45 Work, employment and industrial relations policy

The employment relationship – that between employer and employee – is at the heart of capitalism and a core issue for public policy.^[1]

Governments create rules, policies and institutions within which employees and their representatives, and employers and their representatives operate. The interest to governments when creating policy include the form that bargaining takes, wage and employment levels, the nature and effects of contracting and the rights of workers–much of all this boiling down to issues of power. In recent decades, major policy issues have included the Federal Labor Government’s Prices and Incomes Accords in the 1980s and 1990s, the Coalition (conservative) Government’s ‘WorkChoices’ legislation, the shift back to enterprise bargaining, and developments in such areas as minimum wages and pay equity, the impacts of the gig economy together with legislative changes implemented through the Secure Jobs, Better Pay amendment, Closing Loopholes No. 1 and No. 2 amendments and Workplace Gender Equality Amendments. In this chapter we outline the matters at stake, the players, the policy processes and some of the key issues themselves.

What’s at stake?

Core to policy-decision is the political ideology of the decision maker, and the implications of that ideology for whose interests should prevail within the employment relationship. Put simply, is the priority for government the interests of business or the advancement of worker interests? Approaches to the management of labour may be ‘unitarist’ or ‘pluralist’ and these concepts are manifested in policy and practice.

The imprecision of the employment relationship – the heart of capitalism

At the beginning of the employment relationship, the worker agrees to sell their labour to the employer in the form of an ongoing market transaction. However, it is almost impossible for the contract of employment to specify everything that the employee does in their work. In the service sector, where measurement of employee output is harder, the imprecision of the employment relationship is especially high.

The power of capital and labour

The study of work and industrial relations policy is also the study of power. The groups and individuals with power are those who benefit most from policy making. Public policy may also affect the power that various groups and individuals have.

The relative power of employers and unions at the workplace is not easy to measure. A pluralist approach ‘accepts the rights of employers, employees and unions to bargain over their separate interests.^[2] It also recognises that the conflict that occurs in the workplace is to be expected and managed. In a capitalist economy, governments who wish to advance the interests of workers tend to create policy from a pluralist perspective. Governments, seeking to implement a policy that protects business interests, often adopt a unitarist perspective. This assumes that employers and employees have the same objectives and any conflict that might occur in the employment relationship is unusual. Unitarist policies often do not support the existence of an independent umpire to provide arbitration of workplace disputes. Conservative or ‘right’ approaches of the state to industrial relations (IR) are often associated with unitarist conceptions of IR. There are other perspectives on imdustrial relations (for example, radical, Marxist, post-modern or feminist approaches)^[3] but these are analytical perspectives, sometimes held by workers, but not by employers and rarely by government.

Governments, regardless of whether they espouse a unitarist or pluralist perspective, claim to be interested in improved economic outcomes. This is an objective that can appeal to everyone, and productivity growth, for example, affects the level of resources available to distribute to capital and labour. However, there is no agreement about how improved economic outcomes should be achieved, and this objective is often just a guise for realigning the balance of power in the workplace. Where policies, for example, support capital at the expense of labour they are more likely to entrench inequality. With unions being formally tied to the Australian Labor Party (ALP), conservative parties have long sought to discredit the ALP through reducing the credibility of unions. Indeed, the conflict between capital and labour is the core conflict within capitalism, so it should not surprise us that it is also central to political conflict in Australia, though usually it is not articulated this way.^[4] It is, though, common to think of and depict people, interest groups or parties as being somewhere on a spectrum from ‘left’ (pro-labour) to ‘right’ (pro-capital). It is a term that voters somehow manage to relate to in survey questions and surveys over the past two decades. Using this measure has detected a gradual leftward shift, from the right towards the centre, in people’s self-assessment of their political positioning.^[5]

How the system works

Introduction

Patterns of policy need not reflect patterns of public opinion. The ideology of people in positions of power, the organisational ability of interest groups and the nature of the institutional framework all shape the direction of policy and may do so contrary to directions in public opinion.

There are three parties (groups) with a particular interest in the employment relationship:

• employees and their representatives (commonly union/s)
• employers and their representatives (employer associations)
• the state.

Each affects rule-making associated with the employment relationship.

