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Employment Relationship: Nature and Tensions

Week 11 Tutorial
Employment Relationship: Nature and Tensions
Class Preparation:
In preparation for today’s tutorial, you should have:
 Read the readings for the Week 8 lecture in your text book and on vUWS
 Read the below case study and prepared answers to the questions ready for class discussion.
Aims and Objectives:
 Identify the causes and manifestations of industrial conflict
 Distinguish between the approaches to understanding conflict in the employment relationship
 Distinguish between the hard and soft perspectives of HRM
Case Study Exercise: Spotlight is an Australian retail business specialising in dress and furnishing fabrics, manchester and home decorating products. It is privately owned and operated and employs approximately 6,700 people. Spotlight’s stores are located throughout Australia, New Zealand and Asia. (Spotlight, 2011)
In 2006 Spotlight offered Australian Workplace Agreements (AWAs) to its employees that took away the right to a number of existing entitlements including penalty rates, loadings and other allowances. Employees were offered 2 cents an hour in exchange for this, equivalent to a 16.7% pay cut ($3,639 per year less) (ACTU, 2011 :25). The following article provides an overview of Spotlight’s approach to the negotiation of terms and conditions of employment and some political responses to its approach (Coorey, 2006).
New Spotlight deal worse than two cents offer
Phillip Coorey Political Correspondent July 4, 2006
WORKERS at the new Spotlight store in Mount Druitt are being offered pay and conditions worse than those available to their counterparts in Coffs Harbour.
They are being offered an Australian workplace agreement (AWA) that does not include the two cents an hour pay rise offered to the Coffs Harbour workers in return for surrendering award entitlements, such as penalty rates, overtime and leave loading. An agreement offered to a part-time worker at Mount Druitt also guarantees only four hours’ work a week.
The equivalent NSW award guarantees a minimum of 12 hours a week for part-timers.
The agreement provides no guaranteed pay rise, saying “your wage rate will be reviewed annually and any increase in rate shall remain at the sole discretion of Spotlight”. Non-salaried employees may be required to work “reasonable” additional hours and on public holidays but there would be no overtime or penalty rates: “Additional hours will be paid at your base rate of pay.”
The Opposition Leader, Kim Beazley, said the Spotlight agreement was further proof “John Howard’s AWAs slash wages and conditions”.
“John Howard’s wages race to the bottom started at two cents an hour; it’s now at zero and we know where it’s going next,” he said.
The federal Minister for Workplace Relations, Kevin Andrews, said 38 of the 40 new employees at the Mount Druitt store had been on unemployment benefits and were now $350 a week better off.
“The bottom line is you’re better off with a job than being on the dole and that’s what Kim Beazley doesn’t get,” he said.
Mr Beazley said the laws enabled exploitation. “These workers are young people first entering the workforce and have no bargaining power. The only choice they have is a wage-slashing AWA or no job.”
A spokeswoman for Spotlight said the company was not commenting on the matter. The Mount Druitt workers are being offered the award equivalent of $14.28 an hour. The Coffs Harbour workers were offered $14.30 an hour.
The Coffs Harbour Spotlight store shot to the forefront of the industrial relations debate when management made the two cents pay rise offer in return for abolishing a number of entitlements. Mr Beazley cited it as a basis for his pledge to abolish the contracts.
Under the new laws, workplace agreements were stripped of the no-disadvantage test that previously ensured a worker could be no worse off whether on an award or a collective agreement.
Mr Beazley said his industrial relations campaign would take a while to have an effect.
“This isn’t a sort of overnight cataclysm. This is a crumbling away that occurs with an infestation of termites,” he said.”
In December 2009, Fair Work Australia approved the Spotlight Pty Ltd Australian Stores Enterprise Agreement 2009 (the Agreement). The parties to negotiation of the agreement were Spotlight Pty Ltd and the Shop Distributive and Allied Workers Union. The Agreement provides for a range of conditions of employment superior to those offered in the AWAs.
1. Does Spotlight’s actions in offering the AWAs reflect a soft or hard approach to HRM? Explain your answer.
2.Identify the ways in which covert industrial conflict might have manifested itself at Spotlight.
3. How would this conflict be explained from a unitarist perspective?
4. How would this conflict be explained from a pluralist perspective?
5. Do you agree with Mr Andrew’s or Mr Beazley’s comments?
Reference List
Australian Council of Trade Unions (2011) The Fair Work Act two years on.
Coorey. P (2006) “New Spotlight deal worse off than two cents offer” Sydney Morning Herald, July 4 2006
Fair Work Australia (2009) [2009] FWAA 1769
Spotlight (2011) Our Heritage accessed 9 September 2011


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