Trends in Federal Enterprise Bargaining
March Quarter 2014
Contents
Table 1: Average Annualised Wage Increases (AAWIS) Per Employee
Further Information
Trends In Enterprise Bargaining Report March quarter, 2014
Summary
2
2
3
3
Overall wages growth under federal enterprise agreements – March quarter 2014 (Tables
1 & 2 of the Trends report)
3
Comparison of AAWI and the ABS Wage Price Index (WPI)
Chart 1: WPI and AAWI – March quarter 2011 to March quarter 2014
AAWI for agreements current as at 31 March 2014 (Table 3 of the Trends report)
Chart 2: Current Agreements AAWI – March quarter 2011 to March quarter 2014
3
3
4
4
Private Sector wages growth – March quarter 2014 (Tables 1, 2 and 4 of the Trends report) 4
Chart 3: Private Sector AAWI for Current and Approved Agreements – March 2011 to
March 2014
5
Public sector wages growth – March quarter 2014 (Tables 1, 2, 3 and 12 of the Trends
report)
5
State/Territories wages growth – March quarter 2014 (Table 7 of the Trends report)
6
Wages growth for agreements that cover union/s and agreements with no union/s covered –
March quarter 2014 (Table 10 and 11 of the Trends report)4
6
Level of agreement making - as at 31 March 2014 (Tables 2 & 3 of the Trends report)
Chart 4: Current Agreements and Employee Coverage – March 2010 to March 2014
Footnotes
Trends in federal enterprise bargaining - technical notes
6
6
8
10
The Workplace Agreements Database
10
Agreements included in the WAD
10
Wider context for Trends data
10
Presentation of Trends in Federal Enterprise Bargaining data
11
Employee coverage
11
Duration of agreements
11
Average annualised wage increases (AAWI)
11
Australian and New Zealand Standard Industrial Classification (ANZSIC)
12
Union Coverage
12
Non-quantifiable wage increases
13
Table 1: Average Annualised Wage Increases (AAWIS) Per Employee
Collective agreements approved in the quarter
.
December Quarter
2013 (%)
March Quarter
2014 (%)
Change in
AAWI % Points
All sectors
3.5
3.7
0.2
Private sector
3.6
3.6
0.0
Public sector
3.4
3.9
0.5
December Quarter
2013 (%)
March Quarter
2014 (%)
Change in
AAWI % Points
All sectors
3.7
3.6
-0.1
Private sector
3.7
3.7
0.0
Public sector
3.4
3.5
0.1
All current wage agreements
.
.
Further Information
Trends in Federal Enterprise Bargaining is available online at:
http://employment.gov.au/trends-federal-enterprise-bargaining
The Department recommends that Trends in Federal Enterprise Bargaining data be read in
conjunction with the Technical Notes (appended to this document), which describe the
methodology for the calculation of the data and provide a guide to interpreting the data tables.
For other queries, please contact ebtrends@employment.gov.au
Disclaimer: The Commonwealth, its employees, officers and agents do not accept any liability for any action taken
in reliance upon or based on or in connection with this document. To the extent legally possible, the
Commonwealth, its employees, officers and agents disclaim all liability arising by reason of breach of any duty
(including liability for negligence and negligent misstatement) or as a result of any errors or omissions contained in
this document.
© 2014 Commonwealth of Australia.
Trends in Enterprise Bargaining Report
March quarter, 2014
Summary
Overall wages growth under federal enterprise agreements1 – March quarter 2014
(Tables 1 & 2 of the Trends report)
Wages growth under federal agreements for the March quarter 2014 increased slightly
compared to the December quarter 2013.
The Average Annualised Wage Increase (AAWI) in the March quarter 2014 was 3.7 per cent 2,
up from 3.5 per cent in the December quarter 2013, but down by 0.2 percentage points from
the March quarter 2013.
Comparison of AAWI and the ABS Wage Price Index (WPI)
Chart 1: WPI and AAWI – March quarter 2011 to March quarter 2014
Chart 1 shows that the AAWI has remained relatively stable around 3.5 per cent since mid2012, subject to some fluctuations due to changes in the industry mix from quarter to quarter,
but the WPI has been falling steadily over the same period.

