Fair Work Commission’s Annual Wage Review Decision 2023-2023

Ai Group played a major role in the Fair Work Commission’s Annual Wage Review Decision 2022-2023, including strongly opposing the ACTU’s proposed 7% wage increase. Ai Group filed four written submissions and appeared before the Fair Work Commission (FWC) Expert Panel at the hearing.

Ai Group proposed a 3.8% minimum wage increase and argued the FWC should take into account the 0.5% increase in the Superannuation Guarantee from 1 July 2023, the cost pressures felt by employers, anaemic profitability and productivity growth across a raft of industries, as well as the increasingly sober forecasts of low levels of economic growth and impending headwinds. We urged the FWC to adopt a cautious approach to adjusting minimum wages, highlighting the risk of disemployment effects and increasing inflation.

On 2 June 2023, the FWC Expert Panel decided:

• Award minimum wages would be increased by 5.75%.
• The National Minimum Wage (NMW) would be increased to $882.80 per week or $23.23 per hour. This reflects the FWC’s decision to align the NMW to the C13 classification level found in modern awards. It was previously aligned to the lower C14 level.
• Junior, apprentice and trainee wage rates were adjusted proportionately.
• Wage related allowances and expense related allowances would be increased in accordance with the usual formulas.

Determinations were issued and the increased rates were operative from the start of the first full pay period on or after 1 July 2023.

Ai Group members can access Compliance Advices which set out the new wage rates and allowances for individual modern awards, which can be accessed via Ai Group’s My Awards webpage.

In its Annual Wage Review Decision 2022-2023, the FWC flagged two key issues for the 2023-2024 Annual Wage Review.

First, it would be taking account of the expanded minimum wages objective to achieve gender equality by ensuring equal remuneration for work of equal or comparable value, eliminating gender-based undervaluation of work and addressing gender pay gaps. The FWC is currently undertaking research to identify occupations and industries in which there is gender pay inequity and potential undervaluation of work and qualifications. This research will underpin its approach in 2023-2024.

Secondly, the FWC noted the reduction in the real value of the NMW and minimum award wage rates since 2019 and that the 2022-2023 increases did not maintain or address this because of the need to take account of employer interests and that of the national economy. If the 2023-2024 and subsequent AWRs take place in lower inflationary environments, the FWC may seek to address this reduction in the NMW and minimum award wage rates through more substantial increases.