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State Intervention in Australian Employment Relations


Relations between employers and employees have always been characterized by considerable fluctuations across the globe as these two groups often have conflicting interests and are reluctant to compromise. State regulations were regarded as one of the ways to ensure workers’ rights and wellbeing, but strict supervision and regulatory measures tend to result in low performance and negative consequences for all stakeholders (Wright, Wailes, Bamber, and Lansbury, 2017). At the same time, the lack of regulation may lead to employers’ improper behavior, such as underpayment or the provision of an inappropriate working environment. It is also noteworthy that the level of state regulation of labor relations has an impact on macroeconomic aspects (Bessant, 2018). Vulnerable groups, such as Australian indigenous people, who often live in remote areas, face significant challenges and the worsening of their living conditions (Altman & Klein, 2017). This paper includes a brief analysis of the current state intervention in Australian employment relations and potential solutions to the existing issues in this field.

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Historical Background

State intervention in Australian employment relations has changed during the past decades. In the post-Second-World-War period until the 1980s, the level of state regulation was substantial (Bessant, 2018). The Australian government adopted the Keynesian policy model, which encompassed strict regulation, federal investment, and considerable taxation. The state imposed rules and guidelines that regulated relations between the employer and employee in almost all spheres, including compensations, benefits, working conditions, and safety, among others. The government also developed legislation favorable for unions that were powerful players and made employee demands met in the majority of cases.

However, in the 1980s, this model started less pronounced as neo-liberal values and practices gained momentum. The idea of the ability of markets to self-regulate became dominant in the Australian government (Bessant, 2018). Policymakers saw deregulation and legislation favoring employers as an important background for economic growth, but this approach proved to be negative for the most vulnerable groups. For instance, mining towns can be an illustration of the negative consequences of such policies as these places hardly grew into the so-called open towns, where people unengaged in the industry would settle (Marais et al., 2018). Moreover, in many cases, towns grew around a facility of a single company, which placed the employer in a favorable position, while people turned into vulnerable groups whose rights were often abused. Indigenous peoples were also the groups whose opportunities shrank due to the deregulatory policies. At that, Altman and Klein (2017) note that government incentives aimed at improving the life of this population were partially effective. This limited efficiency made neoliberal concepts stronger, and deregulation of labor relations continued.

Modern Neo-Liberalism

Although Australian society strives for social justice and has rather positive attitudes towards governmental regulation per se, neoliberalism is the governing paradigm. Howe (2017) states that compliance has been steadily declining since the middle of the twentieth century, which makes regulatory models less effective and popular. The recent economic constraints and financial crises contributed to these shifts. Economic growth is placed to the fore, which happens at the expense of vulnerable groups in many cases. One of these cohorts is old adults who are prone to underpayment and worsening working conditions (Howe, 2017). Immigrants are another vulnerable group as these people have limited opportunities due to their low socioeconomic status (Clibborn and Wright, 2018). The existing immigration legislation fails to meet the needs of these individuals, and employers often abuse their rights, trying to reduce costs and remain competitive in the turbulent global market.

At the same time, a lower level of intervention is associated with positive outcomes for companies. Organizations achieve high results and sustainable growth without strict regulations due to diverse types of non-state supervision (Howe, 2017). International institutions, transnational organizations, local communities also influence the development of relations between companies and their employees. These stakeholders introduce standards, principles, and exact practices that are followed due to their effectiveness and positive impact on the development of business. Customers prefer buying from companies that comply with the highest ethical standards in the field of employment relations. It is noteworthy that employees tend to have considerable power in many cases as the nature of the relationship between the employer and workers shapes the level of quality and performance of individuals and the entire company (Wilkinson, Barry, Gomez and Kaufman, 2018). Organizations need to create appropriate working environments to ensure the necessary level of motivation and performance, so state regulatory practices are followed without enforcement due to market laws.

Plurality is one of the characteristic features of the present neoliberalism as the government utilizes diverse incentives and approaches, which proved to be an effective model (Howe, 2017). Affirmative practices are regarded as the most effective approaches because people and companies are encouraged to seek better solutions that could be beneficial for all stakeholders. Such areas as anti-discrimination policies have been enforced by the growing role of codes of conduct organizations are encouraged to create based on a set of certain values.