A gap opened up in early 2013 between the quarterly AAWI results and the outcomes
for the WPI continued in the March quarter 2014. The AAWI was 3.7 per cent while the
annual increase in the WPI was 2.6 per cent.

A comparison between the AAWI and WPI outcomes needs to be treated with some
caution however because, although AAWI outcomes have been consistently higher than
the WPI, the AAWI measure is more volatile and they are different measures of wages
growth.
Note: The WPI is a broader measure of wages growth covering all employees. The WPI
methodology removes the effect of changes in the composition of the labour market on average
hourly rates of pay. On the other hand, the AAWI data in the Trends in Enterprise Bargaining
Report does not control for changes in the compositional mix of enterprise agreements from
quarter to quarter.
1 All estimates are rounded and are subject to revision. Revisions have been made to historical series.
2.
The AAWI does not take into account those agreements for which, for various reasons, it is not possible to calculate an average
wage increase. This qualification is more relevant to some quarters than others.
AAWI for agreements current as at 31 March 2014 (Table 3 of the Trends report)
Chart 2: Current Agreements AAWI – March quarter 2011 to March quarter 2014

Chart 2 shows that the All Industries AAWI for the 22 425 agreements current as at 31
March 2014 (a measure of trend wages growth) has fallen further to 3.6 per cent,
continuing the decline from the most recent high in March 2012 of 4.0 per cent.

The AAWI for current agreements is declining due to the new agreements in recent
quarters having, overall, a lower AAWI than the agreements they replace.

The AAWI for approved agreements shows a decline from a large spike of 4.4 per cent
in the March quarter 2012 to 3.4 per cent in the December Quarter 2012 Also, a steady
increase from June 2013 until the latest quarter is shown.
Private Sector wages growth – March quarter 2014 (Tables 1, 2 and 4 of the Trends
report)

Chart 3 measures the AAWI for private sector agreements approved in the quarter over
the last three years. The AAWI for private sector agreements current as at the end of
each quarter is provided for comparison.

The chart shows that the AAWI for private sector enterprise agreements approved in the
March quarter 2014 was 3.6 per cent, unchanged from the December quarter 2013, and
down from the 3.7 per cent recorded in the March quarter 2013.

The private sector AAWI of 3.6 per cent is lower than the 3.9 per cent average for the
private sector since 2009 when economic activity in Australia started to recover from
some of the effects of the Global Financial Crisis.
Chart 3: Private Sector AAWI for Current and Approved Agreements – March 2011 to
March 2014

Agreements which, due to their coverage of a large number of employees, exerted
significant influences in one direction or the other on the private sector AAWI in the
March quarter 2014 included:
Coles Liquor Group Retail Agreement 2014 (4750 employees) –
3.3 per cent AAWI;
o Australian Catholic University Staff Enterprise Agreement 2013 - 2017 (4110
employees) – 3.8 per cent AAWI;
o Bupa Care Services, NSW Nurses and Midwives’ Association, Australian
Nursing and Midwifery Federation (NSW Branch) and Health Services Union
NSW Branch, New South Wales Enterprise Agreement 2013 (2775
employees) – 3.7 per cent AAWI; and
o Bupa Care Services, Australian Nursing and Midwifery Federation and
Health Services Union Victorian Enterprise Agreement 2013 (2711
employees) – 4.0 per cent AAWI.
The main industry influences on the private sector AAWI were:
o Health and Community Services and Education, with AAWIs of 3.8 per cent
and 3.7 per cent. The upward pressure exerted by these two industries was
partially offset by a relatively low AAWI of 3.1 per cent for Manufacturing.
o

Public sector wages growth – March quarter 2014 (Tables 1, 2, 3 and 12 of the Trends
report)

The AAWI for public sector agreements approved in the March quarter 2014 was 3.9
per cent, up from the 3.4 per cent in the December quarter 2013, but steady on the 3.9
per cent in the March quarter 2013.

