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WORKPLACE RELATIONS


INTRODUCTION

Workplace relations can be regarded as the relationships and interactions in the labour market between employers and employees (and their representatives), and the intervention in these relations by governments, government agencies and tribunals (e.g. Fair Work Commission).

The field of workplace relations is complex and diverse and, for statistical purposes, is not easily measured. The ABS collects information on a number of topics to provide an insight into the state of the workplace relations environment. This section discusses statistics on: the different methods that are used to set pay of employees in Australia (such as award only, collective agreements and individual arrangements); trade union membership; and industrial disputes. Where they exist and are relevant, international guidelines relating to these statistics are also outlined.


HISTORICAL OVERVIEW OF WORKPLACE RELATIONS IN AUSTRALIA

Historically, governments have regulated the Australian labour market to varying degrees. Changes to the structure or processes underpinning the workplace relations environment have generally followed changes in governments, and periods of social or economic change. For most of the last century, employee-employer relationships were shaped by highly centralised Commonwealth and state tribunal-based systems of conciliation and arbitration. However, since the late-1980s, the workplace relations environment in Australia has undergone significant change and is now characterised by more decentralised enterprise level arrangements.

Initially, unions and employers opposed the establishment of a system of conciliation and arbitration. However, following a series of disastrous strikes in the 1890s, it was narrowly agreed at the Constitutional Conventions to include in the Australian Constitution powers of conciliation and arbitration for the prevention and settlement of industrial disputes that extended beyond the limits of any one state. The first legislation to put the Commonwealth's industrial power into effect was the Conciliation and Arbitration Act 1904, under which the Commonwealth Court of Conciliation and Arbitration (forerunner to the Australian Industrial Relations Commission) was established.

The Excise Tariff Act 1906, under which employers were granted tariff protection provided that a fair and reasonable wage was paid to their workers, proved attractive to both unions and employers. The first attempt to define a fair and reasonable wage was made in the Harvester case (1907). This case established the 'basic wage' and initiated an important principle of wage determination: that a fair and reasonable wage should be based on "the normal needs of the average employee, regarded as a human being living in a civilised community". The Harvester standard was used in making other awards; and the basic wage, with margin for skill, became the foundation wage rate.

The federal system, with jurisdiction over matters extending beyond state borders, gradually became dominant over the individual state systems. By 1976 nearly 90% of the workforce had come under awards, of which nearly 40% came under federal jurisdiction. By the mid-1980s there were over 9,000 separate awards, with over 250,000 individual award classifications.

The nexus between tariff protection and the fair wage was weakened in 1973 when the government oversaw a reduction in overall tariff protection, in an attempt to open up the Australian economy to international competition.

The opening up of the Australian economy to international competition has continued since then. This in turn has resulted in a much greater emphasis being given to increases in productivity, improvements in work performance, the abolition of rules of demarcation, and workplace restructuring.

Coincident with these developments was an increased emphasis on agreement making and decentralised bargaining. Decentralisation related to movements away from centralised arbitration and conciliation arrangements (such as awards). These transformations have occurred in both the Commonwealth and State jurisdictions, although the timing and nature of workplace reforms have varied.

At the Federal level, the introduction of a series of bargaining principles (the Restructuring and Efficiency Principle, the Structural Efficiency Principle, and the Enterprise Bargaining Principle) by the Australian Industrial Relations Commission in 1991 provided a framework for decentralised bargaining and workplace reform. The Industrial Relations Reform Act 1993 encompassed provisions to better allow enterprise bargaining in non-unionised workplaces. The opening up of collective bargaining to workers not represented by unions meant that wages and employment conditions could be changed without unions being directly involved in negotiations. The Workplace Relations Act 1996 (Commonwealth) introduced further labour market reforms, enabling the development of individual worker agreements (Australian Workplace Agreements) as well as continuing collective worker agreements (Certified Agreements). The same legislation also facilitated the simplification of awards. At the same time, industrial reform also took place at the state level aimed at encouraging decentralised bargaining and workplace reform.

The level of trade union membership has been generally declining, coinciding with the workplace relations changes noted above. For most of the past century, the proportion of employees who were union members ranged between 42% and 62%. However, the 1990s witnessed significant reductions and membership has generally continued to decline over the years. From August 1992 to August 2016, the proportion of those who were trade union members in their main job has fallen from 40% to 15%.

For most of the past century, the combined effects of State and Federal industrial relations legislation encouraged unionism. One of the aims of the Conciliation and Arbitration Act 1904 was to facilitate and encourage the organisation of bodies of employers and of employees and the submission of industrial disputes to the Court by organisations. Unions played a critical role in the centralised tribunal based system – the only parties that could request the settlement of a dispute by the Court under the Act were 'registered organisations'; that is, unions of employers or employees. The granting of preference clauses in awards for engagement and retrenchment, to unionists over non-unionists, further promoted membership in unions.

In more recent times the roles of unions under State and Federal workplace relations legislation have been less pivotal. The emphasis on decentralised bargaining and the opening up of both collective and individual bargaining to workers not represented by unions have reduced the role of unions in the wage negotiation process. Restriction of the content of Federal awards to certain allowable matters has further encouraged workers to bargain for wages and other employment conditions outside of award provisions. Other reasons for the decline in union membership include the exclusion of union preference clauses from awards, changing public sentiment towards unions, declines in employment in industries that traditionally were highly unionised, and the emergence of new industries that are less unionised.

