Industrial Relations - Centralised vs Decentralised

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  • Topic: WorkChoices, Trade union, Kevin Rudd
  • Pages : 13 (3941 words )
  • Download(s) : 285
  • Published : November 2, 2008
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The implementing of the Workplace Relations (Work Choices) Amendment Act 2005 (‘Work Choices’) by the federal Coalition government saw the most audacious industrial relations legislation enacted for the Australian community in over a century (Peetz, 2006). It was to be a central plank in the government’s stated aim of reform by decentralizing industrial relations laws in Australia.

The changes were significant and included:
-abolition of the ‘no disadvantage’ test
-abolition of unfair dismissal protections for workers in firms with less than 101 workers -privileging individual contracts (‘Australian Workplace Agreements’ or AWAs) over collective agreements (CAs), -restricting the right to undertake collective action

-restricting union entry to workplaces;
-forcing many employers previously covered by State legislation into the federal jurisdiction

Now, with the Rudd Labor government in power, a huge body of legislation will be introduced to dismantle Work Choices. Labor’s new Workplace Relations Amendment (Transition to Forward with Fairness) Bill 2008 seeks to revert to a centralizing of Industrial Relations law in Australia through: -introducing a new ‘no-disadvantage’ test

-Replacing the Coalition government’s Work Choices laws and AWAs. -Ensuring that employees earning under $100,000 per year are protected by a strong safety net which will, in turn, protect key entitlements like public holidays, overtime, penalty rates, annual leave, parental leave, and redundancy for Australian employees (ALP, 2007) Enacted, this is likely to produce a hybrid … a centralized/decentralized IR environment. It also leaves undecided some key elements in the coverage of employees under State rather than federal awards.

Advocates of a decentralized system of IR laws in Australia cite the inadequacy of centralized systems to cope with the increasing demands of a globalised environment, believing that, in order to stay competitive, companies need a system that supports the rigor of continually evolving and staying flexible (ACCI, 2005). The Business Council of Australia declared in 2005 that “The core elements of Work Choices are vital for our (Australia’s) economic growth”. The promoted view was that working together to meet business challenges promoted choice and flexibility in respect to how workers are employed, managed and rewarded (Chaney, 2007).

There was a belief that prior to Work Choices 2005, a “them” and “us” culture permeated the Australian workplace resulting in a restricted productive capacity and limited innovation (Chaney, 2007).

Although AWA’s have been proclaimed as ‘dead and buried’ this is not entirely true. The Rudd government reforms have meant that no new AWA’s can be constructed, but under these new Forward with Fairness arrangements, existing AWAs can continue up to and even beyond their five year nominal expiry dates (Siewert, 2008). Any workers in workplaces currently using AWAs can still be offered a new type of individual workplace agreements called an Individual Transitional Employment Agreement or an ITEA (ALP, 2007). This is virtually the same thing. These willl end on the 31st December 2009 when the more centralised system will be reinstated.

It is argued that a centralized system of inflexible IR laws brings with it awards which are long, complex and difficult for the average employer and employee to interpret (Schubert, 2005). AWA’s can be constructed collaboratively, thereby allowing parties to clearly understand their rights and obligations without being hindered by third party (including unions or arbitral tribunals) interference (Lye, 2005). Negotiating and agreeing on individual workplace wages and conditions means certainty of (forward) cost and the ability to be flexible and competitive (ACCI, 2005).

Rather than threatening jobs, that Business Council of Australia (BCA) pointed out that between 2006 and 2007 more than 200,000 additional full-time...
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