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Minimum wage set to rise by 2.5%

John Buckley
18 June 2021 1 minute readShare

The Fair Work Commission has announced a 2.5 per cent increase to the minimum wage, set to take effect in a phased approach through to 1 November.

The Fair Work Commission on Wednesday announced a 2.5 per cent increase to the minimum wage and related awards which will see Australia’s lowest-paid workers’ hourly wage rise to $20.33, or $772.60 a week for those working full-time — an additional $18.80 a week.

Explaining the commission’s decision, Fair Work Commission president Justice Iain Ross said current economic conditions are vastly different to those observed during the commission’s last minimum wage review, which took place at the height of the pandemic last year.

The last increase, under pandemic conditions, saw the minimum wage rise by 1.75 per cent.

“There was a broad consensus in the submissions before us that the current performance of the economy has exceeded expectations and that the economic recovery is well underway,” Mr Ross said.

However, the increase, which has historically taken effect on 1 July, will this year be introduced in a phased approach. The aviation, tourism and hospitality sectors, and the fitness sector will have to wait until 1 November for a pay rise, while retail workers will receive a pay rise from 1 September.

Meanwhile, some fast-food workers will receive two minimum wage increases in the space of six months after last year’s increase was delayed until February this year across the sector.

“But these businesses also had the benefit of no increase in minimum wages between 1 July 2020 and 1 February 2021,” Mr Ross said. “Further, the timing issue is, of itself, not sufficient to warrant a finding of exceptional circumstances in light of the turnover data.”

Mr Ross said that despite this year’s improved economic conditions, and the healthier increase they have facilitated, uncertainty remains, as a stunted federal vaccine rollout has offered cause for caution.

“The prevailing economic circumstances and the uncertainty surrounding the pathway out of recession have led us to adopt a cautious approach to both the quantum and the timing of an adjustment to the NMW and modern award minimum wages,” he said.

The Australian Chamber of Commerce and Industry called for a 1.1 per cent increase in the lead-up to the review, while the Australian Council of Trade Unions earlier called for a 3.5 per cent increase to Australia’s minimum wage after last year’s 1.75 per cent bump, to encourage consumer spending.

Speaking on the increase, Australian Council of Trade Unions secretary Sally McManus said she was disappointed that some industries will have to wait for a pay rise.

“Fair Work ordered [sic] 2.5 per cent increase for award workers,” Ms McManus wrote on Twitter. “Unions fought against all employers & Fed [sic] Govt who wanted cuts & freezes.

“But they have delayed increase [sic] for retail & others. These supermarket workers worked hard whilst their companies posted record profits. This is just wrong.”

Minimum wage set to rise by 2.5%
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John Buckley

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