Enterprise agreements showing the value of bargaining

by Greg Jericho



Enterprise agreements are now delivering strong wage growth and good outcomes for workers.

The latest figures from the Fair Work Commission (FWC) reveal strong wage growth is beginning to come from enterprise agreements, with the past 3 months seeing a weighted average annual wage growth of 3.9% in agreements lodged with the FWC

Over the past decade enterprise agreements have come under great attack from companies seeking to neuter their effectiveness. The reason was always clear – enterprise agreements deliver better outcomes for workers.

While the past 18 months has seen the wage growth from enterprise lag behind the overall average wage growth this was due mostly to the longer time-frame involved with enterprise agreements negotiations. But now we are starting to see just how workers benefit form the enterprise agreements system.

In the fortnight to 8 September, 37,554 employees were covered by agreements lodged with the FWC that had an average wage annual wage growth of 4.7%. The biggest driver of that average was the 10 agreements lodged with the FWC in the education sector covering 19,375 employees with an average wage growth of 5.8%. This came after the previous fortnight’s average was driven by 32,166 employees in the banking and insurance sector covered by agreements that saw an average annual wage growth of 4.1%.

The data also highlights the better returns workers get with union-supported enterprise agreements. In the past fortnight there has been a strong increase in the 3-month average wage growth of union-supported agreements. This is mostly due to union-supported agreements in the most recent fortnight covering 1,927 employees – well above the 399 fortnightly average. But regardless of the large jump, over the past 14 months since the FWC began publishing this fortnightly data union-supported agreements have consistently provided better wage growth for employees.

While these increases are to be welcomed the most recent quarterly figures of enterprise agreements showed that around 1.78m employees were on agreements that overall averaged just 2.8% annual wage growth. The past 2 years has seen workers real wages plunge at an unprecedented rate and it is only right that workers should see better wage growth now. Even the current 3 months average of 3.9% remains well below current inflation levels. Workers did not cause inflation through excessive wage growth; rather they have been the victims of companies seeking to take advantage of supply-side issues to keep their profits rising.

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