5 TH EDITION INTERNATIONAL COMPARATIVE EMPLOYMENT RELATIONS

5 TH EDITION INTERNATIONAL & COMPARATIVE EMPLOYMENT RELATIONS Globalisation and change Edited by Greg J Bamber, Russell D Lansbury and Nick Wailes CHAPTER 5 Employment Relations in Australia Russell D. Lansbury and Nick Wailes © Allen & Unwin, 2011. These slides are support material for International and Comparative Employment Relations 5 th edition. Lecturers using the book as a set text may freely use these slides in class, and may distribute them to students in their course only. These slides may not be posted on any university library sites, electronic learning platforms or other channels accessible to other courses, the university at large or the general public.

International & Comparative Employment Relations 5 th edition • • • • Edited by Greg J Bamber, Russell D Lansbury & Nick Wailes Lecture outline Key themes Context Shifts in patterns of employment Political context Legal context The Work Choices legislation The Fair Work Act 2009 Australian unions Australian employer associations Strikes Unemployment and working hours Gender equality at work Employee participation in decision-making Conclusions Chapter 5: 2 Australia Copyright Allen & Unwin, 2011

International & Comparative Employment Relations 5 th edition Edited by Greg J Bamber, Russell D Lansbury & Nick Wailes Key themes • Since the 1990 s the Australian industrial relations system has undergone: – Significant legislative change – Significant structural change – Significant declines in union density and power – Significant increases in non-standard forms of employment – A shift away from a centralised industrial relations system to a decentralised system focused on enterprise bargaining Chapter 5: 3 Australia Copyright Allen & Unwin, 2011

International & Comparative Employment Relations 5 th edition Edited by Greg J Bamber, Russell D Lansbury & Nick Wailes Context • Australia has a population of 21 million people and a GDP of just over US$1 trillion • Of the 10 million people in the Australian labour force, 75% are employed in services and 20% in manufacturing and construction • Australia’s economy remains highly dependent on its mining and agriculture industries, despite these industries employing a mere 5% of the total workforce • Australia has generally experienced strong economic growth from the 1980 s to 2007, with the exception of a sharp downturn in 1990 -91 Chapter 5: 4 Australia Copyright Allen & Unwin, 2011

International & Comparative Employment Relations 5 th edition Edited by Greg J Bamber, Russell D Lansbury & Nick Wailes Shifts in patterns of employment • Structure of employment has changed radically in recent years – Decline in full-time permanent employment – Expansion of various forms of non-standard employment • • Casual work Temporary jobs Outsourcing Use of agencies and other labour market intermediaries – The majority of all jobs created during the 1990 s were casual, while part-time jobs were the fastest-growing area of employment Chapter 5: 5 Australia Copyright Allen & Unwin, 2011

International & Comparative Employment Relations 5 th edition Edited by Greg J Bamber, Russell D Lansbury & Nick Wailes Political context • Since 1901 Australia has been a federation – a system of government with a central federal government and six regional ‘State governments’ • The federal government is limited under the Australian Constitution to only making laws in relation to industrial relations with respect to: “conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits of any one State” (Section 51, xxxv) • All other industrial laws were initially the jurisdiction of the states • However, judicial interpretation of the constitution over time has meant that the federal government has been increasingly able to make industrial relations laws under other heads of constitutional power (namely the external affairs and corporations powers) Chapter 5: 6 Australia Copyright Allen & Unwin, 2011

International & Comparative Employment Relations 5 th edition Edited by Greg J Bamber, Russell D Lansbury & Nick Wailes Legal context • The Conciliation and Arbitration Act 1904 established the conciliation and arbitration system which operated until 1988. The system was technically limited to industrial disputes beyond the borders of regional states • However, the practice of unions serving logs of claim on employers from different states (artificially creating an ‘interstate’ dispute) meant that it became the main avenue for dispute settlement and award negotiation – most disputes were settled by negotiation not arbitration • In 1988, the Hawke Labor government passed the Industrial Relations Act 1988 • More significant changes again were introduced in 1993 by the Keating Labor government in the form of the Industrial Relations Reform Act 1993 – Allowed federal non-union collective agreements to be certified for the first time – Incorporated a limited right to protected industrial action during a designated ‘bargaining period’ Chapter 5: 7 Australia Copyright Allen & Unwin, 2011

