Employment relations

 The nature of employment relations

 Employment relations is the function that deals with managing the total relationship between the employees
and employers of a business:
 Planning human resources
 Acquiring people with right skills
 Development and training
 Performance management
 Industrial relations is the relationship between management and labour, and the processes for negotiating
employment conditions.

Stakeholders in the employment relations process

Employers
 Business owners/ managers largely responsible for working conditions of their employees (salaries/ wages).
 Specialist people managers – responsible for negotiating with unions, setting or negotiating wage levels,
recruitment, inducting new employees, training and processing personnel records.
 Employment relations manager – responsible for making every person more valuable and building strong
working relationships between workers, unions and management.
 Joint consultative committee – meeting of management and employee representatives; employees are
consulted about decisions affecting them and information about the business is shared.
 Autonomous work groups – employees make own decisions regarding various aspects of their work.

Employees
 Individual who provides their skills to a business in return for a regular source of income.
 Generally interested in improving wages/ working conditions; therefore conflict with managers.
 Concerned about flexibility, balancing work and family life, and a chance to have a say about changes.
 Employees are important for business’s survival, growth, profitability, quality, flexibility and competitiveness.

Employer associations
 Organisations that represent their employer members; matters include formulating policies and strategies,
processing logs of claims served by unions, negotiation or appearing in industrial tribunals.
 Assist employers in matters of employment contracts, legislation changes, EEO, and so on.

Unions
 Organisations that aim to protect the interests of employees in the workplace.
 Focus on improving living standards of members rather than just monetary wages.
 Shop steward – representative; acts as contact point between union and members, concerned with collection
of members, recruitment, breaches or minor grievances.
 Industrial officers/ union organisers – discuss union policy and settle local disputes.

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 WRA restricts union’s right of entry to workplaces and enforcement of union membership.

Government organisations
 The federal parliament establishes courts and tribunals, and directly regulates wages/ conditions to control
industrial relations.
 Fair Work Australia:
 Established under the Fair Work Act 2009 (Cth) which replaces the Workplace Relations Act 1996.
 Independent body with the power to ensure safety net of minimum conditions, facilitate the making of
enterprise agreements, regulate industrial actions, and resolve collective/ individual workplace disputes
through conciliation, mediation and in some cases arbitration.
 Assumed the functions of the Australian Industrial Relations Commission, the Australian Industrial
Registry and the Australian Fair Pay Commission.
 Office of the Fair Work Ombudsman:
 Investigates workplace complaints and enforces compliance with Australia’s workplace laws.
 Office of the Employment Advocate:
 Assistance on ITEAs, enterprise agreements, the Fair Work Act, no-disadvantage test and freedom of
association provisions.
 Other agencies:
 Human Rights Commission, Anti-Discrimination Board, Equal Opportunity Tribunal

Managing the employment relations function

1. Human resource planning 7. Competent employees with up-to-date

2. Recruitment knowledge
3. Selection 8. Performance appraisal
4. Identification/ selection of competent 9. Career development
employees 10. Satisfactory industrial relations
5. Orientation 11. High-performance employees capable of
6. Training sustaining performance over long term

 The way these functions are carried out depend on: business culture, goals, technology, size, and so on.
 Managers are realising the importance of considering human resources in conjunction with other entities of
the business (finance, promotion, etc).
 Activities associated with the employment relations function carried out by a specialist employment relations
department or by a specialist employment relations manager.

Line management and specialist

 Line manager:
 In charge of other employees, who together work directly on producing the goods/ services.
 May deal with issues such as motivation, discipline, managing conflict, staffing, training and development.
 Appraising employee performance, and planning and selection.
 Specialist human resource managers:
 Provide expertise and assistance to line managers on human resource matters such as recruitment and
selection, and negotiation.

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 Key influences on employment relations

Social influences

Changing work patterns

 Increasing number of females in the workforce, and an increasing trend in part-time work.
 Increase in white-collar work (sales, professionals), decrease in blue-collar work (tradespeople, labourers).
 Increasing use of contract labour and agency workers.
 Decline in availability of unskilled jobs; division between skilled/ unskilled workers.
 More diverse workforce.

Population shifts
 Need for managers to ensure employees understand instructions, are aware of their rights, etc.
 Discrimination, racial harassment, unfair workplace practices, health and safety.
 Programs developed to provide training for cultural awareness, etiquette, language, etc; improves job
satisfaction and communication.

