1
Fair Work Act 2009
s.285—Annual wage review
Annual Wage Review 2023–24
(C2024/1)
JUSTICE HATCHER, PRESIDENT
VICE PRESIDENT ASBURY
DEPUTY PRESIDENT HAMPTON
DEPUTY PRESIDENT O’NEILL
MS LABINE-ROMAIN
PROFESSOR BAIRD
MR CULLY
SYDNEY, 3 JUNE 2024
Annual Wage Review 2023–24.
Contents
Section Paragraph
1. Overview of the decision
1.1 Introduction [1]
1.2 The decision [8]
1.3 Structure of this decision [11]
2. Scope and effect of the Review
2.1 Employees reliant on the NMW [14]
2.2 Modern award-reliant employees [29]
2.3 Effect of AWR decisions [36]
3. Economic, labour market and business considerations [40]
3.1 Inflation and monetary policy [41]
3.2 Economic growth [51]
[2024] FWCFB 3500
DECISION
AUSTRALIA FairWork Commission
[2024] FWCFB 3500
2
Section Paragraph
3.3 The labour market [56]
3.4 Business conditions and outlook [62]
3.5 Productivity [68]
4. Relative living standards and the needs of the low paid [72]
5. Gender equality
5.1 Gender pay gaps [85]
5.2 Ensuring equal remuneration for work of equal or
comparable value and eliminating gender-based
undervaluation
[88]
5.3 Female participation in the workforce [130]
6. Job security [133]
7. Collective bargaining [136]
8. Consideration
8.1 General conclusions [140]
8.2 The NMW [151]
8.3 Modern award minimum wage rates [154]
8.4 The gender equality agenda [162]
9. Conclusion [173]
Appendix: Proposed minimum wage adjustments
[2024] FWCFB 3500
3
Abbreviations and defined terms
Abbreviation / defined term Definition
AAWI Average annual wage increase
ABI/BNSW Australian Business Industrial and Business NSW
ABS Australian Bureau of Statistics
ACC Award Aircraft Cabin Crew Award 2020 [MA000047]
ACCI Australian Chamber of Commerce and Industry
ACT Child Care decision Application by Australian Liquor, Hospitality and
Miscellaneous Workers Union [2005] AIRC 28,
PR954938
ACTU Australian Council of Trade Unions
AENA Average Earnings National Accounts
Aged Care Award Aged Care Award 2010 [MA000018]
Ai Group The Australian Industry Group
ANMF Australian Nursing and Midwifery Federation
ANMF work value application Application AM2024/11 by the ANMF to increase wages
for all nurses covered by the Nurses Award on work
value grounds
ANZSCO Australian and New Zealand Standard Classification of
Occupations
ANZSIC Australian and New Zealand Standard Industrial
Classification
AWOTE Average weekly ordinary time earnings
AWR 2023 decision Annual Wage Review 2022–23 [2023] FWCFB 3500, 323
IR 332
C10 Metals Framework
Alignment Approach
See definition of MRA
COE Characteristics of Employment statistics published by the
ABS
CPI Consumer Price Index
CS Award Children’s Services Award 2010 [MA000120]
ECEC Early childhood education and care
EEH Employee Earnings and Hours statistics published by the
ABS
ERO Equal remuneration order PR525485 applicable to social
and community service employees under the SCHADS
Award; see also [2012] FWAFB 1000, 208 IR 446 and
[2012] FWAFB 5184, 223 IR 410
EST Award Educational Services (Teachers) Award 2020
[MA000077]
FAAA Flight Attendants’ Association of Australia
FW Act Fair Work Act 2009 (Cth)
GDP Gross domestic product
General Retail Award General Retail Industry Award 2020 [MA000004]
Hair and Beauty Award Hair and Beauty Industry Award 2020 [MA000005]
https://www.fwc.gov.au/document-search/view/2/aHR0cHM6Ly9zYXNyY2RhdGFwcmRhdWVhYS5ibG9iLmNvcmUud2luZG93cy5uZXQvYXdhcmRzL01vZGVybkF3YXJkcy9NQTAwMDA0Ny5kb2N40?sid=&q=MA000047
https://www.fwc.gov.au/documents/decisionssigned/html/PR954938.htm
https://www.fwc.gov.au/document-search/view/2/aHR0cHM6Ly9zYXNyY2RhdGFwcmRhdWVhYS5ibG9iLmNvcmUud2luZG93cy5uZXQvYXdhcmRzL01vZGVybkF3YXJkcy9NQTAwMDAxOC5kb2N40?sid=&q=aged%24%24care
https://www.fwc.gov.au/hearings-decisions/major-cases/work-value-case-nurses-and-midwives
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb3500.pdf
https://www.fwc.gov.au/document-search/view/2/aHR0cHM6Ly9zYXNyY2RhdGFwcmRhdWVhYS5ibG9iLmNvcmUud2luZG93cy5uZXQvYXdhcmRzL01vZGVybkF3YXJkcy9NQTAwMDEyMC5kb2N40?sid=&q=MA000120
https://www.fwc.gov.au/documents/awardsandorders/html/pr525485.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2012fwafb1000.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2012fwafb5184.htm
https://www.fwc.gov.au/document-search/view/2/aHR0cHM6Ly9zYXNyY2RhdGFwcmRhdWVhYS5ibG9iLmNvcmUud2luZG93cy5uZXQvYXdhcmRzL01vZGVybkF3YXJkcy9NQTAwMDA3Ny5kb2N40?sid=&q=MA000077
https://www.fwc.gov.au/document-search/view/2/aHR0cHM6Ly9zYXNyY2RhdGFwcmRhdWVhYS5ibG9iLmNvcmUud2luZG93cy5uZXQvYXdhcmRzL01vZGVybkF3YXJkcy9NQTAwMDAwNC5kb2N40?sid=&q=MA000004
https://www.fwc.gov.au/document-search/view/2/aHR0cHM6Ly9zYXNyY2RhdGFwcmRhdWVhYS5ibG9iLmNvcmUud2luZG93cy5uZXQvYXdhcmRzL01vZGVybkF3YXJkcy9NQTAwMDAwNS5kb2N40?sid=&q=MA000005
[2024] FWCFB 3500
4
Abbreviation / defined term Definition
HPSS Award Health Professionals and Support Services Award 2020
[MA000027]
LCI Employee Living Cost Index
Manufacturing Award Manufacturing and Associated Industries and
Occupations Award 2020 [MA000010]
Metal Industry Award Metal Industry Award 1984 [AW819234], Print F8925,
later the Metal, Engineering and Associated Industries
Award, 1998 – Part I [AW789529], Print Q2527
MIHL Minimum Income for Healthy Living (standard)
Miscellaneous Award Miscellaneous Award 2020 [MA000104]
MRA Minimum rate adjustment, a process established by the
National Wage Case August 1989 [1989] AIRC 525, 30
IR 81, Print H9100 to align key classifications in awards
with classifications in the Metal Industry Award; also
known as the ‘C10 Metals Framework Alignment
Approach’
NMW National minimum wage
NMW Report Josh Tomlinson, Characteristics of employees on the
National Minimum Wage (Fair Work Commission
Research Report No 1/2024, February 2024)
Nurses Award Nurses Award 2020 [MA000034]
OECD Organisation for Economic Co-operation and
Development
Pharmacy Award Pharmacy Industry Award 2020 [MA000012]
PPI Producer Price Index
RBA Reserve Bank of Australia
Review Annual wage review
RNNDI Real net national disposable income
RSE Relative standard error
SCHADS Award Social, Community, Home Care and Disability Services
Award 2010 [MA000100]
SDR Special drawing right
Secure Jobs, Better Pay Act Fair Work Legislation Amendment (Secure Jobs, Better
Pay) Act 2022
Stage 1 Aged Care decision Aged Care Award 2010; Nurses Award 2020; Social,
Community, Home Care and Disability Services Industry
Award 2010 [2022] FWCFB 200, 319 IR 127
Stage 1 report Natasha Cortis et al, UNSW Social Policy Research
Centre, Gender-based Occupational Segregation: A
National Data Profile (Final Report, 6 November 2023)
Stage 2 report Fair Work Commission, Stage 2 report — Gender pay
equity research — Annual Wage Review 2023–24
(Report, 4 April 2024)
Stage 3 Aged Care decision Aged Care Award 2010; Nurses Award 2020; Social,
Community, Home Care and Disability Services Industry
Award 2010 [2024] FWCFB 150
https://www.fwc.gov.au/document-search/view/2/aHR0cHM6Ly9zYXNyY2RhdGFwcmRhdWVhYS5ibG9iLmNvcmUud2luZG93cy5uZXQvYXdhcmRzL01vZGVybkF3YXJkcy9NQTAwMDAyNy5kb2N40?sid=&q=MA000027
https://www.fwc.gov.au/document-search/view/2/aHR0cHM6Ly9zYXNyY2RhdGFwcmRhdWVhYS5ibG9iLmNvcmUud2luZG93cy5uZXQvYXdhcmRzL01vZGVybkF3YXJkcy9NQTAwMDAxMC5kb2N40?sid=&q=MA000010
https://www.fwc.gov.au/documents/decisionssigned/html/F8925.htm
http://www.fwc.gov.au/documents/resources/q2527.pdf
https://www.fwc.gov.au/document-search/view/2/aHR0cHM6Ly9zYXNyY2RhdGFwcmRhdWVhYS5ibG9iLmNvcmUud2luZG93cy5uZXQvYXdhcmRzL01vZGVybkF3YXJkcy9NQTAwMDEwNC5kb2N40?sid=&q=MA000104
https://www.fwc.gov.au/documents/decisionssigned/html/H9100.htm
https://www.fwc.gov.au/documents/wage-reviews/2023-24/characteristics-of-employees-on-national-minimum-wage-2024-02-29.pdf
https://www.fwc.gov.au/documents/wage-reviews/2023-24/characteristics-of-employees-on-national-minimum-wage-2024-02-29.pdf
https://www.fwc.gov.au/document-search/view/2/aHR0cHM6Ly9zYXNyY2RhdGFwcmRhdWVhYS5ibG9iLmNvcmUud2luZG93cy5uZXQvYXdhcmRzL01vZGVybkF3YXJkcy9NQTAwMDAzNC5kb2N40?sid=&q=MA000034
https://www.fwc.gov.au/document-search/view/2/aHR0cHM6Ly9zYXNyY2RhdGFwcmRhdWVhYS5ibG9iLmNvcmUud2luZG93cy5uZXQvYXdhcmRzL01vZGVybkF3YXJkcy9NQTAwMDAxMi5kb2N40?sid=&q=MA000012
https://www.fwc.gov.au/document-search/view/2/aHR0cHM6Ly9zYXNyY2RhdGFwcmRhdWVhYS5ibG9iLmNvcmUud2luZG93cy5uZXQvYXdhcmRzL01vZGVybkF3YXJkcy9NQTAwMDEwMC5kb2N40?sid=&q=MA000100
https://www.fwc.gov.au/documents/decisionssigned/html/2022fwcfb200.htm
https://www.fwc.gov.au/documents/consultation/gender-based-occupational-segregation-report-2023-11-06.pdf
https://www.fwc.gov.au/documents/consultation/gender-based-occupational-segregation-report-2023-11-06.pdf
https://www.fwc.gov.au/documents/consultation/stage-2-report-gender-pay-equity-research-2024-04-04.pdf
https://www.fwc.gov.au/documents/consultation/stage-2-report-gender-pay-equity-research-2024-04-04.pdf
https://www.fwc.gov.au/documents/decisionssigned/pdf/2024fwcfb150.pdf
[2024] FWCFB 3500
5
Abbreviation / defined term Definition
SWS Supported Wage System
Teachers decision Application by Independent Education Union of Australia
[2021] FWCFB 2051
UWU United Workers’ Union
WPI Wage Price Index
Yuen and Tomlinson 2023
Report
Kelvin Yuen and Josh Tomlinson, A profile of employee
characteristics across modern awards (Fair Work
Commission Research Report No 1/2023, March 2023)
https://www.fwc.gov.au/documents/decisionssigned/html/2021fwcfb2051.htm
https://www.fwc.gov.au/documents/wage-reviews/2022-23/profile-of-employee-characteristics-across-modern-awards-2023-03-03.pdf
https://www.fwc.gov.au/documents/wage-reviews/2022-23/profile-of-employee-characteristics-across-modern-awards-2023-03-03.pdf
[2024] FWCFB 3500
6
The Annual Wage Review Decision 2023–24
1. Overview of the decision
1.1 Introduction
[1] Section 285 of the Fair Work Act 2009 (Cth) (FW Act) requires the Fair Work
Commission to conduct an annual wage review (Review). An Expert Panel consisting of full-
time Commission members and part-time members with expertise in areas relevant to the
Review is constituted for the purpose of conducting the Review.
[2] The Review has two main functions. The first is to review, and make, the national
minimum wage (NMW) order. The NMW order applies only to persons in the national
industrial relations system who are not covered by a modern award or an enterprise agreement.
The order sets the NMW and also sets special NMWs for employees who are juniors, trainees
and persons with disability and the casual loading for employees who are award/agreement-
free.1 As we explain in section 2 of this decision, the practical application and effect of the
NMW is very limited. In last year’s Annual Wage Review 2022–23 decision2 (AWR 2023
decision), the Expert Panel estimated that only 0.7 per cent of all employees are actually paid
the NMW. Further data analysis carried out since that decision suggests that the proportion of
the workforce that is paid the NMW in accordance with the FW Act is in fact much smaller.
[3] The second and more significant function is to review modern award minimum wages
and consider whether they should be adjusted. There are currently 121 modern awards which
set minimum wages, expressed on a yearly, weekly and/or hourly basis, and conditions for a
wide range of industries and occupations. Approximately 20.7 per cent of all employees are
paid at the applicable minimum wage rates in modern awards and will thereby be directly
affected by this decision. As was found in the AWR 2023 decision,3 the characteristics of this
cohort of employees are significantly different to those of the workforce as a whole: they
predominantly work part-time hours and are female; almost half are casual employees; and
compared to the general workforce they are disproportionately low paid, paid junior rates and
employed by a small business. Primarily because of the part-time and low paid characteristics
of the modern award-reliant cohort, the wages paid to them constitute less than 11 per cent of
the national ‘wage bill’. The AWR 2023 decision4 awarded an increase of 5.75 per cent to
modern award minimum wages, which was significantly higher than the general rate of wages
growth for the workforce as a whole, albeit still less than the rate of inflation at the time.
However, this increase only accounted for approximately 15 per cent of wages growth across
the entire workforce for the year to March 2024.
[4] Accordingly, the direct effect of the Review on wages growth for the Australian
workforce, considered in aggregate, is limited. However, its effect in particular sectors which
are significantly more award-reliant is more marked. For example, the four sectors with the
1 Fair Work Act 2009 (Cth) s 294(1) (‘FW Act’).
2 Annual Wage Review 2022–23 [2023] FWCFB 3500, 323 IR 332 (‘AWR 2023 decision’).
3 Ibid [5].
4 Ibid [9], [178].
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb3500.pdf
[2024] FWCFB 3500
7
highest numbers of award-reliant employees, namely Accommodation and food services,
Health care and social assistance, Retail trade and Administrative and support services,5
account for over 65 per cent of all modern award-reliant employees, and 10 out of the total of
121 modern awards apply to over 63 per cent of all modern award-reliant employees.6 In other
sectors such as Mining, award reliance is negligible.7
[5] The Review is required to be conducted in accordance with the statutory framework of
the FW Act. In particular, it is necessary for us to take into account the considerations specified
in the ‘minimum wages objective’ in s 284(1) of the FW Act and, in relation to modern award
minimum wages, the ‘modern awards objective’ in s 134(1). These considerations include,
among other things, the performance and competitiveness of the national economy, the need to
achieve gender equality, promoting social inclusion through increased workforce participation,
and relative living standards and the needs of the low paid. In considering these matters, we
have taken into account data available up to 28 May 2024.
[6] The relevant aspects of the statutory framework including ss 134(1) and 284(1), and the
principles concerning their application, were the subject of detailed analysis in the AWR 2023
decision.8 We adopt that analysis for the purpose of this decision. It is not necessary to repeat
the conclusions of that analysis save to say that the discharge of the Commission’s functions in
the Review is an evaluative exercise requiring a complex balancing of the prescribed and other
relevant considerations, rather than any mechanistic approach.9
[7] In our conduct of this Review, we have received and considered written submissions
from a wide range of interested parties including the peak councils — the Australian Chamber
of Commerce and Industry (ACCI), the Australian Council of Trade Unions (ACTU), the
Australian Industry Group (Ai Group) and the Council of Small Business Organisations
Australia — registered unions and employer organisations, other employer and employee
interest groups, and the Australian Government and State governments. We also conducted a
hearing on 22 May 2024 at which parties were given the opportunity to make oral submissions
and answer questions from the Expert Panel. In a number of parties’ submissions, specific
proposals have been advanced as to the quantum of the wage adjustments we should order in
this Review. These are summarised in the appendix to this decision. We have taken these
proposals into consideration. However, as was stated in the AWR 2023 decision,10 it is necessary
to emphasise that the Review process is not one of adjudication between competing proposals.
