AWAs: Changing the Structure of Wages?

Abstract

This paper provides an overview of recent developments in remuneration practices in individual agreements (Australian Workplace Agreements or AWAs) and compares them to collective arrangements using data from ACIRRT’s Agreements Database and Monitor (ADAM). The data reveals two key differences in wages provisions between AWAs and collective agreements. First, wage increases in AWAs are often not guaranteed but are ‘at risk’, as they are typically linked to demonstrated productivity improvement through performance. Such performance is more likely to be measured at the individual rather than the group level. The second key difference is the use in AWAs of a loaded or allin rate of pay which is usually accompanied by open-ended hours of work provisions. The paper generally finds that there are substantial differences in the content and incidence of wages information contained in AWAs and collective agreements. The structure of wages is assessed in order to explain the discrepancy in wage outcomes and earnings for workers covered by AWAs. The key question raised by the data is whether the shortcomings of such wage increases granted in AWAs are compensated for by other aspects of the remuneration structure.