BUSINESS MANAGEMENT UNIT 4
Unit 4 assessment task 1C:
employee relations
Angela Diamantopoulos
Gladstone Park Secondary College
This assessment task for Outcome 1 in VCE Business Management Unit 4 is
the third of three tasks (see the Compak June issue for tasks 1A and 1B).
Assessment task C covers: management practices and processes associated
with employee relations; centralised and decentralised industrial relations;
and awards, agreements and contracts. Suggested answers are provided.
Task C has been designed as a closed-book test to be completed in a single
lesson. The case study material relates to the nurses dispute. As this was a
complex industrial issue, teachers may want to consider providing the case
study material to students the day before the assessment task so that they
can familiarise themselves with the material.
Task details
Assessment task
Case study and test (task C)
Unit/area of study
Unit 4: Managing People and Change
Area of Study 1: ‘The human resource management function’
Outcome 1
Analyse and evaluate practices and processes related to human resource management.
Relevant key knowledge and key skills
Key knowledge
The relevant key knowledge for this assessment task includes:
 management practices and processes associated with employee relations
 relationship to business objectives and business strategy
 the similarities and differences between centralised and decentralised approaches
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 industry-wide awards, collective agreements within an individual organisation and individual
contracts
 the role of human resource managers in employee relations under a decentralised approach
 management styles and skills in employee relations, including their application to the
resolution of conflict.
Key skills
The relevant key skills for this assessment task include the ability to:
 accurately use relevant management terms
 analyse business literature, information and data
 evaluate key aspects of human resource management theory
 apply human resource management knowledge and concepts to practical and/or simulated
situations
 evaluate different practices and processes for managing human resources.
Instructions and conditions
In completing the following assessment task you should demonstrate an understanding of the relevant
key knowledge and key skills for Outcome 1 and be able to analyse and evaluate practices and
processes related to human resource management.
Answer all questions in this answer book. The marks for each question are indicated after each
question.
Conditions: Closed book
Time allowed: 50 minutes (plus reading time)
Marks allocated: 25 marks
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Case study and test: Victorian nurses industrial dispute
Read the following case study and answer the questions in the spaces provided.
The long and protracted industrial dispute between the Australian Nursing Federation (ANF) and the
Victorian Baillieu Government ended quietly on 16 March 2012 when government negotiators agreed
to the ANF’s demands and settled the longstanding dispute between them. This saw an end to almost
eight months of heavy industrial action including nurses walking off the job, picketing outside
hospitals, mass rallies, two weeks of work bans and the threat of mass resignations that would
ultimately cripple Victoria’s health system. The mass resignation threat came as Fair Work Australia
Commissioner Anne Gooley on Friday 3 February suspended talks aimed at reaching a negotiated
outcome indefinitely, due to lack of progress. The nurses risked large fines for defying court orders
and had their pay docked due to this action.
On 16 June 2011, the ANF served its log of claims to improve practice nurses' wages and conditions
on more than 1000 Victorian general practices and medical clinics. There was a mixed response to
the log of claims from employers, medical groups and the General Practice Association. In particular,
the employers groups favoured individual contracts over collective agreements and smaller practices
lacked an awareness of what enterprise bargaining entailed.
Victoria’s Health Minister, David Davis, stated that the end to the dispute was a good deal for all:
nurses, patients, taxpayers and the health system.
The ANF, the trade union representing nurse and mental health workers, and the Victorian Hospitals
Industrial Association (VHIA), representing the employers, met on many occasions over the eight
months prior to reaching agreement to discuss and negotiate the 2011 Enterprise Bargaining
Agreement.
As part of ongoing negotiation, numerous sessions of conciliation occurred between the parties
concerned: the VHIA representing the employers (hospitals) and the ANF representing the nurses.
