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IR Reforms: Increase to National Minimum Wages and Greater Rights for Workplace Delegates


Increase to Minimum Wages

The Fair Work Commission (“FWC”) has recently published its Annual Wage Review Decision, which will likely impact many businesses given the current economic climate.

We have set out below the changes and what employers need to know moving forward.

What was the decision?

The FWC have announced:

  • The National Minimum Wage (“NMW”) will increase to $24.10 per hour, or $915.90 per week based on a 38-hour week, exclusive of superannuation; and
  • There will be a 3.75% increase to all modern award minimum wages rates.

For employers, the increase will commence from the first pay period following 1 July 2024.

In its decision, the FWC explained that a primary consideration for the increase was the cost-of-living pressures faced by employees who are reliant on modern awards, especially those on low incomes, even though inflation is significantly lower than it was at the time of last year’s review.

Notably, the FWC declined the Australian Council of Trade Unions proposal of an extra 4% increase on top of the NMW increase across all award rates for workers in highly-feminised awards including early childhood education workers, disability home care workers, dental assistants, pharmacists, psychologists and medical technicians. As an alternative, the FWC has initiated separate proceedings to address gender undervaluation in these awards.

It is important that if your business has employees covered by modern awards or are receiving the national minimum wage, you prepare for the forthcoming changes.

Employers who pay their employees an annual salary must check the overall remuneration remains sufficient to meet the increased award rates. The fact that employees receive an annual salary does not mean they are not covered by a modern award and employers must check to ensure their employees are not being underpaid.

The updated Fair Work Information Statement (“FWIS”) with the new NMW will be available for download from the Fair Work Ombudsman’s website from 1 July 2024. Employers must give every new employee a copy of the FWIS before, or as soon as possible, after the commencement of employment.

Changes To Superannuation

In addition to the above increase, from 1 July 2024, the Superannuation Guarantee increases to 11.5% and will further increase to 12% from 1 July 2025.

Workplace Delegates Rights

On 10 May 2024, Justice Hatcher, President of the FWC, issued a draft delegates’ rights term which will be inserted into all modern awards by 30 June 2024. The introduction of such a term arises from changes to the Fair Work Act 2009 (Cth) (“the FW Act”) as a consequence of the Fair Work Legislation Amendment (Closing Loopholes) Act 2023 (Cth) which commenced operation from 15 December 2023 and introduced specific rights of workplace delegates and new general protections for workplace delegates. In summary, the amendments allow workplace delegates to communicate with employees and represent the industrial interest of eligible employees.

New General Protections for Workplace Delegates

Section 350A of the FW Act provides that an employer of a workplace delegate must not:

  • Unreasonably fail or refuse to deal with the workplace delegate;
  • Knowingly or recklessly make a false or misleading representation to the workplace delegate; or
  • Unreasonably hinder, obstruct or prevent the exercise of the workplace delegate’s rights under the FW Act or a fair work instrument.

The FW Act prohibits an employer from taking adverse action against another person because they have a workplace right which includes workplace delegates rights.

Draft Term

The draft term provides for the exercise of the rights of workplace delegates set out in section 350C of the FW Act.

Before exercising entitlements, a workplace delegate must give the employer written notice of their appointment or election as a workplace delegate. The workplace delegate must provide the employer with evidence that would satisfy a reasonable person of their appointment or election if requested. An employee must give written notice to the employer as soon as they cease their role as workplace delegate.

A workplace delegate may represent the industrial interests of eligible employees in matters including but not limited to:

  • consultation about major workplace change;
  • consultation about changes to rosters or hours of work;
  • resolution of individual or collective grievances or disputes;
  • performance management and disciplinary processes;
  • enterprise bargaining; and
  • any process or procedure in which the employees are entitled to be represented.

The term states that a workplace delegate is entitled to communicate with eligible employees for the purpose of representing their industrial interests, which includes discussing membership of the delegate’s organisation with the employees and consulting the delegate’s organisation regarding matters in which the workplace delegate is representing employees. A workplace delegate is also entitled to communicate with eligible employees individually or collectively, during working hours or work breaks, or before the start or after the end of work.

