MGT 4330 Industrial Relations Chapter 8 Australia and New Zealand
Australia-Facts • Population: 23 million (estimate 2013) • GDP: $1.542 trillion(12th) • GDP per capita: $65,642 (5th) • 75% total work force employed in services and 20% in manufacturing and construction. • Mining and agriculture are the two main industries in Australia’s economy. But these industries employing a mere 5% of the total workforce
Australia-Legislation • Since 1901 Australia has been a federation – a system of government with a central federal government and six regional ‘State governments’ • Commonwealth Constitution limited parliament’s right to make laws on conciliation and arbitration of IR disputes extending beyond the limit of any on State. • Commonwealth’s power only apply to a handful of industries, such as shearing and maritime. • Federal regulated employment and State regulated employment 50:50
Australia-Legislation (cont’d) • The Conciliation and Arbitration Act 1904 established the conciliation and arbitration system which operated until 1988. The system was technically limited to industrial disputes beyond the borders of regional states • However, the practice of unions serving logs of claim on employers from different states (artificially creating an ‘interstate’ dispute) meant that it became the main avenue for dispute settlement and award negotiation – most disputes were settled by negotiation not arbitration • Fair Work Act (FWA)2009 • There is no legislation that mandates works councils
Australia-Actors • High Court of Australia provide guidelines for “fair and reasonable” minimum weekly wage. Unions negotiate with employers based on this guidelines. • From 1986-1996 the dominant mechanism for setting the wage was through a social compact called the Prices and Incomes Accord (‘the Accord’) • Now minimum wages are set by a Minimum Wages Panel under Fair Work Australia
Australia-Actors (cont’d) • Union density 40% during the 1930s and then rising again to a peak of 65% in 1953 • Union density decline from 1992-2002 (See P. 127) • Even in industries that were traditionally highly unionized, such as mining and manufacturing. • High density (electricity, gas, and water supply) • Low density (Agriculture) • Union density is much higher in the public sector (44% in 2007) than in the private sector (15% in 2007) • Australian Council of Trade Unions (ACTU) 1927 • Before 1990s, Union co-operation in setting national wage level • After 1990s, enterprise-level bargaining play main role • Employers have constructed a complex web of industry-level associations. • AIG, ACCI, BCA
Australia-IR conflict • System of conciliation and arbitration is designed to eliminate unnecessary strikes. Thus, most of IR conflict are resolved by arbitration. • Striking was illegal until 1930. • Workers could strike during a designated ‘bargaining period’ and the industrial regulatory body could intervene and determine disputes if the parties were not acting in good faith, if there was little chance of settlement or if intervention was in the public interest
Australia-IR conflict (cont’d) • The strike rate continued to decline during the 1990s and after 2000. • Employers attempted to introduce non-union collective agreements. • High unemployment rate: 5.3% (2009) • About 20% employees work more than 50 hours per week. • By law, workers can request ‘flexible working arrangements’ but employers have no obligation other than having to respond to the request
New Zealand-Facts • Population: 4.45 million (estimate 2013) • GDP: $161 billion • GDP per capita: $36,648 • Economy • Greatly dependents on international trade with Australia, EU, US, etc. • Strongly focused on tourism and primary industries such as agriculture. • Most business-friendly country in the world (world bank 2005)
New Zealand-Legislation • The logic of New Zealand’s arbitration system was an exchange of concessions to trade unions and constraints upon them. • Registered Unions secure exclusive rights to represent workers • Award apply to all employers of workers covered by the award. • The state responsible for the enforcement of the award.
New Zealand-Actors • New Zealand Council of Trade Unions (NZCTU) formed in 1987 • Freedom for employers and employees in their choice both of bargaining agents and bargaining unit. • Slow decline in trade union density
New Zealand-Actors (cont’d) • The Employment Contracts Act of 1991 ("the ECA") promoted individualism in employment relationships at the expense of collectivism. • Employers can make an offer of employment to a prospective employee that includes a trial period of up to 90 days. Trial periods are voluntary, and must be agreed in writing and negotiated in good faith as part of the employment agreement.