Declining Formal Strikes in Australia
Introduction
Industrial strikes and conflicts possess considerable challenges to loss in productivity in working days (Cooper & Ellem, 2008). Conflicts and strike resolution is regulated by the Commonwealth Fair Work Act. Such conflicts can be related to harsh, unfair and unreasonable employer action in relation to recruitment, dismissal or treatment of employees, where their rights are not protected. Such strikes and challenges were at its peak during 1917 but have decreased considerably since the 1970s and from 1991 with the introduction of enterprise bargaining. With inclusion of more and more issues which employees face at workplaces number of applications has reduced significantly (Nankervis, Baird, Coffey & Shields, 2016). While the role of the Fair Work Commission is to pre-emptively block any industrial dispute with renewed attention being given to administrative and legal barriers that limits Australian workers collective action. Work stoppage in industrial lock-out and other strikes possess significant losses in number of working days though they have become extremely rare in Australia currently (Stewart, 2011). The scope of the current analysis includes identifying reasons that have led to the reduction in number of formal strikes across the country. It identifies past trends and reasons for lock-outs with current trends and reasons for decline in lock-outs.
Analysis
The Fair Work Commission has provided various regulations in order to block any industrial action that might hinder industrial productivity. The current regulations that the Commission have developed is completely one-sided as it supports the industrialists and businessmen ignoring labor force completely. In the past Australia, similar to other developed industrial nations, experienced significant number of days lost to formal strikes and lock-out procedures (McKenzie, 2015). Currently the population of Australia is only at 20% as compared to the past but such strike rates is near to zero. In the past more than 4.2 million days was lost in strikes which have also dramatically improved. The following figure from Australian Bureau of Statistics Labour Force revealed the significant drop in rates of formal industrial strikes. There was prohibited action that was taken by the Bus Union and the Rail Tram for economic damages, possibility of safety hazards and public inconvenience. Unions in Australia have high membership, yet they have lower collective bargaining power. Australia is believed to have the most stringent restrictive industrial actions amongst industrialized country. Industrial conflicts had been at record high in the 1970s with average 500 days lost in 1000 workers in the past decade. As per the Accords process disputes fell from 1983, back from 200 days every per 1000 workers from estimates. Work Choices in 2005 post 1991 began steeper decline by bottoming out. The dramatically extent of declining industrial disputes have represented 0.005 % of total work time. Collective industrial actions have become large invisible across Australian economy. Regulators have prohibited work stoppages due to economic damage or public convenience.
Figure 1: Declining Trend in Industrial Disputes per 1000 Employees
Source: ABC, 2014
Australia’s rates of industrial strikes are the lowest amongst all countries in the world, some experts provides that Australia’s restrictions on industrial action is the primary reason (Forsyth, 2012). The introduction of enterprise actions along with other regulations includes prohibiting industrial action, while being within current enterprise agreement. Restricting timing, notice and disclosure, authorization that leads to work stoppage have further reduced formal strike procedures. Strict limits in regards to bargaining demands which are in turn legally tied to industrial action are another procedure that has limited formal strikes. Restrictions on peaceful activities such as boycotts, picketing and other limits on speech during the time of industrial disputes. Blanketing and discretionary authority in order to prohibit an industrial action which might hinder or affect public service have further reduced industrial disputes (Spencer & Hardy, 2014). Arbitrary powers of the Commission in suspend industrial action whenever the regulator deems cooling period has hindered capability of employees to collectively call for industrial strike. The Commission further provides prohibitive protected action in case unions or their representatives have contravened any other regulatory orders, even in cases it is not directly linked to the strike have further demotivated the ability to call for a formal strike (Hardy & Howe, 2010). According to the framed regulations, the Federal Government has powers to directly intervene in terminating any disputes by any Ministerial declaration. These legal and regulatory measures along with certain structural factors introduced by the Commission have significantly reduced any effect or incidence arising from formal strikes. The union members currently in Australia faces immense legal, economic and administrative barriers in order to undertake collective industrial actions towards their bargaining goals (Baccaro & Howell, 2011). The below mentioned data reflects historic trends of days lost in industrial disputes.
Figure 2: Historical Trends in Industrial Disputes
Source: Australian Economic Statistics 1949-1950 to 1996-1997
The International Labour Organization states that, the right to strike comprises of an essential for workers and organisations need to promote and protect economic and social interests for the same. However, Australia the situation can somewhat be contrasted with slowing of share of workers being covered by enterprise agreement with that of wage increase. The Department of Jobs and Small Business data on entries bargaining reflected an annual wage increase of 2.2% in 2017, which is one of the slowest in the history of enterprise bargaining (Toh & Quinlan, 2009). In relation to the above discussion for the regulations that was introduced in Australia with respect to enterprise agreement almost all rights of the Unions have been curbed and to exclude their rights further there have been legal steps included. In the post-war phase of industrial expansion, industrial disputes were very common with over 1700 strikes every year from a period of 1950 to the 1990. With number of strikes peaking to all time high in 1970s , with over 2000 strikes (Gerber, 2013). The introduction of protected industrial action was done when strikes was allowed. At this juncture, the number of disputes almost reduced to about two-thirds. However, in the year 2017, there could be seen a large number of strikes with cases of 106 industrial disputes being reported. The ABS reports that working days that are lost directly or indirectly in a working year have significantly declined when compared to past trends. In the time period 1950s to 1960s, it was estimated that an average of 1 million work days per year was lost due to industrial disputes, which was almost 3 million per year in 1970s and then 2 million in 1980s (ABS., 2018). Introducing enterprise agreement have led to work day lost per year to decline to an average of 145,000 days in a year currently (Hamberger, 2012). The figure below depicts relation of Australia’s postwar economic history of pace of wage growth with that of frequency of industrial disputes.
