The first wage round under the Labour Relations Act 1987: changing relative power

Abstract

Labour's 1984 amendments to the Industrial Relations Act 1973 and the replacement of that act with the Labour Relations Act 1987 have altered the power relationship between employers and unions in private sector wage bargaining. It is argued that the changes favour employers. This paper examines the first private sector wage round negotiated after the passing of the 1987 Act offering a detailed analysis of all 588 documents, 246 of which were awards. A decline in the number of settlements overall is explained by the partial demise offormal second tier bargaining in the northern labour district, particularly in the manufacturing sector. Wage flexibility within the wage round is evidenced by 36 percent of settlements being either greater than 8.0 percent or lower than 7.0 percent. The authors conclude that employers have started to use their increased power in bargaining. Evidence for this is that employers were able to gain changes to hours of work provisions in 25 percent of settlements; resisted back-dating of wage settlements in a growing number of settlements; and were able to prevent any upwards wage drift in the settlements over the term of the wage round.