Awards and Agreements Flashcards
Unit 3 Outcome 2
What are Awards and Agreements?
When an employee begins work at a business, they are compensated with pay and entitlements such as annual leave, parental leave and sick leave. Businesses can become competitive with these entitlements, pay and working conditions to attract quality employees.
What are the different ways of determining Pay/entitlement of conditions at work?
- Minimum Wage and National Employment Standards
- Awards
- Enterprise Agreements
- Individual Employment Contracts
What is Minimum Wage and NES?
This is the sets of minimum rights for all works in the country which are minimum wages and the National Employment Standards. Employees cannot legally work in condition or for wages below set minimums. They are set by the Fair Work Commission and are Reviewed annually.
What are Awards?
Awards set the minimum wages and conditions of employment for those in a specific industry. Similar to the minimum wages and NES, businesses have to set their wages and conditions to fit the sets of the specific award.
What are the Advantages of Awards?
- Business only need to provide the minimum, saving costs
- No time is needed spent negotiating wages & conditions
- Employees are unable to negotiate at enterprise level leads to fewer wage disputes
- provides a safety net for employees, ensuring they can’t be given wages or conditions below industry standards.
What are the Disadvantages of awards?
- Using the industry’s minimum standards may make it more challenging to find and attract talented employees
- Gives the business less flexibility to tailor the wages and conditions to the needs of the business and employees
- Businesses may need to follow and implement multiple awards (e.g. a factory may have manufacturing employees on one award and office staff on a different award.)
What are enterprise agreements?
An enterprise agreement is a business-specific agreement between a group of employees and their employer on the wages and conditions of employment.
Agreements can be reached through bargaining or negotiation between employer and employees. These agreements must be approved by the Fair Work Commission (FWC)
What is the Individual Employment Contract?
This is an agreement between an employer and an individual employee which sets out the terms and conditions of employment. These individual contracts cannot provide less than the minimum requirements set out by the NES and are often used for highly paid employees such as executives.
What are the Advantages of an individual employment contract?
- Highly flexible, allowing to tailor needs for employees and businesses
- can attract and retain high quality employees
- Productivity gains can be rewarded with higher wages and conditions
What are the Disadvantages of an individual employment contract?
- Time consuming to negotiate an agreement
- Negotiations can break down resulting in conflicts
- More expensive for the business
