ADVANCED STUDIES IN INDUSTRIAL RELATIONS HRM523 ASSESSMENT NO.

2 TOPIC: What contribution can industrial relations (or employment relations as it is now commonly known) at the workplace level make to the sustainability of Australian businesses? ZEESHAN ALI 11496404
INSTRUCTOR: THOMAS DENIGAN

DATE: 04/10/2012

INTRODUCTION:
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Almost every Australian is affected directly or indirectly by industrial relations. The groundwork of the employment relations is linked with the employee and employer at the workplace. The association between these two parties and the interaction between them gives the foundation for the industrial relations practice (Alexander, Lewer & Gahan, 2008). Everybody who is creating or making income or engaged in any organization and management of employees is gripped by the employment relation practices. The (BCA 1989, P.5) Business Council of Australia stated that industrial relations believes employees and employers are intrinsically at loggerheads, and that , in the interest of public, the result of the interaction between them and relationship at work place should be standardize and legalized, both have to protect and avoid disrupting the economy. Employment relations can be defined, the study of the rulemaking process and the rules which organize and regulate the relations of employee and employer (Bray, Waring & Cooper, 2011). Organizations, public, small, large or private control and manage their industrial relations affects their performance Relations (Alexander & Lewer,1990). Good industrial relations results in good economic performance of the country. It is simple that Australian`s economic performance relies on the competence to fabricate good Industrial Relations (Alexander & Lewer,1990).Employee, employer, management, trade unions, governments readily admit the significance of industrial relations. There are discrepancies exists as to what actually built good industrial relations and how can it be achieved. However, these differences and interests are balanced and guided by the Australian Constitution and by its ideology. Industrial relations are constructed in a way that it keep the interest of all the parties involved in industrial relations i-e employee, employers, trade unions, and governments. In this assignment, Australian Industrial relations has been discussed, the affect of industrial relations in Australia and its outcomes is discussed, that how the industrial relations affect the life of people and economy of Australia and what has been achieved till yet through industrial relations. Plus there is a comparison between three English spoken language countries i-e UK, New Zealand and Australia. The emergence of small business enterprise is also discussed and the impact of neolibralism on Australian Business.
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In Broader sense, Industrial relations also known as employment relations cover all relationships that an enterprise sustain and retain with different sectors of the society ie customers, employees, employers, state and public have link with the enterprise. The term industrial relations is defined variously. J.T Dunlop (1985) defined it as the difficult and complex relationship among the managers, workers and government bodies. Yoder (1990),defined industrial relation as the management process dealing with union(s) with a sight to negotiate and subsequently control, organize and monitor collective bargaining agreement or labor contract. Industrial relations include relationship between employer and employee, working condition, wages, collective relations, collective bargaining, role of the state, and employee representative and employer representative organizations. These relationships are multifarious and multidimensional undeveloped on economic, social, psychological, occupational, social political and legal levels. To understand Industrial Relations of Australia, it is essential to identify the basic role performed by the constitution, the Commonwealth Act of Australia Constitution Act (Creighton and Stewart, 2005). Creighton and Stewart (2005) stated that the constitution is a very significance power of Australian Industrial relations. Until the 20 th Century, the Industrial relations in Australia were bound by the centralized arbitral system. Since 1993, Commonwealth governments have been depending on the other power base in the constitution to legislate in comparative to industrial relations (Stewart, 2009). In 2009, the commonwealth parliament revoked the current industrial relations law, the Workplace Relations Act 1996 and substitutes it with a new law industrial relations statue called the Fair Work Act 2009, which establish some national employment standards valid to all the national system employees. The FW act also endow with a structure of collective bargaining at the level of the individual enterprise. FW act begin a dynamic role for trade unions, after the restriction to perform in Australian workplaces by the Workplace Relation Act 1996. FW act provides empowerment to the federal industrial tribunal to help and guide the bargaining parties, if necessary. The main principle parties in industrial relation are employees and employers. Bray (2005) argues that at certain times the relation among these two