The growth in the public sector AAWI during the March quarter 2014 was particularly
due to the approval of a range of university agreements, including:
o
o
University of Melbourne Enterprise Agreement 2013 (13 886 employees) –
3.9 per cent AAWI; and
University of Sydney Enterprise Agreement 2013-2017 (13 659 employees)
– 4.4 per cent AAWI.
State/Territories wages growth – March quarter 2014 (Table 7 of the Trends report)

By state and territory, AAWIs were highest in the Northern Territory at 5.0 per cent and
lowest in Tasmania at 2.9 per cent.
Wages growth for agreements that cover union/s and agreements with no union/s
covered – March quarter 2014 (Table 10 and 11 of the Trends report)4

Agreements approved in the March quarter 2014 that formally covered unions had an
AAWI of 3.7 per cent whereas those with no unions formally covered had an AAWI of
3.0 per cent. Agreements without unions have, however, had no obvious impact on the
overall 3.7 per cent AAWI for the quarter because they are very small and cover
relatively few employees.
Level of agreement making - as at 31 March 2014 (Tables 2 & 3 of the Trends report)

Aggregate
o
There were 22 425 agreements current as at 31 March 2014, covering around
2.62 million employees. This is down slightly on the total for 31 December 2013
in terms of agreements and up slightly for employees covered. There were 23
239 agreements, covering 2.60 million employees, current as at 31 December
2013.
Chart 4: Current Agreements and Employee Coverage – March 2010 to March 2014

Chart 4 shows that the number of current agreements has remained steadily around
23,000, from March 2011 to March 2014. Also, over the same period the employees
the agreements cover remain steadily around 2.5 million, with the largest fluctuation of
200,000

