Wages Policy and Wage Determination in 1996

Abstract

Traditionally Australian wage determination has involved specialiscd state agencies providing the setting in which employers, unions and workers settle agreements, written and unwritten, individual and collective. Until recent times the formal elements of the system have been built around the equal standing of unions and employer representatives in setting basic standards under the authority of industrial tribunals. As a matter of practice, however, employers at workplace and enterprise level have, in many industries, enjoyed considerable autonomy in the setting of wages and conditions above minimum standards.' Developments in 1996 confirmed the steady reduction of union influence in the formal process of wage determination and a consequent increase in the relative power enjoyed by employers in setting pay. The changing role of industrial tribunals in these trends was also clarified during the year. At both state and federal level they played an active role in facilitating the development of new, non-union and, in some cases, individual contracts of employment.As the year unfolded a number of key events occurred at national, state and industry levels and important new information on how wages are set within the firm was released. At the national level the last days of the Accord coincided with the tacit acceptance of individual, staff-based systems of employment within the award system. Ironically, the early days of the Liberal-National Coalition coincided with the commencement of a living wage case conducted to maintain the relevance the award rates of pay for the late 1990s. Both developments signified the high level of policy continuity between the outgoing Labor and incoming Liberal-National Coalition governments. The consolidation of employer influence in the system of wage determination received further support in the reforms promoted by most state governments, two of which (Victoria and Queensland) moved to directly align their systems with that prevailing federally. Newly released data on enterprise and workplace level wage determination revealed growing fragmentation in the wages system, with growing numbers of workers being excluded from coflective agreements at workplace level, and a large proportion either achieving wage increases outside of collective bargaining or working longer hours for no increase in pay at all. Developments at industry level revealed that the balance between individual and collective bargaining varied dramatically from industry to industry. They also revealed that the nature and outcomes of collective 1. An excellent account of employer autonomy is provided in Chris Wright (1996), The

Minimum Wage Estimates and Adjustments in Australia Since 1983

“…The major events in year were the second and third safety net adjustment decisions. For approximately one-third of the workforce, award safety net adjustments remained the only source of improvement in wages during 1995 (Buchanan et al, 1996). Registered enterprise agreements consolidated their position as a significant source of wage increase for another third of the workforce.…”

“…The ACTU's aim was to raise the award minimum hourly rate of pay to $12 and for relativities to this rate to be maintained throughout the wage structure. Wide ranging submissions were received by the AIRC, including submissions from relatively nontraditional participants in the wage setting system such as the Brotherhood of St Laurence and the Reserve Bank (Buchanan et al, 1997). Buchanan et al (1997) note two further key issues.…”

“…Wide ranging submissions were received by the AIRC, including submissions from relatively nontraditional participants in the wage setting system such as the Brotherhood of St Laurence and the Reserve Bank (Buchanan et al, 1997). Buchanan et al (1997) note two further key issues. Firstly, the immanent cessation of the Australian Bureau of Statistics survey of award rates of pay was expected to impede the flow of information about award wage movements.…”

Different Paths to Neo‐Liberalism? Comparing Australia and New Zealand

“…Awards continued to operate, but their role was reduced to that of a "safety net" (MacDermott, 1995). Employees covered by awards received some modest wage increases through national wage cases (Dabscheck, 1997) but lagged significantly behind increases available through enterprise bargaining (Buchanan et al, 1997).…”