Equality is a meaningless abstract unless it is founded on
economic security and economic strength.[1]
Chapter 4 Wages setting approaches
4.1
The National Institute of Labour Studies commented that:
… since 2000 there has been a deterioration in the female to
male average wage relativity, a widening of the gender pay gap both in the
casual and non-casual sectors since 2000. Women are in fact losing ground to
men on average in the adult non-managerial labour market.[2]
4.2
The Diversity Council Australia made the point that:
… all of our traditional methods of wage setting and fixing
produce gender-inequitable outcomes. Awards do, collective agreements do and
individual contracts, whether they are common-law contracts or some other form
of individual contract, do. We set out numerous reasons for that. As we also
say, it is well recorded and understood in terms of outcomes for women under
our traditional Australian methods of wage setting and fixing. What is less
well understood is gendered outcomes in those other forms of wage setting and
fixing. As part of this process, we need to begin to talk about that, because
in a large portion of the employment market people work either in occupations and
industries where there are minimum-rate awards—and so the industrial instrument
does not actually have a
large impact on wage outcomes—or, alternatively, under a form
of individual contract, whether common law or otherwise.[3]
4.3
In Victoria, the Workplace Industrial Relations Survey in 2008 found
that female workers were less likely to be paid the average for that occupation
in the workplace for all occupational groups.[4] Furthermore:
Workplaces with a high proportion of male workers were more
likely to have a mix of pay setting arrangements. Predominantly male workplaces
comprised the highest proportion of workplaces that provided over-award
payments and coverage by collective agreements. In contrast, workplaces with
predominately male employees were also the least likely to be covered by
individual agreements and awards. It should also be noted that in this
analysis, predominantly female workplaces tended to be more reliant on award
minimum standards than on collective agreements.[5]
4.4
Gender biases in remuneration practices may result from:
n use of biased
standardized job evaluation schemes which value ‘masculine’ skills over
‘feminine’ skills;
n discretionary managerial
decisions about remuneration including starting salaries, pay rises and bonuses
such as valuing paid skills and experience over unpaid and not understanding
gender-based differences in the negotiating approaches;
n managerial judgments
made about performance and the person’s value to the organisation such as valuing
of seniority and length of services over abilities and contribution;
n providing career
development opportunities for men and training for current jobs for women, and
n valuing and therefore
remunerating more highly occupations which traditionally are men’s occupations.[6]
4.5
Women’s Health Victoria listed the ways in which women’s work can be
undervalued as:
n the absence of
appropriate classification structures;
n poor recognition of
qualifications;
n the absence of
previous and detailed assessments of their work;
n gendered
characterisations of the work undertaken by women; and
n inadequate
application of previous equal pay measures.[7]
4.6
The New South Wales Office for Women’s Policy considered that it is the structural
features linked to women’s working patterns in the Australian labour market that
disproportionately impact on women in the negotiation of wages:
… including their location in the labour market by
occupation, industry and type of employment. Mechanisms to redress the gender
wage gap should be capable of reducing the effects of these structural
features, which include:
n the gender
segregation of the labour market and the associated historic undervaluation of
work carried out in some feminised industries;
n the disproportionate
participation of women in part time employment;
n the concentration of
women in award reliant industries such as hospitality and retail where there is
little opportunity for real bargaining or access to over award payments;
n poorer wage outcomes
for women in all bargaining streams and the lower rates of unionisation in feminised
industries;
n the tendency for
women to trade off wages and wage related benefits as a consequence of needing
to find ways to balance their working lives with their caring responsibilities;
and
n the historically
lower priority assigned to caring responsibilities when developing bargaining
agendas and associated wage claims.[8]
4.7
The Liquor, Hospitality and Miscellaneous Union, Queensland Branch, added
a number of other structural arrangements to that list:
n the deregulation of
the labour market and the dismantling of public labour market institutions;
n non-inclusion of pay
equity in minimum rate determinations;
n lack of legislative
arrangements to facilitate transition in and out of the labour force;
n lack of access to
training and promotion; and
n lack of adequate
legislation mandating pay equity.[9]
4.8
One third of the gender pay gap in Western Australia was explained by
different male and female characteristics including a ‘more favourable industry
distribution and a higher level of capital investment in males’.[10]
4.9
The Shire of York commented that:
Workplace reform is needed on valuing the position and the
person within the workplace to reduce the reliance on gender characterisation
as occurs in many assessments. If the value of the position within the
organisation is paramount it will be immaterial who fills it as employment
conditions and opportunities would be based on worth and contribution.[11]
4.10
The Western Australian Department of Consumer and Employment Protection
suggested the development of a national standard on gender neutral job
evaluation to provide a ‘set of criteria by which public and private sector job
evaluation systems can be evaluated to ensure that the classification factors
used are gender neutral’.[12]
Negotiation of wages
4.11
The New South Wales Office for Women’s Policy commented that:
Different forms of wage setting produce different wage
outcomes. Women receive lower average weekly rates of pay than men in both the
registered collective and individual bargaining streams. Across Australia,
award-reliant female workers earn substantially less than women covered by
collective bargaining arrangements. … the average weekly earnings of men are
greater than that of female workers for all methods of pay setting.[13]
4.12
Minter Ellison presented the following table in relation to the form of
agreement for adult non-managerial employees. Women on awards on average are
paid more than men on awards but less than women on other wage setting
mechanisms.
