Minimum wage increase delayed

22 June, 2020 by
Madeline Woolway

The Fair Work Commission handed down its Annual Wage Review 20190-20 decision on Friday 19 June, issuing a 1.75 percent increase to the national minimum wage. 

The decision amounts to a $13 per week increase, bringing the national minimum wage to $19.84 an hour or $753.80 a week.

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The increase will be staggered, with the hospitality industry among a number of sectors that won’t see the pay rise take effect until 1 February 2021. 

The ACTU proposed an increase of 4 percent. The Australian Chamber of Commerce and Industry, AI Group and other employer bodies, including Restaurant & Catering Australia (R&CA) argued there should be no increase.

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Fair Work Commission president Justice Iain Ross said the Australian Government “urged the panel to take a cautious approach and to prioritise keeping Australian’s in jobs and maintaining the viability of businesses.” 

The panel noted the national economy is undergoing a significant downturn and is almost certain to sink further into its first recession in 30 years. Other factors taken into consideration included the increase to the unemployment rate, a fall in the number of hours worked and a substantial increase in underemployment. 

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The panel also took into account relative living standards and the needs of the low-paid. According to the panel, no increase to the minimum wage would lead to a pay cut in real terms. 

Ross said all of these factors lead to the decision to award the 1.75 percent increase, concluding that an increase of the size requested by the ACTU could lead to further business closures and unemployment. 

While R&CA expressed disappointment at the decision to increase the minimum wage, the peak industry body welcomed the delayed start. 

“This delay, unique to Group 3 Awards, means one thing to the tens of thousands of businesses and workers in the restaurant café, and catering sector — businesses will have some certainty in uncertain times relating to their wage costs as the country recovers from the COVID-19 crisis,” said R&CA CEO Wes Lambert in a statement. 

“The COVID-19 crisis has already forced the permanent closure of as high as 1 in 10 business in our sector, and this decision will only delay pushing these vulnerable businesses further to the edge. Reports today suggest that spending on food and beverages is down 31 percent compared to January 2020.”

The Australian Hotels Association (AHA) welcomed the deferral, which it and its subsidiary Tourism Accommodation Australia had argued for.

“The reprieve offered by the Commission today will provide hospitality businesses with the extra breathing room they need as the industry seeks to recover from months of zero revenue,” said AHA National CEO Stephen Ferguson. 

“As an association we remain firmly focused on ensuring that the JobKeeper Payment scheme is extended for Australia’s hospitality industry.

 “This extension is absolutely essential — failure to do so will result in the loss of many jobs across our sector and we will also see a significant reduction in hours for remaining employees.

“Today’s decision by the Commission is a very welcome one, however it will do little for the employees that are forced out of a job if JobKeeper is ended for our industry in September.”

Image: Ali Yahya