2021-22 Annual Wage Review Progress Update

As is the case every year, the Fair Work Commission (FWC) is preparing to issue its Annual Wage Review decision in June, with the formal consultation process having commenced months ago.

Although the Commission must hand down a decision before 30 June, with final reply submissions not closing until 7 June 2022, it can be expected this year’s decision will fall mid-month or later, likely to run to a similar timeframe as 2021, where final submissions closed on 8 June 2021, and the Full Bench handed down their decision – in which an increase of 2.5% was awarded – on 16 June 2021.

Unions began pressing for a 5% increase to award rates of pay with their original submission based on the late-March Budget forecast which had inflation peaking at 4.25% in the middle of this year, but revised their claim upwards to 5.5% in May, after inflation spiked at 5.1% (with the RBA predicting it will reach 5.5% by mid-year).   If achieved, the revised Union claim would equate to an extra $42.50 per week ($1.12 per hour) for a full-time worker on the National Minimum Wage, bringing it to $815.10 per week ($21.45 an hour) from the current $772.60 per week ($20.33 an hour). ACTU Secretary, Sally McManus, says the revised increase “is what is now needed just to ensure people tread water” adding that, “anything less has them drowning in bills”.

From the employer’s side, Master Grocers Australia and the Timber Merchants Australia have argued for a wage freeze, or, at most an increase capped at 0.5%, whereas Australian Business Industrial and the NSW Business Chamber, have encouraged the FWC to consider granting an increase between 2.5% to 3%, arguing this will help maintain living standards amid rising inflation. Although advocating for the Commission to award a moderate wage increase, ABI-NSW Chamber have recommended that the increase be staggered – as has been the case over the last two years – as industries that have been significantly impacted by the pandemic continue to recover. ABI-NSW Chamber noted that business confidence is still low, and that employers face significant cost pressures – particularly for insurance, energy, fuel, shipping and freight, and materials – and possible COVID restrictions in the future but suggested that “most businesses would have capacity to accommodate these cost increases”.

Elsewhere, Opposition Leader, Anthony Albanese, has been quoted as saying that “the minimum wage should at least keep up with the cost of living” and indicated that, if it takes power at the May 21 election, the ALP would make a submission as part of the minimum wage case that would support a rise in wages that at least ensures workers don’t fall behind the 5.1% increase in the cost of living. The Morrison Government chose not to specify a preferred wage rise in its previous submission to the FWC.

ES Subscribers will be notified by email when the 2021-22 Annual Wage Review decision is handed down in June. Want to ensure you’ll be the first to know? Follow Employer Services on Facebook!