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Industrial Relations - Centralised Vs Decentralised

The implementing of the Workplace Relations (Work Choices) Amendment Act 2005 (‘Work Choices’) by the federal Coalition government saw the most audacious industrial relations legislation enacted for the Australian community in over a century (Peetz, 2006). It was to be a central plank in the government’s stated aim of reform by decentralizing industrial relations laws in Australia.

The changes were significant and included:
- abolition of the ‘no disadvantage’ test
- abolition of unfair dismissal protections for workers in firms with less than 101 workers
- privileging individual contracts (‘Australian Workplace Agreements’ or AWAs) over collective agreements (CAs),
- restricting the right to undertake collective action
- restricting union entry to workplaces;
- forcing many employers previously covered by State legislation into the federal jurisdiction

Now, with the Rudd Labor government in power, a huge body of legislation will be introduced to dismantle Work Choices.
Labor’s new Workplace Relations Amendment (Transition to Forward with Fairness) Bill 2008 seeks to revert to a centralizing of Industrial Relations law in Australia through:
- introducing a new ‘no-disadvantage’ test
- Replacing the Coalition government’s Work Choices laws and AWAs.
- Ensuring that employees earning under $100,000 per year are protected by a strong safety net which will, in turn, protect key entitlements like public holidays, overtime, penalty rates, annual leave, parental leave, and redundancy for Australian employees (ALP, 2007)
Enacted, this is likely to produce a hybrid … a centralized/decentralized IR environment. It also leaves undecided some key elements in the coverage of employees under State rather than federal awards.

Advocates of a decentralized system of IR laws in Australia cite the inadequacy of centralized systems to cope with the increasing demands of a globalised environment, believing that, in order to stay competitive, companies need...