By Alexandra Marriott
In addition to the commencement of the new safety net on 1 January 2010, the Minimum Wage Panel of Fair Work Australia commences its research into minimum wages in Australia.
The Panel is afforded six months a year to undertake research in order to meet the ‘minimum wages objective’ with which the Panel is tasked. The minimum wages objective is described by the Fair Work Act 2009 as the obligation of Fair Work Australia to “establish and maintain a safety net of fair minimum wages” which takes into account:
- the performance and competitiveness of the national economy, including productivity, business competitiveness and viability, inflation and employment growth;
- the promotion of social inclusion through increased workforce participation;
- relative living standards and the needs of the low paid;
- the principle of equal remuneration for work of equal or comparable value; and
- providing a comprehensive range of fair minimum wages to junior employees, employees to whom training arrangements apply and employees with a disability.
Ian Harper’s comments in The Age today about the new Minimum Wage Panel of Fair Work Australia – and the differences between it and the Australian Fair Pay Commission, the functions of which were rolled into Fair Work Australia on 1 July 2009 – are a sobering reflection on some of the more troubling aspects of the new machinery of industrial relations in Australia.
Whilst the WorkChoices reforms continued earlier efforts to devolve the tribunal model of industrial relations in Australia, WorkChoices, nonetheless effected a series of productive changes to the machinery of industrial relations. This was particularly the case with the creation of the Australian Fair Pay Commission (AFPC).
As on Harper’s account, it is my view and understanding that the creation of the AFPC was intended to introduce a “non-judicial” form of wage setting into Australia. Furthermore, as Harper notes, his opportunity to “ground a new economic institution on the principles of openness, transparency and accountability was a rare privilege”.
Of course, the AFPC has not been without its many detractors, nor has it operated at a remove from speculation and controversy. Most recently, the decision to freeze the federal minimum wage won criticism from all sides of industrial relations.
That aside, however, it is this comment that requires the most substantive consideration. As Harper pits this model of the economic institution against that of the Minimum Wage Panel of Fair Work Australia; his concern will lie in the willingness of Fair Work Australia to be consultative, open and transparent. Whilst the function of wage setting returns to a judicial model, the larger question and concern seems to be the capacity of the Minimum Wage Panel to continue the positive characteristics of the AFPC, with regards to broad consultation and transparent decision making.
The first decision made by the Minimum Wage Panel, due in July 2010, will be the litmus test. There is much for the Panel to consider when it commences its work on 1 January 2010. As we closely monitor the extent and breadth of economic recovery and the future capacity for labour market engagement by business, we hope for a consultative model that allows for the representation of the voice and experience of business – not only by peak bodies, but also by those for whom the Panel’s decision is the most significant.
Should the Panel engage with just “peak bodies” or with all those impacted by the decision? And – do you think that we are adequately on the side of economic recovery for the Panel to increase the new ‘federal minimum wage order’ and modern award rates of pay?
The task before the Panel is momentous, and we’d like to know what you think.
[...] previously discussed here, the new Minimum Wage Panel commenced its annual Minimum Wage Review on 1 January this year. The [...]