Australian system of employment relations


Discuss the role and assess the effectiveness of the Fair Work Ombudsman in the
Australian system of employment relations. (20 marks)





The Fair Work Ombudsman in the Australian system of employment relations helps in creating an understanding amongst the employers, the employees and also the contractors, the rights and the responsibilities so that they can stay in compliance with the laws governing the workplace in Australia. The relationship that exists between n employer with that of the employee, needs a detailed understanding so as to make and apply the changes so that it can run fairly. The (Workplace Relations Amendment (Work Choices) Act- Federal Register of Legislation, 2005) along with the (Fair Work Act- Federal Register of Legislation, 2009) have impacted on the significant developments which needs to be explored. As, in all other business relationship, reciprocity is the core element and is expected, in the form of the contracts which exists between the two parties, both explicitly and implicitly. In order to safeguard the interests, and not to allow for staying in power so as to raise the inequality over the collective bargaining, the disadvantaged group, who is the dominating part of the employees, must be potentially advanced so that there remains no conflict and a pluralist form can be maintained as a whole. 


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Employment Relations have evolved from just being a master and servant relationship to the relationship as is now visible based on the consequences of industrial revolution, the factor is shifted from just being an employment to the status of it for determining the contract (Bray M. &., 2014). So, for institutionalising employment relationship is for the promotion of the concept based on the collective bargaining for the creation of institutions which resembles the (Australian Industrial Relations Commission (AIRC)). As, the governance of industrial relations changed from being Pluralistic Neo-Institutionalism to Unitarist the Work Choices legislation on the Neo-Liberalism principles envisaged freedom and choice for masking power and dependency within the employment relationship (Westcott, 2006). So, the uniqueness of the employment relationship that exists between the employer and the employee becomes the focal point based upon the nature of the existing unequal power thereby underscoring linkages between the two main parties.  So, a system that which is in support of the fair and reasonable wages must be developed as means of settling the overarching disputes, thereby providing a good quid pro quo (Herriot, 2001), since, the social protection is meant to balance the capacity for paying the increased wages (Bray M. W., 2018).
When we are into defining the employment relationship, it becomes multifarious. But, basically, employment relationship is those which are the predominant conditions, based on which an employer hires an employee, and on the same perspective, the employee agrees to sell their expertise, along with the payment received, but also stays in perfect agreement to provide the manpower in to the business of the employer. The employment relationship is also a term which is often involved when it comes to defining the bridge between the human resource management and also the industrial relations, and in so doing the existing boundaries of both the ends or the disciplines are encompassed not only against the stakeholders, but also against the factors comprising the environment. The employment contracts are at the bottom line, two types, which signifies the creation of it. Where the contract is explicit, then it has the defined rights, along with the obligations within it, which ensures the binding relationship between the two parties to the contract, exactly like the (Workplace Relations Amendment (Work Choices) Act- Federal Register of Legislation, 2005). Thus, these types of contract are basically a command in guise as propounded by (Deakin, 1986). But, the second essential is the contract which is the psychological one and are developed solely on the implicit terms. In furtherance to it, the ongoing relationship is developed solely on the expectations of the employee. So, it is understandable that, the previously stated contract might not at all change with the period of time it becomes extended, but this second type of contract, that is the psychological one, actually evolves with time, to become a dominant foundation of the relationship of employment, based on which the employee creates their longevity in the contract and also the status of remaining engaged or getting disengaged develops. As it is a quite common phenomenon, that most employees are in to leaving the organisation based on the utter failures or the sheer misunderstandings which develops out of this. The wages are the central dimension to any of the employment relationship so, it is a general expectation that, it must be maintained explicitly, so to gain the competitive advantage and to outgrow the competition it is important to apply a more restructured approach so that the flexibility is developed both numerically as well as functionally. As (Bray M. D., 2005), points out that, this is the underlying concern which is in to creating the possible bifurcation in the labour market in Australia, which vividly describes the core- periphery model. So, a prominent shift is desired through the (Workplace Relations Amendment (Work Choices) Act- Federal Register of Legislation, 2005), which will then help to make the right decisions following the individuals interests by keeping in perfect alignment with the interests of the nation. 
In the case of the employment relationship, a market transaction takes place predominantly, and in general circumstances through the agreement which develops between the employee, who agrees in working with the employer to that of the employer, who agrees in paying the employee. So, employees are into selling their promises, for working with the employer in future, along with their ability and the capacity to work, rather than their actual performance, or their labour towards the actuality on completion. As in the everyday scenarios, it is practically impossible to anticipate in advance that the terms and the conditions so stipulated will be achieved in due time, due to the fact that the relationship which exists is not only a complex one, but also it is a vast phase of change (Westcott, 2006). Again, employers are to ensure the viability and the productivity of the employees, so that they work hard by making use of their skills, to get the desired outcome. So, employers, are in to paying the wages as well as managing the employees to get the return for which they are paying the money. Indeterminacy thus, gets developed and the relationship of the employment becomes prominent. But, this is the situation which exists in general and normal circumstances (Herriot, 2001). But, there are situation where the conflicts often arise due to the disagreement which for not paying the agreed price, or for paying the agreed price, but with the increased input in it, or in other words, the employees are to work more than agreed, but not with any revision as to the payment. With the heightening of the disagreement between the parties, the conflict arises (RD, 2016). So, this potential conflict, develops the pluralism and focusses on the need to have some rules or regulation, which can be of help in governing this kind of situations (Shaw, 2018). Thus, a need to develop the industrial relation is the main concern which can then help in reducing the role of third parties like trade union thereby causing a reduction in the conflict, with an aim to enhance the productivity, by gaining the competitive advantage and gaining the harmony at workplace relations (RD, 2016).
The development of the minimum wage started since a long time, and dominant mechanism was developed called the (Prices and Incomes Accord- Australian politics explainer: the Prices and Incomes Accord, 2017), where the (Australian Industrial Relations Commission (AIRC)) will be in to accepting the recommendations and then give effect to the wage. But, subsequently, Prices and Incomes Accord ended, and the responsibility of setting a minimum wage devolved upon (Australian Fair Pay Commission (AFPC)- Exempt Agencies under the Freedom of Information Act), from (Australian Industrial Relations Commission (AIRC)). But, in the present situation, that responsibility is further shifted from (Australian Fair Pay Commission (AFPC)- Exempt Agencies under the Freedom of Information Act) to Minimum Wages Panel developed under Fair Work Australia, and hence the establishment of the statutory and independent body called The Fair Work Ombudsman (Fair Work Ombudsman) under section 682 of the (Fair Work Act- Federal Register of Legislation, 2009), and based only for jurisdiction so provided under the said Act. The services provided by the Fair Work Ombudsman, are limited to only the employers and also the employees, in Australia. 




