The Department of Employment, Education and Workplace Relations estimates only 5% to 7% of employees are covered by AWAs, saying the Workplace Authority has overstated the rate by assuming that no affected workers resigned, were promoted or dismissed.

The criticism is contained in DEEWR's submission to the Senate inquiry into the transitional IR bill, which echoes the Rudd Government's view that the changes will not cause a wages breakout, increase industrial disputes, or harm productivity, employment and inflation.

The department, using its Workplace Agreements Database, compares productivity measures in AWAs with those in collective agreements (2004-2007) and finds that while more AWAs offered some individual productivity-enhancing provisions and flexible remuneration, collective agreements were "considerably more likely to include all other types of productivity enhancing provisions" such as organisational KPIs and flexible hours and rosters.

"While there is no evidence linking AWAs with increased productivity, there is considerable evidence linking collective agreement making and productivity improvement", DEEWR says.

It cites qualitative research suggesting "the secrecy and pressure surrounding AWAs contributed to unproductive workplaces through a reduction in trust between employees and employers."

Data on productivity growth and price changes since the early 1990s shows that industries with high productivity growth also tended to record smaller price increases, supporting the Government's contention that by emphasising productivity, the changes would "allow for sustainable and responsible increases in real wages, without putting upward pressure on inflation", DEEWR says.

There is no evidence that AWAs increased employment or that the transitional legislation would harm employment growth, particularly for the low-skilled, it adds.

(What a surprise - ed)