Legal influences

An overview of major employment legislation

 Legislation increasing focused on enabling our system to cater for individual enterprise needs.
 Employers/ employees encouraged to make direct agreements about the terms and conditions of
employment that will apply at their workplace.

Federal legislation
 Industrial Relations Act 1988  Workplace Relations Act 1996  Fair Work Act 2009.
 Individual Transitional Employment Agreements (ITEAs) replace AWAs until 2010, when they introduce
new industrial relations legislation.
 ITEAs negotiated between employer and individual employee, with assistance from a union, it must be
approved by the Office of the Employment Advocate with the no-disadvantage test.
 Enterprise agreements have replaced collective agreements.
 Stronger safety net introduced due to criticism about the removal of the no-disadvantage test; this saw
the introduction of the ‘Fairness Test’ run by the Workplace Authority.
 Awards set rules governing minimum wages and working conditions.
 Anti-discrimination legislation – prohibits workplace discrimination on the basis of gender, ethnicity, sexual
preference, religion or disability.
 Age Discrimination Act 2004 (Cth)

State legislation
 Industrial Relations Act 1996 (NSW) – conciliation, arbitration, awards, conditions of employment.
 Occupational Health and Safety Act 2000 (NSW) – establishes legal responsibilities of employers/ employees.

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 Worker’s Compensation Act 1926 (NSW) – to maintain income and benefits for the period employee is unable
to perform usual work.

New organisational behavioural influences

 Traditional pyramid structure:

 Little contact between top management and workers.
 Recruiting would be done centrally, promotions often made from within the business.
 Rewards based on classifications, not performance.

Flat management and team structure

 Employment relations function more likely to focus on staff training and development, the individual and the
team, career development, intrinsic rewards and corporate culture.
 Employees have a greater role in determining the organisation and the conditions of their work.
 Team building – discussion/ direction from management, shared sense of purpose, commitment, stability,
trust, continuous communication, ongoing training and recognition of effort.

Economic influences
 Traditionally, bargaining power of employers increased, and decrease in level of economic growth and level of
inflation.
 New millennium – less collective bargaining, more individual contracts.

The economic cycle

 Attempts to forecast inflation, wages growth, consumer demand, interest rates, etc; business planning.
 Downturn – associated with reduction in customer spending and business investment.
 Reduction in full-time staff in order to cut costs and maintain profit margins or reduce losses.
 However, cost of recruiting/ training may be higher than the cost of keeping good employees.
 In times of recession/ economic contraction, some industries suffer from shortage of skilled labour.
 High economic growth/ employment – increase in bargaining power of employees and unions.

Globalisation
 Early 1980s – financial sector deregulated, tariffs were reduced.
 Modern methods of travel and communication have brought the world closer together; global marketplace.
 Australian products/ services must compete worldwide.
 Managers must have greater knowledge of international business practices and different cultures.
 Increasing employment of people outside their home country.
 Multicultural and diverse workforce – challenge for employment relations managers.
 Aspects of Australian work practices (flexible working hours and multi-skilling) affecting the efficiency of
Australian businesses and their productivity, thus their ability to compete in the global marketplace.

Unit summary

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 Employer-employee relationship changing in response to; changing patterns of work, legislation, restructuring
of businesses and globalisation.
 Diversity-based training programs – improve interpersonal skills, cultural differences, and business culture.

 Effective employment relations

The role of employment relations

 Important impact on the business’s survival, growth, profitability, flexibility and competitiveness.
 Job analysis  Maintenance
 Recruitment  Remuneration
 Selection  Motivation
 Development  Performance appraisal
 Training  Working conditions
 Communication  Legal requirements
 Dispute resolution  Separation

Communications systems
 A lot to do with whether employers and employees get along with each other; if employees are able to
discuss their concerns with management as they arise, serious conflict can be avoided.
 Industrial conflict – severe costs may be imposed on the business, on employees and on the economy.
 Monitoring by senior managers, meetings, emails, newsletters, formal meetings and social functions.
 Affects productivity, belonging, empowerment, knowledge of value and business culture.
 Matters such as language, gestures, notion of public and personal space.

Grievance procedures
 Series of steps which set out the process to be followed in the event of a dispute arising in the workplace.
 Aim – to bring about a quick, effective and negotiated end to any issue.
 Awards also set out formal grievance procedures.
1. Meeting with an appropriate member of management.
2. No resolution – discussed at higher level; involves representatives from employer association and union.
3. No agreement – matter may be referred to the Industrial Relations Commission (Fair Work Australia).

