stakeholders – employers, employees, employer associations, unions, government organisations, society
Employers: want to ensure that the employment relations framework:
- provides flexibility, choice and productivity in working arrangements
- hands employees and employers the responsibility of deciding wages and conditions - provides opportunities for businesses to respond to changes in the external environment Employees: ensure that:
- agreements to increase productivity are adequately rewarded - there is appropriate training leading to career opportunities - the workplace is safe and free from harassment
- they have a reasonable degree of job security
Employer associations: represent businesses in a particular industry and give bargaining strength to the employer. They also lobby governments to ensure the employers’ views are considered when regulations are formed. Employer associations want to ensure:
- industry-wide increases in productivity
- fair reporting of all the employers’ view in negotiations
Union: give bargaining strength to employees. They want to ensure their members:
- are fairly paid
- work in a safe environment free from harassment and discrimination - receive expert help in negotiating agreements with employers - have a high degree of job security
Government organisations: most important one being Fair Work Australia which is responsible for dispute resolution for setting minimum wages and conditions as well as overhauling the award system. The Federal Government wants to ensure that:
- there is sufficient flexibility in employment relations to provide the greatest improvement in productivity, maximum employment and the development of an economy-wide competitive advantage
- the focus of the federal workplace human resource management system is an agreement-making between the employer and the employee. These are called collective agreements and are achieved through enterprise bargaining between the employer and the employee - the government achieves its goal through organisations such as Fair Work Australia Society: is affected by business operations as the people who own/work in businesses make up most of society. Decision making in the HR process influences the availability of goods and services and the prices they are sold at. It also affects the standard of living and the rate of economic growth, e.g. all Australian strikes inconvenience society. FWA has reduced the number of strikes.
Summary of the stakeholders in the HR process:
Employer – concerned about productivity and costs because these affect the competitive position of the business.
Employee – concerned about working conditions and pay.
The government – concerned about things like discrimination in the workforce, e.g. modernising the award system (under Fair Work Australia) to make things simpler.
Unions and employer associations – represents employees and employers.
Shareholders – issues such as productivity as it impacts on profitability.
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legal – the current legal framework
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the employment contract – common law (rights and obligations of employers and employees), minimum employment standards, minimum wage rates, awards, enterprise agreements, other employment contracts
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occupational health and safety and workers compensation
-antidiscrimination and equal employment opportunity
The current legal framework influencing HRM consists of:
1. Common law – refers to laws made by judges in courts.
2. Statute law – those made by the Parliament. The statute law is the Fair Work Act (Cth) 2009. This legislation established Fair Work Australia as the independent umpire.
Fair Work Australia has established the minimum conditions for employment in areas like pay, working conditions, hours of work and holidays on an industry basis (called modern awards).
Modern awards commenced on Jan 1st 2010 and it is intended that there will be a continuous shift of employees from state awards to the Federal modern awards.
To gain above award conditions, employers and employees need to negotiate. Employees want more benefits and employers want higher productivity.
Once an agreement is reached, a contract is signed and if the contract is breached, the other can go to the Federal Court to seek compensation. There will be no industrial actions during the term of an agreement as it is a protected period. Industrial action can occur towards the end of the agreement. 72 hours’ notice must be given.
If an agreement can’t be reached, FWA help mediate or arbitrate an agreement:
- Mediate – where FWA guides both sides
- Arbitrate – where FWA determines the new agreement
Enterprise bargaining is where employer and employees negotiate a collective agreement.
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the employment contract – common law (rights and obligations of employers and employees), minimum employment standards, minimum wage rates, awards, enterprise agreements, other employment contracts
The employment contract – is established when an employee accepts an offer of employment (written or verbal. It gives both employer and employee rights and obligations; some from common law, but most from awards.
Common law agreement – contract of agreement and is legally binding. It sets out how the employee will be rewarded and the work requirements of the employee. Often used by professionals, e.g. doctors and lawyers Contracts of employment often have “trial” periods, where the employee must be paid and can be oral or written (though written creates certainty)
A typical contract outlines:
- nature of the work - rewards
- general info, e.g. hours of work
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Rights and responsibilities of the employer:
- pay correct wages
- reimburse employees for work-related expenses - ensure a safe working environment
- not act in a way that may damage an employee’s reputation or cause mental distress or humiliation
- not act in a way that will damage the trust and confidence necessary for an employment relationship
- forward PAYE tax instalments to the Australian Taxation Office - make appropriate Super contributions
Rights and responsibilities of the employee – obligations include:
- obey the lawful and reasonable instructions of the employer - exercise due care in the performance of work and do it competently - account to the employer for all moneys while employed
- make available to the employer any process or product invented while employed - disclose to the employer information received relevant to the business
- be faithful to the employers interest (e.g. not passing info to competitors)
Each modern award contains the 10 minimum employment standards such as penalty rates and sick leave. It is a part of NES (National Employment Standards) and is set out by FWA. The minimum standards are:
- max weekly hours of work – 38 hours per week
- Requests for flexible working arrangements (e.g. parents with children under school age or with a disability)
- Parental leave – up to 12 months unpaid leave plus the right to request an additional 12 months - Annual leave – 4 weeks paid leave per year
- Personal/carers leave – 10 days paid
- Unpaid carers leave – 2 continuous days unpaid - Compassionate leave – 2 days paid
- Community service leave – unpaid leave for voluntary emergency activities and up to 10 days paid leave for jury duty
- Long service leave
- Public holidays – a paid day off on a public holiday except where reasonably requested to work - Notice of termination and redundancy pay – up to 4 weeks’ notice and 16 weeks redundancy pay,
the actual amount depending on length of service
- occupational health and safety and workers compensation
OH&S refers to all procedures put in place to ensure that the workplace is safe. It involves both legal and ethical issues.
