Enterprise Agreements and Modern Awards
Assignment tasks
Bornstein (2019), in a recent study, found that the number of award covered employees had increased from 15% in 2010, to 23% in 2017, whilst the number of private sector employees covered by enterprise agreements fell almost 40% between 2014 and 2018. What these figures suggest is that growing numbers of Australian workers are finding themselves employed under the safety net terms and conditions of awards, rather than on enterprise agreements which typically offer superior terms and conditions. Coupled with this emerging development has been an increasing number of well-publicised incidences of ‘wage theft’ engulfing major firms, such 7-Eleven, Caltex, Woolworths and Coles, to name a few. Particularly problematic in this regard have been workers employed in restaurants and franchise operations. Many are covered by awards, but are being paid off-the-books or not receiving their proper entitlements. There has in recent years been a growing appreciation of the problem, as well as greater policing, with many firms incurring heavy penalties for breaching legislatively enforced worker entitlements, and being required to make restitution to the employees affected.
All this is suggestive of a conscious evasion of entitlements set out in awards and enterprise agreements on the part of employers, but much of it is also is the product of an inadequate understanding of how to read and apply the terms and conditions set out in these types of labour contract. This assignment provides you with the opportunity to gain a better understanding of how the terms and conditions of labour contracts governed by the Fair Work Act 2009 are established and applied. The first task deals with the defining features of modern awards and enterprise agreements. The second allows you to apply a modern award to a hypothetical scenario. And the third puts you in touch with the debate surrounding the efficacy of current system by which the terms and conditions of employment are settled.
Task 1
What are the major characteristics that distinguish modern awards and enterprise agreements? (5 marks)
Task 2
Being familiar with how to read awards and enterprise agreements regulated by the Fair Work Act 2009 has benefits if you are an employee, for it will allow you to understand what your legal entitlements are when engaged in work. It will also be important to your professional role if you are engaged as a manager of labour.
This task allows you to work with a modern award by asking a series of questions, the answers of which rely on this type of contractual instrument. To this end, a scenario is given of an employee working in a particular industry over a given week. It will require identifying which modern award applies to the employee in question, and which award category is applicable to the employee’s job role. Having identified the appropriate category, the task involves calculating what pay the employee is legally entitled to under the terms of the applicable award for the week given in the scenario. It will also require you to calculate what taxation and superannuation contributions an employer is legally obliged to submit to the relevant institutions on the employee’s behalf for that week. In addressing these tasks, you are expected to set out the various components and associated calculations used in reaching answers to the series of questions associated with the task. This can be done in a tabular or point form. Having reached an answer to the first question, the remaining questions can be ascertained in relatively short order. And so to the scenario:
Lana is a full-time electrical mechanic working in the construction industry. She has completed her trade apprenticeship and holds an Engineering Construction Industry Certificate Level 3. She has a sound understanding of the construction process, which involves handling specialised materials, operating machinery and equipment and undertaking mechanical installations applicable to her trade. She has a leading hand role in being responsible for the supervision of five trade labourers. For tax purposes, Lana claimed a tax-free threshold be applied, and she has no Medicare levy, Higher Education loan or any other form of tax off-sets in play.
She works at a building site on which a multi-level apartment complex is being constructed, The complex is destined to be 30 stories high, but at present the structural components, reinforcing steel, boxing and walls are completed to the 20th floor.
The regular working week operated by the firm in which Lana is employed is 7.30am to 4.00pm, Monday to Friday, with a 10 minute break at 9.30am each day, followed by a 30 minute lunch break at 12.30pm. Last week, Lana worked a regular working week, but in addition she also did some overtime, working until 8.00pm on Wednesday evening, as well as on Saturday between 7.30am-3.50pm.
Based on the scenario set out in the above, answer the following questions (15 marks).
What will be Lana’s gross weekly income?
What taxation needs to be remitted by Lana’s employer to the Australian Taxation office?
What contribution needs to be forwarded by Lana’s employer to her superannuation fund?
What net wage will Lana take home at the end of working week given in the scenario? (15 marks)Task 3
Sally McManus (2018), the President of the Australian Council of Trade Unions, recently declared that the present system of enterprise bargaining is ‘broken’, offering the following observation:
When we moved to an enterprise bargaining system, we imagined that the vast majority of Australian workers would be covered by enterprise agreements. Awards would only be a safety-net for a small number of workers. In response our award system has been stripped back to the bare minimum. But, enterprise bargaining is failing, and more and more people are depending on hollowed out awards. … Enterprise bargaining is so restrictive, so excessively regulated, it is smothering wage growth. The economy cannot grow unless wages grow. Working people must have greater freedom to negotiate and our laws must assist them even up the power imbalance so they can negotiate fair pay increases.
Is Sally McManus right in her assertion, and what evidence can be brought to bear in support of your determination? (15 marks)
*** Grammar, syntax, spelling, citation method and referencing (5 marks)