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Employer Associations & Modern Awards Essay

There have been substantial changes to modern awards over the years that employer associations have historically and are currently advocating. In this regard, issues such as penalty rates and flexibility stemming from employer association submissions have been researched and examined by (Sheldon & Thornthwaite 2013) portraying evidence that employer associations relatively prefer cost cutting and enhanced managerial prerogative as oppose to productivity. Entailed within this essay the key concepts such as penalty rates, managerial prerogative, flexibility and productivity will be discussed with particular focus the modern award reviews combined with an overview of Sheldon and Thornthwaite’s argument in summary and concurrence.

According to (Boxall & Purcell, 2011) management goals are predominantly associated with cost efficiency, controllable flexibility, legitimacy and managerial power. It is these goals that evidently become the concern of relevant employer associations, as such they take on the role of combining, allocating and utilising resources in order to achieve organisational objectives. There have however been significant changes over the years regarding employer association involvement particularly seen over the course of the 1980’s. Employer associations aim to influence and negotiate with the Government of the day as well as tribunals in an effort to ensure that the mutual concerns of organisations are being met. (Sheldon & Thornthwaite, 2013) discuss key system issues with regard to employer associations mainly focusing on restricting union’s right of entry, penalty rates and other provisions incorporating aspects of substantive and procedural rules.

Modern Award reviews primarily began in 2012, it is during this time that leading associations took the opportunity to not only push for more workable provisions but also to campaign for more substantial changes within various awards. Employer associations accounted for a large number of submissions to the tribunal on a broad range of issued in particular penalty rates, public holidays and flexibility. In the technical sense, penalty rates are a form of tangible benefit within the financial context which generally refers to those payments made to workers outside normal working hours. Regulator motivations for including penalty rates in modern awards as stated by (Sloane, 2014) are twofold: firstly, to compensate workers for work performed during what was historically known as ‘unsociable hours’ and secondly, to dissuade employers from operating within those hours.

However, as advocated by (Sheldon & Thornthwaite, 2013) the modern award reviews have ‘provided a forum for employers and their associations to escalate their campaign to the significance of penalty rates in industries operating during the traditionally ‘unsociable hours’, which is evidence that employer associations prefer to enhance managerial prerogative over productivity which is predominantly concerned with the cost of resources. The push for the examination of provisions regarding penalty rates has mostly been seen to affect the tourism and retail industries. Flexibility is made up of numerous components however, within in the context of the workplace involves thinking creatively about how working lives can be better structured to match individual and business needs (Job Access, 2012). Following the review of penalty rate provisions, amendments to the flexibility clause were sought after with particular attention paid to the manufacturing industry.

Greater flexibility was requested in the taking and cashing out of annual leave in a further attempt to enhance cost cutting initiatives through control measures which ultimately leads to the underlying concept of elevated managerial prerogative. Managerial prerogative may be defined as management’s unqualified authority to exercise its discretion in certain areas under the belief that they have exclusive rights to make decisions and therefore resist any interference with that control (Storey, 1983). Sheldon & Thornthwaite make reference to managerial prerogative in the defensive context through aggressive industrial action which has historically been used as a means of strengthening managerial prerogative.

The 2011 Qantas lockout serves as one of the most significant demonstrations of managerial prerogative through the organisations decision to engage in a lockout. As part of a wider push to entrench managerial prerogative employers were also seen to be engaging in aggressive bargaining strategies in order to escalate disputes with the intention of gaining access to arbitration which has an adverse affect on productivity. (Stewart, 2005) promotes the fact that there needs to be greater emphasis on productivity which forges greater efficiency and high trust work systems founded on flexible and fair employment. Productivity is the economic factor stemming from the adequate use of resources; productivity is essentially the measure of achievement through the amount of output that is achieved as result of the input predominantly referring to land, labour and capital as the key resources.

Between penalty rates and productivity there is no association they are separated by the contexts of which they are defined. (AI Group, 2012) identify key problem areas within the Fair Work Act Review and state that it is ‘hampering productivity growth, workplace flexibility and competitiveness’ thus meaning that penalty rates do not influence productivity levels. (Sheldon & Thornthwaite, 2013) do make it apparent that employer association’s main concerns do in fact favour cost cutting and managerial prerogative rather than focusing on the importance of productivity enhancement. (Sheldon & Thornthwaite, 2013) further explored critiques from employer associations whose predominant concern was based on the fact that managerial prerogative was reduced through the increasing weakness of employer’ freedom to contract. (DEEWR, 2012)

Released a report referring to more productive and equitable workplaces which disappointed employer associations thus further confirming productivity enhancement to be of no concern. It is clearly demonstrated that employer associations’ main concerns were that of cost cutting and managerial prerogative it is however, the amalgamation of all the relevant key concepts discussed that essentially equip organisations with a competitive advantage. The core concepts behind the submissions made by employer associations clearly obscure the importance of larger issues which further represents that employer associations prioritise the ease of managements working lives over that of the worker.


Australian Industry (AI) Group (2012), Applications to Vary a Modern Award – 2012 Review, Stephen Smith, Director – National Workplace Relations. Boxall, P and Purcell, J (2011), The Goals of Human Resource Management, Strategy and Human Resource Management, 3rd Edition, Palgrave Macmillan, New York, pp. 1-36. Department of Employment, Education and Workplace Relations (DEEWR) (2012), Towards More Productive and Equitable Workplaces: An Evaluation of the Fair Work Legislation, Australian Government. Job Access, Flexibility in the Workplace, Australian Government, Accessed 1st May 2014 Sheldon, P and Thornthwaite, L. (2013), Employer and Employer Association Matters in 2012, Journal of Industrial Relations, Vol. 55: No. 3, pp. 386-402. Sloane, J (2014), Pay Penalty Rates, but not Through Awards System,
The Australian. Stewart, A (2005), A Simple Plan for Workplace Regulation, Industrial Law News, Issue 7. Storey, J (1983). Managerial Prerogative and the Question of Control, Routledge & Kegan Paul Publishing, London.

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