5 Kelvin Yuen and Josh Tomlinson, A profile of employee characteristics across modern awards (Fair Work Commission
Research Report No 1/2023, March 2023) Chart 3.2 (‘Yuen and Tomlinson 2023 Report’).
6 Ibid Chart 3.3: General Retail Industry Award 2020 [MA000004] (11.0%), Social, Community, Home Care and Disability
Services Award 2010 [MA000100] (10.5%), Hospitality Industry (General) Award 2020 [MA000009] (9.5%), Fast Food
Industry Award 2020 [MA000003] (7.9%), Restaurant Industry Award 2020 [MA000119] (5.4%), Children’s Services
Award 2010 [MA000120] (4.8%), Clerks—Private Sector Award 2020 [MA000002] (3.9%), Health Professionals and
Support Services Award 2020 [MA000027] (3.8%), Vehicle Repair, Services and Retail Award 2020 [MA000089] (3.5%)
and Cleaning Services Award 2020 [MA000022] (3.2%); AWR 2023 decision [2023] FWCFB 3500, 323 IR 332 [50],
Chart 1.
7 AWR 2023 decision [2023] FWCFB 3500, 323 IR 332 [51], Table 2.
8 Ibid [12]–[45].
9 Ibid [22].
10 Ibid [7].
https://www.fwc.gov.au/documents/wage-reviews/2022-23/profile-of-employee-characteristics-across-modern-awards-2023-03-03.pdf
https://www.fwc.gov.au/document-search/view/2/aHR0cHM6Ly9zYXNyY2RhdGFwcmRhdWVhYS5ibG9iLmNvcmUud2luZG93cy5uZXQvYXdhcmRzL01vZGVybkF3YXJkcy9NQTAwMDAwNC5kb2N40?sid=&q=MA000004
https://www.fwc.gov.au/document-search/view/2/aHR0cHM6Ly9zYXNyY2RhdGFwcmRhdWVhYS5ibG9iLmNvcmUud2luZG93cy5uZXQvYXdhcmRzL01vZGVybkF3YXJkcy9NQTAwMDEwMC5kb2N40?sid=&q=MA000100
https://www.fwc.gov.au/document-search/view/2/aHR0cHM6Ly9zYXNyY2RhdGFwcmRhdWVhYS5ibG9iLmNvcmUud2luZG93cy5uZXQvYXdhcmRzL01vZGVybkF3YXJkcy9NQTAwMDAwOS5kb2N40?sid=&q=MA000009
https://www.fwc.gov.au/document-search/view/2/aHR0cHM6Ly9zYXNyY2RhdGFwcmRhdWVhYS5ibG9iLmNvcmUud2luZG93cy5uZXQvYXdhcmRzL01vZGVybkF3YXJkcy9NQTAwMDAwMy5kb2N40?sid=&q=MA000003
https://www.fwc.gov.au/document-search/view/2/aHR0cHM6Ly9zYXNyY2RhdGFwcmRhdWVhYS5ibG9iLmNvcmUud2luZG93cy5uZXQvYXdhcmRzL01vZGVybkF3YXJkcy9NQTAwMDExOS5kb2N40?sid=&q=MA000119
https://www.fwc.gov.au/document-search/view/2/aHR0cHM6Ly9zYXNyY2RhdGFwcmRhdWVhYS5ibG9iLmNvcmUud2luZG93cy5uZXQvYXdhcmRzL01vZGVybkF3YXJkcy9NQTAwMDEyMC5kb2N40?sid=&q=MA000120
https://www.fwc.gov.au/document-search/view/2/aHR0cHM6Ly9zYXNyY2RhdGFwcmRhdWVhYS5ibG9iLmNvcmUud2luZG93cy5uZXQvYXdhcmRzL01vZGVybkF3YXJkcy9NQTAwMDAwMi5kb2N40?sid=&q=MA000002
https://www.fwc.gov.au/document-search/view/2/aHR0cHM6Ly9zYXNyY2RhdGFwcmRhdWVhYS5ibG9iLmNvcmUud2luZG93cy5uZXQvYXdhcmRzL01vZGVybkF3YXJkcy9NQTAwMDAyNy5kb2N40?sid=&q=MA000027
https://www.fwc.gov.au/document-search/view/2/aHR0cHM6Ly9zYXNyY2RhdGFwcmRhdWVhYS5ibG9iLmNvcmUud2luZG93cy5uZXQvYXdhcmRzL01vZGVybkF3YXJkcy9NQTAwMDA4OS5kb2N40?sid=&q=MA000089
https://www.fwc.gov.au/document-search/view/2/aHR0cHM6Ly9zYXNyY2RhdGFwcmRhdWVhYS5ibG9iLmNvcmUud2luZG93cy5uZXQvYXdhcmRzL01vZGVybkF3YXJkcy9NQTAwMDAyMi5kb2N40?sid=&q=MA000022
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb3500.pdf
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb3500.pdf
[2024] FWCFB 3500
8
Rather, our statutory task is to make our own assessment of what constitutes a safety net of fair
minimum wages having regard to the prescribed and other relevant considerations.
1.2 The decision
[8] We have decided to increase the National Minimum Wage and all modern award
minimum wage rates by 3.75 per cent, effective from 1 July 2024. In determining this level of
increase, a primary consideration has been the cost-of-living pressures that modern award-
reliant employees, particularly those who are low paid and live in low-income households,
continue to experience notwithstanding that inflation is considerably lower than it was at the
time of last year’s Review. Modern award minimum wages remain, in real terms, lower than
they were five years ago, notwithstanding last year’s increase of 5.75 per cent, and employee
households reliant on award wages are undergoing financial stress as a result. This has militated
against this Review resulting in any further reduction in real award wage rates. At the same
time, we consider that it is not appropriate at this time to increase award wages by any amount
significantly above the inflation rate, principally because labour productivity is no higher than
it was four years ago and productivity growth has only recently returned to positive territory.
We have taken into account that the labour market and business profit growth overall remain
strong, but the picture is less positive in some of the industry sectors which contain a large
proportion of modern award-reliant employees. We have also taken into account that modern
award-reliant employees will shortly receive the benefit of the Stage 3 tax cuts and the Budget
cost-of-living measures, which are projected to increase real household disposable incomes
over the next 12 months. We have treated the forthcoming increase to the Superannuation
Guarantee contribution amount as a moderating factor.
[9] The increase of 3.75 per cent which we have determined is broadly in line with forecast
wages growth across the economy in 2024 and will make only a modest contribution to the total
amount of wages growth in 2024. We consider therefore that this increase is consistent with the
forecast return of the inflation rate to below 3 per cent in 2025.
[10] We have also determined to establish a program for the timely resolution of gender
undervaluation issues arising in respect of certain modern awards. A gender equity research
project which was undertaken following the decision in last year’s Review has now been
completed, and this has permitted us to identify priority areas for attention. Modern awards and
classifications applicable to early childhood education and care workers, disability home care
workers and other social and community services workers, dental assistants, medical
technicians, psychologists, other health professionals and pharmacists will be the subject of
Commission-initiated proceedings to examine and address gender undervaluation. These
proceedings will commence shortly after the issue of this decision and we intend that they will
be completed by the time of next year’s Review, which will then move on to the consideration
of other gender undervaluation issues.
1.3 Structure of this decision
[11] This decision is structured in the following way. In section 2 of the decision, we make
some observations about the practical scope and effect of annual wage reviews and this
decision. In sections 3–7, we deal with the mandatory considerations in ss 134(1) and 284(1)
of the FW Act grouped into the following categories:
[2024] FWCFB 3500
9
3. Economic, labour market and business considerations: ss 134(1)(c), (d), (f) and
(h); ss 284(1)(a) and (b).
4. Relative living standards and the needs of the low paid: s 134(1)(a); s 284(1)(c).
5. Gender equality: s 134(1)(ab); s 284(1)(aa).
6. Job security: s 134(1)(aa).
7. Collective bargaining: s 134(1)(b).
[12] The consideration in s 134(1)(da) concerns the need to provide for additional
remuneration by way of penalty rates and loadings for work performed in particular
circumstances. The consideration in s 134(1)(g) concerns the need to ensure a simple, easy to
understand, stable and sustainable modern award system for Australia that avoids unnecessary
overlap of modern awards. We do not think either of these is relevant to the Review and we
give them neutral weight in our consideration.
[13] In section 8 we set out our reasons for the outcomes we have determined in this Review.
This includes our consideration concerning s 284(1)(e), which requires us to take into account
the provision of a comprehensive range of fair minimum wages to junior employees, employees
to whom training arrangements apply and employees with a disability. Section 9 sets out a
summary of orders and determinations we intend to make. Finally, the appendix contains a
summary of the proposed minimum wages adjustments, if any, proposed by parties in their
submissions.
2. Scope and effect of the Review
2.1 Employees reliant on the NMW
[14] In the AWR 2023 decision, it was estimated that 0.7 per cent of the Australian employee
workforce is reliant on the NMW — that is, the NMW sets their actual rate of pay — and thus
would be directly affected by any adjustment made to the NMW. This estimate was taken from
a submission made by the Australian Government that approximately 79,200 employees are
NMW-reliant.11 However, we consider that this estimate now requires significant downward
revision.
[15] Section 294(3) of the FW Act provides that the NMW which is set by the national
minimum wage order applies to ‘all award/agreement free employees’ who are not junior
employees, employees to whom training arrangements apply, or employees with a disability.
Section 12 provides that an ‘award/agreement free employee’ is a national system employee to
whom neither a modern award nor an enterprise agreement applies. A modern award includes
a modern enterprise award and a State reference public sector modern award. A modern award
‘applies’ to an employee if it ‘covers’ the employee, is in operation, and no other provision of
the FW Act provides that the award does not apply to the employee (s 47(1)). A modern award
11 Australian Government submission to the Annual Wage Review 2022–23 (31 March 2023) Chart 4.1.
[2024] FWCFB 3500
10
‘covers’ an employee if the award is expressed to cover the employee (s 48(1)). The FW Act
relevantly provides that an award will not apply to an employee who is covered by the award
if:
• the employee is a ‘high income employee’ (currently, an employee who has a
guarantee of annual earnings exceeding $167,500 on a full-time basis):12 s 47(2); or
• an enterprise agreement applies to the employee’s employment at the relevant time:
s 57(1).
[16] There are currently 120 modern awards in operation which cover a wide range of
specified industries and occupations. The classifications in these awards generally capture all
employees up to the supervisory or sub-managerial level, and in some cases cover professional
and lower-level managerial employees. In addition, the Miscellaneous Award 202013 (as varied
effective from 1 July 2020) (Miscellaneous Award) covers employers throughout Australia and
their employees in the classifications for which the award provides who are not covered by any
other modern award (clause 4.1), except, relevantly, for:
(1) managerial employees and professional employees such as accountants and
finance, marketing, legal, human resources, public relations and information
technology specialists (clause 4.2); and
(2) employees excluded from award coverage by the FW Act (clause 4.3).
[17] The classifications in the Miscellaneous Award cover entry-level employees in the first
three months of employment (Level 1), employees without specified qualifications generally
(Level 2), trade-level employees (Level 3) and employees with advanced trade qualifications
or sub-professional employees (Level 4). The lowest minimum rate in the award is currently
$859.30 per week ($22.61 per hour) and the highest is $1085.60 per week ($28.57 per hour).
[18] In relation to the second category of exception from the coverage of the Miscellaneous
Award, s 143(7) of the FW Act provides:
Employees not traditionally covered by awards etc.
(7) A modern award must not be expressed to cover classes of employees:
(a) who, because of the nature or seniority of their role, have traditionally not been
covered by awards (whether made under laws of the Commonwealth or the States);
or
(b) who perform work that is not of a similar nature to work that has traditionally been
regulated by such awards.
Note: For example, in some industries, managerial employees have traditionally not been
covered by awards.
12 FW Act ss 329 and 333; Fair Work Regulations 2009 (Cth) reg 2.13.
13 MA000104.
https://www.fwc.gov.au/document-search/view/2/aHR0cHM6Ly9zYXNyY2RhdGFwcmRhdWVhYS5ibG9iLmNvcmUud2luZG93cy5uZXQvYXdhcmRzL01vZGVybkF3YXJkcy9NQTAwMDEwNC5kb2N40?sid=&q=MA000104
[2024] FWCFB 3500
11
[19] Employees who are ‘award/agreement free’ under the FW Act, and to whom the NMW
may therefore apply, are therefore likely to consist of employees in three categories. The first
category is those who are ‘high income employees’ exempted under s 47(2). However, by
definition, such employees do not rely on the NMW to set their actual rate of pay.
[20] The second category consists of those managerial and professional employees who are
not covered by any of the 120 industry or occupational awards and do not fall within the
coverage of the Miscellaneous Award because they do not fall within any of the classifications
in that award and/or because they fall within the exemption in clause 4.2. However, due to the
typical pay levels of employees in this category, it is in practical terms highly unlikely that they
encompass anybody who is NMW-reliant.
[21] The third category consists of those who are not covered by any modern award,
including the Miscellaneous Award, because they fall within the prohibition on award coverage
in s 143(7). It is theoretically possible that this category includes low paid employees who are
NMW-reliant but who have not traditionally been covered by awards. The difficulty is, as
observed in the AWR 2023 decision, that no party has been able to identify any actual occupation
or industry in which employees in this category are employed. The State and federal arbitral
systems in Australia have traditionally set award wages for all categories of low paid
employees, and the exclusion in s 143(7) would appear to have little or no application to low
paid employees unless there is some recently-emerged new low paid occupation of which we
are unaware.
[22] As stated above, the Australian Government submitted in last year’s Review that, based
on the results of the Employee Earnings and Hours (EEH) survey conducted by the Australian
Bureau of Statistics (ABS) in May 2021, approximately 0.7 per cent of the workforce is NMW-
reliant. EEH data is drawn from a survey of employers concerning employee earnings and hours
that is conducted biennially in May. The published EEH statistics do not actually identify the
number of employees, or the proportion of the workforce, to whom the NMW applies and who
are paid the NMW rate. The Australian Government’s submission in this respect appears to
have been founded on an inference that, in the survey for May 2021, where an employer
responded in respect of an employee that the employee’s pay was not set by a collective
agreement or an award but rather by ‘an individual agreement or individual contract’, and the
employee was paid an ordinary-time amount which approximated the amount of the NMW, the
employee was a NMW-reliant employee.14
[23] One difficulty with this inference is that, while a respondent employer may reasonably
be presumed to know whether a collective agreement of an enterprise-specific nature applies to
an employee, it is less safe to assume that the employer will know whether any modern award
applies to an employee. Award coverage and application is determined by the combined legal
operation of the provisions of the FW Act referred to above and the coverage and classification
provisions of relevant modern awards. It is not a matter of employer opinion or choice (absent
an employer decision to enter into a collective agreement). Therefore, the fact an employer’s
survey response indicates that an employee’s pay is not set by an award does not necessarily
14 ABS, ‘Employee Earnings and Hours, Australia methodology — May 2021’ (19 January 2022).
https://www.abs.gov.au/methodologies/employee-earnings-and-hours-australia-methodology/may-2021
[2024] FWCFB 3500
12
mean that a modern award does not ‘apply’ to the employee within the meaning of the FW Act
such as to make the NMW applicable.
[24] A research report undertaken by the Commission for the purpose of this Review15
(NMW Report) has examined the microdata from the May 2021 EEH survey to identify, among
other things, the characteristics of ‘employees who do not have their earnings set by an award
or a collective agreement and are earning the NMW’.16 Relevantly, this included their industry
and occupational characteristics. The analysis of the EEH microdata in the NMW Report
disclosed that the most common industries and occupations in which such employees were
employed were as set out below.
Table 1: Most common industry subdivisions and major occupations across NMW employees on
an individual arrangement
Industry subdivision: %
Food and beverage services 20.8*
Personal and other services 9.7*
Professional, scientific and technical services (except computer system
design and related services)
8.0*
Other store-based retailing 7.8*
Construction services 7.2*
Adult, community and other education 6.6*
Administrative services 3.7*
Sports and recreation activities 1.5*
Rental and hiring services (except real estate) 1.0*
Occupation sub-major group:
General Clerical Workers 10.1
Sales Assistants and Salespersons 7.1*
Other Labourers 6.8*
Numerical Clerks 5.3*
Sports and Personal Service Workers 4.9**
Cleaners and Laundry Workers 4.8*
Inquiry Clerks and Receptionists 2.8*
Note: * Estimate has a relative standard error (RSE) of between 25 per cent and 50 per cent and should be interpreted with
caution. ** Estimate has a RSE of greater than 50 per cent and is considered too unreliable for general use. Hourly earnings
are adjusted for casual loading, such that those receiving a casual loading have their earnings lowered in line with the magnitude
of the 25 per cent casual loading.
