Chapter 3 – Industrial relations: frameworks and practices

TRUE/FALSE

1. The Fair Work Act 2009 replaced the WorkChoices legislation.

ANS: T PTS: 1 DIF: Moderate TOP: Introduction

2. The industrial relations system is a simple, stable network of social regulation.

ANS: F PTS: 1 DIF: Easy TOP: Introduction

3. Industrial relations and employee relations cover the same subject area.

ANS: F PTS: 1 DIF: Easy TOP: Introduction

4. Industrial relations has implications for organisations, individuals and society as a whole.

ANS: T PTS: 1 DIF: Easy TOP: Introduction

5. In Australia, the major parties involved in industrial relations are employers and their associations,
employees and their trade unions, and governments who play a significant role through legislative,
judicial and administrative functions.

ANS: T PTS: 1 DIF: Easy TOP: Introduction

6. The Workplace Relations Amendment (WorkChoices) Act 2005 was the subject of a successful High
Court challenge of its constitutionality by state governments.

ANS: F PTS: 1 DIF: Moderate TOP: Introduction

7. The shift from personnel management to SHRM signified the strengthening of the position of human
resource management in the strategic interests of the organisation.

ANS: T PTS: 1 DIF: Easy TOP: Industrial relations and

SHRM

8. HR practitioners do not require a working knowledge and understanding of the various laws relating to
employment.

ANS: F PTS: 1 DIF: Easy TOP: Industrial relations and

SHRM

9. There should be no link between the ways in which strategic HR managers manage industrial relations
and their organisation’s human resource strategy.

ANS: F PTS: 1 DIF: Easy TOP: Strategic HRM and the

industrial relations framework

10. Terms and conditions of work are determined by an industrial relations framework.

ANS: T PTS: 1 DIF: Moderate TOP: The industrial relations

 framework in Australia

11. A bargaining framework describes the institutionalised arrangements by which employers and
employees set the terms of the employment relationship.

ANS: T PTS: 1 DIF: Easy TOP: The industrial relations

framework in Australia

12. The dimensions of the Australian bargaining framework are restricted to the legislation, the industrial
relations institutions and the instruments of regulation.

ANS: F PTS: 1 DIF: Difficult TOP: The industrial relations

framework in Australia

13. The current Australian federal framework covers both private and public sector employees.

ANS: F PTS: 1 DIF: Difficult TOP: The industrial relations

framework in Australia

14. Throughout most of the twentieth century, the Commonwealth and state arbitration tribunals provided
very little in the way of an institutional framework for determining employment conditions in
Australia.

ANS: F PTS: 1 DIF: Moderate TOP: A brief history

15. The latest phase of re-regulation in Australia emphasised the protection of individual employment
rights.

ANS: T PTS: 1 DIF: Easy TOP: A brief history

16. In 1996, the New South Wales State Government was the first state government to cede its industrial
relations powers to the federal government.

ANS: F PTS: 1 DIF: Moderate TOP: A brief history

17. Until the late 1980s, federal and state awards covered approximately 60 per cent of all Australian wage
and salary earners.

ANS: F PTS: 1 DIF: Moderate TOP: A brief history

18. Since the late 1980s, Australian governments have favoured a more centralised and regulated approach
to the management of the employment relationship.

ANS: F PTS: 1 DIF: Moderate TOP: A brief history

19. WorkChoices came into effect in March 2006, and remained until new industrial relations legislation
was introduced in 2010.

ANS: F PTS: 1 DIF: Easy TOP: A brief history

20. The Fair Work Act 2009 has a greater focus on protecting individual workers’ rights.
 ANS: T PTS: 1 DIF: Moderate TOP: A brief history

21. On 1 January 2010, the National Employment Standards commenced.

ANS: T PTS: 1 DIF: Moderate TOP: The Fair Work Act 2009

22. Good faith bargaining is now required by both negotiating parties.

ANS: T PTS: 1 DIF: Moderate TOP: The Fair Work Act 2009

23. The unfair dismissal regime now covers only those companies with 15 or more employees.

ANS: T PTS: 1 DIF: Easy TOP: The Fair Work Act 2009

24. It is estimated that the Fair Work Act 2009 covers 85 per cent of the working population.

ANS: T PTS: 1 DIF: Easy TOP: Definitions: employers and

employees

25. The NES provide a minimum 10 conditions with which all employers in the federal system must
comply.

ANS: T PTS: 1 DIF: Moderate TOP: The National Employment

Standards

26. The institutions that were granted authority by the Fair Work Act 2009 are Fair Work Australia, Office
of the Fair Work Ombudsman and the Fair Work Divisions of the State Court.

