Australian Business Report

A REPORT ON EMPLOYMENT RELATIONS FOR WORKPLACE PRODUCTIVITY

AND PERFORMANCE

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Executive Summary

In the contemporary world of civilization, the primary interest of employers is the

employment relation policies that enhance workplace performance and productivity. Similarly,

employees are often inclined to work in an environment that exist employment relation strategies

that emphasizes and promotes equity, fairness, and a better salary. The modern employment

relation policies are aimed at enhancing the fair relationships among the employees and the

employers through trade Unions. The Unions Act as a podium for negotiations between the

employers, and the employees for improved working conditions and terms of employment.

However, in between, the government plays a crucial role in the negotiations as a mediator.

Therefore, the report advocates for Australian employment relations to be structured to meet the

standards of the contemporary world of globalization so as to contribute to workplace

productivity and performance. The paper identifies and outlines the opportunities and the

limitations that arise from adopting the structures that promote workplace performance and

productivity by the Australian employment relations. The report concludes by stating the various

opportunities in the labor industry that are as a result of the adoption of employment relations.

Therefore, the system should fully be restructured to meet the modern criterions.

Contents

CHAPTER 1 INTRODUCTION .......................................................................................................................... 5

1.1 Introduction ........................................................................................................................................ 5

1.2 Background of Analysis ....................................................................................................................... 6

1.3 Definition of Terms ............................................................................................................................. 6

CHAPTER 2 LITERATURE REVIEW .................................................................................................................. 7

2.1 Historical Context of Employment Reforms ....................................................................................... 7

2.2 Australian Industrial Reforms ............................................................................................................. 7

2.3 Demerits of the Current System ......................................................................................................... 8

Chapter 2 DISCUSSIONS ................................................................................................................................ 9

Chapter 3 CONCLUSION AND RECOMMENDATION .................................................................................... 13

3.1 Conclusion ......................................................................................................................................... 13

3.2 Recommendation .............................................................................................................................. 13

References .................................................................................................................................................. 14

CHAPTER 1 INTRODUCTION

1.1 Introduction

The work relations operate under a legal framework that is set by the government on

industrial relations. The legislation of appropriate employment relations should consider the

requirements of both the employer and employee. The requirements are based on the fact that

both the employer and the employee want to gain from the other; however, they also rely on each

other for personal benefit. The appropriate employment industrial should be structured so as to

address and consider the imbalances of authority while offering both entities equal opportunity

for control. The policies should be structured appropriately to facilitate the participation of

employees in daily decision-making at the workplace. The paper, therefore, supports and

encourages the Australian employment relations to be reorganized so as to advance to the

standards of the contemporary world of globalization and contribute to workplace productivity

and performance. The methods used to manage and control labor law is the greatest concern of

the employment relations in Australia. Appropriate employment relations should be structured so

as to protect both the employer and the employee by safeguarding the week, hence leading to

minimum wage. When bargaining, power determines the contracting and the collective ability of

an individual. The one with the most power thus has the highest negotiating strength and to be

influential; whether the employee or the employers. Since bargaining is defined as ones or a

group’s ability to attain what they desire, therefore, it suggests that either the employer or the

employees will have more power at the expense of the other. Therefore, with the structuring of

employment relation policies, power has to be considered at the point of control. That is the

difference between the decisions made by the management and those jointly made with the

employees. I, therefore, believe that the appropriate police need to be implemented and

structured that will offer equality to both the employers and the workers to enhance workplace

productivity and performance.

1.2 Background of Analysis

The 20

century is dominated by arguments about workplace efficiency and economic

policies. It is, therefore, necessary to understand the ways in which employment relations are

affecting workplace and labor performance, and the effects it has on achieving optimal

productivity. Great emphasis is on the importance of protecting the rights and needs of both the

employer and the employees. According to Wilkinson & Picket (2009), this idea is supported by

the argument that people with higher equality are favored and grow faster more than those with

less equality.

1.3 Definition of Terms

Productivity: It is defined by economists as output index to input index (O’Neill 2011).

Therefore, it is the ratio of output value to the input of labor.

Capital Productivity: It is the output per unit capital (O’Neill 2011).

CHAPTER 2 LITERATURE REVIEW

2.1 Historical Context of Employment Reforms

Australia has adopted unique although they have considerably been adapted with time

(Hockey 2015). The early developments of industrial relation policies are at this moment

outlined.

The 1890 strikes resulted in the development of work arbitration tribunals and the federation’s

inclusion of limited dispute settlement power in the constitution (Hockey 2015). The 1907

Harvester Judgment at the Commonwealth Conciliation Court determined the limiting condition

for which a man should be able to support his family (Hockey 2015). This changed the criteria

for defining the minimum wage and illustrated “the equal pay for equal value” slogan.

The federal awards system developed due to trade Unions that used Commonwealth dispute

powers for settlement (Hockey 2015).

The industrial relation system has had various changes: The deviation from for defining wages

and conditions to bargaining while awards provided conditions for employment (Hockey 2015).

Among other changes, the individual worker, rather than collective workers protection was

introduced. The inclusion of the arrangement for the unfair dismissal in the federal industrial

relations was another development change (Hockey 2015).