Table 4.1 Form of Agreement
and Average Hourly Cash Earnings (A$)
Agreements
|
Male FT %
|
Male Total %
|
Female FT %
|
Female Total %
|
Hourly earnings Male A$
|
Hourly earnings Female
|
Award only
|
11.3
|
17.1
|
14.3
|
24.8
|
18
|
18.6
|
Registered collective
|
41
|
38.9
|
45
|
43.5
|
28.7
|
25.7
|
Unregistered collective
|
3.7
|
3.5
|
2.9
|
2.8
|
23.6
|
20.7
|
Registered individual
|
4.3
|
4
|
2.9
|
2.5
|
28.1
|
22.8
|
Unregistered individual
|
39.7
|
36.6
|
34.9
|
26.4
|
27.2
|
23.1
|
All methods of setting pay
|
100
|
100
|
100
|
100
|
26.3
|
23.2
|
Source Preston A Trends in the Gender Pay Gap, 2 March 2007 sourced from ABS 6306.0 May 2006.
Adult Non-managerial employees[14]
4.13
Women under state collective agreements earn more than women under
federal agreements. The Department of Education, Employment and Workplace
Relations provided the following data:
Table 4.2 Gender wage gap for non-managerial adults by
method of setting pay. Hourly ordinary time rates of pay, May 2006
|
Hourly ordinary
time adult rate of pay
|
Gender wage gap (%)
|
|
Male
($)
|
Female
($)
|
|
Federal Agreements
|
Collective
|
28.00
|
25.00
|
10.7
|
Individual
|
26.60
|
23.60
|
11.3
|
State Agreements
|
Collective
|
29.10
|
28.00
|
3.8
|
Individual
|
55.40
|
24.50
|
55.8
|
Unregistered Agreements
|
Collective
|
23.40
|
21.10
|
9.8
|
Individual
|
17.30
|
23.20
|
15.0
|
Award Only
|
19.00
|
19.40
|
-2.1
|
Total
|
26.50
|
23.70
|
10.06
|
Source ABS
Employee, Earnings and Hours (cat. no.6306.0), unpublished data.
4.14
Men have been able to make greater gains under the bargaining system
than women and enjoy more over-award entitlements and bonus payments, overtime
and penalty rates than women.[15]
4.15
Figure 4.1 shows that awards are associated with lower earnings levels
for women, individual agreements are in the middle of the distribution and
collective agreements are at higher earnings levels.[16]
Figure 4.1 Method of pay setting, weekly total cash
earnings – distribution of female full time non managerial adult employees
August 2008
Source Australian
Bureau of Statistics, unpublished
data from the Survey of Employee Earnings and Hours
4.16
The wage setting arrangements also show a different relationship with
regard to the gender wage gap. Women reliant on awards have a higher hourly
earnings rate than men who depend on awards. Also individual agreements have a
stronger gender wage gap but only account for a small proportion of women’s pay
setting arrangements.
Figure 4.2 Mean
hourly earnings of female non managerial employees, gender wage gap and
relative importance of different pay setting arrangements, by pay setting
arrangements, May 2006 – feminisation of wage setting arrangements
Source Department
of Families, Housing, Community Services and Indigenous Affairs, 2008, Gender
Earnings differentials in Australia: A statistical overview of women’s
earnings, unpublished, September 2008.