Worker participation
 Involves workers, together with their managers, making decisions about matters which affect them.
 Can occur through:
 Joint consultative committees – meeting of management and employee representatives; employees are
consulted about decisions affect them and information about the business is shared.
 Task forces
 Employee representatives on boards of management/ directors
 Worker-directors elected by employees, who sit on boards of public institutions
 Make business reports available to employees for discussion
 Direct methods - team building, quality circles and total quality management.

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 Indirect methods – committees and employee representation.
 Matters concerned: job design, pay and condition, occupational health and safety, new technology, discipline,
new products and equal opportunity.

Team briefings
 A meeting between management and team members where discussion can take place.
 Benefits:
 Reinforces management  Helps people accept change
 Increases commitment  Controls informal movement of information
 Prevents misunderstandings  Improves upward communication

Rewards
 Generally have a direct impact on employee productivity and morale.
 Some determined by legislation – superannuation, sick leave, annual leave and minimum wage rates.

Financial rewards
 Awards: legally enforceable documents made by industrial tribunals that determine the minimum wage.
 Over-award payments: above the minimum amount set down in that award.
 Enterprise agreements: made between the employer and employees at a particular enterprise or business.
 Individual contracts: made between the employer and an individual employee.
 Performance-related pay schemes: some of the employee’s total remuneration is based on the
performance of the individual or the work group to which they belong.

Non-financial rewards
 An organisation’s reward structure impacts on cost of production, productivity, employee turnover and overall
performance.
 Work best when individualized, equitably distributed, visible to other employees, flexible and allocated at
relatively low cost.
 Managers need to be aware of what motivates employees.
 Fringe benefits:
 Include company cars, discounts, super contributions, insurance, education expenses, etc.
 Fringe Benefits Tax ensures tax is paid.
 Status:
 Refers to factors such as office size and location, formal awards/ recognition, autonomy and job variety.
 Intrinsic rewards:
 Come from the nature and content of the work itself; people are motivated by what their job entails, the
responsibilities involved, and the degree of control they have over the structure of their work.
 Include choice of job, interesting work, flexible hours, challenges and growth of the individual.

Training and development

 Improves performance of people in a business, and competitiveness of a business.
 Important for promotion and career development.
 On-the-job training: job rotation, apprenticing, coaching and mentoring.
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  Off-the-job training: classroom lectures, simulation exercises, films, conferences and apprentice training.
 Skills/ technical training
 Interpersonal skills training: listening, communication, reducing conflict and problem solving.
 Businesses operate in an environment where there are rapid changes in technology are taking place.
 Training of employees and managers is crucial for success of business.

Induction
 The training of new employees when they start their employment; helps increase an employee’s commitment
to the business and thus reduce turnover.
 Includes information about specific company policies and work rules
 Inform employee about matters relating to occupational health and safety and equal employment policies
 Each organisation has unique culture, established customs and traditions, long-standing unwritten rules and
regulations.
 Comprehensive induction program :
 Reduce initial anxiety
 Enable relations with other workers
 Reinforce valued attitudes
 Develop positive perceptions of the business
 Help understanding of rules, procedures and practices
1. Employees learn about history, conditions, organisational rules, policies and procedures, training and
education opportunities, occupational health and safety measures, and other general information.
2. Orientation: the role of the department is outlined, working arrangements explained, staff introduced.
3. Job induction: new employee may undergo some initial training before starting the job.

Flexible working conditions

 Various changes in society bring about the need for more flexible working conditions, such as varying starting
and finishing times, alternative leave arrangements an the ability to work from home.
 Increasing number of women, and an increasingly multicultural population
 Diversity of family structures; changing role of men and women in work and family life
 Aging population; recognition that people are increasingly caring for the young, the elderly or the ill.

 Flexible working hours allow employees to work an agreed number of hours over a set period of time. To
function effectively, businesses must structure each day with a common core.
 Flexible leave arrangements allow workers to care for family members in case of emergencies, illness and
school holidays; includes time off in lieu, use of annual leave and career breaks.