Late last year a document outlining a government plan to reduce nurse-to-patient ratios was
uncovered. The leaked government document revealed a government plan to: cut $104 million overall
from the annual nursing budget; replace nurses with low-skilled ‘health assistants’; have no fixed
nurse-to-patient ratios; reduce the ratio of registered nurses on wards; and in return for cuts, grant
nurses a pay rise of just 3.5 per cent. The plan was to frustrate pay negotiations and force nurses to
arbitration.
On 25 February, the nurses defied a Fair Work Australia order that ordered them to stop their
industrial action and return to work and to take no further action until June. The nurses organised
stop-work strikes over a three-day period in Geelong, Frankston and the northern suburbs of
Melbourne; and 700 nurses walked out on the Royal Melbourne, Dandenong and Western Hospitals.
Nurses vowed that the walkouts would continue every day, twice a day, until the government agreed
to allow the independent Fair Work umpire to resolve the dispute.
The government believed that the nurses’ industrial action was in clear defiance of Fair Work
Australia and was illegal and unlawful. The Victorian Hospitals Industrial Association (VHIA) on behalf
of Victoria's public hospitals appealed to the Federal Court to end the latest round of industrial action
by nurses. The government warned the nurses that it would take legal action against the union for
allegedly breaching Federal Court orders by organising the bans.
As a goodwill measure to end the current dispute, the Victorian Health Minister David Davis offered to
meet with the ANF state secretary, Lisa Fitzpatrick, if the union agreed to suspend current walk-offs,
which were in defiance of a court order to end industrial action. Mr Davis said he was determined to
see the issue resolved, and although he was not in a position to conduct formal negotiations, he
believed that the government and the hospitals were still prepared to negotiate and eager for
conciliation between the parties to continue.
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On 7 March, the nurses agreed to suspend their industrial action and the VHIA their legal action, and
resume conciliatory talks with the opposing parties. This came after Fair Work Australia issued all
parties with an ultimatum, to reach an agreement by 16 March. On Wednesday 7 March the federal
Workplace Relations Minister, Bill Shorten, stated: ‘The thing about workplace bargaining is that it
requires parties actually rolling up the sleeves and negotiating in good faith’. He encouraged the
parties to use the expertise of the independent umpire to stop the industrial dispute.
Finally, on 16 March 2012, the ANF state secretary, Lisa Fitzpatrick, told a packed meeting of nurses
and mental health workers at Festival Hall that they had reached an agreement with the Victorian
Government and that their industrial dispute was over. Ms Fitzpatrick said the government had agreed
to the following conditions as part of the 2011 Enterprise Bargaining Agreement:
 not to employ nurse assistants in place of enrolled or registered nurses
 not to make the nurses work split shifts
 to grant pay rises of between 14 and 21 per cent over the four-year agreement (well above the
government’s stated wage policy of no more than 2.5 per cent a year)
 for patient safety, to retain the nurse-to-patient ratio of one nurse for no more than four patients.
Questions
Question 1
With reference to the case study, define two of the following terms.
a. trade union
b. industrial action
c. enterprise bargaining agreement
2 x 1 = 2 marks
Question 2
Describe the role of Fair Work Australia in terms of resolving industrial conflict.
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BUSINESS MANAGEMENT UNIT 4
2 marks
Question 3
a. Identify two tactics that were used by the Victorian Government and employers during this
dispute.
2 marks
b. Identify the forms of industrial action that were used by the Australian Nurses Federation (ANF)
during this dispute.
2 marks
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c. Analyse the effectiveness of the forms of industrial action (identified in your answer to Question
3b) taken by the ANF.
3 marks
d. Evaluate whether the settlement of this dispute has now left both parties (Victorian
government/employers and the ANF) with a workable outcome.
3 marks
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Question 4
a. Compare the three types of industrial agreements:
 industry-wide agreements (awards)
 collective agreements
 individual contracts.
3 marks
b. Distinguish between the following terms.
i. protected’ and ‘unprotected’ industrial action
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ii. ‘conciliation’ and ‘arbitration’
2 + 2 = 4 marks
Question 5
a. Discuss whether you believe that the Australian system of employee relations is now both
centralised and decentralised in its approach.
