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FWC hands down highly anticipated minimum wage decision

Shawn Skyring Liam Zisis ||

An expert panel of the Fair Work Commission (FWC) has handed down its decision in its annual minimum wage review for 2021-22.

In a highly anticipated decision, the FWC has approved a series of increases in respect of the National Minimum Wage (NMW) and modern award minimum wages. In summary, the decision of the FWC is as follows:

  1. The NMW will increase by 5.2 per cent, meaning the new NMW will be equal to $812.60 per week or $21.38 per hour, to commence from 1 July 2022; and
  2. Modern award minimum wages will increase by no less than 4.6 per cent, with modern award rates below $869.60 per week attracting an increase of $40 per week and modern award rates above $869.60 per week attracting an increase of 4.6 per cent, to commence from 1 July 2022.

An exception to the 1 July 2022 commencement date for the increase in modern award minimum wages applies to the following modern awards:

  • Aircraft Cabin Crew Award 2020
  • Airline Operations – Ground Staff Award 2020
  • Air Pilots Award 2020
  • Airport Employees Award 2020
  • Airservices Australia Enterprise Award 2016
  • Alpine Resorts Award 2020
  • Hospitality Industry (General) Award 2020
  • Marine Tourism and Charter Vessels Award 2020
  • Registered and Licensed Clubs Award 2020
  • Restaurant Industry Award 2020

The FWC has decided that the minimum wage increases in respect of the modern awards listed above will commence from 1 October 2022.

The FWC was satisfied that exceptional circumstances existed to delay the commencement date for increased wages in the above modern awards, considering labour market outcomes and business performance indicators in those relevant industry sectors. Ultimately, the FWC held that businesses falling under the modern awards listed above which exist within the hospitality sector as well as the aviation and tourism sector are still impacted by the effects of the COVID-19 pandemic, and therefore exceptional circumstances exist in respect of those modern awards.

However, the FWC was not satisfied that there are exceptional circumstances justifying a delay in the commencement date for the increased NMW or wages in the remaining modern awards.

During the submissions period in respect of the 2021-22 annual minimum wage review, the incumbent Labor Government submitted that an increase in minimum wages by 5.1 per cent was appropriate, and the Australian Council of Trade Unions (ACTU) submitted that an increase in minimum wages by 5.5 per cent was appropriate. In contrast, the Australian Chamber of Commerce and Industry, Australian Industry Group and other employer bodies submitted that an increase in minimum wages should be limited between 2.5 and 3 per cent.

The impending increases in minimum wages are higher than the 1.75 and 2.5 per cent increases that were decided by the FWC in its 2019-20 and 2020-21 annual minimum wage reviews respectively, seemingly in the context of rising inflation in the Australian economy.

If you would like advice on the above, please do not hesitate to contact us.

Annual Wage Review 2021-22 [2022] FWCFB 3500

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