Foreword

There has been an increase in interest in employee involvement and participation ¹ among academics, practitioners and policymakers in recent years, against the background of a decline in collective representation through trade unions. In my view, this interest is likely to increase further in the coming decades as the nature and distribution of work is transformed as a consequence of a range of forces for change – economic, technological, geopolitical and social.

Australia’s recent economic prosperity has brought with it significant structural shifts. Our exporters, and those who compete with importers, have seen their competitiveness eroded by movements in the exchange rate in response to higher terms of trade. These changes are seeing a shift away from commodity manufacturing towards higher-value-added products and the services sector. These structural changes are being accelerated by technological innovation, changes in energy consumption, demography and the emergence of the Asian century. These forces for change will have a substantial impact on the nature of our economy and on the future of work. The pace of change is likely to be exponential, rather than linear.

The other challenge we face lies in how we improve our productivity performance, and thereby secure our future economic prosperity. The one thing that economists agree on is that productivity growth is a good thing. Our productivity performance as a nation underpins our standard of living. In the long run, productivity growth – producing more from the same inputs – is the only sustainable way for future generations to enjoy higher living standards. As Nobel prize-winning economist Paul Krugman (1994) has observed: ‘productivity isn’t everything, but in the long term it’s almost everything’.

Australia’s productivity performance, however measured, has declined substantially since the late 1990s. As Glenn Stevens (2011) has observed: ‘it is now just about impossible to avoid the conclusion that productivity growth performance has been quite poor since at least the mid 2000’s’. Paradoxically, the past decade has been one of almost uninterrupted growth in economic activity, employment and household disposable income.

The apparent contradiction between falling productivity rates and rising living standards can be explained by the surge in Australia’s terms of trade. But the consequences of poor productivity growth will catch up with us and impact on living standards. The factors that have shielded us to date are shifting – an aging population is eroding labour force participation rates and it seems likely that Australia’s terms of trade have peaked (Eslake, 2011: 19).

While our labour productivity has recently recovered, it will take persistent growth to return to its expected long-term average level. Multifactor productivity remains very weak, as it has for much of the past decade. Some of the factors impacting on our productivity performance may be transitory – for example, the substantial investment under way in the mining sector may eventually be fully reflected in increased output. But it seems likely that we face a more persistent problem.

It is unlikely that legislative change will provide a solution to declining productivity growth. The recent Review of the Fair Work Act concluded that the productivity pattern of recent decades could not be explained by the differences between the particular industrial relations legislative frameworks over the period.

The legislative framework is important insofar as it determines the rights and responsibilities of employees, employers and their representatives. But just as legislation cannot, of itself, create cooperative workplace relations, nor can it provide a quick fix to the problem of declining productivity growth. While public policy settings and institutional support can facilitate productivity growth – as they affect the environment within which firms work – the key to improving productivity lies at the workplace level.

The structural changes in our economy and the challenge of improving productivity are also taking place in the context of profound shifts in the focus of labour law. The emergence of an increased focus on human rights at work and the concept of industrial citizenship (McCallum, 2006) evidence the increasing individualisation of labour law. ‘Industrial citizenship’ is an umbrella concept encompassing a bundle of individual rights as well as broader, aspirational concepts, such as social inclusion and industrial democracy (Collins, 1987, 2002). How, then, should Australia’s national workplace relations tribunal, the Fair Work Commission, respond to these changes and the challenges they present?

Over the course of 2013, the Commission, in consultation with the major peak employer and union bodies, will develop a broad engagement strategy. Consistent with the Review Panel’s recommendations, the object of the Commission's engagement strategy will be to encourage more productive workplaces by promoting harmonious and cooperative workplace relations. The development of a more cooperative workplace culture that facilitates change and fosters innovation will be at the heart of the Commission's engagement strategy.

Many factors impact on productivity and competitiveness, including the skills of our workforce, infrastructure, taxation, the general regulatory framework, workforce participation and the capacity for enterprises to successfully innovate. Our engagement strategy can assist the industrial parties to find common ground in at least some of these areas. The Australian Chamber of Commerce and Industry (ACCI), the Australian Industry Group (Ai Group) and the Australian Council of Trade Unions (ACTU) have committed to working collaboratively with the Commission in a consultative forum that will oversee the Commission’s workplace engagement strategy.

Employee involvement and participation offers the potential, as part of workplace or organisational policies, to provide employees quality of working experience while contributing to organisational performance. A review of studies by Handel and Levine (2004: 38) suggests that participation ‘can improve organisational outcomes if the reforms are serious’. Increased engagement can also promote the personal development of individuals. As Markey (2004: 533) explains: ‘By allowing employees a voice in the workplace, participation may promote employees’ sense of competence, self-worth and self-actualisation’; thus, participation may meet the ‘non-pecuniary needs of creativity, achievement and social approval’.

The Commission’s engagement strategy will also include greater engagement with the research community. I support the proposition espoused by Markey and Townsend (2013) in the first article in this volume that practitioners need to be engaged with academic research by supporting the study of practices in situ so that the ideas feed back into the practitioner community. The Commission is engaging with the research community in two main ways: first, by co-sponsoring a series of lectures by prominent researchers to facilitate a discussion about workplace relations issues; and second, through support for research initiatives with university researchers investigating the effectiveness of Australian tribunals in developing cooperative workplace relationships.

The premise of the Commission’s engagement strategy is the idea that by working together, employees, unions and employers can develop mutual gains and, likewise, practitioners and academics working together can provide greater gains for all parties. This special edition of the Journal is a timely and valuable contribution to the important issue of employee involvement and participation.