You are on page 1of 5

The changing Australian Labour Market

Trade union is an organisation of workers who aim to achieve the advancement in the
interest of their members. Unions achieve the members interest by improving the
members wage levels and working conditions. Unions are divided into different sectors
according to the particular occupation, industry, firms or a mix of these. Trade unions do
this because it brings fairness and equality to the workplace community.
By achieving this, unions can influence the way the labour market operates through these
improvements in the members. They influence the labour market by restricting the supply
of labour and by exercising the bargaining power in wage negotiation.
Unions can influence the labour market by limiting the supply of labour. When industrial
action is engaged, unions can restrict the supply of labour in a firm or industry and increase
the wage rates of their members. Firms or industries lower their supply of labour when an
increase in wage rates occurs because the firms or industries can no longer support the
increase in their employees income. The firm or industry adjusts to this by retrenching
some of their workers to lower their cost of production. The restriction of labour increases
the employees wage rates but lowers the quantity of labour.
Unions also influence the labour market by exercising their power to bargain in the
negotiation with their employers. When employees have the power to bargain, unions can
respond to their issue and benefit the employees. This occurs when employees come
together and negotiate with their employer about their issue and create that change for the
employees. When employees come together and negotiate, the group of employees have
more power because the employer cannot afford to lose a group of employees which forces
them to make that change. Compared to a single employee, the employer can afford to lose
that employee because of their limit power and the individual can be easily replaced.
The employer association is an organisation formed to represent the interests of the
businesses to lobby the government. Employers association is different to trade unions
because the employers association have different interests and in many situations they are
directed to competition with each other.
The employers association have two main roles. They represent and promote the interest of
their members by lobbying the government and assist employers in managing in industrial
relation issue. The industrial relation involves the laws, institutions and processes
established to resolve disputes between employees and employers. The employer
association represent the employers and promote their interests to the government to help
to employers. They also assist employers in managing industrial relations by representing
their members in industrial tribunals

The employers association does not have as much power as the unions and are usually less
successful than unions. In some occasions the employers association can also benefit the
employers and the employees. When lobbying the government, businesses gain protection
from foreign competition or for industry assistance. They have been able to secure for
Australian producers a greater share in the domestic market. This would increase the
demand for labour and wage rates and also decrease the unemployment rate.
The Industrial tribunal are government agencies that look at the industrial relations system
and attempts to prevent or resolve workplace conflict between the employees and
employers. The main roles of industrial tribunal are to prevent and settle industrial disputes
between employees and employers. They operate independently of the government but the
government limits their power through their legislation.
The roles in the in industrial tribunals have been reduced so the government created a new
agency to resolve this issue. The fair work act created the Fair work Australia which is a
government agency which regulates the industrial relations in Australia.
One of the most important roles of industrial tribunals is to determine the minimum set of
work and pay conditions for employees by setting the awards. It is also stated in the law
that anyone that was above the award standards could enjoy pay and working conditions
but not those below the standard. The AIRC administers the award system and the increase
in the workers nominal wage adjusted for inflation, real wages.
Another important role that industrial tribunals play is resolve disputes between the
employees and employers. This role is done by through arbitration and conciliation.
Conciliation is a process which involves a mediator who tries to resolve disputes by reaching
an agreement. The agreement that was reached is not binding upon either of the parities.
Arbitration occurs in an industrial tribunal or a court and makes a ruling that is legally
binding.
These tribunals have been reinforced by the Federal Court of Australia to interpret and
enforce the tribunals decisions. These tribunals play an important role because government
organisation do not intervene in these decisions and are not enforced in the same way as a
courts decision.
The fair work act was a change to the industrial relation policy. It was from a minimum
standard, individual bargaining, and agreements under the work choices to a system based
on the National Employment Standards and Modern awards, collective bargaining and
enterprise agreements. The Fair Work act is strongly regulated by Fair Work Australia and
Fair Work Ombudsman.

