Employment awards, pay and qualifications: recognition and relationships

Dr Damian Oliver (image courtesy of The University of Sydney)

Prompted in part by changes in the 1984 metalworkers’ employment Award to include a 14 point classification scheme, Dr Damian Oliver from the University of Sydney’s Workplace Research Centre, shared findings in May from a co-authored paper (with Kurt Walpole) about the frequency, pay range and other patterns linked within 122 Australian employment awards to the Australian Qualifications Framework (AQF).

Understanding why qualifications are a part of, and what role they play in, the labour market discussion led Damian to ask four key questions:

  1. How are qualifications recognised in Awards’ classification structures?
  2. How does the relationship between qualifications and classification vary between industries?
  3. What relationship exists between qualifications, classifications and pay? and
  4. How does the above impact upon how organisations utilise workers’ skill and incentivise their further skill acquisition?

There is, explains Dr Oliver, a prevailing assumption that workforces need to continually up-skill. The Government is, in this vein, driving an agenda to increase the proportion of working-age Australians with post-school qualifications. Given the substantial financial and time-based investments required to complete higher qualifications, there is, however, no guarantee that firms or the labour market collectively will recognise them nor remunerate workers for holding them.

Why then look to employment Awards for clarity?

“They have”, says Damian, “a substantial influence and impact upon the Australian labour market as they cover on average around 16 per cent of employees (EEH 2013)… Industries such as Accommodation and Food Services (44 per cent), Administration and Support Services (29.6 per cent) and Retail (25.6 per cent) have a larger representation.”

So what is the AQF, what are ‘classifications’, and what has the research found? In this study, ‘qualifications’ refer to the 10 qualification levels (which excludes the Senior Secondary Certificate) identified by a structure introduced in 1995, and revised in 2011, to explain the knowledge, skill and expected application of them at each level. ‘Classification’ refers to the wage rate aligning with a particular job level in an Award.

Having established a six-tiered ‘classification framework’ within this study (which excludes apprentices, trainees, and groups those with parallel classifications and no reference to an Award as one ‘industry’), Damian reports that one-third of the Awards analysed made no reference to an AQF qualification whilst a further third were linked to at least one. Generally however, most fell in between, as both the job and the qualification partially determined a classification. The relationship between job, qualification and classification also varied between industries, Dr Oliver notes, as did an overlap in pay rate fragmentation. As a side note, the connection between qualifications, pay and classifications in modern awards also made little economic sense, adds Damian.

So what of organisations utilising workers’ skills, or offering incentives to up-skill?

“Outside of the Government, Education, Health and Community Services industries, Awards revealed little incentive for workers to complete formal qualifications… Even where the qualifications implied fully determined or were exclusive to the classification level, wage rates were low…”, Dr Oliver comments. Unsurprisingly, “the areas where a strong relationship did exist between these three measures was affected by licensing and registration arrangements.”

Damian hopes to further draw out from the data the role of managers in guiding these relationships, how skills are used, and again, how each differs by industry.

Contact WOW for an audio recording of this seminar: wow@griffith.edu.au or phone 07 3735 3714.