Module 6 - Role of state and regulation of agreement-making Flashcards
What is the state?
The state includes: parliament, government agencies (department of educ, empl and work), independent tribunals, the courts and FWO.
What is the government?
“Parliament is only one arm of the (government I think) state. The judiciary, of which his Conciliation and Arbitration Court was a component, was another”
Explain the journey from workchoices to Fairwork Australia
- Work Choices:
- The first distinct change is represented by the Howard Government’s ‘Work Choices’ legislation. This was a radical set of changes that, while leaving intact many elements of the previous system, sought to remove various constraints on managerial power.
- On 26 May 2005, John Howard rose in federal parliament to announce his government’s plans for ‘a workplace system geared to the present and the future, not to the past’, one that would ‘provide the long overdue framework to drive future productivity growth, create jobs and increase the standard of living of working Australians’. By October that year the government’s spin doctors had given the new system a brand name, ‘Work Choices’, A month later, a mammoth and hastily drafted Bill was introduced into Parliament to amend the WR Act. By the end of the year the Bill had passed into law as the Workplace Relations Amendment (Work Choices) Act 2005 (Work Choices Act). On 27 March 2006 it was proclaimed to take effect.
- In terms of the sheer scale of the legislative changes, not to mention their public and political impact, Work Choices can fairly be described as ‘the most fundamental revolution in industrial relations since federation’ .7
- The Work Choices Act involved changes to the scope, nature and content of the federal regime. In relation to the scope, the Commonwealth was able not just to cover a larger number of employment relationships than before, but to regulate them in a more comprehensive way. As far as the nature of federal regulation is concerned, there were at least two major shifts. One was to introduce a statutory set of minimum conditions, the Australian Fair Pay and Conditions Standard (the AFPCS). A second shift concerned the resolution of workplace disputes. With the removal of any general power on the part of the Australian Industrial Relations Commission (AIRC) to deal with industrial disputes, the century-old system of compulsory arbitration was finally laid to rest. With isolated exceptions, the AIRC cannot conciliate, let alone arbitrate, unless it has the parties’ consent. Under Work Choices, disputes are primarily to be resolved either consensually, or in the courts. In terms then of the content of federal laws, the strengthening of the hand of employers was most obvious in two reforms. The first was the removal of the no-disadvantage test, allowing the engagement of workers (at least where the state of the labour market allowed) on sub-award conditions. The second was the restriction of access to unfair dismissal claims. The qualifying period of service was extended from three to six months, a new defence prohibited the review of any dismissal based on ‘genuine operational reasons’ and, most tellingly, there was a complete exemption for any enterprise with 100 or fewer employees.
- Other pro-employer reforms under Work Choices included a new power to terminate an expired workplace agreement and fall back to something less than full award conditions; a capacity to acquire a business without inheriting (either at all or for very long) an award or agreement previously applicable to that business; the ability to lodge a Greenfields ‘agreement’ for a new business without needing to negotiate with anyone; and further reductions in the allowable content of awards. This last change included the excision of pay scales from awards.
- Trade unions, for their part, were hampered at every turn. Their capacity to take ‘protected’ industrial action was fettered by the introduction of time-consuming and costly new procedures (primarily, although not exclusively, centred on the requirement to obtain the approval of employees for the taking of industrial action in a secret ballot). There were also new ways of putting an end to protected action. The statutory right of union officials to enter workplaces to investigate complaints or communicate with members was narrowed in various ways, while the capacity of unions to negotiate more favourable terms of entry was removed, at least in relation to registered workplace agreements.
- The primacy of individual Australian Workplace Agreements (AWAs) over collective agreements was strengthened in various ways, while changes to the freedom of association provisions made it harder for unions to oppose any employer-initiated shift to individual arrangements. The removal of the AIRC’s already limited power to deal with bargaining disputes likewise made it more difficult to challenge an employer’s decision to eschew negotiations, even with a union that enjoyed majority support in the workplace.
- A final aspect of the Work Choices reforms that merits comment is the sheer volume of the legislation that it created. The federal industrial statute had been growing apace for many years, and much of the increase in its size and complexity can be attributed to factors that had their genesis in the Keating years.13 but the amount added in March 2006 was still staggering. The WR Act became half as big again, while the Regulations doubled in size. Together they ran to mammoth 1800 or so pages. And this prolixity was not offset by any great degree of readability. On the contrary, the legislation was (and remains) complex, difficult to understand, and replete with uncertainty and ambiguity.
- by the end of 2006 the government had introduced more than 100 amendments to the WR Act itself
- Prompted by a realisation that the government was losing the war of public opinion, the Prime Minister announced in May 2007 that a ‘fairness test’ would be introduced for workplace agreements. This would ensure that ‘protected’ award conditions such as penalty rates or leave loadings could not be signed away without ‘fair compensation’.
