The Fair Work Act 2009 (the Act) requires the Fair Work Commission’s Expert Panel (Minimum Wage Panel) to conduct and complete a review of minimum wages in modern awards and the national minimum wage in each financial year. The Minimum Wage Panel of Fair Work Commission today (Wednesday 4th June 2014) released its National Wage Case decision.
The decision provides that:
- All Modern Award classification scales shall increase by 3.0%.
- The federal minimum wage for award free employees shall be $640.90 per week (rounded to the nearest 10 cents) or $16.87 per hour. The hourly rate has been calculated on the basis of a 38 hour week for a full-time employee. This constitutes an increase $18.70 per week or 0.50 cents per hour.
- The increases shall apply from the first pay period on or after 1st July 2014.
The ACTU had sought an increase of $27 per week while major employer groups had sort an increase of $8.50 per week.
The Minimum Wage Panel in their decision stated “The minimum wage panel said factors favouring a real increase in minimum wages included “the deterioration in the relative living standards of award-reliant workers, the needs of the low paid, the recent widespread improvement in labour productivity growth, the historically low levels of real unit labour costs and the absence in aggregate of cost pressures”.
“The panel said the 0.25% SGL increase due on July 1 was a moderating factor, but did not quantify its impact on the amount awarded.”
“We have not taken into account the proposed repeal of the existing carbon price arrangements or the proposed changes to the tax-transfer system announced in the 2014–15 Budget. It has been a long-standing practice of the Commission and its predecessors to determine the matters before it on the basis of the existing legislative framework and not otherwise.”
“Relative living standards and the needs of the low paid are among the matters we are required to take into account in the fixation of minimum wages. The Panel has considered a range of measures of living costs and price inflation. The real value of award minimum wages and the NMW would decline if an adjustment below the rate of inflation were awarded. The CPI increased by 2.9 percent over the year to the March quarter 2014. The real value of award minimum wages and the NMW is a relevant consideration for the Panel.”
Members who have Workplace Agreements in place will need to ensure that their agreement rates meet or exceed the new minimum award rates and if the agreement pay increases are linked to the panel’s decision, the pay rates will need to be adjusted within the Workplace Agreement accordingly.
The increases can be absorbed into any amounts now being paid over and above the relevant minimum rates. However be aware the Fair Work Ombudsman makes it clear that over award pay-rates can NOT off-set other award entitlements (e.g. penalties or loadings) unless there is formal agreement in place. Rates for juniors, trainees and apprentices will also be adjusted, as usual, on a proportionate basis.
ARTIO can provide first class assistance to any operator who seeks to formalise the employment conditions in their workplace in an Agreement certified by Fair Work Commission.
Should members have any queries in relation to the above or its application, please contact your local ARTIO Branch for assistance.
The new Wage Summary Sheets (effective 1st July 2014) containing the relevant Modern Award(s) Pay Rate adjusted by the 3% and adjustments to allowances, can now be downloaded.