On 3 June 2011, FWA’s Minimum Wage Panel handed down its second annual wage decision: see Annual Wage Review 2010–11 [2011] FWAFB 3400. The submissions made to the review had followed the usual lines. Employer groups largely sought lower outcomes than the ACTU. Some governments expressed an opinion on the wage outcome whilst others, including the federal government, provided what has become their standard formula – a parenthood statement about ‘appropriate outcomes’, with no specific figure put.  

In its decision, the Panel granted a 3.4% increase in minimum award wages, including those set by transitional instruments such as enterprise awards. It adjusted the national minimum wage by a similar amount, bringing it to $589.30 per week or $15.51 per hour. The Panel rejected arguments that the increase be deferred for the many businesses recently affected by natural disasters, especially in Queensland. It did so because there was no obvious way of properly identifying those employers, and conversely a significant risk of unfairness if any deferral did not effectively target the group in need.  

The Panel also, for the first time, established minimum rates for awardfree juniors and trainees. In both cases, it opted to apply the special rates set for those types of worker by the Miscellaneous Award 2010. The Panel had originally intended to conduct a broader review in 2010–11 of junior and trainee wage rates in awards as well, but this has been postponed: see Annual Wage Review 2010-11 – Juniors and Trainees [2011] FWA 619. In addition, and as expected, the Panel increased the casual loading for awardfree employees from 21 to 22%. It should eventually rise to 25%, the standard loading required by modern awards, by July 2014.  

The most interesting outcome of the wage review was the departure from the pattern set in recent years of awarding flat rate increases – a move foreshadowed in the Panel’s first minimum wage ruling: see Annual Wage Review 2009–10 (2010) 193 IR 380 at [336]–[338]. In the Statement accompanying its decision, the Panel explained (at [4]):

The nature of increases to award rates in annual reviews over the last twenty years has compressed award relativities in the award classification structures and reduced the gains from skills acquisition. The position of the higher award classifications has also been reducing relative to market rates and to average earnings. Furthermore, while the real value of minimum wages has been maintained at the lower award classification levels, it is clear that the real value of minimum wages above those levels has fallen. On the information available to us at present we accept that many people have their wages set at award rates higher up the scale. We consider that in this review we should decide on an increase which will not further compress award relativities and which will at least maintain the real value of minimum award wages.

The ACTU has signalled that a more concerted effort will be made in the 2012 annual wage review (possibly linked to the first modern award review) for a further readjustment in wage rate relativities. However, the Panel noted (at [308] of its main decision) that there would be a ‘serious argument’ as to the potential unfairness of any claim to restore relativities, after years of lowerpaid workers receiving higher increases through flat-dollar adjustments.