- Fair Work:
- The Labour Opposition that Kevin Rudd and Julia Gillard led to power had spent much of 2007 developing its own industrial relations policies.
- To meet both union demand and employer pressure, the Forward with Fairness policy that Labour took to the election involved a series of compromises. Predictably, they pleased neither the unions nor the business sector.
- On the one hand, A WAs were to be abolished, the no-disadvantage test reinstituted, the safety net of minimum statutory conditions expanded, and unfair dismissal rights restored. There would be also a renewed emphasis on collective bargaining. But equally, Labour would retain ‘tough’ laws on industrial action, right of entry and freedom of association. It would give special recognition to the position of small businesses in the new unfair dismissal system. It would revamp the award system, offering new scope for employers and individual workers to vary the effect of selected provisions. And there would be a lengthy transitional period before many of the main changes were introduced, both to give employers time to adjust and to allow for the stakeholder consultation that had been so markedly absent in relation to Work Choices. Labour also promised to create a new agency, Fair Work Australia (FW A), as the centrepiece of its new system. This body would replace five existing agencies: the AIRC, the AFPC, the Workplace Authority, the Workplace Ombudsman and the ABCC.
- Aside from abolishing the Workplace Relations Fact Sheet and curtailing the powers of the AFPC, the main changes made by the Transition Act concerned agreement-making and the award system. As promised, the capacity to make AWAs was removed. But existing AWAs could remain in force and would still prevail over collective agreements. A no disadvantage test was restored in place of the fairness test, for both ITEAs and collective agreements, though still administered by the Workplace Authority rather than the AIRC. There were also various other changes to the variation, termination and effect of agreements.
- Having replaced the award rationalisation provisions with a new but essentially similar process for the ‘modernisation’ of awards,
- Aside from the Transition Act, the other move made by the Rudd Government in its first few months in office was to publish an exposure draft of its new National Employment Standards (NES), the statutory minimum conditions that will replace the AFPCS.23 In accordance with its election policy, the government proposed to add new standards on matters such as redundancy pay, community service leave and requests for flexible working arrangements. One matter that may subsequently be added to the NES is an entitlement to paid parental leave, which is the subject of a separate inquiry by the Productivity Commission. In September 2008 the Commission released a draft report proposing a publicly-funded scheme for 18 weeks’ paid leave.25
What are the responsibilities of fair work australia?
• The responsibilities of the FWA include:
o The resolution of workplace grievances
o Hearing unfair dismissal and unlawful termination claims
o Adjusting minimum wages and award wages
o Monitoring compliance with and ensuring application of, legislation, awards and agreements
o Regulating registered industrial organisations.
What is an award?
An award is an enforceable document containing minimum terms and conditions of employment in addition to any legislated minimum terms.
In general, an award applies to employees in a particular industry or occupation and is used as the benchmark for assessing enterprise agreements before approval.
The Fair Work Commission has responsibility for making and varying awards in the national workplace relations system.
What is an EBA?
Enterprise agreements are agreements made at an enterprise level between employers and employees about terms and conditions of employment. The Fair Work Commission can assist in the process of making such agreements, can deal with disputes arising under the terms of agreements and assess and approve agreements.
Explain award modernisation
o The process of award modernisation required the AIRC to review all of the multiple-employer federal awards and the state awards operating in the national industrial system.
o Modern awards usually apply to a particular industry or industry sector though they can also be structured to apply for a specific occupation or group of occupations.
o Modern awards do not apply to managerial employees who have traditionally been award free.
o One of the purposes of the award modernisation is to reduce the number of awards so that there is no overlap in award coverage.
o The process of award modernisation required the AIRC to develop a ‘model flexibility clause’ to facilitate arrangements to meet the genuine individual needs of employers and employees. This clause is included in all modern awards.
o Some wages and conditions increased as a result of moving to the terms that apply elsewhere in the relevant industry while other existing award entitlements were not reflected in the new modern award because they did not have widespread application.
