Pay and employment conditions were historically set in Australia by "awards", awards are legally enforceable determinations made by federal or state industrial tribunals that set the terms of employment usually in a particular industry or occupation, sometimes these awards supplemented by industrial agreements negotiated by trade unions and employers or employer organisations. Another method of wage determination is Individual Contracts (individual agreements) this is where the terms of employment are set and are agreed to by the individual rather than on behalf of the individual. An employee whose pay is set like this is refering to employees who had all or any part of their wages or salaries paid by individual agreements. This group mainly consists of employees whose pay is set by an individual common law contract, employees receiving over award payments by individual agreements and working proprietors who set their own rate of hours.
To ensure that everything is equal, existing wages and conditions in the relevant awards of the Commission constitute the safety net which protects employees who may be unable to reach an enterprise or workplace agreement.
The award safety net also provides the benchmark for the no-disadvantage test that the Workplace Relations Act 1996 (the Act) requires be applied before agreements are certified.
In recent years, the method of wage determination has moved away from an award-based, centralised wage fixing system towards agreements at the enterprise, workplace and individual employee level. This process is where the employer and employee representatives meet to negotiate terms and conditions of employment such as wages, leave arrangements, hours of work and salary increases. This new trend is called "enterprise bargaining".
Enterprise bargaining has many advantages and disadvantages. Wage flexibility is one obvious advantage, the better the company which employers work for the better pay they can get granted. This...