Industrial Relations Definition (Including the Benefits)

By Indeed Editorial Team

Published 6 September 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Industrial relations refers to the laws, conventions and institutions that help regulate workplaces. It provides support for economic and social issues, including wages, working hours and working conditions. Understanding industrial relations can help you know where to find information and support relating to employment conditions and relevant legislation. In this article, we share the meaning of industrial relations, explain what supports industrial relations, share why it is important and provide a list of benefits provided by industrial relations.

Industrial relations definition

To understand the definition of industrial relations, it can be helpful to consider both words separately, industrial and relations. Industrial refers to production activity in which employees engage and relations refers to the relationship between employers and their employees. The industrial relations system aims to provide a harmonious relationship between employers and employees, ensuring continuous productivity.

This system acts as a regulatory body to settle industrial workplace disputes and advise on disciplinary policies, pay rates, working conditions and employment security. Employers and employees usually associate industrial relations with labour laws, industrial awards and unions. These provide guidance to those in the workforce and economic support by helping maintain satisfactory employment.

Related: Work Rights in Australia: A Comprehensive Guide

What are industrial relations supported by?

Labour law, industrial awards and unions support industrial relations. Below, you can find a description of each of these to help you understand what they are:

Labour law

Labour law is legislation that outlines the rights and responsibilities of employees. You can also refer to this law as industrial relations law. This law has a dual structure where the Commonwealth governs some issues and individual state and territory laws govern others. This legislation is in place to ensure employees work in a safe environment that's free of harassment, discrimination and bullying. It also outlines the minimum terms and conditions for employees under the national workplace relations system. One of the most important pieces of labour law is The Fair Work Act 2009.

Related: What Is a Regulatory Requirement and Its Impact on the Workplace?

Industrial award

An industrial award is a ruling that's handed down by the Fair Work Ombudsman. These awards are legal documents that outline employment conditions and minimum pay rates that employees are to be paid by their employer. These awards usually only apply if an employer doesn't have a registered agreement in place with their employees. Depending on what industry you work in, there's likely to be a specific award that applies to you. For example, if you work as an administration officer in the health industry, the Health Professionals and Support Services award may apply to you.

Related: Average Salary in Australia by Profession and Industry

Union

A union is a group of employees who come together to share their voices in the workplace. They can support an employee in talking with their employer to negotiate a pay rise or better working conditions. Unions protect employees' rights against labour laws and help them achieve wage rises, better employment conditions and job security. They can also help employees interpret fair work legislation to understand their rights.

Related: What Is a Union and How Does It Work? (Plus Benefits)

The importance of industrial relations

Industrial relations provide support to employers and employees. It can also be important from a societal perspective. You can read about why it's important at each level below:

Employers

It can be important for employers to maintain good industrial relations to ensure business growth and success. Maintaining good industrial relations generally means referring to unions, labour laws or industrial awards when negotiating improved pay rates and working conditions with employees. You may refer to this negotiation process as collective bargaining. Collective bargaining can help improve employment relationships, which can increase employee retention and attract new employees to a business.

Industrial relations laws can also offer guidance on resolving internal disputes between management and their personnel. Industrial relations can be of great importance to an employer to ensure their employees are happy with their employment. When a business's employees are happy in their roles, it's common for the business to experience increased productivity and a positive culture, both of which can produce significant benefits.

Related: What Is Business Growth? (With Plans and How to Measure It)

Employees

Labour laws, unions and industrial awards aim to protect employee working rights and set the minimum wage that an employer is to pay them. Without these references in place, it may be difficult for employees to negotiate a pay increase, which may cause job dissatisfaction. Industrial awards and labour laws also set the minimum standard of conditions an employer is to provide. This prevents employers from setting their own standards, which may cause the unfair treatment of an employee. These laws act as a protection for employees and can provide them with job security.

Industrial relations can help ensure employees work in safe environments and have adequate training opportunities. It can also help ensure that employees receive their leave entitlements, including annual leave and personal leave. Unions often support employees and look after their interests when settling industrial disputes between them and their employers.

Related: What Is Organisational Culture?

Society

Industrial relations provide fair work opportunities for industrial labourers. These relations also help to provide them with reasonable wages and good working conditions. Without these, employees in particular industries, such as nursing and transport, may go on strike to protest for their working rights. If a strike occurs, it can have a negative societal impact because it can limit public resources and services that communities usually have access to. The continuation of these services contributes to a better lifestyle for members of the community.

Another important aspect of industrial relations for society is the job security it provides employees with. When unemployment rates increase, there's usually an increase in people claiming unemployment benefits. This can have a big impact on society, creating poorer communities and a requirement for significant government expenditure. Because of this, it's important that employers act fairly and provide their employees with the working conditions stipulated in industrial awards and labour laws.

Related: Guide to Unemployment Benefits During the COVID-19 Crisis

Industrial relations benefits

Below, you can find a list of some of the most common benefits that industrial relations can provide employees, employers and society:

  • Continuous production: One of the most important benefits of industrial relations is that it promotes continuous production. This means that employees can expect job security and can feel satisfied with their effective use of resources.

  • Reduced industrial disputes: Effective industrial relations can help reduce the number of industrial disputes that occur, including employee strikes or lodging of grievances. Fair work opportunities and job security typically offer employees contentment in their roles.

  • Improved morale: If employees are happy in their roles and provided with supportive work conditions, company morale is likely to be good. It's common for employees who feel supported in their positions to be more productive and achieve greater results.

  • Increased trust in employers: If an employee can reference an industry award or registered agreement, it can help them understand their working rights, employment conditions or pay rates. Having access to this information can increase trust between the employee and their employer, as all information relating to industrial relations is available and completely transparent.

  • Economic progress: Industrial relations ensure employers provide their employers with acceptable working conditions. This can have a great impact on the economy by generating a more satisfied community of employees, better productivity and increased revenue amongst businesses.

  • Prevents unethical practices: Industrial awards and fair work legislation protect employees from unethical practices. These provisions prevent employees from working in unsafe work environments and provide guidance on the maximum number of working hours to ensure ‌work-life balance.

  • Provides disciplinary support: The industrial relations system provides support to managers to help them work through a business's disciplinary matters. There are guidelines available on the fair work website to assist with matters of serious misconduct, prevent underperformance and provide warnings to employees before taking disciplinary action.

  • Effective use of resources: When employers roster employees onto their duties according to industrial awards or labour law, it can provide them with confidence that they are utilising their resources in the best way. These industrial relations references can guide an employer on the correct working hours, leave entitlements and flexible work arrangements they offer their employees.

Explore more articles