Report shows workers on AWAs earn less

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Report shows workers on AWAs earn less

A report by two respected industrial relations academics has shown that across Australia showed a typical worker employed under an AWA earns 16% less than one on a registered collective agreement.

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A report by two respected industrial relations academics has shown that across Australia showed a typical worker employed under an AWA earns 16% less than one on a registered collective agreement.

The Victorian Minister for Industrial Relations, Rob Hulls, said the new study was conclusive proof that AWAs were 'the fast-track in the race to the bottom on wages and conditions'.

Median wage rates lower

The study was compiled by Griffith and Curtin University Professors David Peetz and Alison Preston. It found median wage rates for AWAs in Victoria were significantly lower because there were fewer high-paid mining jobs and a bigger take up of AWAs in the hospitality industry.

The study found the typical (median) non-managerial employee on an AWA was receiving 16.3% less per hour than their equivalent on a registered collective agreement. For typical women on AWAs the shortfall was even greater at 18.7%.

Published averages 'distorted'

Professor Peetz said there were a couple of reasons why the gap had been underestimated.

'The published figures on registered individual contracts included agreements in the State systems, and they pay nearly twice what AWAs pay,' Professor Peetz said. 'The published averages are also distorted by the wages earned by a small number of high income occupations - like miners - with almost 70% of AWA workers earning less than average AWA earnings.

'The median is a much truer indication of the position of the typical employee.'

Commissioned by Industrial Relations Victoria, the study looked at workers' hourly wages across industries and organisational sizes to test competing ideas on the purposes and effects of AWAs.

Professor Peetz said the research explored whether AWAs produced general benefits in terms of flexibility and higher wages, or were used for cutting labour costs and avoiding unions.

Workers in small business worse off

'The study found the biggest shortfall for AWA workers is in small organisations, where cutting labour costs is likely to be important,' Professor Peetz said. 'Only in very large organisations, which may use AWAs for union avoidance, did AWA workers receive higher average wages than workers on registered collective agreements.

'AWA workers in industries with known union avoidance behaviour, like communications and government administration, also received higher average wages than workers on collective agreements.'

Professor Peetz said in industries like manufacturing, transport, health and construction, where labour costs were important, AWAs paid well below registered collective agreements.

Even mining AWAs lower

'Interestingly, even mining AWAs paid below collective agreements,' Professor Peetz said. 'The study also found workers with the weakest bargaining power - labourers and related workers - had the biggest wages shortfall for AWAs. In hospitality, the only industry where you can get representative data on award wages, AWAs paid even less than awards.

'The results suggest that minimising labour costs is an important element in AWA strategising, and any 'flexibility' benefits that exist are not enough to offset the effects of cost minimisation on wages.'

'Just shameful'

Hulls said it was 'just shameful, that at a time when the economy is booming, a typical Victorian worker on an AWA is rewarded for an honest day's work with 23% less than their counterparts on collective agreements'.

Federal Workplace Relations Minister, Joe Hockey, responded to the report by calling Professor Peetz 'poet laureate of the trade union movement'.

Peetz a 'union spin doctor'

'If Hulls wanted to be taken seriously he would have hired someone other than the headline act of the unions' all star list of spin doctors,' Hockey said.

He said ABS data reports that non-managerial employees on AWAs are earning 9% more each week than employees on collective agreements and 94% more than employees covered by an award.

'As to be expected, Professor Peetz's study is a convenient and selective interpretation of the facts,' Hockey said. 'Professor Peetz fails to recognise a workplace relations system that allowed more women to join the workforce than ever before. Furthermore the study completely misrepresents the fairness test, which is undeniably a stronger safety net than the old no-disadvantage test.'

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