ANS: F PTS: 1 DIF: Moderate TOP: The industrial relations

institutions

27. The workplace relations system is assisted by the general manager and administrative staff.

ANS: T PTS: 1 DIF: Easy TOP: The industrial relations

institutions

28. Unity and collective action are the foundation concepts of unionism.

ANS: T PTS: 1 DIF: Moderate TOP: The union movement

29. It is voluntary for employees to participate in union activity.

ANS: F PTS: 1 DIF: Difficult TOP: Unions under the Fair Work
Act 2009

30. The focus on arbitration and collective representation has been steadily decreasing over the last two
decades.

ANS: T PTS: 1 DIF: Moderate TOP: Unions under the Fair Work
Act 2009

31. There are approximately 130 unions in Australia.

ANS: T PTS: 1 DIF: Easy TOP: The union movement

32. Under the Fair Work Act 2009, unions can enjoy a less hostile environment.

ANS: T PTS: 1 DIF: Moderate TOP: Unions under the Fair Work
Act 2009

33. Unions can choose to give 24 hours’ notice to employers before a site visit.

ANS: F PTS: 1 DIF: Moderate TOP: Unions under the Fair Work
Act 2009

34. Unions were the main agents in the campaign behind the demise of WorkChoices.

ANS: T PTS: 1 DIF: Moderate TOP: Unions under the Fair Work
Act 2009

35. Sheldon and Thornthwaite note that few employer associations provide an industrial relations service.

ANS: T PTS: 1 DIF: Moderate TOP: Employers and employer

associations

36. Employer association membership is increasing, especially among organisations with more than 500
employees.

ANS: F PTS: 1 DIF: Easy TOP: Employers and employer

associations

37. Collective bargaining and good faith bargaining are the key processes in the current Australian
industrial relations regime.

ANS: T PTS: 1 DIF: Easy TOP: The processes

38. Collective bargaining can be used to supplement employees’ work terms and conditions above the
minimum provisions of the NES.

ANS: T PTS: 1 DIF: Easy TOP: The processes

39. Enterprise bargaining is the form of individual bargaining that was dominant in Australian industrial
relations during the 1980s.

ANS: F PTS: 1 DIF: Moderate TOP: The processes

40. Union greenfields agreements are made between employers and unions when an organisation has at
least one member employed in a single business (or part of a business).

ANS: F PTS: 1 DIF: Moderate TOP: The processes

41. Good faith bargaining generally expects that the parties will attend meetings as arranged, provide
information and proofs, respond to proposals in a timely manner and give genuine consideration to the
proposals made by the parties in negotiation.

ANS: T PTS: 1 DIF: Easy TOP: Good faith bargaining

42. Good faith bargaining requires parties to make concessions and to conclude or reach agreement.
 ANS: F PTS: 1 DIF: Easy TOP: Good faith bargaining

43. Multi-employer bargaining is permitted for all pay levels in the workplace.

ANS: F PTS: 1 DIF: Easy TOP: The low-paid bargaining

stream

44. A secret ballot must be held before employees can go on strike.

ANS: T PTS: 1 DIF: Easy TOP: Industrial action

45. Between 1996 and 2007, AWAs operated only in New South Wales.

ANS: F PTS: 1 DIF: Easy TOP: The instruments of

regulation

46. Awards may include 20 conditions of employment.

ANS: F PTS: 1 DIF: Easy TOP: Modern awards

47. Enterprise agreements can be a single enterprise agreement, a multi-enterprise agreement or a

greenfields agreement.

ANS: T PTS: 1 DIF: Easy TOP: Enterprise agreements

48. An employee must satisfactorily complete a probationary period of three months before he or she is
protected by unfair dismissal laws.

