Small and medium establishments and the new federal workplace relations system

Employment Relations Record, Jan, 2007 by Michael Lyons, Dennis Mortimer, Elizabeth Whiting, Fiona Wilkinson

EMPLOYER REPRESENTATION

According to the Business Longitudinal Survey only 30 per cent of small firms were a member of an employer (industry) association (DITR, 2004). The 1995 AWIRS found just under two thirds of the small businesses surveyed were members (Morehead et al., 1997: 311). In the present study, the majority of respondent firms were members of an employer association. The reason for this relatively high level of membership could be that most establishments did not have a manager tasked with the responsibility for employment relations issues. The issues for which SMEs are more likely to seek advice from their employer association are connected with variation to award pay and conditions of employment (see Table 1). The NWRS' Australian Pay and Conditions Standard ('the Standard') purports to be a 'consistent federal standard for all businesses within the federal workplace relations system'. However, if the prevailing award conditions are more generous than the Standard, the 'more generous' award conditions apply unless a workplace agreement excludes them (Explanatory Memorandum, 2005: 13-14). In fact, the federal government concedes there will be additional administrative costs for employers, and there will be little change to the pre-2006 situation of employers needing to 'keep abreast of award variations' (Explanatory Memorandum, 2005: 20). Therefore there is still likely to be a role for employer associations even under the 'simpler' NWRS.

WORKPLACE CHANGE AND TRADE UNIONS

Given the general characteristics of the businesses surveyed--small or medium sized establishments--the expectation would be that a workplace trade union presence is be relatively small. The 1995 AWIRS found that only 17 per cent of the staff in the small businesses surveyed were members of a trade union, while 51 per cent of staff were members in the larger workplaces (Morehead et al., 1997). The IRWIRS reported a membership rate of 15 per cent in the small businesses surveyed (Markey et al., 2001: 368-70). Even in the larger workplaces surveyed for both AWIRS and IRWIRS about one quarter reported no union members at the workplace (Markey et al., 2001: 152-54). In the present study, 26 per cent of the survey respondents indicated that at least one employee was a member of a union. However, this may not be a true reflection of the extent of union membership at each establishment for management may be ignorant of actual union workplace activity (Barrett and Buttigieg, 1999: 56). Reflecting the 'union free' status of the majority of respondents, collective agreements with a trade union were rare (18 of the 121 SMEs). Yet thirty-two respondents (26%) indicated a willingness to negotiate a collective agreement with a union in the future, possibly because union or staff opposition does not appear to be a major barrier to the introduction of new workplaces changes (see Table 2).

EMPLOYEE PAY AND CONDITIONS

The 1995 AWIRS survey of small business found that the State industrial relations system played a major role in regulating the pay and working conditions of staff (Morehead et al., 1997: 313-14). The influence of State awards was even more noticeable with IRWIRS (Markey et al., 2001: 251-52). The supplementary IRWIRS conducted in 2004 with an average respondent firm size of ninety-two employees, and 17 per cent being small business, still found State awards covered the majority of SMEs surveyed (Hodgkinson and Markey, 2006: 43). The Award and Agreement Coverage Survey (AACS) conducted in 1999 found that firms with fewer than twenty staff depended almost totally on awards over agreements to regulate pay and conditions (Joint Governments' Submissions, 2000: 93). Moreover, the Award Review Taskforce's pilot 'award relevance study' found almost half of the employers surveyed were 'totally award reliant' (O'Callaghan, 2006). These findings are consistent with our study; for over half of all staff in the businesses surveyed had their conditions of employment regulated by industrial awards, with the State award system being particularly influential (see Table 3). We also asked the respondents by what means staff are compensated for any overtime worked. The responses, reported in Table 4, are again generally consistent with the AWIRS and IRWIRS findings (Morehead et al., 1997: 315-17; Markey et al., 2001: 364). These results suggest 'temporal flexibility' is not a major concern for SME employers, and call into question the federal government's motivations for introducing the NWRS.