The industrial relations reforms in Australia, in the past two decades and their impact on individual employee rights
Introduction
This literature discusses the various Australian labor laws, their history and their contribution to the current industrial relations reforms. The main focus of this study is to determine whether the current employment acts favor individual employee rights as opposed to collective rights. This study majorly scrutinizes the Australian work choice act and the fair work Australia act in relation to their contribution in the current Australian trade unionism. From the observation, conclusions drawn will point out whether these acts favor collective rights or individual rights.
History of labor laws in Australia
The beginning of the trade unionism in Australia dates back to 1788 to 1849. South Wales was an English penal colony, the first fleet of ships with the then convicts who were referred to as workers, and acted in ways that led to the current trade unionism in Australia. Some of the events that took place include the strike of the convicts, in 1791, demanding daily ratio of food and not the weekly ratio (UNIONS ACT, 2011). By 1930s a number of trade unions were formed including the Shipwrights union in 1830, the Boat Builders Association in 1831 and the Cabinetmakers Association in1833. Since then, there have been cases of unions demanding for better wages and short working and other industrial disputes.
From the early 1900s, the labor unionism the union saw the need of forming legislation to establish arbitration and conciliation. In regard to this concern, the Australian labor federation was established in Queensland, becoming the world’s first labor government. By 1901 when the commonwealth of Australian was formed, the number of trade unionists was 97222 and the then Australian population was 3,774,000. In the same year the NSW arbitration act was formed. In this context, the Australian conciliation and arbitration commission was established in 1904. In 1907, the minimum wage was established by Justice Higgins, stating that the wage would be enough to support a wife and three children. By 1931, the trade membership had grown to 769,000. In 1935, the Queensland building workers achieved their first industrial award by reducing the shop floor hours to 40 hour per week. The unions’ painters wanted a reduction of the working hours due to their exposure to the toxic nature of the paints.
The 1904 conciliation and arbitration act was replaced by the 1988, Industrial Relations Act. 1n 1993, the Victorian government established legislation to reduce both unionism and the awards (Mitchell, Richard et al, 2010). In 1994, the Industrial Relations Reform Act of 1993 became operational. The Workplace Relations Act was formed in 1996 by the conservative Howard government. The act restricted the union’s ability to organize and follow union matters. In the year 2002, the WA state labor government formed new industrial laws that supported the primacy of collective over individual laws, which include the “Good Faith Bargaining” that reinforced the supremacy of tribunal and then revoked anti-workers and union punitive provisions.
In 2006, the Work Choices Act not only replaced the Industrial Relations Reform Acts, but also encouraged the individual bargaining. To reinforce this, it created the Australian Workplace agreement and thwarted the union’s effort to enter the employers’ enterprise to investigate claims or bargaining. The trade unions were incapacitated by this act. In July 2009, the current fair work Australia replaced the work choice. It emphasized on enterprise-based collective agreement and abolished the AWA which favored individual bargaining. The fair work emphasizes on bargaining in good faith and has control to regulate the collective agreement process.
The work choices laws
The work choices laws were formed by the Australian Parliament in 2005 and became operational in March 2006.These laws abolished the Australian traditional federal conciliation and arbitration acts. These laws also encouraged the employer-employee relationship (Harkness, Peter, 2008). Statutory agreements between employer and employees replaced the traditional conciliation and arbitration systems. The government empowered the employer to carry out bargaining with or without trade unions.
Challenges of the work choices to the union
If trade union opted for a strike under this act, to further their claims, they were required to cast a secret ballot in favor of the strike. The employees had to authorize the strike. If the employees did not favor the industrial action, then the union could not proceed. Since union members were restricted to entering the workplace to hold conference with their members or even organize protected industrial actions, how would then collective bargaining take place? This made it difficult to convince the employer to negotiate with the union. If collective bargaining took place, again the terms and contents of collective agreement restricted. On the other hand, the elimination of the no-disadvantage test of registered agreements weakened the awards systems. It meant that in collective bargaining, the awards were no longer the safety net. This erased the union’s relevance. Another blow to the union was when the awards system was restricted as their coverage and contents were subjected to rationalization and simplification which in turn reduced the bargaining power of the unions. Considering that the work choice system covered 75-85% of the Australian employees within the scope of the federal system, the unions therefore had less scope to cover.
In the bargaining structure, the only concern of the government was to ensure that the agreement was in line with the Fair Pay and Conditions Act. This act us was to oversee the minimum wage set by the fair pay commission which include: 4 weeks annual paid leave, 10 days of personal care or sick leave,38 hours of work per week,12 month paid parental leave among others. If an employer met these set standards the unions had no meaning.
The decrease of the Australian Industrial Relations Commission (AIRC) which is a body charged with Conciliation and Arbitration, was a blow to the unions due to its arbitration purposes. The commission’s (AIRC) powers were decreased greatly, for example, its mandate to regulate minimum wage pay was transferred to the Australian fair pay commission. Its powers to endorsement collective work place agreements were assigned to the OEA. The AIRC compulsory powers of arbitration and conciliation were extensively crippled. It was therefore left to battle with private negotiators and mediators to provide controlled dispute resolution tasks.
Benefits of work choices to the employer
The work choices systems were biased to the location and the nature of the employer, meaning that some employers were immune to some industrial penalties and that the law varied from place to place. Work choice system, empowered the small enterprises with 100 employees or less, to dismiss their employees on fair grounds or reasons. Some employers could easily walk away with unfair dismissal by pleading that the dismissal was a genuine operational action. Employees were required by the employer to sign the Australian work place Agreement (AWA) as an employment contract. This agreement was directed to individual bargaining. Again the size of any appropriate award no longer applied to these employees even when the agreement was removed.
