Minimum entitlements for wages and conditions of employment are most often found in enterprise agreements or modern awards. Employers must provide their employees with at least their minimum entitlements.

Some employees are not covered by an award or an enterprise agreement. For these employees, a safety net of minimum wages and conditions is created by the national minimum wage order and the National Employment Standards (NES).

Annual wage review

Reviewing and setting minimum wages has been a key function of Australia’s national workplace relations tribunal since it was first established as a court in the early 1900s.

Under the Fair Work Act, each year the Commission must review the national minimum wage for employees not covered by awards or agreements, and modern award minimum wages.

The Annual Wage Review 2018–19 decision directly affects more than 2.3 million employees who have their wages set by an award, and a significant number of employees paid at junior or apprentice/trainee rates based on the national minimum wage.

Panel

Each year, a seven-member expert panel is constituted to conduct the wage review. The panel comprises:

• the President of the Commission
• three other full-time Members of the Commission
• three part-time Members with knowledge of, or experience in, workplace relations, economics, social policy, business, industry or commerce.

The panel must review minimum wages in modern awards and transitional instruments, as well as the national minimum wage order from the previous annual wage review. In accordance with objectives set out in the Fair Work Act, the panel takes into account specific economic, social and collective bargaining considerations, such as:

• promoting social inclusion through increased workforce participation
• relative living standards and the needs of the low paid
• the principle of equal remuneration for work of equal or comparable value
• various economic considerations.

Decision

On 30 May 2019, the panel issued its decision to:

• award an increase to the national minimum wage of 3 per cent to $740.80 per week, or $19.49 per hour based on a 38-hour week – this is an increase of $21.60 per week or 56 cents per hour
• increase all modern award minimum wages and most transitional instrument wages by 3 per cent.

The panel’s determinations came into operation on 1 July 2019 and took effect from the first full pay period on or after that date.

You can read the decision at [2019] FWCFB 3500 or the summary on our website at www.fwc.gov.au/awards-agreements/minimum-wages-conditions/annual-wage-reviews/annual-wage-review-2018-19/decisions.

Timeliness

The 2018–19 Annual Wage Review decision was issued on 30 May 2019, well before the portfolio budget statements target of 30 June.

Modern awards

Modern awards, together with the NES, provide a minimum safety net of terms and conditions for employees. There are 122 industry and occupational modern awards operating across Australia.

In addition, at 30 June 2019 there were 33 modern awards covering specific enterprises or state public sector bodies that are part of the national workplace relations system.

4 yearly review

With effect from 1 January 2019, the Australian Parliament has repealed those sections of the Fair Work Act that provide for the 4 yearly review of modern awards – see the Fair Work Amendment (Repeal of 4 Yearly Reviews and Other Measures) Act 2018 (Amending Act). Although it will no longer conduct 4 yearly reviews of modern awards, the Commission will complete the review that is currently underway.

Prior to passage of the Amending Act, the Fair Work Act had required the Commission to review all modern awards once every four years. The current 4 yearly review began in February 2014 and is expected to be completed in 2020. The review is focused on the 122 industry and occupational modern awards. The 33 modern enterprise or state reference modern awards will be considered as part of a separate process commencing in 2019–20.

The review’s initial stage considered jurisdictional issues. Having dealt with those matters, the Commission then began to review four groups of individual awards and 17 common issues that apply across multiple awards.

Throughout the review, the Commission has welcomed and encouraged input from those with an interest in how award provisions apply in the workplace.

The review is a significant and complex body of work. During 2018–19, the Commission:

• held 170 hearings, conferences or mentions
• issued 68 decisions and 63 statements
• posted 3,565 documents to its website
• sent 474 emails to subscribers.

Exposure drafts

As part of the 4 yearly review, the Commission develops and publishes exposure drafts for revised versions of each modern award. Exposure drafts are updated and republished as issues are determined.

Exposure drafts for all awards of general application have been produced and published for comment. After extensive consultation with interested parties, the majority of issues relating to exposure drafts in groups 1, 2, 3 and 4 have been finalised.

In 2018–19, a number of Full Benches of the Commission made decisions relating to substantive claims to change entitlements in a number of modern awards. Determinations dealing with substantive claims covered issues such as increases to minimum rates of pay for pharmacists, coverage of employees under the Alpine Resorts Award and hours of work and rostering for health professionals.

Plain language drafting

The plain language redrafting process began in 2015–16, when the Commission conducted a pilot to create a plain language draft of the Pharmacy Industry award, including using a plain language drafting expert and incorporating feedback from industrial parties and users.

Modern awards that have been selected for the plain language drafting process were detailed in the 2017–18 Annual Report. Certain modern awards were selected for the process taking into consideration a number of factors, including industries identified by the Fair Work Ombudsman as having high levels of non-compliance, and high levels of award-reliant small businesses.

In 2018–19, the Commission continued the second tranche of plain language drafting. Processes for the Pharmacy Award, the Clerks Award, the Restaurant Award, the Hospitality Award, the Cleaning Services Award 2010, the Security Services Award 2010, and the General Retail Award have been completed or are nearing completion.

Processes for the Fast Food Industry Award 2010 and the Hair and Beauty Industry Award 2010 will commence in the second half of 2019.

The Commission will apply plain language drafting principles to new award provisions that may arise from common issues and to a number of standard clauses found in all awards in the second half of 2019. The exposure drafts produced during the review will also be restructured in accordance with the plain language guidelines during 2019–20.

Common issues

The Commission has identified 17 common issues across modern awards. They comprise the 13 issues listed in the 2015–16 Annual Report, three issues listed in the 2016–17 Annual Report, and one issue identified in the 2017–18 Annual Report. No additional common issues have been identified in the 2018–19 reporting period.

The majority of common issues have now been heard and determined by various Full Benches of the Commission.

In 2018–19, a number of common issues were finalised, including:

• Casual and part-time employment – A clause relating to casual conversion was inserted into 84 modern awards in October 2018. An issue relating to whether casual employees under the Horticulture Award were entitled to overtime penalty rates was also determined by the Full Bench.
• Family and domestic violence – As outlined in the 2017–18 Annual Report, the new entitlement for five days unpaid leave relating to family and domestic violence was incorporated into 123 modern awards on 1 August 2018. In June 2021, the Full Bench will review the scope of the unpaid leave entitlement and consider whether employees should be able to access paid domestic violence leave.
• Family-friendly working arrangements – This matter was finalised in 2018–19 with the insertion of a provision relating to flexible work arrangements for employees who are parents, carers, 55 years or older or experiencing violence.
• Overtime for casuals – This common issue continued throughout 2018–19, with parties undergoing a submission and report-back process regarding the majority of modern awards.
• Payment of wages – 89 modern awards were varied to include a new clause dealing with payment of wages on termination of employment.

Enterprise instruments

Enterprise instruments are former federal or state awards that covered employees in a single enterprise or a group of related enterprises.

On 31 December 2013, all enterprise instruments terminated unless an application had been made to modernise them.

The Commission received 141 applications to modernise enterprise instruments. Of these, one is outstanding. Finalisation of this matter depends on the outcomes of other matters that are being dealt with as part of the 4 yearly review of modern awards.

State reference public sector transitional awards

State reference public sector transitional awards applied to public sector employees in Victoria and some local government employees in Tasmania. The Fair Work Act requires the Commission to modernise these awards if no application was made to terminate or modernise them by 31 December 2013. There are currently eight state reference public sector modern awards.