The topic of industrial relations has been considerably important for both the employers as well as the employees. The topic is generally discussed in terms of relationship between both employer and the employees and moderating factors that govern outcomes of this relationship. John Dunlop was an eminent British economist who published his famous book called 'Industrial Relation System' in 1958. In this book, Dunlop presented the theory called systems theory of industrial relations. Briefly, Dunlop's systems theory observed that industrial relation/s is a system composed of four main elements. Thus, industrial relation system is composed of certain actors, ideology that bonds the industrial system, contexts of the relationships, and certain rules that govern and moderate the relationship of governance of these actors. This also implied that an industrial relation system can be having distinct subsystem from economic or societal system in which the employer operates. Thus, four elements of industrial relation system as identified by Dunlop were a) Actors (comprising employers and employees, b) ideology that binds actors together, c) context of relationships, and d) rules that govern the actors (Dunlop, 1984), also referred as 'web of rules'. The web of rules that enable development of relationship between both the parties was divided in procedural and substantive rules. This paper will only take into consideration the 'web of rules' as described by Dunlop.
This paper will describe and synthesize viewpoint that how the 'Fair Work Ac t 2009, Australia' does contains procedural and substantive rules in consistency with the systems theory of industrial relations as professed by John Dunlop. The essay will adopt descriptive-argumentative style and carry subsections to clearly demonstrate the understanding of industrial relations of Dunlop's systems theory. It will also try to include instances where Fair Work Act 2009 complied with 'web of rules' elements in Dunlop's industrial relation systems theory, thereby extensively covering the substantive and procedural rules of the act.
Web of rules: The Dunlop's systems theory of industrial relations
As mentioned in the earlier section, Dunlop's systems theory identifies four main elements of industrial relation system. Out of these four main factors/elements, 'web of rules' is the most critical of all elements as Dunlop holds these elements primarily responsible for governing relations between employers and employees. The systems theory of industrial relations state that both substantive and procedural rules, part of 'web of rules' element can be described as "The substantive rules pertain to issues involving wages/salaries, hours of work and other terms and conditions of employment. On the other hand, the procedural rules relate to the rules governing discipline, redundancy, settlement of disputes, periodicity of meetings, renewal of collective agreements and the like" (Lopez-Varela 2012, P. 268). Dunlop does not explain that these rules can only come into existence through mutual agreement of employer and employees, and further these rules can be written, verbal, and customary rules as adopted by the organization over a period of time.
It seems that Dunlop has differentiated between these two types of rules since it is not possible in case of procedural rules to quantify the relationship between employer and employee. Wages, over-time rates, compensation packages, and working hours can be defined in terms of numbers but in case of procedures, only broad parameters/rules of engagement can be set. Nonetheless, the creation of rules is most essential part in Dunlop's systems theory of industrial relations. It is the establishment and management of these 'web of rules' that forms the cornerstone of industrial relations. All other elements, as defined by Dunlop i.e. actors (employer, employee, governmental agencies, etc.), ideology, and relationship contexts are mediated/moderated through 'web of rules'. These rules can also be referred as 'rules of engagement' between different actors.
John Dunlop's (1958) systems theory of industrial relations also identified three main categories of actors within industrial context. There were I) hierarchy of managers as well as their representatives, II) hierarchy of employees that are non-managerial as well as their representatives, and III) specific governmental agencies as well as private agencies developed by employer and employees. The purpose of third actor, the governmental or private agency is to regulate and administer the relationship of first two actors. Dunlop also identified that contexts such as technological, market related, and political contexts shape the behavior of each of the actors. It seems that most of the scholarly work on industrial relations has been carried out keeping this tripartite framework developed by Dunlop. The Fair Work Act 2009 also indicates that these three actors are fundamental to industrial relations. Although, there has been much increase in number of agencies influencing the relationship or 'web of rules' between the employer and employee, the contemporary civic agencies have only come into existence as a means to consolidate the already acknowledged 'tripartite' framework. Before we delve into specific procedural and substantive details of Fair Work Act 2009, it is pertinent to quote the objective of this government promulgated act. The government of Australia stated that "The object of this Act is to provide a balanced framework for cooperative and productive workplace relations that promote national economic prosperity and social inclusion for all Australians" (Fair Work Commission, 2009; Chapter 1-Division 2). The objective implies that procedural transparency (originating from procedural rules) has assumed much dominance in Fair Work Act 2009 as compared to substantive rules. Nonetheless, we now identify procedural and substantive rules in the said act. The need for new frameworks on collective bargaining have been required due to change in forms of employment such as casual employment, flexible working hours, and other forms (Watson, 2003).
Substantive rules of FW Act 2009
FW Act 2009 is a lengthy document that has six elaborate chapters, each dealing with different but interrelated subject regarding industrial relations. Each chapter has sub-parts and each sub-part has multiple divisions (Department of Education, Employment, and Workplace Relations, 2013). Each division has several numbered sections, subsections, clauses, sub-clauses, and provisions. Chapter two is titled as 'Terms and Conditions of Employment' for national system employees in Australia. Part 2-2 of this chapter contains 10 benchmark standards called 'The National Employment Standards'. Out of these 10 standards, 8 standards are related to 'substantive rules'. For instance, standards 1-4 contains detailed rules regarding maximum weekly hours, flexible work arrangements, parental leave, and annual leave respectively. All these standards are related to substantive rules and thus bind the national system employers to comply with them. Standards 5-8 are also related to substantive rules of national system employees and carry detailed rules in form of divisions, sub-divisions, sections, and subsections related to personal or compassionate leave, community service leave, long service leave, and leaves on public holidays respectively. Thus, part 2-2 of the FW Act 2009 sets out detailed rules regarding substantive elements of employment such as those related to leave and holiday entitlements, working hours, and flexibility in hours to be worked. 38 hours work week for full time employees has been mandated under subsection 62(1) clause A of the FW Act (FWC, 2009). Similarly, clauses A & B. Of subsection 65(1) in Division 4 of part 2.2 makes it mandatory for employers to grant flexible working hours of employees having children I) under school-age and II) under 18 having disability. Exception to this legal obligation for the employer is only under reasonable business grounds. Entitled public holidays (under the public holiday standard (7), division 10, section 115(1) of the FW Act) are January 1 (New Year), January 26 (Australia Day), Good Friday, Easter Monday, 25 April (Anzac Day), 25 Dec. (Christmas), 26 Dec. (Boxing Day), and Queens Birthday.
Modern awards having substantive rules
Modern awards are further set of standards based on national employment standards set under the FW Act 2009. There are ten conditions of employment under the Modern Awards system of Australia. Again, eight of these standards are within the category of 'substantive rules' whereas two standards are related to 'procedural rules'. Substantive rules within Modern awards are regarding minimum wages, types of employment, work related arrangements, overtime as well as penalty rates, wage and salary details based on annual compensation, leave and superannuation. Last two standards of Modern award are related to procedural rules such as consultation, dispute settlement and representation. Under the modern award, the substantive rules in FW Act 2009 are as follows. The first two sections of chapter 2 of FW ACT 2009 indicate that these are essentially related to details of 'substantive rules'. However, to make the rules contingent to certain conditionality and dispute solving in this context, both 'national employment standards' and 'modern awards' include procedural rules as well so that relationship of both employer and employee can function swiftly. It is worth mentioning that modern awards are not applicable to employees having guaranteed annual income above the threshold limit of $100,000. This also implies that employees covered or registered under 'enterprise agreement' (enterprise agreements will be discussed later) will not be treated under the modern awards. In a typical modern award, the FWC has identified that minimum wage rate of employees…