Labour market flexibility: wage relativities under the Labour Relations Act 1987

Abstract

The abolition of compulsory arbitration means that bargaining power will be essential to achieve superior settlements. Workers will be attracted to stronger unions and there will be ,a change in union structure. The dismantling of the welfare state will mean that workers will come to depend on union bargaining power for protection. The objects of unions and the subject matter of bargaining are no longer restricted, and the union can insist that the employer provide security which was formerly provided by the state. Restructuring the union movement as promoted by the Labour Relations Act will not in the long run lead to greater wage flexibility. Unions will remain occupationally based, and will be parties to occupationally based awards which do not accommodate the economic circumstances of individual industries or employers. There will be a smaller number of more powerful unions holding the national award structure together through bargaining power, rather than by the force of the Arbitration Commission's reasoning.