Unions

The shape of the union movement today reflects how unions have developed over the past 120 years. The trade union movement enables workers to act collectively, to influence policy decisions affecting workplaces, and to enable workplace negotiations on pay and conditions of work.

The focus of trade unions is on improving the wages and conditions of members. However, their involvement in decision making is not limited to the workplace level – it can also be seen in their involvement in the community and in political lobbying. The Australian Council of Trade Unions (ACTU) has been the sole peak body for unions since the early 1980s, and it undertakes broad political and policy-based work as part of its activities. It has initiated various equal pay and other wage cases to the body now called the Fair Work Commission (FWC), and lobbied or negotiated with governments. Outcomes achieved over many years include ‘occupational health and safety laws, annual holidays legislation, superannuation, Medicare, the award system, penalty rates for overtime and weekend work, and workplace amenities’.^[6]

Under conciliation and arbitration (described below), union density (the share of employees who are members of a union) went from six per cent in 1901 to around 60 per cent by the early 1950s.^[7] From the 1980s, union density declined (see Figure 1), beginning with structural changes in the economy that favoured industries and occupations with low density but were not met with effective union responses, such as organising in new areas.^[8] In the 1990s, unions began a process of large-scale amalgamations to capitalise on economies of scale, but union density continued to decrease, in the face of attacks by employers and various state and national governments. With the move to enterprise bargaining, the focus of IR shifted to the workplace, but this was a level at which unions were often weakly organised, after focusing for many years on advocacy in tribunals, and action in a small number of ‘hot spots’. By 2024, density was below 15 per cent and, with a delay, collective bargaining also declined.^[9]

Employers and employer associations

Employers also form collective organisations. Employer associations are often regarded as the equivalent of unions for employees. Moreover, employers of most people are themselves corporations, which are collectives of capital. Thus, employer associations are industry-based collectives of collectives, formed to counter the associational power of unions.

The roles of employer associations vary, depending on the way they developed and the industry or region in which they traditionally operated. These roles have evolved through the amalgamations, but have largely centred around the representation of political parties and developing responses to industry or national issues raised by unions. Their activities have changed as employment relations has become increasingly decentralised. They may provide services to their members to assist specifically with managing their employment relations issues.

The state

The term ‘state’ is used here to describe the various institutions used to regulate the employment relationship. These institutions include the legislature, executive and the judiciary. The legislature consists of the parliament and is responsible for creating legislation. The judiciary interprets and applies legislation and can be responsible for ensuring that the executive and legislature act within the Constitution. The executive consists of the elected government as well as the various institutions that form part of the public bureaucracy.

The latter include the relevant federal department responsible for employment relations (presently the Department of Employment and Workplace Relations), the labour inspectorate (presently called the Fair Work Ombudsman) and Safe Work Australia. In addition there are quasi-judicial bodies including the industrial tribunal (presently called the Fair Work Commission), the Australian Human Rights Commission, and the Remuneration Tribunal.

The state’s role has substantially varied over time. For most of the 20th century, Australian industrial relations had operated within the conciliation and arbitration system. That system originated in the 1890s, before the nation was federated, in response to bitter and costly disputes in several industries. Unions had strongly but unsuccessfully resisted cuts to wages and conditions. Employers had been unwilling to participate in voluntary conciliation or arbitration, and bloodshed had occurred when employers, workers and law enforcement clashed.

By 1904, federal legislation was introduced to formally regulate and provide a system for the negotiation of worker wages and conditions, and unions were recognised as registered entities. This centralised system of multilateral rule making involved trade unions as representatives of workers, employer associations representing employers, and the industrial labour courts and tribunals. Federal and state governments did not directly determine labour standards at this time,^[10] but they did regulate some internal affairs of unions and employer associations, as these were part of the system (some saw them as virtually an arm of the state).^[11] Tribunal decisions around wages and conditions became binding, and the details were contained within instruments known as ‘awards’.

