In this paper I will discuss the union rights and collective bargaining under the Fair Work Act of Australia. Collective bargaining has been known to have both benefits and drawbacks to the employers, employees and the economy. The entire paper focuses on the issues brought about by Fair Work Act with a close look at collective bargaining and trade unions. Some of the issues discussed include bargaining in good faith, role of individual agreements, dispute resolution, importance of union rights and collective bargaining as well as the weaknesses of union rights and collective bargaining.
Description of collective bargaining
Role of individual agreements
Negotiating workplace agreements
The role of the right to strike, secret ballots and unions
A. Bargaining in good faith
III. Importance of union rights and collective bargaining
Weaknesses of union rights and collective bargaining
Industrial Relations Policy
The Fair Work Act was introduced to solve the problems facing employees at the workplaces and to ensure that employers are fair to their employees. Collective bargaining is one aspect of the Forward with Fairness law and policy that was enacted on 1 July 2009. This law states that employers have the obligation of enabling their employees to negotiate in all aspects that affect them at the workplace. The new laws require that the application of terms and conditions under any employment contract should be consented by both the employer and employee. The rights and responsibilities of each party in the employment contract are negotiated and agreed upon before putting them into action. Joint regulation in a work environment is a requirement that employers should adhere to. It is important that employers should consult employees before implementing any decision that may affect them at the workplace (Smith, 2010).
Collective bargaining creates a contractual relationship between employers and employees. Both parties must consent to the contract. After making the contract, the employer and employee representatives sign the agreement to make it legally enforceable. The documents are kept in a safe place where both parties agree. Amendments to the agreement can be made upon request by any party. However, no changes can be made to the agreement without the consent of any of the parties. Collective bargaining agreements are legal contracts which can be used in a court of law when any of the parties contravenes the provisions of the contract (Smith, 2010).
Description of Collective Bargaining
Collective bargaining entails creating an agreement between two or more parties. The employer has economic power to control all the economic resources of a business and there is need to put restrictions in place to protect the interest of employees (Act, 2009). Employers have the right of hiring, firing, controlling remuneration, setting working conditions and all other factors at the work place are under the control of the employer. The introduction of trade unions empowers employees to fight for their rights and be placed at almost equal position as their employers. Both the employer and the employee are equal because they contribute towards the economy equally and none should possess a superior position than the other. As such employers are owners of capital while employees own labour factor of production. This shows that no economic activity can be done without the existence of any of the parties (Jenkins & Sherman, 1977).
Collective bargaining involves combining the interests of all employees and presenting to the employer as a united group. It is possible for a single employee to be manipulated by the employer in case they are to bargain. When industrialization was realized in the global economies, employment of large number of employees became a common concept. It became impossible to make contracts or agreements between employers and employees. This created the need for establishment of trade unions (Jenkins & Sherman, 1977).
In March 2006, reforms on the Work Choices Act were started with the aim of introducing fairness at workplaces and to protect the interests of employers and their employees (Department of Foreign Affairs and Trade, 2009). The Forward and Fair Act was introduced in 2009 to cover six key areas: awards, agreements, industrial institutions, termination of employment, minimum legislative standards and a national industrial relations system. The Forward with Fairness Act was established with the intention of improving the welfare of employees as well as creating a better environment at the workplace. The interest of employers has been more protected under the new system of laws compared to the previous laws which granted employees more powers (CCH Editors, 2009).
Under the new laws, employees have the right to select their own representatives during a bargaining session. It is required of the employers to allow their employees to select a representative without interference from the employer. Employees will be provided with statements by their employers about the right to choose their own representative during a collective bargaining session. Employees have the right to attend meetings and contribute to decisions made by the employer. Each party in the collective bargaining session will be required to put into consideration each and every proposal issued by the other bargaining party. Unfair treatment during collective bargaining session will not be allowed (Australian Business Lawyers, 2010).
The content of the collective agreement will be determined by the parties. There will no ‘prohibited content’ in the collective agreement as provided by the previous labour laws. The overall aim of introducing the new labour laws is to ensure that employees are treated fairly. A flexibility clause will be attached to collective agreements to allow changes or addition of information between the employers and individual employees (Australian Business Lawyers, 2010).
