COMMERCE – EMPLOYMENT ISSUES

4.1 TYPES OF EMPLOYMENT

entitlements: non-wage benefits such as long service leave or sick leave
loading: extra pay to compensate casual employees for lack of access to entitlements
pro rata: proportion of normal full-time benefits related to the hours worked

1) casual – hourly basis

Advantages Disadvantages
Receive loading (overtime and penalty rates) No entitlements
for compensation
Flexibility to agree or refuse wok at particular Lack of job security
time
Regularly employed for more than year  No work  can be dismissed at 1 hour notice
eligible for some entitlements (e.g. unfair or with 1 hour pay instead of notice
dismissal protection and long service leave)
Not regular  difficult to obtain home loan

2) part time – regular hours but fewer per week than full-time
Advantages Disadvantages
Entitlements on pro rata basis (e.g. work three Smaller weekly pay
days a week  three-fifths of non-wage
benefits
Can earn income and have time for hobbies Reduced entitlements
Job security No loading

3) full time – 40 hours per week over five-day cycle

Advantages Disadvantages
Higher income No/less time for personal hobbies
Easier to save on regular basis
Non-wage benefits (e.g. paid holiday leave and
long service leave)
Job security

4) self-employed
Advantages Disadvantages
Freedom and flexibility (where and when) No guaranteed income  lack of security

Make business decisions Pay for all personal entitlements

Responsible for success No non-wage benefits
Tax advantages

5) voluntary and unpaid

Advantages Disadvantages
Essential role in society (e.g. rural fire services, No financial payment
surf live savers, state emergency services)
Undervalued in society

4.2 - 4.4 CHANGING WORK PATTERNS

Changing industries
industry: a particular form or branch of economic or commercial activity
 a lot of change over last 100 years
 specifically change in type and size of industries
 main industries are primary, secondary and tertiary

Primary industry
primary industry: industry involved in growing or extracting natural resources
 farming, mining, fishing, grazing and forestry
 provide all food  essential
 approximately 60% of all Australia’s exports are primary industry products

Secondary industry
secondary industry: industry involved in turning raw materials into finished or semi-finished
products
 primary industry product  finished or semi-finished product
o e.g. iron ore, coal and limestone  steel  car

Tertiary industry
tertiary industry: industry involved in providing a service to others
 e.g. retailers, dentists, bankers, solicitors
 over past 50 years, number of tertiary industry employees has grown very rapidly  broken
down into quaternary and quinary industry

Quaternary industry
quaternary industry: industry involved in the transfer and processing of information and
knowledge
 e.g. telecommunications, property, computing and education

Quinary industry
quinary industry: industry involved in providing domestic services
 interpretation of existing or new ideas, evaluation of new technologies, and creation of services
 highest level of decision making in society or economy
o top executives or officials in government, science, universities, non-profits, health care
and the media
o also hospitality, childcare, domestic cleaning and home maintenance not measured by
monetary amounts but are essential and contribute to society

Changes in occupations
de-skilling: process by which skilled labour within an industry is eliminated by the
introduction of technologies
o also refers to worker becoming less proficient over time
o moved to different field, often performing low skilled work they are over-qualified for
downsizing: cutting down jobs in order to lower operating costs or maintain profitability
o often result of poor economic conditions
o might also occur if 2 companies are merging
labour force: people aged 15 and over who are either employed or unemployed
 in 1900, nearly one-third of labour force worked in primary industries
 since then, proportion of primary industry workers in labour force has dwindled to about 4%
 improved methods of farming and mining and use of mechanical equipment  fewer workers
needed to produce food supply and minerals
 for long time, many of those who left primary industry moved into secondary industries
(factories)
 in recent years, proportion of labour force needed to do factory work has decreased, presently
about 20%
o factory jobs eliminated by technology, especially automation
 76% of labour force consists of people working in service industries
 advances in computing  growth in tertiary industry employment expected to expand rapidly

Changing employee expectation

 today’s labour force is well educated and employees increasingly want more challenging,
interesting work
 many driven to build career through succession of jobs in range of different businesses
 employees want:
o to be more involved in decision-making process
o greater responsibility for actions and want to initiate tasks without being ordered to

Casualisation of the labour force

 in last 20 years, significant increase in casual employment
 40% of labour force
o OECD shows Australia has one of highest % of temporary labour among OECD
countries
o some industry sectors (i.e. retail and hospitality) employ almost half of their labour force
as casuals
o 15.8% in 1984 to 25.1% in 2018
 some casual workers do not want to work additional hours and like flexibility in balancing work
and personal lives
 some casual employees, especially youth, find it difficult to gain full-time employment
o working life often dominated by periods of part-time and casual work  few opportunities
for promotion and usually retrenched first if business is experiencing financial difficulties
o sometimes experience long periods of unemployment
o exploitation can occur

