National Wage Case 2021 and its implications

By Australasian Convenience and Petroleum Marketers Association Executive Manager Employment and Training Elisha Radwanowski.

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.

The FWC handed down the decision:

Full decision: https://www.fwc.gov.au/documents/wage-reviews/2020-21/decisions/2021fwcfb3500.pdf

Summary of decision: https://www.fwc.gov.au/documents/wage-reviews/2020-21/decisions/2021fwcfb3501.htm,

Video of decision:  https://www.youtube.com/watch?v=C6h-jWMDhQA that the minimum wage will be increased by from the first pay period on or after the 1 July 2021. 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.

National Wage Case

The National Wage Case decision that has been handed down resulted in the minimum wage increasing 2.50%, $772.60 a week to $20.33 per hour.

In handing down this decision the Commission acknowledged the impact of Covid-19 and the response measures and argued that this “impacted by the change in the economic impact and outlook and that the economic recovery has exceeded expectations. While the economic outlook is positive it is noted that there is still risk of further destruction.”

In handing down the decision the Commission acknowledged that the impact of the increase of superannuation to 10% of salary has been taken into account, along with the fact that some industries will be facing their second wage increase in a year.

“The scheduled superannuation increase has also been taken into account. While we are satisfied that exceptional circumstances exist to justify a delay to the operative date for some Awards we recognise that for others they will be facing the second wage increase in a year, however this is balanced by the benefit of a delayed wage increase in 2020.”

The Awards for fuel wholesale, transport, retail and administration will have new rates effective the first full pay period on or after 1 July 2021.

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 2.50% increase for the 2021/2022 year is significantly lower than the 3.5% increase sought by employee groups, but represents a significant increase on the 0% (or matched only to CPI), sought by employer groups.

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 2021/2022 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 affected

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 employment@acapma.com.au to add key staff to the Employment distribution list.

Published with permission from ACAPMA.

Source: https://acapmag.com.au/2021/06/national-wage-case-2021-and-its-implications/