National Wage Case Decision

On 19 June, the Fair Work Commission (FWC) minimum wage panel announced the 2020 annual wage review decision under the Fair Work Act 2009.  The FWC has once again decided to apply a percentage increase to minimum rates of pay.

The decision increases the national minimum wage by 1.75% from $740.80 per week to $753.80 per week, or $19.84 per hour, based on a 38 hour week.  This constitutes an increase of $13.00 per week to the minimum weekly rate or 35 cents per hour to the minimum hourly rate. Minimum rates in modern awards will also be increased by 1.75%, although the timing of the adjustment will vary depending on the modern award, with all awards included in one of three groups.

The FWC had decided, however, to apply the same increase to all modern awards, but from three different operative dates.

The effective dates of the increases for each of the Groups are:

Group 1 Awards: 1 July 2020

Group 2 Awards: 1 November 2020

Group 3 Awards: 1 February 2021

The main Awards affecting our Members are as follows:

Group 2: 

Timber Industry Award

Clerks Private Sector Award

Manufacturing and Associated Industries and Occupations Award

Road Transport & Distribution

Road Transport (Long Distance Operations)

Joinery & Building Trades

Therefore, employees covered by these awards are not due to receive a wage increase until 1 November 2020.   

What are the key points?

• The national minimum wage (NMW), based on the C14 classification in the Manufacturing and Associated Industries and Occupations Award 2010, will be adjusted to $753.80 per week, or $19.84 per hour. The NMW is applicable to adult award/agreement free employees and is operative from the first full pay period on or after 1 July 2020.
• Minimum wage rates in modern awards will be increased by 1.75 % with weekly rates rounded to the nearest 10 cents, with proportionate increases in hourly rates of pay and annual salaries. The operative date for this increase varies depending on the award group.
• The 3 award groups were assessed differently by the FWC as follows:
  • Group 1 Awards: Operative date 1 July 2020
  • Group 2 Awards: Operative 1 November 2020
  • Group 3 Awards: Operative 1 February 2021

Modern award minimum wages for juniors and training employees

• Under most modern awards junior employees receive a percentage of a relevant award rate of pay. As a consequence, these employees will also receive a proportion of the increase in minimum rates.
• Employees to whom a training arrangement applies and who are covered by the National Training Wage Schedule (NTWS) within a modern award will have their rates adjusted by 75%.

Award/agreement free juniors and trainees

• Minimum wages for juniors who are award/agreement free are to be based on the junior wage percentages in the Miscellaneous Award 2010 applied to the national minimum wage.
• For trainees who are award/agreement free, the NTWS in the Miscellaneous Award 2010 as adjusted will apply for these employees. The apprentice provisions in that award and the provisions of the NTWS will be incorporated into the national minimum wage order. The order will also provide that adult apprentices should not receive less than the national minimum wage.

Employees with a disability

The national minimum wage order will contain two special national minimum wages for award/agreement free employees with a disability:

• For employees with a disability whose productivity is not affected, a minimum wage of $753.80 per week or $19.84 per hour based on a 38-hour week.
• Employees whose productivity is affected will be paid in accordance with an assessment under the supported wage system, subject to the minimum payment fixed under the Supported Wage System Schedule (SWSS). The FWC will announce the minimum weekly payment under the SWSS when the national minimum wage order is made.

Transitional instruments

The FWC has decided the rates in transitional instruments remaining in operation will be varied by 1.75%.

Allowances

• In the modern award system, work related allowances are linked to a percentage of the standard rate as defined in the modern award. Accordingly, the increase to wage rates (including the standard rate in the award) will flow on to work related allowances.
• Modern awards provide that an increase to expense related allowances must be considered at the time of an adjustment to the standard rate in the award. To determine the extent of any increase, the relevant adjustment factor is the percentage movement in the applicable index figure most recently published by the Australian Bureau of Statistics since the allowance was last adjusted. For most expense related allowances, the relevant adjustment period will be from 31 March 2019 to 31 March 2020. The FWC will publish draft determinations concerning increases to expense related allowances shortly.

Casual loading for award/ agreement free employees

 The national minimum wage order will contain a casual loading of 25 per cent for award/agreement free employees.

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