2.2 Australian Industrial Reforms

The Workplace Relations Act 1996 was based on individual agreements for employment,

regarded as the employment conditions for new starters (O’Neill 2011). The Act restricted

Unions from workplaces and introduces liberty of association. The Work Choices Act of 2005

applied its constitutional authority to expand the federal jurisdictions (O’Neill 2011). The Act

excluded workplaces with fewer employees (less than 100) from dismissal laws. According to

O’Neill (2011), the Workplace Relation Amendment Act of 2008 generated award

modernization, whereas the Fair Work Act of 2009 raised standards through the National

Employment Standards. The Act provided pays to bargain in good faith (O’Neill 2011).

Therefore, with above reforms implemented, the system of Australia should adopt the industrial

relation structure to contribute to productivity and performance of the workplace.

2.3 Demerits of the Current System

 The current system lacks flexibility leading to interference with management ability. This

has resulted in the difficulty of hiring contractors (Hockey 2015)

 The current system requires overrated negotiation wage rates with short-term agreements

(Hockey, 2015). This threatens long-term investment groups as it is resource intensive.

 The system allows strikes for matters not within the employment relations.

 Work done outside the working cycle are highly penalized (Hockey 2015).

 Productivity is not an essential feature of the employment agreement; therefore, the

system does not encourage productivity and performance.

Chapter 2 DISCUSSIONS

Structuring employment relations to improve productivity and workplace performance has more

advantages to the national economy, employers, and employees.

The current reform agenda has aspects that encourage bargaining, hence allowing the use

of personal agreements. The policies have reduced the function of employment relations tribunal,

have simplified awards, and made them less prescriptive (Fry, Javis & Loundes 2002). The

bargaining structure in the laws is, therefore, affecting workplace productivity. Legislation has

been used by the government to create tribunals that are tasked with the duty of defining the pay

and critical employment conditions of employees. The tribunals also settle and prevent

employment disputes according to Plowman (1999). The government’s focus was on a joint

bargaining between the employer and the Unions on the minimum wage and the conditions of

the tribunal. However, this led to the employment environment where the entire industry sector

could be affected by the action of the industry. The model, however, does not distinguish the

individual requirements of the employer and the employee; hence, it is necessary to change and

restructure the regulation to encourage greater flexibility between the workers and their

managers.

Trade Union movements play a significant role in Australia (Fry, Javis & Loundes 2002).

Analyzes of productivity always involve some measure of Unionization at the association or

organization. In most cases, the outcome of productivity is decided by the interaction of the

Union and the organizational management at the workplace (Freeman & Medoff 1984). On the

other hand, the relationship between Unions and bargaining structures has a negative influence

on productivity (Fry, Javis & Loundes 2002). Unions according to Peetz (2012) hinder a firm’s

performance in various ways; imposing work practices that are restrictive, and by inhibiting the

use of new technologies. Peetz (2012) also suggests that conventional economists believed that

Unions have a adverse effect on the variables of the economy. However, according to Richard

Freeman and James Madoff (Peetz 2012), Unions use their monopoly effect to increase wages,

which lead to the employers investing in technology. Technology, as a result, leads to higher

productivity. Also, employees raise their concerns through the Unions, this result to low work

conflicts and advanced production techniques (Peetz 2012).

Industrial relation legislations advocate for the protection of employees, the Unions and

the employers (Hockey 2015). The system should contain the arrangements that address the

unfair dismissal of employees and should allow them to collectively organize themselves.

According to Hockey (2015), racial and sexual discrimination are the major aspects the system

should protect employees from in an industry. The workplace system of Australia offers a

solution to employee victims of harsh or unjust dismissal (Hockey 2015). The dismissed

employee may be reinstated by virtue of the Fair Work Commission, or be compensated. The

current system gives the managers the mandate to demand performance from poorly productive

employees. However, this can be misused as employers take advantage to mistreat, bully workers

and make unreasonable demands (Hockey 2015). Due to this reason, there is a need for the

system to be restructured to reflect the balance between the privileges of management and the

right of employees to fair treatment by their bosses.

An employee who is dissatisfied with his current job can opt to express it in several ways;

the can chose to do nothing about it, they can articulate their distresses, or they can decide to

leave. According to Freeman and Medoff (1984), this is said to be the underlying exit literature.

Loundes (2000) described this decision as having several factors; the discounted utility expected

of the current industry cut utility from other sources, and the job search cost that is involved.

Having the workplace cost as non-negligible, employees will be compensated by the employers

so that the quits are lowered to a level that is acceptable (Loundes 2000). Employment relations

policies could be used to improve the workplace environment to create satisfaction for both the

employee and the employer through the use of certain reward systems and employee

involvement (Loundes 2000). Therefore, if the industrial relation policies are restructured to

enhance performance and productivity, the rate of employee’s quitting the workplace could

drastically reduce (Loundes 2000).

