In brief - Employers bargaining for enterprise agreements should take note of the average industry pay increase trends and prepare an industrial strategy 

Many employers are experiencing the financial implications of being locked into enterprise agreements that were negotiated in more profitable times.  

While the current industrial and economic climate makes it extremely difficult to wind back benefits contained in existing enterprise agreements, employers should benchmark average pay increases across industries in enterprise agreements to ensure pay demands from employees and unions are in line with the recent wage increase data and to attempt to retain a competitive edge.

Recent wage increase data 

Enterprise agreements made and approved under the Fair Work Act 2009 (Cth) cover 30.2 per cent of all Australian employees. 

The latest Trends in Federal Enterprise Bargaining report released by the Department of Jobs and Small Business provides insightful data about Average Annual Wage Increases (AAWI) contained in enterprise agreements approved by the Fair Work Commission during the March 2018 quarter. 

The AAWI across all industry sectors was 2.7 per cent, up from 2.5 per cent in the December quarter 2017 and unchanged from the March quarter 2017. 

AAWI data from a selection of industries is set out below:
Industry AAWI % in Agreement
Construction 5.5%
Education 2.5%
Electricity, Gas, Water and Waste Services 3.1%
Health and Community Services 2.4%
Manufacturing 2.5%
Mining 2.5%
Retail 3.0%
Transport, Postal and Warehousing 2.2%

Prepare an industrial strategy

Employers should prepare an industrial strategy at least six months before the nominal expiry date of enterprise agreements.  Once the nominal expiry date of an enterprise agreement passes, employees can take protected industrial action to support or advance claims in respect of an agreement that will cover them.

Data, such as average annual wage increases relevant to the employer’s industry, will assist in focusing unions and employee bargaining representatives on claims for pay increases that are consistent with industry trends.

This is commentary published by Colin Biggers & Paisley for general information purposes only. This should not be relied on as specific advice. You should seek your own legal and other advice for any question, or for any specific situation or proposal, before making any final decision. The content also is subject to change. A person listed may not be admitted as a lawyer in all States and Territories. © Colin Biggers & Paisley, Australia 2024.

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