A Critical Review of the Major Opposing Views on Arbitration & Industrial Relations

This paper will critically review the major opposing perspectives on arbitration and industrial relations, with particular attention to how government regulation and intervention relate to the changes made to the system after 1996. The major focus of this brief paper will be to demonstrate that Howard's industrial relations policies resemble those of the late 1800's, where the Master and Servant Act's regulated the relationships between employer and employee. These were replaced with the introduction of the Commonwealth Court of Conciliation and Arbitration (1904-1921).

The outcome from such dramatic change in industrial relations was the forming of unions and major strikes. Subsequently, the new system of employer and employee relations sought to resolve labour disputes and enhance the quality of life for Australian workers. Moreover it was steeped in social democratic ideals and worked to give every Australian a decent standard of living. These ideals have yet shifted back to the individual contract model where the market predetermines wages and working conditions.

During pre-federation when free labour came to dominate the colonies; workers exercised their civil citizenship rights through entry into individual employment contracts. The master and servant laws which empowered these individual contracts were imported from Britain and were quickly implemented and regulated in the Colonies. Isaac argues that ‘the master and servant acts … both in concept and practice reflected the harsh penal code used against the convicts'.

However, the latter part of the 1800's brought with it the rising political influence of the working classes and an increasingly powerful trade union. The modification of the master and servant laws through the collectivisation of union groups resulted in a greater role fir state interventions.

The 1890's saw the emergence of many disputes over working conditions and the power employers had over employees, which was legitimised by law. Australian workers were illustrating this through strikes and the formation of unions. In recognising the duty of government to be the protection and economic welfare of its citizens, a court of Conciliation and Arbitration was established in Australia in the 1890's.

The new systems were based in social democratic ideals and worked to give every Australian a decent standard of living. These were unlike the imported Master and Servant Acts which legitimised employee's subordination and exploitation by the employer.

In 1945 the Australian Council of Trade Unions established and agreed with three major industrial demands: A substantial increase in wage, an end to wage pegging, and a 40 hour week. Unions were founded on the principle that employees on their own, without union advocates and resources are unequal in the bargaining process and prone for exploitation.

The tread towards negotiations on qualitative improvements such as training and job satisfaction makes workplace industrial negotiations for the unions' even more complex, necessitating substantial support for those involved in negotiating these issues at the workplace.

A trade unions' overall aim is that of protecting and advancing the interests of their members. The trade union movement has long been identified with the Labour party, but trade unions seek to act politically by using their representation powers. Unions try to influence government policy regardless of which party is in power.

Employee relations are associated with two things. The first is the "decentralised approach" and in particular enterprise productivity bargaining, which needs to be located within the field that deals with unions, wages policy, bargaining structure and the like. The second defining feature of employee relations is a unitary value system.

The advantages of arbitration are many, these have been highlighted by the ICC (International Chamber of Commerce) International Court of Arbitration on their website, the ICC states, decisions are 'final' and binding', or as described in different terms by Schmitthoff (1990), businessmen prefer 'finality to meticulous legal accuracy'. As arbitral awards are not subject to appeal, they are far more likely to be final than the judgment of courts of first instance. Though the arbitral award maybe subject to a challenge, the grounds of challenge are limited. If this occurs, it is likely to result in a large amount of time passing before a final judgment is passed.

According to work place minister Peter Reith, working conditions must be monitored by the federal parliamentary enactments. Under this the Howard coalition government it is recommended that working conditions should be negotiated individually between the employers and employees. Following the renaming of the Industrial Relations Commission to the Work Place Relation's Commission the Howard government would see the end to trade unions and their ability to negotiate awards. Solomon states ‘Mr. Reith wants to abolish the conciliation and arbitration system established more than a century ago'. Reith and Howard's policy have forced Australian Work Place Agreements (AWA's) on industries and working conditions. Work place relations minister, Peter Reith, offers support by purporting the arbitration system is ‘an Australia we can no longer afford'.

The philosophy underpinning the work place relations act is to ensure ‘the freedom of association, including the rights of the employers and employee to join organisation or association of their choice, or not join an organisation or association'. It sustains a pro-union philosophy through encouraging individual contracts and not awarding preference to union membership. Indeed, under the workplace relations act (1996), the banning of secondary boycotts, along with the implementation of AWA's and certified agreements (CA) is essential. That is, banning secondary boycotts and the introduction of CA's and AWA's through state intervention drastically delimits union's power to negotiate.

This delimiting has occurred due to the restrictions set on union entry into the workplace and inspection of pay records, and the reduction in the procedural flexibility in the application of penal sanction allowed in the pre-existing Act. The only arena for dispute resolution between employer and employee under the act is the ‘legal control based squarely in contract'. Furthermore, it assumes that ‘the employer can be expected to take over the function traditionally ascribed to the union, of protecting and advancing the interests of the worker through representation and collective processes.

Therefore, within this system, industrial courts of the state become increasingly redundant. Under Reith's' system, there is no real umpire to support the worker, no conciliation and no compulsory arbitration system. Rather, those who disobey the new Howard industrial laws would be replaced. Under the Howard coalition government, Solomon (1999) shows us the potential that the whole system will be replaced.

While the Australian industrial relations system is undergoing considerable change, the industrial framework provided by the tribunal systems continues to play in active role in how the major parties interact. As well, despite reservations about the appropriateness of using the judicial system in the resolution of industrial conflict, this avenue continues to be an option for employers to end a dispute. Recent efforts to replace the idea of "industrial relations" with that of "employee relations" reflect efforts to draw attention away from institutions like tribunals and unions, towards individuals and their direct relationships.


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