Agreement making in the March quarter 2014
o
1239 agreements were approved in the March quarter 2014, covering over
182 000 employees.
o
The number of agreements, and employees covered by them, in the March
quarter 2014 is lower than the respective averages over the last three years of
1799 agreements per quarter and 234 700 employees per quarter.
o
Seasonality is one factor behind the lowish level of agreement making in the
March quarter 2014. Smaller than average levels of agreement making have
occurred in three of the last four March quarters.
Footnotes
1. Estimates of average wage increases are calculated for those federal enterprise
agreements that provide quantifiable wage increases over the life of the
agreement. Enterprise agreements for which average percentage wage increases
could not be quantified (e.g. those introducing a new salary structure) are excluded from
these estimates.
AAWI data includes only increases to the base rate of pay, and does not take into
account allowances and bonus payments that are paid separately from the base wage.
2. Trend AAWI data:
The AAWI for agreements approved in a quarter can be more volatile because the
quarterly pool of agreements, normally around 1800 to 2000, is relatively small and
therefore susceptible to the influence of either large agreements or overrepresentation
by agreements from whichever industries are in the middle of their bargaining cycles at
the time.
The table below summarise various trend AAWI measures which indicate the
underlining direction of wage growth for agreements over the year to the March quarter
2014. For comparison, the headline quarterly AAWI has been included in the last row of
the table.
Change in
AAWI
between last
two quarters
June
quarter
2013
September
quarter 2013
December
quarter 2013
March
quarter 2014
Current
Agreements
AAWI*
3.7
3.7
3.7
3.6
-0.1
Weighted
AAWI**
3.5
3.6
3.6
3.6
0.0
Rolling
Average
AAWI
3.5
3.5
3.5
3.5
0.0
Headline
quarterly
AAWI***
3.4
3.5
3.5
3.7
0.2
* The current agreements AAWI measures the average of wages increases contained in the 23 236 operating agreements that had not
passed their nominal expiry date as at 31 Dec 2013.
** The weighting removes any “overrepresentation” or “underrepresentation” by industries in a particular quarter by having regard to their
relative size in the current agreements’ “pool”.
*** Headline quarterly AAWI has been included for comparison purposes. It is the average of wages increases contained in the 1647
agreements approved in the December quarter 2013.
3. Context for the Trends in Enterprise Agreements data on wages growth in federally
registered enterprise agreements:
i. over one third of all non-managerial employees in the Australian labour
market (as measured by the ABS 2012 Employee Earnings and Hours
(EEH) survey) are covered by federal enterprise agreements;
ii. the growth in coverage by federally registered agreements measured by
the more recent ABS EEH surveys is:
All non-managerial employees (%)
2006
2008
2010
2012
Award
21.0
18.1
16.4
17.8
Collective Agreement (Federally Registered)
28.5
29.0
33.1
34.3
Collective Agreement (State Registered)
12.8
13.2
12.4
10.6*
Collective Agreement (Unregistered)
3.2
0.7
0.0
10.6*
Individual Agreement (Registered and
unregistered)
34.5
39.1
38.0
37.3
* The May 2012 ABS EEH Survey does not break up State Registered and Unregistered Collective Agreements
Source for Table: ABS, Employee Earnings and Hours, Cat. No. 6306.0, May 2006, August
2008, May 2010 and May 2012, unpublished data. Please note that this is not intended to
be analysed as a time series.
4. An agreement is identified as being “union” where the Fair Work Act decision approving
the agreement notes in accordance with s201(2) of the Fair Work Act 2009 that the
agreement covers the union(s) which has/have given notice under s183(1) that it/they
want the agreement to cover them. It is recognised that this is a proxy measure as the
data measures coverage rather than bargaining presence.
Trends in federal enterprise bargaining - technical notes
The Workplace Agreements Database
Data presented in the Trends in Federal Enterprise Bargaining report (Trends) are drawn from the
Workplace Agreements Database (WAD), which is maintained by the Workplace Relations Policy Group
of the Department of Employment. The WAD contains information on all known federal enterprise
agreements that have operated since the introduction of the Enterprise Bargaining Principle in October
1991 and that have been subsequently provided to the Department of Employment. The WAD covers
general details (such as sector, ANZSIC, duration, employees covered), wage details (quantum and
timing of increases) and employment conditions.
Agreements included in the WAD
The following agreements are included in the WAD and thus in Trends:

For agreements made under the Fair Work Act 2009 or before the Work Choices amendments to
the Workplace Relations Act 2006 (WR Act), those that have been certified by the Australian
Industrial Relations Commission (AIRC) or approved by the Fair Work Commission (previously Fair
Work Australia).

For agreements made under the Work Choices amendments but before the introduction of the
Fairness Test, those that were lodged with the Office of the Employment Advocate (OEA).

For agreements made under the fairness test, those that were lodged with the Workplace
Authority. However, agreements were subsequently deleted and do not appear in the data if
they ceased to operate because they did not pass the fairness test.

