COVID-19: Fair Work Commission Delays Minimum Wage Increase

The Fair Work Commission (FWC) in handing down its minimum wage review decision has rejected a push from the Australian Chamber of Commerce and Industry (ACCI) and employer groups to deliver a pay freeze consistent with the approach taken during Australia’s last severe economic downturn in 2009.

A decision to grant no increase was rejected primarily because it would mean that the living standards of low-paid award reliant employees would fall.

The FWC also noted that gender pay inequity would be continued by a no increase decision as women are more likely to be low-paid award reliant employees.

In recognition of the challenging economic environment, in particular the impact of COVID-19, the FWC determined to introduce an adjustment which involved a more moderate increase than last year.

The adjustment to the national minimum wage and modern award wages was an increase of 1.75%.

A summary of the key increases to the national minimum wage is as follows:

  • The national minimum wage rate and modern award minimum wage will increase by 1.75%.
  • The national minimum weekly wage will be $753.80, an increase of $13 per week.
  • The national minimum hourly rate will be $19.84, an increase of 35 cents per hour.

Employer groups, led by the ACCI, also pushed for a general deferral of any increase granted as an outcome of the minimum wage review.

The FWC was not satisfied that there were ‘exceptional circumstances’ as required by the statutory framework, to justify the deferral of the adjustment to the national minimum wage.

The adjustment to the national minimum wage, which involves an increase of 1.75%, will take effect from 1 July 2020.

An alternative approach was taken to the adjustment to minimum modern award wages where there were ‘exceptional circumstances’ that justified different operative dates for different groups because of the differential impact of COVID-19 on particular industry sectors as follows:

  • Group 1 Awards (such as healthcare workers, teachers and childcare workers)
    Operative date: 1 July 2020.
  • Group 2 Awards (such as construction workers and manufacturing workers)
    Operative date: 1 November 2020.
  • Group 3 Awards (such as accommodation and food services)
    Operative date: 1 February 2021.

A dissenting decision was issued for the first time in 23 years by wage review panel member, Professor Wooden, who found in favour of the ACCI’s position that “award minimum wage rates remain unchanged in 2020-21.”

We have included a link to the list of Group 1 Awards, Group 2 Awards and Group 3 Awards to assist you in determining the start date for the wage increase for your award reliant workers.

Feel free to contact us if you have any questions about the minimum wage review decision which was handed down on Friday.


1. https://www.fairwork.gov.au/about-us/news-and-media-releases/website-news/the-commission-has-announced-a-1-75-increase-to-minimum-wages#when-will-my-award-increase

For more information, please contact:
Ben Duggan

Ben Duggan
Director
p.  +61 8 8124 1881
e.  Email me

This communication provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such. Professional advice should be sought prior to any action being taken in reliance on any of the information. Should you wish to discuss any matter raised in this alert, or what it means for you, your business or your clients' businesses, please feel free to contact us.

Legal Enquiry

Need assistance? Describe the matter and we’ll be in touch asap.

Legal Enquiry Form

News Subscription

Stay up to date. Key legal developments, firm news and events.

Subscribe Now

footer_logo

Level 14, 100 King William Street Adelaide SA 5000

CALL +61 8 8124 1811

Connect with us

© Copyright - DW Fox Tucker Lawyers - Commercial Lawyers Adelaide