Feminisation of the workplace

participation rate: proportion of people aged 15 or over employed or actively looking for
work
 since 1970s, women started re-entering labour force in large numbers, many employed in
traditionally regarded male occupations
 number of women in workplace has risen rapidly in recent decades
o comprise 48% of workforce
o 59% participation rate
 started to decline in past few years because many part-time/casual positions
have been lost and females make up about 70% of part-time/casual workforce

Gender pay gap

gender pay gap: difference between women’s and men’s earnings, expressed as a
percentage of men’s earnings
 currently 14.1% (has been 15-19% for past 20 years)
 influenced by a number of interrelated work, family and societal factors:
o conscious and unconscious discrimination and bias in hiring and pay decisions
o women and men working in different industries and different jobs, with female-dominated
industries and jobs attracting lower wages
o lack of workplace flexibility to accommodate caring and other responsibilities
o high rates of part-time work for women
o women’s greater time out of the workforce for caring responsibilities impacting career
progression and opportunities
 o women’s disproportionate share of unpaid caring and domestic work
o stereotypes about work women and men ‘should’ do, and way women and men ‘should’
engage in workforce
 account for 68% of primary carers for older people and the disabled
 95% of primary parental leave is taken by women and women spend almost 3 times as much
time taking care of children each day compared to men
 over-represented as part-time workers in low-paid industries and in insecure work
 underrepresented in leadership roles in private and public sectors
 spend 64% of working week performing unpaid care work, almost twice as much than men
 differences between gender pay gap in industries:
o lowest – 7.7% public administrations and safety
o highest – 30% financial and insurance services

Work-life balance
work-life balance: achieving the right amount of time devoted to work and for personal life
 many employees requesting work arrangements that improve work-life balance
 employers also recognising cost savings and benefits of ‘family friendly’ workplace practices to
motivate and retain skilled staff
 initiatives include workplace childcare, family leave and home-based work
 Australia’s national paid parental leave scheme  improve work-life balance for some families
o commenced in 2011
o payment for 18 weeks within first year after birth of child

Job security
job security: likelihood that an employee will keep their job, and not face unemployment
either through being made redundant or dismissed
 past 20 years, employees have faced continuing employment cutbacks, automation, downsizing
increased competition from imports and non-unionised domestic companies
 significant issue for workers after 2008-09 GFC
 downturn in economy  many industries began laying off workers
 psychological and emotional stress  negatively impact health of workers

Technological change
 advances  causing nature of work to change  new jobs while others are made redundant
 ‘information revolution’  new communication technologies  changes in way people work
 ‘always available’ trap: checking emails and SMS messages during downtime  extended
working day
 improves productivity, however, also resulted in unprecedented invasion of personal time 
negative effect on work-life balance

Flexible working conditions

flexible working conditions: patterns of work that allow employees to balance work and
family obligations more effectively
o e.g. opportunities for home-based work  more flexibility during working hours
 many businesses also offer permanent part-time work, job-sharing and flexible working hours
 method to retain skilled and valued staff who have family commitments
 some employees finding flexible working hours and permanent part-time may not be as
beneficial as they hoped
o arisen because employers and employees have different meaning for term ‘flexibility’
 many now work 12-hour shifts, broken by days off
 others have lost weekends and opportunity to enjoy time off with families
 by 2020, 50% of workplace will be remote
o flexible seating environment – no fixed desk
 o The Cloud – virtual device allows us to access information on any device
o 80% of companies allow employees to bring their own devices
 more than half of these organisations mandate bringing own device  reduced
costs for enterprises to provide technology for employees
 technology  flexible access and harmony between work and life

Movement away from full time work

 businesses can change staffing levels easily and cheaply  flexibility:
o part-time employment – less than 20-30 hours a week
o casual positions – no set hours or working patterns
o individual employment contracts – no collective agreements/awards
o outsourcing – using others from outside the business

Outsourcing
outsourcing: process of paying to have part of company’s work done by another company
 five reasons outsourcing is used:
1) allows company to focus on core functions of business
o more flexibility to improve core services
o outsourcing of non-core functions (e.g. call centre)  outsourcing partner
o company reaps all advantages of financial, human and management resources  more
effective and efficient
2) gives company access to skilled employees
o difficult to attract full-time skilled workers
3) cost reduction
o flexibility to expand
o reducing capital and expenses
o cheaper labour costs, low inflation, big tax incentives
4) improves service quality
o innovative and flexible
o longer service hours, maybe 24/7
5) access to technology
o outsourcing partner usually invests and acquires new technological resources
o may implement new technology
 examples of outsourced jobs:
o accounting
o management firms
o teleproviders
o web design and development

4.5 and 4.6 BENEFITS OF EDUCATION AND TRAINING FOR EMPLOYMENT

employee: a person who works for a wage or salary

employer: a person who hires employees

Lifetime of learning
 world is everchanging, people need to become lifelong learners
 all jobs will experience some changes and employees will need to learn new skills to adjust to
changes in their job
o workplace training will happen continually
 others will need to train themselves for new jobs that open up when old ones disappear
 idea of a “job for life” is vanishing, in the future workers will tend not to have clear career path
 most employers prefer to hire people who have undertaken training and gained skills
 benefits of upskilling for employees:
o higher incomes
o promotion and self-improvement
o adaptability – ability to cope with change
o a challenge – chance to learn new things
o improved job satisfaction through better job performance

