New AWAs pay less

by 25 Jul 2007

THE SHORTFALL of wages for typical workers on Australian Workplace Agreements (AWAs) is much larger than previously realised, according to recent research.

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

There were a couple of reasons why the gap had been underestimated, according to Griffith University’s Professor David Peetz and Curtin University of Technology’s Professor Alison Preston, who conducted a study of previously unpublished earnings data from the Australian Bureau of Statistics.

“The published figures on registered individual contracts included agreements in the state systems, and they pay nearly twice what AWAs pay,” 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 per cent 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.

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.

“The study found the biggest shortfall for AWA workers is in small organisations, where cutting labour costs is likely to be important,” 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.”

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

“Interestingly, even mining AWAs paid below collective agreements,”Peetz said.

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