Theoretical Perspectives and Historical Overview of the Australian IR System

Week 3 – Theoretical Perspectives and Historical Overview of the Australian IR System

21702 – Industrial Relations

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Today’s lecture

Part 1 – Theoretical Perspectives


What is theory?

Defining theory and its value in the study of IR


The role of Agency, Context and Strategic Choice in explaining industrial relations


Theoretical perspectives on industrial relations



Marxist/ Radical


Gender and Industrial Relations





Part 2 – Historical overview of Australian IR


Origins and evolution of Australian trade unions


The ‘Great Strikes’ of the 1890s


Conciliation and Arbitration Act and Court


The Harvester Judgement and changes to wage-setting


The new neoliberal era and decentralisation of IR


Linking history and theory





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This week in the media

9 August 2020



7 August 2020



6 August 2020




What is Theory?

Causal theory A complete answer to the ‘why’ question, identifying relationships between variables and an account of the process by which one determines the other
Law A statement of a relationship between two or more variables that inevitably produces the same outcome, in terms of events or phenomena
Model A simplification or representation of relationships between events or phenomena that is designed to provide a clearer picture of the world
Taxonomy A classification scheme designed for a particular purpose that groups together events or phenomena on the basis of similar properties or characteristics Represents an attempt to move analysis from the specific to the general as specific events or social situations are located within categories. But these categories are largely description and don’t explain much about why events or situations occur
Description An account of an event or phenomenon from a particular standpoint, which involves a process of interpretation and reduction, selecting some ‘facts’ as important, while discarding others

Lewins’ five levels of explanation

‘An attempt to account for a given phenomenon, that is, to show what, how and/or why it is’

(Lewin 1992, p. 104)


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Dunlop and Industrial Relations Systems

A simplified version of Dunlop’s systems model

John Dunlop’s (1958) IR Systems model argued that all industrial relations systems comprise three main ‘actors’ or ‘parties’ who interact with each other and produce rules to regulate behaviour

The State




The actors have different goals but are bound by a shared perspective of the system (i.e. ideology, which is ‘a set of ideas and beliefs commonly held by the actors that helps to bind or to integrate the system together as an entity’)


Dunlop’s model suggests that industrial relations systems operate within a larger ‘environment’ or ‘context’, which influences the rule-making behaviour of the actors. The three ‘interrelated contexts’ are:


Market or budgetary constraints

Power relations and the status of the actors


Dunlop’s ‘Systems Approach’ suggests that the actors interact in varying environmental contexts and, by using certain processes and procedures, produce a ‘web of rules’ that allows the system to function

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Context and Agency

Scholars in the US criticised Dunlop’s Systems Approach for relying too much on explaining outcomes based on context


In a seminal book in the industrial relations field (image on slide) published by Kochan, Katz and McKersie (1986), these scholars advocated for a role of ‘strategic choice’ in industrial relations theory


They argued that effective explanations of industrial relations can only come about through a combination of ‘context’ and ‘agency’


‘Contexts’ are the external circumstances in which parties find themselves (largely beyond their control)


‘Agency’ is the capacity of social actors (e.g. individuals, organisations) to take action as a result of the choices they make. Agency emphasises the choices that the parties make on the basis of their ambitions, values and perceptions of the situation they are in


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Strategic Choice

‘industrial relations practices and outcomes are shaped by the interaction of environmental forces along with the strategic choices and values of managers, union leaders, workers and public policy decisions makers’


(Kochan et al. 1994, p. 5)



‘A key premise of our framework is that choice and discretion on the part of labour, management and government affect the course and structure of industrial relations systems…Although environmental pressures are important and serve as a starting point for discussion of the determinants of an industrial relations system, these pressures do not strictly determine industrial relations outcomes. Thus an understanding of the choices the parties make in any given period must be informed by an analysis of the structures and history that constrain those choices.’


(Kochan et al. 1986, pp. 13-14)





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Values and industrial relations

‘Different people perceive the employment relationship from different and competing positions about what is valuable and that those different positions usually reflect deeper assumptions about the nature of organisations and society as a whole’ (Bray et al. 2018)

It is useful to analyse values when studying industrial relations


Taxonomy of values in employment relations are derived from the work of Alan Fox (1966, 1974) – this helps to give a framework for understanding relations between parties

Approach Key analytical tools Ideological perspective Assumptions about the employment relationship
HRM The organisational leadership and policies required to satisfy the psychological needs of employees Unitarist The employment relationship as essentially harmonious with employees and employers sharing common interests, embodied in organisational goals
Marxism Class struggle and control within the labour process Radical The employment relationship as subject to enduring conflict in which the control exercised by employers over employees is illegitimate and can only end when major social change is achieved
Employment relations The rules that regulate the employment relationship Pluralist The employment relationship as having the ever-present potential for conflict because employers and employees sometimes have different interests. These conflicts, however, are legitimate and can be accommodated by an appropriate network of procedural and substantive rules

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3 main theoretical/ ideological perspectives on industrial relations