Source: NMW Report Table C1.
15 Josh Tomlinson, Characteristics of employees on the National Minimum Wage (Fair Work Commission Research Report
No 1/2024, February 2024) (‘NMW Report’).
16 Ibid 4.
https://www.fwc.gov.au/documents/wage-reviews/2023-24/characteristics-of-employees-on-national-minimum-wage-2024-02-29.pdf
[2024] FWCFB 3500
13
[25] It is important to note that Table 1 is concerned with employees paid at or around the
NMW who, according to the May 2021 EEH survey responses, were on ‘individual
arrangements’. As far as we can identify, all of the industries and occupations identified in
Table 1 are, in respect of national system employees, the subject of comprehensive modern
award coverage (except, in some cases, with respect to managerial and professional employees).
There is no indication in Table 1 of any ‘emerging’ industry or occupation not traditionally
covered by awards. Accordingly, this data tends to indicate that (at least) a substantial
proportion of employer EEH survey responses identifying employees paid at around the NMW
rate as not having their pay set by an award are likely to be incorrect. It is possible that what
this data discloses instead is award non-compliance.
[26] The NMW Report also considered whether there are new and emerging occupations
which may fall into gaps in award coverage and, by reference to National Skills Commission
data published in 2020, identified Solar Installers, Social Media Specialists and Hazardous
Materials Labourers (with employment estimates for each at 6,000, 11,000, and 2,000
employees for 2019, respectively) as the lowest paid new and emerging occupations. At least
in respect of Solar Installers and Hazardous Material Labourers, without stating any definitive
conclusion, we consider it likely that they are covered by modern awards. In any event, the
NMW Report states that these three occupations have weekly earnings well above the NMW,
and thus they cannot be NMW-reliant. This is consistent with their non-appearance in Table 1.
[27] In its submissions to this Review, the Australian Government estimates on the basis of
the May 2023 EEH statistics that there are 32,100 employees (representing about 0.25 per cent
of the entire employee workforce) who are NMW-reliant.17 The methodology for this is not
expressly stated but we assume it is the same as for the Government’s 2023 submission. No
explanation is suggested for the very large drop (almost 60 per cent) in the estimated number
of NMW-reliant employees in the space of only two years.
[28] Having regard to the industry and occupational characteristics data in the NMW Report
and the inability of any party to identify any occupation or industry in which NMW-reliant
employees are employed, our conclusion in the absence of any evidence to the contrary is that
the number of NMW-reliant employees is much lower than the Australian Government
estimates (including its current estimate based on the May 2023 EEH statistics) and is likely to
be very small. The upshot of this is that the NMW has very limited practical effect in the
Australian industrial relations landscape notwithstanding its role in the statutory annual wage
review scheme.18 We discuss the implications of this conclusion later in this decision.
2.2 Modern award-reliant employees
[29] The May 2021 EEH data, referred to in the AWR 2023 decision, showed that 23.0 per
cent of the employee workforce was award-reliant — that is, paid in accordance with the
minimum rate in an applicable federal or State award. Of this, it was calculated that 20.5 per
17 Australian Government submission (28 March 2024) Chart 4.1.
18 The rate of the NMW is used to set the amount of parental leave pay under the Commonwealth Government’s Paid Parental
Leave Scheme: Paid Parental Leave Act 2010 (Cth) ss 4, 65(2). However, that does not make the NMW applicable to
employees utilising this scheme, and consideration of this consequential effect of setting the NMW does not arise under
ss 134(1) or 284(1) of the FW Act.
[2024] FWCFB 3500
14
cent of the workforce was modern award-reliant.19 The May 2023 EEH data showed that the
award-reliant proportion of the workforce had increased slightly to 23.2 per cent. It is not
possible to calculate the proportion of modern award-reliant employees (that is, those under
federal awards) from the May 2023 EEH statistics because the microdata will not be released
until after the date of this decision. However, an estimate of about 20.7 per cent of the workforce
as being modern award-reliant (in line with the increase to the total of all award-reliant
employees) appears to be sound.
[30] The AWR 2023 decision20 contained an analysis of the composition and characteristics
of the modern award-reliant workforce based on the May 2021 EEH data. In summary, modern
award-reliant employees:
• are predominantly female (58.1 per cent);
• predominantly work part-time hours (65.2 per cent);
• are disproportionately casual employees (49.7 per cent), with almost half (48.3
per cent) of all casual employees in the workforce being modern award-reliant;
• are younger (34.8 years average age) than the workforce as a whole (40.1 years);
• are more likely to be employed by a small business (35.6 per cent) than for the
workforce as a whole (25.7 per cent); and
• are more likely to be low paid (36.1 per cent) than for the workforce as a whole
(12.1 per cent), and their average hourly wage ($28.60) is significantly lower than
for the rest of the workforce ($46.20).
[31] The 2023 EEH statistics contain the equivalent compositional data for all award-reliant
employees but, again, it is not yet possible to obtain the data for modern award-reliant
employees because the microdata is not yet available. However, two significant changes in the
available data may be identified. First, the proportion of all award-reliant employees who work
part-time hours has increased from 62.6 per cent in May 2021 to 66.7 per cent in 2023.21
Second, the proportion of casual employees has increased from 45.5 per cent to 48.3 per cent
over the same period.22 Since State awards are primarily ‘paid rates’ public sector awards, we
consider that this very significant growth in the proportion of employees working part-time
hours and casual employees is likely to have principally occurred amongst employees under
federal modern awards.
[32] Almost two-thirds of all modern award-reliant employees are covered by 10 modern
awards, namely:
• General Retail Industry Award 202023 (General Retail Award): 11.0 per cent.
• Social, Community, Home Care and Disability Services Award 201024 (SCHADS
Award): 10.5 per cent.
19 Yuen and Tomlinson 2023 Report 13.
20 [2023] FWCFB 3500, 323 IR 332 [46]–[54].
21 Statistical Report — Annual Wage Review 2023–24 (Fair Work Commission, 16 May 2024) Table 7.6.
22 Ibid.
23 MA000004.
24 MA000100.
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb3500.pdf
https://www.fwc.gov.au/documents/wage-reviews/2023-24/c2024-1-statistical-report-awr-2023-24-version-6.pdf
https://www.fwc.gov.au/document-search/view/2/aHR0cHM6Ly9zYXNyY2RhdGFwcmRhdWVhYS5ibG9iLmNvcmUud2luZG93cy5uZXQvYXdhcmRzL01vZGVybkF3YXJkcy9NQTAwMDAwNC5kb2N40?sid=&q=MA000004
https://www.fwc.gov.au/document-search/view/2/aHR0cHM6Ly9zYXNyY2RhdGFwcmRhdWVhYS5ibG9iLmNvcmUud2luZG93cy5uZXQvYXdhcmRzL01vZGVybkF3YXJkcy9NQTAwMDEwMC5kb2N40?sid=&q=MA000100
[2024] FWCFB 3500
15
• Hospitality Industry (General) Award 2020:25 9.5 per cent.
• Fast Food Industry Award 2020:26 7.9 per cent.
• Restaurant Industry Award 2020:27 5.4 per cent.
• Children’s Services Award 201028 (CS Award): 4.8 per cent.
• Clerks—Private Sector Award 2020:29 3.9 per cent.
• Health Professionals and Support Services Award 202030 (HPSS Award): 3.8 per
cent.
• Vehicle Repair, Services and Retail Award 2020:31 3.5 per cent.
• Cleaning Services Award 2020:32 3.2 per cent.33
[33] The proportion of employees within each industry division which is modern award-
reliant varies greatly. In seven industry divisions, more than 20 per cent of employees are
modern award-reliant:
• Accommodation and food services: 59.6 per cent.
• Administrative and support services: 42.3 per cent.
• Other services: 36.4 per cent.
• Retail trade: 29.5 per cent.
• Arts and recreation services: 25.9 per cent.
• Health care and social assistance: 23.0 per cent.
• Rental, hiring and real estate services: 21.4 per cent.
[34] At the other end of the scale, only about 1.1 per cent of employees in Mining are modern
award-reliant. The above data indicates that particular consideration must be given to the
circumstances of industry sectors which are, by proportion or number of employees, highly
modern award-reliant.34 The four industry sectors which contain the largest proportions of all
modern award-reliant employees are Accommodation and food services (21.6 per cent), Health
care and social assistance (17.1 per cent), Retail trade (14 per cent) and Administrative and
support services (13.2 per cent).35 These sectors therefore account for almost two-thirds of all
modern award-reliant employees.
[35] This section of the decision describes those employees, and their employers, who are
directly affected by annual wage review decisions. In addition, there are other categories of
employees and employers who are indirectly affected because they have wage rates linked to
25 MA000009.
26 MA000003.
27 MA000119.
28 MA000120.
29 MA000002.
30 MA000027.
31 MA000089.
32 MA000022.
33 AWR 2023 decision [2023] FWCFB 3500, 323 IR 332 [50], Chart 1.
34 Ibid [51], Table 2.
35 Yuen and Tomlinson 2023 Report Chart 3.2.
https://www.fwc.gov.au/document-search/view/2/aHR0cHM6Ly9zYXNyY2RhdGFwcmRhdWVhYS5ibG9iLmNvcmUud2luZG93cy5uZXQvYXdhcmRzL01vZGVybkF3YXJkcy9NQTAwMDAwOS5kb2N40?sid=&q=MA000009
https://www.fwc.gov.au/document-search/view/2/aHR0cHM6Ly9zYXNyY2RhdGFwcmRhdWVhYS5ibG9iLmNvcmUud2luZG93cy5uZXQvYXdhcmRzL01vZGVybkF3YXJkcy9NQTAwMDAwMy5kb2N40?sid=&q=MA000003
https://www.fwc.gov.au/document-search/view/2/aHR0cHM6Ly9zYXNyY2RhdGFwcmRhdWVhYS5ibG9iLmNvcmUud2luZG93cy5uZXQvYXdhcmRzL01vZGVybkF3YXJkcy9NQTAwMDExOS5kb2N40?sid=&q=MA000119
https://www.fwc.gov.au/document-search/view/2/aHR0cHM6Ly9zYXNyY2RhdGFwcmRhdWVhYS5ibG9iLmNvcmUud2luZG93cy5uZXQvYXdhcmRzL01vZGVybkF3YXJkcy9NQTAwMDEyMC5kb2N40?sid=&q=MA000120
https://www.fwc.gov.au/document-search/view/2/aHR0cHM6Ly9zYXNyY2RhdGFwcmRhdWVhYS5ibG9iLmNvcmUud2luZG93cy5uZXQvYXdhcmRzL01vZGVybkF3YXJkcy9NQTAwMDAwMi5kb2N40?sid=&q=MA000002
https://www.fwc.gov.au/document-search/view/2/aHR0cHM6Ly9zYXNyY2RhdGFwcmRhdWVhYS5ibG9iLmNvcmUud2luZG93cy5uZXQvYXdhcmRzL01vZGVybkF3YXJkcy9NQTAwMDAyNy5kb2N40?sid=&q=MA000027
https://www.fwc.gov.au/document-search/view/2/aHR0cHM6Ly9zYXNyY2RhdGFwcmRhdWVhYS5ibG9iLmNvcmUud2luZG93cy5uZXQvYXdhcmRzL01vZGVybkF3YXJkcy9NQTAwMDA4OS5kb2N40?sid=&q=MA000089
https://www.fwc.gov.au/document-search/view/2/aHR0cHM6Ly9zYXNyY2RhdGFwcmRhdWVhYS5ibG9iLmNvcmUud2luZG93cy5uZXQvYXdhcmRzL01vZGVybkF3YXJkcy9NQTAwMDAyMi5kb2N40?sid=&q=MA000022
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb3500.pdf
[2024] FWCFB 3500
16
annual wage review decisions by various mechanisms.36 The most notable of these are
enterprise agreements which provide for wage increases in line with annual wage review
outcomes. The Australian Government submission identifies that 74,079 employees
(representing approximately 0.6 per cent of the employee workforce) are covered by
agreements of this nature.37 We note that, after this submission was filed, the Coles Retail
Enterprise Agreement 2024 was approved by the Commission on 3 May 2024.38 This
agreement, which will take effect on 4 October 2024, provides for pay increases in line with
annual wage review decisions and covers over 92,000 employees.
2.3 Effect of AWR decisions
[36] Because approximately two-thirds of the modern award-reliant workforce works part-
time hours, and the modern award-reliant workforce is disproportionately low paid, the direct
effect of AWR decisions on aggregate national labour costs and wages growth is limited. In the
AWR 2023 decision,39 the contribution of the wages of modern award-reliant employees to the
economy-wide aggregate wage bill, based on the May 2021 EEH data, was estimated to be 11.2
per cent. This figure has been recalculated, based on the May 2023 EEH data, to be 10.6 per
cent for 2023.
Table 2: Award-dependent wages in the total economy, modern award-reliant employees, 2023
Number
Share total
(%)
Share GDP
(%)
Workers covered by modern awards (millions, 2023) 2.60 20.7* -
Average wage, modern award-reliant employees
($ per week, 2023) 762.6 51.2 -
Wage bill covered by modern award-reliant
employees ($billion per year, 2023) 103.2 10.6 -
Total compensation covered by modern award-
reliant employees ($billion per year) 128.0 - 4.9
Note: Total compensation of employees and gross domestic product (GDP) is based on the June quarter 2023, annualised, as
per Greg Jericho and Jim Stanford, ‘The Irrelevance of Minimum Wages to Future Inflation’ (Briefing Paper, Centre for Future
Work, The Australia Institute, March 2024).*Same proportion of modern award-reliant to total award-reliant employees applied
from 2021 as number of modern award-reliant employees is not yet known for 2023.
Source: Information note—Award-dependent wages in the economy, Fair Work Commission additional material for the
Annual Wage Review 2023–24, 16 April 2024.
[37] The ABS Wage Price Index (WPI) data available at the time of the AWR 2023 decision
indicated that the contribution of award wage increases, including the outcome of the 2022
annual wage review decision,40 to the total increase (original) to the WPI for the 12 months to
36 AWR 2023 decision [2023] FWCFB 3500, 323 IR 332 [56].
37 Australian Government submission (28 March 2024) Chart 4.1.
38 [2024] FWCFB 250.
39 [2023] FWCFB 3500, 323 IR 332 [49], Table 1.
40 Annual Wage Review 2021–22 [2022] FWCFB 3500, 315 IR 367.
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb3500.pdf
https://www.fwc.gov.au/documents/decisionssigned/pdf/2024fwcfb250.pdf
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb3500.pdf
https://www.fwc.gov.au/documents/decisionssigned/html/2022fwcfb3500.htm
[2024] FWCFB 3500
17
the March quarter 2023 was 8.1 per cent.41 In the ABS WPI release for the September quarter
2023, released on 15 November 2023, the ABS advised that it had adjusted its methodology for
calculating the analytical series ‘Contribution to wages growth by method of setting pay’. The
result of this was that the revised series provided for ‘an increased contribution to Awards jobs,
most notably in the September quarters when Award wages are typically adjusted based on
decisions by the Fair Work Commission’,42 with offsetting decreases in the size of the
contributions of Enterprise Agreements and Individual Agreements to the WPI. Based on the
revised analytical series, the figure for the award contribution to the WPI increase for the four
quarters to the March quarter 2023 was 16.0 per cent.43 We note that this represents the
contribution for all awards, including State awards, and therefore does not solely represent the
contribution of the 2022 Review decision.
[38] Table 3 shows the contributions to WPI by method of setting pay for the 12 months to
the March quarter 2024.
Table 3: Contributions to the WPI, by method of setting
Quarter
Enterprise
agreement
(%)
Individual
arrangement
(%)
Award
(%)
Total
increase
(original)
(%)
Total
increase
(seasonally
adjusted)
(%)
June 2023 0.22 0.35 0.00 0.6 1.0
September 2023 0.66 0.74 0.63 1.9 1.2
December 2023 0.45 0.39 0.12 0.9 1.0
March 2024 0.21 0.34 0.02 0.6 0.8
Sum over year 1.54 1.82 0.77 4.1 4.1
Source: Statistical Report — Annual Wage Review 2023–24 (Fair Work Commission, 16 May 2024) Table 5.3; ABS, ‘Wage
Price Index, Australia — March 2024’ (15 May 2024).
