Innovations in labour market policies : the australian law.

340 Pages·2001·2.385 MB·English

by  OECD

«
EMPLOYMENT
Innovations in Labour Market Policies Innovations in
THE AUSTRALIAN WAY Labour Market
With the introduction of Job Network on 1 May 1998, job matching and other Policies
employment assistance services in Australia were subcontracted to hundreds
of private and community organisations. How well has this radical innovation
worked? When jobseekers have to give something to the community in return
THE AUSTRALIAN WAY
for receiving unemployment benefits, what are the results? Which of Australia’s
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many innovations across a wide range of other labour market programmes could n
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be adopted by other countries? Following extensive reforms to a complex o
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industrial relations system to promote enterprise bargaining, what is the best way
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forward? This publication provides an in-depth analysis of industrial relations and ti
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labour market policies, with particular attention to recent insights from three years n EMPLOYMENT
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of operating experience with a contestable employment services market.
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ISBN 92-64-18735-9
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cover.fm Page 1 Thursday, July 12, 2001 3:24 PM
Innovations in Labour
Market Policies
THE AUSTRALIAN WAY
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT
cover.fm Page 2 Thursday, July 12, 2001 3:24 PM
ORGANISATION FOR ECONOMIC CO-OPERATION
AND DEVELOPMENT
Pursuant to Article 1 of the Convention signed in Paris on 14th December 1960,
and which came into force on 30th September 1961, the Organisation for Economic
Co-operation and Development (OECD) shall promote policies designed:
– to achieve the highest sustainable economic growth and employment and a
rising standard of living in Member countries, while maintaining financial
stability, and thus to contribute to the development of the world economy;
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countries in the process of economic development; and
– to contribute to the expansion of world trade on a multilateral, non-
discriminatory basis in accordance with international obligations.
The original Member countries of the OECD are Austria, Belgium, Canada,
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Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, the United
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(28th April 1964), Finland (28th January 1969), Australia (7th June 1971), New
Zealand (29th May 1973), Mexico (18th May 1994), the Czech Republic
(21stDecember1995), Hungary (7th May 1996), Poland (22ndNovember1996),
Korea (12th December 1996) and the Slovak Republic (14th December2000). The
Commission of the European Communities takes part in the work of the OECD
(Article 13 of the OECD Convention).
Publié en français sous le titre :
DES POLITIQUES DU MARCHÉ DU TRAVAIL NOVATRICES
La méthode australienne
© OECD 2001
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Foreword
This review examines labour market policy and industrial relations reform in
Australia. It is part of a series on the Public Employment Service and labour
market policies in OECD countries, with 19 countries covered since the early
1990s. Other recent publications in this series have been The Public Employment
Service in the United States [OECD (1999e)] and Pushing Ahead with Reform in Korea:
Labour Market and Social Safety-net Policies[OECD (2000h)].
The volume draws upon information collected by Secretariat staff during a
visit to Australia in October2000 and submissions by the Australian government.
It has been prepared by David Grubb, Douglas Lippoldt and Peter Tergeist from
the OECD’s Directorate for Education, Employment, Labour and Social Affairs.
A draft of the review was discussed by the Employment, Labour and Social
Affairs Committee in April2001. In late May2001, shortly before going to press, the
Australian government announced a package of measures which are summarised
in a box that appears after the Summary and Conclusions section, but are not
otherwise reflected in the text.
This volume is published on the responsibility of the Secretary-General of
the OECD.
