Baseline Agreements

WHAT IS A BASELINE AGREEMENT?

As the name suggests, a baseline agreement is an enterprise agreement that sets ā€˜baselineā€™ terms and conditions. Baseline conditions are the absolute minimum rates of pay and conditions.

In general, employers seek to have baseline agreements in place because it gives the employer complete control over what employees are paid.

For example, a proposed baseline agreement may contain a minimum annual salary of $90,000 a year for a particular classification, but under an employment contract, workers employed by the company in that classification are actually paid $135,000.

If the enterprise agreement contained the actual annual salary of $135,000, the employer is unable to employ anyone in that classification for less than $135,000. However, with the baseline agreement, the employer can freely employ anyone in that classification for as little as $90,000. Additionally, the employment contracts can be amended by agreement, and because employment contracts are between the company and an individual, there is a large power imbalance in any negotiations regarding the terms of an employment contract.

Employers try to convince workers to vote up baseline agreements on the promise that the company will pay them higher rates of pay under an individualised contract of employment. Whilst this may be true, having your rate of pay established by a contract of employment is nowhere near as secure as having your rate of pay established by an enterprise agreement.

WHY SHOULD BASELINE AGREEMENTS BE AVOIDED?

Baseline agreements provide workers with very little guarantee of minimum terms and conditions ā€“ in many instances these agreements are only marginally better than the award – Ā and contracts of employment can be varied or terminated far more easily than enterprise agreements. This means that for the lifetime of the baseline agreement, workers are vulnerable to their employer being able to reduce their rates of pay.

Baseline agreements are not only detrimental for workers, but detrimental to industry. Employers use baseline agreements as a tool in tendering for contracts; by locking in low rates of pay, they can tender for work with low employment costs, which deskills the industry and promotes the erosion of terms and conditions of employment sector-wide. Baseline agreements erode industry standards by suppressing wages.

WHAT CAN YOU DO TO STOP BASELINE ENTERPRISE AGREEMENTS?

Contracts of employment and baseline agreements provide workers with little to no protection. The only way to guarantee safe, stable, and secure conditions is through union negotiated enterprise agreements.

The Offshore Alliance is committed to ridding the offshore sector of dodgy baseline agreements, by securing industry standard wages and conditions with every employer working in the West Coast hydrocarbon sector.

A baseline agreement provides no real protection for workers, and provides employers with an effective tool for reducing terms and conditions of employment in the sector.

BASELINE AGREEMENTS ā€“ WE NEED TO RID THE SECTOR OF THEM

The Offshore Alliance is active in both opposing baseline agreements from being approved in the Fair Work Commission and negotiating enterprise agreements in the hydrocarbons sector that contain actual industry terms and conditions.

For example, in 2017 a three long battle began with Sodexo, when they attempted to bring in a baseline agreement which would have seen the workers covered paid some of the lowest employment terms and conditionsĀ in the sector.

Supported by the Offshore Alliance, the Sodexo offshore crew organised, unionised, and fought against the Agreement. The Offshore Alliance spent two years in and out of the Fair Work Commission opposing the agreement.

Bargaining lasted 12 months, during which the Sodexo offshore cooks and catering crew became the first offshore catering crew on the West Coast (excluding vessel ops) to take Protected Action.

Sodexo put an agreement out to employees to vote on in October 2020. A majority of employees voted to approve the agreement, which provided a number of significant improvements to the terms and conditions of Sodexo offshore workers, including:

  1. An immediate 15% uplift in rates of pay;
  2. Ā Superannuation payable on all hours;
  3. Indigenous employment commitment;
  4. Job Security provisions – contractors and labour hire must be provided at least the same terms and conditions as employees covered by the enterprise agreement;
  5. Union delegate training;
  6. New allowances, including for night shift, tradespersons, head chefs, and employees on certain offshore facilities;
  7. A significant sign-on bonus;
  8. Rosters locked in and automatic increases in pay if a roster change results in an increase in working hours;
  9. Improved service rewards;
  10. Guaranteed yearly wage increases; and
  11. Ā An improved higher duties clause.