Aspects of the federal government’s industrial relations reforms continue to cause problems for business, with the Australian Fair Pay Commission’s first minimum wage ruling last week creating confusion among some Western Australian employers and industry
Aspects of the federal government’s industrial relations reforms continue to cause problems for business, with the Australian Fair Pay Commission’s first minimum wage ruling last week creating confusion among some Western Australian employers and industry groups.
The commission last week announced a $27.36 a week pay rise to the nation’s lowest-paid workers, just five months after the state government raised its minimum award rate by $20/week.
But many in business remain unsure who is in line to receive the latest increase.
Only constitutional corporations and their employees, who are under federal jurisdiction, receiving the minimum wage rates – under $700/week per week – will receive a wage rise from December 1 2006.
Employees at non-constitutional organisations who earn less than $700/week, or those who are employed at constitutional organisations but were under existing AWAs or collective agreements prior to the commencement of Work Choices, are not eligible. “It’s a dog’s breakfast,” industrial relations analyst Tony Thompson told WA Business News.
“It sounds all very lovely if you know what you’re talking about…but most employers won’t.”
There are also concerns that employers under federal jurisdiction, who mistakenly passed on the state wage rise to their employees, thinking that they were legally bound under the state jurisdiction, will be hit with another pay rise.
“There could be duplications because employers were confused, or because they thought they were being nice; that they’d pass on the $20 the state awards went up by,” Mr Thompson said.
“But if the employee is still under $700 per week, [employers] will have to pass on the full $26 as well.”
With the Fair Pay Commission taking over from the Industrial Relations Commission in March this year, the federal minimum wage ruling, for the first time, was released after the state government’s minimum wage ruling.
“Even though they had their own state minimum rate, the federal [and state] minimum rates aligned. Now they don’t,” Mr Thompson said.
Most employer groups that made submissions to the state wage case in WA proposed that the state Industrial Relations Commission delay its decision until after the FPC announced the federal minimum, he said, but the recommendation was ignored.
Executive director of Business Service Contractors Association, Ian Westoby, has engaged legal and IR consultants to clarify the effects of the federal wage increase on his constituents.
Mr Westoby said some employers may not be aware of the conditions associated with the wage rise, nor their obligations to pass the rise on to eligible employees.
Despite this, he applauded the FPC’s decision.
“It’s a step in the right direction to ensure that Australia doesn’t have a working poor,” Mr Westoby said.
Chamber of Commerce and Industry WA chief executive John Langoulant said that, while he applauded the FPC for looking at fair pay outcomes on an economic basis, the increase was too high.
“We’re surprised and disappointed that the increase was that large, primarily from the point of view of competitiveness in business,” he said.
Mr Langoulant said small and medium sized business, which were already dealing with cost pressures and consecutive interest rate rises, would be hit the hardest.
“It does put a fair dent in the outlook for the small and medium business, and I think its going to give rise to quite a slowing in that sector,” he said.
