Industrial Relations in Australia and New Zealand - Literature review Example

Industrial relations in Australia and New Zealand (Student’s Name) (Student’s number) (Institution) (Course) (Module number) (Instructor’s name) (Submission date) Introduction Conventionally, the term industrial relations involve the relationship between the management/employer and the workers. It entails aspects of industrial life as collective bargaining, trade unionism, workers’ participation in management, discipline and code of conduct, grievance handling, gain-sharing programs and industrial disputes and interpretation of both international and local labour laws. However, these factors of industrial relations are subject to the environment. Lucas (2004) says that the environment determines the effectiveness and feasibility of some of these issues. These relations are exposed to numerous and delicate problems that arise from misalignment in policies, industrial unrest and conflicting ideologies in the national and international spheres. Australia and New Zealand are some of the best examples of countries that display the greatest influence of the industrial relations environment in determining how workers relate with their employers and the management. This paper the discusses the four main parties to industrial relations and examines how one of these parties government industrial relations in Australia and New Zealand and also looks at the limitations to its involvement in the system. Parties There are four main parties who are actively associated with any industrial relations system are the workers, the managements, the organizations of workers and managements, and the government. Bamber, Lansbury and Wailes (2004) argue that though industrial relations basically entail the employer-employee relation, it is unrealistic to confine the study of industrial relations to these two parties. They say that industrial relation is the sum total of all the relations between and among the various parties involved. The government is the main player in the whole system. The government has an overbearing factor given that it facilitates the economic conditions that determine how the employers and employees relate. On the hand, the government imposes direct control over these relations through enactment of laws and acts and be establishing overseeing bodies. The Dunlop’s approach, which was developed by Prof. John T. Dunlop, is one of the many theories that explain industrial relations in given situations. This approach recognizes only three actors in a system: a) management and their representatives in supervision, (b) non-managerial workers and any spokesmen, and (c) specialized governmental bodies and authorities (Concept, scope and approaches to industrial relations, n.d.). This theory also recognises the government as the main actor by saying the first two actors have a responsibility towards one another in the issuance of instructions and following them but their behaviour if a function of government role. In some industries, specialized government bodies have authority that overrides that of the management. This is where the management faces trouble in facilitating proper industrial relations with their employees as per their own understanding. In most countries, the minimum wage level is set by the government as determined by the economy and productivity level of the country but not factors affecting the industry such as demand of goods and services produced (Lucas 2004). Role of government The Australian federal government has over time played a central role in the industrial relations in the country. However due to regime change and political influences, the government stands and poly in regards to industrial relations has not been consistent. Since the 1980’s, there have been major changes which have been enacted through acts of parliament and rules and regulations set by relevant bodies. In 1988, the Labor Government replaced Conciliation and Arbitration Act of 1904 with the Industrial Relations Act. This was followed by change in the name of the overseeing body from the commonwealth conciliation and Arbitration Commission to the Australian Industrial Relations (AIRC) with scope of work remaining the same. This act was reformed in 1993 and further act, the Workplace Relations and other Amendments Act of 1996, was enacted. This Workplace Relations Act gave recognition to non-union members in their collective bargaining efforts. This Act also gave a right to industrial action during the bargaining period. The coming into power of the liberal/conservative coalition government in 1996 ending 13 years of continuous Labor governments ushered in a new period of reforms for industrial relations (Nolan 1998; Rainnie, A. & Grobbelaar 2005). The coalition government embarked to accelerate the reduction of tariffs and promotion of free trade. This led to trade unions questioning the move given that a similar incidence in 1972-75 had caused massive job losses especially industries exposed to foreign competition. Fortunately for the labour industry, the request by the Coalition government to the US to reduce tariffs was declined. This occurrence made trade unions realize they have had no negotiation platform with the government on matters of tariffs which directly impacted on them. As such, efforts were directed into gaining arbitration capacity with government which was duly granted just before the turn of the century. At this time also, New Zealand was also moving towards deregulating the labour market by creation of new laws. Lucas (2004) says that this trend in deregulation of the labour market and resultant better industrial relations were a common trend adopted by countries exhibiting ‘anglo’ characteristics which include Australia, New Zealand, Canada, Britain and the US. Introduction of arbitration raised a lot of issues in the Australian social order in terms of immigration policy, welfare and tariff protection. The tariff policy adopted through arbitration protected local industries and insulated them from cheap imports hence the preservation of employment for the local populations. In protecting the welfare of the people, the trade unions bargained for the determination of wages by tribunals based on social and equity grounds as determined by market forces and productivity rather than the earlier methods where employers determined wages independently. However, although the tariff protection offered a lot of hopes to local manufactures, their viability highly depended on the competitiveness of the domestic industry and the terms of trade for the goods produced by those industries. This implies that tariffs do not exclusively regulate the job market. So who really regulates the job markets which is basically the main concern of industrial relations? A number of factors come into play in regulating industrial relations. The government’s attempts to control these relations have been met with a number of limitations which this paper discusses next. Limitations of government First it is important to understand the ideology of any industrial relations systems. Each system in any give country contains some shared understanding among the actors. This ideology defines and assigns different roles to different actors towards