(Fair Work Ombudsman), is in to promoting the harmony within the work environment, so that it can not only be productive, but also can be cooperative for maintenance of the work place relation in a healthy manner (Bray M. W., 2018). This independent statutory body is into making the work place to stay in compliance with the existing laws and regulations which governs the work place in Australia. This body is also in maintaining itself as the initial point of contact for getting the information, which are not only reliable but at the same time is also on board, which means that it exactly correlates to the concurrent situation so prevailing in the work place relation, so existing in Australia (Herriot, 2001). Furthermore, this body is in to providing the education related to the fair work practices solely focussed on the rights along with the obligations, by creating an assessment for the complaints so placed before them along with the suspected breaches forwarded by whistleblowing. The body is in to litigation for creating a deterrent effect so that, the wrong doers can neither escape the dire consequences, nor can they commit further wrong. The main aim of the Fair Work Ombudsman is to create a relationship which is at the same time both strong and also effective, not only within the employers and the employees, but also for the industry, along with the unions and also includes the stakeholders. The Fair Work Ombudsman, works closely with the (Fair Work Ombudsman)so that they can ensure the services to get integrated, within a proper time frame, thereby making it relevant and also in making it accessible to all the related Australians (Shaw, 2018). 
It is understandable that, there is the existing phenomenon of unequal power within a employment relationship, but it is not at all necessary that the employer will only be having the power, since they pay the wages, but at the same time, if there is no productivity from the employees, then the money the employer will not at all support in production. Hence, to avoid the ever-widening gap, an optimum employment relationship must be achieved so that the employee and the employer relationship can be maintained healthily by promoting and thereby safeguarding the interests not only for the employees but also for the full workplace as a whole, in a proactive manner for facilitating the growth within it (RD, 2016). 




Australian Fair Pay Commission (AFPC)- Exempt Agencies under the Freedom of Information Act. (n.d.). Retrieved from
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Bray, M. D. (2005). A contenporray approach. McGraw Hill.
Bray, M. W. (2018). Employment relations: Theory and practice. Sydney: McGraw-Hill Education (Australia), Sydney. .
Deakin, S. (1986). Labour Law and the Developing Employment Relationship in the UK. Cambridge Journal of Economics, 225-246.
Fair Work Act- Federal Register of Legislation. (2009). Retrieved from
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Prices and Incomes Accord- Australian politics explainer: the Prices and Incomes Accord. (2017). Retrieved from
RD, W. C. (2016). Employment relations in Australia’ . 
Shaw, A. M. (2018). Employment relations . South Melbourne: Cengage Learning Australia, South Melbourne.
Westcott, M. B. (2006). Re-working Work: Dependency and Choice in the Employment Relationship. Labour & Industry, 5-17.
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