Economy

More employers face AWA back-pay bogey

SmartCompany /

The number of employers facing a back-pay burden under the federal government’s fairness test almost doubled in October, despite a decrease in the number of AWAs lodged.

Last month 5149 AWAs were sent back to employers with the requirement that they be changed to comply with the fairness test within 14 days, almost twice that sent back in September.

If the AWAs fail, employers must provide back-pay to make up any shortfall in the employee’s pay while there were on the AWA.

It was not all bad news for the Workplace Authority in its latest figures released on Friday night. The number of AWAs and collective agreements that have passed the fairness test to October increased by 12,026 to reach 24,848 – although that still leaves more than 150,000 workplace agreements failed or still in the system.

Significantly, the decline in the number of employers choosing to use AWAs since the introduction of the fairness test system has continued. A total of 29,089 AWAs were lodged in October, down from 31,014 in September and 33,819 in August.

Business owners are speaking out in increasing numbers against the red-tape and back-pay risks associated with the fairness test.

Darwin shade sail manufacturer Aerosail, was one of the first to employ workers on AWAs in the Northern Territory. Owner James Taylor says that, thanks to the fairness test, AWAs are now more trouble than they’re worth.

“There is so much red-tape associated now it’s not worth the aggravation, the test is really working against small business,” he says.

Taylor says the uncertainty created by having to wait several months to find out whether an AWA has passed the fairness test has ruined what was otherwise a good way of employing people.

“When someone starts on an AWA we send it off to the government, then they come back and say this agreement you’ve got doesn’t comply with the fairness test, you’ve got two weeks to fix it, and in the meantime you’ve got to give them back-pay,” Taylor says.

“And they’re so slow with the paperwork – if we submitted it and they got it back in two days that’d be fine, but to find out two or three months later that you’ve been employing this guy on the wrong terms and conditions and you need to give him back-pay, it’s just disgusting.”

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