Industrial Relations

Industrial Relations is the system and practices that govern the relationship between employers, employees, and trade unions. When the concept of industrial relations is raised the focus is usually on employee entitlements (to fair wages, working hours and working conditions), and employer work-related obligations. In Australia, the Fair Work Act 2009 (FWA) and other federal and state laws regulate aspects of industrial relations such as collective bargaining, dispute resolution and the protection of employee rights and workplace flexibility. This intricate system aims to balance the interests of all parties while ensuring fair and equitable workplace practices. This article looks at the key legislative provisions and current trends shaping industrial relations in Australia.

Historical framework

In Australia, industrial relations have undergone significant evolution, informed by social changes, case law developments and legislative reforms. During the colonial period, Australian workers had relatively few rights and limited powers in relation to their employment. Many workers were killed or injured in workplaces without even basic consideration for safety, worked dangerously long working hours, and received insufficient wages to support a family. From the 1850s, Australian workers began to band together in unions and exercise more power as a collective. The negotiation between these workers and employers, including the employment of industrial action such as strikes, were the earliest instances of industrial relations in this country.

By the early 20^th century, industrial relations in Australia were characterised by compulsory arbitration and the introduction of wage-fixing tribunals. While these mechanisms were important means of establishing basic rights and protections for workers, they were inflexible and reflected a dynamic in which workers lacked sophistication to be an equal bargaining party.

Over time, there was a shift towards collective bargaining, which provided employers and employees with a more flexible mechanism to allow the negotiation of employment terms and conditions. The Workplace Relations Act 1996 reduced the role of the Australian Industrial Relations Commission and promoted individual workplace agreements. However, after the controversial WorkChoices reforms of 2005 created significant backlash in the community, the federal government implemented the Fair Work Act (FWA).

Key provisions of the FWA

The FWA still serves as the cornerstone of Australia’s industrial relations framework. It created the forum now known as the Fair Work Commission, and provided a safety net of minimum employment terms and conditions. It also introduced the:

1. National Employment Standards (NES): the NES contains twelve minimum employment entitlements that must be provided to all employees. These include access to minimum amounts of paid and unpaid leave (with compensatory provisions for casual workers not entitled to paid leave), consideration of reasonable flexible work arrangements, maximum weekly hours and redundancy entitlements.
2. Modern Awards: modern awards set minimum employment terms and conditions for specific occupations and industries. These awards are intended to sit alongside the NES and ensure fair working conditions and remuneration.
3. Enterprise Agreements: collective bargaining is encouraged at the enterprise level, allowing employers and employees to negotiate specific terms and conditions tailored to their specific needs. Enterprise agreements must adhere to the Better Off Overall Test (BOOT), to ensure that employees are in a better position that they would be under the relevant award.
4. Unfair Dismissal Protections: under the FWA, employees have robust protections against unfair dismissal, so that they can seek redress if their termination was unjust, harsh or unreasonable.
5. Adverse Action Protections: the FWA makes it unlawful to take adverse action against an employee for exercising their workplace rights (such as querying their employment conditions or making a complaint).
6. Right to Union Representation: the FWA protects the legal right of employees to join a union and be represented by a union representative during enterprise bargaining.

National and state industrial relations

Business owners need to be aware whether they are covered by the national or state relations systems, because they have different rights and obligations. The national Industrial Relations system covers private sector businesses (including private schools, universities and non-government community services). Claims and enquiries are directed to the Fair Work Ombudsman, which is an independent federal agency that works with employers, employees, contractors and the community. This national system does not cover the state public sector and local government workers. Instead, the specific state industrial relations system covers the local government sector, including Government Business Enterprises.

Current developments

The industrial relations landscape in Australia continues to evolve, with several changes arising from the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022. This legislation signals the most extensive industrial relations reform since the introduction of the Fair Work Act. These changes will significantly impact on workplace systems and employment terms and conditions. For instance, the amendment imposes multiple changes to multi-enterprise bargaining, flexible work arrangement requests and unpaid parental leave requests. Additionally, it reinstates the obligation for the FWC to consider prospective employees in the Better Off Overall Test and redefines the “minimum bargaining period” required before the FWC can make an Intractable Bargaining Declaration.

In Australia, industrial relations is a complex and continually changing system of legislation, enterprise bargaining and dispute resolution. The employment law team at Go To Court can help with advice and representation on any industrial relations matter. Please contact the team on 1300 636 846 today for any legal assistance.