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parties can have disagreements, when the needs and interests of both parties resist or oppose each other, and sometimes relationship can be collaborative in that both of the parties work together for their mutual benefits. Most of the employee organizations are known as unions, some of them are also known as federations or associations. Employee organizations are registered with FW act 2009. They have certain rights under the FW act 2009, related to the safety and protection of their members` industrial interests. Mostly, these organizations linked or belong to two peak organizations, Northern Territory Trades and Labor Council, known as Unions NT and through the National bodies, the Australian Council of Trade Unions (ACTU). ACTU role is critical and important. It plays role in national wages case, the award modernization, relation major test cases, and play key role when unions do not agree with each other about their representational rights in relation to particular groups of employees. There are also employer organizations which represent the interest of employers from the major groups. During the centralized arbitral system, employer organizations were very active. Though they can still represent employers in FW act, but their role has more of a lobbying the government and backing for the interest of employers. Chamber of Commerce and Territory construction Association are the two peak groups. There are two main industrial processes in Australia. First process is about the regulation of employment relationship, which includes the policies for such as salary and conditions are set down. Employment relationship contains four sub-processes, which are state regulations, individual common law contacts, the direct implementation of managerial prerogative, and collective bargaining (Bray and Waring 2006). The second process links with the dispute resolution. Bray (2005) stated that dispute in any form are inherent aspect of employment relationship. The trends in Australian Industrial Relations have some similarities and differences with other countries. If we compare it with UK and New Zealand, the trend between 1980s and 1990s has been a lot similar. Beggs and Chapman (1987) argued that mostly the effect has been of the Accord in promoting a smeared development in levels of industrial disputation of Australia. All the three countries have a fair intensity of unionization and laws which supported collectivism of the employment relationship and
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accorded unique benefits to trade unions as workers` representatives. Industrial relations history of all the three countries shows that there has been a shift towards enterprise-based bargaining. In UK there was evident trend towards decentralization of ay determination towards the aggressive labor market. The plant level bargaining is very common in UK. In case of New Zealand and Australia, the transformation in the role of the reward system has been a main attribute of their shift in the direction of enterprise-based bargaining. It was a rapid change in New Zealand, while in Australia the shift has been a slow process slower from national and sectoral bargaining to enterprise-based bargaining and not much persuasive. In UK increased cost and difficulties of recruiting and retaining members produced enormous amount of change in union activities. MetCalf (1994) stated that there has been a financial decline in the trade union movement in UK. Gardner (1995) stated that after the enactment of ECA in New Zealand there has been a downfall in the financial position of unions In Australia, the rationalization of unions was primarily the results of a union-initiated policies, supported briefly by supportive legislation. UK initiated the first transformation of industrial relations institution with the Thacher Conservative Government election. In New Zealand with the ECA 1991, there had been some large changes in Industrial Relations institution, contains the establishment of certification elections to identify union representation and elimination of compulsory unionism. They accelerated the reward system being put an end to and trade unions lose all legal privileges. ECA is linked with the declined number of unions and members. The case of Australia is somehow different. The elected federal government was favorably inclined to the trade union movements for most of the past fifteen year, and opposed to commence unreceptive legislation. However, the process of change occurred, incorporated a very long experiment with income policy and corporatism. The final result has been a scale of decentralization of pay determination, especially covering larger, unionized enterprises. A good amount fraction of the workforce remains covered by the award system. The more recent change has built-in the provision for individual bargaining. Nonetheless, the technicalities of the system of enforced attribution lingered, in contrast to the situation in New Zealand.
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New Zealand is on a faster-track, also relatively deregulated, UK is on a slow-track, but now relatively de-regulated, and Australia is on a slow-track, partially deregulated, despite the differences between them, and differences in the labor market productivity of the three countries rebel definitive conclusions. After the ECA the unemployment in New Zealand is still significantly lower than Australia. In UK the unemployment remained stubborn high. The contribution of Industrial Relations in Australia cannot be denied. It has largely improved the economy of Australia, and the life standards of the people of Australia. The market sector contain twelve industries which are agriculture, mining, fishing, accommodation, retail, cafes and restaurants, transport, storage, wholesale, forestry, electricity , gas and water, finance and insurance and recreational, has been developed through industrial relations, accounts for 65% of the GDP. Excluded industries like health, education, government administration, and defense are also well developed but they are not profitable industries though they play important role in the development of organization. Industrial Relations influence productivity draw from an assumption that they manipulate the behavior of means of capital, managers and workers. It may be occur because