International & Comparative Employment Relations 5 th edition • Edited by Greg J Bamber, Russell D Lansbury & Nick Wailes The Work Choices legislation In 1996, the Howard Liberal-National coalition introduced the Workplace Relations Act (WRA) 1996 which: – Limited the power of the Australian Industrial Relations Commission (AIRC) – Made it possible to register individual contracts known as Australian Workplace Agreements (AWAs) • In 2005, the Howard Liberal government passed the highly controversial ‘Work Choices’ amendments to the WRA 1996 that had previously been rejected by the Senate, including: – Creation of a national system of industrial relations under the corporations power of the Constitution, thus removing state control of industrial relations and allowing the federal government to set minimum terms and conditions without recourse to awards for 85% of the workforce – The ability for AWAs to undercut award/collective agreement conditions – Significant restrictions on union activities – Reduced role for the AIRC – Exempted businesses with fewer than 100 employees from unfair dismissal laws – Introduced 5 minimum employment conditions • Work Choices was deeply unpopular in Australia and, combined with a strong union media campaign called ‘Your Rights at Work’, contributed to Liberal-National coalition losing the 2007 election Chapter 5: 8 Australia Copyright Allen & Unwin, 2011

International & Comparative Employment Relations 5 th edition Edited by Greg J Bamber, Russell D Lansbury & Nick Wailes Transition to ‘Fair Work’ • After Labor’s election victory in 2007, the new Rudd Labor Government pledged to ‘roll back’ Work Choices and implement a ‘fair and balanced’ industrial relations policy • The new policy (the Fair Work Act 2009) was less of a recasting of the industrial relations system and more of a retreat from the excesses of Work Choices • This is partly explained by the fact that the Coalition and Independents still controlled the Senate (upper house of parliament) and would have been unlikely to pass radical reforms Chapter 5: 9 Australia Copyright Allen & Unwin, 2011

International & Comparative Employment Relations 5 th edition Edited by Greg J Bamber, Russell D Lansbury & Nick Wailes Fair Work Act (FWA) 2009 • The main features of the FWA were: – Fair Work Australia was established as the new employment regulator along with the office of the Fair Work Ombudsman to promote and enforce compliance with the new laws – AWAs were abolished but individual common law contracts remained – Ten new National Employment Standards (NES) were established as minimum employment conditions for all workers under the federal scheme – The introduction of a new system of modern awards to provide an additional safety net – Unfair dismissal protection was extended to cover all employees except those working in a small business (15 employees or less) or on probation – Employees earning more than approximately $100 000 per year were now able to be on arrangements not based on an award – Employers and unions are now required to bargain in good faith but are not compelled to reach an agreement. However, FWA can issue a ‘workplace determination’ where a good faith bargaining order is ignored – Union officials are able to enter workplaces to talk with employees provided that they hold a permit issued by FWA and abide by conditions of the permit (including giving notice) – Employees must be Better Off Overall (BOOT test) under an agreement than they would be under an award in order for the agreement to be registered Chapter 5: 10 Australia Copyright Allen & Unwin, 2011

International & Comparative Employment Relations 5 th edition Edited by Greg J Bamber, Russell D Lansbury & Nick Wailes Australian unions • The establishment of conciliation and arbitration systems encouraged the rapid growth of Australian unions and, to a lesser extent, employer associations • By 1921, approximately half of the Australian labour force was unionised • Australian union density has fluctuated since this time – dipping to 40% during the 1930 s and then rising again to a peak of 65% in 1953 • Union density in Australia has been declining steadily over the past two decades – In 1990, union density was 49% of the total workforce – In 2007, it was 19. 5% • Union density is much higher in the public sector (44% in 2007) than in the private sector (15% in 2007) Chapter 5: 11 Australia Copyright Allen & Unwin, 2011

