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Chapter 6

The State and Industrial Relations

Definition of the state

The State can be defined as an institutional system of politicalgovernment, with a monopoly over tax and the legitimate use of force ina society. Our set of state institutions includes:

- the legislature (parliament);

- the executive (government ministers);

- the judiciary (courts);

- central administration (the civil service);

- the police and army, which from time to time have played an importantrole in industrial relations, especially industrial disputes;

- local government; and- specialist agencies such as, in the employment field, industrial

tribunals, conciliation and arbitration services, equal opportunitiescommissions and health and safety inspectorates

(Gospel and Palmer, 1993, p. 154).

These lecture slides are copyright to Eruditions Publishing and may not be used or reproduced without written permission of the publisher, except in those

institutions and courses where Petzall, Abbott, Timo, Australian Industrial Relations in Asian Context2E is a prescribed student textbook.


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Theories of state intervention

(Review Chapter 1 for general theories of IR and the role of the State)

In Western democratic society the distribution of poweris often mediatedthrough organised social interests (i.e. pressure groups).

Types of pressure groups:

- environmental groups (e.g. Greenpeace)

- cause groups (e.g. RSPCA)

- professional associations (e.g. Australian Medical Association)

They also include:

- trade unions (e.g. Australian Council of Trade Unions)

- employer associations (e.g. Business Council of Australia)

- business organisations in their own right

How they influence the political process

- lobby government, ministers and parliamentarians

- provide submissions to parliamentary and party enquiries

- use media campaigns and researched articles to persuade public andpolitical opinion


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The way political power is distributed and used in industrial relations canbe seen through four different theories of state intervention.

1.Pluralist theoriesKey authors: Truman (1956); Dahl (1961)

Focus: Competing social groups

Key tenets:

(i) The state is made ofdifferent institutions reflecting different needs andinterests of society.

(ii) Government is the provider of rules, regulations and policies whichpressure groups representing social interests try to influence.

(iii) Some pressure groups have greater resources for political influence,but none is capable of prevailing over others in all circumstances.

(iv) As a consequence, politics is not governed by any single powercentre, but is instead dispersed amongst multiple centres of power.

(v) The conduct of government is about resolving the conflicting interestsof pressure groups, with political actors using a set of rules orcommonly agreed processes for resolving conflicts.

(vi) State policy outcomes are the result of the balance of competingorganised social interests.


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Diagram of Pluralist view of democratic political processes

Application to industrial relations:

The state intervenes in industrial relations to reconcile competing socialinterests in the workplace.

These interests can favour employees, employers, the state itself, or allthree. None is dominant all the time. It depends on the issue provokingthe intervention and the type of political resources each player canbring to bear at the time.

OrganisedSocialInterests State Policy outcomes

Organised

Social

Interests StatePolicy

Outcomes


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2. Elitist theories

Key authors: Bottomore (1966); Nordlinger (1981)

Focus: Elite domination

Key tenets

(i) Societies are invariably dominated by a minority (or elite), who take

the major political and economic decisions.

(ii) Such elites gain their dominant position as a result of

- ownership of economic resources

- religious dogma or doctrine

- control military power

- the position they hold in large-scale organisations (e.g. political

parties, public bureaucracies, trade unions, business organisations)

(iii) State policy outcomes are determined by what serves the interests ofruling elites.


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Diagram of Elitist view of democratic political process


The state intervenes in industrial relations to accommodate the interests of

the ruling elite.

These interests can favouremployees, employers, the state itself, or all

three, with none dominant and much depending on what will serve the

interests of those in control of the relevant organisations and resources.

StatePolicy outcomes

= elite

State

elite

Policy

Outcomes

Bourgeoisie


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3. Marxist theories

Key authors: Miliband (1969); OConnor (1973)

Focus: Class divisions

Key tenets

(i) In advanced capitalist societies people are divided into two competing

social classesthe bourgeoisie who own the means of production and

the proletariat who have nothing to sell but their labour.

(ii) Because the bourgeoisie is economically dominant in society it is able

to wield decisive political power.

(iii) Because the bourgeoisie is able to wield decisive political powerthe

state acts as an instrument of class domination to maintain its dominant

position.

(iv) The state is put in this position because its freedom of action is limitedby its dependence on a successful economic base for its continued

survival.


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Diagram of Marxist view of democratic political process


The state intervenes in industrial relations to secure the class interests of

the bourgeoisie in the workplace.

The interests served favouremployers only.

Policy outcomesStateBourgeoisie

Proletariat

Bourgeoisie

Proletariat

StatePolicy

Outcomes


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4. Corporatist theories

Key authors: Schmitter (1974); Lehmbruch (1977)

Focus: Incorporated producer groups

Key tenets

(i) The state is the main provider of rules, regulations and policies.

(ii) Because of their control over income, employment and investment,

producer groups (i.e. trade unions, large business corporations and

employer associations) have the power to disrupt or frustrate theconduct of state economic and social policies.

(iii) The state grants rights of incorporation to producer groups in the

determination of economic and social policies as a means of soliciting

their support and cooperation for the conduct of such policies.

(iv) The outcome of state economic and social policies is the consequenceof negotiations with major producer groups.


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Diagram of Corporatist view of democratic political process

Application for industrial relations:

The state intervenes in industrial relations to maintain control over nationaleconomic and social policies.

