Australias Wage Determination System Essay
Throughout the 20th century, Australia has maintained a system of tribunals to make decisions about wage and non wage outcomes and to help resolve industrial disputes. Institutional forces affect the operation of the free market in order to improve labour market outcomes, such as guaranteeing minimum wages and conditions. The four institutional forces that affect labour markets are Governments, Trade Unions, Employer …show more content…
AWA’s are individual employment contracts between an employer and an employee. The introductions of AWAs was intended to create maximum flexibility to adjust work and pay conditions. Once an AWA is negotiated it must be lodged with the Office of the employment advocate to pass a community standards test, which ensures the employee is better off.
This involves employers and trade unions negotiating enterprise agreements in order for a raise in real wages or working conditions, which would increase productivity. Trade unions bargain collectively on behalf of their members thereby increasing the bargaining power of individual workers in negotiations.
Recent Policy and Proposals
Under a new federal government plan, medium to large sized businesses with up to 100 employees, (90 % of employers), will be exempt from unfair dismissal claims. The prime minister believes this will create more jobs as this is an incentive to hire workers. However, many believe that this new policy is a ‘fire at will’ policy, whereby workers are seen as commodity, a cost of production and are disposed of once unneeded. This policy means that employees will lose their rights to seek justice after being sacked. However, workers will still be able to make breach-of-contract claims in court under common law or claim under anti-discrimination laws. Many workers do not want to go to the trouble and