Human Resources International Employment Relations Essay

Excerpt from Essay :

5. How have the trade unions in the industry responded to the changes in employment relations in the industry?

Since 1991, both Labor and Liberal-National governments have encouraged enterprise bargaining, marking a major shift away from a more centralized approach to employment relations. On the other hand, there is still an aspect of external regulation in the automotive sector and more generally, across the industrial relations system. The AIRC, a tribunal established by the Commonwealth Government at the turn of the twentieth century continues to have the power to settle disputes through conciliation and arbitration, to certify enterprise agreements and to establish minimum standards across the workforce. The ongoing role of the AIRC has meant that the legacy of external directive continues to have an influence in the automotive assembly division, as do other third parties such as trade unions (Lansbury, Wright and Bairdi, 2006).

Over the last two decades, there has been a significant decline in the proportion of workers in Australia that are members of trade unions, falling from 49 per cent in 1982 to 23 per cent in 2002. In spite of this decline, unions in the automotive sector have upheld high levels of membership, which has intended that they continue to wield substantial power in automotive employment relations. Among the vehicle producers and large part suppliers there is almost 100 per cent union coverage below the managerial levels of the personnel. The trade union that covers most employers in the automotive industry is the Australian Manufacturing Workers Union (AMWU), which was augmented in 1995 through an amalgamation of several manufacturing-based unions. While there are several other unions covering clerical workers and electrical tradespersons, the AMWU represents about 90 per cent of unionized employees, with its Vehicle Division covering around 70 per cent of waged employees in the sector. The opinion among employees interviewed for this study was that there is widespread support for the AMWU, although some members articulated the view that their union should have pressed companies harder in order to raise skill levels and increase career opportunities for the workforce. There also lingers a difference between the Vehicle and Metal divisions of the AMWU over the issue of permitting production workers to move into maintenance and trades areas of work. Disputes in the industry have been increasing since the late 1990's as employers seek to achieve greater labor flexibility and productivity improvements through enterprise bargaining. Despite this, according to management and union officials in the industry, relations between the parties are generally amicable (Lansbury, Wright and Bairdi, 2006).

6. Are there further changes in employment relations that the industry is required to make into the future to ensure the industry remains viable? If so, what are they? What role will government, institutions and trade unions have in these future changes?

For the automotive complex to perform well there is a need for improved partnerships between the users and the producers; the transfer of knowledge between the users, producers and the public sector research organizations; and a clear role for government in supporting industry, the research infrastructure as well as through raising standards. The automotive industry in Australia has become more competitive and more export-oriented over the last decade. The industry has evolved into a clever, multi-skilled business able to compete against imports on quality and reliability. It has achieved profit margins on low production runs that few of the high production manufacturers would consider viable. Nonetheless, the assemblers increasingly need to find new competencies in all realms, ranging from electronics, intelligent transport systems to finance and purchasing. Therefore they are looking for global partners who can design and supply the same part or module on a worldwide basis (Riemen and Marceau, n.d.).

The role of regulating authorities is fundamental in a well functioning complex.

In particular, the government has responsibility for the provision of standards, in stimulating firms to increase their export efforts, and in supporting the education and training system.

Overall, Australia adopts world standards but is ahead for example in stipulating the use of seatbelts. In response, Autoliv and Holden collaborate with MUARC on safety technology to stay ahead of their competitors. Expertise and training in safety technology is relatively recent in Australia thus both companies need to rely on training providers overseas. Thus there is a certain weakness in the complex. While government is setting a high standard which producers and users, in cooperation with the public sector research organizations, are aiming to comply with, they are in need for basic research and training to sustain future progress. Government has not adequately addressed the response to this knowledge shortage. The Australian government could also set higher standards in areas such as fuel consumption and recyclable materials to encourage further product development. Governments play an important role in the international trade arena. Australia does not benefit from any trade agreement while at the same time it has substantially lowered its tariffs. The assemblers are applying pressure on the Commonwealth government to keep the import tariffs for passenger motor vehicles at 15 per cent beyond 2005. Furthermore they are lobbying the government to put legislation in place that will lower the average age of cars and to provide them with a forecast on industry policy after ACIS ends in 2005 (Riemen and Marceau, n.d.).


Lansbury, Russell D., Wright, Chris F. And Bairdi, Marian. (2006). Decentralized Bargaining

in a Globalizing Industry The Automotive Assembly Industry in Australia. Industrial Relations, 61(1), 70-92.

Riemen, Wendy and Marceau, Jane. (n.d.). Running on Empty? Innovation in the Australian

Automotive Industry. Retrieved September 2, 2010, from Web site:…

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