The existing enterprise employee relation system that is persisting in Australia currently is one of the most evolved trade-facilitating bodies in the entire modern-day industrial and business world. The development of trade unions plays a vital role when it comes to the negotiation and bargaining aspect of any agreement ratified by the various involved parties i.e. the employer, employee, and other stakeholders (Angwin, 2017).
The history of such bodies which are extensively involved with the agreement-making, bargaining, and final approval processes of the various corporate entities. The different statutes and legal frameworks that have been formed from time to time have the ultimate agenda to preserve the powers that should ideally be vested in the trade unions. But there have also been instances in the history of the trade unions across the nations, where these bodies have been stripped of some of the most important elements such as the financial security of the trade unions, diminished ability to bargain on the various workplace agreements deals thus bringing down the incentives for the individual to join such trade bodies (Bray & Waring, 2014).
The Workplace Act of 1996 (WRA) amended later on as the Workplace Relations Amendment (Work Choices) ACT of 2005 is an example of the decentralizing measures undertaken by the then-incumbent government to neutralize the influence that the trade unions bear on the various trade deals and agreements made in regard of the employees.
In the year 2007, the Labor Government headed by Kevin Rudd turned a few things around when it came to the existing norm regarding trade unions and presented a unified, employee-oriented approach that paved the way for a cooperative workplace relation. Employee relations can be a complicated concept given the nature and the multiplicity of the affected parties in the equation (Bray et al., 2014).
The Fair Work Act which was adopted in the year 2009, in conjunction with the Fair Work Ombudsman has proved to be helpful for the employees, employers, contractors, and the community of the working class at large to understand and derive benefit from the established system. This has also led to the practice of having workplace-related disputes and conflicts, compliant about the terms, conditions, wages, and salaries in an amicable and mutually beneficial manner from both the employee’s and the employer’s perspective.
The various Agreements that form the basis for the bargaining between the employer and the trade union in the industry that represent the labor force can be about a lot of workplace aspects such as the ordinary work hours, hourly wages for ordinary work hours as well as for overtime, workplace-related terms and conditions, performance-based conditions and pay, employee benefit and welfare, industry and company norms on the various kinds of leaves that can be availed by the employee and a lot others (Cooke, 2014).
These kinds of agreements are undertaken and agreed upon by the enterprise and the trade union of which the employees are a member. Upon approval of the bargained agreement, it becomes one of the many industrial or organizational rules for the employees. Any of the standard enterprise bargaining agreements are signed for three years unless mentioned otherwise (Donaghey et al., 2014). The negotiation that takes place between the enterprise and the trade unions on behalf of the employees is the trickiest part of any of the industrial agreements.
In such conditions, the Fair Work Commission and the Fair Work Ombudsman serve as the authority to channel the dialogue between the two parties involved in the bargaining.
Figure 1: Flow of Events
Source: (Forsyth, Gahan & Howe, 2011)
In Figure 1, the diagram illustrates the flow of events starting from the very first steps of the agreement-making process to getting the same approved and ratified by the various parties such as the employer and the employee. In the first stage of the agreement-making process, it is usually the employer who pitches the idea or initiates the bargaining on the enterprise agreement that has been drawn up previously (Godard, 2014).
Following this, the employee is served with a notice or a memo that spells out his right to avail a bargaining representative such as a member of the trade union or any other eligible individual-centric representative to agree upon or make mollifications to the proposed trade agreements.
The next stage that follows post the employee hires a bargaining representative, the bargaining stage involves good faith bargaining. Good faith bargaining can be understood in terms of the exchange of information, which in this case has to be as transparent as possible and lay down the terms and conditions of the agreement such that it is in the interest of both the employer and the employee.
In case the deliberations that are undertaken between the management of the workplace and the trade union or any other industrial body that represents the employees of the organization, do not give a favorable outcome, or are overtly biased towards or against one of the parties involved, the issue might be escalated and brought to the notice of the Fair Work Commission.
Once the issues that had been prompted in the previous iteration of the agreement are eliminated, the employer asks the employees of the organization to approve the agreement by voting for or against it. After the employees represented by the trade union have cleared the proposal it is then sent to the Fair Work Commission for ratification (Kalleberg & Hewison, 2013).
However, another perspective on the Fair Work Commission of Australia sheds a different light on the administrative and functional paradigm of the body. The Resignations tendered by the former Vice-President of the Fair Work Commission, Graeme Watson, cites that the body and the associated legalities that have brought about the existence of the commission have failed to achieve any tangible positive benefit to the industrial relation system (Lakhani, Kuruvilla & Avgar, 2013). He brought forth certain ideological anomalies in the commission which is responsible for the terms and conditions of employment along with employee pay and benefit norms across the industries in the country. Watson also cited that the operations of the commission are not in line with the guidelines and objectives that have otherwise been laid out by the Fair Work Act 2009.
Moreover, from time to time, the Fair Work Commission has also been dubbed as undesirable and overtly complicated when it comes to its application to small-scale industrial enterprises. The Fair Work Act itself is a massive legislature that creates a lot of paperwork and may not be considered the most efficient by some critics in favor of small business enterprises that struggle with complying with the norms (McPhail, Jerrard & Southcombe, 2015). This has been cited as one of the legislatures that are not particularly welcoming to small business owners and entrepreneurs who would like to start a venture of their own.
Under the FWA, 2009 agreements that are pursued by the various industrial bodies can be of the following types:
The Fair Work Commission undertakes the approval of any of the above kinds of agreements by getting the signed copy of the agreement submitted to it along with any kind of declarations that need to be made in any particular case as per the norms laid by the Fair Work Commission.
The Fair Work Commission tests the agreement on various aspects whether the agreement satisfies the BOOT test or not. It also considers whether or not it agreement has been made to be approved by the employees without any unfair means or coercion. Additionally, the commission also provides a dispute settlement procedure at the end before approving it within 14 days of its submission (Townsend, Wilkinson & Burgess, 2013).
But in a broader sense and about most other thriving businesses and industries in the country, the Fair Work Commission provides a platform to address the various issues between employers and their respective employees amicably without having to go for the legal options and thus paying for the legal fees in the tune of millions on the part of the employer.
From the employee and trade union perspective as well, as said by the president of the FWC Iain Ross, also saying that the commission helps to provide a stable framework that dictates the productive and industrial relations in [play in any of the Australian workplace in the country. Moreover, the commission has also devoted itself to improving economic prosperity at large and promoting social inclusion in the diverse work culture that could be seen across the country.
The FWA recalibrates the concentration of control over the labor force in Australia back onto the collective and centralized administration without needing the body to be an absolute decision-maker in this regard (Donaghey et al., 2014). The FWA demonstrates an inclination for single endeavor agreements, as the proof proposes these seem to be ‘drivers of efficiency development’. This inclination is shown through its way of dealing with example bargaining and less-ideal treatment of multi-enterprise agreements.
In conclusion, it can be said that the Fair Work Act of 2009 and the Fair Work Commission have been able to reduce the degree of unfairness in the system towards the Labor force of the country to some extent. Even then, the legal and judicial aspect of it serves as a hindrance for most small businesses. But as the Act was formulated keeping the bigger enterprises in the country, it often becomes a proverbial albatross around the neck of the budding entrepreneurs.
Angwin, M (2017), ‘EBAs are now just a blockage to productivity’, Australian Financial Review, 14 February, p. 39.
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