Fair Work Commission’s Annual Wage Review 2021-2022

The Fair Work Commission (FWC) has handed down its Annual Wage Review 2021-2022 Decision. Key elements of the Decision include:

• Award minimum wages will be increased by 4.6% subject to a minimum increase of $40 per week. The effect of this is that award rates will increase between 4.6% and 5.2%:
  • award wage rates above $869.60 will receive a 4.6% adjustments and award wages below $896.60 per week will be adjusted by $40 per week; and
  • award rates at the base trade level (C10) and higher will receive a 4.6% increase.
• Award wage increases are operative on different dates for different awards as follows:
  • for most awards, the minimum wage increase is operative from the first full pay period that starts on or after 1 July 2022; and
  • for some (but not all) awards in the aviation, tourism and hospitality industries, the minimum wage increase is operative from the first full pay period that starts on or after 1 October 2022.
• The National Minimum Wage will be increased to $812.60 per week or $21.38 per hour, operative from the first full pay period that starts on or after 1 July 2022.
• Junior, apprentice and trainee wage rates will be adjusted proportionately.
• Wage related allowances and expense related allowances will be increased in accordance with the usual formulas.

Ai Group played a major role in the FWC’s Annual Wage Review 2021-2022, including strongly opposing the ACTU’s proposed 5.5% wage increase.

Ai Group filed four written submissions during the FWC proceedings and appeared before the Expert Panel at the Hearings.

Ai Group proposed a 2.5% minimum wage increase and argued that the FWC should take into account the 0.5% increase in the Superannuation Guarantee (SG) from 1 July, the removal of the $450 threshold for SG eligibility and the increase in the Low and Middle Income Tax Offset which will deliver the equivalent of a 1.3% increase in pre-tax income to an employee on the National Minimum Wage over the coming months.

In our media release, Ai Group expressed the view that the wage increase that the FWC has awarded is too high and risks fuelling inflation and leading to even higher interest rates. The cost increase will be difficult to absorb for businesses that are already struggling to cope with big increases in material and energy costs, interest rate rises, supply chain disruptions and labour shortages.

Over the next few weeks, Ai Group will distribute a Compliance Advice to Members on individual modern awards setting out the new wage rates and allowances once these are determined by the FWC.