Table 4.3 Methods of setting pay, average weekly total
cash earnings, Australia, May 2006
|
Average Weekly Earnings non-managerial employees
|
Gap
|
Amount
|
|
Males
|
Females
|
%
|
$
|
Award only
|
$555.30
|
$448.50
|
18.5
|
$101.80
|
Registered collective agreements
|
$1038.00
|
$729.80
|
32.6
|
$353.20
|
Unregistered collective agreements
|
$873.00
|
$580.20
|
33.5
|
$292.80
|
Registered individual agreements
|
$1119.30
|
$689.10
|
38.4
|
$430.20
|
Unregistered individual agreements
|
$1021.40
|
$719.10
|
29.6
|
$302.30
|
All methods of setting pay
|
$946.00
|
$652.00
|
31.1
|
$294.00
|
Source Australian
Bureau of Statistics, Employee Earnings and Hours, Australia, May 2006 (reissue
20 April 2007);cat no. 6306.0 Table 20 adapted
4.17
Preston found that high-income women are more likely to be
disadvantaged and cautioned against focusing on the mean wage because of the
variation in the size of the gap across the distribution.[17]
4.18
The extent to which employers are open to negotiation is another
important factor.[18] In situations where full
time employment is difficult to get, and some one is offered a job ‘they will
pretty much take it regardless of how bad the pay is, and they will hang on to
it tooth and claw’.[19] Working Womens’ Centres
stated that most low paid low status positions are offered on a take it or
leave it basis:
There is little awareness by women employees, especially
those in low status, low paid work about wage negotiation and few resources for
them to access to assist with this. For instance if a woman was able to
negotiate paid maternity leave for herself would she necessarily be aware that
she should factor in superannuation and/or long service leave entitlements that
would be lost if she did not bargain for them? Data released from the Workplace
Authority on the impact of AWA's indicated that women were disadvantaged by
individual bargaining arrangements.[20]
4.19
Research by the Centre for Work + Life in South Australia found that the
vulnerability of the women studied:
Arose primarily from their restricted options arising from
the need to juggle work and caring responsibilities; employment in small
workplaces; historical reliance on award provisions and legal minimum wages and
conditions; part-time, casual and contract employment; job insecurity; lack of
access to information; and a lack of union access and representation. These
women had little bargaining power with which to pursue workplace agreements or
individual contracts that met their needs.[21]
4.20
During negotiations women take into account a range of options including
flexibility and may trade off pay to gain these options.[22]
The example was given of women withdrawing from a promotional opportunity to
gain flexibility.[23]
4.21
In the negotiation of wages, women will tend to ‘work around things and
communicate in a circular way’ while men will take a more direct approach.[24]
Women do not tend to drive a hard bargain and may seek good outcomes for both
parties.[25]
Research has shown that the pay gap in countries with
centralised pay systems is far less than in countries with deregulated and
decentralised wage bargaining like the United States largely because women are
likely to do worse than men if required to individually bargain with their
employers.[26]
4.22
The Human Resource Manager of the Epping Club commented on the
difference in salary negotiations between men and women:
Men appear to believe they are entitled to their request and
present a proposal supporting their request. To my disappointment women do not
demonstrate the same confidence nor do they prepare for the negotiation
process. Often times expecting that their line manager or CEO will “look after
them”. History also reflects that when women do not achieve the salary increase
expected they have to tell their colleagues about it, causing a flow on effect
from reduction in moral[e]. Men just deal with it.[27]
4.23
The Tasmanian Chamber of Commerce and Industry found that:
n women are much less
likely to pursue wage increases and prefer to be offered increases.
n they are less likely
to put forward their skills and the reasons why they should get the promotion
on offer.
n they are likely to be
happy with what they are offered rather than pursuing an equal deal with their
male colleagues.[28]
4.24
Commissioner Broderick reported that men are more likely to ask for more
money and that younger women were better at this than older women.[29]
Women Into Politics supported the view that women employees are less
forthcoming than men in seeking higher remuneration and that ‘women are
generally more willing to talk to a union officer or other intermediary than to
make representations to an employer on their own behalf’.[30]
4.25
The Diversity Council added that:
This is in part a consequence of women having less
negotiating capacity during collective and individual bargaining, leading to
lower levels of wages and other entitlements. It is commonly noted that an
important contributing factor is women’s differing negotiating styles (usually
regarded as less pro-active and aggressive) to what has traditionally delivered
positive remuneration and employment benefits outcomes.[31]
4.26
The exercise of negotiation skills can depend on the adequacy of
information available and for some professions market rates are available on
the web.[32] Those required to
negotiate wages could benefit from information on the market rates of pay for
particular occupations:
In our regular consultations with female employees, we find
they have really poor understanding of what the going rate is. Men tend to have
better networks and they have a better understanding of what the going rate is.