3
© OECD 2001
Table of contents
Foreword...................................................................................................................... 3
Introduction................................................................................................................. 11
Summary and Conclusions........................................................................................ 13
A. Overview: the recasting of labour market policy and labour market
institutions...................................................................................................... 13
B. Job Network.................................................................................................... 15
C. Unemployment benefits............................................................................... 25
D. Active labour market programmes.............................................................. 31
E. Labour market policy and the process of government............................ 39
F. Issues in workplace relations reform........................................................... 43
Chapter 1 Setting the Scene: an Overview of the Australian Labour Market.. 55
A. Introduction –land, population and economic development................ 55
B. The labour force and employment.............................................................. 58
C. Unemployment............................................................................................... 68
D. Income inequality and poverty.................................................................... 71
E. Government.................................................................................................... 72
F. The post-war evolution of Australian labour market policy..................... 75
G. The current labour market policy framework............................................. 80
H. Setting the scene........................................................................................... 85
Chapter 2 The Institutional Set-up of Labour Market Policy
and Employment Services....................................................................... 87
A. Introduction.................................................................................................... 87
B. Labour market agencies and actors............................................................ 87
C. Job Network contracting, payment mechanisms and member profile... 95
D. Labour market programmes outside the Job Network.............................110
E. Human Resources for employment services..............................................111
Chapter 3 The Job Network System and Placement issues................................115
A. Introduction....................................................................................................115
B. Job Network services.....................................................................................115 5
© OECD 2001
Innovations in Labour Market Policies: the Australian Way
C. System components and client flows..........................................................120
D. Referrals of clients for service......................................................................123
E. Job Network information flows and complaints procedures....................129
F. AJS and vacancy registration........................................................................130
G. Job Network outcomes..................................................................................132
H. Enhancement of Job Network placement activity.....................................140
Chapter 4 Unemployment and Related Benefits..................................................151
A. Overview..........................................................................................................151
B. Benefit entitlement structures: withdrawal rates, individualisation
and other features to facilitate taking up work..........................................155
C. Eligibility conditions for unemployment benefits....................................163
D. Centrelink processes.....................................................................................172
E. The labour market impact of administration, entitlement
and eligibility conditions..............................................................................184
F. Related benefits.............................................................................................189
G. Welfare reform................................................................................................193
Chapter 5 Labour Market Programmes..................................................................197
A. Introduction....................................................................................................197
B. Labour market programmes in the 1990s...................................................197
C. Programme provision within Job Network..................................................206
D. Work for the Dole...........................................................................................209
E. Evaluations of the net impact of labour market programmes.................213
F. Three large programme areas: youth and training, indigenous
and disability programmes...........................................................................223
G. Specialist programmes for severely disadvantaged jobseekers,
labour market re-entrants and regional initiatives...................................224
Chapter 6 Workplace Relations and Wage Determination..................................229
A. Introduction....................................................................................................229
B. The evolution of the regulatory environment............................................230
C. The employment relations parties..............................................................232
D. Main features of industrial relations reform...............................................240
E. Outcome indicators........................................................................................248
F. Summary..........................................................................................................262
Annex A Optimal Payment Mechanisms for the Competitive Provision
of Employment Services...........................................................................265
6 Annex B Training and Youth Programmes..............................................................271
© OECD 2001
Table of Contents
Annex C Indigenous Programmes...........................................................................280
Annex D Disability Programmes..............................................................................286
Notes.............................................................................................................................295
Bibliography................................................................................................................325
Glossary........................................................................................................................343
Boxes
Australians Working Together............................................................................ 51
Box 1.1. Official statistics on the indigenous population........................ 56
Box 1.2. Casual employment....................................................................... 65
Box 1.3. Labour market programme indicators......................................... 84
Box 2.1. Service changes during the first and second tender
periods of Job Network.................................................................103
Box 2.2. Information technology support for Job Network......................105
Box 6.1. EPL in Australia..............................................................................238
Box 6.2. ILO Comments on workplace relations regulation in Australia.244
Tables and Charts
Chapter 1
Table 1.1. GDP per capita at current market prices, 1999.......................... 58
Table 1.2. Labour force participation and employment
in OECD countries, 1999................................................................ 60
Table 1.3. Labour force participation rates and employment/population
ratios by age, 1999.......................................................................... 63
Table 1.4. Educational attainment and literacy........................................... 67
Table 1.5. Unemployment rates for selected demographic groups.......... 70
Table 1.6. Unemployment rates by state...................................................... 71
Table 1.7. Indicators of income inequality and poverty,
mid-1980s to mid-1990s................................................................ 73
