On Friday 19 June 2020, the Fair Work Commission’s Expert Panel (Panel) released its decision regarding the Annual Wage Review 2019-20.
The decision was much anticipated, considering the impact of the COVID-19 on Australian businesses and the economic downturn with the road to economic recovery remaining “uncertain”. This crisis followed devastating drought, bushfires and floods experienced by many regions across Australia.
Despite the pressures facing employers, the majority of the Panel argued that if it did not increase wages, some families could be forced into poverty.
In its first split decision since 1997, the Panel has increased all modern award rates of pay by 1.75% in recognition of the economic effects of the coronavirus pandemic, and has set staggered operative dates between July this year and February next year.
FWC president and minimum wage panel head Justice Iain Ross said three operative dates had been chosen based on the impacts of the pandemic on each sector.
The operative dates are as follows:
|Award Group||Operative Date|
|Group 1 Awards – frontline healthcare and social assistance workers, teachers and childcare workers and other essential services||1 July 2020|
|Group 2 Awards – construction, manufacturing and the two main transport awards (see below)||1 November 2020|
|Group 3 Awards – accommodation/food services, arts/recreation, aviation, retail and tourism||1 February 2021|
The federal minimum wage (FMW) will also increase from July 1, with the FMW increasing to $753.80 or $19.84 an hour, an increase of $13.00 per week or 35 cents per hour.
Interestingly, the new panel member Professor Mark Wooden delivered a minority decision favouring a wage freeze.
The 1.75% increase is lower than the latest consumer price inflation figure of 2.2%.
Specific road transport related awards
Group 2 (first full pay period on or after 1 November 2020)
· Road Transport and Distribution Award 2020
· Road Transport (Long Distance Operations) Award 2020
· Clerks – Private Sector Award 2020
· Transport (Cash in Transit) Award 2020
· Manufacturing and Associated Industries and Occupations Award 2020
Group 3 (first full pay period on or after 1 February 2021)
· Vehicle Repair, Services and Retail Award 2020
What to do
The decision to increase minimum rates of pay, including under modern awards, means that a typical employee in the road transport industry currently reliant on award wages will receive a pay rise from 1 November 2020. Where employees are paid above these rates, employers may consider not passing on the increase. But get advice first.
Employers covered by modern awards or with employees receiving payments based on the NMW will need to review their arrangements to ensure that employees are paid correctly.
From 1 November 2020, employers covered by an enterprise agreement will need to make sure that the base rate of pay under their enterprise agreement is not less than the base rate of pay that would be payable under the relevant modern award.
Our experienced advisors are also here to answer your questions on what this decision means for you. Please reach out to our team on (02) 6295 3000 or email [email protected].