Unions slam employers backing AWAs ahead of Work Choices scrap

A report entitled, “AWAs, Collective Agreements and Earnings: Beneath the Aggregate Data” recently revealed that employees on AWA individual agreements earn 16% less than employees under collective agreements.  The Australian Council for Trade Unions (ACTU) accepted the report which was prepared by Professor Dadid Peetz of Griffith University and Professor Allison Preston of Curtin University.  The study was conducted on behalf of the Department of Innovation, Industry and Regional Development of the Industrial Relations Victoria.

The report, which was released on 17 July 2007, addressed the concerns about the negative effect of the Work Choices reforms on the earnings of employees under Australian Workforce Agreements (AWAs).  The study compared the hourly earnings of employees under AWAs and those under collective agreements:
* In different industries;
* In different occupations; and
* In various company sizes.

The report cites the following relevant observations:

1. There is a major pay gap between employees under AWA individual contracts and those under collective agreements.  To illustrate, AWA workers were paid a median hourly rate of $20.50, which is $4 less than the hourly rate of workers under collective agreements.

2. The wage gap is higher for women covered by AWAs, with the female median earnings almost 19% lower than those of women under collective agreements.

3. The industries that paid AWA workers less than their counterparts under collective agreements are the manufacturing, construction, transport, storage, health, community services, property, business services and the personal and other services sector.

4. Although a pay gap between AWAs and collective agreements exists in most businesses, the gap is wider among small businesses than among larger enterprises.

5. The so-called “flexibility benefits” under AWAs are not sufficient to offset the reduction in the workers’ wages.

6. AWAs eliminated or reduced “protected” award conditions such as penalty rates, overtime rates, shift work loadings, public holiday pay and rest breaks.

7. Employers tend to pay more under AWAs only when they wish to avoid negotiations with unions.

Thus, the ACTU referred to the report as “proof” that the Howard Government’s AWAs were being used to cut labor wages and conditions and to “sideline” the role of unions in helping workers bargain collectively.  In an official statement on 17 July 2007, ACTU President Sharan Burrow said, “This study confirms that vulnerable workers – those with fewer skills or with little bargaining power –are the ones most likely to lose pay and conditions under AWA individual contracts.  There can no longer be any shadow of doubt that typical workers on AWAs are worse off than their counterparts on collective agreements.”