The term explains that employers are obliged to provide a workplace delegate with access to or use of the following workplace facilities, unless these are absent in the workplace:

  • a room or area to hold discussions which is fit for purpose, private and accessible by the workplace delegate and eligible employees;
  • a physical or electronic noticeboard;
  • electronic means of communication that are ordinarily used by the employer to communicate with eligible employees in the workplace;
  • a lockable filing cabinet or other secure document storage area; and
  • office facilities and equipment including printers, scanned photocopiers and wi-fi.

The term further sets out that non-small business employers are obliged to provide a workplace delegate with access to up to 5 days of paid time during normal working hour for initial training and 1 day each subsequent year, to attend training related to representation of the industrial interests of eligible employees, subject to the following conditions:

  • The employer is not required to provide the 5 days or 1 day of paid time during normal working hours, to more than one workplace delegate per 50 eligible employees;
  • A day of paid time during normal working hours is the number of hours the workplace delegate would normally be rostered or required to work on a day on which the delegate is absent from work to attend the training;
  • The workplace delegate must give the employer as much notice as is practicable, and not less than 5 weeks’ notice, of the dates, subject matter and the daily start and finish times of the training;
  • The workplace delegate must, on request, provide the employer with an outline of the training content;
  • The employer must advise the workplace delegate as soon as is practicable, and not less than 2 weeks from the day on which the training is scheduled to commence, whether the workplace delegate’s access to paid time during normal working hours to attend the training has been approved. Such approval must not be unreasonably withheld; and
  • The workplace delegate must provide the employer with evidence that would satisfy a reasonable person of attendance at the training, within 7 days after the day on which the training ends.

The term imposes conditions on the workplace delegate’s entitlements described above. The workplace delegate must:

  • comply with their duties and obligations as an employee;
  • comply with reasonable policies and procedure of the employer;
  • not hinder, obstruct or prevent the normal performance of work; and
  • not hinder, obstruct or prevent employees exercising their rights to freedom of association.

Further, an employer is not required to provide a workplace delegate with access to electronic means of communication in a way that provides individual contact details for eligible employees. Also, an eligible employee is not required to be represented by a workplace delegate without their consent.

Comments on the draft term for the FWC’s consideration were due on Friday, 17 May 2024.

The FWC is yet to release a further statement on the draft term following submissions by interested parties.

The final modern award terms which incorporate the finalised draft delegates’ rights term is scheduled for publication on 28 June 2024 ahead of commencement on 1 July 2024.

Key Takeaways:

As a result of the above changes, we recommend that employers :

  • Check modern award coverage of your employees;
  • Check whether your employees earn award wages or are paid an ‘all up’ salary. If the latter, you should review whether the annual wage being paid still satisfies the requirements of the award;
  • If you have an enterprise agreement in place, the rate increase may also affect your employees and as such, you should review the base rate specified in your enterprise agreement;
  • Ensure your payroll system is updated to give effect to the forthcoming increases;
  • Review the company’s budget and financial projections to accommodate any wage adjustments;
  • Download the new Fair Work Information Statement from the Fair Work Ombudsman’s website on 1 July 2024 and ensure this is given to every new employee before or as soon as possible after, the commencement of employment;
  • Increase the superannuation contribution rate to 11.5% for all eligible employees from 1 July 2024;
  • Familiarise yourself with the new rights of workplace delegates and new obligations on employers in respect of their rights;
  • Review processes and procedures with respect to dealing with workplace delegates and ensure that these comply with the new provisions in the FW Act; and
  • Consider whether enterprise agreements need to be updated in accordance with the draft term so as to meet the ‘better off overall test’ at the next round of enterprise bargaining.

If you wish to discuss any aspect of this client alert, or require specialist advice in relation to an employment law matter, please do not hesitate to contact us.

This alert is not intended to constitute, and should not be treated as, legal advice.


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