Family friendly programs

 Benefits:
 Increased productivity  A good corporate image within society
 Improvements in morale and commitment  Increased ability to attract new workers
 Reductions in absenteeism  Reduced stress
 Reductions in lateness  Increased staff retention

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 Permanent part-time work
 Allows workers to balance family commitments with work.
 Permanent part-time worker works less than a full ordinary week or month or year, but is entitled to such
things as sick leave and annual associated with permanent employment.
Job-sharing
 Allows two or more people to share one full-time job.
 Advantage for employer – usually more than one person trained in the job.

Career breaks
 Employee arranges a fixed period away from work; the employer guarantees a job at the end of the period.

Home-based work
 Teleworking/ telecommuting – remain in touch with business via email and phone, etc.
 Increase in productivity due to less talking/ socialising, greater ability to concentrate due to less noise and
fewer interruptions.
 Flexible working hours, savings on travel costs, greater control over the scheduling of work times.

Parental leave
 Time taken off work to care for children for the first year of their life; entitled to 52 weeks unpaid leave.

Personal carers’ leave

 Employees under federal awards are entitled to use sick leave and bereavement leave to care for sick family.

Childcare
 Issues – cost of childcare and its availability to fit in with work requirements.
 Schemes available – school holiday care, before and after school care, home based care, etc.
 Some employers have established own childcare centres, or combine in joint ventures with other childcare
providers. Others establish a family room in the workplace.

Shiftwork
 Working outside the normal spread of hours, working continuous shifts and working a permanent shift
outside normal business hours.

Measures of effectiveness

Levels of staff turnover

 Turnover refers to the rate at which employees leave the business to be replaced by new employees.
 Voluntary – resignation or retirement
 Involuntary – dismissal or retrenchment
 High levels of turnover indicate that employees are not satisfied and that E.R. is not effective.
 Costly for business because new employees have to be recruited and trained; also risk losing experienced
employees; productivity is affected.

Absenteeism
 The percentage of employees, on an average day, who are away from work or on sick leave without leave
being approved in advance.

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 Indication of E.R. problems.
 Level of absenteeism – indicator of overall morale and job satisfaction.
 It can increase overall labour costs and lower productivity by disrupting work flow, making extra demands on
other employees and reducing output.

Disputation
 The withdrawal from work by a group of employees who are not happy about something.
 Stop-work meetings, overtime bans, work to rule, go slows and strikes.
 Matters generally about management policy, working conditions, pay issues, union rights or award provisions.

Quality
 Quality management focuses on the continuous improvement of the systems within business.
 Depends on the right environment and culture, and the right people who are adequately trained/ motivated.
 Quality is about people’s attitudes, and managers who draw on the knowledge/ skill of their employees.
 Work groups – improve employment relations, productivity, efficiency, employee commitment and morale.
 Quality circles – work groups who share an area of responsibility; they meet regularly to investigate quality
problems, recommend solutions and take corrective action.
 Team building and total quality management – achieve employee representation, management change,
method for employees to discuss their grievances.

Benchmarking
 Involves comparing performance of business against best achievements of similar worldwide organisations.
 E.R. can be benchmarked on an industry by industry, or business by business basis.
 A business meets best practice when it is internationally competitive through efficient work and management
practices, including reforms such as restructuring.

Unit summary

 Management of people has impact on business survival, growth, profitability, flexibility and competitiveness.
 Grievance procedure – form of communication which sets out steps to be followed in event of a dispute.
 Worker participation – involving employees in decision making about matters such as working conditions;
team building, quality circles, committees or employee members on boards.
 Rewards – financial, non-financial or intrinsic.
 Ideally, most effective reward system will be flexible; suited to each individual employee.
 Training and development improves performance of people in a business, thus the competitiveness.
 Governments and employers have come to recognise that achieving a balance between work and family is
important if workers are to be happy and productive. Result – developing family friendly working conditions.
 Measuring effectiveness of the employment relationship:
 Staff turnover
 Absenteeism
 Level of disputation
 Quality management – progressive management, union support and employee involvement are critical in
achieving continuous improvement. Employment relationship should be reflected in quality practices.

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 The legal framework of employment

The employment contract

 An individual contract of employment exists between every employer and employee.
 Creates rights and responsibilities set down in awards, agreements and legislation.
 Contract of service – an employee is subject to the control and direction of the employer.
 Individual contractor – performs an agreed task for an agreed price under a contract for service.
 Contract – an agreement which gives rise to legal rights and obligations between parties to it, and which will
be enforced by the courts.

