Australias Wage Determination System Essay

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Australia has gone from a highly centralized wage determination system to a mainly decentralized one. There has been a move away from accords and awards to enterprise bargaining, through the 96 Workplace Relations Act. Recent policies include changes to unfair dismissal claims and the 2005 workplace reforms package. 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…
This centralised wage system reduced the levels of inflation, industrial disputation and unemployment. The Industrial Relations Reform Act (1993), was the first major step towards a decentralized system. It was a compromise between a decentralized system, based on enterprise bargaining and a centralized system. It moved away from the national wage case and introduced the award safety net - that awards underpin enterprise bargaining. It intended that the wages and conditions of employees would be increasingly determined through enterprise agreements, and awards would only be for those unable to make agreements. 1996 Workplace Relations Act The election of the Liberal Coalition Government saw the end of the Accords, centralised wage determination, and a lessening of the role of institutions (IRC, ACTU) in the wage determination processes. This new system lessened the power of unions by making it easier for workers to form enterprise unions. It deregulated the labour market by reducing the
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