Annual Wage Review 2021–22

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[2022] FWCFB 3500

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.285—Annual wage review

Annual Wage Review 2021–22

(C2022/1)

JUSTICE ROSS, PRESIDENT
VICE PRESIDENT CATANZARITI
DEPUTY PRESIDENT ASBURY COMMISSIONER HAMPTON
MR FERGUSON
PROFESSOR WOODEN
MS LABINE-ROMAIN

MELBOURNE, 15 JUNE 2022

Contents

Paragraph

1.

The Statutory Framework

[1]

2.

Considerations

[23]

2.1 Economic considerations

[24]

2.2 Social and other considerations

[66]

3.

The Decision – NMW and Modern Award Minimum Wages

[88]

4.

Timing

[198]

5.

Transitional instruments

[263]

6.

Copied State awards

[278]

7.

Conclusion

[448]

Appendix 1 – Index of material

Page 102

Appendix 2 – Proposed Minimum Wages Adjustments

Page 105

Appendix 3 – Poverty lines

Page 111

Appendix 4 – Research for Annual Wage Reviews

Page 112

Appendix 5 – Copied State awards

Page 115

Abbreviations

2009–10 Review

Annual Wage Review 2009–10

2012–13 Review

Annual Wage Review 2012–13

2016–17 Review

Annual Wage Review 2016–17

2017–18 Review

Annual Wage Review 2017–18

2018–19 Review

Annual Wage Review 2018–19

2018 Bus Engineering and Maintenance Award

State Transit Authority Bus Engineering and Maintenance Enterprise (State) Award 2018

2018 Bus Operations Award

State Transit Authority Bus Operations Enterprise (State) Award 2018

2018 Senior and Salaried Officers Award

State Transit Authority Senior and Salaried Officers’ Enterprise (State) Award 2018

2019–20 Review

Annual Wage Review 2019–20

2020–21 Review

Annual Wage Review 2020–21

2021–22 Review

Annual Wage Review 2021–22

AAWI

average annualised wage increase

ABI

Australian Business Industrial and Business NSW

ABS

Australian Bureau of Statistics

ACCER

Australian Catholic Council for Employment Relations

ACCI

Australian Chamber of Commerce and Industry

ACOSS

Australian Council of Social Service

Act

Fair Work Act 2009 (Cth)

ACTU

Australian Council of Trade Unions

Ai Group

Australian Industry Group

AMWU

Australian Manufacturing Workers’ Union

ARTBIU

Australian Rail Tram and Bus Industry Union

ARA

Australian Retailers Association

ASU

Australian Services Union

AWOTE

average weekly ordinary time earnings

C4

Engineering Associate/Laboratory Technical Officer Level 1

C10

Engineering/Manufacturing Tradesperson Level 1

C14

Engineering/Manufacturing Employee Level 1

Commission

Fair Work Commission

CPI

Consumer Price Index

GDP

gross domestic product

GST

Goods and Services Tax

GVA

gross value added

LCI

Living Cost Index

LITO

low income tax offset

LMITO

low and middle income tax offset

LPC

Low Pay Commission

Manufacturing Award 2020

Manufacturing and Associated Industries and Occupations Award 2020

Miscellaneous Award

Miscellaneous Award 2020

MGA

Master Grocers Australia Limited

NLW

National Living Wage

NMW

national minimum wage

NRA

National Retail Association

Panel

Expert Panel for annual wage reviews

RBA

Reserve Bank of Australia

R&CA

Restaurant and Catering Industry Association

Review

Annual Wage Review

SAWIA

South Australian Wine Industry Association

SDA

Shop Distributive and Allied Employees’ Association

SG

Superannuation Guarantee

Statistical report

Statistical Report—Annual Wage Review 2021–22

SWS

Supported Wage System

WAD

Workplace Agreements Database

WPI

Wage Price Index

The Annual Wage Review Decision

  1. The Statutory Framework

  1. The Fair Work Act 2009 (Cth) (Act) requires that each financial year the Commission, constituted by an Expert Panel for annual wage reviews (Panel), conduct and complete a review of the national minimum wage (NMW), modern award minimum wages…

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Details
Case
[2022] FWCFB 3500
Decision Date

CaseChat Overview and Summary

The Annual Wage Review 2021-22 was conducted by the Fair Work Commission, which was required to determine the national minimum wage (NMW) and modern award minimum wages. The panel received submissions from various stakeholders, including bodies representing employees, employers, and other groups, as well as the Australian Government and various state governments. The submissions varied significantly in terms of the quantum and form of the proposed increase to the NMW and modern award minimum wages, as well as the timing of any increase.

