Growth In Industries With Low Union Membership example essay topic

Australia has gone from a highly centralized wage determination system to a mainly decentralized one. There has been a move away from accords and awards to enterprise bargaining, through the 96 Workplace Relations Act. Recent policies include changes to unfair dismissal claims and the 2005 workplace reforms package. Throughout the 20th century, Australia has maintained a system of tribunals to make decisions about wage and non wage outcomes and to help resolve industrial disputes. Institutional forces affect the operation of the free market in order to improve labour market outcomes, such as guaranteeing minimum wages and conditions. The four institutional forces that affect labour markets are Governments, Trade Unions, Employer associations and Industrial Relations tribunal.

Trade unions represent groups of workers on a collective basis. The most important trade union is the Australian Council of Trade Unions (ACTU), which is the peak union body to which most unions are affiliated. Trade unions membership has declined substantially from the 1970^aEURTMs with an average membership of 55% to just 23% in 2003. This is caused by the increase in casual and part time employment, growth in industries with low union membership such as retail and the decentralization of wage determination.

Employer associations represent business groups in similar industries in industrial relations matters. They seek wage moderation to maintain profitability. The head employer association is the Australian Chamber of Commerce and Industry. At the federal level is the independently run Australian Industrial Relations Commission (AIRC). They establish and maintain the fair minimum rates of pay and conditions (award safety net system) for all workers. Award wage increases are determined by the AIRC annually after hearing submissions from the government, ACTU and unions.

They apply the no disadvantage test to CA^aEURTMs and AWA^aEURTMs to make sure workers are better off than the underpinning award. They also help settle industrial disputes through conciliation and arbitration. Move Away from centralized The Accords (1983-1995), were a social contract negotiated between the Federal Government and ACTU on minimum wages and specified working conditions for a number of occupations under Federal awards. This centralised wage system reduced the levels of inflation, industrial disputation and unemployment. The Industrial Relations Reform Act (1993), was the first major step towards a decentralized system.

It was a compromise between a decentralized system, based on enterprise bargaining and a centralized system. It moved away from the national wage case and introduced the award safety net - that awards underpin enterprise bargaining. It intended that the wages and conditions of employees would be increasingly determined through enterprise agreements, and awards would only be for those unable to make agreements. 1996 Workplace Relations Act The election of the Liberal Coalition Government saw the end of the Accords, centralised wage determination, and a lessening of the role of institutions (IRC, ACTU) in the wage determination processes. This new system lessened the power of unions by making it easier for workers to form enterprise unions. It deregulated the labour market by reducing the awards on working conditions to 20 allowable matters.

This made non-union contracts more attractive. It introduced AWA^aEURTMs for the first time. -Australian Workplace Agreements AWA^aEURTMs are individual employment contracts between an employer and an employee. The introduction's of AWAs was intended to create maximum flexibility to adjust work and pay conditions.

Once an AWA is negotiated it must be lodged with the Office of the employment advocate to pass a community standards test, which ensures the employee is better off. -Certified Agreements This involves employers and trade unions negotiating enterprise agreements in order for a raise in real wages or working conditions, which would increase productivity. Trade unions bargain collectively on behalf of their members thereby increasing the bargaining power of individual workers in negotiations. Recent Policy and Proposals Under a new federal government plan, medium to large sized businesses with up to 100 employees, (90% of employers), will be exempt from unfair dismissal claims. The prime minister believes this will create more jobs as this is an incentive to hire workers.

However, many be live that this new policy is a ^a EUR~fire at will^aeurtms policy, whereby workers are seen as commodity, a cost of production and are disposed of once unneeded. This policy means that employees will lose their rights to seek justice after being sacked. However, workers will still be able to make breach-of-contract claims in court under common law or claim under anti-discrimination laws. Many workers do not want to go to the trouble and costs of suing someone and will not try to seek justice. Previously you would simply go to the AIRC.

The probation period for new employees would also increase from three to six months, giving employers more time to sack people they believe are unsuitable for the job. Howard has just announced the 2005 workplace reforms package. The Fair Pay Commission will take over the wage determination role of the Australian Industrial Relations Commission (AIRC). It is meant to boost productivity by increasing workplace flexibility and placing new constraints on unions.

The change is aimed at having workers covered by individual employment agreements rather than collective awards. Its creation is a big win for employer groups, who have campaigned for decades to strip back the powers of the industrial relations umpire to determine workplace arrangements. However, many believe it will lead to a reduction in pay and conditions. New legislation will also strip back minimum employment conditions. The current 20 'allowable matters' will be cut to about 16. The wage determination system has moved from centralised determination through National Wage Cases towards an enterprise bargaining framework.

Safety nets are there mainly for low paid workers who are unable to secure wage increases under enterprise bargaining. There has been sustained moderate wage increases, low inflation, strong productivity growth and employment growth. This system appears to generate the best of both enterprise agreements and centralised wage determination.