The employer must ensure (legal duty) the health, safety and welfare of employees. If employees are not following procedures, the business culture must be changed.
Workers compensation in Australia is a compulsory employer-financed, “no fault”, occupational disabilities program for work-related injury and disease.
After an accident the injured worker receives all necessary medical and rehabilitation care and does not suffer loss of income. Workers comp is a legal consideration, but the aim is to ensure the worker is in the same position if the accident had not happened (the ethical aspect).
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antidiscrimination and equal employment opportunity
Anti-discrimination refers to measures aimed at stopping unjust or harmful treatment on the basis of things like race, age, gender, disabilities or sexual preferences.
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The legal issue is set out in the legislation:
- Racial Discrimination Act 1975 - Sex Discrimination Act 1984 - Disability Discrimination Act 1992 - Equal Opportunity Act 1987
The ethical issue is difficult to enforce/detect as it is difficult to prove.
EEO (Equal Employment Opportunities) – tries to provide opportunities to groups of people who may have been denied a fair go in the past.
The legal issues are set out in:
- Affirmative Action (EEO for Women) Act 1986 (Cth)
This legislation requires large companies with more than 100 employees to report publicly on the number of women in new appointments and promotions. The aim is to get senior management to think about what is right.
economic
Economic influences refer to changes in the level of spending in an economy.
When the economy is booming, employees have greater bargaining power as businesses compete for skill levels, e.g. the Australian mining sector since 2010 → increased wages.
When the economy is in recession, the demand for business products will fall, so it is necessary to reduce staff to cut costs. There will be a lot of skilled employees unemployed and therefor employees have less bargaining power.
technological
Technological influences – have a huge impact on human resource management and their staff requirements, e.g. Walmart’s barcoding meant they only needed a third of their previous checkout staff → competitive advantage. Walmart are now using RFID (Radio Frequency Identification Technology) → NFC (Near Field Communication), i.e. Google Wallet.
Changes in technology (the way things are done) require training to use the new technology.
Short term – can be an issue getting the finance to train
Long term – leads to increases in productivity and profitability and reduces costs
social – changing work patterns, living standards
Social influences – to do with changes in society, i.e. the attitudes, values and benefits in society Recently changes have been dramatic including:
- changing work patterns - changing living standards
Changing work patterns – in the last 10 years there has been a decline in full-time work and an increase in part-time and casual work – called casualisation of the workforce (Australia has one of the most casualised workplaces in the world). Significant features include:
- the disappearance of almost all unskilled jobs - increase in the number of women in the workforce
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- growth in the service industries (retail, food services, accommodation and travel) - reduction of workers in manufacturing
- increased mobility of workers (from one business to another) - increased numbers of employees working from their homes
Changing living standards – used to be measured by GDP/capita (sum total of goods and services produced in a country in a year/population). However todays’ standard of living involves more so it is measured in terms of HDI (Human Development Indicators) as it includes things like:
- longevity
- infant and maternal mortality rates - education
- crime rates, etc.
According to this, Australia had the highest standard of living in 2011. This was due to equality in income distribution, access to education and employees thinking about a work-life balance when negotiating agreements.
ethics and corporate social responsibility
Ethics and corporate social responsibility influences – refer to the responsibility of businesses to work with the full range of stakeholders to help solve societies problems.
Typical e.g.’s of CSR include:
- ensure employees have a safe workplace that is free from accidents, harassment and
discrimination – there are 135,000 incidents of work-related fatalities, permanent disabilities or serious temporary disabilities per year. In the 2005/06 financial year, the cost of work-related injuries/illness was $58 billion.
- AEC (Australian Employment Covenant) – a plan to place 50,000 Indigenous people in long-term jobs within 2 years, e.g. Fortescue Metals and ANZ have Indigenous employment programs.
- Sustainability – e.g. BHP Billiton accepts the need to work against global warming, so they are working to reduce carbon emissions.
10.4 HSC TOPIC: HUMAN RESOURCES