Absenteeism is defined (Loundes 2000) as the time an employee is away from duty due

to illness or any other reasons that are approved. It can be used by the employees to as a way to

equalize the amount of time that they are required to work, or the time they believe they are

supposed to work (Loundes 2000). Employers, however, can manage absenteeism through the

control method, which suggests that for employers to manage absenteeism, they need to have

monitoring skills, with a particular level of punishment (Loundes 2000). Managing absenteeism

is costly and tiresome for the employer, and to the employee, it reduces performance and

productivity. However, introducing policies that offer employees rewards for full-time

attendance, the flexibility of working time, and reorganizing their work pattern to suit the

preference of the employees will increase productivity.

Factors based on location are felt strongly in the professional and information and

technology sector (Working Smarter: Flexible Work and Telework 2012). The advancement in

technology has not only made it easier to share information and remote communication but also,

it is changing and advancing the way employees’ perception of working in a flexible

environment. Advancement in technology is also resulting to the rise in demand of highly skilled

personnel that is required to support the growth of productivity. According to the human capital

theory, workers with skills and experience always have a positive impact on productivity and

performance as they adapt easy and boost change (Fry, Javis & Loundes 2002). Therefore, it has

influenced the change of business organizations together with employment relationship (Karoly

& Panis 2004).

Therefore, adopting and structuring relational employment policies become essential in attracting

and retaining employees (Working Smarter: Flexible Work and Telework 2012).

However, despite all this, not all sector have had bad individual contracts, hence not all

require the employment relation structuring. With the introduction of the Australian Workplace

Agreement (AWA), mining is industry is one example that has experienced work flexibility in

the workplace. The Western Australian region has recorded the lowest rate of unemployment.

Therefore, firms find it difficult to get enough workers with the necessary skills. The mining

industry has vehemently supported technological innovation, excellent performance

accountability and, and a high standard of production as a well as sustainable productivity

growth (Timo 1998). Due to the shortage of employees, Australian Workplace Agreement has

made it possible for employees to be paid a higher salary. It has also enabled the negotiation of

conditions that meet the needs of both the employer and the employees. Hence, as a result, the

company gains profits enhanced productivity and loyalty from its workers (Timo 1998). Rio

Tinto, for example, moved from award coverage to personal contracts by offering employees

more money a year. Similarly Australia Workplace Agreement removed Union’s industrial

action, a move seen to be a problem to the company growth. Due to Australian Workplace

Agreement, workers are, therefore, said to be productive as a result of the good wages they are

paid (Peetz 2006). In a nutshell, the mining sector has shown how employment relations policies

can lead to the realization of Employment Relations.

Chapter 3 CONCLUSION AND RECOMMENDATION

3.1 Conclusion

After the Fair Work Act was introduced, the industrial relations now fostered an employment

relation landscape where obtaining productivity improvement is difficult. With the current work

relation laws, an increase in productivity is ruled out by Unions as an exchange for increased

working conditions and wages.

The employment relation systems in place currently have neither given the vulnerable workers

nor assisted them with a support between the Unions and the employers. The support is required

to facilitate productive performance under fair and equitable pay. This, therefore, illustrates my

stand and argument that the current relation policies need to be structured so as to encourage

fairness to both employees and the employer. I can be confident of the fact that appropriate

employment relation regulations will lead to a good industrial relation. The government of

Australia needs to act on the issues at hand to develop informed and well-developed decisions in

togetherness with the employees, the Unions, and the employers.

3.2 Recommendation

Despite the fact that market reform is not the only thing to improve productivity, it is the only

thing that is within the government’s authority. Therefore, to successfully link employment

relation policies and workplace productivity, the Australian government should mediate to

facilitate the structuring the system of the current industrial policies.

References

Working Smarter: Flexible Work and Telework. 2012, October ). Retrieved from Microsoft interview with

AI Group.

Farmakis-Gamboni, S., Yuen, K., Preston, M., & Katić, M. 2014, Productivity and innovation in enterprise

agreement clauses: an overview of literature, data and case studies at the workplace level.

Freeman, R., & Medoff, J. 1984, What do Unions Do? New York: Basic Books.

Fry, T. R., Javis, K., & Loundes, J. 2002, Are Pro-Reformers Better Performers? Victoria, Australia: The

University of Melbourne.

Hockey, J. B. 2015, WorkPlace Relation Frame Work: The Inquiry in Context. Australian Government

Productivity Commision .

Karoly, L. A., & Panis, C. 2004, Forces Shaping the Future Workforce and Workplace in the United States.

The 21st Cuntuary at Work.

Loundes, J. 2000, Management and Industrial Relations Practices and Outcomes in Australian

Workplaces. The University of Melbourne.

O'Neill, S. 2011, Industrial relations reforms: boosting labour productivity? FlagPost.

Peetz, D. 2006, Brave new workplace: how individual contracts are changing our jobs.

Peetz, D. 2012, Does Industrial Relation Policy Affect Productivity. ABL, 268-292.

Plowman, D. 1999, Researching Industrial Relations. Federation Press.

Timo, N. 1998, Precarious Employment and Individual Contracts in an Australian Mining Company. a

journal of the social and economic relations of work, 53-68.

Wilson, T. 2013, Workplace relations: an answer to Australia's productivity conundrum? Chatered

Accounts .

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