EMPLOYEE INDIVIDUAL CONTRACTOR

Worker’s compensation Covered by law Own, through private insurance
Torts Employer is liable Employer not liable
Contract Binds employer Cannot bind employer
Tax Employer liable (payroll, benefits) Arrange own taxes
Leave entitlements Entitled to statutory/ award Self-employed, own allowance
Awards Industrial award No

Duties of employers
Duty of care
 Providing safe equipment, plant and machinery, and a safe system of work.
 Warning employees of unusual or unexpected risks.
 Instructing/ training for performance of work.
 Duties regarding working conditions/ occupational health and safety set out in legislation.

Duty to pay required remuneration

 Pay correct income as set out in the award, agreement or employment contract.
 Employer must repay employee expenses if they spend money to carry out their work.

Duty to provide work

 Casual contract – no obligation on the employer, no obligation to pay wages when no work is available.
 Continuing contract – employer must pay wages whether work is provided or not.

Right to dismiss
 If employee has failed to: obey lawful instructions, perform duties over a period of time, perform duties with
necessary safety or meet conditions of the employment contract.

Duties of employees
Duty to obey the employer’s lawful, reasonable and safe commands
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 Duty to work with skill, competence and care

Duty of good faith and confidentiality

Duty to disclose information relevant to the employer

The employment contract

 Common law sets the minimum standards of an employment relationship.

 Legislation has much of the responsibility for determining wages and working conditions (protection).
 Legislation developed to resolve disputes; industrial tribunals established to act as third party in resolution.

Statutes
 Fair Work Act 2009 (Cth)
 Fair Work Ombudsman

Awards
 Legally enforceable documents made by industrial tribunals that set out the minimum wages and conditions.
 Cover matters of pay rates, overtime rates, and hours of work, sick leave and annual leave.
 Binding on employers, they generally remain in force unless they are varied or cancelled; industrial tribunals
have the power to increase minimum wages or change certain conditions of employment.
 Award simplification – only 20 allowable matters, others dealt with independently.
 Can operate alongside agreements, or be replaced by them.
 May include enterprise flexibility clauses; allow firms to vary award provisions to suit specific needs.

Agreements
 Informal:
 Oral or written agreements that are not registered or approved by any authority or tribunal.
 Cannot take priority over terms/ conditions set out in an award or formal agreement.
 Employee covered can take legal action under common law if there is a breach.
 Formal:
 Written agreements made under legislation and are lodged with an authority such as Fair Work Australia
or the Employment Advocate for registration or approval.
 Under the Fair Work Act, employees can make enterprise agreements or ITEAs.

Individual Transitional Employment Agreements

 Individual agreement that sets out the employees’ terms and conditions of employment.
 Lodged with the Workplace Authority.

Enterprise agreements
 Collective agreements made between an employer and a group of employees or a union.
 Lodged with the Workplace Authority for approval by Fair Work Australia.
 To be certified, FWA must be satisfied that:
 Agreement passes the no-disadvantage test.

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  The agreement has genuine approval by majority of the employees.
 It contains a dispute settlement procedure.
 The employer did not coerce any employee not to request a union to represent them.
 From 1 January 2010, the better off overall test will apply; compares the terms of a proposed
agreement against the relevant modern award to ensure employees will be better off overall.

Types of employment contract

Permanent and part-time

 Continuing contract of employment of unspecified duration, and are required to work a certain number of
hours per week.
 Conditions for part-time workers are generally on a pro rata basis. E.g. work 3 out of 5 days; entitled to 3/5 th
of annual leave entitlement of a full-time employee under same award or agreement.
 Termination involves a period of notice as specified in the award, agreement or legislation.

Casual
 Casual employees usually employed for short-term, irregular or seasonal work.
 Employer and employee enter into a series of short-term contracts on specific occasions; there is no promise
to provide work or be available for work on other occasions.
 Usually no access to permanent employment entitlements.
 If employed regularly, employee may be entitled to benefits such as super and long service leave.
 Provisions exist to protect casual workers from unfair dismissal if employed regularly for 12 months or more.

Fixed-term
 Employed to work on specific project/ replace employees who are absent on long-service or maternity leave.
 Employee has right to sue employer if the contract is terminated before the expiry date.
 Excluded from Federal unfair dismissal provisions.

Apprenticeships and traineeships

 Agreements between employers and apprentices/ trainees for training and employment.
 Set period of time during which there are special training obligations; leads to recognised qualification.