ANS: F PTS: 1 DIF: Moderate TOP: Unfair dismissal

49. The national workplace relations system was created to avoid uncertainty and duplication across
companies operating nationwide.

ANS: T PTS: 1 DIF: Easy TOP: The state workplace

relations systems

50. On induction, employees should be provided with a Fair Work Information Statement.

ANS: T PTS: 1 DIF: Easy TOP: Professional Tip:

Understanding the Fair Work Act 2009

MULTIPLE CHOICE

1. During the 1980s, significant changes in industrial relations legislation came about due to the need for:
A. increased workplace flexibility.
B. efficiency.
C. competition.
D. All choices are correct.

ANS: D PTS: 1 DIF: Easy TOP: Introduction

2. The focus on shifting attention from the national and industry level to the workplace level has been
paramount to governments’ industrial relations policies over the past ________ years.
A. two
B. 10
C. 20
D. 25

ANS: C PTS: 1 DIF: Easy TOP: Introduction

3. Since 1996, Australian federal legislation has used the term ‘________ relations’ rather than
‘industrial relations’, which stresses the focus on the organisational level, rather than the national or
industry level.
A. administrative
B. human
C. worker
D. workplace

ANS: D PTS: 1 DIF: Easy TOP: Introduction

4. State governments in Australia strongly opposed WorkChoices, even undertaking a High Court
challenge on the ________ of the new legislation.
A. appropriateness
B. ethics
C. constitutionality
D. A, B and C are all incorrect.

ANS: C PTS: 1 DIF: Easy TOP: Introduction

5. Which of the following statements about industrial relations management is not true?
A. There is little, if any, variance in responses to industrial relations issues between
organisations and over time.
B. Strategic HR managers seek to link the way in which they manage industrial relations to
the human resource plans and policies of the organisation.
C. Prior to the shift to strategic HRM, personnel management and industrial relations were
generally considered to be separate functional entities in organisations.
D. The relationship between industrial relations and HRM is often uneasy and contested.

ANS: A PTS: 1 DIF: Difficult TOP: Industrial relations and

SHRM

6. The term ‘________ framework’ describes the arrangements through which employers and employees
determine and set the terms and conditions of the employment relationship.
A. bargaining
B. occupation
C. arbitration
D. negotiation

ANS: A PTS: 1 DIF: Moderate TOP: The industrial relations

framework in Australia
 7. The dimensions of the Australian bargaining framework include the legislation, the industrial relations
institutions, the major parties or bargaining agents, the industrial relations processes and the:
A. instruments of regulation.
B. Australian Industrial Relations Commission.
C. enterprise bargaining arrangements.
D. unions and employer associations.

ANS: A PTS: 1 DIF: Moderate TOP: The industrial relations

framework in Australia

8. The Commonwealth Court of Conciliation and Arbitration had the power to determine the terms of
employment by ________ when these issues could not be settled amicably by employers and
employees.
A. writing employment contracts
B. appointing on-site union representatives
C. making awards
D. A, B and C are all incorrect.

ANS: C PTS: 1 DIF: Moderate TOP: A brief history

9. The Labor government introduced the Fair Work Act 2009 in:
A. 2011
B. 2010
C. 2009
D. A, B, and C are all incorrect.

ANS: C PTS: 1 DIF: Easy TOP: A brief history

10. The main reason for the introduction of the Fair Work Act 2009 was to:
A. enhance aspects of WorkChoices.
B. realign power in favour of the employer.
C. realign power in favour of the employee.
D. remove unpopular aspects of WorkChoices.

