AWAs not as good as Government claims, seminar told

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AWAs not as good as Government claims, seminar told

Collective agreements are more favourable to workers than AWAs, despite Federal Government claims to the contrary, a seminar on IR bargaining has been told.

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Collective agreements are more favourable to workers than AWAs, despite Federal Government claims to the contrary, a seminar on IR bargaining has been told.

The seminar was presented by the Australian Centre for Industrial Relations and Research (acirrt) and the law firm Cutler, Hughes and Harris.

On September 29 this year, Workplace Relations Minister Kevin Andrews said figures showed that employees on AWAs earn, on average, 13% more than those on collective agreements, and 100% more than those on awards.

However Kristina van Barneveld, an Honorary Associate of acirrt and National Industrial Officer of the Rail, Bus and Tram Union, told the seminar in Sydney that the benefits of AWAs are one-sided, with employers achieving wages and hours flexibility at the expense of employee entitlements.

And she said that labour intensive industries such as hospitality would be the first to be hit by the Federal Government’s new WorkChoices legislation - which heavily favours AWAs.

Key findings

Her key findings from a survey comparing AWAs and Certified Agreements (CAs) from the hospitality industry were:

  • Most of the benefits which have been gained through the introduction of AWAs are one-sided, with employers achieving wages and hours flexibility at the expense of employee entitlements.
  • The lack of innovative provisions in AWAs and to some extent in hospitality certified agreements suggests that, in an industry where low labour costs have a significant impact on the organisation’s bottom line, the temptation is for employers to use-agreement-making to decrease these costs as much as possible.
  • Rather than use the ‘carrot’ approach to managing employees, it seems that hospitality employers prefer to wield the stick.
  • The question is whether this approach achieves the desired productivity and efficiency outcomes or whether it has a detrimental impact on morale, productivity and organisational performance. Case study evidence suggested the latter.

'Race to the bottom'

Barneveld said that with the ‘no disadvantage’ test gone from AWAs employers would be even more tempted to ‘use the stick’, however such ‘blackmail’ had a bad affect on morale.

However, she said there had been some unusual developments in the industry where employees rebelled against their treatment.

In one non-union hotel the employees had banded together and refused to work overtime.

The employer had told them that overtime had already been factored into their wage rate, but they still refused, demanding the employer tell them what ‘reasonable’ overtime was.

Barneveld concluded that with the effective removal of the floor agreements ‘the race to the bottom will begin’.

‘In high labour cost industries ‘good’ employers will be drawn into the race or will face going out of business’, she said.

‘To compete, new employees will be hired on substandard individual agreements, undermining collective agreements.

‘In the cleaning industry, for example, just one Greenfield agreements an employer makes with himself can undercut everyone else in the industry and force them to lower wages and conditions so as to compete.’

AWAs - statistics

Barneveld said statistics from the Office of Employment Advocate showed that the top five users of AWAs up to October 2005 were retail trade (3900), property and business services (2435), manufacturing (1965), accommodation, cafes and restaurants (1933) and communication services (1057).

AWA penetration by industry figures were: mining (30.7%), communication services (25%), accommodation, cafes and restaurants (12.8%), property and business services (6.7%) and retail trade (6.2%).

Compare AWAs, awards and agreements

However in the hospitality industry 65% of employees were covered by awards, 24% by individual agreements, 7% by collective agreements and only 4% by AWAs.

A comparison of AWAs and collective agreements in the hospitality industry showed employees were significantly better off under CAs.

Annualised salaries

A survey of the contents of about 60 AWAs and the same number of CAs which had annualised wages showed that penalty rates were absorbed in 66.7% of AWAs but in only 24.6% of CAs. Overtime had been absorbed in 28.6% of AWAs and 7.2% of CAs and annual leave loading in 54% of AWAs and 8.7% of CAs.

Allowances

The survey also showed that allowances, such as car, travel, first aid and laundry allowances were more prevalent in CAs than AWAs.

Overtime

In 23.8% of AWAs overtime was paid at a single rate, but in only 1.4% of CAs.

Weekends and public holidays

Working on Saturdays, Sundays and public holidays was not paid at a higher rate in about 25% of AWAs, but less than 5% of CAs.

‘I would have expected this to be higher, but it is clear you can’t get people to work on those days unless you pay penalty rates,’ Barneveld said.

Flexibility

She said there was not much difference on flexibility in work organisation provisions between AWAs and CAs, but CAs tended to be much more family friendly than AWAs.

Training

Training provisions were also much higher in CAs, with 59.4% of them stating training that would be provided to employees, compared with 15.9% of AWAs.

Role of OEA

Barneveld said some AWAs inspected should have been rejected by the OEA because the employees’ wages and conditions had been based on the wrong award, and thus should not have passed the no disadvantage test.

Wage increase - provision

In a separate report to the seminar, acirrt’s Agreement Data Base Coordinator, Larissa Bamberry, said a survey of all AWAs and Enterprise Agreements (EAs) on the data base had shown that there was no mention of wage increases in 73.2% of AWAs, compared to 12.7% of EAs

She said the comparisons showed that AWAs could be better if employees work 9 to 5 Monday to Friday, but outside those hours they tend to get less than the award.

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