These interests may favouremployers, trade unions, or the state, buttypically all three, depending on the ability of producer groups to deliveron commitments in agreements reached with the state.

These interests are favoured over other organised social interests, but are

not necessarily always contradictory to such interests.

State Policyoutcomes

Other organisedsocial interests

Producergroups

Other organised

social interests

Producer

Groups

State Policy

Outcomes


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Role played by the state in industrial relations (1)

1. Provider of procedural and substantive rulesThe state exerts influence over industrial relations system by regulating

relations between the actors. This regulation (laws) is the substantiveand procedural rules of the industrial relations system.

(a) Substantive rules directly regulate the terms and conditions ofemployment. They include:

- federal legislation for minimum standards(e.g. annual leave, sick leave, equalemployment opportunity, working hours, termination of employment, andthe form in which wages are paid)

- state legislation (e.g. occupational health and safety)

- federal legislation for federal public sector(wages and conditions)

(b) Procedural rules regulate the behaviour of actors participating in

industrial relations bargaining. They include:- federal and state legislation establishing industrial tribunals

- federal and state legislation giving tribunals power to legally recogniseparticipating actors and to establish procedures for resolution of disputes.

- federal and state legislation giving tribunals power to negotiate and ratifybargaining agreements


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2. Ability to manipulate social and economic environment

The state impacts industrial relations by its social and economic policies,and its ownership and management of public services and utilities:

(a) Social and economic policies (examples only).

- Welfare policies impact on labour mobility and employment levels

- Education policies impact on skill levels and occupational mobility

- Health policies impact on absenteeism and health and safety

- Taxation policies impact on wage rates and work incentives

- Monetary policies impact on employment levels and real wage rates

- Tariff policies impact on employer profits and collective bargaining outcomes

- Employment policies impact on employment and dispute levels

(b) Ownership and management of public services and utilities: all requiredirect state involvement in setting wages and working conditions for

employees. These services and utilities include:- infrastructure e.g. ports, roads, railways and bridges

- essential services e.g. hospitals and schools

- public utilities (unprivatised) e.g. water, power, gas and public transport

- public corporations e.g. insurance and telecommunications companies


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3. Influence as a major employer

The state is influential as a major employer, directly responsible for

employees wages and conditions. In Australia, public sector

employees work at federal, state and municipal levels, and (where the

service is not privatised) provide:

- immigration services - judiciary services - education service

- pension services - port services - health services

- welfare services - transport services - prison services

- unemployment services - road maintenance - military services

- law enforcement - garbage collection


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4. As a signatory to international conventions

The state is influential because ofobligations under international treaties

and membership of international bodies. Many obligations involve

social and labour commitments. In Australia the power to enter into

these obligations is defined by the Constitution.

The most important international organisations for industrial relations are :

- International Labour Organisation (ILO); and

- Organisation for Economic Cooperation and Development (OECD).

The most important membership obligations to these organisations are:

- the forty-hour working week- equal pay for work of equal value

- anti-discrimination in employment and occupation.


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5. Through the attitudes and policies of political parties

In pluralist democracies, political parties influence industrial relations.

In Australia, major parties wield power in government and in parliament.However, after July 2005, non-government parties will no longer havecontrol of the federal upper house, the Senate.

Australian political parties can be divided three ways:

(a) Labor Party: historically sympathetic towards trade unions, arbitrationprocesses and collective bargaining.

(b) Liberal and National parties (or the Coalition): historically sympatheticto business and tolerant of trade unions, arbitration and collectivebargaining. Since 1996, however, have introduced legislation hostile totrade unions, limiting arbitration and reducing collective bargaining.

(c)Australian Democrats, through the Senate, have supported trade unionandbusiness interests. In recent years have supported trade unionsand arbitration against more extreme Coalition policy of individualbargaining. After July 2005, lost seats and balance of power in Senate.


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What is the Australian Form of Government? (1)

- Bi-cameral system: House of Representatives and Senate (Parliament)

- Parliament discusses, amends and enacts legislation

- Electorates are geographic areas that divide the country according to

population: 148 x representatives for House of Representatives. 64 x

Senators elected proportionately from State-wide electorates.

- Elections are held every three years, are compulsory and preferential

- Legislation:A Bill is drafted by government after consultation with public

departments, pressure groups, community groups etc. A Bill is read 3

times in both houses of Parliament, may undergo committee reviews,

passes both houses as an Act.

- Governor-General is the Queens representative. signs approval of alllegislation, summons and dissolves Parliament, makes appointments,

convenes Executive Council with 2 or 3 Ministers.


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What is the Australian Form of Government? (2)

- Government made up of ministers from and answerable to parliament;

formed by the party holding the majority of lower house seats- Parties organisations for fighting elections and ensure discipline during

parliamentary voting

- Ministers are in charge of an area of public policy and head public

departments; there are around 20

- Public (Service) Departments advise ministers and administer policy

- Federal system six states, two territories and one national government

- Constitution defines the powers and responsibilities of the national

government (default powers lie with the States).

- Independent judiciary separate from legislature (parliament) and

executive (government), interprets laws by the Constitution andcommon law, court system created by Constitution

- Pressure groups any organised interest group attempting to influence

parliament without seeking political office.

These lecture slides are copyright to Eruditions Publishing and may not be used or reproduced without written permission of the publisher, except in those

institutions and courses where Petzall, Abbott, Timo, Australian Industrial Relations in Asian Context2E is a prescribed student textbook.

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