2 marks
b. Describe one advantage of a decentralised employee relations system.
1 mark
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c. Describe one disadvantage of a decentralised employee relations system.
1 mark
Total: 25 marks
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Suggested answers
Question 1
With reference to the case study, define two of the following terms. (2 x 1 = 3 marks)
a. trade union
b. industrial action
c. enterprise bargaining agreement
Trade union: Trade unions are organisations that represent employees in an industry, trade or
occupation in an effort to improve their wages and working conditions; for example, the ANF’s role is
to represent the nurses and mental health workers in negotiating their enterprise bargaining
agreement.
Industrial action: Industrial action is the result of an industrial dispute that occurs when a
disagreement arises between management (the Victorian Government and the 1000 Victorian general
practices and medical clinics) and employees or their representatives, the ANF (nurses’ union), over
matters of pay and working conditions. The type of industrial action taken by the nurses included
walking off the job, picketing outside hospitals, mass rallies, two weeks of work bans, and the threat of
mass resignations that would ultimately cripple Victoria’s health system.
Enterprise bargaining agreement: An enterprise bargaining agreement (EBA) is a formal agreement
that results from the enterprise bargaining process, which involves direct negotiation between either
an employer and employees or an employer and a trade union(s) acting on behalf of employees at a
particular workplace (organisation). Once established, it is legally binding on the employer and
employees. The ANF employees wanted a new enterprise agreement, one that would improve nurses'
wages and conditions.
Question 2
Describe the role of Fair Work Australia in terms of resolving industrial conflict. (2 marks)
The Fair Work Act 2008 established Fair Work Australia as a one-stop shop for information, advice
and assistance on workplace issues. It replaced the function of a number of government agencies
such as the Australian Industrial Relations Commission, the Australian Industrial Registry, the
Australian Fair Pay Commission and the Australian Fair Pay Commission Secretariat. The role of Fair
Work Australia in relation to resolving industrial conflict is to act as an independent tribunal, arranging
arbitration hearings that are conducted along the lines of a court case. A commissioner can be
appointed to convene a conference between the parties to resolve the issue, hear the matter, and
make orders to ensure that good faith bargaining occurs between the parties in conflict.
Question 3
a. Identify two tactics that were used by the Victorian Government and employers during
this dispute. (2 marks)
The government and employer groups:
 developed a secret plan relating to nurse-to-patient patient ratios (a point of contention
between the parties) that was designed to frustrate negotiations and force nurses to
arbitration
 called to have the nurses’ industrial action declared as ‘unlawful and illegal’
 used delaying tactics—making the dispute long and protracted
 stated that they preferred individual contracts rather than collective agreements
 were involved in conciliation sessions.
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b. Identify the forms of industrial action that were used by the Australian Nurses
Federation (ANF) during this dispute. (2 marks)
 Walking off the job
 Picketing outside hospitals
 Mass rallies
 Work bans
 Threats of mass resignations
When identifying the type of action taken by the ANF, students need to highlight characteristics
(or features) of the industrial action taken; for example, work ban—an industrial action in which
employees carry out selected duties relating to a particular job, thus causing a slowdown.
c. Analyse the effectiveness of the forms of industrial action (identified in your answer to
Question 3b) taken by the ANF. (3 marks)
The Australian Nursing Federation (ANF) undertook a variety of industrial action to try and bring
about a conclusion that would suit their point of view. Examples of industrial action in the case
study included: strikes, walking off the job, picketing, work bans, mass rallies, and the threat of
mass resignations that would cripple the health system.
Walk offs occur when employees walk off the job and go on strike by withdrawing their labour
and stopping production without giving the employer a lot of notice. The nurses walked off the
job during their period of industrial action, taking strike action that caused massive disruptions
to hospitals and scheduled surgeries. This was an effective form of industrial action for the
nurses to take as it inconvenienced the employers and other stakeholders.
