Last Friday, 19 June 2020, the Fair Work Commission released its much-anticipated Annual Wage Review for 2020-2021.
In the first split annual wage review decision since 1997, the Commission acknowledged the current global pandemic and resulting economic downturn and recession caused by both the pandemic and the corresponding measures intended to prevent its spread.
The Commission has declared that the National Minimum Wage and modern award minimum rates of pay will increase by 1.75%, considering that no rate increase would lead to a decrease in living standards for low-paid award-reliant employees.
The increase to the National Minimum Wage will take effect from 1 July 2020, however the Commission considered that the current economic situation warranted a 3-stage approach with respect to increases to award rates.
First tranche – 1 July 2020 (Group 1)
Certain awards will be subject to rate increases from 1 July 2020. The awards in Group 1 cover industries which the Commission considered were less affected by the pandemic, including frontline health services, education, childcare and other essential services such as funeral, cleaning and banking.
A complete list of modern awards in Group 1 is available here.
Second tranche – 1 November 2020 (Group 2)
Certain awards will be subject to rate increases from 1 November 2020. The awards in Group 2 cover industries which the Commission considered were adversely affected by the pandemic (but not to the same extent as Group 3 industries) including construction, manufacturing and professional services.
Approximately 40% of modern awards fall within Group 2. A complete list of modern awards in Group 2 is available here.
Third tranche – 1 February 2021 (Group 3)
The remainder of awards will be subject to rate increases from 1 February 2021. The Commission considered that these awards cover the most significantly affected industries, including accommodation, food services, tourism, retail, arts and recreation.
A complete list of modern awards in Group 3 is available here.
For further advice on how these changes will affect your business or your employees, please contact our specialist workplace law team.
This article provides general comments only. It does not purport to be legal advice. Before acting on the basis of any material contained in this article, we recommend that you seek professional advice.
Paul Dugan, Principal in our Disputes Team
Direct Telephone: +61 8 8210 2266
Kylie Dunn, Senior Associate in our Disputes Team
Direct Telephone: +61 8 8210 2286
The authors would like to thank Lachlan Chuong for his assistance in preparing this article.