Tradespeople
 State legislation/ awards require that an employer does not employ anyone under 21 to do tradework unless
they are an apprentice or have completed one.

Unit summary

 The basis of our E.R. system is the common law contract of employment.
 Contract – agreement which gives rise to legal rights/ obligations, and which will be enforced by the courts.
 Legislation is responsible for protecting employees and resolving industrial disputes.

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 No-disadvantage test – applied by the Office of the Employment Advocate to make sure employees will not
be worse off overall if they accept the terms of an agreement.
 Formal agreements are written agreements made under legislation, and are lodged with an authority such as
Fair Work Australia or the Workplace Authority for registration or approval. They take legal precedence over
informal agreements.

 Industrial conflict

Definition and causes

 Employers have sought to cut the costs of wages and conditions, and maintain/ increase the rights of
management.
 Unions representing their members’ interests have wanted to improve their wages and conditions, and to
expand their influence in the workplace.
 ABS definition of industrial conflict – a withdrawal from work by a group of employees, or a refusal by an
employer to allow workers to work.
 Disputes:
 Management policy  Trade unionism
 Physical working conditions  Award provisions
 Pay issues  Leave
 Hours of work  Compensation

Wage demands
 Demand by employees for an increase in their wage rate or changes to the way in which their wages are
calculated or determined.
 Awards set minimum standards; employers/ employees being encouraged to negotiate such matters.

Working conditions
 Concern protective clothing, shortage or condition of equipment, lack of amenities, arduous tasks, etc.

Management policy
 Includes matters of terms/ conditions of employment, new awards/ agreements, promotion or deployment,
disciplinary matters and disagreement with managerial decisions.

Political goals and social issues

 Issues include conscription, urban development, apartheid, conversation, supporting Indigenous people.

Perspectives on conflict
 Unitary view: assumes all employees within the business share the goals of the business as defined by
senior management. This view likens the business to a team or unit.

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 Pluralist view: organisations are made of many parts and have a number of different stakeholders; as a
result, not everyone will share identical interests. Conflict is expected; managers are challenged to develop an
effective system to resolve it.
 Radical view: focuses on the imbalance of power between employers and employees.
 Traditional view: conflict had a negative impact on businesses. It was associated with violence and harm.
Management had responsibility to rid the organisation of conflict.
 Human relations view: conflict was a natural and inevitable occurrence; it cannot be eliminated, thus it
must be accepted and there are times when it may benefit the organisation.
 Interactionist view: encourages ongoing minimum level of conflict, to keep business viable/ self-critical.

Types of industrial action

Overt action
Lockouts
 Workers are not permitted to enter the workplace unless they agree to follow management orders or work as
directed.

Pickets
 Striking workers prevent entry into the workplace.

Strikes
 Employees withdraw their labour in order to enforce a demand or express a grievance.
 More frequent in large enterprises; tend to have higher rates of unionism.

Bans
 Employees work their required number of ordinary hours but refuse to work any extra overtime hours.
 Aims to promote employee demands by restricting output from their workplace.

Work to rule
 Union members work to the strict letter of any agreements or awards, refusing to do any extra duties.
 Results in reduction of output and production disruption.
 Go-slows – workers reduce their rate of output until management meet their demands
 Stop-works – workers leave the job or workplace for a specified period.

Covert action
Absenteeism
 The percentage of employees, on an average day, who are away from work or on sick leave without leave
being approved in advance.
 Hard to distinguish genuine absence from a voluntary absence.

Sabotage
 Deliberate damaging of machinery and deliberate interference with products, systems and procedures.

Labour turnover
 Caused by voluntary resignations; indication of employee dissatisfaction.

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 Exclusion from decision-making in business
 Conflict arising when employees believe they have not been given the opportunity to have their say.
 Managers/ professionals more likely to be consulted than labourers/ sales workers.
 Supervisors discuss changes with employees
 Managers discuss changes with employees
 Other workers told employee
 The union discussed changes
 Notice/ newsletter
 Meeting

Roles of stakeholders in resolving disputes

 Main stakeholders involved in a dispute – workers and management.
 Encourage union and employer associations’ participation – integral role in the resolution of industrial issues.
 The government provides framework and rules under which workers/ management negotiate.
 Employer associations:
 Represent the individual employers who are their members.
 Provide information to resolve disputes.
 Help formulate policies and strategies, process logs of claims served by unions, represent their members
in negotiations with unions, and appear before industrial tribunals on behalf of their members.
 Federal and state governments:
 Provide institutional framework for negotiations between employees and employers.
 Establish rules under which the parties negotiate (individual contracts, enterprise agreements, or in the
conciliation and arbitration system).
 Workplace Authority replaced the Office of the Employment Advocate.