The Forward with Fairness Act advocates for collective bargaining and clearly discourages individual bargaining by all means. Six different types of agreements (AWAs, collective agreements by the employees, collective agreement by the unions, multi-business agreements, employer greenfields agreements and union greenfields agreements) existed under the previous laws. These laws were summarized to focus more on collective bargaining rather than individual bargaining (CCH Editors, 2009).
Bargaining in good faith
Section 228 of the Forward with Fairness Act provides the requirements for a good faith bargaining. The Forward with Fairness Act provides that there be bargaining representatives who are mandated with taking part in collective bargaining meetings and airing the concerns of their parties. Parties to a bargaining agreement are required to disclose relevant information within the specified time. In this case, relevant information refers to any information that may help in making an agreement but does not include confidential information or any information that is sensitive to commercial activities. Bargaining representatives are also supposed to attend to any suggestions that have been aired by the other bargaining party promptly. Each representative must avoid doing conducts which may undermine the freedom of association (CCH Editors, 2009).
The Forward with Fairness laws provide that all negotiations be done in good faith. Both the employees and the employer will have to be represented in a bargaining session. It is important to note that even though the new laws require that employers engage employees in a bargaining process, there is no requirement to come to an agreement during the bargaining process. The parties to a bargaining agreement are required to express their ideas in good faith and no party should be coerced to make a specific decision. Employee representatives are required to present the decisions of the employees during the collective bargaining process (Riley & Sheldon, 2008).
When collective bargaining fail, disputes always occur and it is important that all parties seek a dispute resolution system. Forward with Fairness Act provides several dispute resolution mechanisms such as conciliation, arbitration, recourse to court, and mediation. Unlike the previous laws which issued stop orders whenever a bargaining process failed, Forward with fairness Act intervenes whenever a bargaining process fails but does not provide the final agreement. The new law provides arbitration whenever conflicts occur (Forsyth & Stewart, 2009).
Negotiating workplace agreements
Negotiating workplace agreements under the new Act requires that both the employees and employer come into consensus about how the organization should be operated. Since all employees cannot be involved in a workplace agreement, their representatives deliver the decisions made by all the employees. Under the new laws all employees have equal rights and their decisions should be considered. A rule of majority applies since all ideas cannot be included in an agreement. The representatives take the decisions which have been unanimously agreed upon (CCH Editors, 2009).
Role of individual agreements
Under the previous law, there existed individual agreements between the employer and each employee. These agreements related to the workplace code of ethics, terms and conditions of work and any other relevant issue that affects the relationship between the employer and individual employees. The union had no right to interfere with individual agreements unless employees complain of injustice. Such agreements are made between the employer and the employees (CCH Editors, 2009). The Forward Fairness Act changed the provisions of the Work Choices Act by advocating for collective bargaining rather than individual bargaining. The importance of this provision was to protect employees from manipulation by their employers. Collective decision making has been encouraged by the new system by ensuring that agreements favour both the employer and the employee and that no side is favoured or disadvantaged (Great Britain: Parliament: House of Commons: Innovation, Universities, Science and Skills Committee, 2009).
The role of the right to strike, secret ballots and unions
Most of the standards maintained by the Work Choices Act about industrial action have remained in the Forward with Fairness Act. The Act distinguishes protected and unprotected industrial action and provides immunity to employees who engage in protected industrial action. The Forward with Fairness has the jurisdiction of stopping employees involved in unprotected industrial action. There are conditions which must be fulfilled for industrial action to be categorized as protected. The Forward with Fairness act provides relevant ministers with powers to stop protected industrial action especially when such an activity damages the economy of Australia, causes threats to life, or endangers welfare of the people (CCH Editors, 2009).
