Different sectors react to new wage hike

Impact being felt across HR industry

Different sectors react to new wage hike

Australia’s Fair Work Commission (FWC) increased the National Minimum Wage (NMW) by 5.2%, amounting to $40 a week, and the modern award minimum wage by 4.6%, subject to a minimum increase of $40 per week.

Wage Increase

Based on the Annual Wage Review 2021-22, from 1 July 2022, the NMW will be at $812.60 per week or $21.38 per hour. The said wage applies to employees not covered by an award or registered agreement that outlines the minimum pay rates and conditions of employment. 

Meanwhile, under the award minimum wage increase, the FWC said that modern award minimum wage rates above $869.60 per week would receive a 4.6% adjustment, while rates below $869.60 per week would get a $40 increase.

Delay in the operational changes

The FWC said specific awards would only be effective from 1 October 2022. “The Panel was satisfied that exceptional circumstances exist such as to warrant a delayed operative date for modern awards in the aviation, tourism and hospitality sectors,” the commission said.

The affected awards are:

Aviation

  • Aircraft Cabin Crew Award 2020
  • Airline Operations – Ground Staff Award 2020
  • Air Pilots Award 2020
  • Airport Employees Award 2020
  • Airservices Australia Enterprise Award 2016

Hospitality

  • Hospitality Industry (General) Award 2020
  • Registered and Licensed Clubs Award 2020
  • Restaurant Industry Award 2020

Tourism

  • Marine Tourism and Charter Vessels Award 2020
  • Alpine Resorts Award 2020

Inflation and wage increase

In 2021, the FWC said the Consumer Price Index (CPI) and the trimmed mean measure of inflation stood at 1.1%. However, CPI and underlying inflation rates rose this year at 5.5% and 3.7%, respectively.

The FWC said the rise in inflation affected both businesses and workers, especially low-paid workers, because inflation weakened the value of workers’ wages and reduced their standard of living.

“The Panel accepted the need for moderation in order to constrain the inflationary pressures arising from our decision,” the FWC said during the Annual Review 2021-22. “That said, the Panel noted that it was conscious that the low paid are particularly vulnerable in the context of rising inflation.”

Proposals of the different sectors

Before the Annual Wage Review 2021-22, the Australian Catholic Council for Employment Relations (ACCER) proposed a 6.5% increase to the NMW, while the Australian Council of Trade Unions (ACTU) recommended a 5% increase.

However, the FWC did not heed the call of these sectors because the Panel said, “in the present economic circumstances, [these proposals] would pose a real risk of significant adverse effects to the national economy.”

Following FWC’s decision, ACTU secretary Sally McManus said that the union movement had fought hard for the wage increase.

“Our country needs to take a fresh look at this problem and address it. It is not acceptable that working Australians and their families continue to go backward while big business does so well,” she said in ACTU’s media release.

While the FWC’s decision was welcomed by the chair of Catholic Social Services Australia, Francis Sullivan, he said it would still be hard for low-income workers to make ends meet.

“Many of the working poor in Australia have barely enough to pay their rent and put food on the table,” Sullivan said in the organization’s media release. “And with runaway inflation and cost of living increases, this is only getting worse.”

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