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What was the outcome of the Annual Wage Review Decision?

Applying to modern awards, enterprise awards and award free employees.
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What was the outcome of the Annual Wage Review Decision?

What was the outcome of the Annual Wage Review Decision?

22 June 2020

By Australian Business Lawyers & Advisors

On 19 June 2020, the Full Bench of the Fair Work Commission (‘FWC’) handed down its annual wage review decision. The decision applies to all employees covered by modern awards, enterprise awards, as well as award free employees.






SUMMARY OF DECISION

  • Minimum wages in modern awards will be increased by 1.75% from the start of the first full pay period on or after (ffppooa) 1 July 2020 for Group 1 Awards.
  • Minimum wages in modern awards will be increased by 1.75% from the start of the first full pay period on or after (ffppooa) 1 November 2020 for Group 2 Awards.
  • Minimum wages in modern awards will be increased by 1.75% from the start of the first full pay period on or after (ffppooa) 1 February 2021 for Group 3 Awards.
  • This increase can be absorbed into existing over award payments, as per the absorption clause in the applicable modern award.
  • The 1.75% increase will also apply to the national minimum wage, increasing it by $13 to $753.80 per week, or $19.84 per hour from the start of the first full pay period on or after (ffppooa) 1 July 2020
  • The national minimum wages for juniors, employees under training arrangements, and employees with a disability have also been increased by 1.75% in accordance with whether their award falls within Group 1, 2 or 3.
 

KEY FEATURES OF THE DECISION

Award covered employees

Adult minimum wages

The minimum rates of pay for adult employees covered by a modern award are to be increased by 1.75% from start the ffppooa 1 July 2020, 1 November 2020 or 1 February 2021. Weekly wages will be rounded to the nearest $0.10.


Juniors, apprentices, trainees and piece workers

Most junior and apprentice rates are expressed as a percentage of a nominated adult rate and so the 1.75% increase will also flow through to these employees’ wages.
 
National Training Wages for trainees will also be increased by 1.75% from the start of the ffppooa 1 November 2020.
 
Piece rates will increase in accordance with the relevant provisions in the modern award.


Employees with a disability

Most modern awards contain a supported wage system for employees with a disability. These employees are paid a percentage of the relevant adult wage, based on their assessed capacity. As a result, the 1.75% increase will also flow through to these employees. There is a minimum weekly payment (currently $87) which will also be increased. The new minimum weekly payment was not determined today but is expected to be announced before 1 July 2020. Members will be advised when further information is available.


Award/agreement free employees

Adult minimum wages

Award/agreement free adult employees are covered by the national minimum wage. This will be increased by $13 to $753.80 per week (or $19.84 per hour) from the start of the  ffppooa 1 July 2020.
 
Casual award/agreement free employees are also covered by a default casual loading which remains at 25%.


Special national minimum wages for award/agreement free junior employees

Previous wage reviews have established a special minimum wage for award/agreement free junior employees. These employees receive a percentage of the national minimum wage determined by the junior wage scale in the Miscellaneous Award 2020.
 
This provision will continue to apply to relevant employees and their minimum wages will increase accordingly from 1 November 2020.


Special national minimum wages for award/agreement free employees to whom training arrangements apply

Previous wage reviews have established a special minimum wage for award/agreement free trainees and apprentices.
 
Award/agreement free apprentices receive a percentage of the national minimum wage determined by the apprentice scale in the Miscellaneous Award 2020. Award/agreement free adult apprentices must not receive less that the full national minimum wage for adults.
 
Award/agreement free trainees must be paid in accordance with the National Training Wage, as found in Schedule E of the Miscellaneous Award 2020.
 
These provisions will continue to apply to relevant employees and minimum wages will increase accordingly.


Special national minimum wages for award/agreement free employees with a disability

The minimum rate of pay for award/agreement free employees with a disability that does not affect their work has also been increased by 1.75%. The adult minimum wage for these employees will rise to $13 per week, with juniors paid a percentage of this based on the scale in the Miscellaneous Award 2020.
 
Award/agreement free employees with a disability that affects their work are paid a percentage of this amount, based on their assessed productive capacity. There is a minimum weekly payment for these employees (currently $87) which will also be increased. The new minimum weekly payment was not determined today but is expected to be announced before 1 July 2020. Members will be advised when further information is available.

View the summary of the decision

View the full decision


FURTHER INFORMATION

Members who are subscribed to ‘2010’ Modern Awards online will receive updates on changes to existing pay and allowance summaries outlining the impact of the wage review on the awards that apply to their business. These will be made available in due course. It should be noted that the new ‘2020’ Modern Awards have summaries of pay rates and allowances in the Schedules contained within the awards.
 
You can view which Modern Awards are included in Groups 1, 2 and 3 from page 14 of the Decision Summary, which you can access by clicking above.

Please call the Workplace Assured Advice Line on 1300 579 162 if you require further information.
 

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