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Heads up on award wage increases – round 3

When the Fair Work Commission handed down last year’s annual wage review decision it divided awards into 3 groups based on the level of impact that COVID-19 had had on the particular industry. Some had the 1.75% increase applied from 1 July 2020, some from 1 November 2020 and those worst affected now have their turn from 1 February 2021. These are in the main awards that apply in the hospitality, entertainment, tourism and retail sectors.

The relevant awards are:

 Air Pilots Award 2020
 Aircraft Cabin Crew Award 2020
 Airline Operations-Ground Staff Award 2020
 Airport Employees Award 2020
 Alpine Resorts Award 2020
 Amusement, Events and Recreation Award 2020
 Commercial Sales Award 2020
 Dry Cleaning and Laundry Industry Award 2020
 Fast Food Industry Award 2010
 Fitness Industry Award 2010
 General Retail Industry Award 2010
 Hair and Beauty Industry Award 2010
 Horse and Greyhound Training Award 2020
 Hospitality Industry (General) Award 2020
 Live Performance Award 2010
 Mannequins and Models Award 2020
 Marine Tourism and Charter Vessels Award 2020
 Nursery Award 2020
 Professional Diving Industry (Recreational) Award 2020
 Racing Clubs Events Award 2010
 Racing Industry Ground Maintenance Award 2020
 Registered and Licensed Clubs Award 2010
 Restaurant Industry Award 2020
 Sporting Organisations Award 2020
 Travelling Shows Award 2020
 Vehicle Repair, Services and Retail Award 2020
 Wine Industry Award 2010

For employers, the different scenarios that can apply are:

1. If you have employees who are covered by a modern award and you otherwise apply all of the terms and conditions of the award, you must ensure that employees are paid at least the award rate for their classification as adjusted for this decision.

2. If you have employees who are award free and not covered by an enterprise agreement, you must ensure that they are paid at least the National Minimum Wage as adjusted for this decision.

3. If you have employees who are covered by an award and you pay them on an annualized wage basis or on a salary or all purpose rate which sets off certain monetary employment conditions such as annual leave loading, overtime and shift loadings, penalty payments and allowances, you need to recalculate the rate of pay to ensure that the employee remains better off overall against award entitlements and comply with any award provisions that might apply to annualized wage arrangement.

4. If you have employees who are covered by an enterprise agreement which provides for annual adjustment of wages in line with Annual wage Review decisions of the Fair Work Commission, you need to adjust wages by 1.75% from the operative date for the relevant award.

5. If you have employees who are covered by an enterprise agreement but the agreement does not provide for annual adjustment as per 4., you need to ensure that wages paid are at least equal to those applying to the underpinning modern awards or the National Minimum Wage as applicable from the relevant operative date.

6. You need also to have regard to any provisions in employment contracts which might provide an obligation to pass on any increases separate from or additional to any of the above scenarios.

The Fair Work Ombudsman has a Pay Calculator Tool on its website and also publishes Pay Guides for each award – these provide detailed advice on ordinary time and overtime and penalty rates for each classification in the relevant award. You can access these resources at https://www.fairwork.gov.au/pay/minimum-wages/pay-guides.

If you need assistance in understanding and applying the effects of this decision in your business, we are happy to assist.

To can take advantage of our free first consultation – contact us on 0438533311 or at https://ridgelinehr.com.au/contact-us/