KK9: Awards and Agreements

Question 1

Awards 

Answer 1

are legal
documents that outline
the minimum wages and
conditions of work for
employees across an
entire industry.

Question 2

Agreements 

Answer 2

are legal
documents that outline
the wages and conditions
of employees and are
applicable to a particular
business or group of
businesses.

Question 3

Advantages:Award

Answer 3

Employee wages and conditions are
determined by the FWC, therefore
implementing awards minimises
the time taken to create individual
employment contracts or negotiate
an enterprise agreement.

Transparency and equality between
employees is maintained, as they
all receive the same wages and
conditions as set out by their award.
* The FWC ensures that all
employees receive appropriate
wages and conditions of work.

Money * Awards establish the minimum
wages for employees and can be
cost-effective, allowing a business
to minimise its labour costs whilst
remaining compliant with the law.

Question 4

Advantages:Agreements

Answer 4

Positive relationships between
employees and employers may
develop in the negotiation process.
* Businesses have greater flexibility
when setting wages and conditions,
allowing the business to better meet
employee needs and objectives.
* A business may attract highly
skilled and talented employees if it
is paying wages that are above the
industry average.
–
Employee * Unions representing employees
during negotiations can ensure
they are not taken advantage of by
their employer and can improve the
wages and conditions they receive.
* Can improve employee satisfaction
and performance as they receive
wages and conditions better than
the relevant award.

Question 5

Disadvantages:Award

Answer 5

Generalised industry awards offer
limited flexibility for different
business models and therefore,
impact a business’s ability to meet
its objectives.

• Businesses lack the opportunity to
  develop a relationship with their
  employees, as awards are based
  upon predetermined standards.

Employees may be unsatisfied by
only receiving the minimum wages
and conditions.

• Employees may leave the business
  to find employment with a higher
  pay rate than their current award,
  causing an increase in staff turnover.

Question 6

Disadvantages:Agreements

Answer 6

Inequality in wages and conditions
may increase, as employees of a
certain business may be receiving
less than employees at a similar
business that is operating under a
different agreement.

• Employees who cannot gain
  representation from unions may
  be exploited by employers, as there
  may be a power imbalance between
  the employee and the business.
  Time – * It can be a time-consuming process
  for employees and employers
  to negotiate and establish the
  entitlements contained in an
  agreement.

Agreements can be more costly
than following an award, as
the wages and conditions of an
agreement must improve upon
those of the relevant industry
award in order to satisfy the ‘better
off overall test’