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Assumes common interests and commitment by employees and employers to organisational goals


Conservative and pro-management


Management’s role is to provide strong leadership and good communications


Employee’s should be loyal to management and the organisation, recognising their common objectives


Trade unions are unwelcome as they compete with management for the loyalty of employees


State intervention should not be necessary



Fox (1966, 1974)

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Recognises employers and employees will inevitably experience legitimate conflicts of interest that need to be resolved


No one party dominates


The state acts as an impartial guardian of the ‘public interest’, protecting the weak and restraining the strong


Management’s role is to reconcile conflicting opinions


Trade unions are legitimate representatives of employee interests


Scholars generally agree that industrial relations is pluralist: employees and employers have common but also conflicting interests

Fox (1966, 1974)

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Radical / Marxist

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Marxist focus on class struggle and control


Fundamental conflict of interest between workers and employers, stemming from private ownership of means of production and unequal distribution of income and power


Those who own the means of production (capitalists) have more power than those who labour for wages (the proletariat)


Production requires labour, which capitalists must buy from workers in the form of ‘labour power’


The State plays an integral role in protecting the interests of those who own the means of production


Employees are vulnerable as individuals, but this can lead them to forming worker collectives and unions




Fox (1966, 1974)

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Gender and industrial relations

Feminist scholars (e.g. Barbara Pocock, Judy Wajcman – see your readings for Week 3) argue that gender has been an understudied theme in Australian industrial relations theory and practice


Our analysis of IR issues has been ‘gender neutral’ or even ‘gender blind’


Feminist scholars argue that this is because the study of IR has been narrowly focused on the sphere of paid work which has, during a large part of history, excluded or marginalised women, seeing an under-representation of the interests of women


Scholars argue for greater attention around the needs and interests of women in IR debates, particularly at the level of collective bargaining and in setting the terms and conditions of employment e.g. gender equality bargaining


We need to exercise caution, however, in categorising all women as sharing the same interests or characteristics




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Why bother with IR history?

Explains the social, political and legal background to the IR system


Teaches us about the future


The arguments apparent in the ‘Great Strikes’ did not go away i.e. How should the employment relationship be regulated and what role do each of the parties have in this?


Origins and evolution of Australian unions (1800s – 1890)

Trade unions have their origins in the 1800s as occupationally-based mutual benefit societies that grew into ‘craft unions’ as skilled workers (e.g. engineers, carpenters, printers) started to organise and form unions


Unions were successful in winning the right to the eight-hour work day in 1856


By the late 1880s, unions had attained considerable membership and power, extended their organisation into most trades and industries, and continued to demand improvements in wages and conditions


This scenario changed with the major defeat of unions during the ‘Great Strikes’ of the 1890s


Pre-Federation – The Great Strikes (1890s)

The Ballad Of 1891 (Words by Helen Palmer ©Doreen Bridges Music Doreen Jacobs)

The price of wool was falling in 1891 The men who owned the acres saw something must be done “We will break the Shearers’ Union, and show we’re masters still And they’ll take the terms we give them, or we’ll find the ones who will” From Claremont to Barcaldine, the shearers’ camps were full Ten thousand blades were ready to strip the greasy wool When through the west like thunder, rang out the Union’s call “The sheds’ll be shore Union or they won’t be shorn at all” Oh, Billy Lane was with them, his words were like a flame The flag of blue above them, they spoke Eureka’s name “Tomorrow,” said the squatters, “they’ll find it does not pay We’re bringing up free labourers to get the clip away” “Tomorrow,” said the shearers, “they may not be so keen We can mount three thousand horses, to show them what we mean” “Then we’ll pack the west with troopers, from Bourke to Charters Towers You can have your fill of speeches but the final strength is ours” “Be damned to your six-shooters, your troopers and police The sheep are growing heavy, the burr is in the fleece” “Then if Nordenfeldt and Gatling won’t bring you to your knees We’ll find a law,” the squatters said, “that’s made for times like these” To trial at Rockhampton the fourteen men were brought The judge had got his s, the squatters owned the court But for every one that’s sentenced, ten thousand won’t forget Where they jail someone for striking, it’s a rich man’s country yet

You can listen to The Ballad of 1891 about the Shearers’ Strike here:

Maritime strike of 1890 saw Australian maritime workers take sustained strike action over August to November for grievances around pay and conditions. The strike was unsuccessful with maritime workers ed back to work and facing a 30% pay cut


The Great Shearer’s Strike of 1891 was a dispute between unionised and non-unionised wool workers in Queensland lasting months, triggering violence and arrests of union leaders


These strikes signalled a turning point for the labour movement and recognition of the need for greater political protection. Significantly, the strikes prompted the emergence of a system of compulsory conciliation and arbitration and the formation of the Australian Labor Party (ALP)


Conciliation and arbitration: the historic compromise

An early president of the Arbitration Court made this explicit: ‘The system of arbitration adopted by the Act is based on unionism. Indeed, without unions, it is hard to conceive how arbitration could be worked’ (Higgins 1920, 15). This was because compulsory arbitration regulated relationships between organisations, between employers and employer associations on the one side and unions on the other. It did not regulate relations between individuals.