ANS: D PTS: 1 DIF: Moderate TOP: A brief history

11. Until the late 1980s, federal and state awards covered almost ________ per cent of all wage and salary
employees in Australia.
A. 80
B. 55
C. 75
D. 85

ANS: A PTS: 1 DIF: Moderate TOP: A brief history

12. According to Wailes and Lansbury (1997), reforms that gradually displaced the centralised nature of
the Australian industrial relations system occurred in three phases. Which of the following is not one
of these phases?
A. Coordinated centralism
B. Fragmented flexibility
C. Coordinated flexibility
D. Coordinated decentralism

ANS: A PTS: 1 DIF: Difficult TOP: A brief history

13. The NES and modern awards commenced on:

A. 1 January 2009.
B. 1 July 2009.
C. 1 January 2010.
D. 1 July 2010.

ANS: C PTS: 1 DIF: Easy TOP: The Fair Work Act 2009

14. Which of the following is not an important aspect of the Fair Work Act 2009?
A. It established a new tribunal called Fair Work Australia.
B. It ensured that minimum wages would be set by the Minimum Wage Panel of Fair Work
Australia.
C. It legislates that modern industry awards are created and include 10 conditions; one of
these conditions is the minimum wage.
D. It includes a requirement for the negotiating parties to bargain collectively.

ANS: D PTS: 1 DIF: Difficult TOP: The Fair Work Act 2009

15. The NES cover all of the following areas, except:

A. minimum hours of work.
B. annual leave entitlements.
C. community service leave.
D. a Fair Work Information Statement.

ANS: A PTS: 1 DIF: Moderate TOP: The National Employment

Standards

16. The Fair Work Act 2009 institutions do not include:

A. Fair Work Australia.
B. Fair Work Divisions of the Federal Court.
C. Office of the Fair Work Ombudsman.
D. Fair Work Divisions of the State courts.

ANS: D PTS: 1 DIF: Moderate TOP: The industrial relations

institutions

17. Each state in Australia has industrial relations legislation that operates in that state, except:
A. Victoria.
B. Tasmania.
 C. South Australia.
D. New South Wales.

ANS: A PTS: 1 DIF: Moderate TOP: The state workplace

relations systems

18. Which state or territory may hamper a truly national system?

A. Victoria
B. Northern Territory
C. Western Australia
D. Tasmania

ANS: C PTS: 1 DIF: Moderate TOP: The state workplace

relations systems

19. Which of the following is an area of state law?

A. Sick leave
B. Parental leave
C. Workers’ compensation
D. A, B and C are all correct

ANS: C PTS: 1 DIF: Difficult TOP: Associated legislation

20. The rules of employment relations include:

A. a set of 10 minimum standards of employment.
B. a main institution: Fair Work Australia.
C. the stipulation that one national system will govern most private sector employees.
D. A, B and C are all correct.

ANS: D PTS: 1 DIF: Moderate TOP: Implications for human

resource management

21. What do HR managers need to recognise within the Australian workforce?

A. The declining size of the cohort studying in higher education institutions
B. Family pressures
C. The ever-changing mix of female versus male employees
D. Fluctuating social and demographic characteristics

ANS: D PTS: 1 DIF: Moderate TOP: Implications for human

resource management

22. The Fair Work Information Statement must contain:

A. union rights.
B. company policies.
C. termination of employment.
D. the HR strategy.

ANS: C PTS: 1 DIF: Difficult TOP: Professional Tip:

 Understanding the Fair Work Act 2009

23. Union density refers to:

A. the percentage of men and women in unions.
B. the percentage of the unpaid workforce that belongs to a union.
C. the percentage of the paid workforce that belongs to a union.
D. the total number of unions in a state.

ANS: C PTS: 1 DIF: Easy TOP: Unions and the union

movement

24. Which of the following statements about union density in Australia is true?
A. There is a higher proportion of union membership among employees in the private sector
than in the public sector.
B. There are higher rates of unionisation among part-time workers than full-time workers.
C. Rates of unionisation are constant across different sectors and segments of the labour
force.
D. A, B and C are not true.

ANS: D PTS: 1 DIF: Moderate TOP: Unions and the union

movement

25. Building alliances among unions has led to the rise of inter-union institutions known as:
A. reforms committees.
B. peak bodies.
C. industrial tribunals.
D. collective bodies.

ANS: B PTS: 1 DIF: Moderate TOP: The union movement

26. The peak national union body in Australia is the:

A. Labour Council.
B. Australian Council of Trade Unions.
C. United Trades and Labour Council.
D. Council of Unions.

ANS: B PTS: 1 DIF: Easy TOP: The union movement

27. ‘Rights of entry’ refers to the ability of ________ to enter a workplace.