For agreements made under the Transition to Forward with Fairness amendments to the WR Act,
union collective and employee collective agreements that were approved by the Workplace
Authority. Union greenfields and employer greenfields were included when they were lodged,
but were deleted if they ceased to operate because they did not pass the no-disadvantage test.
Wider context for Trends data
Over one third of all non-managerial employees in the Australian labour market (as measured by the
ABS 2012 Employee Earnings and Hours survey) are covered by federal enterprise agreements. The
table below shows the growth in coverage by federally registered agreements, as measured by the
most recent ABS EEH surveys.
All non-managerial employees (%)
2006
2008
2010
2012
Award
21.0
18.1
16.4
17.8
Collective Agreement (Federally Registered)
28.5
29.0
33.1
34.3
Collective Agreement (State Registered)
12.8
13.2
12.4
10.6*
Collective Agreement (Unregistered)
3.2
0.7
0.0
10.6*
Individual Agreement (Registered and unregistered)
34.5
39.1
38.0
37.3
* The May 2012 ABS EEH Survey does not break up State Registered and Unregistered Collective Agreements.
Source for Table: ABS, Employee Earnings and Hours, Cat. No. 6306.0, May 2006, August 2008, May 2010 and May
2012, unpublished data.
Presentation of Trends in Federal Enterprise Bargaining data
A typical row of data in Trends appears as follows:
All Industries
1239
Total number of agreements for a given quarter
AAWI (%)
3.7
Average Annualised Wage Increase for the quarter
Duration
3.1
Average formal duration per employee for the quarter
Employees ('000)
182.0
Estimated total number of employees covered by the number of
agreements in the first row
It is important to note that not all agreements contain quantifiable wage increases and in most cases
the AAWI is not derived from the total number of agreements shown in the first row or the total
number of employees shown in the third row. A more detailed explanation of why this is the case is
provided below under ’Average annualised wage increases’.
Employee coverage
Information on the number of employees covered by an agreement is drawn from the information
provided to the Fair Work Commission, the AIRC or the Workplace Authority by the employer who
lodges the agreement.
In the Trends data, the number of employees covered by agreements is presented as an estimated
figure, as employee coverage figures are not always provided when an agreement is lodged.
Where an agreement’s employee coverage is not known and the agreement replaces an earlier
agreement where employee coverage is known, the employee coverage of the earlier agreement is
used. For those agreements still lacking employee coverage a ‘modified mean’ is used to estimate
employee coverage. The modified mean is generated for each industry group by current quarter
removing the largest 5% and smallest 5% of agreements, and then calculating the mean of the
remainder.
As the number of employees covered by an enterprise agreement frequently changes during the life of
an agreement, due to workforce fluctuations, the total number of employees covered is not necessarily
indicative of the total current coverage of enterprise agreements.
Duration of agreements
‘Formal duration’ is the period from certification to expiry in years.
The ‘effective duration’ of each agreement is used to calculate wage increases rather than formal
duration (that is, the period from certification to expiry). The effective duration of a wage agreement is
the difference in years between: certification, commencement or the date of the first wage increase
(whichever is earliest) and expiry date or the date of the last wage increase (whichever is latest) or
termination date (where applicable and only if prior to the later of either the expiry date or the date of
the last wage increase). Those few agreements with a formal duration of less than one year are deemed
to have an effective duration of 12 months.
Average annualised wage increases (AAWI)
Estimates of average wage increases are calculated for those federal enterprise agreements that
provide quantifiable wage increases over the life of the agreement. Enterprise agreements for which
average percentage wage increases could not be quantified (e.g. those with inconsistent increases) are
excluded from these estimates.
AAWI data examines only increases to the base rate of pay, and does not take into account allowances
and bonus payments that are paid separate to the base wage. The ABS produces a more comprehensive
dataset on total labour costs (Labour Price Index): http://www.abs.gov.au/ausstats/abs@.nsf/mf/6345.0
For agreements with quantifiable wage increases, the average annualised wage increase (AAWI) per
agreement is calculated by:
1. Summing the percentage wage increases to give a total percentage wage increase for each
agreement (flat dollar increases are converted to a percentage using average weekly ordinary
time earnings (AWOTE) (Drawn from ABS, 6302.0 - Average Weekly Earnings, Australia) for the
relevant ANZSIC industry division and quarter). Wage increases awarded during the life of an
