On 1 June 2012, Fair Work Australia’s Minimum Wage Panel (MWP) handed down its third annual wage review under the Fair Work Act 2009 (Cth).
The outcome of the Review is that from 1 July 2012:
- Modern award minimum wages will increase by 2.9%.
- The National Minimum Wage will increase to $606.40 per week (up from $589.30 per week) or $15.96 per hour (up from $15.51 per hour).
- The casual loading for all award/agreement free employees will increase to 23%.
The increases to modern award minimum wages will flow through to junior employees, employees to whom training arrangements apply, employees with a disability, and employees who are paid piece rates.
All remaining transitional instruments, including enterprise instruments and division 2B State enterprise awards, will be varied to reflect these changes with certain exceptions.
In coming to its decision, the MWP considered submissions put forward by a wide range of parties – the Australian and State Governments, collective bodies representing employees and employers, other specific groups and private individuals. Also, the MWP undertook an analysis of the state of the Australian economy, concluding that overall economic conditions have been reasonably strong and that the Australian economy is expected to perform well in 2012-13.
In practical terms, the decision of the MWP means that employers who pay their employees at minimum wage rates pursuant to a modern award, the National Minimum Wage or other industrial instrument, will be required to increase their employees’ pay in the first pay period on or after 1 July 2012. Employers who pay their employees above the minimum rates of applicable modern awards or other industrial instruments may be able to absorb the increases without making any changes.