Similar to the Work Choices Act, the Forward with Fairness Act requires authorization of protected industrial action by the use of secret ballots. Whenever industrial action is proposed by the employees, secret ballots must be cast to ensure that all employees consent to the action. However, ballots are not used when the employer seeks industrial action. Secret ballots provide members to a labour union with the right to make decisions collectively and by the rule of the majority. Any action undertaken by the union must be approved by the members (CCH Editors, 2009). Labour unions act as representatives of the employees to the employer and they have the mandate to negotiate better terms of employment on behalf of the employees. It is the role of labour unions under the Forward Fairness Act to resolve conflicts that may arise at the workplace (Australian Human Resource Institute, 2009).
Importance of Union Rights and Collective Bargaining
Collective bargaining is important because the rights of employees are protected. It is through collective bargaining that employees express their opinions about the operations of the organization. Employees interact with their employers during a collective bargaining process and they come into consensus about work conditions and terms of employment. Before the introduction of the Fair Work Act, employers had excess power and could oppress their workers. The rights of employees were not respected and in most cases employees could be denied their rights to express themselves. Employees in today’s work environment have the power to decide about their work conditions and to contribute to the decisions of the organization (Riley & Sheldon, 2008).
Collective bargaining creates a condition where wages are based on a competitive basis. After the introduction of Fair Work Act, employees have the right to get a fair wage rate because they bargain to get the best. Employers cannot impose wage rates upon employees and a bargaining process must be followed before setting standard wages. This is a great advantage to the employees because employers cannot dictate or force employees to take low wages. Therefore, it is evident that wages are based on competition and the market environment. Employees have the freedom to request wages depending on the prevailing market conditions. It has been found out that collective bargaining improves the wages and benefits provided to employees. There is also evidence that organized employees get higher wages than unorganized employees (Riley & Sheldon, 2008).
Democracy at the workplace has been achieved after the introduction of collective bargaining. Employers can no longer act as dictators to their employees because employees have been empowered to express themselves. The inexistence of trade unions allowed employers to change terms and conditions at the workplace without consultation with the employees. Fair Work Act on the other hand provided a condition whereby employees have the freedom to express their rights and to be consulted whenever there are changes on the terms and conditions at the workplace (Riley & Sheldon, 2008).
Access to information about the rights of employees has been affected after the introduction of trade unions. Unions enlighten employees about their rights and they are able to exercise such rights at the place of work. In most cases employees are not aware of their rights and they need a body that can inform them about their rights. Employers withhold information about the rights of employees so that they can manipulate them for their own benefit. Trade unions act as advocates for employees because they educate them about their rights and protect them against oppression by their employers (Riley & Sheldon, 2008).
Collective bargaining has formalized the process of making agreements at the workplace. Whenever employees are involved in a collective bargaining with their employer, a legal contract is established. Legal contracts protect the rights of the parties involved in the process of making the agreement. The contracts are enforceable at a court of law and employees can seek justice whenever their employer contravenes the provisions of the agreement. A formal process of making agreements at the workplace has been created and the informal procedures which were previously in use have been abolished to protect employees (Riley & Sheldon, 2008).
Weaknesses of the Union Rights and Collective Bargaining
Collective bargaining has brought about the existence of strikes at the workplace. Employees now have the power to hold strikes when their employers fail to protect their rights. When people are united they gain power to express themselves than when they are divided. Organizations incur huge losses whenever strikes are in progress. Strikes also affect economic development and growth because they slow down the rate of production of goods and services. There are important goods and services which may retard the economy if their production is stopped. The introduction of collective bargaining can therefore be said to have a negative impact on the progress of the economy because they have resulted into increment of strikes at workplaces (Riley & Sheldon, 2008).
The Forward with Fairness Act was established to introduce changes at the workplace and to provide employees with more rights. The law protects both the employee and the employer for an effective economic performance. The new laws will improve conditions at the workplaces since the rights of all stakeholders are protected. The interest of both the employers and employees has been adequately protected by the Forward with Fairness Act. It is important that employers and employees integrate the new laws into the workplace to ensure goals set by organizations are achieved. Collective bargaining should be encouraged while individual bargaining should be discarded to ensure the rights of employees and employers are protected. Collective bargaining is an important aspect that has been introduced by the new labour laws and should be used to improve workplace conditions. The government should also continue to enforce the new laws to protect the rights of employees.
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