Academic journal article The Economic and Labour Relations Review : ELRR

Labour Flexibility and Employment Law: The New Order

Academic journal article The Economic and Labour Relations Review : ELRR

Labour Flexibility and Employment Law: The New Order

Article excerpt

1. Labour Market Flexibility

By the end of the 1980s there was agreement amongst the major political parties, and peak organisations of employers and employees, that one of the main aims of reform in Australia was labour market flexibility. While there continues to be disagreement as to exactly how to achieve flexibility, there is agreement that flexibility is the ability to respond to the changing needs of the economic environment; it is a responsiveness to economic variables.

A distinction may be drawn between numerical, functional and financial flexibility. Numerical flexibility has to do with achieving exactly the right number of employees at each stage of the fluctuations in the level of demand. Functional flexibility has to do with the ease of changing from one job to another; with the mobility of workers; with the change of function or location within an enterprise; with the redeployment of employees between different tasks. Financial flexibility deals with the possibility of taking into account the real constraints of the economic environment while at the same time determining wage levels at industry, enterprise or individual employee level. In this way financial flexibility is used to promote functional and numerical flexibility.

Australia is undergoing a fundamental change in the way that the production of goods and services is being organized. The interlinked pressures of accelerating technological flexibility, institutionalized inflation and historically unprecedented levels of inflation is creating a new economic, social, political and industrial landscape. That emerging landscape has certain sharp features amongst which we can identify the following:

a. the manufacturing sector is shrinking as evidenced by the decline in the traditional "smokestack industries" and in the amalgamations amongst metal trades union in the past twenty years;

b. the primary and secondary sectors are shrinking and the service sector is expanding with tourism being Australia's largest export-earner at the end of the 1980s;

c. in the past decade there has been a retreat from full employment and a fundamental change in the labour market away from physical production work and towards the service sector;

d there is a transformation in the composition of the workforce, in particular an increase in the participation rates of women in the paid workforce;

e. new employment patterns are emerging: there is an increased growth of the casual, part-time, temporary workforce both in absolute numbers and relative to the "full-time" or permanent workforce and a growing use of "workers on a long leash" such as home workers;

f. trade union membership is declining as a proportion of the workforce and unions are facing the challenge of "de-industrialisation", that is, a decline in the smokestack industries and associated joblosses;

g. the population is ageing and the birthrate is declining: the "baby boom" is over but people are retiring earlier at one end of the age spectrum and finding employment scarce at the other;

h. there is evidence of a growing employer "militancy";a perceived willingness to resort to legal action outside the arbitration system as a first step rather than as a last step. There are also emerging management practices which are characterised as anti-union by opponents and as union-substitution by proponents;

i. there is a growing call for workforce "flexibility". By the close of the 1980s all major political parties, the employers' organisations and the ACTU were agreed that flexibility could be achieved through the development of a highly skilled, productive and therefore more rewarded workforce. The main mechanism presently employed to achieve this goal is award restructuring which is occurring in the context of union negotiations for wage increases with the focus upon broadbanding skill levels and efficiency and the pursuit of stronger international competitiveness. …

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