Picketing occurs when employees physically demonstrate outside the premises of their
employer, with the aim of disrupting and even stopping production by deterring other
employees and suppliers from entering the premises and thus crossing the picket line. This was
an effective strategy as it brought media attention to the nurses’ actions.
Mass rallies occur after the employees go out on strike by withdrawing their labour and
stopping production. They occur when the majority of employees congregate at a meeting
place to hear how negotiations are going between the union representing them and their
employer. Usually after a mass meeting the union members walk to the employer’s workplace
to rally in front of its premises. This is an effective strategy as it often generates media
attention, disrupts the normal routine of the hospitals, and ensures that the employer is made
aware of their employees’ demands.
Work bans are when employees refuse to perform tasks that would normally be part of their
everyday work life. A number of work bans were placed on elective forms of surgery, which
inconvenienced the hospitals; as such, it was an effective tool to use.
The threat of mass resignations is used by employees when they threaten to quit their place of
employment en masse. This form of industrial action was probably the most effective strategy
the nurses used. Mass resignations would mean that employers would be forced to wok
through the employment cycle and advertise, shortlist, interview and then select new
employees to staff vacant positions. This would be a very costly and time-consuming process,
which would cause a great amount of inconvenience and stress for employers.
Answers analysing each type of industrial action must also explain how effective the action
was.
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d. Evaluate whether the settlement of this dispute has now left both parties (Victorian
government/employers and the ANF) with a workable outcome. (3 marks)
The settlement of this dispute after eight months of industrial action, which saw the ANF using
different types of industrial action, appears to have resulted in a workable outcome. While the
original log of claims by the ANF has not been fully met, the organisation has gained
agreement from the government that: nurse assistants will not be employed in place of qualified
nurses; split shifts will not be introduced; the current nurse-to-patient ratios will be retained; and
pay increases between 14 and 21 per cent over the four-year term of the agreement will be
introduced. While the Victorian Government has had to make certain concessions, it now has in
place a workplace agreement that will last for four years, which includes no further threats of
protected industrial action that could cripple the health system. It will allow the government to
undertake its budget planning for the health sector with a degree of certainty.
Question 4
a. Compare the three types of industrial agreements. (3 marks)
 industry-wide agreements (awards)
 collective agreements
 individual contracts.
An industry-wide agreement or an award is a legally binding agreement that sets out the
minimum wages and conditions of employment for a group of people, usually industry-wide,
while a collective agreement is one that has been determined by the process of collective
bargaining and determines the terms and conditions of employment through direct negotiation
between unions and employers relating to a particular workplace or industry. An individual
contract is an agreement made directly between an employer and an employee that covers
working conditions and remuneration. The ANF was negotiating on behalf of the nurses for an
enterprise bargaining collective agreement, which would cover the working conditions of the
nurses as an industry.
b. Distinguish between the following terms.
i. ‘protected’ and ‘unprotected’ industrial action (2 marks)
Protected industrial action is action that occurs during a protected period when a new
collective agreement is being negotiated, while unprotected industrial action is industrial
action taken outside the negotiating and bargaining process. For example, any industrial
action taken by the nurses during the period of negotiating the agreement would be
considered protected; while any action taken outside this period would be considered
unprotected.
ii. ‘Conciliation’ and ‘arbitration’ (2 marks)
Arbitration is the process of resolving a dispute by using an impartial person, such as a
judge or a panel of judges who hear both sides of the industrial matter and then determine
the outcome. On the other hand, conciliation is the process by which a third party, usually a
conciliator, facilitates agreement between management and employees in relation to a
dispute. The difference between arbitration and conciliation is that arbitration involves the
determination of an order that is binding on all parties; whereas conciliation is simply a
recommendation to both parties to come to some agreement and requires the mutual
intention of both parties to comply with the recommendation or proposed resolution.