Chart 1.1. Real GDP, Australia........................................................................ 59
Chart 1.2.a. Labour force participation rates, Australia, 1980-1999.............. 61
Chart 1.2.b. Employment/Population ratios, Australia, 1980-1999............... 61
Chart 1.3. Civilian employment, Australia, 1980-2000................................. 63
Chart 1.4. Civilian employment by industry, selected OECD countries,
1999.................................................................................................. 64
Chart 1.5. Education and employment participation of teenagers,
Australia, 1986-2000....................................................................... 68 7
© OECD 2001
Innovations in Labour Market Policies: the Australian Way
Chart 1.6. Unemployment benefit recipients and total unemployed,
Australia........................................................................................... 69
Chart 1.7. Share of Gross Domestic Product spent on income support,
Australia........................................................................................... 72
Chart 1.8. Labour market programme indicators, Australia, 1989-2000.... 85
Figure 1.1. Map of Australia............................................................................. 56
Chapter 2
Table 2.1. Job Network members and sites by type of service,
1998-2000......................................................................................... 97
Table 2.2. Number of Job Network services by sites and specialist
services, May 1998......................................................................... 97
Chart 2.1. Main actors in labour market policy and employment
services, Australia.......................................................................... 91
Chapter 3
Table 3.1. Method of recruitment used in previous 12 months................120
Table 3.2. Job Seeker Classification Instrument, selection rates
for Intensive Assistance, various groups of jobseekers,
May to August 1998........................................................................127
Table 3.3. Job search experience of unemployed persons........................133
Table 3.4. Job Network referrals and commencements..............................134
Table 3.5. Job Network: characteristics of those commencing measures.136
Table 3.6. Observed post-assistance outcomes for Job Network
and Working Nation participants.................................................137
Table 3.7. Basic employment service flows, stocks and market share
indicators.........................................................................................141
Chart 3.1. Job Network: flows of unemployed jobseekers.........................122
Chart 3.2. Monthly vacancies and placements............................................139
Table 3.A.1. Selected employment assistance measures: Job Network,
CSP and DES...................................................................................145
Chapter 4
Table 4.1. Selected income support and related payments
and programmes, September to December 1998.....................152
Table 4.2. Number of recipients of basic income support payments,
1965 to 1998....................................................................................154
Table 4.3. Change in the number of unemployed with earnings
in certain ranges between the May1995 and August1996
comparable data sets....................................................................161
Table 4.4. Selected changes to labour market behavioural criteria
for benefit eligibility to 1997........................................................166
8 Table 4.5. Mutual Obligation Options in 2000/01.........................................171
© OECD 2001
Table of Contents
Table 4.6. Schedule of unemployment benefit reductions
and non-payment periods............................................................176
Table 4.7. Unemployment benefit refusals and sanctions,
10July 1997 to 30November 1997...............................................177
Table 4.8. Breaches resulting from reports by Job Network members,
1999/2000.........................................................................................179
Table 4.9. Reviews and appeals of decisions concerning eligibility
for Newstart Allowance, 1999-2000..............................................183
Chart 4.1. Unemployment beneficiaries and labour force survey
unemployment, relative number and long-term shares..........156
Chart 4.2. Proportion of unemployment beneficiaries with earnings.......159
Chart 4.3. Schedules for net income at different levels of gross earnings
before and after July1995 changes to the income test............160
Chapter 5
Table 5.1. Public labour market programme expenditure
and participant inflows, 1995/96 and 1998/99.............................203
Table 5.2. Employment rates for participants in labour market
programmes and control groups, 1996........................................214
Table 5.3. Comparison of three-month employment status
for the SEUP sample......................................................................215
Table 5.4. The net impact of programme participation
in SEUP programme participation and control groups.............216
Chapter 6
Table 6.1. Number of unions and union members by trade union size...234
Table 6.2. Selected AIRC caseload categories.............................................237
Table 6.3. Stepping stones in Australian workplace reform.......................241
Table 6.4. Methods of pay determination....................................................249
Table 6.5. Trade union density by selected indicators...............................253
Chart 6.1. Trade union membership and density, Australia......................252
Chart 6.2. Strike rates......................................................................................256
Chart 6.3. Real wages per employee in selected OECD countries...........258
Chart 6.4. Real compensation per employee and labour productivity,
Australia...........................................................................................259
Chart 6.5. Trends in earnings dispersion D9/D1, selected OECD
countries..........................................................................................260
9
© OECD 2001
Introduction
This report examines labour market policy in Australia, with attention to both
workplace relations and the functions of job-broking, benefit administration and
referral to and administration of labour market programmes which typically make
up the Public Employment Service (PES). However, Australia has been among the
first OECD countries to introduce market-type mechanisms into job-broking and
related employment services. Since the introduction of Job Network in 1998,
employment services are mainly offered by independent providers from the
private and community sector. The remaining government body is offering
services on the same terms and conditions as the private providers, and has
retained only a relatively minor market share in the market. This radical
transformation of employment service delivery is without parallel in OECD
countries, and it shows that the delivery of publicly-financed employment
services by private and community providers is a viable option.
Another significant recent development has been the government’s intention
of retaining only the most cost-effective active labour market programmes. This
led to the abolition of the main long-term training and subsidised employment
programmes for the unemployed, although many smaller programmes for
particular target groups were retained or introduced. A third development has
been an increased emphasis on the principle of “Mutual Obligation” in the benefit
system which requires some people who have been unemployed for some time
to take up one of a number of options (including part-time and voluntary work), or
participate in a new job-creation programme called “Work for the Dole”. Against a
background of rapid economic growth, unemployment fell rapidly during the early
years of these new policies.
Industrial relations can make an important contribution to labour market
efficiency. Australia’s industrial relations system is exceptional in that most
workers are covered by “awards” set through a quasi-judicial system of
conciliation and arbitration operating through industrial tribunals at both state
and Commonwealth levels. Awards, which originated as a response to industrial
disputes, set wages and other conditions of work for a large proportion of workers.
Over the last decade, the system has been undergoing a paradigm shift in that
awards are rapidly losing in importance in favour of bargained agreements at 11
© OECD 2001