Education

VET
 vocational educational and training courses
 give students practical, work-related experience, as well as literacy and numeracy skills
 students likely to be interested in going to TAFE course, apprenticeship, traineeship or job

TAFE
 Technical and Further Education (TAFE) course
 training for many different career areas
 cater for people will all levels of education
 tourism, business studies, visual arts and plumbing
 have to complete Year 10

Apprenticeships
apprenticeship: training and education in a trade
 cover a wide range of careers, including hairdressing, carpentry, sales and information
technology
 allows you to work while studying area of interest
 learn about job while working with employer
 on particular days, and/or some evenings required to attend classes at a TAFE college

Training
cadetship/traineeship: training in a full-time job, with time allocated to attend university or
TAFE
 work experience program where students encourages to seek temporary employment at firm to
gain insight into particular field of work
o e.g. accounting
 company employs you and gives you time to attend university or TAFE
 good way to become trained and educated in field of work

4.7 – 4.9 TYPES OF EMPLOYMENT CONTRACTS

The employment contract

employment contract: a legally binding, formal agreement between employee and employer
 factors of employment contract:
o leave – holiday, sick, paid parental
o health care benefits
o overtime pay
o minimum wage
o bonus
o insurance
o severance pay – an amount paid to an employee on the early termination of a contract
 three important elements to contracts: offer, acceptance and consideration
o offer – during interview, informed about terms and conditions

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o acceptance – agree to these terms and conditions
o consideration – employer supplies wage and other conditions benefits that both
o consideration – employee supplies labour parties will receive
 can be verbal contract
o safer to have written contract, especially if one party does not fulfil side of the contract

Fair Work Act 2009

 major piece of employment legislation
1) provides for terms and conditions of employment
2) sets out rights and responsibilities of employees, employers and related organisations
3) provides for compliance with and enforcement of the Act
4) provides for administration by establishing Fair Work Commission and Fair Work
Ombudsman
o establishes 3 types of employment contract streams that determine pay and conditions of
employees - awards, enterprise agreements and common law

Minimum standards
 employment contract cannot provide for less than the legal minimum set out in:
o the National Employment Standards (NES)
o awards, enterprise agreements or other registered agreements that may apply
 all employees covered by the NES, regardless of whether they’ve signed a contract
o contract can’t make employees worse off than their minimum legal entitlements

Employee entitlements – National Employment Standards (NES)

 developed by federal government to provide greater safety net for employees, particularly for
most vulnerable and low-paid in the workforce
 apply to all full-time and part-time employees, whether permanent or fixed term
o most don’t apply to casual employees, as casuals are paid loading as compensation

National employment standards

1) hours of work – 38 hours per week
2) right to request flexible working arrangements
3) parental leave – up to 12 months unpaid leave
4) personal/carer’s and compassionate leave – 10 days paid leave, 2 days unpaid
5) community service leave – up to 10 days paid jury service
6) annual leave – 4 weeks paid leave per year
7) long service leave
8) public holidays
9) notice of termination and redundancy pay – up to 4 weeks’ notice of termination and up to 16
weeks’ redundancy pay
10) fair work statement

Awards
award: a legally binding document that outlines minimum pay and conditions of employment
safety net: a set of minimum terms and conditions of employment
 cover employees who work in same industries and occupations
 modern awards include information about:
o wages, including penalty and overtime rates
o hours of work and rest breaks, including flexible work arrangements
o allowances for uniforms or tools
o leave, including sick, holiday, long service, study, family and maternity leave
 o superannuation
o redundancy entitlements
 adjusted for wage increases given in National Wage cases heard by Fair Work Commission
 large proportion of lower skilled occupational sectors: hospitality, retailing, community services
 some employers may provide above-award payments  attracts and keeps workers
 infringements to award may be reported to FWC through Fair Work Ombudsman, or through a
trade union

Advantages Disadvantages
Set a minimum for pay and conditions Inflexible – may not suit all employees
Cover all employees performing a similar job Prevent recognition of individual initiative as all
employees receive same pay
Protect employees from exploitation

Enterprise agreement
enterprise: under Fair Work Act 2009, any kind of business, activity, project or undertaking
enterprise agreement: agreement about pay and conditions made between one or more
national system employers and their employees
 agreement about pay and conditions between employer and group of employees or union
 offers broader terms and conditions than modern award
 NES still apply
 cannot be less than modern awards standards
 can either replace modern award or act as ‘add-on agreement’
 key features:
o may cover rates of pay, penalty rates and overtime, hours of work, allowances and leave
o must be in writing and approved by all parties
o approved by Fair Work Commission (FWC), who must be satisfied that agreement:
 passes a ‘better off overall test’ (BOOT) compared to modern award
 does not include any unlawful conditions
 has an expiry date (no longer than 4 hours from date FWC approves agreement
 outlines how disputes are to be settled
 includes flexibility clause allowing for variations if required
 includes terms about relationship between each employer and employees
covered by agreement and relationship between employer and any employee
organisations (e.g. trade union) who will be covered by agreement