[39] The AWR 2023 decision increased all minimum wage rates in modern awards by 5.75
per cent effective from 1 July 2023. In addition to this, a 15 per cent interim pay increase for
direct care staff in the aged care sector arising from separate work value proceedings took effect
on 30 June 2023. The combined effect of these two decisions is shown in the award contribution
for the September quarter 2023 of 0.63 per cent. This constituted 15.3 per cent of the total
increase (original) to the WPI for the four quarters to March 2024. The contribution of the AWR
2023 decision was therefore slightly less than this.
3. Economic, labour market and business considerations
[40] The current economic circumstances which have priority in our consideration in this
year’s Review include a rate of inflation that remains above the Reserve Bank of Australia’s
41 AWR 2023 decision [2023] FWCFB 3500, 323 IR 332 [77]–[78].
42 ABS, ‘Wage Price Index, Australia methodology — March 2024’ (15 May 2024).
43 ABS, ‘Wage Price Index, Australia — March 2024’ (15 May 2024).
https://www.fwc.gov.au/documents/wage-reviews/2023-24/c2024-1-statistical-report-awr-2023-24-version-6.pdf
https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/wage-price-index-australia/mar-2024
https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/wage-price-index-australia/mar-2024
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb3500.pdf
https://www.abs.gov.au/methodologies/wage-price-index-australia-methodology/mar-2024
https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/wage-price-index-australia/mar-2024
[2024] FWCFB 3500
18
(RBA’s) target range of 2–3 per cent, the RBA’s policy response to this by way of a progressive
tightening of monetary policy, the effect this policy response is likely to have for economic
growth and labour markets, and the uncertain outlook for productivity growth. We set out in
this section of the decision the economic, labour market and business circumstances which we
consider to be of primary relevance to the considerations in ss 134(1)(c), (d), (f) and (h) and
ss 284(1)(a) and (b) of the FW Act.
3.1 Inflation and monetary policy
[41] Inflation has eased considerably since the time of last year’s annual wage review but
remains the most significant challenge currently facing the Australian economy. The headline
Consumer Price Index (CPI) rate for the 12 months to the March quarter 2024 was 3.6 per cent,
down from 7.0 per cent for the equivalent period last year. The March quarter 2024 CPI increase
was 1.0 per cent, which was higher than expected and represented an increase from the
December quarter 2023 result of 0.6 per cent. The trimmed mean, which measures underlying
inflation, remains higher at 4.0 per cent annually, down from a revised 6.5 per cent 12 months
ago. The Employee Living Cost Index (LCI), which unlike the CPI takes into account changes
in mortgage interest rates, has increased at a significantly higher rate — 6.5 per cent — than
the CPI for the 12 months to the March quarter 2024. The equivalent figure 12 months ago was
9.6 per cent.
Table 4: CPI, underlying inflation, LCI for employee households, index and growth rate over the
year
Quarter
CPI
(% change)
Trimmed mean
(% change)
Weighted median
(% change)
Employee LCI
(% change)
Mar-14 2.9 2.7 2.4 2.1
Mar-15 1.3 2.3 2.4 0.9
Mar-16 1.3 1.7 1.5 1.1
Mar-17 2.1 1.7 1.6 1.5
Mar-18 1.9 1.7 2.0 2.0
Mar-19 1.3 1.6 1.5 1.4
Mar-20 2.2 1.7 1.6 1.1
Mar-21 1.1 1.1 1.2 0.0
Mar-22 5.1 3.8 3.5 3.8
Mar-23 7.0 6.5 5.9 9.6
Mar-24 3.6 4.0 4.4 6.5
Note: CPI and LCI data are expressed in original terms. Percentage change is calculated in relation to the corresponding quarter
in the previous year. Source: ABS, ‘Consumer Price Index, Australia — March Quarter 2024’ (24 April 2024); ABS, ‘Selected
Living Cost Indexes, Australia — March 2024’, (1 May 2024).
[42] The CPI subgroup which makes the highest contribution to the CPI is Housing, at 21.7
per cent of the total.44 The cost of rental accommodation, which is included in the Housing
44 Statistical Report — Annual Wage Review 2023–24 (Fair Work Commission, 16 May 2024) Table 4.2.
https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/consumer-price-index-australia/mar-quarter-2024
https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/selected-living-cost-indexes-australia/mar-2024
https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/selected-living-cost-indexes-australia/mar-2024
https://www.fwc.gov.au/documents/wage-reviews/2023-24/c2024-1-statistical-report-awr-2023-24-version-6.pdf
[2024] FWCFB 3500
19
subgroup, increased by 7.8 per cent in the 12 months to the March quarter 2024. This was the
highest rate of increase since 2009 and was the main contributor to the annual rise in the
Housing subgroup. Services inflation (4.3 per cent) is now higher than goods inflation (3.1 per
cent), a reversal of the position of 12 months ago, but both have reduced. Annual inflation for
non-tradables was 5.0 per cent for the 12 months to the March quarter 2024 and 0.9 per cent for
tradables, compared to 7.5 and 6.1 per cent respectively for 2022–23.45 This indicates that the
principal driver of the inflation rate has switched from international to domestic factors over
that period.
[43] The Producer Price Index (PPI), which measures the change in prices received by
domestic producers for their output, rose 4.3 per cent in the 12 months to the March quarter
2024, compared to a revised 4.9 per cent for the equivalent period last year.
[44] The policy response of the RBA to a rate of inflation which has been above its target
range since mid-2021 has been to significantly increase interest rates beginning in May 2022.
There have now been 13 consecutive interest rate increases, the most recent being in November
2023.
Table 5: Interest rate decisions
Effective date Cash rate — % Change — % points
8 November 2023 4.35 +0.25
7 June 2023 4.10 +0.25
3 May 2023 3.85 +0.25
8 March 2023 3.60 +0.25
8 February 2023 3.35 +0.25
7 December 2022 3.10 +0.25
2 November 2022 2.85 +0.25
5 October 2022 2.60 +0.25
7 September 2022 2.35 +0.50
3 August 2022 1.85 +0.50
6 July 2022 1.35 +0.50
8 June 2022 0.85 +0.50
4 May 2022 0.35 +0.25
6 April 2022 0.10 0.00
Source: ‘Cash Rate Target’, Reserve Bank of Australia (Web Page).
[45] In its May 2024 Statement on Monetary Policy, released before the 2024–25 Budget,
the RBA revised its CPI forecasts upward in light of the higher than expected CPI result for the
March quarter 2024 and a stronger than expected labour market (which we discuss further
below). It does not project inflation to fall within its target band until the second half of 2025,
with no fall in CPI inflation occurring this calendar year. The RBA forecasts do not incorporate
any effect of the Budget’s cost-of-living relief measures on inflation.
45 ABS, ‘Consumer Price Index, Australia — March Quarter 2024’, (24 April 2024).
https://www.rba.gov.au/statistics/cash-rate/
https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/consumer-price-index-australia/mar-quarter-2024
[2024] FWCFB 3500
20
Table 6: RBA inflation forecasts
Year ended
Jun 2024 Dec 2024 Jun 2025 Dec 2025 Jun 2026
CPI Inflation
(previous)
3.8
(3.3)
3.8
(3.2)
3.2
(3.1)
2.8
(2.8)
2.6
(2.6)
Trimmed mean inflation
(previous)
3.8
(3.6)
3.4
(3.1)
3.1
(3.0)
2.8
(2.8)
2.6
(2.6)
Source: Reserve Bank of Australia, Statement on Monetary Policy (May 2024). ‘Previous’ refers to forecasts made in the
RBA’s February 2024 Statement.
[46] The RBA’s assessment concerning future inflation and interest rates is as follows:
Inflation is expected to be higher in the near term than anticipated at the time of the February
Statement. Services inflation has declined by a little less than expected, the labour market is
assessed as being tighter than previously thought and the outlook for the labour market is
slightly stronger. Higher petrol prices and the legislated end of energy rebates will also lift
headline inflation in the near term.
The forecasts assume that the cash rate is higher for longer. The staff forecasts are conditioned
on the assumption that the cash rate target remains around its current level until mid-2025 before
gradually declining over the remainder of the forecast period. This path is about ½ percentage
point higher from 2025 onwards than in the February Statement.46
[47] However, the RBA has not ruled out at least one further interest rate increase:
The outlook remains uncertain. The path of inflation on its return to target is unlikely to be
smooth. The path of interest rates that will best ensure that inflation returns to target in a
reasonable timeframe remains uncertain and the Board is not ruling anything in or out. The
Board will rely upon the data and the evolving assessment of risks and remain vigilant to the
risks of inflation remaining too high.
. . .
Market participants revised up cash rate expectations in response to stronger-than-expected
Australian inflation and labour market data. Market pricing implies there is some chance of one
more rate increase in Australia this year, with no reduction in the cash rate expected until 2025.
Indeed, market participants expect policy to be eased more gradually and noticeably later than
previously anticipated.47
[48] In the Budget, the Australian Government announced a range of measures to mitigate
increases to the cost of living. The Government had previously legislated for modified ‘Stage
3’ tax cuts via the Treasury Laws Amendment (Cost of Living Tax Cuts) Act 2024 which,
effective from 1 July 2024, will reduce the 19 per cent tax rate to 16 per cent and the 32.5 per
cent rate to 30 per cent and increase the annual income threshold for the 37 per cent rate from
$120,000 to $135,000 and for the 45 per cent rate from $180,000 to $190,000.48 The Budget
announcement of principal significance to inflation is the energy rebate, whereby a rebate on
46 Reserve Bank of Australia, Statement on Monetary Policy (May 2024) 4.
47 Ibid 1–2.
48 The Treasury Laws Amendment (Cost of Living—Medicare Levy) Act 2024 also increased the Medicare levy low-income
thresholds.
https://www.rba.gov.au/publications/smp/2024/may/pdf/statement-on-monetary-policy-2024-05.pdf
https://www.rba.gov.au/publications/smp/2024/may/pdf/statement-on-monetary-policy-2024-05.pdf
[2024] FWCFB 3500
21
electricity bills of $300 for households and $325 for small businesses will operate from 1 July
2024. In addition, the Budget increases the maximum rate of Commonwealth Rent Assistance
by 10 per cent. These two measures are expected to directly reduce the CPI by around a half
percentage point over 2024–25.
[49] Taking this into account, the Budget’s forecasts for inflation are significantly lower than
those of the RBA:
Table 7: Budget inflation forecasts
2023–24 2024–25 2025–26
Consumer price index 3½% 2¾% 2¾%
Source: Commonwealth of Australia, Budget 2024–25: Budget Strategy and Outlook (Budget Paper No. 1, 14 May 2024)
Table 2.2.
[50] However, the Budget identifies ‘substantial risks to the domestic outlook’ including that
inflation could prove more persistent than forecast, with possible implications for policy
settings and growth, and that if productivity does not pick up as expected, price pressures may
be more persistent, with potential implications for unemployment and the real economy.49
3.2 Economic growth
[51] Economic growth has slowed, principally as a result of subdued domestic demand in
response to rising interest rates and the higher cost of living. The National Accounts for the
December quarter 2023 show that GDP grew by 0.2 per cent for the quarter and by 1.5 per cent
over the calendar year 2023, compared to 2.4 per cent for 2022. Due to high population growth,
per capita GDP actually declined in 2023 by 1.0 per cent. Real net national disposable income
(RNNDI) rose by 1.6 per cent over the year, but fell by 0.9 per cent on a per capita basis.
Table 8: Key national accounts aggregate, percentage changes
Quarter Year
Sep–Dec
2022
Dec 2022 –
Mar 2023
Mar–Jun
2023
Jun–Sep
2023
Sep–Dec
2023
Dec 2022 –
Dec 2023
GDP 0.8 0.6 0.5 0.3 0.2 1.5
GDP per capita 0.3 - -0.2 -0.5 -0.3 -1.0
Gross value
added market
sector
0.6 0.7 0.6 0.1 0.1 1.5
Real net national
disposable income
0.6 1.6 -0.9 -0.5 1.4 1.6
49 Commonwealth of Australia, Budget 2024–25: Budget Strategy and Outlook (Budget Paper No. 1, 14 May 2024) 51.
https://budget.gov.au/content/bp1/download/bp1_2024-25.pdf
https://budget.gov.au/content/bp1/download/bp1_2024-25.pdf
[2024] FWCFB 3500
22
Quarter Year
Sep–Dec
2022
Dec 2022 –
Mar 2023
Mar–Jun
2023
Jun–Sep
2023
Sep–Dec
2023
Dec 2022 –
Dec 2023
Real net national
disposable income
per capita
0.1 1.0 -1.5 -1.2 0.8 -0.9
Source: ABS, ‘Australian National Accounts: National Income, Expenditure and Product — December 2023’ (6 March 2024).
[52] The primary contributors to economic growth in 2023 were government expenditure,
exports and non-mining investment. Household consumption was subdued, reflecting the effect
of monetary policy on discretionary expenditure.
Chart 1: Contributions to GDP growth, year ended December 2023
Source: ABS, ‘Australian National Accounts: National Income, Expenditure and Product — December 2023’ (6 March 2024);
RBA, Chart Pack, Contributions to GDP Growth, 2023.
[53] Annual growth in 2023 varied greatly amongst the most modern award-reliant industry
sectors. There was strong growth in Health care and social assistance, weak growth in
Administrative and support services, and Accommodation and food services and Retail trade
both contracted.
1.5
0.0
-0.2
0.2
0.7
1.3
1.1
-0.7
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
GDP Household
consumption
Dwelling
investment
Mining
investment
Non-mining
investment
Government Exports Imports
Ppts
https://www.abs.gov.au/statistics/economy/national-accounts/australian-national-accounts-national-income-expenditure-and-product/dec-2023
https://www.abs.gov.au/statistics/economy/national-accounts/australian-national-accounts-national-income-expenditure-and-product/dec-2023
[2024] FWCFB 3500
23
Chart 2: Change in gross value added by industry, December quarter 2023
Source: Statistical Report — Annual Wage Review 2023–24 (Fair Work Commission, 16 May 2024) Chart 1.4; ABS,
‘Australian National Accounts: National Income, Expenditure and Product — December 2023’ (6 March 2024).
[54] The RBA forecasts weak economic growth, with subdued household consumption for
the balance of the calendar year. It sees higher growth and consumption in 2025 as growth in
real incomes supports increases in household spending. The Budget forecasts are broadly
comparable, with growth to remain subdued, but with a recovery in household consumption
supported over the next financial year by higher wages growth, the forecast moderation in
inflation, continuing employment growth and the Stage 3 tax cuts. It identifies recent strength
in business investment, net exports and public investment as also supporting economic
growth.50
50 Ibid.
-4 -2 0 2 4 6 8
Manufacturing
Construction
Electricity, gas, water and waste services
Other services
Transport, postal and warehousing
Education and training
Wholesale trade
Retail trade
Arts and recreation services
Agriculture, forestry and fishing
All industries
Financial and insurance services
Public administration and safety
Mining
Rental, hiring and real estate services
Accommodation and food services
Administrative and support services
Professional, scientific and technical services
Health care and social assistance
Information media and telecommunications
Per centAnnualised change December qtr 2013 to December qtr 2023
Over the year to December qtr 2023
December qtr 2023
https://www.fwc.gov.au/documents/wage-reviews/2023-24/c2024-1-statistical-report-awr-2023-24-version-6.pdf
https://www.abs.gov.au/statistics/economy/national-accounts/australian-national-accounts-national-income-expenditure-and-product/dec-2023
[2024] FWCFB 3500
24
Table 9: RBA and budget forecasts of growth rates in GDP and household consumption
June 2024 Dec 2024 June 2025 Dec 2025 June 2026
Gross domestic
product
RBA
Budget
1.2
1¾
1.6
2.1
2
2.3
2.4
2¼
Household
consumption
RBA
Budget
0.1
¼
1.3
2.6
2
2.8
2.7
2¾
Source: Commonwealth of Australia, Budget 2024–25: Budget Strategy and Outlook (Budget Paper No. 1, 14 May 2024) 53;
Reserve Bank of Australia, Statement on Monetary Policy (May 2024) 51.
[55] The International Monetary Fund forecasts 1.5 per cent growth for 2024 and 2.0 per cent
for 2025.51
3.3 The labour market
[56] The labour market has slightly weakened since last year’s annual wage review, but has
remained resilient over the course of 2023–24 notwithstanding further tightening in monetary
policy and weakened economic growth. Seasonally adjusted, the unemployment rate for April
2024 increased slightly to 4.1 per cent, but employment growth remains strong. Employment
increased by 2.8 per cent over the year, but hours worked were 0.8 per cent lower across the
year. The underemployment rate is 6.6 per cent, higher than last year’s 6.2 per cent (revised).
