Industrial News: July 2010

Annual Wage Review 2010

Employees on award wages are set to receive their first wage increase in almost two years. The Decision1 providing a $26 per week increase is the first made by Fair Work Australia’s Minimum Wage Panel under the new industrial system established by the Fair Work Act 2009. All weekly minimum wages in the Modern Awards will increase by this amount effective from the first full pay period on or after 1 July 2010.

For the estimated 1.4 million workers affected, the increase restores some fairness to the argument about what is considered a reasonable safety net in relation to minimum wages. Under Work Choices, the so-called Fair Pay Commission was responsible for determining minimum wage increases under guidelines that gave priority to promoting national economic prosperity. Last year, this system delivered a wage freeze instead of an increase, leaving low paid workers high and dry.

The Fair Work legislation sets out new guidelines, requiring the panel to establish and maintain a safety net of fair minimum wages taking into account a number of economic factors but also giving consideration to the relative living standards and needs of low paid workers and promoting “social inclusion” through increasing the level of workforce participation.

The $26 per week increase is just under the $27 increase sought by the ACTU and more than double the figure put forward by the major employer groups. On consideration of the evidence put before it, the panel came to the conclusion that a “significant increase in minimum wages is warranted,” taking into account a range of matters including economic and productivity growth; inflation and wages growth and an increase in employment and hours worked over the relevant period.

In summary, the decision points to the better than expected performance of the economy since March 2008 and the fact that over that time “productivity, prices and real earnings have grown but minimum wages have not.” It goes on to state that an increase in minimum wages is necessary to “provide a fair and relevant safety net, protect the relative living standards of award-reliant employees and assist the low paid to meet their needs”.

Rates of pay in modern awards will be varied and published by Fair Work Australia. While the vast majority of nurses have their wages and conditions determined by a collective agreement, there are still some nurses and midwives who are covered by the Nurses Award and who will be affected positively by this decision.

The increase also brings the national minimum wage to $569.90 per week or $15 per hour.

Debbie Richards
ANF Federal Industrial Officer

1. Annual Wage Review 2010 FWAFB 4000