The central agency, originally the Conciliation and Arbitration Court, was split in the 1950s into a court and a tribunal. The latter, the Australian Conciliation and Arbitration Commission (ACAC), became the Australian Industrial Relations Commission (AIRC) and then Fair Work Australia (subsequently the FWC). In the long run, the decisions of tribunals, although often contested, appeared to be somewhat similar to the outcomes that the market would have delivered, apart from a tendency to produce a more egalitarian distribution of earnings, which also included progress towards equal pay for women.^[12]

At the parliamentary level, there are deep divisions between the major political parties. In some ways these parties are the political manifestation of capital and labour. The unions created the ALP, and still have a formal role in it, though there are often wide political gulfs between them. The Liberal Party was established in the 1940s in an attempt to reorganise the non-Labor parties (i.e. the parties of capital) to better fight the ALP, then in government. Its creation was facilitated by the newly established Institute of Public Affairs.

The elements determining pay and conditions

The legal ‘safety net’ for employees – the minimum conditions which should govern their work – has several components: a minimum wage, National Employment Standards (NES) set out in the Fair Work Act (2009), and modern awards. On top of these sit, for a substantial minority of workers, enterprise agreements.

The minimum wage is set by the Fair Work Commission’s Expert Panel, with effect from 1 July each year. The National Employment Standards are required by law to be provided to all employees. The NES and minimum wage apply to all employees as a ‘bottom floor’ set of minimum conditions. The NES includes provisions regarding:

• maximum weekly hours
• requests for flexible working arrangements
• casual employment
• parental leave and related entitlements
• annual leave
• personal/carer’s leave, compassionate leave, and family and domestic violence leave
• community service leave
• long-service leave
• public holidays
• superannuation contributions
• notice of termination and redundancy pay
• Fair Work Information Statement (the FWIS) and Casual Employment Information Statement (the CEIS).^[13]

Although seemingly detailed and prescriptive, there are gaps in some of them, so it is not as robust a list as it might initially appear. Hence, through the Closing Loopholes Acts, in particular the Fair Work Legislation Amendment (Closing Loopholes No. 2) Act (2024), implemented changes to the definition of casual employees and casual conversion.^[14] Employees who are employed under a modern award are entitled to minimum pay and other conditions outlined in the relevant award. Where an organisation has negotiated an enterprise agreement, pay and conditions for employees will be outlined in the enterprise agreement, which can be different to the award but should leave employees better off overall than if they were employed under the award. In addition, employees and employers may negotiate an individual flexibility arrangement (IFA) that can be used to implement more flexible work practices, particularly on hours of work. An IFA, in theory, cannot be used to erode the minimum rights of employees. Again, the employee should be better off overall when compared to the modern award or enterprise agreement that the IFA varies.

Modern awards protect a number of entitlements. These can include:

• minimum wages
• types of employment (e.g. full-time, part-time or casual)
• overtime and penalty rates
• work arrangements (e.g. rostering or variations to working hours)
• annual wage or salary arrangements
• allowances (e.g. for employees required to clean their uniform)
• annual leave loading and arrangements for taking leave
• superannuation
• procedures for consultation, representation and dispute settlement.^[15]

Most modern awards are based on a designated industry or an occupation within a group of industries of employment. A miscellaneous award attempts to cover all remaining workers. Any who might not be covered, however, are still entitled to the minimum wage and the NES.^[16]

The federal dimension

Federal industrial legislation in the 20th century relied on varied parts of the Constitution. Principally, the conciliation and arbitration power in section 51 (xxxv) of the Constitution, was used to encourage the settlement of disputes through bargaining at the enterprise level. Residual powers rest with the states, so at times 30 to 40 per cent of Australian employees were under state awards. While, in 1993, the external affairs power (s51[xxix]) was used to provide for redress against unfair dismissal and unequal remuneration between men and women, this was historically unusual. That year, the corporations power (s51[xx]) was used to allow the negotiation of enterprise flexibility agreements between incorporated employers and groups of employees without any representation by trade unions or employer associations. This use was widened in 2005 to form the basis for the entirety of the Howard government’s ‘WorkChoices’ legislation. The High Court validated this, and so responsibility for most industrial relations matters moved from the states to the federal government. To make this work, it was still necessary for the states to refer power on non-corporate employers to the federal government, which all states except Western Australia did. Most states retained the responsibility for their own employees (such as state employed teachers and nurses).