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Question 5
a. Discuss whether you believe that the Australian system of employee relations is now
both centralised and decentralised in its approach. (2 marks)
Australia’s system of employee relations is a blend of both centralised and decentralised in its
approach. The centralised approach is still evident in our modern award system where the
government and its industrial tribunals control the process of wage determination (that is, pay
and working conditions) for employees working in the same industry but with different
employers. The centralised system has also created the National Employment Standards that
act as minimum legal employment standards that must be complied with in both the centralised
and decentralised employee relations approaches.
The decentralised approach occurs when the employer and employees decide to negotiate and
enter into a collective agreement that relates to the pay and working conditions of the
employees at that particular workplace or enterprise. Both the centralised and decentralised
approaches are similarly regulated in the event of needing to resolve a dispute or take industrial
action. Protection for employees is provided under both approaches, with employees being
given access to the protection bodies associated with Fair Work Australia; however, under a
collective agreement the Better Off Overall Test (BOOT) is also used to check the agreement
against the award.
b. Describe one advantage of a decentralised employee relations system. (1 mark)
 It allows for greater flexibility to make agreements that reflect the needs of the individual
workplace or enterprise.
 Communication between management and the workers is increased, which can lead to
increased productivity and cooperation.
 Suggestions for ways to increase productivity can come from the workers due to discussions
between management and workers being more open.
c. Describe one disadvantage of a decentralised employee relations system. (1 mark)
 Reduces the level of control of the government in wage determination.
 It is more time-consuming for employers to undertake negotiations.
 Some workers feel more vulnerable due to the reduced influence of unions as the
representative of workers.
Only one advantage is required to be described in response to Question 5b and one
disadvantage in response to Question 5c.
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Teacher references
‘Revealed: secret plan to cut nurse numbers’, The Age, 6 November 2011,
http://www.theage.com.au/victoria/revealed-secret-plan-to-cut-nurse-numbers-20111105-1n1f9.html
‘Court orders end to Vic nursing protest‘, ABC News, 20 February 2012,
http://www.abc.net.au/news/2012-02-28/court-orders-end-to-nursing-protest/3857818
‘Mass resignations not the way to go: Davis’, ABC News, 22 February 2012,
http://www.abc.net.au/news/2012-02-22/mass-resignations-not-the-way-to-go3a-davis/3844526
‘Nurses ordered to suspend industrial action’, ABC News, 24 February 2012,
http://www.abc.net.au/news/2012-02-24/fair-work-australia-rules-on-nurses/3851088
‘Nurses to ignore Fair Work strike ban’, ABC News, 25 February 2012,
http://www.abc.net.au/news/2012-02-24/nurses-continue-industrial-action/3851632
‘Nurses continue to defy FWA no-strike order’, ABC News, 27 February 2012,
http://www.abc.net.au/news/2012-02-27/nurses-continue-to-defy-fwa-no-strike-order/3854284.
‘Hospitals take court action against striking nurses’, ABC News, 28 February 2012,
http://www.abc.net.au/news/2012-02-28/hospitals-take-court-action-against-striking-nurses/3857138
‘Nurses defy return to work order’, ABC News, 29 February 2012, http://www.abc.net.au/news/201202-29/nurses-defy-return-to-work-court-order/3859444
‘End in sight for Victorian nurses dispute’, Ministers' Media Centre: Education, Employment and
Workplace Relations Portfolio, 7 March 2012, http://ministers.deewr.gov.au/shorten/end-sightvictorian-nurses-dispute
‘Victorian nurses settle wage dispute’, 16 March 2012, http://www.abc.net.au/news/2012-0316/victorian-nurses-settle-wage-dispute/3894568
Disclaimer: This assessment task has been written by the author (Angela Diamantopoulos) for use with students
of VCE Business Management. This does not imply that it has been endorsed by the Victorian Curriculum and
Assessment Authority (VCAA). While every care is taken, we accept no responsibility for the accuracy of
information or advice contained in Compak. Teachers are advised to preview and evaluate all Compak classroom
resources before using them or distributing them to students.
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