What Is the Difference between an Award and Australian Workplace Agreement

When it comes to employment in Australia, there are several ways in which an employee’s work is recognized and rewarded. Two of the most common terms that come up in discussions around Australian workplaces are “awards” and “Australian workplace agreements” (AWAs). While they may seem similar, there are some important differences between the two.

An award is a set of legally binding minimum standards that apply to specific industries or occupations. Awards govern the terms and conditions of employment, such as minimum wages, working hours, leave entitlements, and overtime rates. They are created by the Fair Work Commission in consultation with unions and employer groups and apply to all employees, including those who are not part of a union.

AWAs, on the other hand, were individual agreements between an employer and employee that set out the terms and conditions of employment. AWAs were introduced in 1996 and were intended to provide greater flexibility and productivity in the workplace. However, they were criticized for undermining minimum standards and unfair bargaining power. In 2009, AWAs were replaced by individual flexibility agreements (IFAs), which still offer some flexibility to meet genuine business needs but must meet minimum statutory entitlements.

One of the key differences between awards and AWAs (and IFAs) is that awards apply to all employees in a particular industry or occupation, whereas AWAs were specific to individual employees. This means that awards provide a level of protection and consistency for all workers, regardless of their employment status or bargaining power.

Another difference is that awards are created by the Fair Work Commission and are subject to review and amendment, whereas AWAs were negotiated between individual employers and employees and were not subject to the same level of scrutiny. Awards are also more transparent than AWAs, as they are publicly available and easy to understand.

It is worth noting that while awards set minimum standards, employers can still provide higher wages and better conditions than those required by the award. Employers who want to offer more favorable terms can do so by negotiating an enterprise agreement with their employees or offering individual contracts that meet the minimum standards set out in the award.

In conclusion, while awards and AWAs may seem similar on the surface, they are fundamentally different in how they apply to employment in Australia. Awards provide a consistent and transparent set of minimum standards that apply to all employees in a particular industry or occupation, while AWAs (and IFAs) were individual agreements between employers and employees that have since been replaced. Whether you are an employer or an employee, it is important to understand your rights and obligations under the applicable award or agreement.