On 5 July Professor Ian Harper, Chairman of the Australian Fair Pay Commission, announced the outcome of the second minimum wage rate review conducted by the Australian Fair Pay Commission.
The second decision provides for a moderate minimum rate increase to apply from the first full pay period on or after 1 October 2007. This is ten months after the initial decision of the Australian Fair Pay Commission applied from 1 December 2006.
The decision delivers:
- An increase of approximately $10.25 per week ($0.27 per hour) in all adult pay scales that currently provide for a basic periodic rate of pay up to the level of $700.00 per week; and
- An increase of approximately $5.30 per week ($0.14 per hour) in all adult rates of pay that provide a basic periodic rate of pay above $700.00 per week; and
- An increase of $10.26 per week in the federal minimum wage.
Junior employees, employees on training arrangements and employees with disabilities will get wage increases based upon the same proportion and relativities that applied in the previous wage adjustment.
Transitional award rates remain subject to the decisions of the Australian Industrial Relations Commission. Under the Workplace Relations Act 1996, the AIRC cannot make decisions inconsistent with those of the Australian Fair Pay Commission.
Unions have commenced making applications to flow on the AFPC decision to transitional awards with a hearing on the matter scheduled for 23 July in the Australian Industrial Relations Commission.
ARA Members with queries should call ARA Employee Relations on: (03) 9321 5020.
How does the decision stack up to previous increases?
There had been much criticism by employers of the record high increase delivered by the AFPC in the first decision when they awarded an increase of $27.36 per week. The most recent decision of the AFPC in awarding a moderate $10.25 per week provides employees with an overall increase of $37.61 since 1 December 2006 when the first AFPC decision became operative. This compares with an aggregate of $36.00 per week awarded by the Australian Industrial Relations Commission in the two final national wage decisions before the workplace relations reform commencement in 2004 and 2005 and $35.00 in 2002 and 2003.
Australian Fair Pay Commission future decisions to bring greater certainty to employers
At the time of announcing the 5 July wage decision the Australian Fair Pay Commission also announced that future decisions will be handed down in July each year with an implementation date in October that year. This will effectively provide at least 12 months between increases in minimum rate of pay and provide adequate lead time for employers to implement the decision before the operative date. The AFPC has also announced that the AFPC has commenced the process of creating and publishing legally binding Pay Scales so that employers have a clear understanding of their minimum wage obligations, instead of the current Pay Scales summaries available for the top 100 awards only, although it is expected that this process will take some time.
