Australia’s industrial relations system was for a long time centralized and arbitral in nature. This was the case until the 20th century when there emerged a movement towards a more decentralized system in which the parties (government, employer organizations and unions) saw the need for enterprise bargaining as the ultimate basis upon which to determine future wage adjustments, (Lansbury, 2000:35). This paper outlines the constitutional basis and the details of the nature of Australia’s industrial relations system with regard to Unions and the changes that have been observed over time.
The Australian industrial relations system derives both its power and necessary constitutional litigation basis from the Commonwealth of Australia Constitution Act. However, at the time the Act commenced back in 1901, it said very little about industrial relations except for provisions in sub-section 51(xxxv) which was the only sub-section of the entire constitution that talked of industrial relations issues, (Stewart, 2009: 20). Provisions of sub-section 51(xxxv) of the Australian constitution give Commonwealth Parliament the power to make conciliatory and arbitration laws which are meant to check and resolve industrial disputes that span beyond the scope of a single state. The design and wording of these provisions imposes restriction to the extend to which the Commonwealth Parliament can legislate over general employment issues as well as its ability to legislate more directly over industrial disputes. This implies that Commonwealth Parliament can only exercise these constitutional powers when the issues at hand are purely industrial in character, (Creighton and Stewart, 2005: 84-85).
In Australia, Unions have played and continue to play a significant role in matters to do with labour market regulation in light of fact that employment relations have been for a long time institutionalized. It has been a common trend to find major political parties use industrial relations reform agenda as their campaign platform. The intention for such reforms is usually to foster workplace change and eliminate unnecessary rigidity in the labour market by establishing a decentralized bargaining framework for enterprises. This enterprise bargaining process was initiated in the late 1980s under the Hawke Labour Administration together with the input of the union movement. During this period, the Australian Labour Party (ALP) had signed an Accord with the Australian Council of Trade Unions (ACTU) to deal with labour issues including wages. But the Business Council of Australia (BCA) expressed concerns that there was still over-regulation of the labour market. BCA advocated for comprehensive enterprise bargaining approach that would foster sustainable competition regardless of whether the unions would be involved or not, (Lansbury, 2000: 34-35).