Minimum Wage Determination for the Australian Workers - Case Study Example

CONTEMPORARY REWARD MANAGEMENT {Insert university’s name} {Insert instructor’s name} {Insert student’s name} October 5, 2012. CONTEMPORARY REWARD MANAGEMENT Executive Summary Australian Council of Trade Union (ACTU) and Australian Chamber of Commerce Industry are bodies that oversee implementation of interests of Australian workers represent Australian enterprise and industry at national and international level respectively. Thus, they play key roles in contemporary reward management and ensuring Fair Work Australia. In attempts to meet their goals, these two bodies play key roles in minimum wage determination for the Australian workers. Australian Council of Trade Union (ACTU) is the main body that oversees the implementation of the interests of the 2 million workers in Australia. It consists of 46 affiliated unions which are also targeted at meeting the interests of workers across Australia. The main aim of ACTU is to improve the living standards as well as to raise the quality of working life of the Australian people. Therefore as a body aimed at improving living standards, ACTU has managed quite a number of industrial gains including, years of wage increase for the working Australians through the award system, improved working environment which is safe and non hazardous for workers, equity and equality of women together with better employment conditions (Shield, 2007, p.23). On the other hand, the Australian Chamber of Commerce and Industry (ACCI) is the leading council of business organization in Australia and it also represents the channel through which Australian Enterprise and Industry air their voices. Indeed, as the peak council for business organization, ACCI represents Australian enterprise and industry at national and international level. Therefore, owing to the work and importance of ACCI it plays a major role in bringing together industry, government, regulators and very important and influential policy forums which in one way or the other affect doing business at national and international level (Storey, 2009, p.30). The role of ACTU and ACCI in the minimum wage determination is crucial and can’t be ignored. And as part of the parties proposals ACTU and ACCI submitted their modern award minimum wage and national minimum wage. These were submitted by these two bodies to fulfill their mandate as outlined by the fair work act 2009 through which the minimum wage panel was established. Submissions that were proposed by the ACTU and ACCI recommended an increase to the national minimum wage as well as the modern awards. ACTU recommended an increase to the minimum wage by a tired approach which established $26 dollar increase to the national minimum wage. ACTU also took a position of increasing modern award wages to C10 levels or higher. In percentage terms, ACTU has proposed a 3.8 percent increase at the C10 levels which it has suggested to be applied to all the individuals within the modern award wages. Thus, when ACTU refers to the C10 levels, it implies wage increase to all the engineers and manufacturing trade persons who are in the first level of the manufacturing award. On the contrary, ACCI recommended a flat dollar increase considered on award to ward basis. ACCI therefore proposed an increase of $9.40 week (White & Druker, 2009, p.106). The two parties, ACTU and ACCI developed their proposals in line with the Fair Work Australia minimum wages objectives. Thus while developing the proposal, the Fair Work Australia took into consideration some key factors like the performance and competitiveness which needs to be met to check on the national economy. Also, while developing proposals, the ACTU and ACCI had to meet the expectations of the Fair Work Australia like business competitiveness and visibility, productivity and inflation and employment growth. This is so because when the above factors are observed the Fair Work Australia is going to meet one of its key objectives like increasing/ raising awareness on social inclusion through increased involvement of the workforce. Hence, when this is met, the Fair Work Australia will be in position of addressing the needs of the low paid. Indeed it is on this basis that the ACTU and ACCI decided to increase minimal wage so as to ensure increase in the living standards, an aspect that is included by the Fair Work Australia as part of its objective (Shields, 2007. p. 25). Furthermore, to address the minimum wage requirement and enhance work fair Australia, there was need to ensure the remuneration increase cut across board so that the people in low pay group benefits as well. This is in line with the Work Fair Australia fourth objective where they expect that there should be equal remuneration which should measure to the work or value of the work done. Hence, the two parties decided to award increase at a flat rate for all workforces. Indeed providing equal remuneration for work of comparable value as was factored in by the ACTU and ACCI was a necessity because through this they were able to fulfill the need of junior employees and those with the disability (Corby et al, 2009. p.97). Consequently, considering the proposals, the parties engaged, that is the ACTU and the ACCI had to factor in some views. For instance, the two parties noted that economic growth for the months between