International & Comparative Employment Relations 5 th edition Edited by Greg J Bamber, Russell D Lansbury & Nick Wailes Reasons for union decline • The reasons for union decline are complex and varied • A key factor has been structural change in the economy, including – The contraction of manufacturing employment (a sector with traditionally strong unionism) – The rapid growth of the services sector (a sector with historically weak unionism) • A related change has been a decline in full-time employment and growth of forms of non-standard employment • Other contributory factors include: – Growing anti-unionism amongst employers – Removal of institutional arrangements under the centralised system of arbitration – Internal union policies Chapter 5: 12 Australia Copyright Allen & Unwin, 2011

International & Comparative Employment Relations 5 th edition Edited by Greg J Bamber, Russell D Lansbury & Nick Wailes Australian Council of Trade Unions (ACTU) • The ACTU is the main confederation for manual and non-manual unions in Australia • It was formed in 1927 and covers approximately 95% of all unionised workers • This high level of coverage is the result of historical mergers with other powerful peak union bodies • The general trend during the 1990 s was for unions to merge – from 360 federal unions into 20 industry-based ‘super unions’. This was an ACTU-directed attempt to stop the decline in membership density • The ACTU organised the successful ‘Your Rights at Work’ campaign in response to Work Choices • In recent years, the ACTU has focused on strategies to reverse union decline – Focus on organising to become less dependent on the state – Focus on engaging in community/social movements Chapter 5: 13 Australia Copyright Allen & Unwin, 2011

International & Comparative Employment Relations 5 th edition Edited by Greg J Bamber, Russell D Lansbury & Nick Wailes Australian employer associations • The early growth of unions led to development of Australian employer associations • The first peak employer group, Confederation of Australian Industry (CAI) was established in 1977, almost 50 years after the peak union body, the ACTU • Disunity and fragmentation have been ongoing problems for Australian employer associations • In 1992, the CAI merged with other peak employer bodies to form the Australian Chamber of Commerce and Industry (ACCI) • A similar merger in 1998 resulted in the formation of the Australian Industry Group (Ai. G) • In 1983, the Business Council of Australia (BCA) was formed – CEOs from Australia’s largest corporations • Most employer associations were vocally supportive of the Work Choices legislation, with some bodies even funding pro-Work Choices media advertisements • There has been a recent shift from industrial advocacy to fee-based services for members Chapter 5: 14 Australia Copyright Allen & Unwin, 2011

International & Comparative Employment Relations 5 th edition Edited by Greg J Bamber, Russell D Lansbury & Nick Wailes Strikes 1 • The historical system of conciliation and arbitration proceeded on the basis that conciliation would be exhausted before arbitration took place – the key aim of this system was to render strikes unnecessary • Under the conciliation and arbitration system, striking was illegal until 1930 when this provision of the Act was removed – yet Australian workers only received a protected right to strike in 1993 • During the 1980 s and 1990 s, average working days lost through disputes per 1000 employees halved due to – Changing macro-economic conditions – The Prices and Incomes Accord (‘the Accord’) Chapter 5: 15 Australia Copyright Allen & Unwin, 2011

International & Comparative Employment Relations 5 th edition Edited by Greg J Bamber, Russell D Lansbury & Nick Wailes Strikes 2 • • • Following 1993, workers could strike during a designated ‘bargaining period’ and the industrial regulatory body could intervene and determine disputes if the parties were not acting in good faith, if there was little chance of settlement or if intervention was in the public interest In 1996, the Howard government retained this provision in its reforms although in a more restricted form The strike rate continued to decline during the 1990 s and after 2000 – it remained above the OECD average but was significantly lower than the levels of the 1980 s After 2000, there was an increase in employer-initiated industrial action, as employers attempted to introduce non-union collective agreements in traditionally unionised industries The 2005 Work Choices reforms further eroded the role of the industrial regulator, the Australian Industrial Relations Commission (AIRC), removing its compulsory arbitral power Under the Fair Work Act 2009, the regulator Fair Work Australia can only intervene where there is a breakdown or intractable negotiations between parties or where the negotiations are causing significant economic harm to the parties Chapter 5: 16 Australia Copyright Allen & Unwin, 2011

