Prepared for: Dr. Shalene Werth Submitted:12 November 2010 Prepared by Li Chenyi Differentiation between Fair Work Australia and WorkChoice Fair Work Australia Fair Work Australia (FWA) is the new government industrial relations institution established by the Rudd Government’s Fair Work Act 2009. It replaced WorkChoice act on 1 July 2009. This essay will compare and contrast FWA and WorkChoice from the theory of unitarism and pluralism. And discuss the transition of industrial relation system of Australia based on these two legislations.
In 2007, the Australia Labor Party (ALP) came to power, and then, the Rudd Government legislated amendments to all existing tribunals, bodies and agencies created by the Howard government with FWA in 2009 hence the Australia’s workplace relations system changed. FWA is proposed to be a ‘one-stop shop’ for information, advice and assistance in settling grievances and disputes, ensuring compliance with industrial relations obligations, and overseeing the forward with fairness industrial relations system (Australian Labour Party 2007a, pp. 7-18). The range of functions cover five areas including the safety net of minimum wages and employment conditions; enterprise bargaining; Industrial action; Dispute resolution; and Termination of employment (Fair Work ombudsman, 2010). The responsibilities of FWA include: 1. The resolution of workplace grievances 2. Hearing unfair dismissal and unlawful termination claims 3. Adjusting minimum wages and award wages 4. Monitoring compliance with, and ensuring application of, legislation, awards and agreements 5.
Regulating registered industrial organisations The FWA is supported by the theory of pluralism, which indicated that workers and management are always in conflict, people needs to negotiation to assort with each party’s interests. Collective bargaining is at the heart of Labor’s workplace relations system and FWA focus on collective bargaining. The legislation provides for a number of forms of collective agreement. These are all referred to as ‘enterprise agreements’ and no distinction is made between union and non-union agreements (Balnave, 2009, p. 82). Although collective agreements were allowed under WorkChoice law, individual-level bargaining is the foundation of WorkChoices(Loudoun, 2009, p. 109). While Fair Work Act allows for three types of agreements which include enterprise agreements, multi-enterprise agreements and greenfield agreements. In the workplace, Befort & Budd (2009) stated that ‘pluralists therefore champion grievance procedures, employee voice mechanisms such as works councils and labor unions, collective bargaining, and labor-management partnerships.
While in the policy arena, pluralists advocate for minimum wage laws, occupational health and safety standards, international labor standards, and other employment and labor laws and public policies. Pluralists argued that for conflict to be regulated, even if it can not be resolved, there are implications for the wider society (Loudoun, 2009, p. 11). Consequently, they think that the conflict should be dealt by collective bargaining and is viewed not necessarily as a bad thing, and if managed could in fact be channeled towards evolution and positive change (Wikipedia, 2010).
Australia Workplace Agreements (AWA) was an individual written agreement between an employer and employee about the employee’s terms and conditions of employment, which prevailed over any state of federal award (Sappey, 2006, pp. 268-9). Put forward with the Office of the Employment Advocate (OEA), In view of unfair dismissal, the Rudd government’s Fair Work Act made amendments to federal unfair dismissal laws. Unfair dismissal rights expand to more people. FWA defined the unfair dismissal as both “harsh, unjust or unreasonable dismissal” and that “the dismissal was not a case of genuine edundancy” (Fair Work Australia website, 2010). Further more, to protect legal right of employers, it is not defined as unfair dismissal if the employer is a small business employer and they follow the Small Business Fair Dismissal Code when dismissing an employee. Finally if employer is find illegal on unfair dismissal. It may order reinstatement or the payment of compensation up to 26 week’s pay (to a maximum of $54150) to the employee if reinstatement would be inappropriate in the given circumstances (Loudoun, 2009, p80).
Mark Phillips (2009) stated that “All workers have protection after a six month qualifying period (12 months for small businesses with 15 full-time equivalent staff or less)” and “The exemption from unfair dismissal when sackings occur for ‘operational reasons’ will be removed. This was seen as the major improvement on WorkChoices. By contrast, under WorkChoice Laws the coverage of the unfair dismissal laws was as less as to only business employing more than 100 employees (Loudoun, 2009, p79).
So this law leads to that more unfair treatment of employees when they were dismissed as indicated by the decline of unfair dismissal application to the Industrial Relation Commission of NSW (IRC of NSW 2006, p. 11) and the AIRC (AIRC 2007). Rudd government retained the restriction of union right of entry to workplaces, and restrictions on workers’ right to strike (Ross Gittins, 2007), But union right of entry under Fair Work Australia is wider than of WorkChoice, FWA deals with the ‘right of entry’ disputes regarding officials of a trade union in accordance with the FWA(Loudoun, 2009, p. 9). Under the WorkChoices legislation, the power of trade unions to represent members during contract negotiation periods was weakened, due to laws that prevented union right of entry into the workplace. Additionally, an emphasis on AWAs (Changes in the Workplace 2010), individual agreements negotiated one-on-one result in a decrease of collective bargaining, further reducing the possible involvement of unions. The Workchoice legislation Increased restrictions on allowable industrial action, while the Fair work Australia, it seems less restrictions.
