[2011] FWA 7288

FAIR WORK AUSTRALIA

STATEMENT

Fair Work Act 2009
s.285—Annual wage reviews to be conducted

Annual Wage Review 2011–12
(C2012/1)

JUSTICE GIUDICE, PRESIDENT

MELBOURNE, 24 OCTOBER 2011

RESEARCH PROGRAM

[1] In its decision in the Annual Wage Review 2010-11, the Minimum Wage Panel (the Panel) referred to the establishment of a research program. The decision included this passage:

“[414] We intend to give consideration to the research program for the Annual Wage Review 2011–12 as soon as practicable. We invite interested parties to lodge research proposals by 31 July 2011. We note that research has already been programmed into the effects of minimum wage increases on gender pay equity. The parameters of that research may require reconsideration in light of our decision in this review. Sometime after 31 July the President will convene a public conference with the Panel to discuss the proposals. The research program will not necessarily be restricted to the parties’ proposals.”

[2] A number of research proposals were filed. A public conference took place with the Panel on 21 September 2011.

[3] Accompanying this statement is a draft research program for the review. Any submissions or suggestions in relation to the draft research program should be received by 4 November 2011. Submissions can be filed electronically at [email protected] or by facsimile to (03) 9655 0401.

PRESIDENT

Printed by authority of the Commonwealth Government Printer

Draft research program—for comment

Background

In the Minimum Wage Panel’s (the Panel) 3 June 2011 decision, the Panel stated:

“[414] We intend to give consideration to the research program for the Annual Wage Review 2011–12 as soon as practicable. We invite interested parties to lodge research proposals by 31 July 2011. We note that research has already been programmed into the effects of minimum wage increases on gender pay equity. The parameters of that research may require reconsideration in light of our decision in this review. Sometime after 31 July the President will convene a public conference with the Panel to discuss the proposals. The research program will not necessarily be restricted to the parties’ proposals.”

The public conference foreshadowed by the Panel was held on 21 September 2011. The Panel received 6 research proposals from the:

The Australian Department of Education, Employment and Workplace Relations (DEEWR)

Australian Council of Trade Unions (ACTU)

Australian Industry Group (Ai Group)

Australian Business Industrial (ABI)

Australian Manufacturing Workers’ Union (AMWU)

Australian Catholic Council for Employment Relations (ACCER)

The Australian Chamber of Commerce and Industry (ACCI) gave comments on the research proposals at the public conference on 21 September 2011.

Research projects currently underway

Research projects currently underway are:

Award-reliance

Minimum wages and their role in the process and incentive to bargain

Minimum wage-reliant small businesses

Extent and composition of award reliance by gender.

Details of these projects are available from the Fair Work Australia website at

Future research

Following consideration of proposals and consultations the following research projects will be initiated to inform future annual wage reviews:

Statistical reporting

Statistical reporting on range of data relevant to annual wage reviews will continue to be published on the Fair Work Australia website and will be updated periodically as revised data becomes available.

Statistical analysis: Job mobility and low paid work

Statistical reporting will be undertaken in relation to transitions of people between non-employment (both unemployed and not in the labour force), low pay employment and high pay employment. The data will be drawn from the Household Income and Labour Dynamics in Australia (HILDA) survey, which is a longitudinal survey conducted each year. A benchmark (or benchmarks) of low pay based on earnings/income will be used.

Statistical analysis: Expenditure patterns of low-paid workers

The expenditure patterns of households with low-paid workers will be investigated, using data from the Australian Bureau of Statistics Household Expenditure Survey (HES) for 2009–10. These will be compared to the expenditure patterns of other types of households, including households with workers on higher pay.

As the method of setting pay for employees is not included in the HES, the HES analysis will use a benchmark (or benchmarks) of low pay based on earnings/income.

Minimum wages and their role in the process and incentive to bargain

Research currently commissioned by Fair Work Australia from the Workplace Research Centre, University of Sydney in relation to the role of minimum wages in the process and incentive to bargain will include an agreement analysis. Fair Work Australia will investigate the extent to which this agreement analysis can address the following issues:

a comparison of award and a sample of agreement rates of pay for similar work;

the extent to which wage relativities within the agreements analysed match wage relativities within modern awards; and

the extent to which modern award classification structures are replicated in agreements analysed (as opposed to agreement specific classifications).

The case study work to be undertaken in the Workplace Research Centre, University of Sydney research will provide analysis of the relationships, if any, between minimum wage adjustment and over award rates of pay (including over award payments and agreement rates of pay).

The elasticity of hours worked with respect to changes in minimum wage rates

The Minimum Wages and Research Branch of Fair Work Australia will investigate the feasibility of research into the elasticity of hours worked in response to changes in minimum wages.

At research consultations on 21 September 2011 no suitable methodology or data source was identified to answer this research question. An open tender process will be considered to determine whether research is feasible.