The main objectives of the Commonwealth Conciliation and Arbitration Act 1904 (among other objectives included):

To prevent lock outs and strikes in relation to industrial disputes

To constitute a Commonwealth Court of Conciliation and Arbitration having jurisdiction for the prevention and settlement of industrial disputes

To provide for the making and enforcement of industrial agreements between employers and employees in relation to industrial disputes


Conciliation and Arbitration Act 1904


The Harvester Judgement of 1907

[Ex parte H.V. McKay (1907) 2 CAR 1]

Henry Bourne Higgins (1851-1929)

The arbitration system led to the development of a centralised framework of wage determination, designed to protect workers who were unable to make gains through individual bargaining


The Harvester case of 1907 fixed a minimum wage deemed to be ‘fair and reasonable’ for an unskilled worker to support his family (a wife and three children) and live in “frugal comfort”


This set the foundations for Australia’s minimum wage system and entrenched the notion of “a fair day’s pay for a fair day’s work”




Changing economic and socio-political context – The Accord

In the context of economic and social changes occurring in the 1970s, the Labor Party was elected to Federal Government in 1983


In the same year, the Prices and Incomes Accord was signed between the Labor Party and ACTU to prevent rising inflation, facilitate government plans for structural reform of the economy, and centralise wage determination


As part of the agreement, the ACTU agreed that unions wouldn’t make any extra wage claims (to cap rising inflation) and, in exchange, the government pledged to strengthen the “social wage” in Australia


We’ve since seen a trend towards decentralisation of wage determination and a focus on enterprise-level bargaining (to be discussed in later weeks)

The Hawke-Keating Government led from 1983 to 1996

Bill Kelty was Secretary of the ACTU at the signing of the Accord in 1983



What? Belief in the free market and minimum barriers to the flow of goods, services and capital. Extends traditional liberal philosophy – separation of politics and economics and that markets should be free from interference of government.


This approach is based on four principles:


Economic growth is paramount.

Free trade benefits all nations – rich or poor – because every nation has a comparative advantage.

Government spending creates inefficiency and waste: although most neoliberals agree that not all public expenditure is wasteful, many argue that it can be reduced.

In the distribution of economic goods, individual responsibility replaces the concepts of public goods and community


Interest groups, such as the HR Nicholls Society, believe that the regulation of workplace relations should be minimal and employers should be given full flexibility, and publicly rejected the Accord arrangement


The election of the Howard Government and introduction of changes to workplace law led to one of the most radical transformations of Australia’s IR system (see the reading by Ellem and Cooper (2008) in your Reading List for more on this)


One of the most significant aspects of the Workchoices legislation introduced by the Howard Government in 2005 was changing the constitutional foundation for federal employment relations legislation, from the conciliation and arbitration power to the corporations power. This allowed the Federal government to directly set minimum terms and conditions of employment without recourse to the making of awards in the settlement of an industrial dispute.

Prime Minister John Howard led the Liberal-National Coalition from 1996 to 2007



While ideological perspectives in the study of industrial relations are classified into three (unitarist, pluralist and Marixt/radical), the theoretical approach used in this subject is characterised by a pluralist perspective and the use of rules and rule-making as the key tool for understanding the employment relationship


It’s important to consider gender in our analysis of employment relations processes and outcomes


Historically, we’ve seen a shift from a centralised framework of determining wages and conditions (via industrial tribunals and the C&A system) towards decentralisation


Trade unions enjoyed a favourable political, economic and IR climate during the 20th century, which was disrupted with the emergence of a neoliberal government agenda in the 1980s and 1990s


History shows a shift in the balance of power between the parties, which we will look at in more detail over the next 3 weeks


Next Week – The Parties (Part 1) – The State


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Reference List

Union Song, The Ballad of 1891,

Queensland Historical Atlas, Great Shearers’ Strike of 1891,

Ellem and Cooper (2008) ‘The Neoliberal State, Trade Unions and Collective Bargaining in Australia’, British Journal of Industrial Relations, 46(3), 532-554.

Fair Work Ombudsman – Australia’s industrial relations timeline – a brief history of workplace relations law in Australia

ABC News (2018) ‘ACTU- Labor Accord that helped shape Australia is gone, but not forgotten’

AWU Queensland, ‘125 th Anniversary of the Great Shearers’ Strike’, YouTube video

Wajcman, J. (2000), ‘Feminism Facing Industrial Relations in Britain, British Journal of Industrial Relations, 38(2): 183-201.

Fox (1974) Beyond Contract

Fox (1966) Industrial Sociology And Industrial Relations

Flanders (1970) Management and unions: the theory and reform of industrial relations

Dunlop (1958) Industrial Relations Systems

Kochan, Katz and McKersie (1986) The Transformation of American Industrial Relations





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