chapter 11: changing australian labour market Flashcards
define industrial relations
the relationship b/w employees and employers
what is the industrial relations system
involves the laws, institutions and processes established to resolve the conflict between employers and employees
- sets rules for how the labour market operates
what is a trade union
a trade union is an association of worker that aims to advnace the interests of its members by improving their wages and working conditions
-represent and protect their constituent’s interest by neogtiating wage increases (both employee and employer)
outline the four types of unions
- occupational unions (aka craft unions): these unions draw members from group of ppl who possess particular skill or range of skills regardless of industry (eg electrical trades union)
- industry based union: these cover workers in a particular industry regardless of what type of work they do (eg aus meat industry employee union)
- enterprise based unions: they respresent the workings of one specific enterprise (rare)
- general based unions: these cover whole range of workers w/ many diff skills across various industries (mining or energy union)
describe the factors that have contributed to decline in union membership
- changes to wage negotiation - movement away from centralised bargaining to enterprise bargaining –> reduce overall influence of wage unions ie centralised bargaining is an aggressive bargaining method that is no longer effective/relevant
- changes within industries: bus growth has mainly occurred in industries where union membership levels have been historically low (eg retail or service industries)
- changes in the nature of employment: employment growth has mainly occurred in casual, part-time and temporary employment, which have lower lvls of trade union membership (low employment of full time as they have more obligations attached –> pay more for leaves)
recently industries are movign away from unions bcos of more accessibility to info and hence, no need for representation
how can unions influence the labour markets
unions can influence labour markets in 2 ways:
1. by restricting supply of labour
2. exercising their bargaining power in wage negotiations (effective as a collective)
Both lead to increase in wage rates
describe how unions can influence labour market outcomes by restricting the supply of labour
- demanding that employers only hire members from their union
- demanding employers only provide a licence to work for their members
-set wage floor - effect: supply curve shift the left (decrease in supply) therefore increasing wages
- eg ppl go on strike
describe how unions can influence labour market outcomes by exercising their bargaining power in negotiations with employers
all employees act together (rather than alone) –> significant power as it is difficult to replace entire workforce.
- Employee acting alone is easy to fire
- change shape of supply curve –> labour supply exceeds quantity of labour demanded
- employment will also be less than original equilibrium quantity –> unemployment
what are employer associations
employers combined to form their own organisation - not as well organised as unions bcos employers often have different interests and in many are constantly competing amongst each other
- employer associations represent business interests on eco policy issues such as taxation, regulations and industrial relations
what are the main roles of employer associations
- represent and promote interest of their members by lobbying the gov on industrial relations policies
- they assist employees in managing industrial relations issues, such as by representing their members in the various industrial tribunals set up to settle industrial disputes
what are industrial tribunals
system of tribunals to prevent and settle industrial disputes b/w employees and employers
- operate independently from gov
- extent of their power is determined by legislation
what are some examples of tribunals
- australian industrial relations commission (AIRC) and the federal court of aus main role is to determine a minimum set of workand pay conditions thru setting awards
what are awards
awards are a set of pay and conditions specific to an employee’s work or industry sector
- safety net of minimum wages and conditions
- awards set the absolute minimum rates of pay and entitlements
- the fair work commission sets these award rates
what are enterprise agreements
- most common method of wage determination in the formal industrial relations system
- negotiated collectively through enetrprise bargaining between and employer and employees (aka collective agreements)
- cover 35% of employees
- must comply with national employment standards and cannot offer rates below mandated award
- must pass the “Better off Overall test (BOOT) ie better off with agreement than the applicable award
