Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 8–1 CHAPTER EIGHT BARGAINING STRUCTURES AND PROCESSES Part three Processes and change

Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 8–2 Overview  Bargaining structures and processes  Managerial prerogative  Individual contracting  Collective bargaining  Award making  The complexity of bargaining structures  Final observations  Summary

Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 8–3 Key concepts: Bargaining structures and processes  ‘ Bargaining structure’ is the concept used to describe the specific institutional arrangements by which employers and employees determine the terms and conditions of the employment relationship.  A particular bargaining structure can be distinguished in terms of five dimensions: 1.‘level of bargaining’—single or multiple employer etc. 2.‘bargaining agents’—are the parties represented individually or collectively?

Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 8–4 3.‘scope of bargaining’—the issues being bargained and subjects addressed in the actual agreements that are produced by bargaining 4.‘status of bargaining’—the legal status of bargaining procedures and outcomes 5.‘coverage of bargaining’—the proportion of the workforce of a nation, industry or enterprise whose terms and conditions of employment are determined by the different types of bargaining. Key concepts: Bargaining structures and processes (cont.)

Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 8–5 Managerial prerogative  Defined as: ‘those areas of decision-making within an organisation over which managers claim to have an unfettered right to decide as they see fit’ (Sutcliffe and Callus 1994, p. 114).  Managerial prerogative is included in this discussion, because it is a rule-making process: – core of the struggle been labour and management – all about the ‘control test’.

Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 8–6 Managerial prerogative (cont.)  The extent of managerial prerogative in Australia: – management prerogative has fluctuated over recent years, but always has been considerable in Australia – basis in common law, but restricted by:  statute  the AIRC  unions – reduced during the 1980s largely due to several High Court decisions that gave the AIRC jurisdiction to handle a broader range of matters.

Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 8–7  The extent of managerial prerogative in Australia (cont.): – managerial prerogative has been on the rise again from the 1990s and onwards:  new legislation increasing managerial discretion: enterprise bargaining individual employment contracts rise of non-union representation  decline in union membership. Managerial prerogative (cont.)

Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 8–8 Individual contracting  Broadly defined as: ‘a process by which the terms and conditions of employment are determined between individual employees and their employers’.  There has been a growth in individual contracting.  There is very little ‘bargaining’ because of the unequal power between the parties.  It is a reflection of the move to the individualisation of the employment relationship.

Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 8–9 Individual contracting (cont.)  The extent and type of individual contracting has been described as ‘procedural’ and ‘substantive’ individualisation (Brown 1998): – ‘substantive’ individualisation:  the differentiation of terms and conditions contained in individual employment contracts (e.g. wages/salary, working conditions, spread of hours and starting/finishing times etc.) – ‘procedural’ individualisation:  the mechanism and instruments used to determine and set conditions of employment (e.g. negotiating terms, and arbitration).

Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 8–10 Individual contracting (cont.)  Recent debate in Australia has mostly focused on procedural individualisation: – the law.  The call for individual contracting came during the 1980s: – initially not considered achievable – however, the Workplace Relations Act of 1996 enabled Australian Workplace Agreements (AWAs).

Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 8–11 Individual contracting (cont.)  Australian Workplace Agreements (AWAs): – can displace any relevant industrial award or agreement – assessed by the office of the Employment Advocate according to the ‘no-disadvantage’ test – are not permitted ‘as a total package’ to disadvantage an employee by companies with the relevant award – while heavily promoted by the federal government they have not been taken up in large numbers (less than 2%).

Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 8–12  Australian Workplace Agreements (AWAs) (cont.): – proposed advantages of AWAs:  lead to improved productivity (organisational and national)  allow individual efforts to be measured and rewarded rather than groups  facilitate closer relations between individual employees and their employer  provide management with greater discretion in the management of the employment relationship – the degree of success is debatable:  some argue the main benefits of AWAs are to dismantle collectivism in the workplace, marginalise trade unions and promote free-market working conditions. Individual contracting (cont.)

Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 8–13 Individual contracting (cont.)  Individual contracting and ‘hard’ and soft’ HRM: – another issue in debates over individual contracting is whether employers using AWAs practise ‘hard’ or ‘soft’ HRM – ‘hard’ HRM—characterised by cost minimisation and work intensification – ‘soft’ HRM—characterised by nurturing work environment and progressive policies.

Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 8–14  Individual contracting and ‘hard’ and soft’ HRM (cont.): –literature extremely polarised:  Roan et al. (2000) found ‘hard’ HRM practices more common when AWAs used—similar findings elsewhere  Wooden (1998 and 2000) found a higher incidence of communication structures in workplaces with a high use of AWAs; however, this finding has been disputed by others –the negotiation of AWAs appear to be unilateral –there is no evidence of ‘substantive’ individualisation in AWAs. Only in relation to rewards for individual employee performance. Individual contracting (cont.)

Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 8–15 Collective bargaining  Defined as: ‘a method or process of negotiating about wages and working conditions and other terms of employment between an employer … On the one hand, and representatives of workers and their organisations or the other, with a view of arriving at collective agreements’ (Marsh and Evans 1973, p. 61).  Usually involves two parties (bilateral).  Arbitration involves a third party (trilateral).

Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 8–16  There are three essential aspects relating to the legal status of collective bargaining: 1.recognition of trade unions for bargaining purposes 2.status of the outcome of bargaining (i.e. the collective agreement) 3.procedures and tactics of bargaining. Collective bargaining (cont.)

Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 8–17 Collective bargaining (cont.)  Use of statutory law because of the hostility of common law for collective action.  Introduction of compulsory arbitration forced employees to deal with unions: – helped unions gain power and increase membership and member benefits – also imposed constraints on unions.  The party with the greatest bargaining power is also the most likely to prefer collective bargaining over arbitration.

Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 8–18 Collective bargaining (cont.)  Trends in collective bargaining in Australia, 1960s–2000s: –late 1960s–early 1970s: considerable decentralised collective bargaining, both within the arbitration system and for ‘over-awards’, with little control by the arbitration tribunals –mid 1970s–1981: limited collective bargaining as the arbitration tribunals attempted to control wage increases through centralised ‘wage indexation’ –1981–1983: resurgence of decentralised collective bargaining sanctioned by the tribunals after the abandonment of wage indexation.

Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 8–19 Collective bargaining (cont.)  Trends in collective bargaining in Australia, 1960s–2000s (cont): –1983–1986: first phase of the Accord. Very little collective bargaining as a ‘new’ highly centralised wage indexation system administered by the arbitration tribunals in context to the Accord’s ‘tightly’ controlled wage increases –1987–1991: gradual decentralisation of the wages system administered by the tribunals, with increasing collective bargaining alongside arbitration as part of ‘managed decentralism’ –1991–2000s: ascendency of decentralised collective bargaining in the form of ‘enterprise bargaining’ with arbitrated awards becoming less important in their role as ‘safety nets’.

Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 8–20 Collective bargaining (cont.)  Coverage of collective bargaining: –2001–2002: over one-third of employees had their wages determined by collective bargaining:  one-fifth of employees had their wages determined solely by ‘safety net’ award increases  40% of employees had their wages determined by individual agreements, mostly unregistered.

Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 8–21 Award making  An award can be defined as: ‘a legally enforceable determination (or the document) containing the terms and conditions of employment in a firm or industry’ (Sutcliffe and Callus 1994, p. 17).  Awards in Australia are similar to collective agreements in other countries, but their legal status differs somewhat: – where agreement between the parties to provision in an award is not able to be reached, the Commission can impose an outcome – awards are enforceable in law. Proceedings can be initiated by the public authorities and/or the persons entitled to the benefit of the award and/or those actually covered by the award.

Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 8–22  An award is the means by which tribunals resolve ‘industrial disputes’: – through a ‘log of claims’ – rejection by employers – ambit determination – conciliation/arbitration – appeals.  Awards can be either: – multi-employer awards—covering a whole industry or occupation – single-employer awards—only applicable to a single- employer. Award making (cont.)

Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 8–23  A high proportion of workers in Australia had their wages and working conditions determined by the commission by either awards or registered collective agreements prior to 1980s: – changed from 1980s because of growing employer hostility to centralised system.  Awards seen by employees to damage workplace productivity: – too many (occupationally-based) awards in each workplace – too centralised and, therefore, not effective of workplace conditions – too ‘prescriptive’, laid down set wage rates and working conditions and did not reflect workplace conditions.  Changes to awards: – award restructuring under the Accord – Industrial Relations Reform Act of 1993 – Workplace Relation Act of Award making (cont.)

Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 8–24 The complexity of bargaining structures (cont.)  Earlier depiction represents a simplification of bargaining structures.  In practice, workplaces are likely to be regulated through various means: – horizontal complexity: ‘layers’ of regulation, by several rules on the same issue from different sources – vertical complexity: rules for different occupational groups are created through different processes.  The ‘success’ of national systems of IR regulation depends on the congruence between the different sources of regulation.

Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 8–25 Final observations  Concept of ‘bargaining structure’ used to describe the range of activities leading to rule making.  Although four main ideal–typical types of rule-making exist, managerial prerogative dominates in most workplaces.  Collective bargaining and award making are the two main collective processes to rule making: – award traditionally most significant, but declining – rise in importance of collective bargaining.  Most workplaces have layers of workplace regulation.

Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 8–26 Summary  Complexity of rule making described through the concept of ‘bargaining structure’.  Four main regulatory mechanisms in Australian IR rule-making system: 1.managerial prerogative: dominant form of rule-making; and scope rises and falls over time 2.individual contracting: long been a feature of Australian industrial relations; and has also changed increased in scope in recent years 3.collective bargaining: within minimum-rates awards, collective bargaining has also long been a feature of Australian industrial relations; and has also changed over time to include non-union bargaining 4.Award making: uniquely Australian; form and coverage has changed over time; and since the 1990s they have declined in coverage.