15 Jun HR LAW ALERT: ANNUAL WAGE REVIEW 2021/2022

The Fair Work Commission has today delivered its annual wage review 2021/2022 decision, increasing the National Minimum Wage (“NMW”) by 5.2% from $772.60 per week or $20.33 per hour to $812.60 per week or $21.38 per hour from 1 July 2022.  This is an increase of $40.00 per week or $1.05 per hour to the hourly rate. 

The Fair Work Commission decided to increase Modern Award minimum wages by 4.6% subject to a minimum increase for adult award classifications of $40.00 per week. The $40.00 per week increase is based on a 38-hour week for a full-time employee. In effect, Modern Award minimum wage rates above $869.60 per week will receive a 4.6% adjustment, wage rates below $869.60 per week will be adjusted by $40.00 per week.

In most Modern Awards the effect of the decision will be that the 4.6% increase will cut in around the C10, or trade level, and the flat $40.00 increase will apply to the lower classifications.

The Fair Work Commission advised that the most significant changes since last year’s annual wage review decision have been the sharp rise in the cost of living and the strengthening of the labour market.

When will the increases take effect?

In respect of the timing of these increases, the Fair Work Act 2009 (Cth) provides that unless there are exceptional circumstances, variations made to the NMW and Modern Award minimum wages arising from a wage review are to operate from 1 July in the financial year following the wage review.

The Fair Work Commission considered whether there were any exceptional circumstances that may warrant a delay to the operative dates of the variation determinations.  

The Fair Work Commission was satisfied there were exceptional circumstances to warrant a delay to the operative date for Modern Awards in the aviation, tourism and hospitality sectors.  As such, the variation determinations in the following Modern Awards will operate from 1 October 2022:

• Aircraft Cabin Crew Award 2020
• Airline Operations – Ground Staff Award 2020
• Air Pilots Award 2020
• Airport Employees Award 2020
• Airservices Australia Enterprise Award 2016
• Alpine Resorts Award 2020
• Hospitality Industry (General) Award 2020
• Marine Tourism and Charter Vessels Award 2020
• Registered and Licensed Clubs Award 2020
• Restaurant Industry Award 2020

For the remaining Modern Awards, the Fair Work Commission did not consider there were exceptional circumstances to warrant a delayed operative date, so increases in the remaining Modern Awards will operate from 1 July 2022.

A summary of the decision can be accessed here:

If any of your employees are covered by a Modern Award and you are unsure what Modern Award and/or minimum rate will apply and when, contact the HR Law team for assistance.   We can also assist with reviewing your current contracts of employment and wage rates to see if the increases announced today can be absorbed into your existing pay arrangements.

A reminder for Enterprise Agreement covered employers – if you have an Enterprise Agreement covering any of your employees, the rate increase may also affect you. Specifically, Enterprise Agreement based employees cannot be paid less than the minimum base rate that they would be paid under an applicable Modern Award.  Accordingly, you should conduct a review of the base rates under your Enterprise Agreement and compare this to the rate each employee would receive under the applicable Modern Award when the increase takes effect.  You should also check if the Enterprise Agreement contains an increase mechanism for rates that apply in the new financial year and the effect of the phased increases. The HR Law team can assist you with this process.

The team at HR Law remain committed to assisting employers navigate their legal obligations and the changes and developments in the law. If you have any questions or need assistance, please contact us on 07 3211 3350.