How the employment of the constitution to make laws weakened conciliation and arbitration.
The government did not rely on the labor powers that emphasized on traditional conciliation and arbitration tribunals nor the trade unions in formulating Australian work choices laws. It rather relied on the constitutional powers which gave provision for corporation power (section 51) of the Australian constitution which empowers parliament to formulate laws, in regard to foreign corporation, trading and/or financial corporations formed within the common wealth. Again the constitution amendments no longer relied on the industrial arbitration powers and therefore it was weakened.
Fair work Australia
This is an independent national workplace regulations tribunal that was established in 2009 and became operational in July 2010. This tribunal took over from the Australian industrial relations commission and the Australian fair pay commission. It has the mandate to carry out employment functions related to: dispute resolution, employment contract, industrial action, enterprise bargaining, safety net of minimum wages and employment conditions among others.
Unlike the work choices system which weakened the unions, the fair work Australia strengthens them a little bit. This act supports collective bargaining in “good faith.
The impact of fair work on the unions
Fair Work Australia has the power to stop or terminate a protected strike and this spells a mighty blow to the unions. It will be very unfair if Fair Work Australia grants a union a go ahead to strike, for example, and suddenly the action is outlawed by the same body. This will weaken the bargaining options of the union, therefore rendering the union’s attempts fruitless. This system, just like the Work Choice, favors the casting of secret ballot vote by employees to determine a strike. The ballot is one of the requirements of a protected strike (Australian government, 2010). The fair work prohibits industry wide or pattern bargaining. This system also prohibits industrial acts like the secondary boycott and agreement during bargaining.
In the Australian Fair Work Act, there is no distinction of the union or non-union agreements. This means the concern of this law is to solve industrial disputes, either collectively or individually. Employees may nominate a representative, and both the employer and the union have to respect that. Unionized employees are represented by their union representative but can choose another representative if they so wish (Australian government, 2010). This action invests the agreement powers with the employee. And if the employee is contentment with a procedure the collective bargaining is null and void.
Employees can revoke their union membership any time. They are not bound by the union regulations. This will weaken the powers of the union which is invested in the numbers of membership (CCH Editors, 2010). The arbitration system is no longer in place, the regulator only comes in when the collective bargaining is not carried out in good faith, and only comes to give orders so as to ensure compliance. The ordering in this case does not necessarily arbitration or reconcile.
The new pay regulating commission established by the labor government (FWA) is currently charged with the annual wage reviews. The new friendlier act of fair work wills do not leave the unions either with much to do in the work places’ collective bargaining. The fair work also includes the National employment standards (NES) which constitutes of 10 major requirements. The implementation of NES standards by this law, leave the unions with less scope on negotiation matters ,therefore, sooner or later, will make the unions be irrelevant to the employment matters and decision making. Therefore as seen, the government through its statutory laws favors employee-employer mutual benefit.
The regulation theories
The theories of regulation is seek to justify why regulation is accepted.
The public interest theory
This is a traditional theory that has considered market malfunctions as the motivating cause for the administration of regulations (Clark Ian, 2002).The regulation is meant to correct the malfunctions. In this theory the government acts as the regulator to correct the situations of the market failures due to hidden information or other external factors. The theory gives assumption that a market represents a failure and it is not able to fix this problem on its own. The theory assumes that the government is able to fix this problem and arrive at a satisfactory outcome. It is assumed that the benefits of intervention by the regulator outweigh the total cost of intervention. The aim of this theory is to achieve economic satisfaction. In the labor relations, the government has played a major role in formulating legislation that has always governed the employment relationships. Currently, such laws in Australia include the Australian Fair Work Act.
Principal agent theory
This theory concentrates on issues of information asymmetry. The operator is assumed to know much about his ability, efforts and utility market, than the regulator does. In this case, the operator is assumed to be the business agent while the government is the regulator. The operator can be government-owned or private (Clark Ian, 2002). This form of theory is used in the incentive policies or control. An example of this can be the minimum wage regulation (fair pay).
Normative theories
This theory of regulation normally concludes that competition should be encouraged by the regulator who should reasonably reduce the cost of information asymmetries through obtaining information and provide the operator with incentives so as to maximize their performance and provide for the price structure that should improve the economic efficiency. The regulator should as well establish regulatory structures for regulation under the law (PPIAF, 2011). The system should be transparent, independent, predictable, credible and legitimate for the regulatory system. An example of such a structure is the current Australia Fair Work Act which the government established to look into the matters on employment and regulates the industrial relations.
Conclusion
I agree with the statement. The law has changed so much that collective rights are less relevant for industrial relations and employment law.
Reference
Australian government, 2010,Australian’s Fair Work Systems.(FAIR WORK) From
CCH Editors ,2010, Understanding the Fair Work Act, edition 2. Publisher CCH, Canada.
Clark Ian,2002,Governance,The State, Regulation and Industrial Relations, History. London UK
Harkness, Peter, 2008, Labor Market Reforms in Australia: The New Industrial Relations Law and the Elections.http://monthlyreview.org/2008/01/01/labor-market-reform-in-australia-the-new-industrial-relations-law-and-the-electionsthe work choices legislation
Mitchell, Richard et al, 2010, The Evolution of Labor Laws in Australia: Measuring the Change Introduction.
PPIAF, 2011, The Regulation Theories. Accessed 27 September 2011, http://www.regulationbodyofknowledge.org/chapter1/narrative/06/
Stewart and Williams, 2007, Work Choices: What the High Court Said, Sydney, Federation Press.

UNIONS ACT, 2011, Working in Australia: From Master Servant to Work Choices.