The participation rate remains at a near-historic high of 66.7 per cent, as does the employment-
to-population ratio of 64.0 per cent.
51 Statistical Report — Annual Wage Review 2023–24 (Fair Work Commission, 16 May 2024) Table 14.2.
https://budget.gov.au/content/bp1/download/bp1_2024-25.pdf
https://www.rba.gov.au/publications/smp/2024/may/pdf/statement-on-monetary-policy-2024-05.pdf
https://www.fwc.gov.au/documents/wage-reviews/2023-24/c2024-1-statistical-report-awr-2023-24-version-6.pdf
[2024] FWCFB 3500
25
Chart 3: Participation, unemployment and underemployment rates
Source: Statistical Report — Annual Wage Review 2023–24 (Fair Work Commission, 16 May 2024) Charts 6.1–6.3; ABS,
‘Labour Force, Australia — April 2024’ (16 May 2024).
[57] However, the position is somewhat more mixed in the industry sectors with the most
modern award-reliant employees, with both employment and hours worked having fallen in
Accommodation and food services and employment having fallen in Retail trade over the year
to December 2023.
Table 10: Filled jobs and hours actually worked in industries with the most modern award-reliant
employees, growth over the year to the December quarter 2023
Industry Annual growth in
filled jobs
Annual growth in
hours worked
Retail trade -1.3 0.3
Accommodation and food services -2.9 -5.8
Administrative and support services 2.5 6.9
Health care and social assistance 9.2 9.2
Source: ABS, ‘Labour Account Australia — December 2023’ (8 March 2024).
[58] Notwithstanding that the labour market overall has performed somewhat more strongly
than expected 12 months ago, wages growth has remained broadly within expectations. Table
11 shows that wages growth is at elevated levels compared to most of the last decade, but
appears to have reached or perhaps passed its peak. The WPI increased by 0.8 per cent,
seasonally adjusted, in the March quarter 2024, lower than for the four preceding quarters.
66.7
4.1
6.6
0
2
4
6
8
10
12
14
61
62
63
64
65
66
67
68
Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-23
Per centPer cent
Participation rate (LHS) Unemployment rate (RHS) Underemployment rate (RHS)
https://www.fwc.gov.au/documents/wage-reviews/2023-24/c2024-1-statistical-report-awr-2023-24-version-6.pdf
https://www.abs.gov.au/statistics/labour/employment-and-unemployment/labour-force-australia/apr-2024
https://www.abs.gov.au/statistics/labour/labour-accounts/labour-account-australia/dec-2023
[2024] FWCFB 3500
26
Table 11: Measures of nominal wages growth, growth rate over the year
Year ended
(Quarter)
WPI
(% change)
AWOTE^
(% change)
C10
(% change)
AAWI
(% change)
AENA^^
(% change)
Dec-13 2.6 2.9 2.6 3.4 3.2
Dec-14 2.5 2.8 3.0 3.4 1.9
Dec-15 2.2 1.6 2.5 3.0 0.6
Dec-16 1.9 2.2 2.4 3.1 0.3
Dec-17 2.1 2.4 3.3 2.5 2.0
Dec-18 2.3 2.3 3.5 2.9 2.3
Dec-19 2.2 3.3 3.0 2.7 3.3
Dec-20 1.3 3.2 1.8* 2.2 3.6
Dec-21 2.4 2.2 2.5 2.6 4.7
Dec-22 3.3 3.4 4.6 3.0 3.8
Dec-23 4.2 4.5 5.7** 4.3 5.0
Mar-24 4.1 n/a 5.7** n/a n/a
Note: * Actual increase from the Annual Wage Review 2019–20 was 1.75 per cent. ** Actual increase from the Annual Wage
Review 2022–23 was 5.75 per cent. Increase calculated from wage rates rounded to the nearest cent. ̂ Average weekly ordinary
time earnings data are presented for November of each year. ^^ Average Earnings National Accounts = Compensation of
employees / Total number of employees.
Source: Statistical Report — Annual Wage Review 2023–24 (Fair Work Commission, 16 May 2024) Table 5.1.
[59] The Commission’s own data concerning the average annual wage increase (AAWI),
where ascertainable, provided for in enterprise agreements which are the subject of applications
to the Commission for approval tends to confirm that wages growth has passed its peak. Table
12 shows the average AAWI, weighted for the number of employees covered by each
agreement, for 2024 (to the fortnight ending 19 April) compared with each half of 2023.
Table 12: Average AAWI for enterprise agreements, 2023–2024
Period Average AAWI
1 January – 30 June 2023 3.5%
1 July – 31 December 2023 4.0%
1 January – 19 April 2024 3.8%
[60] Currently, the biggest driver of wages growth in the economy is individual arrangements
in the private sector. Across industry sectors, with the exception of Health care and social
assistance, there was not a significant degree of difference in wages growth compared to the
national figure for the year to March 2024. The more highly modern award-reliant Retail trade,
Accommodation and food services and Administrative and support services sectors experienced
wages growth of 4.4, 4.0 and 4.3 per cent respectively compared to all industries growth of 4.1
per cent, notwithstanding the 5.75 per cent increase awarded in the AWR 2023 decision. The
5.3 per cent increase in the Health care and social assistance sector likely reflects the 15 per
cent minimum pay increase for direct care workers in aged care which took effect on 30 June
2023 and was in addition to the 5.75 per cent increase.
https://www.fwc.gov.au/documents/wage-reviews/2023-24/c2024-1-statistical-report-awr-2023-24-version-6.pdf
[2024] FWCFB 3500
27
[61] The RBA and Budget forecasts for employment growth and unemployment are broadly
similar and indicate a softening but, in historical terms, still robust labour market. Consistent
with this, they forecast a moderation of wages growth, but to a level which remains relatively
high by recent standards and, on their respective forecasts for inflation, would result in modest
real wages increases over 2024–25. The Budget’s forecast for the WPI for 2024–25 is somewhat
lower than the RBA’s. The Budget forecasts that, as a result of increasing real wages together
with the Stage 3 tax cuts, real household disposable income will increase by 3.5 per cent in
2024–25.
Table 13: RBA and Budget forecasts for employment and wages
June 2024 Dec 2024 June 2025 Dec 2025 June 2026
Employment growth %
RBA
Budget
2.1
2¼
1.4
1.2
¾
1.3
1.4
1¼
Unemployment rate %
RBA
Budget
4.0
4
4.2
4.3
4½
4.3
4.3
4½
Wage Price Index %
RBA
Budget
4.2
4
3.8
3.6
3¼
3.4
3.3
3¼
Source: Commonwealth of Australia, Budget 2024–25: Budget Strategy and Outlook (Budget Paper No. 1, 14 May 2024) 53;
Reserve Bank of Australia, Statement on Monetary Policy (May 2024) 51.
3.4 Business conditions and outlook
[62] Total business profits declined by 5.4 per cent in the 12 months to the December quarter
2023, but this was the result of a large decline of 14.5 per cent in mining profits linked to a 15.4
per cent fall in commodity prices over the year.52 In non-mining sectors, profits grew by 4.2
per cent, higher than for 2022. This result was somewhat lower than the annualised growth rates
over the last 5- and 10-year periods, but we note the distortion produced by the unusual level
of profits growth in the first year of the COVID-19 pandemic in 2020.
Table 14: Company gross operating profits, mining and non-mining industries, growth rates
Quarter Mining
(%)
Non-mining
(%)
Total
(%)
Dec-13 37.0 1.3 11.3
Dec-14 -20.5 1.3 -6.2
Dec-15 -16.0 2.4 -3.0
Dec-16 78.3 10.7 27.8
Dec-17 2.5 6.3 5.0
Dec-18 28.6 3.0 11.8
Dec-19 8.5 1.0 3.9
Dec-20 3.7 24.0 15.6
Dec-21 37.4 0.8 14.3
Dec-22 33.0 2.1 15.8
52 In SDR (special drawing right) terms: ‘Index of Commodity Prices – April 2024’, Reserve Bank of Australia (Web Page, 1
May 2024).
https://budget.gov.au/content/bp1/download/bp1_2024-25.pdf
https://www.rba.gov.au/publications/smp/2024/may/pdf/statement-on-monetary-policy-2024-05.pdf
https://www.rba.gov.au/statistics/frequency/commodity-prices/2024/icp-0424.html#:%7E:text=In%20Index%20of%20Commodity%20Prices%202024&text=Preliminary%20estimates%20for%20April%20indicate,and%20base%20metals%20subindices%20increased.
[2024] FWCFB 3500
28
Quarter Mining
(%)
Non-mining
(%)
Total
(%)
Dec-23 -14.5 4.2 -5.4
5 years to Dec-23* 11.9 6.0 8.5
10 years to Dec-23* 10.7 5.4 7.5
Note: *Annualised growth rates.
Source: ABS, ‘Business Indicators, Australia — December 2023’ (4 March 2024).
[63] The picture for profits was mixed for industry sectors which have a high degree of
modern award reliance. Most notably, there was a substantial decline in profits in the
Accommodation and food services sector, in which about 22 per cent of modern award-reliant
employees are located. Profits in the Retail trade sector and in Arts and recreation services were
also flat. This likely reflects reductions in discretionary spending by consumers in the face of
higher interest rates. However, profits growth in Administrative and support services, Other
services and Rental, hiring and real estate services was healthy, albeit less so in the December
quarter 2023.
Chart 4: Growth in gross operating profits, current prices, by industry
Note: * Data for Financial and insurance services encompasses only the Auxiliary finance and insurance services subdivision.
**All industries includes only the private sector (excluding Public administration and safety, Education and training and
Health care and social assistance) and excludes Agriculture, forestry and fishing.
Source: Statistical Report — Annual Wage Review 2023–24 (Fair Work Commission, 16 May 2024) Chart 3.2; ABS,
‘Business Indicators, Australia — December 2023’ (4 March 2024).
-20 0 20 40 60 80 100 120 140 160
Mining
Accommodation and food services
Wholesale trade
**All industries
Information media and telecommunications
Arts and recreation services
Retail trade
Manufacturing
Transport, postal and warehousing
Professional, scientific and technical services
Rental, hiring and real estate services
Other services
Construction
Electricity, gas, water and waste services
Administrative and support services
*Financial and insurance services
Per cent
Over the year to the December quarter 2023 December quarter 2023
https://www.abs.gov.au/statistics/economy/business-indicators/business-indicators-australia/dec-2023
https://www.fwc.gov.au/documents/wage-reviews/2023-24/c2024-1-statistical-report-awr-2023-24-version-6.pdf
https://www.abs.gov.au/statistics/economy/business-indicators/business-indicators-australia/dec-2023
[2024] FWCFB 3500
29
[64] For the year to June 2023 (the latest available data), business entry rates exceeded
business exit rates, and there was a large increase in the number of businesses in the higher
turnover range.53 The latest available data for the business bankruptcy rate, for 2022–23, shows
that the bankruptcy rate has increased slightly but remained well below the rate experienced for
most of the past decade.54 Total retail turnover, seasonally adjusted, increased by 0.8 per cent
in the 12 months to March 2024, but there are significant variations in turnover change between
different retail sectors, and total turnover declined in the March quarter 2024 largely because
of a significant decline in Household goods retailing.55
[65] Private business investment growth has been strong over the last 18 months, and grew
by 8.2 per cent (5.9 per cent in Mining and 8.9 per cent in Non-mining) during 2023. It is
forecast to continue to grow in 2024, albeit at a slower rate.56
[66] Business surveys give mixed reports. The NAB Quarterly Business Survey for the
March quarter 2024, published on 18 April 2024, shows an increase in business confidence
compared to the December quarter 2023 and the March quarter 2023, but remains in negative
territory.57 Business conditions are assessed as having ‘stabilised at above-average levels’, but
are lower than for 12 months ago. Business activity overall is assessed as ‘resilient’, with
positive outcomes for expected forward orders, capacity utilisation and capital expenditure. In
respect of the labour market, expectations for employment have eased but remained positive,
and 78 per cent of firms reported availability of labour as a constraint on output. The rate of
labour cost growth slowed slightly to 1.2 per cent in the March quarter 2024, but expectations
are for this to reduce significantly to 0.9 per cent in the next three months and for expected
average wage growth to be 2 per cent for 2023–24. Nonetheless, wage costs remain the top
issue affecting business confidence. Purchase cost growth, final product price growth and retail
price growth are all expected to reduce over the next three months. The NAB survey projects
that ‘price growth measures are now tracking around a rate that, if maintained, would be
consistent with inflation easing towards the top of the RBA’s target range’58 by the end of 2024.
[67] The ACCI–Westpac Survey of Industrial Trends is focused on manufacturing. The
survey conducted in the period from 15 February to 11 March 202459 indicated a deterioration
in conditions in the manufacturing sector in the March quarter 2024 with a decline in new
orders, a fall in output, and a reduction in overtime and in staff numbers. However,
manufacturers’ expectations are more positive, indicating that ‘the weakness in conditions
coming back from summer holidays may be relatively short-lived, or at least somewhat
overstated’.60 Sentiment about the general business situation has deteriorated over the last two
53 Statistical Report — Annual Wage Review 2023–24 (Fair Work Commission, 16 May 2024) Chart 3.5; ABS, ‘Counts of
Australian Businesses, Including Entries and Exits — July 2019 to June 2023’ (22 August 2023).
54 Statistical Report — Annual Wage Review 2023–24 (Fair Work Commission, 16 May 2024) Chart 3.4.
55 Ibid Charts 3.6 and 3.7; ABS, ‘Retail Trade, Australia — March 2024’ (28 May 2024).
56 ABS, ‘Australian National Accounts: National Income, Expenditure and Product — December 2023’(6 March 2024);
Statement on Monetary Policy, Reserve Bank of Australia (May 2024) 26; Statistical Report — Annual Wage Review 2023–
24 (Fair Work Commission, 16 May 2024) Tables 14.3, 14.4.
57 National Australia Bank, NAB Quarterly Business Survey Q1 2024 (18 April 2024) 1.
58 Ibid.
59 Australian Chamber of Commerce and Industry and Westpac Banking Corporation, ACCI–Westpac Survey of Industrial
Trends (Report No 250, March 2024) 1.
60 Ibid 3.
https://www.fwc.gov.au/documents/wage-reviews/2023-24/c2024-1-statistical-report-awr-2023-24-version-6.pdf
https://www.abs.gov.au/statistics/economy/business-indicators/counts-australian-businesses-including-entries-and-exits/jul2019-jun2023
https://www.abs.gov.au/statistics/economy/business-indicators/counts-australian-businesses-including-entries-and-exits/jul2019-jun2023
https://www.fwc.gov.au/documents/wage-reviews/2023-24/c2024-1-statistical-report-awr-2023-24-version-6.pdf
https://www.abs.gov.au/statistics/industry/retail-and-wholesale-trade/retail-trade-australia/apr-2024
https://www.abs.gov.au/statistics/economy/national-accounts/australian-national-accounts-national-income-expenditure-and-product/dec-2023
https://www.fwc.gov.au/documents/wage-reviews/2023-24/c2024-1-statistical-report-awr-2023-24-version-6.pdf
https://www.fwc.gov.au/documents/wage-reviews/2023-24/c2024-1-statistical-report-awr-2023-24-version-6.pdf
https://www.nab.com.au/content/dam/nab-email-composer/nabmarketsresearchembargo/economics/pdf/economics/2024q1%20NAB%20Qtly%20Business%20Survey.pdf
https://www.australianchamber.com.au/wp-content/uploads/2024/03/AusChamberWestpacSurvey2024Q1.pdf
https://www.australianchamber.com.au/wp-content/uploads/2024/03/AusChamberWestpacSurvey2024Q1.pdf
[2024] FWCFB 3500
30
years because of increases in costs and interest rates, and ‘continued to move deeper into
pessimistic territory’ in the March quarter 2024.61 Investment intentions remain robust, but
capacity utilisation has declined. In respect of the labour market, firms are now reporting that
labour is now ‘easier to find’ than in the December quarter 2023, but expect further upward
pressure on wages (notwithstanding an easing in actual wages growth in manufacturing to 4.2
per cent in the December quarter 2023). 62
3.5 Productivity
[68] Australia’s long run rate of productivity growth over the last 15 years (measured to
2022) has been lower than it was in the 1990s and the early 2000s. However, this has been an
international phenomenon and, on average over this 15-year period, productivity growth in
Australia has been higher than in most comparable economies.