Single-enterprise agreement
single-enterprise agreement: made between single employer (or two or more single interest
employers) and employees employed at time agreement is made, and who will be covered by
agreement
 single interest employers are employers in joint venture or common enterprise or related
corporations
o can also be employers authorised as single interest employers by FWC, either
franchisees or other employers where Minister for Employment has made declaration

Multi-enterprise agreement
multi-enterprise agreement: made between two or more employers (that are not all single
interest employers), employees employed at time agreement is made and who will be
covered by agreement

Greenfields agreement
greenfields agreement: made in relation to new enterprise of employer or employers before
any employees are employed
 o either be single or multi-enterprise agreement
 parties include employer (or employers in multi-enterprise greenfields agreement) and one or
more relevant employee associations (usually trade union)

Advantages Disadvantages
Consultation with and involvement of Possibility of undermining of award standards,
employees with some employees working longer hours
Possibility of improved pay and conditions Possibility of job losses
Access to training Greater inequity in wage rates between
employees
Greater flexibility

Enterprise bargaining
enterprise bargaining: process of negotiation generally between the employer, employees
and their bargaining representatives (normally trade union) with the goal of making
enterprise agreement
 Fair Work 2009 establishes set of clear rules and obligations about how bargaining process
occurs (includes rules about bargaining, content of enterprise agreements, and how an
agreement is made and approved)
 bargaining is process done with intent of reaching enterprise agreement

Common law contract

common law contract: when an employer and an individual employee negotiate a contract
covering pay and conditions
 individual, negotiated agreement
 employees not under any award or enterprise agreements
 common among professional and managerial employees
 usually for employees who earns over $145 000/year

Advantages Disadvantages
Right to sue for compensation if employment Offer less protection than other agreements
conditions are not met
Flexibility to suit varied needs of individuals Possible exploitation of employees due to
unfair bargaining positions
Individual initiative awarded Expense of any court case if either party sues
for compensation

Rights and obligations of employees and employers

 all employment contracts establish legally binding rights and obligations for both parties
 obligations of one party = rights of the other party

Employees’ rights / Employers’ obligations Employers’ rights / Employees’ obligations

Pay correct income – set by an award or Obey lawful and reasonable commands made
agreements by the employer
Provide a safe, healthy and discrimination-free Attend work at required times
workplace
Provide a pay slip showing the total amount Use care and skill in carrying out their work
and how it was calculated activities
Not require the undertaking of illegal activities Act in good faith and in the interests of the
employer
Abide by requirements of industrial relations Dress appropriately
legislation
Respect colleagues and employer
 These rights and obligations apply to casual, part-time and full-time employees

Independent contractors
 about 10% of labour force consists of independent contractors (consultants or freelancers)
 do not have same legal status as employees
 tend to have set term for a project and control own work
 carries most of the risk of a job, including covering own superannuation, tax, insurance and
leave
 employment risks such as sickness shifted to person undertaking work  prefer to hire
contractors

4.10 UNEMPLOYMENT

unemployment: where individuals want to work but are unable to find a job
 unemployment  labour resources in economy not fully utilised
 to be counted as unemployed, a person must be:
o over 15 years of age
o without work
o either actively looked for full-time or part-time work at any time in the last four weeks and
were available for work OR waiting to start a new job if the job had been available
 actively looking for work includes:
o written, telephoned or applied to an employer
o an interview with an employer for work
o answered an advertisement for a job
o checked or registered with an employment agency
o taken steps to purchase or start your own business
o advertised or tendered for work
o contacted friends or relatives to find work
o does not include passive action without some additional, active, job search step
 looking in newspapers or at job advertisements on the internet
 checking noticeboards

Types of unemployment
Cyclical
 a fall in consumer spending which reduces demand for workers
 caused by downturn in business cycle
 demand for labour is derived from demand for resources
 demand for goods and services fall  businesses respond by cutting back on production and
reduce workforce to reduce expenses

Structural
 people’s skills no longer needed due to new technology
 mismatch of skills required and skills available
 restructuring economy from old industries with introduction of new technology  people out of
work as they do not have right skills and experience for ‘new’ jobs

Frictional
 cause by imperfect working of the labour market
 when a person loses (or quits) a job they need time to research other job opportunities, go
through application procedures and prepare themselves for new job
 can be geographic (relocation) or occupational but is short term
Long term
 occurs for those actively looking for a job for over 6 months
 many employers overlook someone who’s been actively looking for that long
 higher percentage of the unemployed fall into this category than before GFC or in prior
recessions

