The Fair Work Commission (FWC) undertakes the National Wage Case each year to determine if, and to what level the minimum wage should be increased. Today the FWC handed down the decision (Full decision: https://www.fwc.gov.au/documents/wage-reviews/2021-22/decisions/2022-fwcfb-3500-decision.pdf , Summary of Decision: https://www.fwc.gov.au/documents/wage-reviews/2021-22/decisions/2022-fwc-3501-summary.pdf ) that the minimum wage will be increased by from the first pay period on or after the 1st July 2022. This will have an impact on the base rate in all Modern Awards.
The decision will have a flow on effect to all of the Modern Awards and will result in increases in the base rates that are applicable in all Awards. In the coming weeks the FWC will release draft and then final determinations for each of the Awards.
“What is clear now is that for the first time there will be a difference between the National Wage Case increase and the increase that will flow through to the Awards” explains ACAPMAs Elisha Radwanowski.
“In cases where the Award rate in 2021/2022 is MORE than $869.90 the increase that will be applied from 1st July 2022 is 4.6%, but for those below the $869.90 level the increase will be 5.2%” adds Elisha.
“Practically speaking the impact on the Fuel Industry is that; a fuel tanker driver, TWG 8, would see their wage increase by 4.6%, fuel admin staff, who are at or above Level 2, would see their wage increase by 4.6% while fuel retail staff will see their wage increase by 5.2%, though casual rates will, as usual be set outside of this standard and will be finalised by the Determinations” continued Elisha.
“The draft and then final Determinations will add clarity on these matters and ACAPMA will circulate as soon as they are published” concluded Elisha.
National Wage Case
The National Wage Case decision that has been handed down resulted in the minimum wage increasing 5.2%, to $ 812.60 a week or $ 21.38 per hour.
In handing down this decision the Commission acknowledged the rising cost of living as well as the low unemployment rate and noted that as the RBA noted in May 2022; “the outlook for inflation is also materially higher than envisaged three months ago. Headline inflation is now expected to peak at around 6 per cent in the second half of this year, partly driven by higher petrol prices and sharp increases in the cost of new dwellings. Trimmed mean inflation is expected to peak around 4.5 per cent” and that this rise is impacting both businesses and employees.
The Fair Work Commission also noted that the increase in non discretionary items is a concern and is impacting the lowest paid the most.
In handing down the decision the Commission acknowledged that the impact of the increase of superannuation to 10.5% of salary has been taken into account.
The Awards for fuel wholesale, transport, retail and administration will have new rates effective the first full pay period on or after 1 July 2022.
This has a clear flow-on effect to the wage rates in all Modern Awards and thus requires all employers to review their employment instruments before the new rates come into effect.
Each year, the FWC reviews the cost of living, economy-wide productivity indicators and the general health of the Australian economy to determine if the minimum wage rates set in the Awards are commensurate with a living wage. While not all National Wage Cases result in an increase in the minimum wage, most do.
The 5.2% increase for the 2022/2023 year is lower than the 5.5% increase sought by employee groups, but represents a significant increase on the 2.5-3.0% , sought by employer groups.
|Year||Minimum Wage per hour||% increase on previous year|
|2009||$14.31||0.00% – No change|
The Determinations that will actually vary the rates in the Awards, will be released later this week and should be finalized late next week.
ACAPMA Employment Quick Reference Guides
It is important for business operators to remember that the National Wage Case sets the Minimum Wage, but that the rates that must be provided to those working in the downstream petroleum industry will be changed by the FWC making formal amendments to the Awards, and that these changes are not always a simple increase by the standard percentage, especially for casuals in the retail sector. So while we know today the new National Minimum Wage, we will have to wait for the final Determinations to vary the Awards before we have the final rates that will apply for 2022/2023 financial year.
ACAPMA is eagerly anticipating the release of the draft and then final Determinations from the FWC, which are typically released around the third week of June. These Determinations will translate this minimum wage decision into changes to the Modern Awards. ACAPMA is ready to prepare and circulate the ACAPMA Quick Reference Guides to ACAPMA Members.
ACAPMA’s employment department produces Quick Reference Guides each year, to summarise key Award requirements, including finalised rates for:
- The Road Transport and Distribution Award 2020 for fuel tanker drivers,
- The Vehicle Repair Services and Retail Award 2020 for console operators, roadhouse and driveway attendants, and
- The Clerks Private Sector Award 2020 for clerical staff.
All employment instruments effected
While the National Wage Case directly changes the wage rates in the Modern Awards there is also a flow on effect to all employment instruments.
Employers who use direct contracts, enterprise agreements, individual flexibility agreements or racked rates must take the time to review the wage rates contained within those instruments as the National Employment Standards, which apply to all employees, provide for the Modern Award rates to be the basis for all wage rates, regardless of instrument.
All employers need to review the base rates in their instruments to ensure they are equal to, or above the levels set in, the Modern Awards after the National Wage Case increase.
Register now so you don’t miss out
The ACAPMA Quick Reference Guides will be sent to the Principle members upon their release; however, all members are encouraged to have the responsible persons in their business, such as payroll or workplace relations managers, register to receive these Guides on their release, to ensure they receive the information in a timely fashion.
To register to receive the ACAPMA Quick Reference Guides and other key workplace relations information please email firstname.lastname@example.org to add key staff to the Employment distribution list.
Elisha Radwanowski BCom(HRM&IR)