Table 15: Labour productivity growth in Australia, New Zealand, G7 countries and the OECD,63
2022
Annual, 2022 (%) 15-year annualised (%)
Australia -2.0 1.1
United States -1.6 1.2
United Kingdom 1.0 0.4
France -1.9 0.3
Germany 0.5 0.7
Italy -0.3 0.2
Canada -0.8 0.8
Japan 0.9 0.8
New Zealand 0.1 0.8
OECD average -0.7 0.9
Source: Fair Work Commission, Information note—Labour productivity, additional material for the Annual Wage Review
2023–24, 6 May 2024; OECD, ‘Level of GDP per capita and productivity’, OECD.Stat (Web Page, viewed 9 April 2024).
[69] What is unusual, as Table 15 shows, is the disruption to productivity growth caused by
the COVID-19 pandemic and its aftermath in Australia. Labour productivity, as measured by
GDP per hour worked, increased during the pandemic phase by 2.4 per cent in 2020 and 2.5 per
cent in 2021. This above-average rate of growth has been explained on the basis that the industry
sectors which were most affected by lockdowns and other restrictions on public movement,
such as hospitality and retail, were those which typically had lower levels of labour
productivity. When these sectors shed labour to a disproportionate extent during the pandemic
phase, average labour productivity across the economy grew as a consequence. This effect
reversed itself in the recovery phase, when the same sectors fully reopened and employment
and hours worked grew rapidly, supported by the resumption of immigration. In addition to the
full resumption of operations in sectors with lower labour productivity levels, productivity
61 Ibid.
62 Ibid 7.
63 Organisation for Economic Co-operation and Development.
https://stats.oecd.org/index.aspx?DataSetCode=PDB_LV
[2024] FWCFB 3500
31
performance was further affected by the extent of the use of inexperienced workers to meet
demand and the fact that employment growth outpaced growth in capital stock, meaning less
capital was deployed per unit of labour.64
[70] The result has been that productivity fell by 4.5 per cent to the December quarter 2022
and 0.4 per cent to the December quarter 2023,65 meaning that there has been no overall growth
in productivity since March 2018 (or, in the market sector, June 2020). This is clearly abnormal
both in the context of Australia’s post-war economic history and in the international context (as
Table 15 makes clear). In the AWR 2023 decision,66 this poor productivity performance was a
moderating factor in the determination of the quantum of minimum wage increases awarded.
Combined with relatively high wages growth, the reduction in productivity over 2022 and 2023
has caused a significant increase in nominal unit labour costs.
Chart 5: Unit labour costs, index
Source: Statistical Report — Annual Wage Review 2023–24 (Fair Work Commission, 16 May 2024) Chart 2.3; ABS,
‘Australian National Accounts: National Income, Expenditure and Product — December 2023’ (6 March 2024).
[71] There have been some signs that the Australian economy is moving past this post-
pandemic phase and may be reverting to its long run rate of productivity growth. Productivity
(GDP per hour worked) increased by 1 per cent in the September quarter 2023 and 0.5 per cent
in the December quarter 2023. The strong growth in business investment will presumably yield
productivity dividends at some stage. The RBA’s forecast is for productivity growth of 1.8 per
cent for 2023–24 and 1.3 per cent for 2024–25. However, in its Statement on Monetary Policy
for May 2024, the RBA said that ‘substantial uncertainty remains around the [productivity]
64 Reserve Bank of Australia, Statement on Monetary Policy (May 2024) 40; Luci Ellis, ‘The Laptop Warrior, the Barista and
the Governor’, Westpac IQ (Web Page, 27 March 2024); Productivity Commission, Quarterly productivity bulletin –
December 2023 (December 2023) 3.
65 Statistical Report — Annual Wage Review 2023–24 (Fair Work Commission, 16 May 2024) Table 2.1.
66 [2023] FWCFB 3500, 323 IR 332 [176(4)].
128.2
97.1
88
94
100
106
112
118
124
130
Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-23
Index (Dec-13 = 100)
Nominal unit labour costs Real unit labour costs
https://www.fwc.gov.au/documents/wage-reviews/2023-24/c2024-1-statistical-report-awr-2023-24-version-6.pdf
https://www.abs.gov.au/statistics/economy/national-accounts/australian-national-accounts-national-income-expenditure-and-product/dec-2023
https://www.rba.gov.au/publications/smp/2024/may/pdf/statement-on-monetary-policy-2024-05.pdf
https://www.westpaciq.com.au/economics/2024/03/lucis-note-27-march-2024
https://www.westpaciq.com.au/economics/2024/03/lucis-note-27-march-2024
https://www.pc.gov.au/ongoing/productivity-insights/bulletins/quarterly-bulletin-december-2023/bulletin-december-2023.pdf
https://www.pc.gov.au/ongoing/productivity-insights/bulletins/quarterly-bulletin-december-2023/bulletin-december-2023.pdf
https://www.fwc.gov.au/documents/wage-reviews/2023-24/c2024-1-statistical-report-awr-2023-24-version-6.pdf
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb3500.pdf
[2024] FWCFB 3500
32
outlook’, and downgraded its productivity growth forecast for 2023–24.67 The Budget does not
contain an explicit forecast for productivity. It states that productivity ‘is expected to continue
to pick up as economic conditions improve’,68 but later goes on to say:
While productivity has grown for two consecutive quarters, the extent to which productivity
growth will recover remains uncertain. A slower recovery in productivity growth could have
implications for both inflation and growth.69
4. Relative living standards and the needs of the low paid
[72] Sections 134(1)(a) and 284(1)(c) require consideration of the ‘relative living standards
and the needs of the low paid’. ‘Relative living standards’ is plainly a comparative concept. In
past annual wage review decisions, ‘the low paid’ have also been defined in a comparative way
in that the measure adopted has been those employees whose ordinary-time earnings are below
two-thirds of median adult ordinary-time earnings of all full-time employees. There are two
measures of this benchmark. The first is derived from the ABS Characteristics of Employment
(COE) data. Based on the COE data for August 2023, the benchmark is $1066.67 per week.
The second is derived from the ABS EEH data, and as at May 2023 is $1131.33 per week.70
[73] On the COE benchmark, every modern award minimum weekly rate of pay up to and
including the C8 classification rate71 is below the low paid threshold. On the EEH benchmark,
it is every modern award rate up to and including the C7 rate. However, other award ordinary-
time pay entitlements such as industry and other allowances, shift loadings, evening and
weekend penalty rates payable on ordinary time, and the casual loading where applicable, also
need to be taken into account in assessing employees’ earnings for the purpose of comparison
with the low paid benchmark. Thus, while the majority of modern award base pay rates are
below the benchmark, only a minority, albeit a substantial minority (36.1 per cent) of modern
award-reliant employees (on adult rates of pay) are actually low paid.72 Using the comparative
measure referred to, it is their needs which must be taken into account insofar as modern awards
are concerned. This group constitutes approximately 6.2 per cent of the total employee
workforce.73
[74] In respect of the NMW, because an employee to whom the NMW applies is, by
definition, not entitled to any of the additional ordinary-time pay entitlements which may apply
to award-reliant employees, any such employee is necessarily low paid using the measure
described above. However, for the reasons set out earlier in this decision, we are not satisfied
that the number or proportion of employees in this category are other than very small.
[75] Not all low paid workers live in low-income households. Approximately one-third of
low paid employees reside in employee households in the top five income deciles, measured by
67 Reserve Bank of Australia, Statement on Monetary Policy (May 2024) 44–45.
68 Commonwealth of Australia, Budget 2024–25: Budget Strategy and Outlook (Budget Paper No. 1, 14 May 2024) 40.
69 Ibid 61.
70 Statistical Report — Annual Wage Review 2023–24 (Fair Work Commission, 16 May 2024) Table 8.2.
71 See Manufacturing and Associated Industries and Occupations Award 2020 [MA000010] cl 20.1(a).
72 Statistical Report — Annual Wage Review 2022–23 (Fair Work Commission, 18 May 2023) Table 7.4.
73 ABS, ‘Microdata: Employee Earnings and Hours, Australia — May 2021’ (10 June 2022).
https://www.rba.gov.au/publications/smp/2024/may/pdf/statement-on-monetary-policy-2024-05.pdf
https://budget.gov.au/content/bp1/download/bp1_2024-25.pdf
https://www.fwc.gov.au/documents/wage-reviews/2023-24/c2024-1-statistical-report-awr-2023-24-version-6.pdf
https://www.fwc.gov.au/document-search/view/2/aHR0cHM6Ly9zYXNyY2RhdGFwcmRhdWVhYS5ibG9iLmNvcmUud2luZG93cy5uZXQvYXdhcmRzL01vZGVybkF3YXJkcy9NQTAwMDAxMC5kb2N40?sid=&q=MA000010
https://www.fwc.gov.au/documents/wage-reviews/2022-23/c20231-stat-report-6-fwc-180523.pdf
https://www.abs.gov.au/statistics/microdata-tablebuilder/available-microdata-tablebuilder/employee-earnings-and-hours-australia
[2024] FWCFB 3500
33
equivalised household disposable income.74 Their needs, and relative living standards, are
therefore not the main focus of our consideration, which is rather upon those low paid workers
who reside in low-income households.
[76] For such workers, their immediate need is to maintain their living standards in the face
of the significant increase in the cost of living. The effect of relatively high inflation over the
past three years has been to reduce the real wages of modern award-reliant employees,
notwithstanding that last year’s increase of 5.75 per cent was the largest national wage increase
for approximately forty years and that their nominal wage rates have grown more than the WPI
over the period.
Chart 6: Real WPI growth by method of setting pay—1, 3 and 5 years
Note: Data are in original terms.
Source: Fair Work Commission; ABS, ‘Wage Price Index, Australia — March 2024’ (15 May 2024); ABS, ‘Consumer Price
Index, Australia — March Quarter 2024’ (24 April 2024).
[77] The NMW has not, however, declined in real terms over this period because the AWR
2023 decision75 discontinued the traditional alignment of the NMW with the C14 rate and
instead aligned the NMW with the higher C13 rate. The 5.75 per cent increase was then applied
to this realigned rate (currently $882.80 per week or $23.23 per hour). The result of this is that
the ratio of the NMW to median earnings is at its highest point (55.2 per cent) for a decade.76
[78] For low paid NMW and modern award-reliant workers, the cost-of-living situation they
face is likely worse than Chart 6, which deflates wage rates by the headline CPI, indicates. The
CPI rate of inflation for non-discretionary goods such as food, automotive fuel, housing and
health costs was 4.2 per cent over the 12 months to the March quarter 2024, higher than the
74 Australian Government submission to the Annual Wage Review 2021–22 (1 April 2022) [42], Chart 2.2.
75 [2023] FWCFB 3500, 323 IR 332 [8], [172]–[173].
76 Statistical Report — Annual Wage Review 2023–24 (Fair Work Commission, 16 May 2024) Table 8.1.
105.1
106.0
99.4
105.7
105.6
100.0
102.1
103.4
98.2
94
96
98
100
102
104
106
108
110
Dec-18 Jun-19 Dec-19 Jun-20 Dec-20 Jun-21 Dec-21 Jun-22 Dec-22 Jun-23 Dec-23
Index (Mar-24=100)
Enterprise Agreement Individual Arrangement Award
3 years 1 year5 years
https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/wage-price-index-australia/mar-2024
https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/consumer-price-index-australia/mar-quarter-2024
https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/consumer-price-index-australia/mar-quarter-2024
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb3500.pdf
https://www.fwc.gov.au/documents/wage-reviews/2023-24/c2024-1-statistical-report-awr-2023-24-version-6.pdf
[2024] FWCFB 3500
34
headline CPI rate of 3.6 per cent.77 The LCI for employee households, which takes into account
increased mortgage costs, is higher still: over the same period, it was 6.5 per cent.78 We
therefore conclude that low paid NMW- and modern award-reliant employees in low-income
households are continuing to experience financial stress and a decline in living standards
because of inflation.
[79] The Stage 3 tax cuts which will take effect from 1 July 2024 will provide some relief
from cost-of-living pressures for modern award-reliant workers. However, low paid workers
will not benefit from these tax cuts to the same degree as those earning around median incomes.
For an employee earning wages at the COE-derived low paid benchmark of $1066.67 per week,
the tax cut will be worth about $20.50 per week compared to about $33.85 per week for an
employee on the COE measure of median earnings.79 Further, we note that, from a longer-term
perspective, the tax cuts will mostly but not fully reverse the effects of bracket creep over the
last 12 years for low-income earners.80
[80] Low paid workers will obtain some further relief from a number of the measures
announced in the Budget to assist with the cost of living. All households will benefit from the
energy bill rebate. The 10 per cent increase in the maximum rate of Commonwealth Rent
Assistance will be of benefit to some low paid workers who rent their accommodation —
generally, low-income households with dependent children who are eligible for Family Tax
Benefit Part A at more than the base rate, and low paid workers who receive other types of
Commonwealth income support payments. Other Budget measures potentially relevant to low
paid workers are:
• A one-year freeze on indexation of the maximum Pharmaceutical Benefits
Scheme (PBS) patient co-payment for everyone with a Medicare card.
• A reduction of indexation amounts for debts incurred under the Higher Education
Loan Program. However, this is not likely to be of short-term assistance to any
low paid workers under this scheme, since no debt repayments are required until
annual earnings exceed $54,434 (for 2024–25) and repayments are calculated
based on income levels, not the size of the debt.
[81] In the AWR 2023 decision, the Expert Panel referred to the budget standards report
published by the Commission in March 2023 which, among other things, analysed disposable
incomes when receiving the then-C14 rate, to which the NMW was then aligned, on a full-time
basis relative to budgets constructed according to the Minimum Income for Healthy Living
(MIHL) standard for 14 household types. This showed that, excluding discretionary spending,
12 of those 14 household types earned less than the budget amounts necessary to meet the MIHL
standard and, if discretionary spending was included, none of them did.81
77 Ibid Table 4.1, Chart 4.5.
78 Ibid Table 4.1.
79 Australian Government, ‘Estimate Your Tax Cut’, Tax Cuts for Every Taxpayer (Web Page); Statistical Report — Annual
Wage Review 2023–24 (Fair Work Commission, 16 May 2024) Tables 8.1–8.2; ABS, ‘Characteristics of Employment
Australia — August 2023’ (13 December 2023).
80 Paul Tilley, ‘Stage 3 Tax Cuts v Bracket Creep: Time to Index the Personal Income Tax Rate Scale’ (Policy Brief
No 4/2024, Tax and Transfer Policy Institute, Crawford School of Public Policy, Australian National University, March
2024) Figure 5.
81 AWR 2023 decision [2023] FWCFB 3500, 323 IR 332 [101].
https://taxcuts.gov.au/
https://www.fwc.gov.au/documents/wage-reviews/2023-24/c2024-1-statistical-report-awr-2023-24-version-6.pdf
https://www.fwc.gov.au/documents/wage-reviews/2023-24/c2024-1-statistical-report-awr-2023-24-version-6.pdf
https://www.abs.gov.au/statistics/labour/earnings-and-working-conditions/characteristics-employment-australia/aug-2023
https://www.abs.gov.au/statistics/labour/earnings-and-working-conditions/characteristics-employment-australia/aug-2023
https://taxpolicy.crawford.anu.edu.au/sites/default/files/uploads/taxstudies_crawford_anu_edu_au/2024-03/final_pb_paul_tilley_mar_2024.pdf
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb3500.pdf
[2024] FWCFB 3500
35
[82] However, we do not consider that this analysis can be given significant weight in our
consideration of relative living standards and the needs of the low paid for three reasons. First,
as already stated, the AWR 2023 decision changed the alignment of the NMW from the C14
rate to C13. Second, because it is not possible to identify anyone to whom the NMW actually
applies, we do not know which, if any, of the household types is relevant to NMW-reliant
employees. The third is that, as foreshadowed in the AWR 2023 decision,82 a review of those
modern awards containing the C14 rate has now substantially been completed. This Review
was widened in scope following the AWR 2023 decision to include any modern awards
containing a classification rate below the C13 level and ultimately encompassed 70 modern
awards (including a number of modern enterprise awards). In a decision issued on 16 April
2024,83 the Full Bench conducting the review determined that the lowest adult rate in any
modern award applicable to ongoing employment should be at least the C13 rate, and that any
rate below the C13 rate (including but not limited to the C14 rate) must be an entry-level rate
which operates only for a limited period not exceeding six months and provides a clear
transition to the next classification rate (which must not be less than the C13 rate).84 The Full
Bench’s decision outlined, on a provisional basis, the variations to be made to each relevant
award with an operative date of 1 January 2025. Although the Full Bench prescribed a
maximum period of six months for any employee to remain on a classification rate that is below
the C13 rate, in the large majority of proposed award variations the actual period is three months
or less. We can reasonably anticipate therefore that, by the time of next year’s annual wage
review, any award rate below the C13 rate will simply be a temporary stepping stone to a rate
at the C13 level or higher. In these circumstances, we do not consider it useful to continue to
analyse relative living standards or the needs of the low paid by reference to the C14 rate.