That is one of the reasons why they let themselves get ‘dudded’, because they
do not have the information to make a good choice.[33]
4.27
The Queensland Working Women’s Service has conducted intensive workshops
on negotiation skills for women and these have been very well received.[34]
Union membership
4.28
The Department of Education, Employment and Workplace Relations reported
that 21.1 per cent of full time males were union members compared to 20.2 per
cent of women and 10.4 per cent of part time males compared to 17.7 per cent of
part time females.[35]
On average, the gender pay gap tends to be low for union
members across state/territory, industry, occupations and employment types. ABS
EEBTUM data for August 2007 show that the average weekly gender pay gap was low
for union members. The gender pay gap for full-time union members stood at 12.9
per cent compared with 22.0 per cent for full-time non-union members. For
part-time employees, the gender pay gap stood at 3.7 per cent for union members
compared with 2.7 per cent for non-union members.[36]
4.29
The experience of Crown Melbourne Limited is that:
Male dominated unions do not pursue non-direct wage claims –
such as the right to work part time or with flexible hours – but concentrate
all their efforts purely on wage outcomes. They will trade off other conditions
readily.[37]
4.30
Women Into Politics also commented on the approach of trade unions to
focus on increased wages in award negotiations:
Even professional unions … for over half of the last century,
accepted female members’ fees while not attempting to address clear issues of
equal opportunity and pay equity for women members. They never took serious
industrial action to support their female members and left it to the rank and
file female to agitate outside the union for equal pay and equal opportunity.[38]
4.31
The Tasmanian Chamber of Commerce and Industry found that:
The process of union collective bargaining is often
alienating to women who see it as unduly confrontational and not something with
which they wish to be associated. Agreement making where employers and
employees engage directly in discussions allows a negotiation that more likely
to involve all, and less likely to be confrontational. [39]
4.32
Women who are unionised may appear to be less active because they are
part time or casual employees.[40] Sectors where there is
less representation and therefore less bargaining power are mainly female so
the ‘impacts are gendered. Where employees have to negotiate their own wages
and conditions, the outcomes are worse’.[41] Teachers and nurses have
a high level of unionisation while child care, hospitality and retail have
lower levels.[42]
4.33
The low levels of unionisation in the aged care sector. The caring
nature of the work means that nurses are less likely to take industrial action.
The Australian Nursing Federation considers that this has resulted in enterprise
agreements that are inferior to their colleagues in other sectors.[43]
The aged care sector is dominated by non-nursing staff.[44]
Aged Care and Community Services commented that ‘there needs to be a move
towards professionalising the sector through an education and training system’.[45]
4.34
Further, the Work and Family Policy Roundtable commented that the
service sector which had a predominantly female workforce had ‘less to trade
off in terms of inefficiencies and working time flexibility; and that there was
no apparent relationship between the quantum of wage increases and working time
trade offs’.[46]
4.35
Many unions have a male dominated culture and may be seen as less
attractive to women. The Independent Education Union of Australia believed that
the need to address gender inequity in the union movement was now on the
agenda:
Institutionalised gender inequality perpetuated by unions and
other industrial actors has been a big problem, but the union movement is aware
of that problem and is beginning to address it, but I agree that much remains
to be done … often flexible conditions of work or paid maternity leave that are
traded off. Mainstreaming is going to be really important and this is why the
educative and research function is important.[47]
Role of awards
4.36
Dr Short commented that there are much more than 20 per cent of employees
covered by awards as the Australian Bureau of Statistics record as there are slight
variations in awards which are categorised as individual agreements which
lessens the impact of award decisions.[48] The ACTU stated:
about 40 per cent of that workforce are currently covered by
collective agreements; about another 40 per cent are covered by individual
agreements of one sort or another—predominantly agreements that sit on top of
the award; and there are about 20 per cent in the middle that are award dependent
for their wages.[49]
4.37
Thus:
… we have 20 per cent award dependent and another 40 per cent
for most of whom the award sets their minimum. In the collective bargaining
stream, the award still has an enormous normative value. Most enterprise
agreements are a tack-on to the award. The award forms the design, the
architecture, of the enterprise agreement. So the award system is enormously
important in setting the structure of the terms and conditions and wages that
apply in our workplaces. With the award wages structure, even if you are paying
in the building and mining industries three times what the minimum rate is, the
classification structure and the progression criteria et cetera tend to carry
over through the enterprise bargaining stream.[50]
4.38
Dr Meg Smith added that:
Although minimum rates of pay capture some aspects of that,
even in workplaces where there might be a formalised enterprise bargaining
agreement, the award rate of pay still sits below that and informs that
agreement to some significant extent. I think women’s low representation in
enterprise bargaining—particularly those women who are employed in either a
permanent part-time or a casual capacity and in the private sector—means that
those regulatory instruments by way of minimum rates awards still retain a
significant importance for those women.[51]
4.39
Department of Education, Employment and Workplace Relations commented
that:
… gender wage gaps ranged from -2.1 per cent for
award-reliant employees (revealing that females on awards earn more than males
on awards) to 55.8 per cent for state registered individual agreements. The higher award-reliance of females
contributes to the gender pay gap. Award-reliant employees earn less than
employees on other industrial instruments and a higher proportion of females