When attempting to negotiate or bargain for a new collective agreement, both employees and employers can take protected in FWA. Before industrial action commence, employee must authorise it through ballot. In addition, the new industrial umpire, Fair Work Australia, will be able to step in to settle an agreement after all other efforts have been made and there is industrial action that is harming both parties. The umpire will also be able to intervene when there have been serious and persistent breaches of good faith bargaining, as we have seen in cases like Telstra and Cochlear.
Phillips (2009) indicated that there will be new, effective ways for groups of workers like cleaners, childcare workers, hospital workers and community workers to bargain collectively in ways not previously possible. While the rule is rigorous, Industrial action can be suspended or terminated in situations including 3 situations 1. threatens to cause significant damage to the Australian economy 2. Threatens the life, personal safety, health or welfare of the community 3.
Causes or threatens to cause imminent significant economic harm to any employees (some cases employers). ( (Loudoun, 2009, p. 78) Because unitarists believe that conflict can be minimised by effective management in a free market environment, thus industrial is not necessary, Under WorkChoice legislation, it developed 3 acts refer to the industrial action, which include 1. Increased restrictions on allowable industrial action; 2. Mandating secret ballots for industrial action; 3. Outlawing pattern bargaining and industry-wide industrial action.
Awards were simplified by Howard government, and the WorkChoice made reduction in the allowable matters permitted in awards which seems not to protect the right of workers to bargain collectively’ (Balnave, Brown, Maconachie & Stone 2009, p. 468). By contrast, under the Rudd Government’s forward with fairness industrial relation policy, awards are a central component of the “safety net” of pay and conditions of employment. The APL’s safety net has two separate parts: legislated national employment standard that cannot be removing, replaced or modified.
And minimum employment standard that may be included in individual awards (Australian Labour party 2007a, pp. 7-11) Under WorkChoices, the Australian Fair Pay and Conditions Standard (AFPCS) included five minimum standards which were enshrined in legislation. (Employment relations Study book 2010)Labour party intends to expand the legislated minimum standards to include ten matters. These will make up the National Employment Standards (NES) and replace theThe 10 legislated National Employment Standards (NES) are: 1. Maximum weekly hours of work 2. Requests for flexible working arrangements . Parental leave (and related entitlements) 4. Annual leave 5. Personal/carer’s and compassionate leave 6. Community service leave 7. Long service leave 8. Public holidays 9. Notice of termination and redundancy 10. The Fair Work Information Statement (Balnave et al. 2009, pp. 480–1). Loudoun(2009, p. 85) Stated that the NES plays a central role in the federal government’s national industrial relations system, an have three objectives which include fair to working people; flexible for business and promote productivity and economic growth for future prosperity of Australia(DEEWR 2008, p. ) Rudd government’s Transition Act terminated the award rationalisation process which introduced by WorkChoices. Loudoun (2009, p. 86) also indicated that “the principal federal award in an industry was the starting point for the drafting of the modern award” one of the purposes of award modernisation is to reduce he number of awards in operation to avoid overlap of the number of award coverage for both individual employees and individual employers. Fair Work Australia focus on employees more than WorkChoice Legislation does.
According to Pluralism, because of difference of interest, as reflected in inequality in all aspects, leads inevitably to conflict. The attention to employees seems to be more important, because it may leads to a negative effect on economy and community if grievances are not resolved in time. The more overt conflict solved, the less negative effect influenced. To ensure that ‘individual conditions of employment could be lower than the relevant award, but overall an agreement could not reduce award standards (which under the [WRA] 1996 included 20 allowable matters’ (Balnave et al. 009, p. 469). Further more, FWA’s grievance settlement role covers national workplace relation system employees and employers and some organisations. It is obviously that FWA reinforces power of unions in workplaces while the WorkChoice tend to decrease the power of unions. The Fair Work Act continues to outlaw pattern bargaining and removes the distinction between ‘union’ and ‘non-union’ agreements (Cooper, 2009).
Billing(2009) Indicated that an enhanced role for union officials as bargaining representatives, parties to agreements and participants in dispute resolution arising from agreements and a role for FWA to arbitrate (in a far wider range of circumstances than the AIRC) especially with respect to the ‘low paid’. By contrast, for deeply believe of that conflict can be minimised by effective management. WorkChoice act emphasis employers more, and to the best of its abilities to productivity and reduce grievances by effective management. So WorkChoice In summary, it is found inevitable that Fair Work Australia replaced WorkChoice.
Rudd government put forward serious acts to improve workers working condition and protected collective negotiations between employers and employees. Through comparing and contracting these two legislations, it is obvious that collective negotiation play a more and more important role in industrial relation because it is an effective way to resolve grievance and dispute. Setting unfair dismissal standard based on the size of enterprise is a rational way to protected legal right of both employees and employer. It also takes small business’s practical situation into consideration and put forward clear regulations.