December quarter 2011 and the earlier months had been uneven yet there was a notable mining bloom. In the post review of the submissions budget, the ACTU noted that the budgets anticipated for the year 2012-2013 had to factor in the difference in growth rate, a point which was appreciated in the budget submissions. Furthermore, most of the submissions identified transition to modern awards and future increases in superannuation as some of the additional expenses that will be incurred by most of the businesses. Therefore, these views had to be captured in the submissions to ensure leveled and Fair Work Australia. In addition, the submissions by ACTU and ACCI identified the need to mention carbon prices and the ever rising value of the exchange rate. For instance, the ACCI stood with the Australian government on their stand on minimum wage and households’ double compensation. In this regard, ACCI supported the idea that the minimum wage should not be used at whatever cost to double compensate the families as the pay for living impact of the carbon price (Armstrong and Brown, 2009. p. 76). On the other hand, of the most not worthy inclusions was the labor market conditions which had softened with time during the year 2011. And because of the slow growth in the employment sector which led to the differences in employment outcomes within states as well as the territories. Because of the above factors, there was notable fall in employment in most of the states along with worsening rate of unemployment. And to ensure that Australia is a good country to work in, ACTU addressed these view in its submission, and since it deals directly with the work force it was convincing that they considered this concern within their submission. In fact it was satisfying that the Australian government together with the ACTU were able to share the same views on them employment growth. Nonetheless, they cautioned and noted their concern on the looming weakened employment growth in the service related sectors. On the contrary, they noted that there will be strong employment growth in the resource related sector. On this not, they identified the need for flat rate increase in the wage levels to address the challenges and the wage gap within all sectors of the divide (Armstrong et al, 2010, p.56). It’s worth remarking that employees should at all times be rewarded for the energy, time and all the effort they put at work. And this is what the ACTU and the ACCI have tried to put in place. The fact that the two parties have tried all efforts to design, develop and implement equitable reward system which is congruent with the Work Fair Australia is appraisable. In fact another area where the ACTU and ACCI have got a plus is the fact that they are able to bring in the individuals needs like the workforce and the industries expectations. Indeed they have noted and realized the need to focus on reward systems which is the most common way of rewarding in the modern market following change in the labor markets and the employment contracts. By using this reward system, the ACTU and the ACCI have managed to meet the strategic objectives by communicating the wanted behavior to the employees and workers within the Australian continent. This is why one must appreciate the contribution of the contemporary reward system adopted by the ACTU and ACCI since they have led to positive organizational culture change. All these efforts are good acceptable ways that need to be used to reward employees so as to promote fair compensation and reward. Thus methods like market determined pay which are commonly used by the ACTU are good and sustainable since they ensure reward for value and work (Amstrong, 2010, p.27). In conclusion, as much as the ACTU and the ACCI tries to address the contemporary reward approach, they have failed to meet the minimum wage objective and the modern awards objectives. Therefore, to address these they need to liaise with the panel to consider the basic needs of the low paid as well as the relative living standards. References Armstrong, M., 2010. Armstrong's handbook of reward management practice: improving performance through reward, Kogan Page Limited, London. Pp. 13-31. Armstrong, M., Brown, D. and Reilly, P. 2010. Evidence-based reward management: creating measurable business impact from your pay and reward practices, Kogan Page Limited, London. Pp. 56-67. Armstrong M. & Brown, D. 2009. Strategic reward: implementing more effective reward management, London: Kogan Page, Pp. 63-80. Corby, S., Palmer, S. & Lindop, E (eds.). 2009. Rethinking reward, Palgrave Macmillan, Basingstoke. Pp. 95-100. Ross, J. et al. 2009. Fair Work Australia: Decision. Commonwealth Government Printer. (online). Available at http://www.fwa.gov.au/decisionssigned/html/2012fwafb5000.htm . Accessed on 4th/10/12. Shields, J. 2007. Managing employee performance and reward: concepts practices strategies. Cambridge: Cambridge University Press, Pp. 20-26. Storey, J 2007. Human resource management: a critical text. 3rd edition. London.: Thomson Learning Pp. 27-33. White, G. & Druker, J. 2009. (eds.). Reward management: a critical text, 2nd ed., Routledge London. Pp. 101-115. Ross, J. et al. 2009. Fair Work Australia: Decision. Commonwealth Government Printer. (online). Available at http://www.fwa.gov.au/decisionssigned/html/2012fwafb5000.htm . Accessed on 4th/10/12. Read More