After that time, much of the WorkChoices legislation was wound back (especially regarding dismissal and individual contracts), and the Fair Work Act that replaced it has itself been amended several times. More recent legislative amendments to the Act have been made through the Respect at Work (2021); Secure Jobs Better Pay (2022); Paid Family and Domestic Leave (2022); Protecting Worker Entitlements (2023), and the Closing Loopholes (2023) and Closing Loopholes No. 2 (2024) amendments.^[17] As such, the federal government largely maintains responsibility for industrial relations.

Issues

Introduction

We now turn to policy matters that have featured in political debates in recent Australian history. These include matters concerning wages policy, pay equity, individualism and collectivism, productivity, flexibility and insecurity, union power and industrial conflict.

Wages and bargaining

Through the first half of the 20th century, awards became central to setting pay and conditions. They provided a framework for employers to adhere to for rewarding employees with wages and conditions of employment in return for their work effort. The award system was seen as offering stability to the economy and perhaps restraining strike activity. The number of awards grew as they covered an increasing range of industries. The number of award conditions contained within awards also grew. Furthermore, the government sought to protect local industries and jobs through tariffs and quotas.

However, by the late 1970s to early 1980s, economic circumstances were complex and changing and in 1983, the ALP introduced the Prices and Incomes Accord (referred to as ‘the Accord,’ negotiated with the ACTU), a highly centralised wage determination policy which restructured the IR system.^[18] It aimed to reduce both unemployment and inflation, and improve worker wellbeing through other actions of government. It was renegotiated several times, including radically in 1991, leading to a shift to ‘enterprise bargaining’.^[19] This was backed by 1992 legislation reducing the AIRC’s capacity to reject certified agreements and by wholesale legislative changes in 1993 (the Industrial Relations Reform Act 1993 (Cth).^[20] These formally established a right to strike in negotiation of a new Enterprise Bargaining Agreement (EBA) – but nothing else – whereas previously, strikes had occurred in a legal grey zone with few restrictions in practice. EBAs also had to satisfy a no-disadvantage test, meaning workers on them should be no worse off than they would be under awards.

This introduction of enterprise bargaining starkly contrasted previous heavy state involvement (via the AIRC). Once agreement between an employer and unions was reached, these EBAs would be made legally binding through approval by the AIRC.

With decreasing involvement in workplace matters, the role of the AIRC shifted to maintaining an appropriate ‘safety net’ of minimum award wages and conditions, after taking account of economic conditions and broader social objectives. Initially, the idea was to set growth in the safety net at a level low enough to encourage workers to move to enterprise bargaining. However, this idea gradually lost salience, not least because a large gap quickly opened up in most industries between award rates and EBA rates. It was often the resistance of employers, rather than employees, that held back the growth of EB.

A key influence on wages growth is the relative power of labour compared to that of employers, and the power of workers fell over several decades through declining unionism and rising economic insecurity – a trend heightened by legislative changes that also disadvantaged workers through most of the period up to 2022. A series of changes to law and government practice after 2022 partially reversed this, but could not reverse the broader economic forces that have weakened workers’ bargaining power. Wages growth fell to historically low levels, despite a seemingly ‘tight’ labour market through the decade to 2022, though it showed some recovery after that.^[21]

Another influence on actual wages received is the Fair Work Ombudsman (FWO), charged with ensuring compliance with the system. Employers in a range of industries, but especially horticulture and hospitality, were found to be exploiting and underpaying workers (what the ACTU called ‘wage theft’). The FWO was frequently criticised for inaction on these issues – in effect, for allowing employers too much flexibility in the determination of pay and conditions. With extensive media coverage before the 2016 election, the Coalition foreshadowed, and eventually introduced, legislation making accessorial, franchisor and holding company employers liable for certain contraventions of workplace laws.^[22] The issue continued to have salience, especially for the most vulnerable workers (migrants on temporary visas), and in the lead-up to the 2019 election the Coalition government received the report from the migrant workers taskforce and promised to implement most of its recommendations.