International & Comparative Employment Relations 5 th edition Edited by Greg J Bamber, Russell D Lansbury & Nick Wailes Determination of wages • • The relevant federal tribunal has set a ‘minimum wage’ in some form since 1907 From 1986 -1996 the dominant mechanism for setting the wage was through a social compact called the Prices and Incomes Accord (‘the Accord’) Under the Accord, the government and the ACTU would present a joint submission to the National Wage Case – in most instances the AIRC would accept the recommendation and introduced wage principles to give them effect The Accord was a trade-off – unions would promise not to see extra claims in wage bargaining in return for increases in the ‘social wage’ and a range of industry policies The election of the Howard Liberal government ended the Accord and its role in shaping wages policy Under Work Choices the responsibility for setting a federal minimum wage shifted from the AIRC to the newly established Australian Fair Pay Commission (AFPC) Now minimum wages are set by a Minimum Wages Panel under Fair Work Australia, replacing the AFPC Chapter 5: 17 Australia Copyright Allen & Unwin, 2011

International & Comparative Employment Relations 5 th edition Edited by Greg J Bamber, Russell D Lansbury & Nick Wailes Unemployment and working hours • After experiencing full employment and labour shortages for almost a decade, the unemployment rate in Australia rose from 4. 3% in mid-2008 to 5. 3% in mid-2009 • Substantial government spending was credited with preventing the unemployment rate from rising beyond this point • Under-employment is a growing problem as well • Working hours are also increasing – one in five workers is employed for more than 50 hours per week • Under the Fair Work Act 2009, workers can request ‘flexible working arrangements’ but employers have no obligation other than having to respond to the request Chapter 5: 18 Australia Copyright Allen & Unwin, 2011

International & Comparative Employment Relations 5 th edition Edited by Greg J Bamber, Russell D Lansbury & Nick Wailes Gender equality at work • Women comprise 48% of the paid workforce in Australia • Women’s wages are generally lower than male wages and their employment is concentrated in low-paid areas of work • Gender pay gap was 16% in 2007 although this varies between states and industry sectors • In the past, major advances in pay equity were achieved through test cases in the AIRC but this stalled after Work Choices • The Fair Work Act 2009 allows FWA to make orders requiring equal remuneration for work of ‘equal or comparable value’ – replacing the more limited ‘equal pay for equal value’. The legislation also removed need to prove discrimination causing the gender pay gap • The new low-paid bargaining stream might also have positive outcomes for women Chapter 5: 19 Australia Copyright Allen & Unwin, 2011

International & Comparative Employment Relations 5 th edition Edited by Greg J Bamber, Russell D Lansbury & Nick Wailes Employee participation in decision making • There was some evidence during the 1990 s that the numbers of joint consultative committees were increasing • There is no legislation that mandates works councils • The merits of statutory work councils continue to be debated in Australia, including whether they would address the current representation gap or increase managerial prerogatives in the absence of a broader ‘social partnership’ framework • There is growing concern about the lack of employee consultation generally in the context of declining unionism Chapter 5: 20 Australia Copyright Allen & Unwin, 2011

International & Comparative Employment Relations 5 th edition Edited by Greg J Bamber, Russell D Lansbury & Nick Wailes Conclusions • The 1990 s were a period of significant change for Australian industrial relations. They saw – significant structural change – significant legislative change – a shift away from the centralised system of the past towards enterprise bargaining – significant declines in union density and power • The 2005 Work Choices legislation radically reformed the Australian industrial relations system with continuing consequences • There are ongoing questions about the role of collective bargaining, unions and other forms of employee representation © Allen & Unwin, 2011. These slides are support material for International and Comparative Employment Relations 5 th edition. Lecturers using the book as a set text may freely use these slides in class, and may distribute them to students in their course only. These slides may not be posted on any university library sites, electronic learning platforms or other channels accessible to other courses, the university at large or the general public.