Just 2.2% of employees on AWAs, ITEAs

17 June 2009

Just one in every 45 employees had their pay and conditions determined by AWAs or ITEAs in August last year, according to new ABS statistics that, according to Professor David Peetz, prove that claims about AWA density before the 2007 federal election were "wildly exaggerated".

The Bureau's Employee Earnings and Hours data, released today, shows that 175,000 employees (2.2%) were covered by registered individual agreements (almost all would have been AWAs or ITEAs) in August last year.

Peetz, the Professor of IR at Griffith University in Brisbane, notes the survey was conducted 18 months after the capacity for making new AWAs was abolished.

"If there had been a million AWAs in place at the time of the last election, as some advocates claimed, there would be a lot more people still on 'registered individual agreements' in August 2008 than the 175,000 estimated by the ABS, even after allowing for labour turnover.

"These statistics highlight the fact that the bolder claims about how many people were contemporaneously covered by AWAs were always wildly exaggerated", he says.

The statistics show that in the private sector, unregistered individual agreements were the dominant means of setting pay, covering 44.7% of employees, well ahead of registered collective agreements (25.6%), awards or pay scales only (20.4%), registered collective agreements (2.4%) and unregistered collective agreements (0.7%).

In the public sector, registered collective agreements prevailed, covering 96% of employees, ahead of unregistered individual agreements (2%), registered individual agreements (1.1%), unregistered collective agreements (0.5%) and awards or pay scales only (about 0.4%).

Awards are more important for pay-setting among female (19.9%) than male (13.3%) employees and this is more marked in the private sector (females 25.8% and males 15.7%).

Hospitality (50.3%) is the only industry in which awards or pay scales determine pay for more than half of employees. Griffith's Peetz says this appears to be a reduction from about 57% in 2006, although definitional changes make it difficult to be certain. This seems to reflect the growth of non-union collective agreements in that industry, he says.

Tasmania (20.8% and NSW (20.2%) are the states with the greatest reliance on awards and pay scales.

Individual agreements are dominant in WA (determining pay for 47.8% of employees), compared to just 30.3% in Tasmania.

Collective agreements are more likely to be found among employers of more than 1,000 employees (82.2%) than those employing fewer than 20 (3.7%).

Griffith's Peetz also points out that registered individual agreements paid 5.6% less per hour than registered collective agreements in May 2008.

This discrepancy has blown out from 3.3% in May 2006. This is probably due to post-March 2006 AWAs not being subject to the no disadvantage test and to AWAs already in place having lower hourly pay rates, he says.

Time for ABS to address data shortcomings: Peetz

Peetz also says it is time for the ABS to give priority to distinguishing between union and non-union collective agreements. In the future it will also be able to stop making a distinction between registered and unregistered individual agreements, as registered individual deals are "now in terminal decline".

There is now also limited value in continuing to distinguish between registered and unregistered collective agreements, as there now only 53,000 people covered by unregistered ones - a 78% reduction since 2006.

He says non-union collective agreements tend to be replacing registered individual agreements, and that while it is clear non-union collective deals have lower pay rises than their union counterparts, "we have few systematic data about them".

"The union/non-union distinction is a lot more important now than the registered/unregistered distinction", he says.

Employee Earnings and Hours, Australia, August 2008, 6306.0

Original article: Workplace Express – www.workplaceexpress.com.au