A growing trend in work organisation in Australia is for firms to outsource many activities that had been previously performed in-house. Outsourcing these activities, it is argued, will free up human and capital resources as well as allow for increased flexibility in the way labour is employed. Although the extent of outsourcing and other approaches to flexibility have been well documented in Australia, little attempt has been made to evaluate such practices. The purpose of this paper is to review the existing research and to evaluate the effect of outsourcing on firm performance and employee commitment. The research findings, which are based on four manufacturing companies, shows that employee commitment among contractor employees is generally high, although the economic benefits to the firm may take several years to realise.

Data from the two rounds of the Australian Workplace Relations Survey conducted in 1989/90 and 1995 are used to examine the extent of growth in outsourced labour (or contracting out), the characteristics of workplaces which are intensive users of outsourced labour, and the sources of growth in contractor-based employment. A key conclusion reached is that growth in the incidence of outsourcing is not a function of employment growth being most rapid in those types of firms and industries which have traditionally used contractors, but instead has taken place across a wide range of workplaces.

Outsourcing is very much part of the neo-liberal agenda for the public sector. The rationale for transferring the provision of goods and services, traditionally the responsibility of governments to private enterprise lies in the perception of public sector inefficiency and the philosophy that reducing the role of government, is essential for the optimal performance of the economy. While the impact of outsourcing is not always easy to isolate given its coexistence with a variety of complementary neo-liberal strategies such as legislative attacks on trade unions, there is strong evidence to suggest that it has contributed significantly to the reduction of employment, wages and working conditions. This has occurred both as functions are transferred to the less regulated private sector and as those left in government employment are subjected to the impact of ongoing financial stringency in their struggle to compete with the private sector and hold on to their jobs.

Academic and policy discourse about Competitive Tendering and Contracting (CTC) derives its intellectual legitimacy from the theory of contestable markets. Applying contestability to CTC implies that efficiency gains generated through the initial open tender are repeated at successive stages of tendering. This paper presents a theoretically and pragmatically grounded critique of the application of this theory to CTC by focusing on the Re-Opened Tender (ROT) stage. Working within the neo-classical economic paradigm, contestability will be shown to be constrained at ROT, resulting in the most inefficient and worst possible welfare outcome for the buyer.

The trend towards outsourcing maintenance functions to labour hire firms raises questions about the capacity of unions to maintain membership levels and employment standards amongst an increasingly casualised labour hire workforce. The Victorian manufacturing maintenance sector has experienced substantial outsourcing to labour hire firms, but unions in this sector have maintained membership levels and established enterprise agreements to govern employment of labour hire workers. In 1997, labour hire workers in this sector struck for almost 7 weeks in support of a wage claim. This paper outlines the nature of employment regulation of labour hire firms in Victorian manufacturing maintenance and the factors leading to the 1997 dispute. It analyses how the union organised industrial action and how the employers responded. The conclusion explores some questions about collective action by labour hire workers, and highlights some problems of dispute resolution under the current regulatory regime.

This paper provides some analysis of microeconomic criteria for the regulation of union - employer wage bargaining in the context of a decentralised wage determination system. Using a simple model, where the employer has monopoly power in the product market, it is shown that an efficient collusive bargain struck between union and employer will benefit the consumer. This result holds under quite weak assumptions about the objectives of the union. Under not unreasonable assumptions about the nature of union objectives, the collusive bargaining outcome will be better for the consumer them removing the monopoly power of the employer while the monopoly power of the union remains. The implication for wages policy is that rather than proscribe collusive bargaining between a union and an employer with monopoly power, regulation should assist such bargaining as there are social benefits.

Labour market programs are time honoured microeconomic policies, which offer different solutions to different policy makers. Some advocate them to moderate wage inflation and thus complement macroeconomic demand expansion. For others, they are advanced as a second-best, but politically feasible, substitute for reducing real wages. For many, they are regarded as an equity measure to assist the very long-term unemployed. All these goals are macroeconomic, for the policy maker is interested in the number and type of people displaced from employment as a result of the labour market programs. However, despite this, the macroeconomic field of labour market program evaluations is surprisingly thin. Few direct measures exist in Australia and overseas on the aggregate employment effects of such programs and the inference from related works finds little consistent evidence that they increase aggregate employment. Furthermore, there is a lack of macroeconomic assessments of the equity effects.

Previous research reveals that failure to resolve intra-union conflict may lead to the emergence of breakaways. Drawing on evidence from the Australian entertainment industry, this study examines the more unusual case of an attempt to secede by elements of the leadership (rather than membership) from the Australian Theatrical and Amusement Employees Association. Following secession, the breakaway group merged with a different union. The paper argues that the country’s system of industrial relations shaped the form of the breakaway and ultimately provided the legal vehicle for the disaffected group to split from its parent union. It further shows how union breakaways are not necessarily caused by union merger activity although it often appears that they are.