Through the Fair Work Legislation Amendment (Closing Loopholes) Act 2023, the Fair Work Act (2009) was amended making the intentional underpayment of wages and/or entitlements a criminal offence. This took effect from 1 January 2025 with the FWO able to investigate suspected breaches using their compliance and enforcement powers.^[23]

Pay equity

The concept of equity is concerned with fairness, derived from social justice principles of equal rights and access to full participation in society. The difference between high and low wage earners is one aspect of pay equity. While a minimum wage aims to provide some standard of living to safeguard against poverty,^[24] other inequities may persist due to other historical, systemic and social factors^[25]. For example, the 1907 Harvester decision set the male basic wage to support his wife and five children. This social norm of the time viewed the male as the worker and the female as the homemaker. This has been seen as reflecting a breadwinner/homemaker model, and perpetuated gender discrimination, manifesting in the issue of the gender pay gap.

Even after explicit pay discrimination based on gender was ended by the ACAC, traditional male forms of work such as manual and heavy work have attracted a higher value than female forms of work, which are seen to embody ‘softer’ skills in occupations like nursing or childcare.^[26] Whitehouse and Rooney^[27] highlight the undervaluation of work performed by women, and Baird^[28] reinforces this view citing that our industrial relations system has had an ‘uncomfortably ambivalent relationship to women, casting women as either “ungendered” workers (or equivalent to the male worker ideal type), or the “other” type of worker (encumbered with care responsibilities outside of work). While this undervaluation affects specific jobs, other systemic biases also damage a woman’s position. For example, where a policy is focusing on promotion linked to length of service which may inadvertently discriminate against women, due to the taking of parental leave.

Despite a range of state interventions toward providing pay equity, including a major Convention,^[29] anti-discrimination and equal opportunity legislation, and various equal pay decisions by tribunals, the gender pay gap remains at around at 11.5 per cent of male hourly earnings.^[30] Pay inequality also extends to a range of vulnerable groups in the labour market who are denied access to good quality and well-paid work experience and less bargaining power, including Indigenous Australians,^[31] people living with disabilities^[32], youth, and temporary and skilled migrant workers.^[33] ‘Neoliberal’ policies outside employment relations appear to worsen this disadvantage, and increase poverty (especially when we compare different countries), with little or no consistent gain in terms of productivity.^[34]

The former Coalition government commenced a review of the Workplace Gender Equality Act (2012) in 2021 that led to a range of recommendations, including measures to narrow the gender pay gap.^[35] Following the election of the Labor government in 2022, the Workplace Gender Equality Amendment (Closing the Gender Gap) Act Bill 2023, was passed.^[36] This resulted in key changes that enable the Workplace Gender Equality Agency (WGEA) to publish gender pay gap data at the employer level.^[37] In early 2025, the Workplace Gender Equality Amendment (Setting Gender Equality Targets) Bill 2024 was passed.^[38] This change will require ‘designated relevant employers’ with over 500 employees to identify three gender equality targets that they aim to meet or improve against over a 3 year period, commencing from 2026.^[39] Additionally, the Secure Jobs Better Pay 2022 amendments to the Fair Work legislation were enacted to address gender inequality and to examine the gender-based undervaluation of work.^[40]

Individualism and collectivism

One of the key left–right differences in IR policy is the emphasis on collectivism versus individualism. For example, statutorily providing for individual contracts, known as Australian Workplace Agreements (AWAs), was a focus of amendments to federal legislation of the Howard/LNP government, culminating in 2005 when the Coalition gained control of the Senate and enacted what was commonly known as the ‘WorkChoices’ legislation.

The powers of the AIRC were further limited. WorkChoices gave AWAs supremacy over EBAs or awards, and moved the role of fixing minimum wages and casual loadings to the Australian Fair Pay Commission (AFPC). Only five minimum working conditions needed to be included in awards and AWAs. The no-disadvantage test was abolished.^[41] AWAs frequently reduced penalty rates (wage premiums for anti-social working hours), overtime and shift allowances. Small and medium businesses (with less than 101 employees) became exempt from unfair dismissal laws, giving employers ‘greater freedom over the terms of which they can hire and fire workers’.^[42] There were publicised examples of people given a choice between a pay cut and losing their job.^[43]

These changes were highly contested and became a central issue to the 2007 federal election under the unions’ ‘Your Rights @ Work’ (YRAW) campaign. The ALP was subsequently returned to power. It reinstated unfair dismissal protections, phased out AWAs, re-established the integrity of awards (now known as ‘modern awards’), while reducing their number and overlap and provided the ability for them to be varied at the workplace level by ‘agreement’.^[44] What became the Fair Work Commission (FWC) was established. However, not all aspects of WorkChoices were changed. Unions did not receive full reinstatement of workplace entry rights.^[45] Industrial action remained unlawful in many contexts and requirements for a secret ballot were modified but largely retained. Good faith bargaining requirements were introduced for negotiating EBAs (s228 of the Fair Work Act (2009)). The Coalition’s defeat at the hands of the YRAW campaign led it to drop ideas about fully individualising IR, though it maintained an interest in shifting the balance of power at the workplace.

