Academic journal article The Economic and Labour Relations Review : ELRR

The Fruits of Abdication: Australian Multi-Employer Award Respondency

Academic journal article The Economic and Labour Relations Review : ELRR

The Fruits of Abdication: Australian Multi-Employer Award Respondency

Article excerpt

1. Introduction

In recent years there has been a growing interest in enterprise bargaining and the decentralisation of wage determination. Developments on these fronts should not obscure the fact that for the foreseeable future the majority of private sector employees and employers will continue to work under employment conditions established by multi-employer awards. For this reason it is important that industrial relations reform extend to the area of multi-employer awards and multi-employer bargaining.

A major difficulty in attempting changes to the multi-employer award system is the absence of any systematic analysis of the existing award structure. This was a factor leading the Industrial Relations Commission to agree to a review of award structures in the National Wage Case decision of October 1991.

This article analyses the structure of multi-employer awards. It argues that the present structure of such awards can be criticised on both economic and industrial relations grounds. It suggests that multi-employer award respondency has not been shaped by principles designed or made to that particular purpose. Various legal devices for establishing respondency have combined with tribunal rulings (chiefly aimed at regulating union jurisdiction) and the ad hoc interests of unions and employers, to produce the existing pattern of multi-employer awards. The empirical evidence suggests that awards exhibit neither an industrial nor an occupational concentration. Rather, they have evolved as occupational hybrid awards. The evidence also suggests that there is an absence of representative concentration. This implies that single employer association respondency is not the norm.

The paper is broken up into three substantive sections. In Section 2 we outline the basic rules of award respondency together with the broad consequences of those rules.

Section 3 documents the patterns of multi-employer respondency. It examines a number of characteristics of the 77 largest awards, each of which determines the employment conditions for 10,000 or more employees. This Section suggests an untidy and inefficient award structure.

In Section 4 we offer an explanation for that structure. We argue that, unlike their counterparts in other countries, Australian employer associations failed to exercise a decisive role in shaping award structures as the quid pro quo for conceding union recognition in the formative period of the compulsory arbitration system. We note that multi-employer bargaining is not unique to Australia. Elsewhere, however, it tends to be contoured around the structure and membership of industry associations of employers. Industry-wide agreements are the outcome. At a key phase in the development of compulsory arbitration Australian employers devoted energy to opposing its introduction or reducing its impact rather than to guiding its structure. By default the outcome was a system of awards contoured around the membership of occupational unions. A factor permissive of this employer association abdication was the development of 'protection all round' which insulated most employers from the adverse affects of inefficient labour awards and practices. The removal of such protection necessitates a reassessment by associations of the State-imposed 'historic compromise' and the resultant multi-employer award structure.

2. The Basic Rules of Employer Respondency

Principles of multi-employer award respondency are concerned with determining which employers, or groups of employers, should be brought together into common awards. There are two rational principles by which this problem can be handled. The first is an occupational principle; all employers using a common occupation (defined by the skills and attributes of employees) should be bound by the same award. Closely bound up with the notion of 'the rate for the job', occupational awards can be consistent with standard factor prices as well as 'fairness'. …

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