Dispute resolution processes

Grievance procedures
 Encouraged by FWA (previously AIRC) for preventing and settling industrial disputes.
 One of 20 allowable matters in all new awards and a requirement in many existing awards.
1. Grievance discussed by employee and supervisor.
2. Negotiation
3. Mediation
4. Conciliation
5. Arbitration

Negotiation
 A discussion between the parties concerned to try to mutually resolve a dispute, without intervention or
assistance of authorities.
 Union may become involved if direct worker-management negotiations fail to resolve the issue.
 Collective bargaining – negotiation between a union and management/ employer.
 Union officials act on behalf of workers.
 Representative from employer association likely to act on behalf of management.
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 Employees/ employers increasingly encouraged to negotiate workplace agreements to assist in dispute
resolution.

Mediation
 Voluntary negotiation process where a neutral third person assists the parties to resolve their dispute.
 Third party does not act on state or federal legislation.

Conciliation
 Form of mediation ordered by an industrial tribunal.
 Either party informs the industrial registrar of dispute, and requests FWA to call a compulsory hearing.

Arbitration
 An industrial commissioner evaluates the arguments of both parties and comes to a legally binding decision.
 Parties represented by experienced industrial lawyers.

Common law action

 Include these matters:
 Breach of duty of care
 Vicarious liability (actions of employee make employer liable of tort)
 Breach of contract
 If breach concerns a tort (civil wrong), legal action results in compensation.
 If breach concerns a contract, legal action results in common law remedy of damages.

Business/ division closure

 Disputes cost money in lost working time and legal expenses.

Costs and benefits of industrial conflict

Financial costs
 Associated with lost production due to industrial action (stop-work meetings, bans, go-slows and strikes).
 Lost market share to domestic and foreign competitors.
 Reputation for being unreliable supplier due to industrial unrest.
 Increases in administrative costs when dealing with disputes, costs for consultation, etc.
 Costs as result of absenteeism, vandalism or theft.
 Employees suffer from lost wages, sometimes loss of employment.

Personal costs
 Tension as result of unmet demands, stalled negotiations, etc; breakdown of communication.
 Low morale, job dissatisfaction, increased resentment.
 Future problems of absenteeism, labour turnover and falls in productivity.

Social costs
 Workplace problems carried to the home (family breakdown, domestic violence, and drug/ alcohol abuse).

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 Anti-strike or anti-employer sentiments may create potential for violence and social unrest.

Political costs
 Challenged/ damaged political reputations and internal political party disagreement.
 Public opinion of political party may be damaged by mishandling of a dispute.

International costs
 Relate to the lost markets and lost market share because the business and the country gains a reputation as
an unreliable supplier (foreign buyers question Australia’s future dependence).
 Industrial conflict leads to falls in productivity and financial costs are increased; Australian businesses become
less competitive internationally.

Benefits
 Opportunity to express dissatisfaction – workers bring issues to attention of management before any long-
term damage is done.
 New methods – decision-making process, production techniques, negotiation.
 Productivity increased through changes in work and management practices.
 New communication lines opened between workers and management.
 Health and safety issues addressed.
 Overall effect of improving communication/ discussing grievances leads to improved morale, reduced labour
turnover and absenteeism – creates harmonious work environment.

Unit summary
 Unions gradually more directly involved in non-industrial issues (political, social).
 Industrial action:
 Overt: lockouts, pickets, strikes, bans, work to rule.
 Covert: absenteeism, sabotage, turnover, exclusion from decision-making in business.
 Main stakeholders in a dispute – workers (unions) and management (employer associations).
 Government provides framework and rules for workers/ management to negotiate.
 Dispute resolution process:
1. Grievance procedures
2. Negotiation
3. Mediation
4. Conciliation
5. Arbitration
 Overall effect of improving communication and discussing grievances - increased productivity, efficiency and
competitiveness.

 Ethical and legal aspects

 Numerous issues in the workplace impact on the employer-employee relationship.
 Working conditions and worker’s compensation have always been in the forefront.
 Other issues have gained importance – occupational health and safety, anti-discrimination, EEO and unfair
dismissal.

