Academic journal article The Economic and Labour Relations Review : ELRR

Outsourcing, Employment and Industrial Relations in the Public Sector

Academic journal article The Economic and Labour Relations Review : ELRR

Outsourcing, Employment and Industrial Relations in the Public Sector

Article excerpt

Introduction

The Australian state, like that in other OECD countries (eg the UK and New Zealand), has been and continues to be in a phase of extensive restructuring (Fairbrother, 1998; Teicher, 1998). The restructuring process has proceeded since the early 1980s, cautiously at first, but since the 1990s with more urgency (O'Brien, 1998). It has transcended the two major political parties, indeed the Labor Party is regarded as the pioneer of the restructuring process in the Federal sphere of government (MacInnes, 1993). The functions, size, operations, effectiveness and efficiency of the public sector has been subject to extensive debate and analysis (EPAC, 1986; James, 1987). In addition, the relationship between the public sector and the private sector has undergone a revolution (Teicher, 1998). The relative size of the public sector in Australia has diminished, the responsibilities between different tiers of government within the Australian public sector has altered, many public sector functions and agencies have been privatised, senior appointments have been politicised, and the lifetime career model of public sector has been considerably eroded (Fairbrother, 1998). Managerial authority has increased, commercialisation has expanded and performance criteria have been implemented at all levels of the public sector (Teicher, 1998). These changes have also occurred at a time when the industrial relations system in Australia has shifted towards enterprise agreements, non-union agreements and individual employment contracts (Quinlan, 1998). Public sector restructuring has complemented industrial relations restructuring, and as a consequence, the terms, conditions and nature of public sector employment and industrial relations in Australia has fundamentally shifted (O'Brien, 1998).

In this article we look at one component of the restructuring process of the public sector in Australia, that of contracting out. Outsourcing, contracting out or compulsory competitive tendering are sweeping across all sectors of the Australian economy, including the public sector (Industry Commission, 1996). Indeed, it has swept across all tiers of government from local to federal government and through to government agencies and public business enterprises. It has covered all inputs and services from cleaning, prisons and road construction through to information technology, auditing and training/Even supposedly pure public goods such as the court system is now subject to proposals for contacting out; at least in Victoria (Lawson, 1999). The extent and speed of outsourcing implementation in the Australian public sector has been so extensive that it is the public sector which is seen to be leading the way over a more cautious and conservative private sector (Bryan and Connors, 1999). At a fundamental level, outsourcing represents a form of partial privatisation of the public sector where functions and inputs are privatised but ownership remains within the public sector. However, outsourcing has the potential to shift employment from the public to the private sector, increase managerial prerogative, rearrange employment conditions, increase employment insecurity and completely restructure the public sector internal labour market. In turn, outsourcing can deunionise the public sector, recontractactualise public sector employment and place pressure on employment conditions.

In this article we investigate the impact of contracting out on public sector employment and industrial relations. In the next section we discuss the nature and forms of outsourcing. Following, the reasons for outsourcing in the public sector are listed. The extent and examples of outsourcing in the Australian public sector are then outlined. The next two sections assess the impact of outsourcing on public sector employment and industrial relations. The final sections consider the impact of outsourcing on public sector unionism and the public service employment model. …

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