Figure 3: Work Stoppages and Wage Growth, 1950-2017
Source: Australian Economic Statistics 1949-1950 to 1996-1997
The Australian economy post war has a relationship between pace of wage growth and frequency of industrial disputes. The data released by ABS reflects that the credible threat from work stoppage is integral in the collective bargaining powers of workers. Thus, it can be stated that industrial action can be related to faster growth in rate of wages. In the current scenario rates of wage increase has dramatically slowed which can be seen associated with reducing number of formal strikes in Australian industries (Sandford & TanKiang, 2011). With industrialists and businessmen having full support from the Commission and the Federal Government, rates of industrial strikes can be seen to be going down significantly. Complaints registered are now dismissed or treated under stringent legal scenarios. Internationally industrial strikes have reduced significantly since the 1980s but did not disappear. Disappearance of industrial action in Australia can be seen as a complete action as compared to other developed industrialized countries. Comparison of Australia’s industrial formal strikes with that of other OECD countries reflects that Australia leads significantly (Kippist & Fitzgerald, 2009). Australia has lowest strike frequency rates when compared to its population-normalized frequency. France on the contrary has seen higher rates of industrial disputes as compared to any other OECD country. There are some countries where there is lower frequency of industrial disputes such as the U.S.; however such low rates can be attributed to lower union membership and incapability of unions to conduct any type of activities such as industrial actions. In some other countries such as Netherlands, Sweden and Austria unions participate in regular industry-wide negotiations hence they have lower rates of strikes. They have present collaborative centralized bargaining structures to achieving wage increase with lower number of strikes (Pyman, Holland, Teicher & Cooper, 2010).
In Australia, there is fair number of union participation and issues prevailing for which workers can call for formal strikes. However, the restrictive practices debar unions into entering any sort of formal procedure for negotiations and bargaining. In short, all powers of the union and employees rest with the Commission and they enjoy relatively fewer rights under the new enterprise agreement. In order to end industrial strikes, a cumulative decision was entered into by the regulators for prohibiting industrial disputes. Examples of past industrial disputes in Australia in Sydney can be seen to have impact on its economy. With the new regime in place, work stoppages have reduced by almost 97% ever since 1970s. It can be said that the procedure of collective bargaining allows labors to interact with employers, however in absence of the same unilateral powers of employers to hire and fire prevails (Jericho, 2015). While no one appreciates work-stoppages due to cost associated with it and disruptions, the new state of art regulations prohibits any sort of free will to do so. Strikes are common in most nations of the world, the resultant costs of disputes has to be considered for understanding the impact that they generate on society and economically. In Australia, the Commission along with the government has necessitated a course of action leaving potential industrial disputes to be one-sided. The Commission totally ignores the broader aspect of economic and social costs that might arise from wage stagnation and from rising inequality of labour incomes, which form basic characteristics of today’s labour market. The current prevalent scenario in Australia needs some corrections from the lopsided trajectory of its labour market. The current policies prevalent in Australia are more likely to affect the larger variables stagnant wages, strained household finances and falling labour share in national output. The variables are more likely to impact the broader macro-economic variables of consumption pattern, reducing in number of industrial workers, declining industrial output and so on. All policies and regulations need to provide an appropriate balance such that a healthy collective bargaining can be introduced and cost of disagreement can be reduced. The Commission needs to take into consideration such that basic rights of the basic rights of the labors can be meaningfully restored and a positive labour market trend can be established.
Conclusion
The scope of the current discussion reveals that the Fair Work Commission have pre-emptively analysed all data related to number of days of lock-out and reasons for such lock-outs. The primary reason that can be attributed to reduction in industrial disputes across Australia is attributed to restrictive practices undertaken by the Commission along with the Federal Government. The Commission in an active manner has been able to prohibit any collective actions that workers might take. It prohibits industrial action at the term of current enterprise arrangements, strict timing, notice, authorization, disclosure for any sort of work closure. Restrictions on peaceful activities in industrial disputes and ability to prohibit protected unions. Moreover, the Federal government’s power to directly intervene for termination of disputes has given industries an edge over workers. With various restrictive efforts and policies, there have been record low rates of formal strikes in Australia with significant drop in complaints as well. Though there are such actions, until the basic rights of workers in regards to stagnant wages, falling share of national output and strained household expenses continue, there is bound to be negative trends in the labour market.
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