What does wage determination decentralisation refer to?

Wage determination decentralisation refers to the process where wage decisions are made at the level of individual workplaces. This approach empowers employers and employees to negotiate wages specific to their circumstances, taking into account factors such as productivity, local labour market conditions, and the financial capacity of the business.

Decentralisation allows for more tailored wage agreements that reflect the needs and dynamics of each workplace rather than a one-size-fits-all approach mandated by a central authority or government. It often leads to greater flexibility and responsiveness within the labour market, fostering an environment where wages can be adjusted based on individual performance and other localized factors.

In contrast, wage decisions made by central government suggest a top-down approach where a uniform standard is applied, which does not align with the concept of decentralisation. Likewise, wage decisions dictated solely by industrial tribunals or international agreements imply a level of external imposition on wages that does not reflect the individual negotiations occurring within specific workplaces.