Both trade unions and wage determination are subject to much debate concerning rights and responsibilities of employers and the employees. Outlined below are some of the methods used to determine wages in Australia, and the foremost advantages and disadvantages of enterprise bargaining. Recent trends in wage determination and some of the impacts are also discussed.
In New South Wales, employers and employees can be covered by either the federal or state industrial relations systems, or they may be award free. However, recently Australia has been favouring a more decentralized system of wage bargaining. This is reflected by a rise in influence of employers, a change in political will, and a view that market determined wages will help reduce unemployment.
Although wage determination is currently a topic of much debate, it can be divided into three separate groups; collective bargaining, arbitration, and individual contract.
Collective bargaining, also known as certified agreements, occurs when labour union representatives and employers negotiate in order to reach an agreement on a contract, including factors such as wage, hours and working conditions.
Arbitration refers to when an impartial referee is called upon to hear the dispute. Awards are legally enforceable determinations made by federal or state industrial tribunals that set the terms of unemployment usually in a particular industry or occupation. Employees whose pay is set by award only; this refers to employees who are covered by awards but were not paid more than the award rate of pay. This method is the only remaining centralized element in wage-fixing system.
Individual contracts, or agreements, set up the terms of employment for an individual employer and are agreed to by the individual rather than on behalf of the individual, this will consequently mean that any part of the employees wage will be paid by...