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Monday, 7 March 2005
Page: 185

Senator Murray asked the Minister representing the Minister for Employment and Workplace Relations, upon notice, on 9 December 2004:

(1)   Is it the intention of the Act that AWAs should be struck as a bargain between the employer and an individual employee; if not, what is the policy.

(2)   Is it the case that some AWAs are negotiated between the employer and the employee and therefore constitute a bargain.

(3) (a)   If an employer is offering an AWA on a ‘take it or leave it basis’, how can it be a bargain; (b) is it important for the Office of the Employment Advocate or the Act to distinguish between AWAs that are a bargain, and are therefore not imposed, and those that are not a bargain, where the risk of duress may be higher.

(4)   Does the Government believe that it is appropriate to ask an employee to sign an AWA determined by the employer without offering the employee the opportunity to negotiate its terms and conditions.

(5)   Are there any mechanisms in the Act to ensure that the employee has been given the opportunity to negotiate an AWA; if so, how are they enforced.

(6)   With reference to section 170VPA (1)(d) of the Act which essentially prohibits AWAs being signed under duress, by requiring that the ‘employee [has] genuinely consented to making the AWA’: (a) how is this section implemented and enforced; (b) are employees made aware of the section before they sign the AWA; (c) are employees informed how they go about informing authorities that they have indeed not genuinely consented to the AWA; and (d) what mechanisms are in place to ensure that employees are not being forced to sign their AWAs.

(7)   With reference to evidence given by Mr Hamberger at the Employment, Workplace Relations and Education Legislation Committee estimates hearings on 6 November 2003 (Hansard p. 23) referring to identical AWAs: (a) does the Minister agree that large numbers of individual AWAs that are identical are in fact collective agreements because all those employees are on the same terms and conditions; (b) would it not be easier to just certify a collective agreement with those terms that are in the AWAs; and (c) what is the reason for not doing this.

(8)   Does the Government acknowledge that in some cases AWAs are being misused and an inquiry into AWAs would be useful to ensure that AWAs are being implemented in the spirit in which they were first introduced, that is, to give an employer and an employee the flexibility to negotiate terms and conditions that meet both their needs.

Senator Abetz (Special Minister of State) —The Minister for Employment and Workplace Relations has provided the following answer to the honourable senator’s question:

(1)   The intention in introducing Australian workplace agreements (AWAs), was to provide more effective choice and flexibility for employers and employees in reaching agreements. Like certified agreements, AWAs are intended to meet the objective of placing primary responsibility for determining terms and conditions with employers and employees at the workplace. Unlike certified agreements, AWAs may be negotiated with employees on an individual or collective basis (but must be signed individually).

(2)   Yes, some AWAs could be described as a ‘bargain’ reached between the employer and the employee.

(3) (a)   The Workplace Relations Act 1996 contains approval requirements to protect employees, and employers, from duress in relation to AWAs. Existing employees cannot be offered an AWA as a condition of employment. New, or prospective, employees can be offered an AWA as part of the terms and conditions of the contract of employment. They can choose whether to take the position that has those terms and conditions.

(b)   The Office of the Employment Advocate (OEA) ensures an AWA meets all the statutory requirements including those related to duress. The OEA must distinguish however between existing employees and prospective employees when applying the approval process.

(4)   It is entirely appropriate for an employer to offer a position with particular terms and conditions of employment and this is what occurs where an employee is going to be covered by an award or a collective agreement that is already in the workplace. Though a prospective employee may well be offered an AWA as part of the contract of employment they are free to negotiate their terms and conditions of employment with the employer.

(5)   The Act does not specify how employers and employees should negotiate, that would be overly prescriptive. The Act does require genuine consent on the part of the employee before approval of an AWA. There are procedural requirements that must be satisfied before an AWA can be approved including a consideration period for the employee. The Employment Advocate must be satisfied that:

  • the agreement contains an anti-discrimination clause and dispute resolution procedure;
  • the agreement does not include any provisions that prohibit or restrict one of the parties from disclosing details of the AWA to another person;
  • the employee received a copy of the AWA at least the required number of days before signing the AWA (i.e. 14 days for existing employees and 5 days for new employees);
  • the employer explained the effect of the AWA to the employee;
  • the employee genuinely consented to the making of the AWA; and in a case where the employer failed to offer an AWA in the same terms to all comparable employees, the employer did not act unfairly or unreasonably in failing to do so.

(6) (a)   The Act recognises that an essential part of every AWA is that the parties genuinely consent to the terms of the AWA. Lack of genuine consent means the AWA is not legally valid. If the Employment Advocate is not satisfied that an employee genuinely consented to making an AWA, then the AWA must be refused. The OEA has a process for protecting genuine consent which is as follows:

  • Employers must provide a declaration to the OEA that an AWA information statement has been provided to each employee.
  • The OEA must send a letter to employees advising them that an AWA with their name on it has been lodged with the OEA.
  • Both the information statement and the letter advise the employee about their right to genuine consent and invite the employee to contact the OEA if they have any concerns regarding genuine consent, their AWA or any other issues.
  • The OEA will investigate any claims made by employees concerning a lack of genuine consent.

(b)   As detailed above, the employer must demonstrate that the employee was provided with an information statement including their right to genuine consent. The EA must refuse to approve the AWA if there is evidence that employees were not advised of their rights.

(c)   Employees are informed via the information statement and letter of offer that they have a right to genuinely consent to the AWA and that they should contact the OEA if they have any concerns.

(d)   The EA follows the process outlined above to ensure there has been genuine consent and an employee has not been forced to sign their AWA.

(7) (a)   The Act provides for AWAs to be collectively negotiated as long as each AWA is individually signed. Under the Act an employer is obliged to offer AWAs in the same terms to comparable employees unless there is a valid reason not to.

(b)   It is not the OEA’s role to tell employers and employees how to negotiate.

(c)   There are many reasons individuals chose to use one form of industrial coverage over another.

(8)   There is no evidence that AWAs are being misused and that an enquiry is needed or would even be useful. The bi-annual agreement making report released recently by DEWR reported positive outcomes for workplaces and individual employees with AWAs (Agreement making in Australia under the WR Act, 2002 and 2003). There is also evidence on wage rates from the Australian Bureau of Statistics that shows the average weekly total earnings of employees on AWAs are much higher than those on certified agreements ($1001.10 compared to $741.30) or awards. And, the high wage benefits of individual agreement making are not confined to managerial employees:

  • Managers and administrators are 14 per cent better off than their counterparts on certified agreements.
  • Non-managerial employees are 12 per cent better off than their counterparts on certified agreements.
  • Private sector employees on AWAs earn 23 per cent more than private sector employees on certified agreements.
  • Public sector employees on AWAs earn 50 per cent more than public sector employees on certified agreements.
  • Female employees on AWAs earn 32 per cent more than female employees on certified agreements.
  • AWA employees are better off than employees on certified agreements in the majority of Australian New Zealand Standard Industry Classifications industries.
  • AWA employees are better off than employees on certified agreements in the majority of occupational categories.

Source: Australian Bureau of Statistics, Unpublished data, Employee Earnings and Hours, Cat. No. 6306.0