count for this essay is 1634. The author of this essay also submitted the references he used to finished this essay.
How have changes to the national employment relation system in the last 10 years impacted on workplace relations today?
Employment relations can be broadly defined as the study of the formal and informal rules which regulate the employment relationship and the social processes which create and enforce the rules (Bray, Waring and Cooper, 2009).
Australia has seen some radical changes to its national employment relation system over the past ten years. Industrial relations reform has been a key item on the agenda of both major political parties in Australia in the last two decades and continues to dominate political debate as seen in 2007 (Hall, 2008). The Introduction of WorkChoices in 2005became an era most remembered by Australians as the introduction of Australian Workplace Agreements (AWA’s) and the disbandment of unfair dismissal laws for employers with less than 100 employees.Following the successful election of the Australian Labor Party (ALP) in 2007, Australian’s saw the introduction of Fair Work Australia and the establishment of WorkChoices. The introduction of both employment relation systems had a profound effect on the Australian workforce and has forever changed how Australian’s view employment relations.
This paper explores the changes to Australia’s national employment relation system in the last ten years and attempts to elucidate the impact these changes have had on employment relations in Australia today.
In 1996 and again in 2004, Australia saw the election of the Liberal-National Coalition party led by John Howard. Fundamental industrial relations reform had been a long-held ambition of Prime Minister John Howard (Hall, 2006) and the introduction of the Workplace Relations Act1996 and later the Workplace Relations Amendment (Work Choices) Act 2005 profoundly changed the way in which wages and conditions were determined in Australia.WorkChoicesa national workplace relations system based on the corporations power in the Commonwealth Constitution, was promoted as the means to strengthen the Australian economy, be more efficient and in turn allow employers to create more jobs and pay higher wages, thereby ensuring fairness for all (Hall, 2006). The changes introduced by WorkChoices was said to facilitate fair and reasonable work relations on the basis of mutual interest between employer and employee (Mack, 2007). This Unitarian ideology assumes that employers and employees share a common interest and that the workplace and employment relations are fundamentally non-conflictual (Bray et al., 2009).Based on this ideology WorkChoices was promoted as the means for employers and employees to negotiate and reach consensus on wages and conditions that met both parties’ needs without the involvement of unions or rigid award entitlements. This was a move away from Australia’s collectivist traditions and strong union involvement to a more fragmented system of bargaining between employer and employee (Lansbury, 2000).
In 2006, the Australian Fair Pay Commission was introduced and the award system was stripped to a minimum of five basic provisions with a shift to favour individual bargaining over collective bargaining, through individual Australian Workplace Agreements (AWA’s), which overrode collective agreements (Pocock et al., 2008). This ensuing fairness for all touted by the Liberal-National Coalition saw employers given the freedom to offer individualized AWA’s, the freedom to make an agreement or leave pay to the bare minimal and the freedom to dismiss employees (for employers with less than 100 employees) (Hall, 2006). Employees on the other hand saw few freedoms other than to trade-off various award conditions or entitlements for other benefits (Hall, 2006).With its anti-union sentiment, WorkChoices represented a shift in the balance of power in favour of employers (Barnes, 2006). WorkChoices effectively provided the means for employers to offer jobs with lower pay and poorer conditions, restricted the powers of the Australian Industrial Relations Commission (AIRC) and reduced the protection and support of trade unions (Hall, 2006).
Since the introduction of WorkChoices in 2005 numerous studies have shown that WorkChoices has had negative effects on the pay and conditions of Australian workers which has impacted negatively on all aspects of the employment relationship such as job security, income uncertainty, and uncertainty in work hours and reduced protection against unfair dismissal(Pocock et al., 2008). As a result of these negative effects employees are less likely to feel committed to their employer and employers may observe reduced productivity and higher turnover rates putting a strain on the employment relationship. Employers, who used WorkChoices as a means to remove workers entitlements, block lawful industrial action and the refusal to bargain were effectively damaging the long term relations they had built with many employees and potentially damaging the reputation they had with the Australian community. However it is presumptuous to assume that some employers didn’t use this new freedom to develop stronger relationships with employers, an opportunity to bargain with employees without the bullying tactics used by unions in the past.