Seasonal
 certain industries only produce or distribute products at certain times of the year
 industries include farming, tourism and construction

Hard core
 individuals who have never been employed full-time, or who have been unable to find
employment for an extended period
 may be excluded from official unemployment statistics in some economies, as those who are not
actively looking for work may not be counted

Hidden
 not counted as unemployed by ABS, but who hypothetically would be in labour force if there was
full employment, or at least searching for a job if labour market was more buoyant and job
applicant thought they had a decent chance of getting a job
 includes those who have taken lifestyle changes due to absence of employment opportunities
o e.g. proportion of people enrolled in full-time education, or caring full-time for children
 cost of childcare  potential salary would be significantly reduced  choses to
be unemployed but would like to be employed otherwise

Underemployment
 have jobs but aren’t working to their full capacity or skill level
 includes those who are working part-time but would prefer full-time jobs and who are working in
jobs where they aren’t being fully utilised
 often caused by cyclical unemployment
 during a recession, unemployed workers will take what they can to make ends meet

Full employment
 major objective of Federal Government
 recognises 4-5% of people looking for work will not find suitable jobs even when economy is
expanding

Employment statistics
 all people who have jobs plus al people who are actively looking for work:
total labour force = employed + unemployed people
 number of unemployed people
unemployment rate = x 100%
total labour force

Country Number of people Number of people Labour force Unemployment

employed unemployed rate (%)
A 3 500 000 200 000 3 700 000 5.41%
B 15 750 000 1 500 000 17 250 000 8.70%
C 1 600 000 300 000 1 900 000 15.80%
D 56 250 000 2 750 000 59 000 000 4.66%

Labour force participation

participation rate: percentage of people in working-age population that are in the labour
force
 typically moves with business cycle
o businesses hiring more workers and offering higher wages  incentives greater to
actively look for work  higher rate of participation
o businesses are not hiring and offering smaller wages  less incentive for people to look
for work  lower rate
 also structural influences affecting participation that are independent of business cycle
o technological advances  lower participation
 some trends that have affected participation:
o more opportunities to work part time
o increase in number of females looking for work (increased female participation)
o people working longer to delay retirement
labour force
participation rate = x 100%
working−age population
Social costs of unemployment
 suffer economically and socially
 individual costs felt by whole of society
1) families may need to relocate to other areas in search of work
2) family members may become separated in process
3) society’s living standards and quality of life reduced

Personal costs of unemployment

 boredom – plenty of time but limited by money shortages
o many unemployed people become frustrated and bored
o can sometimes lead to vandalism, drug use, crime and other anti-social behaviour
 poor health – emotional and financial pressures can have enormous impact on person’s
physical and mental health
 loss of self-esteem – society places a lot of importance on type of work person does
o person who is unemployed can often lose self-confidence
 discrimination – out of labour force for long periods of time  more difficult to apply
o employer can unintentionally discriminate against person who has been unemployed for
extended period of time and not give them an interview
 isolation – many unemployed people feel not accepted as part of society and become
depressed, ill or hostile
o harder to find employment  vicious cycle of long-term unemployment
 ridicule and prejudice – being unemployed may affect how other in society view people
o often seen as ‘dole-bludgers’
o frequently object of ridicule and prejudice
 loss of skills – longer a person is unemployed, the more difficult it becomes to find a job
 o while not working, they are not acquiring new skills or practicing their existing skills

Economic costs of unemployment

 unemployment rate important as measure of joblessness
 gauge of economy’s growth rate
 government spending – expenditure on social welfare payments increases
 poverty – without job, there is no regular income
o social welfare payments only maintain person at level below poverty line
o with few savings, there is little left over for costs involved in job-seeking
 redundancies – companies pay redundancies to lay people off
 unemployment rate is lagging indicator – doesn’t measure effect of economic events (recession)
o unemployment rate doesn’t rise until after recession has already started
 reduced consumer spending

Employment and the economy

 cost of laying people off (redundancies)  employers reluctant to lay people off when economy
slows and will watch economy’s performance before taking action
 for large companies, it can take months to put together a layoff plan
 companies even more reluctant to hire new workers until they are sure economy is well into
expansion phase of business cycle

July 2019 statistics

 unemployment rate is 5.3%
 underemployment rate is 8.4%
 participation rate is 66.1%

4.11 – 4.13 LEGAL ISSUES RELATING TO THE WORKPLACE

Workplace Health and Safety (WH&S)

 work can be a health hazard for employees
 construction, agriculture/forestry and transport account for about 50% of workplace deaths
 most of the deaths are men under the age of 34.
 97% of work related deaths could have been prevented
 3 main causes of workplace injury and illness are:
1) inadequate training
2) lack of appreciation for the seriousness of health and safety issues
3) attitude – ‘she’ll be right’, complacency
 on 1 January 2012, Work Health and Safety (WHS) Act 2010 (Cwlth) came into effect
 safety and protection of employees and outlines legal requirements for employers and
employees
 employers must ensure:
o their workplace is safe
o machinery is regularly inspected and maintained
o protective clothing and adequate training are provided
o committees are set up to enforce the WH&S rules
 employers have a written WH&S policy
 all employees must:
o comply with safety instructions
o report any situation they think may be dangerous
o co-operate in accident investigations to prevent them from happening again
 WorkCover Authority of New South Wales is government agency responsible for providing
WH&S advice to employers and employees and conducts workplace inspections

