Work Choices was established to hand greater control of industrial relations to the federal government. It has seen many changes from the original Workplace Relations Bill. A more in-depth analysis of Work Choices can be found in Appendix B and D. As seen in Appendix D, Work Choices aims to: * Abolish state Industrial Relations systems * Exempt employers with under 100 employees from unfair dismissal * Diminish the power of the AIRC with the AFPC * Enable employers to undercut Collective Enterprise Agreements with AWA's.
The reason for the amendment was to create a more efficient labour market. As seen in Appendix C, with unemployment as low as 4. 4% seasonally adjusted in April 20078 a more efficient distribution of resources (especially labour) is needed to increase productivity. The increase of productivity and living standards is another long-term goal of Work Choices. On the short-term, though, Work Choices looks at smoothing out the fluctuations of the business cycle especially by controlling key economic indictors such as inflation. One such way of doing this is through the AFPC.
The Australian Fair Pay Commission (AFPC) sets and adjusts the minimal wages and casual loadings for employees. As seen in Appendix C, it is an independent, statutory body "established under the 'Workplace Relations Amendment (Work Choices) Act 2005' on the 14th December. "9 This commission replaced the Australian Industrial Relations Commission (AIRC) Safety Net, though the AIRC still retains the role of dealing with employment disputes. The AIRC safety net did not immediately apply to all awards, first needing the confirmation of the trade unions before they were applied.
The APFC on the other hand does not need this approval, and their decision is immediately effective across the board. Also with the AFPC, minimal pay can be set that would benefit the economy in general, looking at figures such as inflation and unemployment, rather than just benefiting the workers and looking at employee/employer relations. It is through the APFC that the government are trying to smooth out the fluctuations of the business cycle that were not addressed by the old system.
Through the recent changes of the Workplace Relations Act, it can be seen how Workplace Relations is a contemporary issue and has a large affect on the economy, not just the labour market. Work Choices seems to have a positive affect on the Australian Economy, as both inflation and unemployment have been decreasing. Along with the increased productivity (all seen in Appendix C) it is safe to say that the Howard Government are introducing industrial relation laws that will benefit the economy and households in the long-term, though there is a sacrifice of benefits in the short term.
Bulmer, J. (2007). Update Economics B. Nahroonga NSW:Bulmer Chapman & Co Pty Ltd Dixon, T. O'Mahony, J. (2006). The Market Economy. Port Melbourne, Vicotoria: Leading Edge Education McConnel, J. Nailon, K. Johnston, C. (1996). Economic Activity Book 2. South Melbourne: VCTA Publishing. Skulley, M. Rollins, A. (2007). Union Wage Claims Threat to Employers. Australian Financial Review. 30th March, pg 18 http://www.abs.gov.au/