are award-reliant than males.[52]
4.40
Diversity Council Australia stated:
The gender pay gap is also inadvertently adversely affected
by the move in the past twenty years to wages and conditions of employment
being determined by a combination of awards (both ‘paid’ and ‘minimum’ rates),
enterprise bargaining and individual contracts, rather than centrally and by
awards. While women earn less under awards, the gender pay gap is smaller
compared with registered or public individual arrangements (including AWAs).[53]
4.41
Dr Christine Short found that:
n male-dominated awards
tended to have had structural efficiency or work value adjustment exercises carried
out earlier;
n male-dominated awards
were more likely to have benefited from advantageous minimum rate adjustment
processes than female dominated awards;
n safety net
adjustments were generally applied at an earlier date to male-dominated awards;
n female-dominated
areas of employment were less likely to be covered by enterprise agreements
and, where they did exist, were more likely to have been negotiated two to
three years later;
n female-dominated
agreements usually had considerably lower increases relative to the award rates
of pay; and
n the application of
percentage, rather than dollar, increases were widening the gap between upper
and lower ends of the pay scale, with women likely to be disproportionately
represented at the lower end.[54]
4.42
New South Wales Office for Women’s Policy commented that:
… the industries where women are significantly concentrated
are also those industries that are most reliant on minimum wage regulation
through award dependence, with little opportunity to collectively bargain for
better wage outcomes ... while award reliance is unlikely to provide
opportunities for workers in these areas to achieve significant improvements in
wages (which are more readily available in bargaining scenarios), the award
system has played an important redistributive role in ensuring that, where
appropriate, improved working conditions are available by way of award
variation. Test cases in the state and federal industrial tribunals have been
the main mechanism for achieving these kinds of improvements … National and
state wage cases, as well as more recent mechanisms for adjusting minimum wage
rates, play a part in ensuring that women in award reliant industries share in
the wage improvements that are achieved through these processes.[55]
Table 4.4 Award reliant industries, Australia 2006
Industry
|
Percentage of employees totally award reliant
|
Hospitality
|
60.1
|
Retail
|
31.3
|
Health and Community Services
|
26.6
|
Personal Services
|
23.5
|
Property and Business Services
|
19.7
|
All Industries
|
20.0
|
Source
John Buchanan, ‘Low paid employment – a brief statistical profile’, Overheads
prepared for press conference on LHMU – University of SA – ARC Project on low
paid service sector employment, WRC, University of Sydney 2006[56]
4.43
There needs to be focus on bringing awards closer to the market rate as
the system is ‘discriminating against women and, for that matter, people of
ethnic backgrounds and people with disabilities, who rely on those awards’.[57]
… wage increases for award that are more realistic – not less
than inflation and leading to a situation where in my sample of wages studied
in WA women achieved 50% of the wage increase than WA men did over the 13 year
period studied. I believe we need a new form of adjustments to awards to bring
their rates closer to the rest of the marketplace.[58]
4.44
New South Wales Office for Women’s Policy suggested:
Given that low paid, award-reliant industries are
predominantly feminised, the introduction of the low paid bargaining stream by
the Fair Work Act 2009 may have some positive impact on low paid women’s
ability to engage in enterprise bargaining. However, it should be noted that
when bargaining does occur, historically women are more likely than men to
trade off wages, and wage related monetary entitlements, for employment conditions
and flexible work arrangements which help them meet their disproportionate
caring, family and household responsibilities. This effect is strongest in
individual bargaining scenarios.[59]
4.45
The National Institute of Labour Studies found that of the 41 per cent
growth in female employment between 1994 and 2008, two thirds was concentrated
in the four low paid industries listed at Table 4.5 while the increase in male
employment over the same period was spread evenly across industries.[60]
NILS studied the low-paid industries because of the high proportion of
employees paid under the award rates:
These are retail trade; accommodation, cafes and restaurants;
health and community services; and property and business services. Together,
these four industries out of 17 accounted for a little bit more than two-thirds
of all award dependent employees in 2006. It is not strictly speaking true that
they are all low paid, but they are in large proportion affected by decisions
of the Fair Pay Commission and the workers are lower paid than other workers on
average.[61]
4.46
There was no pay gap within the award dependent sector.[62]
Businesses with fewer than 100 employees make up the majority of the workforce
and in many of those businesses women rely on the award as the parent agreement.[63]
4.47
Ritchies Stores Pty Ltd support the centralised minimum wage setting
system as a safety net but added that there are ‘many instances where award
provisions that are intended to protect employees may in reality have had an
adverse effect on employees by denying them the opportunity to negotiate
individually with employers’.[64]
4.48
The New South Wales Office for Women’s Policy commented that the
available information:
… reinforces the conclusion that the concentration of women
in industries with relatively high award coverage, and with fewer opportunities
to enter into collective bargaining arrangements, inhibits the capacity of
women to improve their relatively poor earnings position. It should be noted, however, that historically
enterprise bargaining has not provided the same improvements in remuneration
for women as for men for a variety of reasons and has not been as effective at
addressing issues of concern to women workers as might have been hoped.[65]
Individual agreements
4.49
The National Institute of Labour Studies found the largest gender pay
gap between men and women were where pay was set by individual agreements:
… all of the deterioration that has occurred in the gap
between men and women has been taking place in the individual agreement sector.
