MGT2EMR Employment Relation Essay

Introduction:

This essay is about the fast changing global economy and an overall sense of pessimism about the future role of unions in Australia. This essay examines a few topics concerning the past and present of unionism, and attempts to make sense of them in terms of strategic decisions that, Australian trade unions might make in planning for the future.

The Decline of Australian Trade Union Membership in Last Few Years:

Unions have played an essential role in Australian society through raising workers' living standards and pursuing social justice issues. Shorter working hours, equal pay for women, greater health and safety, vacation time, superannuation, vocational training, and other aspects of Australian working life are the result of persistent and vigorous union campaigns (Bowden, 2011). Despite these real-world successes, the outlook for the Australian union movement does not sound interesting, based on statistics. By looking at the data, it has been demonstrated that, at the end of twentieth century, Australian Union membership, has started to fallen in terms of absolute numbers and as a proportion of the labor force (Schnabel, 2013).

David Peetz provides one of the best contributions on the reasons for union decline. David Peetz describes the three main factors that causing the decline in Australian union density or trade membership. The three main factors are: structural change in the labor market, institutional factors and union response to new employer strategies (Peetz, 1998: 175). The number of union member has declined from around 2.5 million in 1976 to 1.5 million in 2016, additionally on the same year the share number of employees or the union density has fallen from 51% to 14% (Gilfillan & McGann, 2018)

Structural Change

Structural change in the market includes the casualization, the growth in the part time work, growth of different industries and occupation where union density is traditionally low, increase in the scope of self-employment and other alternative employment arrangements. As researcher argued that, approximately half of the decline in union density and trade union membership was occurred in the year from 1980s to 2000 (Ellem, Goods & Todd, 2020). The structural transformation has been cited as a major cause of union decline in advanced capitalist economies. In the context of these structural changes, Australian union representatives ascribe a substantial part of the decline in unionization to decreased manufacturing jobs. Another factor for the structural change in the decline in union density is the shift share analysis of union organisation rates, by industry and occupation (Western, 1996).

Trends in Level of Union Membership and Union Density 

(Source: Australian Bureau of Statistics, Trade union membership August 2020)

• The above mentioned graph displays that, union members and union density faced the steady decline from year 1986 to 2020.
•  only 14% of employees were trade union members
• From 1992, the proportion of employees, who were trade union members, has fallen from 40% to 14%.

Figure 1:  trade union membership by gender wise:

(Source: Australian Bureau of Statistics, Trade union membership August 2020)

Figure 1 depicts that, over last few years the trade union membership has fallen from 40% to 14%. Only 14.3% were a member of trade union in their main job. This is decrease from 14.6% that has been recorded in August 2018. Generally the trade union membership has experienced decline since 1988. From 1992 to 2020, the proportion of employees has fallen such as (from 43% to 13% for men and 35% to 16% for women.

 Figure 2: trade union membership by industry wise

(Source: Australian Bureau of Statistics, Trade union membership August 2020)

The figure presents the industries with highest proportion of employees who were trade union member

• education and training had 31% member of trade union, that is followed by public administration and safety 28% and health care and social assistance 28%, reasons behind the decline in trade union membership are:
• The steady decline in the employment of industries that usually had high concentration.
• The collapse of compulsory unionism in Australia in the era of 1980s to 1990s
• Increase the growth of employment in service industries that traditionally had low union presence (such as food services, accommodation, retail and trade)

Figure 3: Trade union membership by occupation wise

(Source: Australian Bureau of Statistics, Trade union membership August 2020)

• Figure 3 presents the occupation with highest recorded proportion of employees who were trade union member
• According to data 21% professionals were a member of trade union, which is then followed by community and personal service worker 18% and machinery operator and driver 17%.
• Another reason that, contributed in the declination of union membership and union density in last few years is that, shift of interest from permanent job to part time or casual employment

Institutional factor:

Institutional factors include the legislative changes that have an adverse effect on the union membership. This involves the de-collectivization of the employment relationship as well as the withdrawal of union recognition. The highly dependence of Australian trade union on legislation and compulsory union provision made them vulnerable to radical legislative change ( Tapia, 2013). Under the Federal Workplace Relation Act (1996), union preferences and union compulsory was made illegal for both the employees, who covered under the federal system and those who were within reach of common wealth power. Similarly, different legislative changes prohibited the compulsory unionization under the government acts in different industries. 

In the year 1990 to 1995, the conservative governments in five states of Australia introduced the new legislative framework, that aimed to prohibit the compulsory unionization, as well as encourage the individual bargaining, and make the transition an easier to non-award coverage. As before in the late 1980s, more than half of the members were required to be union members as the part of their employment. But after the new regime in 1996, the newly elected Howard government terminated the compulsory unionism and made it more difficult for the union to strike and recruit (Ibsen & Tapia, 2017). So in past, it was a major factor that effected the movement and growth of union in Australia. So it can be said that, the end of compulsory membership due to the federal and state legislation in the 80s and 90s, was a main contributor to the decline of union membership and density, in Australia.

 Later in 2005 the Howard the liberal government passed the most controversial “work choice” amendment to the WRA 1996 that had been previously rejected by senate. According to this law, new national industrial relation system has been established under the corporation power of the constitution that allowed the federal government to set minimum terms and condition for the work force. Moreover the most important thing is that, this law has imposed significant restrictions on union activities. Changes in policy, rules, regulations, and contracts have also had a direct impact on union membership and density over time (Lansbury, Wright, Bamber & Wailes 2020)

New employer strategies: 

New employer strategies and failure of union respond is another reason of decline in union membership. Employer attitude and strategies plays an important role in the success and decline of union membership. According to Peetz (1998: 177), it has been noticed that, there has been some American style anti-union trends in Australian employer behavior in the 1990s. Further he argued that Australian union was unable to encounter this employer behavior and poor strategic choices. Peetz claims that the concentration of Australian unions on market share rather than expansionary unionism is an example of poor union strategy, especially given the waste of resources when unions fight expensive coverage disputes.

On the other side, various surveys have been conducted in order to check the Austrian public perception toward union membership. Australian Centre for Industrial Relations Research and Teaching (ACIRRT) survey commissioned by the Labor Council of NSW conducted a survey in 1997 on this serious matter, and found the result that, there is reduction in the sympathy toward union member, and also identified the dissatisfaction with union services, particularly among union member. This scenario caused the reduction in confidence in the union capacity to deliver its better services by both unionist and non- unionist alike. So this suggested that, union revival is based on improving union infrastructure and strategic management (Labor Council of NSW, 1997)

Conclusion: 

Over the last four decades, the Australian economy has seen a gradual decline in union membership and in density. The major cause of this declination is a change in structural factors, which has a significant impact on the employment of various industries, along with an increase use of more flexible forms of employment. Moreover it has been examined that, there have been structural and institutional changes that have occurred and have had an adverse effect on the Australian union membership. There are some “exogenous” and external factors that impacted badly on union movement. The change of government, legislative system, employer attitudes and strategies towards the union plays a crucial role in the success and failure of union movement. However, on the other side there were some “endogenous” and internal factors that had a significant effect on the union movement and operational activities of union. These internal factors include the union structure, union governance, resources, human resource policies & strategies and union strategic choices. in addition it has been determined that, , level of union membership in Australia may face additional problems in the future, as more flexible forms of work have become firmly entrenched in some areas while becoming more prevalent in others.