The level of industrial disputation in Australia has also decreased in recent years, with significant declines in strike and lockout activity since the 1980s. Traditionally, awards were the mechanism used by industrial tribunals to settle and prevent disputes, with unions bringing disputes (both 'actual disputes' and 'paper disputes') to the tribunals to improve the wages and other conditions of employment of their members. However, few disputes are now brought before the industrial tribunals for resolution. Those disputes that are brought before the tribunals tend to be of a longer duration and involve fewer workers. The majority of disputes tend to be short (one day or less in duration) and involve many workers.

Under decentralised bargaining systems, industrial action is only legal during the period in which employees and employers bargain on wages and other conditions of employment, so long as the action is supporting or advancing claims in relation to the enterprise bargaining, and that the existing agreement has passed its nominal expiry date. Accordingly, neither party may legally engage in industrial action when an agreement is in place (except over Occupational Health and Safety issues). However, disputes sometimes occur outside these periods.

More recent times have seen significant changes to the workplace relations landscape in Australia. The introduction of the Workplace Relations Amendment (Work Choices) Act 2005 represented a movement towards a single, unified system of labour law, through the use of the corporations powers of the constitution. Work Choices resulted in key areas of change in the workplace relations environment, such as new arrangements for setting minimum wages and conditions, award simplification and rationalisation, a changed role for the Australian Industrial Relations Commission and the creation of the Australian Fair Pay Commission, increased regulation of industrial disputes, and changes to unfair dismissal laws.

The Fair Work Act 2009, which took effect on 1 July 2009, replaced the Workplace Relations Amendment (Work Choices) Act 2005. While the new legislation has resulted in considerable change to the workplace relations landscape, the general structure of a unitary national system for workplace relations, based primarily on the powers of the constitution, has remained. In addition, all states and territories, except Western Australia, had already or have now referred their workplace relations powers with respect to sole traders and partnerships to the Commonwealth as of 2011 (while Victoria, Northern Territory and Australian Capital Territory did not have a state workplace relations system in operation). This has seen the proportion of employees who are in the federal jurisdiction rise to 87% in 2010. As well as the introduction of modern awards, a set of minimum National Employment Standards were introduced from early 2010. The Fair Work Act 2009 also established Fair Work Australia (now Fair Work Commission) to operate as the body responsible for setting minimum wages and conditions for employees in the national workplace relations system.

On 26 November 2015 the Fair Work Amendment Act 2015 came into effect. The Act amended the Fair Work Act 2009 to: reform greenfields agreement making, including to apply good faith bargaining rules to negotiations and to provide an optional six month notified negotiation period; introduce measures to maintain the value of monies held by the Commonwealth for underpaid workers; provide that a request for extended unpaid parental leave cannot be refused unless the employer has given the employee a reasonable opportunity to discuss the request; and provide that an application for a protected action ballot can only be made once bargaining for a proposed enterprise agreement has commenced (footnote 1).

The Australian Government introduced the Fair Work Amendment (Remaining 2014 Measures) Bill 2015 into Parliament on 3 December 2015. The Bill includes: measures to provide clarity and certainty for employees and employers around the use of individual flexibility arrangements, while maintaining existing protections for employees; reforms to transfer of business rules to provide that where an employee transfers to an associated entity of their current employer on their own initiative, their industrial instrument will not transfer with them; and reforms to union workplace access rules to address excessive workplace visits for discussion purposes (footnote 1).


METHODS OF SETTING PAY

Statistical measures relating to how employees' pay is set (such as award only or through an agreement) are used to monitor the effects of industrial and workplace relations reforms and wages policy.

Concepts and International Guidelines

• award only;
• collective agreement; and
• individual arrangement.

• the definition of collective agreements outlined in the international guidelines is broader than the definition used in the EEH. The international definition encompasses both collective agreements and awards as defined in the ABS survey; and
• the definition of collective agreements outlined in the international guidelines is restricted to written agreements, whereas the survey definition includes both written and verbal agreements.

Figure 12.1: Types of Disputes Included in the ABS Industrial Disputes Collection

• Cause of dispute - relates to the main cause of stoppages of work, and not necessarily all causes that may have been responsible for work stoppages. Initially, the classification of cause of dispute identifies whether a dispute occurred during a process of workplace/enterprise bargaining. Disputes are then further classified according to the main cause of the dispute. Causes include: remuneration; employment conditions; health and safety; job security; managerial policy; and union issues.

• Working days lost per employee involved - for an individual dispute, defined as the average number of working days lost per employee involved in the dispute. It is calculated by dividing the number of working days lost in the dispute by the number of employees involved (both directly and indirectly).

• Employees directly involved in a dispute - those who actually participated in the dispute in order to enforce or resist a demand or to express a grievance.

• Employees indirectly involved in a dispute - those who were stood down at the location where the dispute occurred, but who were not themselves parties to the dispute. Employees who were stood down at locations other than those where the dispute occurred are excluded.

• Employees newly involved in a dispute - for a new dispute, comprise all employees involved and, for an ongoing dispute, those involved for the first time.

• Total employees involved - comprises employees newly involved and, for an ongoing dispute, those who continue to be involved. Total employees involved for any period of time is obtained by adding together the number of employees involved in each dispute for the period.

• Reason work resumed - relates to the reason(s) for ending the stoppage of work, and not necessarily to the reason(s) for settling all matters in the dispute. Reasons include: negotiation without intervention of a third party; State legislation; Federal legislation; pre-determined return to work; resumption without negotiation; and mediation.

• Working days lost - refers to working days lost by employees directly and indirectly involved in the dispute. Estimates of working days lost per thousand employees are calculated for a quarterly period by dividing the total number of working days lost in the period by the total number of employees in the Australian workforce in the period (obtained from the ABS Labour Force Survey) and multiplying by 1,000.

1. Department of Employment: Australia’s National Workplace System. https://www.employment.gov.au/australias-national-workplace-relations-system <Back