The Fair Work Commission's Minimum Wage Panel (Panel) handed
down its 2013 wage decision yesterday, ruling that all award rates
of pay will increase by 2.6%, effective from the first wage period
after 1 July 2013. The national minimum weekly wage will increase
by AUD15.80 a week to AUD622.20 which represents an hourly rate
increase of 31 cents an hour to AUD16.37.
The Reasons For the Decision
The Panel says the following matters were taken into account in
reaching its decision:
general economic conditions, which the Panel described as
remaining reasonably strong, particularly in comparison to other
OECD countries, together with the expectation that the economy will
continue to out-perform most of the developed world, even despite
the forecast of a moderation in growth over the next year
the imminent increase to the superannuation guarantee rate by
0.25%,which the Panel categorised as a deferred benefit to
employees, directed at enhancing retirement living standards rather
than current living standards during employment, and as a result,
the increased superannuation rate was not to be basis for reducing
any increase to current award pay rates
relative living standards and the needs of the low paid and
social cohesion. The Panel notes that 16% of employees are entirely
award reliant and that a failure to increase award rates would
contribute to an increased earning inequality and potential lack of
The Panel rejected the submissions by particular industry
sectors that sought to exempt particular industries and/or
employers in particular geographical areas (for example, employers
in areas that suffered the recent natural disasters and that have
received natural disaster relief) from the wage increase on the
basis that these industries and/or geographical locations have
rendered the employers unable to meet the increased wage cost. The
Panel determined there was no compelling reason to exempt or delay
the increase for these groups.
What Should Employers Do?
The new award rates will commence from the first pay period
after 1 July 2013. To ensure they are ready, employers should:
identify those employees that are award based or who are
entitled to allowances or penalty provision calculated on the award
rates and ensure that these payments are increased by 2.6% from the
first pay period after 1 July 2013
review employees whose employment is covered by an award but
who are paid an annualised wage under a common law employment
contract to ensure that the annualised wage rate that incorporates
award allowances still meets and or exceeds the minimum award
entitlements for these employees
if engaging in or about to engage in enterprise agreement
negotiations, consider the impact of the increased award rates on
the ability of the proposed enterprise agreement to meet the better
off overall test.
If employers are unsure about any individual award, entitlement
of employment contract, or the impact of this decision on a
particular enterprise agreement negotiation they should seek
specific advice in advance of the 1 July 2013 commencement
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
K&L Gates has been awarded a 2012 EOWA Employer of Choice
for Women citation acknowledging our commitment to workplace
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Long experience representing many of Australia's leading employers has taught us that in employment litigation the identity of an employee's representative is a major factor in how employee litigation runs.
Australian employees receive certain entitlements (such as annual leave and superannuation) where contractors do not.
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