If you look at the trend over time, we have seen a progressive narrowing of the
gap in the award covered sector and a slower but still evident closing of the
gap for workers covered by collective agreements. In contrast to this, we have
seen a widening of the gap between men and women covered by individual
agreements.[66]
4.50
The New South Wales Office for Women’s Policy stated that:
It is also relevant to note that the largest gender earnings
gap appears where registered individual agreements prevail. This essentially represents
the Australian Workplace Agreements (AWAs) encouraged under Work Choices and
shows the negative impact that forced individual arrangements can have on
workers with little bargaining power, in this case, women in low-skill or
unskilled jobs. This is particularly the
case in feminised service industries, where outputs are less easily measured
for the sake of trading increased productivity for increased remuneration.[67]
4.51
The lack of transparency of wage negotiations in individual agreements
was highlighted in a number of submissions:
The decentralisation and individualisation of bargaining also
detracts from wage transparency and therefore provides an environment in which
women are less likely to be aware of instances of inequitable remuneration for
equal work. This issue has recently been highlighted as a cause of pay inequity
in the United Kingdom. The UK Minister for Women and Equality introduced an
Equality Bill to Parliament in June 2008 that will outlaw pay secrecy clauses
and make it unlawful to stop employees discussing their pay. This is intended
to support a range of other pay equity strategies being undertaken.[68]
4.52
The Equality Legislation currently being considered by the British
Parliament will make it unlawful to demand silence on pay and this transparency
measure will give others access to the pay levels of peers.[69]
In addition, women are more likely to more highly value
flexible working conditions and family friendly work places and will accept
lower wages outcomes for these arrangements.[70]
4.53
A 2004 survey found that Australian Workplace Agreements were more often
related to extended working hours than to enhance work and family balance.[71]
The National Institute of Labour Studies stated that:
… it is worrying for the cause of equal pay that the trend in
the individual agreement sector seems to be towards a widening of the
difference between men and women. It is highly problematic, because through
that period of labour market deregulation and decentralisation in how wages are
set we have as a country lost the capacity, I think, to mandate through
regulation that equal pay occur.[72]
4.54
Research has shown that the ‘prevalence of individual contracts does
contribute to the widening of the gap’ but in Western Australia the gender pay
gap had widened massively before the introduction of individual contracts.[73]
The ACTU added that:
Of the 40 per cent who are on individual arrangements, unless
they were on an AWA, which is probably a maximum of six per cent … but it may
have got out to six per cent at its peak and it will be shrinking now—most of
them are on, legally, an over-award arrangement, because the award still
applies to them. Most of them are non-managerial employees. Whether that is
what is being paid at the workplace is a different matter, but the award is
still setting their base rate of pay and their base conditions, and they are
just being paid something above that.[74]
4.55
The National Institute of Labour Studies added that:
… it is neither in the low pay sectors affected by Fair Pay
Commission decisions nor in the bargaining sectors covered by union collective
agreements where the problem still lies. Actually, to the extent that women are
paid less than men, it is predominantly concentrated in the sectors that are
more market oriented in their pay setting and where wages are set either
informally in above award agreements that are not registered or formally
through instruments like Australian workplace agreements. The individual
agreement sector is the sector where the main disparity in pay persists. I have
said that this is a problem because obviously there is less scope for
policymakers to mandate equal pay in this sector.[75]
4.56
Although the gender pay gap was higher for women on individual
agreements compared to men in some situations, there was evidence that this was
not universal. Further, in 1993 and 1996 individual work contracts were
introduced under Western Australian legislation but research did not
definitively reach a position on the impact.[76] The Australian Public
Service Commission found that the gap was no larger for those on AWAs than
those on collective agreements.[77]
4.57
In terms of absolute value, NILS found that for both men and women wages
are higher under individual bargaining than under the award system.[78]
