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Guilherme Mazui

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What is the Difference Between Award and Agreement?

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The main difference between an award and an agreement lies in their nature and how they are established.

  • Award: An award is typically granted or ordered following the evaluation and assessment of facts and evidence by a judicial body. In the context of employment, awards are set by the Fair Work Commission after consultation with the community. They establish detailed minimum standards that apply throughout a covered industry or occupation.
  • Agreement: An agreement refers to a mutual understanding between two or more parties with respect to some matter. In the context of employment, enterprise agreements are negotiated between employers and employees and approved by the Fair Work Commission, provided they pass the Better Off Overall Test (BOOT). These agreements can vary the application of an award to a specific business and may have some terms and conditions that are different from the award.

In summary:

  • Awards are set by the Fair Work Commission and apply to specific industries or occupations.
  • Agreements are negotiated between employers and employees and can cover a specific business or businesses.
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  • What is the Difference Between Award and Agreement?
  • Comparative Table: Award vs Agreement

    • Comparative Table: Award vs Agreement

    The main difference between awards and agreements lies in their purpose and governing bodies. Here is a table that outlines the key differences between awards and agreements:

    Feature Awards Agreements
    Purpose Awards are legal documents that set out wages and conditions of employment for employees in a specific industry or occupation. Agreements are collective agreements between an employer and employees that set out wages and conditions of employment and must be approved by the Fair Work Commission.
    Governing Body Awards are governed by the Fair Work Commission (FWC). Agreements are also governed by the Fair Work Commission, but they override the modern award applicable to the industry if there is a conflict between the two.
    Application Awards apply to most employees in a specific industry or occupation, but not all employees fall under a modern award. Agreements apply to employees and employers who are parties to the agreement, with the exception of high-level executives and other roles that fall outside the governance of these instruments.
    Minimum Standards Awards provide minimum terms and conditions of employment for all employees, regardless of whether they fall under an award or agreement. Agreements cannot provide less than the National Employment Standards (NES) entitlements, which protect all employees with or without an agreement or award.
    Examples Examples of awards include the General Retail Industry Award and the Security Services Award. There are no specific examples mentioned, but agreements can be more straightforward and administratively efficient compared to awards.

    In summary, awards set out minimum wages and conditions of employment for employees in a specific industry or occupation, while agreements are collective agreements that provide wages and conditions of employment for employees in a specific workplace. Awards are governed by the Fair Work Commission, while agreements must also be approved by the Fair Work Commission but can override awards if there is a conflict between the two.

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    Guilherme Mazui

    Guilherme Mazui is graduated in journalism from the Federal University of Minas Gerais (UFMG) and a master's degree in Communication from the University of São Paulo (USP). In addition, he has experience in advertising writing and has worked as a content editor in several companies.