Workplace Relations Act 1996.

University Degree Business and Administrative studies

Workplace Relations Act 1996

The Workplace Relations Act 1996 (WRA) fundamentally changed the industrial relations system in Australia. The Act provided the framework that supports a more direct relationship between employers and employees, with a much-reduced role for third party intervention. Amongst the many objectives of the act, reducing the power of the Australian Industrial Royal Commission (AIRC) and that of unions was of great importance. The new system provided a basis for boosting productivity, competitiveness and economic growth by focusing on the needs of enterprises or workplaces. The key features of the WRA altered the role of the stakeholders of employment relations including the employees, employers, trade unions and the state. The new law emphasized stability, reliability and respect for workplace agreements.

Previously, the greatest sources of legal obligations for employment relationship were awards - documents created by federal or state industrial tribunals that set out the minimum terms and conditions of employment (De Cieri & Kramar: 2003). The WRA, however, altered the awards system by reducing the scope of awards to ‘20 allowable matters’. This change now acts as a safety net of fair and enforceable minimum wages and conditions. Benefits beyond this system must be settled at the workplace level through workplace agreements.

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Australia’s previous industrial relations systems emphasized the settlement of disputes by third parties such as tribunals, unions and employer associations rather than encouraging employers and employees to reach responsible solutions based on their own workplace organisations and needs (Reith: 1997). The WRA, however, encouraged direct employee-employer relations in making agreements and thus reducing the role of third parties (Dept of Workplace Relations & Small Business: 1998). Employers and employees can choose to enter into formalized agreements, such as Australian workplace agreements (AWAs), which are individual agreements, or certified agreements (CAs), which cover employees collectively (Dept of Workplace Relations & Small Business: 1998). However, these agreements need to be tested as per the “no-disadvantage test” to ensure the agreement did not result in employees being worse off overall compared with their legal entitlements under awards and other employment laws. AWAs require approval by an Employee Advocate (EA) – “a new statutory office established under the Act” whilst CAs continue to be authorized by the AIRC (Changes in Federal Workplace Relations Law – Legislation Guide: 1996).

This change has had a significant effect on the role of both employers and employees. Employers now possess a much greater power in determining the terms and conditions of employment to meet the needs of their workplace and employees too can have a say on proposed conditions. The Act however reduced the power and role of the AIRC in making and varying awards. The AIRC may act as an arbitrator to settle exceptional cases about non-allowable matters and may intervene only in circumstances where disputes threaten to harm the community or the economy.

The AIRC’s role in employment relations is still important but different as employers and employees will increasingly handle their own industrial relations and agreement making, and awards become a safety net of minimum wages and conditions. However, the AIRC still possesses a number of key responsibilities including arbitrating in exceptional matter, dealing with unfair dismissal applications, authorizing CAs after having conducted the no disadvantage test and assessing proposed AWAs – all of which are essential to ensure that the proposed polices of the Act are adhered to by all parties involved (Key Features of the New Federal Workplace Relations Law). Clearer rights and responsibilities are presented to support compliance with obligations under awards and agreements within the act.

Union structures and roles were also re-structured by the Act. The freedom of association provisions ensures that employees and independent contractors are free to join or not to join unions, and employers are free to join or not to join employer organisations (). The provisions also ensure that employers, employees and independent contractors cannot be discriminated against because of their membership or non-membership of these organisations. In other words, membership of unions and associations are voluntary, and compulsory unionism and preference clauses are prohibited by the Act (Key Features of the New Federal Workplace Relations Law). The ‘conveniently belong’ provision was replaced with new provisions which make it easier for new organisations to register. Special provision has been made for the creation of enterprise unions.

The new federal Workplace Relations Act 1996 is based on principles, which support more direct and productive workplace relations between employers and employees. These principles give more choice in reaching agreements in unionized and non-unionized workplaces. The Act opens the way for more flexible working arrangements suited to the changing ways Australians are working.

Reference List

Birmingham, A. (1999) A Guide to the Workplace Relations Act 1996, in M. Morris, d. Moritmer & P. Leece (eds), Workplace Reform and Enterprise Bargaining, Harcourt Brace, Sydney.

De Cieri, H. and Kramar, R. (2003), Industrial Relations, Human Resource Management in Australia, McGraw-Hill, Sydney.

Department of Workplace Relations & Small Business (1998) The Workplace Relations Act 1996 – A Guide for Micro Business. Canberra. <>

The Hon Peter Reith MP – Australian Minister of Industrial Relations (April 1997) Workplace Relations Act: Modernizing Australia’s Industrial Relations