Bullying in the workplace

 85% of workers suffer or witness bullying in workplace
 most noticeable forms are intimidation, humiliation, verbal abuse and threatened or actual
violence against an employee
 repeated actions likely to generate a risk to health and safety
 subtle forms such as exclusion, isolation or assigning meaningless tasks unrelated to the job

Sexual harassment
sexual harassment: wide range of unwelcome behaviour of sexual nature that could make
person feel humiliated or offended
o includes comments on person’s physical appearance, questions about person’s sex life and
display of pornographic images
 Anti-Discrimination Act 1997 (NSW) and Sex Discrimination Act 1984 (Cwlth) make sexual
harassment unlawful
 Australian Human Rights Commission provides free advice for any person who feels they have
been unlawfully sexually harassed
o investigates complaints and helps find solution

Anti-discrimination
discrimination: treating a person less favourably because of factors such as gender,
ethnicity, religion or disability
 direct discrimination – treating group less favourably than another person or group in similar
circumstances
 indirect discrimination – treatment which seems fair but has unequal or unfair impact on one
person or group compared with others
 women – difficult to gain promotion and gender pay gap
 older employees – sometimes dismissed or forced to retire to be replaced by younger, lower-
paid workers
 migrants and indigenous people – difficult to secure permanent employment
 late 1970s – federal and state laws passed to end discrimination
 illegal to discriminate on grounds of a person’s:
o gender, ethnicity, age or sexual orientation
o physical or mental disability
o religious faith or political opinions
o marital status, family responsibilities, pregnancy or potential pregnancy
 main legislation:
1) Racial Discrimination Act 1975 (Cwlth)
o employers cannot specify particular racial or cultural characteristics when advertising a
position
2) Sex Discrimination Act 1984 (Cwlth)
o unlawful to discriminate on basis of sex, pregnancy or potential pregnancy or marital
status
o cannot discriminate based on family responsibilities with respect to dismissals
o prohibits sexual harassment
3) Disability Discrimination Act 1992 (Cwlth)
o within reason, all people with a disability have equal access to employment
4) Age Discrimination Act 2004 (Cwlth)
o people are not discriminated against on basis of age
5) Affirmative Action Act 1986 (Cwlth)
 o requires businesses to promote equal employment opportunities (EEO) for those people
previously discriminated against

Unfair dismissal
unfair dismissal: termination of employment that is consider to be harsh, unjust or
unreasonable
 if employee is not performing his or her job satisfactorily or behaves inappropriately, business
can terminate employment
 three ways employee can be dismissed:
1) summary dismissal – serious breach of employment contract (e.g. fraud, intoxication,
assault of an employer or employee)
2) dismissal ‘by notice’ – failure to perform job adequately
3) redundancy or retrenchment – employer no longer needs employee for economic or
operational reasons
 protection from unfair dismissal has been incorporated into federal legislation
 Fair Work Act 2009 (Cwlth) – employee who believes they have been unfairly dismissed can
apply to Fair Work Australia for reinstatement and/or compensation
o main objective is to create system that gives employees access to cheap, simple and fair
process of appeal
 employees of small business cannot claim for unfair dismissal until after minimum employment
period of 12 months
 larger businesses minimum employment period is 6 months

Redundancy and retraining

redundancy: when a particular job a person is doing is no longer required to be performed,
sometimes due to technological changes
 unless existing employee can be retrained for another job, they will be made redundant
 can be either voluntary or involuntary
 voluntary – business decides how many employees should be ‘let go’
o employees nominate themselves for voluntary redundancy
o offered redundancy package or severance: a payout of a sum of money (payout of any
unused entitlements such as long service leave and termination pay)
 involuntary – too few employees volunteer for voluntary
o business may be forced to decide which employees made redundant
o involuntary redundancy package is less than voluntary package

Privacy
 many businesses monitor employee telephone conversations, web hits, keystrokes, completion
time and emails
 some companies use closed-circuit television cameras to watch employees
 sometimes employees have to use log-off code whenever they leave their desks
 monitoring raises number of ethical issues
 critics claim business’s right to know is offset by workers’ right to privacy
 growing concern over invasion of privacy
 invasion of privacy:
o performing genetic screening to deny employment to people whose future health
problems might disadvantage business
o demanding drug and alcohol testing of employees
o listening to phone calls and checks web hits to determine whether they relate to job or
are being made for private purposes
 businesses have right, and to some extent, obligation to protect themselves against theft,
misuse of company resources and unsafe work practices
 however, goals should not be achieved at expense of personal privacy

