Not just award rate will increase: Looking under the hood of the Annual Wage Review result – Employee Rights/ Labour Relations – Australia

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With lower than 20% of Australian staff engaged on
enterprise agreements (EAs), the proportion whose
minimal circumstances and wages are straight set by Modern Awards is
important, and the Fair Work Commission (FWC)
annual wage case result is intently watched.

In 2022, the FWC has determined an general important improve,
though utilized erratically relying on the classification of

However, the influence of the choice can nonetheless prolong to
subtle workers with EAs in a quantity of methods:

    • EA charges could be robotically lifted the place the choice has
      raised Award base charges above the equal EA base rate, exposing
      employers to later underpayment claims; and


    • The choice will gas a requirement for the same share rate
      improve in EA bargaining, with none explicit evaluation of how
      far above minimal charges present EAs already are and with out
      willingness to make productiveness commerce-offs, requiring deft
      bargaining methods and deliberate use by employers of
      good-religion-bargaining obligations on unions.


In a protracted anticipated choice on the again of a major
improve in client costs and inflation, the FWC has handed down
its Annual Wage Review choice, deciding to implement the
following wage will increase from 1 July 2022:

Percentage improve Dollar worth
National Minimum Wage 5.2% $812.60 per week or $21.38 per hour
Minimum Award Wages 4.6%* *Wage charges beneath $869.60 per week can be elevated by $40 per
week Wage charges above $869.60 per week will obtain a 4.6%

A lagging restoration from the final two years of pandemic associated
restrictions persuaded the FWC to delay these will increase till 1
October 2022 for sure industries. The delayed operative date of
the will increase applies to the following Awards:

” Aircraft Cabin Crew Award 2020 ” Alpine Resorts Award 2020 ” Marine Tourism and Charter Vessels Award 2020
” Airline Operations – Ground Staff Award 2020 ” Hospitality Industry (General) Award 2020 ” Registered and Licensed Clubs Award 2020
” Air Pilots Award 2020 ” Airservices Australia Enterprise Award 2016 ” Restaurant Industry Award 2020
” Airport Employees Award 2020

Impact on Enterprise Agreement Covered Employees

While the influence on employers and workers coated by Modern
Awards, or employed at the nationwide minimal wage is obvious, the
FWC’s choice additionally impacts base charges in EAs the place these have
slipped beneath the equal Modern Award rate as a result of this

The Fair Work Act 2009 (FW Act)
supplies that base charges of pay under an EA throughout its operation
should not be lower than the related Modern Award rate or the
nationwide minimal wage order rate. If Award charges transfer considerably
(even after the Better-Off-Overall-Test has been met on the preliminary
approval), the equal EA rate additionally robotically strikes.

In these circumstances, employers might want to increase the base
charges paid to settlement coated workers to match the elevated
minimal Award charges. Employers ought to overview their enterprise
agreements which are presently in operation (each in time period and
nominally expired) to evaluate whether or not base charges under these
agreements will should be elevated to match the incoming
elevated charges.

EAs additionally generally have wage will increase that decide to will increase
that match or exceed the FWC’s annual wage overview. Those with
EAs which have that formulation can even must have the elevated
charges up to date, noting that some will increase could not must happen
till 1 October 2022 if the underlying Award is one of the a number of
with a delayed date for the will increase.

A failure to make sure that workers coated by an settlement are
being paid a rate equal to the related Modern Award rate or
nationwide minimal wage order rate dangers an publicity to underpayments
and different breaches of the FW Act.

Impacts on Bargaining

The minimal wage case is particularly focussed on the place
of the least-properly paid Australians. Despite that, it’s typically
wrongly pointed to by unions as the yardstick by which any future
bargained-for EA will increase needs to be set for some of the finest-paid

The Reserve Bank of Australia Governor, Phillip Lowe, has made a
comparable level by reference to the inflation rate in a speech on 21
June 2022, the place he mentioned pushing inflation-beating wage will increase
for all staff may trigger detriment to the Australian economic system,
stating that “if wage will increase grow to be frequent in the 4 and
5 p.c vary, then. . . it’ll be more durable to return
inflation to 2 and a half p.c” and “in the ’70s
we received into bother as a result of wages progress responded mechanically to
the increased inflation rate”.

The FW Act contains mechanisms in the good-religion-bargaining
guidelines which can be utilized to attract out unions on the distinction and
whether or not a wage demand is just a simplistic utility of a minimal
wage choice improve in circumstances for which it was not
designed or justified. While that doesn’t stop a wage demand
being pressed, finally it is going to assist to elucidate to a related
workforce why a specific wage place that’s lower than the
share minimal wage improve is being taken by the


Minimum wage selections have an effect properly past workers on
minimal Award charges of pay, and expose employers with EAs to
underpayment claims and intense future bargaining calls for.

The content material of this text is meant to supply a normal
information to the subject material. Specialist recommendation needs to be sought
about your particular circumstances.

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