The Fair Work Commission handed down its Annual Wage Review decision on 19 June and, like many things in 2020, it was not business as usual. For the first time, the expert panel was split with a majority decision that all modern award rates of pay increase by 1.75% in the new financial year. In awarding an increase less than the consumer price inflation figure, the majority:
• took into account the RBA’s “plausible baseline scenario” that growth will turn around in the September quarter;
• accepted that economic considerations favour greater moderation;
• took into account that some low paid award reliant households have disposable incomes less than the 60% of median income poverty line;
• said that no increase would mean a fall in the living standards of low paid award reliant employees;
• considered that gender pay equity favoured an increase;
• took into account the various economic assistance packages that had benefitted low paid households.
This means that the federal weekly minimum full time wage will increase from 1 July 2020 by $13.00 per week to $753.80 ($19.84 per hour) from $740.80 ($19.49 per hour). Modern award rates of pay will increase by this amount or more. However, award increases will take effect on different dates depending on the effects of Covid19 on different award groupings:
• 1 July for modern awards applying to frontline health care and social workers, teachers, childcare workers and other essential services employees;
• 1 November for about 40% of award employees including construction and manufacturing;
• 1 February 2021 for the most economically affected sectors including accommodation, food services, arts, aviation, retail trade and tourism.
A summary of the Commission’s decision can be found at FWC Annual Wage Review 2019-20 Summary of Decision . Employers should check the Fair Work Commission website for pay rate revisions to their particular modern award/s and implementation dates. You can also subscribe to electronic award updates from the Commission. The Fair Work Ombudsman also has online pay checking resources (www.fairwork.gov.au/pay).
Care needs to be taken in relation to annualised wage arrangements given the FWC’s recent tightening of award requirements in this area (see our February 2020 bulletin Are you up to date with award annualised wage changes?).
Also, from 1 July 2020, the unfair dismissal high income threshold (the annual remuneration level, above which award free employees cannot bring unfair dismissal claims) will increase to $153,600 (from $148,700 and excluding superannuation and non guaranteed amounts, eg commission) and the maximum compensation for unfair dismissals will increase to $76,800.00. Please contact us if you would like any further information or help.