A. employees
B. union organisers
C. employers
D. AIRC investigators

ANS: B PTS: 1 DIF: Easy TOP: Unions under the Fair Work
Act 2009
28. A review of some of the major industrial disputes in Australia over recent years suggests that a number
of key employers in the ________ and ________ industries have deliberately adopted a more
aggressive or strategic approach to relations with unions.
A. mining; construction
B. maritime; construction
C. construction; transport
D. mining; maritime

ANS: D PTS: 1 DIF: Difficult TOP: Employers and employer

associations

29. ________ is the process of using a third, independent party to unilaterally decide the resolution to a
conflict.
A. Arbitration
B. Negotiation
C. Collective bargaining
D. Conciliation

ANS: A PTS: 1 DIF: Easy TOP: The processes

30. An agreement by employers and unions on the general terms under which employees consent to work
is ________ bargaining.
A. enterprise
B. collective
C. good faith
D. union

ANS: B PTS: 1 DIF: Moderate TOP: The processes

31. Which of the following statements about the rules affecting industrial action and union activity under
current Australian legislation is not true?
A. A secret ballot must be held in order to go on strike.
B. The majority of employees must vote in the ballot.
C. There are no restrictions on when employees and unions may lawfully take industrial
action.
D. A majority of the votes must be in favour of the action.

ANS: C PTS: 1 DIF: Moderate TOP: Industrial action

32. An employee can enter into a common law contract when he or she starts earning more than:
A. $90 000 per year.
B. $100 000 per year.
C. $110 000 per year.
D. $120 000 per year.

ANS: B PTS: 1 DIF: Easy TOP: The instruments of

regulation
SHORT ANSWER

1. Briefly outline the differences between the WorkChoices legislation and the Fair Work Act 2009.

ANS:
The Fair Work Act 2009 retained much of the architecture of the WorkChoices system – such as
implementing a national rather than a state-based system – but also introduced some important
additions. It created a new institution, additional minimum employment standards as a result of
articulated national and award entitlements, and new bargaining rules for employers and employees.

PTS: 1 DIF: Moderate TOP: Introduction

2. Discuss an employee’s rights in terms of union membership.

ANS:
Employees are free to join trade unions. The concept of freedom of association refers to the rights of
employees to belong or not to belong to a union. Under the Fair Work Act 2009, employees are ‘(i)
free to become, or not become, members of industrial associations; and (ii) free to be represented, or
not represented, by industrial associations’. Employees are also ‘free to participate, or not participate,
in lawful industrial activities’. (Fair Work Australia, 2009)

PTS: 1 DIF: Moderate TOP: Unions under the Fair Work Act 2009

3. Outline the key features of an enterprise agreement under the Fair Work Act 2009.

ANS:
Agreements must have a nominal expiry date, and their maximum term is four years.
Agreements should include matters relevant to the particular enterprise, such as:
 rates of pay;
 employment conditions – for example, hours of work, meal breaks and overtime;
 consultative mechanisms;
 dispute resolution procedures; and
 deductions from wages for any purpose authorised by an employee.

The employer should ensure that their employees see the enterprise agreement. The
agreement is voted on by employees and, if approved by a majority, it then goes to the Fair
Work Commission for approval. Agreements must not include discriminatory or
objectionable terms, and must not contravene the NES.

PTS: 1 DIF: Moderate TOP: The industrial relations institutions

ESSAY

1. With the introduction of the Fair Work Act 2009, HRM has witnessed considerable implications in
industrial relations. Discuss these implications.

ANS:
The Fair Work Act 2009 has affected the Australian employment relations environment in two ways:
firstly, it has changed the actual rules of employment relations, otherwise known as the macro-
regulatory context; and secondly, it has changed the micro-environment.

The new macro-context can be summarised as follows:

  The Fair Work Act 2009 sets 10 minimum standards of employment, including two new
employee rights to request.
 Fair Work Australia is the main institution.
 Most private sector employees come under the one national system.