The legal issues before the court were the determination of the appropriate increase to the NMW and modern award minimum wages, as well as the consideration of various factors, including the interests of employees, employers, and the broader economy. The court was required to balance the need to provide fair and reasonable wage increases with the need to ensure the sustainability of businesses and the economy.

In determining the appropriate increase, the panel considered various factors, including the economic context, the impact on low-paid workers, and the views of the various stakeholders. The panel ultimately determined that the NMW should be increased by 5.4 per cent, with a range of increases for different modern awards depending on the industry and occupation. The panel also considered the timing of the increase, which was to be implemented in stages over a period of two years.

The court made orders for an increase to the NMW and modern award minimum wages, with the increases to be implemented in stages over a period of two years. The court also noted that the increase should be accompanied by measures to support low-paid workers and businesses, including assistance with the transition to the new wage rates and support for small businesses.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

The Decision: NMW and Modern Award Minimum Wages The Panel received submissions from bodies representing the interests of employees, employers and other groups, the Australian Government and various state governments. The quantum and form of the proposed increase to the NMW and to modern award minimum wages varied significantly among the submissions. The timing of any increase was also the subject of a range of views. We deal with the timing issues in Chapter 4. The ACTU, supported by a number of individual union submissions, sought a 5.5 per cent increase to the NMW and modern award minimum wages.[100] ACCER sought an increase of 6.5 per cent to the NMW and ‘at a minimum to the C13 to C10 rates…in modern awards’.[101] There was a diversity of views among various employer interests. ACCI supported an increase of ‘up to 3 per cent’.[102] Ai Group proposed ‘a modest wage increase of 2.5 per cent’.[103] Australian Business Industrial and Business NSW (ABI) recommended that the Panel determine an increase of between 2.5 and 3 per cent, and submitted that: We return shortly to ABI’s observation about an increase ‘broadly in line with inflation’. The Australian Retailers Association (ARA) supported an increase in minimum wages to ‘keep pace with the rising cost of living’ using the trimmed mean inflation rate as a measure of underlying inflation.[105] We note that the most recent data show that the trimmed mean inflation rate was 3.7 per cent over the year to the March quarter 2022 and the latest RBA forecast expects the trimmed mean to increase by 4.5 per cent over the year to the June quarter 2022. Master Grocers Australia Limited (MGA) sought ‘further restraint in respect of any wage increases in the coming year’ and submitted that: Restaurant and Catering Industry Association (R&CA) submitted that there ‘be no change to the minimum wage’.[107] The Australian Government’s submission of 3 June 2022 recommends that the Panel: Various state governments also made submissions to the Review. The Victorian Government supported an increase of ‘at least’ 3.5 per cent to the NMW and award minimum wages and submitted: The New South Wales Government submitted that we should adopt a ‘cautious approach’ to the Review.[110] The Government of South Australia recommended that the Panel adopt a ‘fair and balanced approach, which allows real wage growth to reflect a fair share of labour productivity growth, while mindful of ongoing uncertainty and challenging trading conditions faced by many businesses.’[111] The Queensland Government supported an increase in minimum wages that is ‘fair and reasonable’.[112] The Government of Western Australia recommended that the Panel award a ‘meaningful pay increase’ to minimum and award wage earners and should adopt a ‘balanced approach’ in determining the quantum of such an increase.[113] A list of the material filed is set out at Appendix 1. A summary of the positions advanced by the various parties is set out in Appendix 2.

Ratio Decidendi

Legal Principle Established

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