[83] The AWR 2023 decision also presented an equivalent analysis of disposable incomes at
higher classification levels compared to the MIHL budgets formulated for the 14 household
types. At the C10 level, this showed that the budget amount was in excess of income for nine
household types if discretionary expenditure was excluded, and 13 household types if
included.85 However, the analysis assumes that an employee at the C10 level receives only the
minimum rate of pay for ordinary time and does not receive any additional allowances, loadings
or penalty rates for ordinary time. Nor does the analysis take into account any overtime
earnings. For that reason, it is not possible to say that, for any household type, the analysis
presents a realistic picture of disposable income for an employee classified at C10.
[84] We consider that further research is necessary to gain a better understanding as to the
modern awards and classification levels which predominantly apply to modern award-reliant
employees who are low paid, and the earnings which employees can realistically expect to
obtain at various award classification levels inclusive of additional payments such as
allowances, loadings and penalty rates. The Commission will explore opportunities for a
research project after the completion of this Review. We note that in the AWR 2023 decision86
the Expert Panel said that there should be a comprehensive review of the NMW by reference to
the budget standards research and other relevant material to arrive at a NMW amount which is
82 Ibid [103], [173].
83 Review of C14 and C13 rates in modern awards [2024] FWCFB 213.
84 Ibid [7], [30].
85 AWR 2023 decision [2023] FWCFB 3500, 323 IR 332 [109], Table 15.
86 Ibid [108].
https://www.fwc.gov.au/documents/decisionssigned/pdf/2024fwcfb213.pdf
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb3500.pdf
[2024] FWCFB 3500
36
set having proper regard to the needs of the low paid and the other considerations in s 284(1)
of the FW Act. However, as already stated, we have now come to the view that it is not currently
possible to identify persons to whom the NMW actually applies, and the number of such persons
is likely to be very small. In light of this, unless any evidence to the contrary emerges, we do
not consider that such a review would be a practical proposition.
5. Gender equality
5.1 Gender pay gaps
[85] As explained in the AWR 2023 decision,87 s 284(1)(aa) of the FW Act identifies
‘addressing gender pay gaps’ as one of the means by which ‘the need to achieve gender
equality’ may be achieved. The gender pay gap may be measured in different ways and for
different workforce segments (thus making it apt to refer to gender pay gaps). Using the same
measures of the gender pay gap used in previous Reviews, Table 16 shows that the gap has
reduced to some degree over the last two years.
Table 16: Estimates of the gender pay gap, 2021 and 2023
Measure
2023 2021
Male
earnings
($)
Female
earnings
($)
Gender
pay gap
(%)
Male
earnings
($)
Female
earnings
($)
Gender
pay gap
(%)
Weekly
AWOTE (November) 1982.80 1744.80 12.0 1846.50 1591.20 13.8
EEH adult ordinary
time cash earnings,
non-managerial full-
time (May)
1911.80 1725.60 9.7 1809.10 1617.10 10.6
Hourly
EEH adult total cash
earnings, non-
managerial full-time
(May)
50.50 46.20 8.5 47.50 43.30 8.8
EEH adult ordinary
time cash earnings,
non-managerial full-
time (May)
49.70 46.00 7.4 47.10 43.10 8.5
Note: AWOTE refer to full-time adult employees. The gender pay gap is calculated as the difference between female’s and
male’s earnings, expressed as a percentage of male’s earnings. * Adult refers to employees paid an adult rate.
Source: ABS, ‘Average Weekly Earnings, Australia — November 2023’ (22 February 2024); ABS, ‘Employee Earnings and
Hours, Australia — May 2023’ (24 January 2024); ABS, ‘Average Weekly Earnings, Australia — November 2021’ (24
February 2022); ABS, ‘Employee Earnings and Hours, Australia — May 2021’ (19 January 2022).
87 Ibid [45].
https://www.abs.gov.au/statistics/labour/earnings-and-working-conditions/average-weekly-earnings-australia/nov-2023
https://www.abs.gov.au/statistics/labour/earnings-and-working-conditions/employee-earnings-and-hours-australia/may-2023
https://www.abs.gov.au/statistics/labour/earnings-and-working-conditions/employee-earnings-and-hours-australia/may-2023
https://www.abs.gov.au/statistics/labour/earnings-and-working-conditions/average-weekly-earnings-australia/nov-2021
https://www.abs.gov.au/statistics/labour/earnings-and-working-conditions/employee-earnings-and-hours-australia/may-2021
[2024] FWCFB 3500
37
[86] This continues a trend of a steady reduction in the gender pay gap over the last decade,
shown in Chart 7.
Chart 7: Gender pay gap, AWOTE, November 2013 to November 2023
Source: ABS, ‘Average Weekly Earnings, Australia — November 2023’ (22 February 2024), reproduced from Australian
Government submission, 28 March 2024, Chart 6.1.
[87] While s 284(1)(aa) refers to addressing gender pay gaps, it was observed in the AWR
2023 decision88 that the aggregate gender pay gap (whatever measure is used) cannot be
‘addressed’ in the sense of being wholly or substantially closed by increasing minimum wage
rates in the NMW and modern awards by any reasonable amount. As stated earlier in this
decision, the modern award-reliant workforce constitutes only about 20.7 per cent of the entire
workforce and 10.6 per cent of the national wage bill, so that the wage rates of most of the
workforce remain out of reach of the modern award system. Further, for that proportion of the
workforce which is modern award-reliant, the gender pay gap is significantly smaller (1.8 per
cent).89 Accordingly, while a uniform increase to modern award minimum rates of pay which
exceeds market rates of wage increase will likely have the effect of narrowing the gender pay
gap by reason of modern award-reliant workers being predominantly female, this effect will be
small. While weighing in favour of an increase of this order, this effect would not alone
constitute a major justification for it.
5.2 Ensuring equal remuneration for work of equal or comparable value and eliminating
gender-based undervaluation
[88] Ensuring equal remuneration for work of equal or comparable value and eliminating
gender-based undervaluation are referred to in ss 134(1)(ab) and 284(1)(aa) of the FW Act as
88 Ibid [118]–[119].
89 Ibid [2023] FWCFB 3500, 323 IR 332 [119]; Statistical Report — Annual Wage Review 2022–23 (Fair Work Commission,
18 May 2023) Table 11.2.
17% 20% 12% 13% 15% 16% 10% 18% 11% 19% 14% 9% 8% Nov-2013 May-2014 Nov-2014 May-2015 Nov-2014, 18.7% Nov-2015 May-2016 Nov-2016 GPG (full-time weekly earnings) May-2017 Nov-2017 May-2018 Nov-2018 Nov-2020, 13.4% May-2019 Nov-2019 May-2022, 14.1% May-2020 Nov-2020 May-2021 Nov-2021 Nov-2023, 12.0% May-2022 Nov-2022 May-2023 Nov-2023 T
https://www.abs.gov.au/statistics/labour/earnings-and-working-conditions/average-weekly-earnings-australia/nov-2023
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb3500.pdf
https://www.fwc.gov.au/documents/wage-reviews/2022-23/c20231-stat-report-6-fwc-180523.pdf
[2024] FWCFB 3500
38
means by which gender equality in the workplace may be achieved. Gender undervaluation,
considered in the award context, refers to a situation where the minimum rates of pay in an
award have been established based on an undervaluation of the relevant work that has occurred
for gender-related reasons.90 ‘Equal remuneration for work of equal or comparable value’ is
defined in s 302(2) of the FW Act to mean ‘equal remuneration for men and women workers
for work of equal or comparable value’. The inclusion of ‘ensuring equal remuneration for work
of equal or comparable value’ and ‘eliminating gender-based undervaluation of work’ as part
of the mandatory gender equality consideration in the minimum wages objective91 means that
it is necessary for us to consider whether the existing NMW and modern award minimum wage
rates constitute a properly-valued and non-gender-biased foundation upon which to make any
wages adjustment in the conduct of this Review.92 In the context of award wage fixation, these
are related and overlapping concepts and we will refer to both concepts under the general rubric
of ‘gender undervaluation’ in this part of our decision.
[89] In the AWR 2023 decision, the Expert Panel identified two ‘potential gender-related
difficulties’ in the way in which award wages had historically been set.93 The first was that the
National Wage Case April 199194 effectively foreclosed retrospective reconsideration of work
value in any federal award. This inhibited any review in accordance with contemporary
standards of rates of pay in female-dominated awards which were fixed pre-1990 and may
consequently have been influenced by the gender-based assumptions about work value which
were then prevalent. The second was that the classification benchmarks for the minimum rate
adjustment (MRA) process established by the National Wage Case August 198995 (elsewhere
referred to as the ‘C10 Metals Framework Alignment Approach’) were derived solely from
awards covering male-dominated occupations and industries, and their application to female-
dominated awards may have involved gender-based assumptions about relative work value. The
Expert Panel said that the identified issues:
…indicate that that there may be a systemic problem, of pre-FW Act origins, concerning the
way in which modern award minimum wages in female-dominated industries have been set
which involves gender undervaluation and unequal remuneration for work of equal or
comparable value.96
[90] An additional work value issue with potential implications for the minimum wage rates
of modern award-reliant women in higher award classifications was also identified, namely that
the alignment of classifications requiring the holding of an undergraduate degree with the C1
90 Equal Remuneration Decision 2015 [2015] FWCFB 8200, 256 IR 362 [292]; AWR 2023 decision [2023] FWCFB 3500,
323 IR 332 [37]–[38]; Aged Care Award 2010; Nurses Award 2020; Social, Community, Home Care and Disability Services
Industry Award 2010 [2024] FWCFB 150 [16] (‘Stage 3 Aged Care decision’).
91 FW Act s 284(1)(aa).
92 AWR 2023 decision [2023] FWCFB 3500, 323 IR 332 [40].
93 Ibid [124].
94 [1991] AIRC 281, 36 IR 120, Print J7400.
95 [1989] AIRC 525, 30 IR 81, Print H9100.
96 AWR 2023 decision [2023] FWCFB 3500, 323 IR 332 [133].
https://www.fwc.gov.au/documents/decisionssigned/html/2015fwcfb8200.htm
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb3500.pdf
https://www.fwc.gov.au/documents/decisionssigned/pdf/2024fwcfb150.pdf
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb3500.pdf
https://www.fwc.gov.au/documents/decisionssigned/html/J7400.htm
https://www.fwc.gov.au/documents/decisionssigned/html/H9100.htm
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb3500.pdf
[2024] FWCFB 3500
39
classification in the Metal Industry Award97 was never implemented in most awards.98 The
Expert Panel said:
[136] The gender dimension of this issue is apparent in two related ways. First, women are more
award-reliant than men and there is evidence that the proportion of women in the award-reliant
workforce is at its highest level at higher-paid classifications including those requiring
undergraduate qualifications. That is, 58.7 per cent of higher-paid award-reliant employees are
women; by contrast, 41.3 per cent of higher-paid award reliant employees are men. Second, as
was pointed out in the Gender undervaluation statement, there is a considerable overlap between
the 29 modern awards containing undergraduate classifications and those applying to female-
dominated industries.
(footnote omitted)
[91] The Expert Panel said that the issues it had identified were ‘obviously too broad and
complex to be resolved within the limited timeframe of [the 2022–23] Review, and their
resolution will require a body of research to support it’.99 The AWR 2023 decision foreshadowed
that the Commission would conduct a two-stage research project to identify occupations and
industries in which there is gender pay inequity and potential undervaluation of work and
qualifications. Stage 1 of this project was to identify occupations and industries in which
gender-based occupational segregation is prevalent and the modern awards which covered those
occupations and industries. Stage 2 was to report on the extent to which the modern awards
covering the gender-segregated occupations and industries identified in Stage 1 have associated
indicia that suggest they may be subject to gender undervaluation.100 The Panel concluded:
[139] Once this research project has been completed and the research reports have been
published, Commission proceedings will be initiated to consider and, if necessary, address the
outcomes of the research project. Depending upon the timing, this may occur as part of or in
association with the 2023–24 Review.101
The research project
[92] This research project has now been completed. The Stage 1 report,102 which was
prepared by the Social Policy Research Centre at the University of New South Wales, was
published on the Commission’s website on 15 November 2023. The Stage 1 report identified
29 occupations covered by 13 modern awards which were:
• large (containing over 10,000 people);
• very highly feminised (over 80 per cent female); and
• located within feminised industry classes (over 60 per cent female).
97 Metal Industry Award 1984 [AW819234], Print F8925, later the Metal, Engineering and Associated Industries Award,
1998 – Part I [AW789529], Print Q2527.
98 AWR 2023 decision [2023] FWCFB 3500, 323 IR 332 [134].
99 Ibid [137].
100 Ibid [137]–[138].
101 Ibid.
102 Natasha Cortis et al, UNSW Social Policy Research Centre, Gender-based Occupational Segregation: A National Data
Profile (Final Report, 6 November 2023) (‘Stage 1 report’).
https://www.fwc.gov.au/documents/decisionssigned/html/F8925.htm
http://www.fwc.gov.au/documents/resources/q2527.pdf
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb3500.pdf
https://www.fwc.gov.au/documents/consultation/gender-based-occupational-segregation-report-2023-11-06.pdf
https://www.fwc.gov.au/documents/consultation/gender-based-occupational-segregation-report-2023-11-06.pdf
[2024] FWCFB 3500
40
[93] The following table103 sets out these occupations and industries, the proportion of
female workers, the total numbers employed and the relevant modern award.
Table 17: Large, very-highly-feminised occupations in feminised industry classes
Occupation
Unit Group
Industry class Female
(%)
Total
employees
Award identified via EEH or
FWC
Sales Assistants
(General)
Clothing Retailing 85.5 46,906 General Retail Industry Award
2020104
Retail Managers Clothing Retailing 80.9 17,758 General Retail Industry Award
2020105
Pharmacy Sales
Assistants
Pharmaceutical,
Cosmetic and
Toiletry Goods
Retailing
87.6 33,420 Pharmacy Industry Award 2020
Conveyancers
and Legal
Executives
Legal Services 83.4 12,853 Legal Services Award 2020
Veterinary
Nurses
Veterinary
Services
96.4 12,094 Animal Care and Veterinary
Services Award 2020
Early Childhood
(Pre-primary
School)
Teachers
Preschool
Education
97.6 13,116 Educational Services (Teachers)
Award 2020
Child Carers Preschool
Education
97.2 49,446 Children’s Services Award 2010
Education Aides Primary Education 92.9 49,520 Educational Services (Schools)
General Staff Award 2020
Primary School
Teachers
Primary Education 85.4 135,851 Educational Services (Teachers)
Award 2020
Education Aides Secondary
Education
82.1 20,846 Educational Services (Schools)
General Staff Award 2020
Education Aides Combined Primary
and Secondary
Education
88 14,754 Educational Services (Schools)
General Staff Award 2020
Primary School
Teachers
Combined Primary
and Secondary
Education
84 19,288 Educational Services (Teachers)
Award 2020
Midwives Hospitals106 98.9 17,017 Nurses Award 2020
Receptionists Hospitals 92.4 18,338 Health Professionals and Support
Services Award 2020
Enrolled and
Mothercraft
Nurses
Hospitals 89.9 23,129 Nurses Award 2020
General Clerks Hospitals 89.8 18,804 Health Professionals and Support
Services Award 2020
103 Derived from Table 5.2 of the Stage 1 report.
104 In addition, the Educational Services (Schools) General Staff Award 2020 [MA000076] covers school uniform shops.
105 See footnote above.
106 All references to Hospitals in this table exclude psychiatric hospitals.
https://www.fwc.gov.au/document-search/view/2/aHR0cHM6Ly9zYXNyY2RhdGFwcmRhdWVhYS5ibG9iLmNvcmUud2luZG93cy5uZXQvYXdhcmRzL01vZGVybkF3YXJkcy9NQTAwMDA3Ni5kb2N40?sid=&q=MA000076
[2024] FWCFB 3500
41
Occupation
Unit Group
Industry class Female
(%)
Total
employees
Award identified via EEH or
FWC
Registered
Nurses
Hospitals 87.9 176,597 Nurses Award 2020
Nurse Managers Hospitals 86.6 15,312 Nurses Award 2020
Receptionists General Practice
Medical Services
95.9 27,723 Health Professionals and Support
Services Award 2020
Registered
Nurses
General Practice
Medical Services
95.6 12,167 Nurses Award 2020
Medical
Technicians
Pathology and
Diagnostic
Imaging Services
85.3 13,738 Health Professionals and Support
Services Award 2020
Dental
Assistants
Dental Services 97.5 23,400 Health Professionals and Support
Services Award 2020;
Aboriginal and Torres Strait
Islander Health Workers and
Practitioners and Aboriginal
Community Controlled Health
Services Award 2020 (for dental
services which are Aboriginal
community controlled)
Psychologists Other Allied
Health Services
80.6 14,205 Health Professionals and Support
Services Award 2020
Registered
Nurses
Aged Care
Residential
Services
88.3 34,393 Nurses Award 2020
Nursing Support
and Personal
Care Workers
Aged Care
Residential
Services
87.2 59,367 Aged Care Award 2010
Aged and
Disabled Carers
Aged Care
Residential
Services
86.5 62,122 Social, Community, Home Care
and Disability Services Industry
Award 2010;
Aged Care Award 2010
Child Carers107 Child Care
Services
96 84,074 Children’s Services Award 2010
Beauty
Therapists
Hairdressing and
Beauty Services
97.2 28,182 Hair and Beauty Industry Award
2020
Hairdressers Hairdressing and
Beauty Services
83.5 51,530 Hair and Beauty Industry Award
2020
[94] In total, the above occupations employ over 1.1 million workers, constituting over 9 per
cent of all employees.
