The ACTU wants a $26.45 hourly minimum wage floor to shield three million low-paid workers from mounting inflation
The Australian Council of Trade Unions (ACTU) has opened its case before the Fair Work Commission in Sydney, pressing for a 6% increase to minimum and award wages.
This is an increase from the earlier 5% target after the federal Budget forecast inflation could reach 5% or higher due to ongoing global trade disruptions.
If granted in full, the claim would lift the minimum wage to $26.45 per hour, the equivalent to a weekly wage of $1,004.88, while adding 0.64% to the national payroll.
The commission's determination directly affects the wages of approximately three million workers whose pay is set by modern awards, predominantly those in hospitality, retail, fast food, administration, and the care sector.
According to Australian Bureau of Statistics data cited by the ACTU, real wages are already 4.5% below their March 2021 levels following the post-COVID inflation surge – a position unions argue cannot be allowed to deepen.
"The Fair Work Commission must not allow three million of our lower-paid workers to go backwards and even accept real wage cuts, as would happen if employer groups get their way and are able to limit wages effectively to below inflation," said ACTU secretary Sally McManus.
"Workers on minimum and award wages do not have the chance to save money. That means if inflation overtakes the pay rise the Fair Work Commission awards, as it did in the post-COVID era, they go backwards – then they have got no choice other than to cut back on essentials."
The employer counterargument
Employer groups are seeking a significantly smaller increase, with claims ranging between 3 and 3.9%. The ACTU said the lower end of that range would amount to a real wage cut of around $1,600 a year for an award-reliant worker on $50,000.
The Council of Small Business Organisations Australia has gone further, calling for a five-month wage freeze.
Unions are also opposing an employer argument that the 1% reduction to the lowest personal income tax rate – a cost-of-living measure for workers – should effectively be used to offset any wage rise, reducing the minimum wage by a corresponding amount.
What HR leaders should watch
The Fair Work Commission's ruling, expected within weeks, will set the wages floor for all modern award classifications and will influence bargaining benchmarks across the broader economy. HR executives in award-reliant industries should be modelling payroll scenarios across the 3 to 6% range and reviewing workforce planning assumptions accordingly.
With cost-of-living pressures already affecting employee engagement and retention, the outcome carries implications well beyond direct wage costs.
