The 2005 labour election laws introduced other barriers to changing and updating premiums and perpetuated the narrowing of authorized issues. However, the main effect is elsewhere. Legislation rejects non-disadvantage tests, thus piercing the (mitigated) links that combine agreements and rewards. In response to public concerns, the federal government withdrew slightly in 2007 and introduced a new equity test (Sutherland, 2007). However, the most important mechanism for providing a safety or soil net under agreements is the Australian Fair Payment and Conditions Standard (PSACS). This includes a minimum wage, paid annual leave, paid personal leave, unpaid parental leave and a cap on the normal weekly working time. Scholars (Fenwick, 2006; Stewart, 2006; Cooney, Howe and Murray, 2006) highlighted the limited scope of these provisions. Even in these five cases, they suggest that the appearance of minimum standards is misleading, given that the provisions do not apply to all workers and that there are sufficient opportunities for exemptions where they do. For example, the four-week annual leave plan does not apply to casual workers and may in any event be partially paid. Nor is there a plausible adjustment mechanism, except for minimum wages (including junior, training and disability salaries, casual expenses and pay and classification scales) that are the province of a new body, the Australian Fair Pay Commission (PSAC) (Waring, Ruyter and Burgess, 2005).
The compensation system is an integral part of the collective agreement as it defines minimum wages. A collective agreement is a collective agreement on working conditions such as wages and public holidays between a company and a union („specific collective agreement“) or between the employer organization of a given branch and the union („sector collective agreement“). In addition, there are generally binding collective agreements. These important agreements also bind disorganized employers and workers who work for them. Collective agreements are generally valid for two years, sometimes three and sometimes one. Before the contract expires, the union and employer will enter into negotiations for a renewal contract. A collective agreement applies to your employment relationship if you are a member of the union, if your employer is a member of the employer organization and if the union and the employers` organization have negotiated a collective agreement.