HRM107 quick notes.docx - Employment Relationship An...

Employment Relationship
 An economic exchange –an agreement between the employer and employee over the sale of the
employee’s potential to work.
 A power relationship –whereby the employee agrees to submit to the authority and direction of the
employer.
 It is also a continuous and open-ended contract
• Employees can modify and restrict their work effort;
• Employees can combine collectively to challenge managerial authority.
 The relationship is interdependent in nature. I.e. both workers and employers have an interest in the
organisation’s viability
 The various parties can have conflicting priorities (eg over wages, employment conditions and
managerial prerogatives) and this can lead to industrial conflict
 This gives rise to the bargaining framework ; ‘the rules, regulations and institutions that govern the
employment relationship and which set the terms and conditions of work and employment’ (see
Nankervis,chapter 3).
 HRM influences and is influenced by this system. HR practitioners must work within the regulatory
framework it provides and make corresponding strategic choices.
The Bargaining Framework is an umbrella term. It simply refers to the arrangements by which terms and
conditions of work are determined. It refers to the ‘rules of the game’ and the ‘rules of the parties’.
Australia has had a rich history of government intervention in employment relations.
• 1904 Conciliation & Arbitration Act

o Settled disputes
o Minimum entitlements were gradually introduced
• 1980’s: Accords
• 1990’s:shift to enterprise bargaining
• 2006:WorkChoices
• 2009:FairWorkAc

The minimum wage is the lowest base rate that an employee can be paid for ordinary hours worked.
It must be adhered to by all businesses operating in Australia.

Every year, the Fair Work Commission’s (FWC) Expert Panel reviews the minimum wages received
by employees in the national workplace relations system. The process involves:
i. Written submissions from interested organisations & individuals
ii. Consultations before the Expert Panel
iii. Research commissioned by the Expert Panel.

The current National Minimum Wage is $18.93 per hour, or $719.20 per 38- hour week (before tax).
Casual workers are covered by this national minimum wage, but they also must receive at least 25%
casual loading.

The Fair Work Act provides that the Commission must conduct a 4 yearly review of Modern Awards.

Recent decision to vary certain penalty rate provisions in some awards for the hospitality, restaurant
and retail industries.

The decision affects penalty rate provisions for some permanent and casual employees working on
Sundays, public holidays, early mornings or late evenings in these industries.
A union is an organisation, consisting predominantly of employees, which aims to protect and promote the
interests of its members.

Union membership enabled Australian employees to increase their bargaining power. By acting collectively,
they could command higher wages and better working conditions than they might otherwise have received if