Decentralization of Collective Bargaining in Australia

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In Australia, industrial relations system has been shaped by diverse legislative Acts and political forces coupled with judicial decisions at both the state and federal level. This evident in the sense that there have been diverse amendments of the 1904 Act in light of increased pressures in the industrial sector. This elicited mixed reactions from the employees and employers, among other stakeholders in the industry. However, due to the disadvantages and/or drawbacks of the centralized system of collective bargaining in comparison to the advantages or positive aspects of the decentralized approach of collective bargaining, employers have favored departure from the centralized wage-fixing. Against this backdrop, it behooves us to explore the reasons as why employers have favored the decentralization of Collective bargaining in Australia.
Instructively, it behooves to set the premise on the background of the industrial relation system in the within the territorial jurisdiction of the Federation of Australia. Pursuant to section 51 under the Australian Constitution, the Federal Government has the powers to legislate with regard to conciliation as well as arbitration with a view to prevent and settle industrial disputes that step out of the confines of any given state (Fleming, 2004). Previously, the Conciliation and Arbitration Act of1904 had been the relevant Act in this respect, and it provided for the existence of trade unions and instituted the Commonwealth Conciliation and Arbitration Act Court (Fleming, 2004). The commonwealth Court lost powers to the Commonwealth Conciliation and Arbitration Commission in 1956; subsequently, it was renamed to the Australian Industrial Relations Commission (AIRC) which serves to resolve dis...

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