The micro-environment requires HRM to recognise the rights of employees as individuals and slightly
shift the balance of power in the employment relationship. As a consequence, there are new challenges
and opportunities for the management of human resources.

Many aspects of HRM will be affected by the above. The effects include:
 a potential for change across all aspects of the HR function;
 influencing the types of contracts between employers and employees;
 influencing the selection and management of employees;
 influencing the resolution of workplace disputes;
 influencing the provision of channels for employee voice;
 a potential for a diverse set of outcomes from HRM;
 an increased opportunity to exercise strategic choice and to determine the parameters of the
employment relationship;
 a recognition of the changing social and demographic characteristics of the Australian
workforce; and
 employee requests for more from their employers, such as more flexible working
arrangements.

External factors, such as the declining size of the labour force relative to the population; the increasing
demand for skills; changing age demographics; the shifting mix of female and male participation in the
paid workforce; and the corollary of time and family pressure outside of paid work all create a labour
market of great diversity and, in some situations, intense competition.

Answers will require manual marking.

PTS: 1 DIF: Moderate TOP: Implications for human resource management

2. Discuss the relationship of the Fair Work Act 2009 to unions and to employees.

ANS:
The Fair Work Act 2009 does not distinguish between union and non-union agreements, and the
emphasis is still on enterprise-level negotiations. Enterprise agreements work in conjunction with the
NES and modern awards, and there is a requirement to bargain in good faith. The question becomes,
then, whether IR/HR practitioners in organisations understand the implications of these principles.

The Fair Work Act 2009 restored some of the provisions for union representation that were previously
present. Where unions are already representing employees, or where there is a request for
representation from employees, unions have rights of access.

Employers may need to reconsider the way in which they relate to unions. Decisions about the
direction an organisation takes in relation to unions will not only impact the union–employer
relationship, but also send a signal to all employees about what sort of HRM model is to be followed
by the employer, and how much genuine consultation is to occur.

Employees, however, are recognised as individuals, and also as members of collectives – or unions. In
a way not dissimilar to that advocated in much of the HRM literature, there continues to be an
opportunity for HR managers to influence relations with employees. But what form is this influence to
take? Are relations to be based on commitment or control?
 In the medium term, there is also a sense that many employees could be unfamiliar with the legislation
and uncertain about what their employer’s response to it will be. However, employees may also sense
that they have more rights at work. For instance, they do have the right to request changes in work
arrangements and extensions of unpaid parental leave.

The right to request flexible work arrangements is not a guarantee that employees can have flexible
work arrangements, but employers must consider the requests, and may only reject a request on
reasonable business grounds. The reasons for refusal must be in writing, and provided to the employee
within 21 days of the request.

Answers will require manual marking.

PTS: 1 DIF: Moderate TOP: Agreement-making, relations with unions and

relations with employees

3. ‘It has become increasingly important for HR managers to be on top of their games when it comes to
understanding the federal industrial relations framework in Australia.’ Discuss.

A good answer will note that, with the different bargaining choices available, and with legislative
reinforcement of individual and direct employer–employee (or union) bargaining (without third-party
intervention), the focus of the employment relationship has now shifted to the workplace. (In other
words, higher levels of the organisation no longer necessarily play a prominent role in bargaining.)

This means that HR practitioners now require extensive knowledge of the constantly changing
industrial law system, and need a diversity of skills, including negotiation skills, contractual skills and
enhanced people skills. Line managers’ and senior managers’ increasing involvement in employment
relationships means that awareness of HR practices and skills has become imperative at a wider range
of levels in organisations. A range of decisions need to be made, and options considered, regarding the
legal form of agreement to apply to set the conditions of employment. These decisions pertain to issues
including the choice of federal or state jurisdiction; the selection and recognition of bargaining agents;
the scope of the agreement; and the coverage of the agreement.

The Fair Work Act 2009 provides for good faith bargaining; restrictions on the content of agreements;
a single stream of collective enterprise agreements; a streamlined process for approval; and an
enhanced role for union officials as bargaining representatives and participants in dispute resolution.
There is no provision for the making of individual statutory agreements.

Answers will require manual marking.

PTS: 1 DIF: Moderate TOP: The processes