Productivity, flexibility and insecurity

A recurring flashpoint in industrial relations policy is around issues of productivity and flexibility. Employer bodies have argued for changes on these grounds since the Accord days. This was usually contested because increased flexibility for employers would be mirrored in increased insecurity for employees. As such, matters affecting pay and conditions became controversial because of actions of institutions promoting flexibility. For example the FWC in 2017 decided to reduce Sunday penalty rates in retail and hospitality, following employer submissions focusing on the need for greater flexibility in those industries and the employment opportunities it would allegedly create. A report by the Productivity Commission made similar recommendations and statements from individual Coalition politicians favoured such a cut.^[46]

The issue was particularly salient because of its impact on low-income workers and, implicitly, the potential for eventual flow-on to other workers. Soon, ‘insecurity’ became a major issue, with unions focusing on high rates of casualisation, labour hire, franchise employment, the use of ‘independent’ contractors, and continuing growth in under-employment, with academic attention focusing on several of these issues.^[47] The emergence of changing business models and the growth of the ‘platform’ or ‘gig economy’ heightened focus on these issues.^[48] Individual jurisdictions have introduced legislation aimed at specific issues such as labour hire or occupational health and safety.^[49]

In 2022, legislation addressed one of the major issues of insecurity: the requirements that employers pay ‘labour hire’ workers the same as what they paid their own employees. The FWC was also given the almost unique power (internationally speaking) to regulate payments, conditions and bargaining in the previously unregulated ‘gig economy’, including digital platform workers and owner-drivers of trucks, without relying on whether those workers could be categorised as ‘employees’. At the heart of this is often the link between poor safety practices and unregulated payment systems.^[50] It is an issue where policy innovations in Australia are, internationally, at the cutting edge, though we have yet to see how it plays out in practice.^[51]

 

Arguments for cuts in pay or conditions are often couched in terms of productivity benefits, though many claims are questionable, reflecting confusion between productivity (as a ratio of quantities), and profit (as a ratio of incomes). In this context, several observations are sobering. Productivity is directed by management, not workers. Productivity tends to be higher where employees have a voice in the workplace.^[52] It is not unions, on average, that reduce productivity – it is poor quality workplace relations.^[53] Productivity is not increased by reducing wages – more likely, the reverse is the case.^[54] So, Australia performs poorly by international standards on several relevant criteria (such as investment in research and development, insecure work, training and the perceived quality of management).^[55] Over four decades of reforms have failed to improve the productivity trajectory, perhaps because shifting the balance of power between management and labour has not led management to be more willing and able to invest in improving productivity. As employer power increases, the need to maximise efficiency decreases.^[56] The capacity of public policy to shape the quality of labour-management relations at the workplace is much more limited than its ability to regulate pay and conditions.

Unions and industrial conflict

Despite lower density, unions attract a lot of political attention. This is because they still wield considerable political mobilising ability (few other union movements would be able to claim the impact of the Australian unions’ 2007 YRAW campaign had on an election result). Unions are the largest organised part of civil society, and are formally linked to the Coalition’s political enemy, the ALP. Their influence on the Labor in government is much less now, however, with the relationship having shifted from one of being an ‘equal player’ during the Accord years, to that of an ‘interest group’ in political negotiations over the Fair Work Act.

After losing status during the WorkChoices years, unions are again recognised as bargaining representatives within collective bargaining processes, under the Fair Work Act (2009),^[57] but both union internal affairs and the undertaking of industrial conflict are regulated in extensive detail, especially by comparison with almost all other industrialised nations. Several of the procedures were introduced under WorkChoices but subject only to minor changes by the Fair Work Act. There remains a serious question in Australia as to whether a genuine right to strike exists.^[58] Such features led unions to run the ‘Change the Rules’ political campaign preceding the 2019 election. However, in contrast to the union movement’s success in swinging votes in the 2007 and 2016 elections,^[59] this campaign had limited impact, perhaps signifying the low point of union political power this century. The level of industrial conflict has been much lower in recent years, in part reflecting the diminished power of the labour movement in the context of the legislative and economic forces mentioned earlier. That power has increased since the return of Labor to government in 2022, but nowhere near the levels that existed in much of the 20th century.