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Working conditions
 Includes matters of job design, work hours, participation in decision-making, physical conditions, flexibility,
communication, health and safety, and the employment contract.
 Traditionally, awards set out work conditions and entitlements.
 Under the FWA, there is more emphasis on enterprise agreements and ITEAs.
 Intended to be more flexible and suited to individual employees.
 Awards now act as a safety net, providing minimum wages and conditions.
 No guarantee that issues outside the 20 allowable matters will be included in agreements.
 The better off overall test – compares terms of a proposed agreement against the relevant modern award to
ensure employees will not be disadvantaged.

Occupational health and safety

 Each state/ territory has an occupational health and safety act, setting out laws that applying to a workplace
to ensure people do not suffer injury or illness.
 Non-compliance results in a fine, issuing of an improvement, a prohibition notice or imprisonment.
 Codes of practice – give practical advice and guidance on how to comply with general obligations.
 Employer associations, trade unions and industry bodies jointly develop standards for their industry.
 Duty of care makes it mandatory for duty holder to anticipate possible causes of injury/ illness and do
everything reasonably practicable to remove or minimise these causes of harm.
 Benefits:
 Increased productivity
 Lower workers’ compensation costs
 Less down-time at work
 Increased efficiency
 OHS committees – monitor the workplace; identify risk areas and safe workplace procedures.
 Occupational Health and Safety Act 2000 (NSW)

Workers’ compensation

 These laws provide compensation payments for workers if they are injured as a result of their work.
 Workers’ Compensation Act 1987 (NSW) and the Workplace Injury Management and Workers’ Compensation
Act 1998 (NSW) – establish a statutory, no fault system of compensation.
 Legislation aims to maintain a regular income for the period that employee is unable to carry out usual work,
and to pay for associated medical expenses.
Emphasises rehabilitation and retraining, as well as monetary compensation.
 Employer retains a trained and experienced worker and minimises cost impact on insurance premiums.
 Employer liable to pay compensation is required to take out an insurance policy.
 Workers’ compensation claims can be reduced by:
 Changing conditions that cause accidents.
 Reducing accidents/ poor health through programs
 Rehabilitation programs to get injured workers back to work ASAP.

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 State and Federal agencies
 WorkCover Authority of NSW manages compliance, safety, injury management, and compensation systems.
 Workers’ Compensation Advisory Council for NSW provides advice and recommendations to Minister for
Industrial Relations on compensation and OHS policy and legislation.

Common law redress

 Provides mechanism for injured workers to seek redress for employer’s negligence.
 Fault must be established and attributed to the employer.
 Court mainly considers the economic contributions each party make; this establishes if a duty of care exists.

Anti-discrimination

 Direct – treating one person less favourably than another on basis of particular characteristics.
 Indirect – treating everyone equally, in a way that ends up being unfair to people with particular attributes.
 Unlawful even if untended, and unlawful to discriminate against applicants.
 Prevention:
Obtain support for implementing strategy to address issues.
Develop written policy to prohibit discrimination; regularly distribute and promote.
Monitor and ensure responsibilities are fulfilled by all workers.
 NSW Anti-Discrimination Board – hears general/ legal inquiries, and formal complaints.

Equal employment opportunity

 Ensuring all employees are treated with fairness and respect in the workplace.
 Affirmative Action (Equal Employment Opportunity) Act 1986 : employers required to develop an Affirmative
Action program, designed to eliminate discrimination against women.
 Equal Opportunity for Women in the Workplace Act 1999:
 Promote principle that women should be dealt with on basis of merit.
 Elimination of discrimination, and provision of equal opportunity for women.
 Equal opportunity program addresses – recruitment, promotion, separation, training and development, pay
equity, sexual harassment, work and family, and occupational segregation.

Unfair dismissal

 Dismissal – employee has their employment terminated for reasons other than redundancy.
 Unfair dismissal – harsh, unjust or unreasonable.
 Factors to determine unfair dismissal:
Valid reason?
Notification of reason to employee
If employee had opportunity to respond to reason
If it related to unsatisfactory work performance
 Unlawful reasons for dismissal:

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  Illness or injury
 Trade union activities or membership
 Race, sex, gender, etc.
 Refusing to negotiate/ sign an agreement
 Maternity/ parental leave
 Notice (pay in lieu) not required in serious cases of misconduct.
 Law requires process of written warnings/ counselling and time allowed for improved performance before
someone can be dismissed fairly.

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