By Alexandra Marriott
As previously discussed here, the new Minimum Wage Panel commenced its annual Minimum Wage Review on 1 January this year. The task before the Panel is significant.
The last decision of the Australian Fair Pay Commission in 2009 froze wages. This was a significant decision in Australia’s history of wage fixation, and acknowledged the link between increased minimum wages and reduced labour force engagement. This decision was controversial, and is certain to impact the 2010 Minimum Wage Review; the ACTU and affiliates are demanding a ‘catch-up’ component.
The Fair Work Act 2009 introduced the new machinery of Government, Fair Work Australia. Within the new machinery, the Minimum Wage Panel will undertake an annual review of minimum wages – with regard to the Fair Work Act’s ‘Minimum Wage Objective’ – and is empowered to determine minimum wage decisions.
The Panel’s Minimum Wage Decision will take effect on 1 July, with no indication given at this stage when the Decision will be announced.
The ACTU have announced they will make submissions to the Minimum Wage Panel that argue for a weekly increase of $27.00 to minimum wages.
Minimum wages are generally considered to be closely linked to workforce engagement. The decision of the Panel will ultimately impact on the capacity of business to engage employees, and will also prove to be something of a litmus test for the feasibility of the new Fair Work system.
Accordingly, VECCI affirms ACCI’s call for reasonable and balanced minimum wage rise in 2010.
What kind of increase do you think is reasonable? Will a Minimum Wage Decision that provides a significant increase impact upon the capacity of your business to preserve existing levels of employee engagement?
Let us know your thoughts on this pressing issue.
With the abolition of AWA’s the cost of guarding, if we follow the fair work pay scale, would escalate to a situation where the cost of hiring a Guard will be unaffordable (eg. to hire a guard on a public holiday will cost the employer approx $45.00 per hour to this we have to add super, work cover leave entitalment and tax. This would mean that the charge to the client would be some thing in the vacinity of $60.00 – $65.00 per hour.)
If the minimum wage increase is granted by $27.00 then the hourly rate in the example above would esclate to approx $48.00 per hour. This will again raise the charge rate to the client to about $70.00 – $75.00 per hour
Such a large increase will effect our level of labour hire. There is no “fat” in our business to absorb and increased wages bill.