The government as employer

A quite different aspect of IR public policy is the government’s role as employer. Sometimes it has led the way in advancing labour interests – for example, the Whitlam Labor government (1972–75) took a ‘pace setter’ role in increasing annual leave and introducing maternity leave. As public sector work is highly regulated, the gender pay gap is lower in the public sector than in the private sector.^[60] On the other hand, public sector employers also face the direct cost of wage increases, and so governments at the federal and state level, both Coalition and ALP, may impose caps on negotiated wage increases or even attempt to reduce conditions, leading at times to major industrial action.^[61]

Conclusions

Most public policy in the area of industrial relations, particularly since the 1990s, has been driven by two things: political ideology, and each political party’s perception of what the political environment will permit. For the ALP, there is an urge to improve the position of labour (and no love of ‘the big end of town’), but it is constrained by what it considers the business sector and what the media will accept. For the Coalition, there is an urge to improve the position of capital (and no love of unions), but it is constrained by what it considers the electorate will allow. Occasionally, especially if an election is near, a party will enact policies that are counter to its traditional base, because of political considerations. Both sides are also constrained, in terms of legislation, by what the Senate will allow, but they (particularly the Coalition) have concluded that making the ‘right’ appointments of personnel to key positions can be at least as important as the formal aims of an organisation or its governing legislation.

 

Industrial relations policies are rarely evaluated in the way of public policies in several other areas, and if they are it is often for specific purposes, reflected in the bodies or individuals chosen for the task. A feature of IR policy is the use of inquiries to justify political positioning, and also to provide some distancing for a government that wants to test public reaction to ideas. Two examples were the Heydon Royal Commission into Trade Union Governance and Corruption, and a Productivity Commission enquiry into workplace regulations.^[62] Another feature is the use of the rationale of ‘productivity’ to justify changes, even when the evidence on this is limited or contradictory – the most glaring example being of reform in the building and construction industry.^[63] That is, even where the reason is ideology or politics, the stated rationale may be about productivity, flexibility or economic growth.

 

Although all areas of public policy are influenced by ideology and politics, this phenomenon is particularly marked in IR policy. While ‘evidence-based policy’ may be a phrase that haunts many other areas of public policy, its ghost is barely evident here. We might ponder why industrial relations is perhaps the area of public policy where the Labor government of the 2020s has most kept to the vision that many people have of what is expected of a Labor government.

References

About the authors

Before this chapter could be updated in 2026, one of the authors, Shalene Werth, passed away. Shalene was a valued member of the academic community and had been undertaking cutting-edge research into chronic illness and work in Australia, and broader questions of disability and employment. She was highly regarded by her colleagues at the University of Southern Queensland and elsewhere, and is deeply missed by her family, friends and collaborators.

Susan Ressia is Associate Professor in the Department of Employment Relations and Human Resources at Griffith University, Brisbane, Australia. Her research focuses on the job search experiences of independent non-English speaking background skilled migrants in Australia. Susan’s research interests also include the areas of work–life balance, managing diversity, intersectionality, equality and social justice issues. Susan is co-author of Employment relations: an integrated approach (2nd edn. 2018) and Work in the 21st century: how do I log on? (2017). She has also published in Gender, Work and Organization and the Asia-Pacific Journal of Human Resources.

David Peetz is emeritus professor of employment relations at Griffith University.  He previously worked at the Australian National University and in the then Commonwealth Department of Industrial Relations, spending over five years in its Senior Executive Service.  He has undertaken work for unions, employers and governments of both political persuasions.  He is the author of Unions in a contrary world (1998) and Brave new workplace (2006) and co-author of Women of the coal rushes (2010), in addition to numerous academic articles, papers and reports, as well as articles for The Conversation.  He is a Fellow of the Academy of the Social Sciences.