One of the illustrations of the effectiveness of a self-regulated market can be regarded as the so-called gig economy. This model implies the interaction between the employee and employer based on shared responsibility and risks (Wright, Wailes, Bamber and Lansbury, 2017). This type of economy reaches up to 20% of the labor force in the United States and Europe, although it is still limited to certain sectors. For instance, Uber is one of the most famous representatives of the companies operating in the gig economy. People use the platform created by the employer to reach potential customers and provide their services. At that, they do not have any benefits, and their rights are hardly secured, which is a considerable limitation. Nevertheless, the approach is rather effective, which is apparent in the view of growing interest in this type of labor relations.

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Potential Solution

Based on the analysis of the current intervention of the state in the Australian employment relations, it is possible to note that the current trend can have positive outcomes and can be seen as beneficial for Australian government, although some areas need consideration. Plurality should remain the guiding principle of the existing labor relations. The government should not try to introduce strict regulations and enhance supervision over different aspects of operations. This approach has proved its ineffectiveness and unnecessary financial losses for the budget (Howe, 2017). It is more effective to concentrate on specific areas where regulation is necessary. These areas are associated with safety and equality, while the development of infrastructure and addressing the needs of vulnerable groups can be enhanced with the help of affirmative actions (Bessant, 2018; Marais et al., 2018). The government should enforce laws that motivate employers to invest in the creation of infrastructure and engagement of different groups of people. Instead of controlling a set of operations or banning something, the government can provide tax-related benefits that could help organizations gain a competitive advantage.

The influence of the government should be limited but can be used as a frame for the impact of transnational institutions. The Australian government has to ensure that the practices promoted by these institutions are in line with the local legislation and the practices that have proved their positive effects on the development of the economy. More power can be given to communities that can shape the policies followed by companies operating in the corresponding areas. Organizations and communities will share responsibility, which will balance their interests. Finally, the role of scholars and practitioners can hardly be overestimated as well since these people need to collaborate and come up with innovative approaches and frameworks that would ensure economic growth.


To sum up, the current state intervention in Australian employment relations is characterized by the reign of neoliberal ideas. This approach is rather effective as businesses can remain flexible, which is critical in the turbulent times the global economy is facing. Market self-regulation can be beneficial if several stakeholders remain active players in the process. The role of the state, transnational institutions, and organizations, as well as communities, should be balanced. These three major stakeholders will effectively develop the most favorable environment. The government has to introduce laws that facilitate economic growth but ensure that employees’ rights are addressed. Further research is also needed to ensure the creation of effective models and paradigms, sharing experiences with other countries, and receiving feedback from all the involved parties.

Reference List

Altman, J. and Klein, E. (2017) ‘Lessons from a basic income programme for Indigenous Australians’, Oxford Development Studies, 46(1), pp.132-146.

Bessant, J. (2018) ‘Young precariat and a new work order? A case for historical sociology’, Journal of Youth Studies, 21(6), pp.780-798.

Clibborn, S. and Wright, C. (2018) ‘Employer theft of temporary migrant workers’ wages in Australia: why has the state failed to act?’ The Economic and Labour Relations Review, 29(2), pp.207-227.

Howe, J. (2017) ‘Labour regulation now and in the future: Current trends and emerging themes’, Journal of Industrial Relations, 59(2), pp.209-224.

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Marais, L., McKenzie, F., Deacon, L., Nel, E., Rooyen, D. and Cloete, J. (2018) ‘The changing nature of mining towns: reflections from Australia, Canada and South Africa’, Land Use Policy, 76, pp.779-788.

Wilkinson, A., Barry, M., Gomez, R. and Kaufman, B. (2018) ‘Taking the pulse at work: an employment relations scorecard for Australia’, Journal of Industrial Relations, 60(2), pp.145-175.

Wright, C., Wailes, N., Bamber, G. and Lansbury, R. (2017) ‘Beyond national systems, towards a ‘gig economy’? A research agenda for international and comparative employment relations’, Employee Responsibilities and Rights Journal, 29(4), pp.247-257.

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