industrial relations have the aptitude to influence the ability of management to manage, because they influence the intensity of antagonism and cooperation in the workplace, and for the reason of that term on which labor is employed, persuade the innovation and investment decision of business formation .Doucouliagos, and Laroche (2003) stated that trade unions unpleasant the affect of productivity by cementing restrictive labor practices and exaggerate them and us attitudes. Trade unions may compel firms to agree to disorganized personnel firing and hiring practices, and restrain the pace of work, working hours and skill formation) but contrary unions have a good effect on productivity as well. They support and maintain the workplace resolution and complex matters that might becomes the root cause in productivity-diminishing behavior. Unions increase productivity by providing workers with a resource of expressing discontent as an substitute to exiting up by creating up communication sources between employees and employers, and also by bringing on managers to
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modify and subsitute methods of production and acquire more efficient policies (Freeman,1976; Freeman and Medoff,1984). Increase in the growth of productivity involves the cooperation and involvement of the workers. It is possible when the employment relationships are characterized by trust and where workers believe and consider they have a secured and protected venture in the long-run success of their employers (Buchele and Christiansen 1999). In Australia, Louca (2003), originate that between1984-1985 and 2000-01, Queensland recorded highest rate 1.6 per cent per year, when the national growth rate of multifactor productivity was 1.2 percent per year, followed by NSW 1.2 per cent, South Australia 1.1 per cent, Victoria 1.0 per cent and Tasmania 0.3 per cent. Generally in labor productivity there was similar growth rates (Nguyen, Smith and Meyer-Boehm, 2003). There was high growth rate in Western Australia. Nguyen 2003 attributed that the high growth rate in labor productivity is due to the mining industry. Human capital is equated by the attainment of education. Population with education and high skilled may be helpful and contributing to high income and productivity, but workers with high qualification are also attracted towards to a state with high income and productivity and have population in tune to the benefits of education and acquisition of skills. Drac, foster and Green (2003) stated that Victoria and NSW has highly qualified population and degree completion rate is high as compare to other states of Australia. They argue that NSW has the highest capital human stock. Hancock and Hsieh (2006) found out that an increase in average qualification level in Southern Australia during1994-95 and 2003-04 increased the labor quality by 2.4 per cent. Retaining workers where their skills are not efficiently utilized tend to decrease average productivity. Interstate migration helps to boost average productivity. Peetz (2006) argued that Australian Workplace Agreements has not much contribution in productivity, though they have contributed to profits. Furthermore, he stated that AWAs have not yielded productivity results like to those of union collective bargaining or awards. In a study of BCA by Fry, Jarvis and Loundes (2002), they studied 282
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organizations and found out that collective bargaining coverage was linked with higher productivity as argued by the firms by themselves. The higher growth in productivity in the episode considered by BCA is associated to labor productivity, rather than multifactor productivity. Peetz stated that AWAs are the fraction of a low road approach to employment relations, as employers are supported to minimize or reduce cost of labor. Such methodology is less beneficial to productivity increase than a high road approach where the employment and workplace conditions are more encouraging to the workers serve as an enticement to, skills development and training and innovations. Peetz states that 86 per cent of employees are registered under the certified agreements which provide the cover for training, and 34 per cent of AWAs have substance associated to training. In the wider sense, industrial relations cover all such relationships that a business enterprise maintains with various sections of the society such as workers, state, customers and public who come into its contact. Webster and Loundes (2002) describe the causes influencing the employer-union and employer-employee relationship in larger businesses in Australia, identifying that more cooperative relations were frequently considered to be beneficial in high productivity. Furthermore, their finding includes that unions having lower densities-fewer union members relative to total staff were linked with more cooperative relations between employees and employers. In Australia there has been a lot of focus by the Industrial relations of Australia. The small business covers 95 per cent of total non-agricultural private sector businesses. These businesses employed 48 per cent of workers (ABS 1999). Recently, there has been rise in employment shift towards small business, contributing more to employment (Australian Bureau of Industry Economics, 1992). It is not easy task to accurately measure or determined the level of formalized individual and enterprise bargaining in Australia. Despite the changes in legislative, large numbers of businesses prefer to remain within the centralized system. It is assumed that policy makers and government understand the needs of small business better than their owners (Callus, 1991). The Percentage of Small Business by Industry Category (Source: ABS 1999)
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Industry Category

