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Effects of Work Choices Act on Rio Tinto - Case Study Example

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Effects of Work Choices Act on Rio Tinto

Trade unions will find it more difficult to service their existing members, recruit new members and organize industrial action. This legislation also clearly shifts the balance of the power in the employment relationship more towards the employer. This will be most obvious in businesses with 100 employees or less, where employers will have the right to dismiss workers almost at will. Most importantly, if offered an AWA, the only real alternative for many employees will be to quit.
This entails the creation of the Australian Fair Pay Commission which will be responsible for establishing and varying the federal minimum wage, all other wages specified in awards, and casual pay loadings. The abolition of the no-disadvantage test will be implemented. Its replacement by the Australian Fair Pay and Conditions Standard covering just five basic conditions: award rates of pay, maximum ordinary hours of work, annual leave, personal and carers leave, and parental leave. These five conditions will be the only award conditions which cannot be varied or excluded in a workplace agreement. Further, in the event of the termination of an agreement it is these five minimum conditions that the parties fall back to. There are major changes in the nature and operation of federal awards. With the exception of the five minimum conditions, workplace agreements will replace all award conditions that otherwise would apply to the workers covered by these agreements. Australian Workplace Agreements, or AWAs will also take precedence over collective agreements, even if those collective agreements are currently in operation. A much simpler approval process for agreements, with all agreements, both collective and individual, needs only to be lodged with the Office of the Employment Advocate (OEA) to take effect. There are tighter rules governing rights of entry by trade unions to workplaces.


The management can fire employees who are members of the
Construction, Forestry Mining and Energy Union (CFMEU) and replace them with non-union workers and immigrant workers.

The Management can establish a black list of critical, unproductive or non-performing workers and offer them AWAs. If they refuse it, management can ask them to resign immediately.

The Management can enforce a strike ban on the labor union hence guaranteeing industrial peace. If the workers resort to strike, the company can lay off the workers with the reason that they have affected the economy by crippling the company. The Company can request the Labor Minister to declare the strike as illegal.

The company can check the collective agreements of the different subsidiaries and decide not to re-negotiate a new agreement with these unions. The company can just offer individual AWAs to the workers.

The Management can terminate personnel with medical problems, numerous absences and recurrent poor work performance.


The strong anti-union stance of Work Choices Act will enable Rio Tinto Mining to derive financial benefits from the utilization of labor resources.

(Nigel Munro)
Corporate Affairs ...Show more


This information brief memo presents a description of the current situation facing the Rio Tinto Mining Corporation vis-vis the Workplace Choices Act and it presents the options available to top management on how to derive benefits from the Workplace Choices Act.
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Effects of Work Choices Act on Rio Tinto essay example
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