The fair work act was passed on the 20th of March 2009 and it consisted of five main
elements to Rudds new government industrial relation system. The act was enforced to all
employees on the 1st of January 2010. The act consists of five main elements of the Rudd
governments new industrial relations system. It included a legislated safety net of ten
National Employment Standards which applied to all employees. A new modern award was
established and contained the National Employment standard and terms that were specific
to a certain industry or occupation. These terms included the minimum wages, the type of
employment, work arrangement, overtime and penalty rates, allowances, leave,
superannuation, and ordinary hours of work and dispute settlement procedures. The
modern award included and simplified thousands of awards that existed in the federal
awards system.
Fair Work act also allowed Fair Work Australia to take over the approval of the enterprise
agreements. The enterprise agreements includes the single enterprise, multi-enterprise and
the Greenfields agreements which all needed to be approved by Fair Work Australia pass
the No Disadvantage Test. The streamlined protection deals with the protection in the
workplace and the industrial rights such as discrimination and unfair dismissal. The Fair
Work Australia and the Fair Work Ombudsman took over several agencies to regulate the
new Forward with Fairness industrial relation system.
The National Employment Standard is the 10 minimum entitlements received by all
employees. The National Employment standard replaced the Australian Fair Pay and
Conditions Standard which contained five minimum standards. The 10 entitlements are
maximum weekly hours, request for flexible working arrangements, parental leave and
related entitlements, annual leave, personal carers leave and compassionate leave,
community service leave, Long service leave, Public holidays, Notice of termination and
redundancy pay, and Fair Work Information Statement.
Modern Awards are the minimal wage and conditions that are entitled to employees. The
Modern Awards contains 10 minimal conditions that are obliged to create fairness to
employees. These conditions are minimum wage levels, type of employment, overtime and
penalty rates of pay, leave entitlements, allowances and superannuation. The Modern
Award replaced the federal awards which had 4000 awards to 20 terms.

Setting the minimum wage is was establish to maintain a fair minimum wage to all
employees. Fair Work Australia governs the minimum wage level where they conduct their
research and consider the social objective and economic conditions to determine the
minimum wage. There are five objectives to consider when setting a minimum level. The
outcome of the national economy is considered when setting minimum wage levels which
are inflation, business validity, employment, and productivity. They also need to consider
the promotion of social inclusion by increasing the workforce participation rate. The
potential changes in the standard of living and the cost of the needs. To fairly pay an
employee or a comparable value for the value of work performed. The provision of fair
minimum wages to junior employees and to those who have disability or require training.
Enterprise agreements are the wage and working conditions being negotiated between a
group of employees and one or more employers. These agreements need to be approved by
Fair Work Australia and pass the no disadvantage test. The agreements can be made to suit
the employee specific needs but need to oblige with the minimum standards. Enterprise
agreements were design to encourage flexibility between the employee and employer by
improving productivity.
Good faith bargaining is when the employee and the employer attempt to reach an
agreement. The bargaining representative must follow a set of requirement to comply as a
good faith bargaining. The bargaining representative must attend and participate in
meetings, respond to proposals made by others, giving genuine consideration made by the
other party, refraining from unfair conduct, and recognising and bargaining with other
bargaining representative over the enterprise agreement. If these requirements are not
met, the Fair Work Australia will intervene and make an order to bargain in another place.
The No Disadvantage test ensures that the agreement does not or would not result in the
reduction of the terms and condition of the employee. The agreement is compared to a
general award or an award designated by the Fair Work Australia as the most appropriate
cover for the employees. The Better Off Overall Test is a comparison between the
agreement and a modern award to see whether the employee fits under that agreement.
This ensures that the employees are under a suitable agreement than a under a Modern
Award.
Common Law contracts are an agreement between the employee and the employer but the
employee and the employer are free to agree on certain conditions but must comply with
the minimum condition in the National Employment Standard. This gives flexibility for the
employers and employees to change their working condition according to their individual
requirements and circumstances. Common law contracts are commonly used for the
remuneration of professionals, executives, managers because their requirements exceed
the minimum standards.

Fair Work Ombudsman is an independent government organisation which helps employees


understands their rights and responsibilities at work. Their role is to provide assistance and
education to employees, employers and outworkers. The employees and employers
standard comply with the Fair Work act and to investigate and possible breach with the law.
If any of the laws were broken, then the situation is taken to court to be dealt with. The
employees and employers workplace must comply with the Fair Work act. To appoint Fair
Work inspectors to monitor and investigate the breaches of the Fair Work act. Another role
is to provide information about the National Employment standards, Modern awards,
agreement making, the right to freedom and termination of employment. Fair Work
Ombudsman needs to provide the best practices guides on the workplace relations and
workplace practices.
Fair Work Commission is an independent national workplace relations tribunal. It is
responsible for maintaining the safety net of a minimum wage and employment conditions
and a range of workplace regulations and purposes. They can hear unfair dismissal and
unlawful termination applications and resolve general claims. They can also accept and
resolve bully complaints within the workplace environment. Fair Work Ombudsman can
make changes to pay and entitlements in awards and registered agreements. They can make
and change awards and approve them. They can make decisions about industrial action and
union movements.