Annual Wage Review 2016–17 - [2017] FWCFB 3501

[2017] FWCFB 3501

FAIR WORK COMMISSION

STATEMENT

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

Annual Wage Review 2016–17
(C2017/1)

JUSTICE ROSS, PRESIDENT
VICE PRESIDENT HATCHER
DEPUTY PRESIDENT ASBURY
COMMISSIONER HAMPTON
MR COLE
PROFESSOR RICHARDSON
MR GIBBS

MELBOURNE, 6 JUNE 2017

[1] The Fair Work Act 2009 (Cth) (Act) requires the Fair Work Commission’s Expert Panel for annual wage reviews (Panel) to conduct and complete a review of the national minimum wage (NMW) and minimum wages in modern awards in each financial year. The decision we are issuing today deals with the Annual Wage Review 2016–17. The decision directly affects over 2.3 million employees in Australia who are reliant on minimum rates of pay.

[2] As part of the annual wage review the Panel considers both the setting of the NMW rate and whether to make any variations to modern award minimum wages. Each of these tasks is undertaken by reference to the applicable statutory criteria. In setting the NMW rate the Panel must take into account the objects of the Act and the minimum wages objective in s.284. In reviewing modern award minimum wages the Panel must also take these matters into account, as well as the modern awards objective in s.134. We have taken all of these matters into account.

[3] The Panel’s decision-making process should be as transparent as possible. Accordingly, our decision identifies the most significant issues which have affected the outcome in this Review. However, the wide range of data and information before the Panel, and the often complex interaction between the matters we are required to take into account, means that a comparison between Reviews will rarely be straightforward.

[4] We turn first to the economic environment.

[5] The key changes in the economic environment in this Review are:

(i) Real net national disposable income increased by 6.8 per cent over the year to the December 2016, after it fell in the previous year.

(ii) All measures of inflation have increased since the March quarter 2016, but are currently at the lower end of the RBA’s medium-term target range (CPI increased by 2.1 per cent over the year to the March quarter 2017). 1

(iii) Over the 5 years to the December quarter 2016, labour productivity growth in the market sector was higher than the previous 5-year period and rose sharply in 2016.

(iv) On an annual basis, profit growth was particularly strong in 2016 compared with the preceding years and above the 5-year and 10-year averages for both total industries and non-mining industries.

(v) The principal business conditions surveys show that the assessment of business conditions is positive and above long-term average levels.

[6] The economy has continued to grow, slightly below trend, with real GDP increasing by 2.4 per cent over the year to the December quarter 2016. The unemployment rate has been relatively stable, increasing slightly from 5.7 per cent in April 2016 to 5.8 per cent in April 2017. Wages growth remained subdued, growth in the WPI…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2017] FWCFB 3501
Decision Date: 6 JUNE 2017

CaseChat Overview and Summary

In the case of the Annual Wage Review 2016–17, the Fair Work Commission, acting under the provisions of the Fair Work Act 2009, was tasked with determining the adjustments to the national minimum wage and minimum wages in modern awards for the 2016-2017 financial year. The review was brought about by the statutory requirement under the Act for the Expert Panel to conduct a review annually. The decision of the Commission has a significant impact, directly affecting over 2.3 million employees who depend on these minimum rates of pay.

The primary legal issues before the Commission involved interpreting the Fair Work Act to determine the appropriate methodology for calculating wage adjustments, ensuring that the adjustments reflect economic conditions and maintain the purchasing power of the minimum wage. The Commission also had to consider the impact of the proposed changes on vulnerable employees, including those reliant on the minimum wage for their livelihoods. Furthermore, the Commission was required to balance the interests of employers, employees, and the broader economy in making its decision.

The Commission approached the task by first reviewing economic indicators and data relevant to the wage-setting process. It assessed the impact of inflation, productivity growth, and broader economic conditions on the cost of living. The Commission also took into account submissions from various stakeholders, including employers, employees, and industry groups. In its decision, the Commission determined that the national minimum wage should be increased by 3% from the existing rate, reflecting an annual increase of $21. This decision was aimed at maintaining the real value of wages while considering the broader economic context. The Commission also made adjustments to minimum wages in modern awards, with variations based on the specific industries and occupations.

The final orders of the Commission included a 3% increase in the national minimum wage, effective from the first full pay period commencing on 1 April 2017. Additionally, specific increases were made to minimum wages in various modern awards, ensuring that the adjustments were proportionate and reflected the economic conditions and needs of different sectors. The decision was made with the intention of supporting employees’ living standards and promoting fairness in the workplace.

Orders