Outsourcing
outsourcing: contracting of some tasks to outside suppliers
o e.g. school cleaning is outsourced to private companies, call centres
 many businesses have rearranged their workforces to employ minimum full-time staff and to use
as many people from outside the business as possible
o on a contract, casual or part-time rate or piecework
Advantages Disadvantages
Business can focus on core activities or areas Reduced job security
of specialisation – resources used more
efficiently and improvements to quality
Provides employment opportunities Lack of employee entitlements
Cost savings – services acquired at cheaper Domestic staff currently performing tasks could
rate as different providers compete for business lose jobs
Contractors have greater control over way they
provide their services
Businesses can change staffing levels as work
demands vary

Piecework
pieceworkers: people who are paid according to number of items they make
 encourages effort and rewards efficiency
 recently lots of piecework in textile industry has been outsourced  thousands of mainly migrant
women in Australia being employed by clothing companies at very low piece rates
 workers do not have access to normal award conditions, workers compensation, overtime and
sickness benefits
o frequently work 70 – 80 hours per week

4.14 THE ROLE OF UNIONS AND EMPLOYER GROUPS

trade union: an organisation that looks after workers in a particular job or industry
o members pay fee to finance union’s operations
o trade unions advocate for rights of workers to ensure better working conditions

Trade unions: early beginnings

 working conditions during Industrial Revolution were extremely poor  rise of trade unions
 working conditions experienced today are result of past trade union actions

Role of trade unions

 joining together  workers able to approach employers and bargain with more strength for
improved pay and conditions
o Australia was first country to legislate eight-hour working day
 unions generally aim to:
o protect interests of union members (e.g. campaigns and negotiations for increased pay)
o improve working conditions of members (e.g. monitoring health and safety)
o ensure fair treatment of employees at work (e.g. preventing unfair dismissals)
o promote quality of life issues (e.g. limiting work hours)
 usually, each individual workplace will elect voluntary union representative who will:
o attend local union meetings
o keep members informed and assist them with work-related issues
 o organise meetings at the workplace
o represent members in negotiations with management
 during past 25 years, Australian workers belonging to trade union has steadily declined
o 55% in 1982 to 18% today
o part-time and casual employees <25 and females have lowest level of membership
o middle-aged and older male workers are at highest level
o unions offer many new services (e.g. cheap personal loans, free legal service and
discounted goods and services  attempt to increase membership

Employers’ associations
 employers join together to protect common interests
 Australian Industry Group (AIG) is peak industry association, representing 60 000 businesses
 Australian Chamber of Commerce and Industry, Business Council of Australia (BCA) and
Australian Retailers Association (ARA)
 main roles are to:
o represent employers in dealings with trade unions
o give advice and assistance on wide range of issues such as taxation, industrial relations
and employment legislation
o lobby governments with memberships’ views
o negotiate with union to establish new set of pay and conditions

4.15 RESOLVING DISPUTES

 main methods which normally occur depending on seriousness of dispute are:

1) grievance procedure
2) negotiation
3) medication
4) conciliation
5) arbitration

Grievance procedures
grievances: complaints that an employee has formally recognised with a manager or union
representative
grievance procedures: a number of predetermined steps that are followed to resolve a
dispute
 usually occur when employee thinks they have been unfairly treated
 handled within business
 most businesses have developed system of grievance procedures  reduce risk of low-level
complaints growing into major confrontational issue
 problem is mostly resolved after discussions between people involved

Negotiation
negotiation: a method of resolving disputes where parties involved discuss issues in an
attempt to reach a compromise
 supervisor/manager formally recognises negotiated agreement
 reach an agreement that satisfies all those involved
 ‘give and take’ may be required to attempt to reach compromise solution
 usually results in all parties feeling satisfied about decision and committed to end result
 if negotiation fails, next alternative is mediation

Mediation
mediation: when a third party helps those involved in a dispute to reach a solution
acceptable to both sides
 mediators do not act for either party nor do they advise or decide who is right or wrong
 main role is to encourage parties to examine all the issues
 discussions are confidential and held in non-threatening environment
 main advantage of mediation:
o both parties will feel they have achieved something by themselves
o provides a win-win solution where no one ‘loses’
 if mediation fails, next alternative is having case heard in court by Fair Work Australia, which has
power to conciliate and arbitrate

Conciliation and arbitration

conciliation: similar to mediation except the conciliator can suggest possible solutions
arbitration: when an independent body makes a final (and binding) decision on a dispute
between two parties
Conciliation
 Fair Work Australia helps settle dispute by trying to get both parties to reach mutually acceptable
solution
 if no solution is reached and dispute continues, next alternative is arbitration

Arbitration
 Fair Work Australia arbitrates by making legally-binding decision
o employer and employee must accept decision
 main disadvantage is that both parties may feel they have lost some control over process and
final outcome compared to mediation or conciliation