agreement that compound based on the previous wage increase are taken into account. For
example, for an agreement that contains three 4% increases over three years, the AAWI is
calculated based on percentage increases of 4%, 4.16% and 4.33%.
2. Annualising the total percentage wage increase by dividing it by the effective duration.
AAWI per agreement provides only a simple unweighted average and tends to overstate the average
wage increase received by employees. For this reason Trends reports the AAWI per employee, which is
calculated by weighting AAWI per agreement by the number of employees covered by that agreement.
The all current wage estimates are the AAWI per employee for all quantifiable federal wage agreements
that are current on the last day of the quarter. Current agreements are those agreements that have
been certified but have neither been terminated nor expired at a given point in time. An agreement
that expires on a given date is deemed to be current on that date.
Estimates of AAWI generally exclude increases paid in the form of conditional performance pay, one-off
bonuses, profit sharing or share acquisition, as these data cannot readily be either quantified or
annualised.
Australian and New Zealand Standard Industrial Classification (ANZSIC)
From the September quarter 2009, Trends uses ANZSIC 2006 divisions for data presented by industry,
while previous releases used ANZSIC 1993 divisions. This change followed the use of ANZSIC 2006
divisions in the August 2009 Average Weekly Earnings survey released by the ABS, from which data
about AWOTE are drawn for use in calculating AAWIs.
From the September quarter 2009, historical industry data contained in the Trends report have also
been produced using ANZSIC 2006 divisions.
Union Coverage
Care should be taken when analysing the data in tables 10 and 11, which compare agreements that
cover a union with those that do not.
Data about unions covered by agreements made under the Fair Work Act 2009 may not provide an
accurate reflection of union involvement in bargaining for agreements. Under the Fair Work Act 2009 it
is possible for a union to have been involved in bargaining for an agreement and then not be covered
by the approved agreement. It is also possible for a union to be covered by an agreement because they
were a bargaining representative, even if they did not take an active role in the negotiations.
Further, data about non-greenfields agreements made under the Fair Work Act 2009 that cover a union
cannot be directly compared with data about union collective agreements or s.170LJ agreements made
under the Workplace Relations Act 1996, which had to be made with a union. While a union may be a
bargaining representative, there is no capacity under the Fair Work Act 2009 for agreements (other
than greenfields agreements) to be made with a union.
Non-quantifiable wage increases
Wage increases are only recorded in the WAD if the same percentage wage increase that applies to all
employees covered by the agreement can be quantified. There are many reasons why wage increases
provided for in federal enterprise agreements may not be quantifiable. The list of reasons recorded in
the WAD about why wage increases cannot be quantified is as follows:
Reason
Definition
Inconsistent Increase
Percentage wage increases vary between
classifications in the agreement, or for employees
in different states.
Performance Linked
Wage increases are awarded only if certain
productivity improvements are made, or if wage
increases are dependent upon individual or
company performance.
Linked to CPI
Wage increases in the agreement are linked in
some way to CPI movements, and cannot be
quantified.
Linked to Minimum Wages
Wage increases in the agreement are linked in
some way to movements in the minimum wage or
award rates, and cannot be quantified.
Other Reason
Wage increases cannot be quantified due to a
reason not elsewhere classified.
Types of Collective Agreements
Trends in Federal Enterprise Bargaining tables 2, 3 and 9 include information about collective
agreements broken down by the type of agreement, as determined by the relevant legislation. The
following list shows the types of collective agreements available under the two pieces of legislation
included in this report:
Collective agreements made under the Workplace Relations Act 1996

Employee collective

Employee greenfields

Union collective

Union greenfields
Enterprise agreements made under the Fair Work Act 2009

Single enterprise non-greenfields

Single enterprise greenfields

Multi-enterprise non-greenfields

Multi-enterprise greenfields
Of note, in sections 327-330 of the Workplace Relations Act 1996, the primary division between types
of agreements was whether they were made with a union or without a union, while the primary
division between agreements made under section 172 of the Fair Work Act 2009 is whether they cover
a single or multiple enterprises. Under both pieces of legislation, the secondary division is whether or
not the agreement is a greenfields agreement, that is, it is made to cover a genuine new enterprise or
undertaking for which no persons have been employed.