(Cabalu et al. 1996). Lewis et al. (2015) estimate that the compliance costs of
regulation to small businesses in Australia are significant—about $10 billion
per year for the economy (two thirds of 1 per cent of annual gross domestic
product (GDP)) as a whole, and result in inefficiency for business and the
economy. It is very clear that small businesses regard taking on a new
employee as a costly and high-risk activity, and will avoid doing so until
there is no alternative.
Although there are many issues arising from labour market regulation,
much of the focus recently has been on minimum wages and penalty rates.
7.7 How Do Other Countries Do Things?
The main theme that emerges from section 7.5’s commentary on Australia’s
industrial relations and the brief overview of comparator countries in this
section is that no other significant comparator country has tribunal-
determined wages to the extent that Australia does. Also, no significant coun-
try has such extensively legislated national standards. For instance, long
service leave is a legislated entitlement in Australia and nowhere else. In this
section a number of comparator countries are examined to provide a contrast
with Australia and illustrate its uniqueness.
7.7.1United Kingdom
The UK used to be famous (notorious) for the strength of its union movement,
and much of the militant attitudes of (some) unionists in Australia drew
comparisons with the considerable industrial disruptions characteristic of
the UK up to the early 1980s. However, the UK has undergone considerable
changes in industrial relations since then. Most obvious is the decline in
union density, which reached a peak of 56 per cent in 1979, coinciding with
the election of the Thatcher government, but now stands at 25 per cent (DBIS
2015a).
In the UK, pay and conditions are largely negotiated at the company or
plant level in the private sector, and through sector-level agreements in the
public sector. There are no national agreements across sectors in the UK and
this has not been a feature of the UK system, except for some experimentation
with prices and incomes policy in the 1970s. However, although there are no
formal mechanisms for the coordination of wage bargaining in the UK, in
practice agreements in certain companies and sectors often act as informal
benchmarks for agreements in other areas. Collective agreements are volun-
tary and are not enforceable but collective agreements are normally incorpor-
ated into individual contracts of employment that are legally enforceable.
Australia’s Industrial Relations Singularity