The Chamber of Commerce and Industry of Western Australia stated that:
… some of the highest paid male dominated industries like
mining and construction have the highest number of individual agreements and
females in this industry, likely to be employed on individual agreements, are
the highest paid female employees of all industries.[79]
4.58
Mr Russel Bancroft from the Victorian Government cautioned that:
Quite often individual agreements, whether they be AWAs or
common law contracts, may provide a higher base rate of pay, but that is in
return for reductions in other benefits such as overtime payments, penalty
rates or annual leave loading—benefits that are usually found under awards or
collective agreements. So, quite often, we are not comparing like with like,
and the statistics in that respect may be misleading if they are looked at just
on face value.[80]
4.59
UnionsWA commented on the move away from centralised wage fixing and
bargaining has resulted in ‘a high degree of confusion and uncertainty’ about
people’s entitlements.[81] The boom conditions
recently experienced in Western Australia have resulted in skills shortages and
more benefits to the male dominated industries and has resulted in low
unemployment being concurrent with a widening of the pay gap in that state.[82]
While there are a number of factors impacting on pay equity, UnionsWA argued
that a more centralised approach would tend to compress the gap between men’s
and women’s wages.[83] According to the CCIWA:
Nursing, for example, is one of the largest female dominated
sectors and yet it is also strongly unionised and subject to collective
bargaining agreements negotiated between unions and employers. It can't be said
that in that industry employees have been forced into individual agreements
without any bargaining power.[84]
Collective bargaining
4.60
Women do not do as well as men under enterprise bargaining[85]
but UnionsWA submitted that collective bargaining delivers higher wage
outcomes.[86]
4.61
The example was given of the Australian Public Service wages are set by
collective agreements and salaries are linked to classifications which contain
a number of increment points.[87] The Australian Public
Service Commission (APSC) described the factors impacting on remuneration
levels as ‘their size and nature, the labour market in which they operate and
their funding arrangements of the various agencies’.[88]
4.62
The Community and Public Sector Union (CPSU) highlighted the fact that
women in the APS are employed in the lowest-paying agencies, and in the lower
levels of those agencies.[89] The CPSU attributed this
to the underevaluation of the work in these agencies and ongoing fiscal
constraints.[90] The CPSU commented that
‘it is not about productivity; it is about how government values work’.[91]
4.63
The CPSU argued that there are substantial costs involved in the
development of separate agency collective agreements and the return to a single
pay structure has the potential to address a number of pay equity issues within
the public sector as well as potential savings.[92]
The CPSU suggest that the APS could address this through the development of a
framework that promotes collective bargaining, equality, participation,
flexibility and mobility’.[93]
4.64
Almost 20 per cent of employed women are working in the healthcare
system, with 17.2 per cent of workers in health care and social assistance on
award or pay scale rates, 64.5 per cent on collective agreements and 18.2 per
cent on individual arrangements. Twelve per cent work in education and training
in which 81.2 per cent are on collective agreements and 10.4 per cent on
individual arrangements.[94]
Figure 4.3 Wage setting arrangements – female, August 2008
Source ABS Employee Earnings and
Hours, August 2008, cat. No. 6306.0
Figure 4.4 Wage setting arrangements – male, August 2008
Source ABS,
Employee Earnings and Hours, August 2008, (6306.0)
Table 4.5 Methods of setting pay, adult non-managerial
employees, (May 2006), Community services industry[95]
|
Male
|
Female
|
Persons
|
Methods of setting pay
|
(‘000)
|
(%)
|
(‘000)
|
(%)
|
(‘000)
|
(%)
|
Collective Agreement (Federally Registered)
|
10.1
|
24.8
|
49.4
|
24.9
|
59.5
|
24.9
|
Individual Agreement (Federally Registered)
|
0.4
|
1.1
|
1.6
|
0.8
|
2.1
|
0.9
|
Collective Agreement (State Registered)
|
7.1
|
17.4
|
21.4
|
10.8
|
28.6
|
11.9
|
Individual Agreement (State Registered)
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
Individual Agreement (Unregistered)
|
6.1
|
14.9
|
26.2
|
13.2
|
32.2
|
13.5
|
Working Proprietors
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
Collective Agreement (Unregistered)
|
n.p.
|
n.p.
|
7.7
|
3.9
|
9.0
|
3.8
|
Award Only
|
15.8
|
38.7
|
92.2
|
46.4
|
108.1
|
45.1
|
Total
|
40.9
|
100.0
|
198.6
|
100.0
|
239.4
|
100.0
|
Source Department
of Education, Employment and Workplace Relations, Supplementary Submission No.
