Executive Monograph

The Transformation of Australian Industrial Relations

*** This series is now complete ***

The Future of Australian Industrial Relations - Executive Monograph Series No 5 (August 1999)

Executive Summary

- The current federal Coalition Government appears committed to contin-ued reform of industrial relations arrangements and processes, seeking to enhance the emphasis on enterprises, workplaces and individuals in the bargaining process, with a consequential further reduced role for the Australian Industrial Relations Commission.

- While the pace and shape of institutional reform is dependent on the po-litical process, the ability of governments to resist change is argued to be weak. In particular, a return to a highly centralised system for the deter-mination of wages and employment conditions is neither a realistic nor sustainable option. Centralised institutions are inconsistent with both the values of many individuals in modern societies and the demands of a global economy.

- Support for the argument that a significant reversal in the reform process is unlikely is provided by international evidence suggesting both a gradual gravitation downwards in the locus of bargaining and a decline in trade union density in the majority of Western industrial economies.

- There also appears to be little likelihood that a shift towards Third Way politics, as might occur under a federal Labor government, will see any significant winding back of reforms. Indeed, re-regulation of industrial re-lations arrangements by the state can be argued to be inconsistent with the emphasis that the Third Way places on individual freedom and initia-tive. That said, one possible change that would be of large significance and would be consistent with Third Way politics is a shift towards greater coordination of wage bargaining. Whether coordination can co-exist with genuine commitment to enterprise-level negotiation, however, is highly debateable.

- The view that the current decentralist thrust of industrial reform is likely to continue is shared by Australia managers, with the majority of respon-dents to a survey reporting expectations of a shift away from reliance on awards towards greater reliance on agreements, and especially individual agreements.

- Critics of industrial relations reform typically claim that the reform pro-cess has adversely affected working lives by heightening fears about job insecurity, increasing working hours and widening the gap between high wage earners and low wage earners. The evidence linking industrial rela-tions reform to changing levels of job security and increasing working hours, however, is weak. Indeed, it is questionable whether a trend rise in job insecurity has even occurred. The link between decentralisation of wage bargaining and rising earnings inequality, however, is much stronger. Policy-makers thus must turn their minds to devising policies for cush-ioning the inequitable effects of decentralised wage bargaining on incomes. This requires not regulating wages, which only increases the gap between the work rich and the work poor, but using the social security and taxation systems in a much more efficacious and imaginative fashion.

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