4.16 TAXATION

taxes: the part of our income taken by the government to pay for collective goods and
services

Reasons for taxes

collective wants: goods and services that are for the use of the whole community
 taxes provide collective wants
o e.g. schools, hospitals, defence forces and social welfare payments
 to pay for collective wants, government needs to raise money through taxes
 taxes are main source of revenue

Types of taxes
Goods and Services Tax (GST): a broad-based tax of 10% on the supply of most goods and
services consumed in Australia
 number of different taxes in Australia
 personal income tax affects working life the most – percentage of each worker’s earnings given
to federal government, tax rates per person vary according to income
 progressive tax system – increases as income increases, tax depends on income level
 most common method of paying personal income tax is through Pay As You Go (PAYG) system
o generally applies to wage and salary earners
o employer deducts tax out of pay and sends to Australian Taxation Office (ATO)
o system based on tax year between 1 July – 30 June
 federal government also gains revenue from:
o company taxes paid by businesses out of their profits
o excise duty – special tax placed on cigarettes, alcohol and petrol
 o customs duty – tax on imports
o capital gains tax – tax on profits made on sale of assets (e.g. property and shares)
o since 2000, Australia has had GST – payable on most goods and services sold, with
major exception of fresh food
 applied to each stage of production but paid by final consumer
 10% of price of each purchase is returned to federal government
 money passed on to state and territory government
 direct taxes: paid directly to the government to the taxpayer
1) personal income tax
2) company tax
3) capital gains tax
 indirect taxes: applied on manufacture or sale of goods and services, initially paid by an
intermediary, who add amount of tax paid onto value of good and then onto end user
1) Goods and Services Tax
2) excise duty tax
3) customs duty tax

Process of paying taxes

Tax File Number (TFN) declaration
 start a new job  complete TFN declaration form
 ATO will use information on form to determine amount of tax automatically deducted from pay
 must complete form for each employer

Income tax return

 Australia’s tax system works on self-assessment  must show assessable income and claim
only deduction and offsets entitled to
 income tax return must be completed and returned to ATO at end of financial year
 ATO will check return to determine whether each person has paid enough tax
o not enough tax paid  pay more tax
o paid too much tax  ATO will give refund

4.17 SUPERANNUATION

What is superannuation?
superannuation: a way of saving so an employee has some money in retirement
self-funded retirees: putting aside money while employee is young and able to work for when
they are older and no longer have a regular income
 compulsory savings scheme
 employer contributes part of employee’s wage or salary into superannuation fund
o funds invested to increase their value before paid to employee when they retire
 current superannuation contribution rate by employer is 9.5%
 employees can choose to contribute to fund  increase amount they will receive on retirement
 government encourages employees to make personal contributions by allowing some
contributions to be tax deductible
 through super co-contribution scheme, low and middle income earners receive payment from
government for every after-tax dollar they contribute to their superannuation
 laws in place that determine when someone is eligible to access superannuation savings
 those who have financial resources advised to plan ahead  can be self-funded retirees
 longer money left in super fund = more it grows
o however, global recession caused by GFC has decreased superannuation fund values
o some people will put off retirement until funds recover while others may need to reduce
their expected level of income
Accessing superannuation/retirement
preservation age: earliest age someone can access their super
 laws in place that determine when person is eligible to access superannuation savings
 cannot access super until preservation age is reached and retired
o born after 1964, preservation age is 60
o born before 1 July 1960, preservation age is 55
 can be accessed prior to preservation age under extenuating circumstances
 when someone gains access to their super, they can either take out the money as:
1) a lump sum
2) income stream

Personal contributions
 federal government encouraging people to start superannuation savings plan while they are
young and able to work so they can become self-funded retirees
 can retire when you choose, but need pay for living expenses after you no longer earn income
 after lifetime of working, superannuation contribution rate of 12% (9.5% by employer and 2.5%
by employee) of average person’s pay will create about $1 million by the time they are 60
 starting savings program early  provide comfortable lifestyle in retirement
 when you retire you may be eligible for age pension
o however pension amount not always enough to maintain comfortable lifestyle
 government abolished age limit for retirement  encourage older workers to remain in
workforce

Advantages and disadvantages of superannuation as an investment option

Advantages Disadvantages
 Forced saving scheme – money locked for  Most people have to wait until preservation
predefined period age to access their super funds
 Money automatically deducted and invested  Investments may lose value over time
 Value increases over time  Additional costs (administration and
 Allows you to maintain lifestyle into old age management fees) charged by super funds
 Money invested by super fund and  Taxation may be paid on certain lump sum
professionally managed payments
 Resources pooled with other investors   Still need to pay tax on investment earnings
access investments you otherwise might  If you access super before age of 60, you
not have access to may pay more tax
 Super fund stays active even when you
change employers
 If super is taken out as an income stream
rather than lump sum, money continues to
earn interest