the system. Each actor has thus to play his part in order for the system to function accordingly. The government as one of the main actors in the Australian/New Zealand system participates in the system though various ways. The Equal Opportunity for Women in the Workplace Act 1999 calls for employers to promote and offer equal opportunities to female employees same as their male counterparts. Occupational Health and Safety Act of 1991 protects workers, persons near workplaces and other stakeholders from health risks that arise from activities taking place in the workplace. While these statutes are developed for the commonwealth government, state governments have their own statues (Rainnie & Grobbelaar 2005; Gahan & Hartcourt n.d). Some of these statues regulate certain industries such as mining which exhibit unique characteristics that are not addressed by the commonwealth statutes. Lucas (2004) notes that some state governments have refused to cede industrial relations powers to the federal government. As such lack of a centralized source of authority in enacting industrial relations laws limit the contribution of the state to industrial relations matters. Trade unions have been the biggest hindrance to the government participation in industrial relations. The government’s main aim is to provide a level playing field for all the actors, a sentiment not shared by most trade unions (Lansbury n.d.). During periods of decreased economic growth, economists predict a shrinking in the number of permanent job placements available and an increase in the number of temporary placements and increased general unemployment. Organizations are forced to cut back on their spending due to decreased demand while expansion and development projects are put on hold (Gahan & Hartcourt, n.d.). Unfortunately, trade unions do not seem to understand these as indicated by the recent strike of more than 3000 Technical and Further Education (TAFE) in February this year in New South Wales. The strike was called in response to Labor governments planned reduction in public school spending by more than $50 million. According to TAFE, such a move would render many teachers jobless and would lead to deterioration on the running of public schools which they claim are already underfunded. To avert the strike, the government was called for a negotiated settlement which was ignored hence banned the strike which went on anyway (World socialist website 2010). The Australian labour market has seen a shift from a pluralist system of employment relations to a unitarist approach characterized by few forms of collective worker representation. Membership to trade unions has fallen drastically in Australia which implies that majority of workers can only bargain and participate in industrial relations as individuals which denies them enough leverage. The government is thus faced with a problem of enacting polices that will give individual employees enough leverage in industrial relations. Bamber et al (2004) say that union membership has fallen from 49% of the labour force in 1990 to only 23% as of 2002. The authors attribute this trend to structural changes in the economy. For example there has been increased growth of the service industry as the economies of New Zealand and Australia expand. Traditionally, the service industry has shown little interest in the trade unions hence the fall in trade union membership. Government’s role in other countries In any given industrial relations system, the role and participation level of the actors is greatly influenced by the context and situation. Technological factors, economic growth, market constraints, distribution of power in the community and cultural aspects all determine how the government can actively participate in industrial relations. For instance, Australia is one of the few countries that follow a decentralized government with multiple levels. While this complicates the enactment of laws relating to industrial relations, centralized governments have an easy task. All the industrial relations laws enacted apply across the country hence a harmonized participation of the government in industrial relations (Bamber et al 2004). Gahan and Hartcour (n.d.) say that there is no standard role of the government in industrial relations. This is confirmed by the Australian government’s practice of interchanging centralised and decentralised system. A government has to facilitate flexibility at the least as shown by a number of European countries. In the 80’s Belgium, France, Britain and Spain eased their laws on dismissals to allow employers to adapt better to changing economic conditions. Other such as Netherlands and Britain removed minimum wage requirements. A weakened role of the government in influencing industrial relations such as through minimum wage requirements has reduced workers bargaining powers and has led to huge disparities in earnings between CEO’s and lower level employees thus contributing to the larger economic problem of economic disparities in a number of OECD countries. Developed and technologically advanced countries have stronger service industries than manufacturing ones. Employees in the manufacturing sector are more likely to join trade unions hence the government is positioned though facilitating trade unions to cater for the welfare of the people. In such countries it would be disastrous to ignore majority of the labour force working in the manufacturing sectors Conclusion The parties in industrial relations environment are intertwined. The activity ad contribution of the actor as per the role assigned by the system determines how other parties perform. Democracy and market deregulation have overlapped the ole of government in developed countries where participation is hampered by low trade union membership and absence of laws to cater for individual employees while developing countries the government plays a significant role same way as the Australian government did a few decades ago. References Bamber, G., Lansbury, R.D. & Wailes, N. (2004). International and comparative employment relations: globalisation and the developed market economies. Sydney: Sage Concept, scope and approaches to industrial relations. Accessed online on 28/04/2010 from http://www.ignou.ac.in/edusat/mba/ms24/Ms%2024%20Block%201/pdf/Unit-1.pdf Gahan, P. & Hartcourt, T. (n.d.). Australian Labour Market Institutions, ‘Deregulation’ and the Open Economy. Accessed online on 28/04/2010 from www.cid.harvard.edu/cidtrade/Papers/LabourInstit.pdf Lansbury, R. D. (n.d.) Workplace change and employment relations reform in Australia: prospects for a new social partnership?. Accessed online on 28/04/2010 from www.australianreview.net/journal/v1/n1/lansbury.pdf Lucas, R. (2004). Employment relations in the hospitality and tourism industries. London: Routledge Nolan, D. (1998). The Australasian labour law reforms: Australia and New Zealand at the end of the twentieth century. Perth: Federation Press, Rainnie, A. & Grobbelaar, M. (2005). New regionalism in Australia. Sydney: Ashgate Publishing World socialist website (2010). Australia: TAFE teachers challenge Labor’s education reforms, defying strike ban. Accessed online on 28/04/2010 from http://www.wsws.org/articles/2010/feb2010/tafe-f12.shtml Read More