Fair Work Commission to Increase Minimum Base Wage Under Certain Awards For Lowest Paid Workers

The Fair Work Commission has released its provisional views about the base minimum wages for the lowest paid workers covered by certain modern awards, clarifying how long introductory rates can apply to employees, and signalling a rise in minimum rates for employees in some industries.

In July 2023, the Fair Work Commission (FWC) made the decision to align the National Minimum Wage with the C13 classification wage rate in the Manufacturing and Associated Industries and Occupations Award 2020 (as discussed in our article here). Previously the National Minimum Wage was aligned to the lower C14 classification wage rate.

This move away from the C14 classification wage rate was then the subject of a broader review by the FWC, in order to consider minimum award rates that fall below the National Minimum Wage.

In the course of that review, the FWC took the position that the C13 rate should be the relevant minimum entitlement for any ongoing employee, and that any lower rate should only be for introductory purposes, or employees who are ‘new’ to their industry.

As a first step, the FWC confirmed its view that:

• The lowest rate for any ongoing classification in a modern award should be the C13 rate;
• Any rate below the C13 rate must be entry-level only and operate for a limited period of time; and
• The transitional period for the sub-C13 rate should be a maximum of 6 months.

On this basis, the FWC reviewed 70 identified modern awards with sub-C13 minimum rates, and separated them into 5 categories:

1. Awards not requiring any variation;
2. Awards where interested parties have agreed to a variation to address the FWC’s views as outlined above;
3. The Manufacturing Award and awards with similarly drafted entry-level classifications;
4. Awards where there is a dispute about whether they conform to the FWC’s view about and/or what, if any, variations should be made; and
5. Awards in relation to which no submissions were received.

The Awards in each of these categories, together with any proposed changes, are listed below.

What is Next?

As the above are provisional views, these changes are not yet finalised for the relevant modern awards and may be altered by the FWC. However, the FWC has announced that it will be releasing draft determinations for each of the proposed changes in the near future, meaning that industry representatives will be able to make submissions on each before any changes are confirmed to the awards.

If you are concerned about how the changes might affect your business, it is critical to seek advice about managing those impacts ahead of time as they may have financial impacts, and potentially expose some employers to underpayments issues should the changes (once confirmed) not be implemented. If you have any questions about this, HR Legal can help.

Source: Review of C14 and C13 rates in modern awards [2024] FWCFB 213