58.3, p. 15, ABS Employee Earnings and Hours (cat. no. 6306.0) May 2006,
unpublished data
4.65
Dr Christine Short commented that:
It was clear that even when female dominated occupations
actually achieved enterprise bargaining agreements, they did not receive as
large increases as men in the 9 occupational areas studied (builders’ labourer,
metal tradesperson, miner/dump truck operator, truck driver, child carer,
teacher, clerk, salesperson). However, only teachers and to some extent
salespersons had actually achieved EBAs during the period 1990 to 2003. Women
tend to work in areas where there are a large number of employers and where
they are not present in a workplace in large numbers making collective
bargaining agreements very difficult to achieve.[96]
4.66
Dr Short found that separate agreements for clerks outside the
Enterprise Bargaining Agreement was not helpful and there was an increasing
tendency for EBAs not to cover everyone.[97]
If we had stuck to an award system, we might have got
somewhere close to 90 per cent— 99 or whatever—but going to an EBA system made
things worse and going into individual agreements made things worse again.[98]
4.67
In the community services and retailing sectors, Dr Sara Charlesworth
noted that there were very few further efficiencies to be traded off in an
enterprise agreement while outdoor workers could ‘give up their dead animal
allowances, they could give up their dirt allowances, they could give up their
wet weather allowances’[99] and their wash up time
at the end of shift.
4.68
The Australian Nursing Federation referred to the ‘undervaluing of
women’s work in general is a critical factor in the many battles for fair wages
and conditions for nurses across the different areas of nursing employment’[100].
Award rates have dropped in real terms over time and the Queensland Nurses
Union added:
… the advent of collective bargaining, in particular, has
meant that significant gaps have developed in the wages earned by nurses who
have equivalent competencies, qualifications and the like. Those gaps have
occurred particularly where sections of the industry are reliant on government
funding, for example, and the collective bargaining system has not delivered an
adequate mechanism to lift those wages up.[101]
4.69
National Pay Equity Coalition and the Women’s Electoral Lobby Australia
Inc commented that:
Collective bargaining can be a pay equity strategy,
especially where the bargaining is for a particular occupation (for example:
nursing). It can provide an opportunity to negotiate about conducting equal
remuneration reviews and implementing pay equity plans. Pay equity is generally
better in more collective employment relations environments. However, where
bargaining covers a range of occupations, targeting a particular group can be
problematic for unions and can be seen as being at odds with a strategy to
maximise collective benefits. Collective bargaining is not likely to be an
effective strategy for occupations with low unionisation and/or little industrial
strength, and/or where unions have few women and/or are not supportive of pay
equity for women. Pay equity can be weighed up and/or traded off against other
benefits sought in bargaining. For collective bargaining to be successful in
addressing pay equity, rules governing bargaining in the industrial system must
include rights to call parties to negotiate, conciliate and, in the event of
failure to agree, for Fair Work Australia to arbitrate on agreements and make
awards on an occupational, industry and workplace level.[102]
4.70
Those who have access to collective bargaining may also have access to
more information about pay equity issues and the information needs to filter
through to those who will be relying on improvements:
Even if changes are made and the remuneration principle is
created, the majority of people who are likely to benefit from that probably
will not know about it. Where the education comes from, who guides it and who
supports it are very important questions as well.[103]
4.71
National Pay Equity Coalition and the Women’s Electoral Lobby Australia
Inc added that requested information should be provided to industrial parties
involved in collective bargaining and noted that:
While collective bargaining may not always be an effective
means of progressing pay equity, it should not be permitted to be at odds with
the fundamental legislated human right to equal remuneration for work of equal
value without sex discrimination.[104]
Non salary remuneration
4.72
Men are more likely to receive non-salary remuneration such as bonuses
and allowances, longer hours, more overtime and more likely to work shifts
while ‘women are disproportionately employed in occupations and/or industries
with low levels of bargaining power, are often more reluctant to negotiate wage
increases, and may experience poorer returns to negotiation’.[105]
4.73
The point was made that:
Performance related pay confuses the waters, as it were, yet
further, because it can be very difficult to get a sense of what bonuses are
being offered. These sometimes outstrip even basic rates of pay and so can
impact hugely on the whole pay package.[106]
4.74
In the finance sector where there is a relatively high gender wage gap,
the Finance Sector Union of Australia made the point that:
It is increasingly difficult to isolate earnings data and
ensure fair comparisons in the finance sector due to the rise in performance
payments/bonuses and commissions, as the industry becomes more competitive and
emphasises sales of products, more than service to customers. This difficulty
is compounded by the lack of objective work value criteria in the industry –
the finance sector more or less bypassed the examination of skills based
relativities which occurred as part of award restructuring in the late
1980s/early 1990s. It is therefore hard to objectively compare like with like
jobs.[107]
Casual work
4.75
The gender pay gap for casual workers was smaller than for non-casual.[108]
Women without paid leave entitlements were more likely to receive a casual
loading than men in this situation.[109] Further, ‘female part
time casuals earn about 10 per cent less than female part time permanents.’[110]