Percentage of Small Business in Category

Mining 87.9 Manufacturing 91.5 Construction 99.0 Wholesale trade 90.4 Retail trade 97.0 Accommodation, Cafs & Restaurants 88.1 Transport and Storage 97.7 Finance and Insurance 94.1 Property and Business Services 97.6 Education 91.1 Health 95.3 Cultural and Recreational Services 95.9 Personal and Other Services 98.5

There were new fundamental changes in Australia legal and political structure during 1999 and 2000s. This was the foundation laid down for the neo-liberalism. Neoliberal is a term used to promote free market capitalist economy. More privatization took place during neo-liberalism and the economy became much wider in access to commodities, technology, and increasing the speed of development (1999). In November 2007, Julia Gillard and Kevin Rudd, created a new approach, which was much closer to the union movement and their major legislative initiative (Fair Work Act) and gave support to collective bargaining and union (Bray, Waring & Cooper, 2011). Neoliberalism increased employment opportunities, and decrease the members of union by creating more part-time and casual job opportunities. It enhances business opportunities in Australia and lead to the growth in economy and development of Australia. Managerial prerogratives have stretched with each successive development in employment relations regulations (Bray and Waring, 2011). Australian represents high manifestation of the neo-liberal agenda. The federal government has embarked a program to decollectivize the workforce, assist individual agreement making, and strengthen managerial prerogative. Undoubtedly, the future of industrial relations will bring increase and novel regulatory challenges as the nature of employment at work place continue to evolve. Regulators
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will be test by the corporate restructuring, globalization, and the growth in non-standard forms of employment. McCullam (2006) has put emphasis on the need for labor law to encourage industrial citizenship. Industrial relations is evolving in order to contribute in effective way in the development of Australia and it keep evolving with the changes occurs in the external and internal environment.

CONCLUSION:
The industrial relations of Australia has been evolved with time and changes occur in the environment. Though there are many pros and cons of industrial relation evolution till now but it cannot be denied that industrial relations has contributed immensely in the business sector of Australia, plus it has improved the life of people in Australia, and for both employer and employee. The role of industrial relations currently are set for longterm. The Australian Industrial relations are more decentralized now. Globalization and neo-liberal system has evolved the industrial relation in Australia and its contribution. The state, unions, employers and employees are interlinked with each other to work cooperatively and gain their mutual interest, which contribute to the state in effective way. The industrial relation will keep evolving with the changes in environment, like wise its contribution will also changes, but its objective will always be in the favor of positive contribution to the state. The current policy is contributing more towards capitalism and to decrease the impact of union in organization. The current scenario of industrial relations is more focused on the small business enterprise which helps in contribution towards more employment and economy of the state.

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