While there is ample evidence to suggest that WorkChoices had undermined the rights and standards in many Australian workplaces there is also some evidence that suggests WorkChoices has had a flow on effect with an increase in employment, increased productivity, reduced union influence and low unemployment figures (Stone, 2008).
However despite some evidence that WorkChoices did have positive effects on the economy and labor market most of the evidence and press was negative and the 2007 Federal election saw the end of the Howard Government largely due to the “Your Rights at Work’ campaign led by the Australian Council of Trade Unions (ACTU) (Oliver, 2008). In 2007, Kevin Rudd was elected Prime Minister and the ALP won in a landslide, partly due to anti-WorkChoices sentiments across the nation (Cooper, 2009).
On the 13February 2008 Minister Julia Gillard introduced legislation into parliament which was the first steps toward dismantling WorkChoices and implementing the promises the ALP outlined in their ‘Forward with Fairness’ policy (Cooper, 2009). The Workplace Relations Amendment (Transition to Forward with Fairness) Act 2008 removed the option for employers to make any new AWA’s and introduced the ‘no disadvantage test’ for which all agreements would be judged (Cooper, 2009). The ‘no disadvantage test’ ensures that the new Individual Transition Employment Agreements (ITEA) used by employers already using AWA’s could not be used to undercut wages and implement unlawful conditions the way AWA’s did under WorkChoices (Bray et al., 2009).
The Rudd Government undertook an extensive and meticulous consultative process with all industrial relations stakeholders with a strong focus on the business sector, resulting in the Fair Work Act 2009 which included provisions such as National Employment Standards, rights and responsibilities of employees, employers and the organisation (Bray et al., 2009). The addition of these provisions set the ground rules for minimum standards for wages and conditions and deals with matters such as unfair dismissal, industrial action and enterprise bargaining.
The year 2009 saw the inaugural sitting of the new national regulator ‘Fair Work Australia’ (FWA) and all states except Western Australia (WA) transfer their industrial relation powers to the Commonwealth expanding the coverage of its system to most private sector employees in the country creating a truly national employment relation system (Cooper, 2010). From the 1 January 2010 all agreements were known as ‘Enterprise Agreements’ and the Act provided for unions to be involved in the bargaining process, however unions do not have an automatic right to be involved in the collective bargaining process.However, unlike WorkChoices, any employee wishing to enter into discussions with unions may do so. The Fair Work Act introduces the requirement for employers to bargain in good faith for employees who wish to enter into a collective agreement, and where all attempts to negotiate fall down the FWA will assist parties to reach an agreement.
The modernization of all awards into 10 basic industry-specific minimum standards certainly simplifies the previous system, however flexibility clauses in the Act allows employers to roll up some or all of these conditions into annualized salaries or rates of pay which might only equate to income slightly higher than the award minimum (Hall, 2008). These flexibility clauses may encourage some employers to adopt HR policies that fall outside the jurisdiction of industrial institutions and the enterprise agreements which have the potential to cause conflict in the workplace.
The ability for employers to exploit the wages and conditions of employees was a major flaw in the new WorkChoices reforms and rather than provide equity in the employment relationship by focusing on individual bargaining, the research suggests that in many cases it negatively impacted on employees’ job security, gave employees little option to voice their concerns, provided less certainty in their employment income and offered little protection in relation to unfair dismissal in circumstances where they would normally have been protected. Employee dissatisfaction has a profound effect not only on the employee and subsequently on their family and community but also on their productivity and the workplace culture.Employers that used WorkChoices to the disadvantage of employees may have caused long term damage to the employment relationship for what were short terms gains to their bottom line.
However it must be stated that WorkChoices did pave the way for the new Fair Work Act and there are certainly similarities in both national systems. The Fair Work Act taking into consideration the business sector appears to meet employees and employers half way by providing some protection for employees against ruthless employers and provides employers the flexibility to meet the requirements of employees while meeting the objectives of the business. With its pluralist approach the Fair Work Act recognizes that all parties must be considered in the employment relationship and works to create a better employment relationship.
However it is early days and the full impact of the Fair Work Act is not yet apparent. Employment relations in Australia will no doubt continue to dominate the discussions of both major parties and while WorkChoices was extreme in its approach to stimulating the Australian economy, the Fair Work Act is a great step towards achieving positive outcomes in employment relations in Australia.