Annual Wage Review 2019–20 - [2020] FWCFB 3501

Summary of Decision

Annual Wage Review 2019–20

C2020/1

[2020] FWCFB 3501

1. Introduction

[1] The Fair Work Act 2009 (Cth) (Act) requires the Commission, constituted by an Expert Panel for annual wage reviews (Panel), to conduct and complete a review of the national minimum wage (NMW) and modern award minimum wages in each financial year (the Review). The Panel must make a NMW order and may set, vary or revoke modern award minimum wages. The NMW order applies to award/agreement free employees 1 and modern award minimum wages are the minimum wages contained in modern awards.2

[2] This Review is being undertaken during a global pandemic. The outbreak of the coronavirus, COVID-19, and the measures put in place to contain the spread of the virus have led to significant shifts in the way work and society is conducted, with substantial economic consequences. Variations have been made to the Review timetable to allow parties to provide submissions regarding the impacts of the pandemic as they have unfolded and to comment on the most recent available data. Final public consultations took place on 10 June 2020.

[3] The Panel received submissions from the Australian Government, several state governments, bodies that represent the interests of employees and employers, other entities and individuals. These proposals are set out in Appendix 2. The proposals in respect of the adjustment of the modern award minimum wages were sharply polarized.

[4] The ACTU proposed a uniform increase of 4 per cent to the NMW and modern award minimum wages. 3 The Victorian State Government proposed an increase of at least 3 per cent to the NMW and a ‘fair and reasonable increase’ to modern award minimum wages. Other parties also proposed increases, of varying amounts.

[5] The Australian Chamber of Commerce and Industry (ACCI), 4 Australian Industry Group (Ai Group),5 National Retail Association (NRA),6 National Farmers Federation (NFF),7 Restaurant and Catering Industry Association (R&CA)8 and Australian Retailers Association (ARA)9 proposed that there be no increase to the NMW and modern award minimum wages.

[6] The Australian Government and most state governments did not propose a specific quantum increase to the NMW and modern award minimum wages.

[7] The Australian Government urged the Panel to take a cautious approach in light of the continuously emerging and wide-ranging potential impacts of the COVID-19 pandemic and to prioritise keeping Australians in jobs and maintaining the viability of businesses. 10

[8] A key contextual consideration in relation to the present proceedings is the statutory constraints regarding the conduct of Reviews. In particular, section 285(1) provides that the Panel ‘must conduct and complete an annual wage review in each financial year’ (emphasis added). It follows that 30 June 2020 provides the outer limit for the completion of the 2019–20 Review.

[9] As a practical matter the decision had to be published by 19 June 2020, in order to allow sufficient time for draft variation determinations to be published and for interested parties to submit corrections or other amendments to the draft…

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: [2020] FWCFB 3501
Decision Date: 23 June 2020

CaseChat Overview and Summary

The case involved a panel of the Fair Work Commission conducting the Annual Wage Review for 2019–20. The panel was required to determine an adjustment to the national minimum wage and modern award minimum wages. The legal issues were whether there should be an adjustment at all, and if so, what the quantum of the adjustment should be and when it should come into effect. The majority of the panel, consisting of Justice Ross, Vice President Catanzariti, Deputy President Asbury, Commissioner Hampton, Mr Ferguson, and Ms Labine-Romain, decided that there should be an adjustment. They concluded that an increase was warranted to maintain the real value of the wages of minimum wage employees. The majority awarded an increase of 1.75 per cent, which was substantially lower than the increase awarded the previous year due to the marked change in the economic environment. In terms of timing, the majority decided on different operative dates for different groups of modern awards. Group 1 awards, which covered industries and sectors less affected by the pandemic, would come into operation on 1 July 2020. Group 2 awards, which covered industry sectors adversely impacted by the pandemic, would come into operation on 1 November 2020. Group 3 awards, which covered industry sectors most adversely affected by the pandemic, would come into operation on 1 February 2021. Professor Wooden, in dissent, recommended that award minimum wage rates remain unchanged in 2020–21. The majority's approach was to adopt a cautious approach to both the quantum and timing of the adjustment, taking into account the prevailing economic circumstances and the uncertainty surrounding the pathway out of recession. They considered the statutory considerations, economic conditions, and the impact of the COVID-19 pandemic on different sectors of the economy. The majority concluded that the increases and operative dates they had determined were justified, consistent with the statutory framework, and struck an appropriate balance between the interests of employers and employees.

Orders