Explain the role of industrial tribunals
• Industrial Tribunals p 71
o Industrial tribunals were central to the operation of the Australian system of compulsory conciliation and arbitration
o The functions of the state and federal industrial relations tribunals were remarkably similar.
o The federal industrial conciliation and arbitration tribunal authorised by section 51(35) of the Australian constitution exercised the powers and functions granted to it by the federal parliament. For most of the 20th century, these powers and functions were directly connected with prevention and or settlement of interstate industrial disputes and also in the process, the power started to deal with the creation of federal awards to regulate conditions of employment in the relevant industries.
legislative changes to employment matters
• We can conclude confidently that since Governments change employment relations legislation and that might lead to changes in emphasis upon the rights of employers or employees and unions, there are ideological (belief that guides an individual or institution) bases to making those changes. AN example is the interpretations of enterprise or decentralised bargaining. This debate went on from 1980’s to mid-2000s. At the core of the debate was an old battle of collectivism and individualism. There was strong resistance by employers who regarded the introduction of a conciliation and arbitration court as state interference in employment and business. Arbitration, they argued, challenged the employer’s “freedom of contract”. Freedom of contract justified any refusal to recognise unions let alone to negotiate with them. The corollary of their argument was they had an unfettered “right to engage non-unionists and to make arrangements as to rates of wages independently of the rates agreed upon by Trade Unions”. Employers adopted a range of strategies during the twentieth-century to avoid or exclude unions from Australian workplaces.
• During the 1980s and 1990s, some employer associations’ policies strongly reflected the “freedom of contract” issue together with the de-unionisation of employment relations. The Business Council of Australia (BCA), for example, advocated a new system of “employee relations” in which unions played no part in employment relations and employers would directly deal with employees. This tradition found voice in the Coalition’s policy and formed the foundations of the Government’s industrial relations legislation in the Workplace Relations Act 1996: “The most important industrial relations reform needed in Australia is one which will allow employers and employees to enter into direct arrangements with each other regarding pay and working conditions … without the unwanted intervention of trade unions, employer organisations or industrial tribunals and without the needless complexity of the existing system…. The practical reality is that the goals of meaningful reform, more jobs and higher wages, cannot be achieved unless the union monopoly over the bargaining process in our industrial relations system is dismantled” (Howard 1996).
• In the 1990s, first a Labour government legitimated non-union but collective bargaining in addition to collective agreements with trade unions. This focus on collective bargaining maintained a generally pluralist emphasis on the State role. Then the conservative Coalition Government legitimated in legislation both non-union individual bargaining and non-union collective bargaining. This was a generally unitarist legislative program.
• 6.3.1 Pluralist and unitarist perspectives on employment relations law
o The issue of whether collectivism or individualism should govern relations between employers and employees is inextricably linked to other questions: for example, the role of trade unions in the workplace and questions regarding equity. By “equity” in employment relations we mean “a set of fair employment standards covering both material outcomes and personal treatment that respect human dignity and liberty”.
o There was a statement by The Judge of that Court (conciliation and arbitration 1904 court), Justice Henry Bourne Higgins, in the Harvester case in 1907 which had several important elements, the principle one of which is his argument supporting collective agreements over individual bargaining.
o The BCA wanted to move the focus away from unions to directly dealing with employees so that organisations could deal with the future directions of change. One of the key elements of BCA’s reform agenda rested on allowing ‘employee representation arrangements to be based on decisions by employees individually or collectively about who can best represent their interests in their dealings with employers and how those interests can be best represented.’ The BCA argued that the role of unions in bargaining would be dependent on the authority given to them by their members’ (BCA 1993, p. 12), a principle not disputed by supporters of unionisation.
o How did this approach work in practice? One major mining company, CRA, which has since been merged into Rio Tinto, argued that unions “owe their existence to conflict between management and workers and so have a strong interest in maintaining that conflict. Ultimately, employees cannot be both committed unionists and committed employees”. It was the view of the Chief Personnel Adviser that “we also need to send clear signals to employees that union activities are incompatible with our desired workplace culture … taking every opportunity to lead employees to question the value of union membership’
o The BCA promoted individualised contracts is not having an aim to reduce wages but to promote efficiency “in a climate in which employers and employees have a genuine sense of common purpose, and in which employees feel motivated to give of their best, including the ideas which only they can produce regarding how improvements can be made. There is no way to coerce these attitudes from people” (The Weekend Australian, 7-8 January 1995). Protagonists for individualised contracts saw them as a vehicle for achieving a direct relationship with their employees, in a ‘high trust’ strategy. They argued that collective bargaining reflected an adversarial, “them and us” view of the world at odds with the principles of cooperation and ‘common purpose’. According to Hamberger (1995a; 1995b), this ‘high trust’ approach is consistent with a strategic Human Resource Management function of integrating employee aspirations and goals to match those of the company, eliminating the potential for adversarial relations by encouraging a common purpose
o see Table 6.1 for the characteristics of industrial relations which are categorised into three categories: frameworks, public policy and the organisation. These categories considered fewer than four headings: ideology, regulation of the employment relationship through legislation, organisational features, and in the general orientation of employers to employees - what I have called, “managerial styles”. The columns headed “Pluralism” and “Unitarism” contain some of the features you might expect in these frameworks.
