Australian Minimum Wages to Rise by 3.3%

New Order or Decree

On June 6, 2017, the Australian Fair Work Commission’s minimum wage panel increased the modern award minimum wages by 3.3%. The decision also lifts the Australian federal weekly full-time minimum wage from $17.70 per hour ($672.70 per week) to $18.29 per hour ($694.90 per week). The increase to minimum wages will take effect from the first full pay period that starts on or after Saturday, July 1, 2017. All employers of Australian staff must review compensation currently paid to ensure that employees’ base rates of pay meet or exceed the new minimum rates of pay.

Abolition and Replacement of the 457 Visa and Other Changes

New Order or Decree

On April 18, 2017, the Prime Minister of Australia announced the abolition of the Temporary Work (Skilled) visa (457 visa) and its replacement, the new Temporary Skill Shortage (TSS) visa. Effective April 19, 2017, the occupation lists underpinning the 457 visa were significantly condensed from 651 to 435 occupations, with 216 occupations removed and access to 59 other occupations restricted. Effective July 1, 2017, the occupations lists will be revised every six months and criminal history clearance certificates and English language competency will become mandatory. The TSS visa will be fully implemented in March 2018, comprised of a Short-Term stream of up to two years, and a Medium-Term stream of up to four years. Employers should consider their 457 visa holders’ eligibility to qualify for the new TSS visa, as well as eligibility for a permanent migration pathway, given these changes affect both temporary and permanent visa pathways.

“Customary Turnover of Labor” Rule Invalidates Redundancy Claim

Precedential Decision by Judiciary or Regulatory Agency

A major facilities and labor hire employer has avoided paying an 11-week redundancy to a manager it dismissed, the Full Bench of the WA Industrial Relations Commission finding that the split qualified as an instance of "ordinary and customary turnover of labour," which is an exception in s119(2) of the Fair Work Act. The decision overturns an earlier ruling of the Commission that the manager had a contractual entitlement to a redundancy payment, given the reference to the employer’s retrenchment policy in the manager’s contract. The Commission confirmed that the redundancy provisions of the Act must be read and applied as a whole, notwithstanding the capacity for parties to agree to ancillary and supplementary entitlements that do not disadvantage the employee. Spotless Group v. Dennis Buckle [2017] WAIRC 323 (9 June 2017).

Proposed Law Seeks to Impose Liability on Companies and Franchisors

Proposed Bill or Initiative

The Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017 proposes significant expansion to the accessorial liability provisions of the Fair Work Act 2009, to impose liability on companies and franchisors for the unlawful actions of their corporate subsidiaries and franchisees. The key aspects of the Bill include (1) exposing a “responsible franchisor” or holding company for breaches by the franchisee/subsidiary, where the ‘parent’ has a significant degree of influence or control over the affairs; (2) substantially increasing the maximum penalties for serious civil remedy contraventions from 60 to 600 penalty units (i.e., $108,000 – indexed annually); and (3) increasing the Fair Work Ombudsman’s powers to require persons to provide information. The Bill is expected to pass the Senate in August 2017 and become law. As a matter of priority, all businesses should ensure that their Australian counterparts (or franchises) have compliant employment management systems and practices in place.