[95] The Stage 1 report refers to Australian and international research which demonstrates
that gender segregation is a driver of the undervaluation of women’s work and gender pay gaps.
In particular, the research referred to indicates that industrial and occupational segregation has
been estimated to account for 24 per cent of the hourly gender pay gap and that wage penalties
for women emerge where occupations are more than 60 per cent feminised,108 with women
107 ‘Child Carers’ encompasses employees within the Levels 2, 3 and 4 classifications in the Children’s Services Award 2010.
108 Stage 1 report 13.
[2024] FWCFB 3500
42
having the potential to earn more in male dominated occupations. The research also explains109
that gender segregation drives the undervaluation of women’s work in the following ways (the
‘Five Vs’):
• Visibility: skills used in female jobs are not properly identified;
• Valuation: skills are defined in terms of masculine norms such as technical skills,
strength, and responsibility, not soft skills relating to communication and care;
• Vocation: women’s skills are treated as natural, derived from women’s roles as
mothers and carers, and work is assumed to be done for intrinsic reward, not pay;
• Value-adding: women’s jobs are concentrated in labour intensive occupations
(such as care) where scope for productivity improvement and profit are limited;
• Variance: women’s jobs do not conform to male norms of full-time work, with
part-time work being regarded as less skilled and less productive.
[96] A number of the highly-feminised occupations in Table 17 above, within certain
industry subdivisions, are identified in the Stage 1 report as significantly reliant upon award
rates of pay for pay setting. The following occupations have more than 15 per cent of the
workforce using an award as the only method of setting pay:110
Table 18: Very-highly-feminised occupations that are significantly award-reliant
Occupation Industry subdivision
Method of setting pay —
award only — % of
employees
Pharmacy Sales
Assistants
Other Store-based Retailing 82.2
Child Carers Social Assistance Services 75.2
Hairdressers Personal and Other Services 69.8
Beauty Therapists Personal and Other Services 69.7
Child Carers Preschool and School Education 51.4
Receptionists Medical and Other Health Care Services 43.0
Medical technicians Medical and Other Health Care Services 42.1
Sales Assistants
(General)
Other Store-based Retailing 40.9
Registered nurses Medical and Other Health Care Services 39.6
Dental assistants Medical and Other Health Care Services 33.5
Aged and Disabled
Carers
Residential Care Services 19.2
Retail Managers Other Store-based Retailing 17.5
[97] The Stage 2 report,111 which was prepared by the Commission’s own research staff and
published on 4 April 2024, examines the history of wage fixation in 12 of the 13 modern awards
which cover the large and very-highly-feminised occupations located in feminised industry
109 By reference to Damian Grimshaw and Jill Rubery, ‘Undervaluing Women’s Work’ (Working Paper No 53, European Work
and Employment Research Centre, University of Manchester, 2007).
110 Derived from Tables 7.2, 8.2, 9.2, 10.2, 12.2 and 13.2 of the Stage 1 report.
111 Fair Work Commission, Stage 2 report — Gender pay equity research — Annual Wage Review 2023–24 (Report, 4 April
2024) (‘Stage 2 report’).
https://www.njl.nu/uploads/Paper_2007_Jill_Rubery.pdf
https://www.fwc.gov.au/documents/wage-reviews/2022-23/profile-of-employee-characteristics-across-modern-awards-2023-03-03.pdf
[2024] FWCFB 3500
43
classes identified in the Stage 1 report. The Aged Care Award 2010112 (Aged Care Award) was
not included because it was being dealt with concurrently in the aged care work value
proceedings. The relevant history of wage fixation for the Nurses Award 2020113 (Nurses
Award) was also dealt with in the Stage 3 Aged Care decision114 and that analysis was adopted
in the Stage 2 report.
[98] In respect of the remaining 11 awards, the analyses in the Stage 2 report are summarised
in Table 19 below by reference to whether, in respect of the wage rates for the female-dominated
occupations identified in Table 17 above, any of the following three potential indicia of gender
undervaluation are identified:
(1) The wage rates are not the product of a proper work value assessment.
(2) The classification structure and wage rates have been constructed on the basis of
the alignment of a key classification with the C10 rate on the basis of a
requirement for an Australian Qualifications Framework Level 3 qualification or
equivalent.
(3) Wage rates for employees requiring an undergraduate qualification have not been
aligned with the C1 rate.
[99] Table 19 demonstrates that these 11 awards are subject to most or all of the above indicia
of gender undervaluation, as relevant to each award. In particular, apart from aged carers under
the SCHADS Award who have been the subject of the ongoing aged care work value
proceedings, none have been subject to a work value assessment that has been free of gender
assumptions.
Table 19: Potential indicia of gender undervaluation in 11 modern awards covering very-highly-
feminised occupations
Award Work value
assessment?
Alignment
with C10?
Alignment
with C1?
Aboriginal and Torres Strait Islander Health
Workers and Practitioners and Aboriginal
Community Controlled Health Services
Award 2020
Dental Assistants
No
Yes
N/A
Animal Care and Veterinary Services Award
2020
Veterinary Nurses
No
Yes
N/A
Children’s Services Award 2010
Child Carers
Yes*
*but constrained by
C10 Metals Framework
Alignment Approach
Yes
N/A
Educational Services (Schools) General Staff
Award 2020
Education Aides
No
Yes
N/A
112 MA000018.
113 MA000034.
114 [2024] FWCFB 150.
https://www.fwc.gov.au/document-search/view/2/aHR0cHM6Ly9zYXNyY2RhdGFwcmRhdWVhYS5ibG9iLmNvcmUud2luZG93cy5uZXQvYXdhcmRzL01vZGVybkF3YXJkcy9NQTAwMDAxOC5kb2N40?sid=&q=MA000018
https://www.fwc.gov.au/document-search/view/2/aHR0cHM6Ly9zYXNyY2RhdGFwcmRhdWVhYS5ibG9iLmNvcmUud2luZG93cy5uZXQvYXdhcmRzL01vZGVybkF3YXJkcy9NQTAwMDAzNC5kb2N40?sid=&q=MA000034
https://www.fwc.gov.au/documents/decisionssigned/pdf/2024fwcfb150.pdf
[2024] FWCFB 3500
44
Award Work value
assessment?
Alignment
with C10?
Alignment
with C1?
Educational Services (Teachers) Award 2020
Early Childhood (Pre-primary
School) Teachers
Primary School Teachers
Yes
Yes
N/A
N/A
Yes
Yes
General Retail Industry Award 2020
Retail Managers
No
Yes
N/A
Hair and Beauty Industry Award 2020
Beauty Therapists
Hairdressers
No
No
Yes
Yes
N/A
N/A
Health Professionals and Support Services
Award 2020
Receptionists
General Clerks
Medical Technicians
No
No
No
Yes
Yes
Yes
N/A
N/A
No
Legal Services Award 2020
Conveyancers and Legal Executives
No
No
No
Pharmacy Industry Award 2020
Pharmacy Sales Assistants
No
Yes
N/A
Social, Community, Home Care and
Disability Services Industry Award 2010
Disabled Carers
Aged Carers
No
Yes
Yes
No
N/A
N/A
The Stage 3 Aged Care decision
[100] The Stage 3 Aged Care decision115 was published on 15 March 2024. This decision,
apart from issues of phasing in, operative date and classification definitions, finalised the wages
outcome for the work value proceedings initiated by the Health Services Union, the Australian
Nursing and Midwifery Federation (ANMF) and others in 2020 and 2021, except in respect of
registered and enrolled nurses. Seven conclusions stated in the decision are relevant to our
consideration of gender equality issues in this Review.
[101] First, in a general review of the history of award wage fixation at the federal level in
Australia, the decision identified that the principle of ‘equal pay for work of equal value’
established by the National Wage and Equal Pay Cases 1972,116 which contemplated the
conduct of broad-ranging work value inquiries including comparisons of work value between
female classifications in awards covering female-dominated occupations with female or male
classifications in different awards, was never properly implemented.117
[102] Second, the Stage 3 Aged Care decision affirmed the proposition that the C10 Metals
Framework Alignment Approach constrained the proper work value assessment of female-
dominated work by requiring, as at least the prima facie position, alignment with the
115 Ibid.
116 [1972] CthArbRp 1420, 147 CAR 172.
117 Stage 3 Aged Care decision [2024] FWCFB 150 [62]–[75].
https://www.fwc.gov.au/documents/decisionssigned/pdf/2024fwcfb150.pdf
[2024] FWCFB 3500
45
classifications for male-dominated work in the Metal Industry Award based on a bare
comparison of training qualifications.118
[103] Third, the decision also affirmed that the failure to properly implement the C1
classification rate for employees requiring an undergraduate degree particularly disadvantaged
female workers because women are more award-reliant than men, the proportion of female
award reliance is at its largest at higher-paid award classifications, including those requiring
undergraduate qualifications, and there is a considerable overlap between those awards
containing classifications requiring an undergraduate degree and those applying to female-
dominated industries.119
[104] Fourth, the rates of pay for personal care workers, home care workers and assistants in
nursing in the aged care sector covered by the Aged Care Award, the SCHADS Award and the
Nurses Award had been the subject of historic gender undervaluation because they had been
established on the basis of an alignment with the C10 rates based on a bare comparison of
qualifications without any assessment of the work value of such workers ever having been
carried out prior to the aged care work value proceedings the subject of the Stage 3 Aged Care
decision.120 As a result, the ‘invisible’ caring skills of interpersonal and contextual awareness,
verbal and non-verbal communication, emotion management and dynamic workflow
coordination ‘were effectively disregarded by the simplistic use of the masculinised C10
benchmark as the basis for the award pay structures for PCWs, HCWs and AINs’.121
[105] Fifth, the rates of pay for registered and enrolled nurses covered by the Nurses Award
were also found to have been the subject of historic gender undervaluation. The pay rates for
registered nurses are not properly fixed minimum rates because they have never been aligned
with the C1 rate. Nursing has undergone a revolutionary transformation from an occupation
which in 1958 was equated to a trade to a recognised profession for which a university degree
is required for entry. However, the federal award system has failed to set minimum award rates
of pay which properly recognise the addition to work value effected by this transformation.
Because the rates of pay for enrolled nurses have been set on the basis of established relativities
with registered nurses, this historic undervaluation has also applied to enrolled nurses in the
aged care sector under the Nurses Award.122 Further, the same analysis would indicate that the
work of all registered and enrolled nurses covered by the Nurses Award, not just those
employed in the aged care sector, have been subject to a failure to properly apply the C10 Metals
Framework Alignment Approach and gender undervaluation.123
[106] Sixth, the minimum rate established by the SCHADS Award operating in conjunction
with the equal remuneration order124 (ERO) applicable to Certificate III-qualified social and
118 Ibid [92].
119 Ibid [94].
120 Ibid [96]–[110], [134].
121 Ibid [156(1)]. PCW, HCW and AIN stand for personal care worker, home care worker and assistant in nursing respectively.
122 Ibid [111]–[135], [156(2)].
123 Ibid [207(2)].
124 Equal Remuneration Case — Australian Municipal, Administrative, Clerical and Services Union and others PR525485; see
also Equal Remuneration Case [2012] FWAFB 1000, 208 IR 446 and Equal Remuneration Case [2012] FWAFB 5184, 223
IR 410.
https://www.fwc.gov.au/documents/awardsandorders/html/pr525485.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2012fwafb1000.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2012fwafb5184.htm
[2024] FWCFB 3500
46
community service employees — currently $1223.90 per week (rounded to the nearest 10 cents)
— is appropriate to serve as a benchmark rate for Certificate III-qualified personal care workers,
home care workers and assistants in nursing in the aged care sector since it has authoritatively
been determined to be a rate which ensures equal remuneration for work of equal or comparable
value and can be relied upon as being free of assumptions based on gender.125 In addition, this
benchmark rate:
…provides appropriate guidance as to the rectification of historic gender undervaluation in
respect of female-dominated ‘caring’ work. The adoption of such a benchmark rate for work of
this nature, in replacement of the C10 rate, would provide a stable anchor point for a modern
award system which ensures gender equality in the valuation of work.126
[107] Seventh, the proper application of the C10 Metals Framework Alignment Approach in
a manner free from gender assumptions and consistent with the principles stated by the Full
Bench in the Teachers decision127 would result in the wage rate for a four-year-degree-qualified
registered nurse in aged care being set at $1470.80 per week, with this becoming the benchmark
rate for the fixation of minimum wages for registered nurses in aged care. The fixation of this
rate could confidently be regarded as one free from gender assumptions since it approximately
equates to the rate (currently $1466.77 per week) for a four year degree-qualified social and
community services employee under the SCHADS Award and the ERO.128
Other developments
[108] Two other developments which have occurred since the AWR 2023 decision are relevant
to our consideration of the gender equality considerations. The first concerns the
commencement of multi-enterprise bargaining via the new supported bargaining mechanism
established by the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022
(Secure Jobs, Better Pay Act) in the early childhood education and care (ECEC) sector covered
by the CS Award and the Educational Services (Teachers) Award 2020129 (EST Award). On 27
September 2023, a Full Bench of the Commission issued a decision130 in which it granted an
application made jointly by the United Workers’ Union (UWU), the Australian Education
Union and the Independent Education Union of Australia for a supported bargaining
authorisation under s 242(1) of the FW Act applicable to 64 employers operating in the ECEC
sector. All 64 employers consented to the making of the authorisation. In its consideration of
whether it was appropriate to make the authorisation sought under s 243(1)(b), the Full Bench
said:
[55] The second matter is that over 90 per cent of the workforce in the ECEC sector is female,
and there is no evidentiary basis to conclude that the position is any different in respect of the
workforce of the employers who would be covered by the proposed multi-enterprise agreement.
Having regard to our earlier finding that low rates of pay prevail in the ECEC sector, granting
125 Stage 3 Aged Care decision [2024] FWCFB 150 [158]–[172].
126 Ibid [173].
127 Application by Independent Education Union of Australia [2021] FWCFB 2051 (‘Teachers decision’).
128 Stage 3 Aged Care decision [2024] FWCFB 150 [204].
129 MA000077.
130 Application by United Workers’ Union, Australian Education Union and Independent Education Union of Australia
[2023] FWCFB 176.
https://www.fwc.gov.au/documents/decisionssigned/pdf/2024fwcfb150.pdf
https://www.fwc.gov.au/documents/decisionssigned/html/2021fwcfb2051.htm
https://www.fwc.gov.au/documents/decisionssigned/pdf/2024fwcfb150.pdf
https://www.fwc.gov.au/document-search/view/2/aHR0cHM6Ly9zYXNyY2RhdGFwcmRhdWVhYS5ibG9iLmNvcmUud2luZG93cy5uZXQvYXdhcmRzL01vZGVybkF3YXJkcy9NQTAwMDA3Ny5kb2N40?sid=&q=MA000077
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb176.pdf
[2024] FWCFB 3500
47
the authorisation applied for would open the prospect of improving rates of pay of a female-
dominated workforce, which would be consistent with that part of the object of the FW Act in
s 3(a) concerned with the promotion of gender equality. This weighs in favour of the making of
the authorisation.131
[109] Bargaining facilitated by the Commission pursuant to the authorisation has proceeded
since the above decision. The Australian Government has participated intensively in the
bargaining process since it is recognised that it will need to be the primary funding source for
any wage increases that result from the bargaining. The Budget has confirmed that the
Australian Government is ‘committ[ed] to providing funding towards a wage increase for early
childhood education and care workers, with details to be settled following Fair Work
Commission processes’.132 No specific amount of funding is identified. The Budget notes that
this support ‘builds on … changes to the Fair Work Act to consider gender equality’.133
[110] The second development is that, on 9 February 2024, the ANMF made an application134
to increases wages for all nurses covered by the Nurses Award on work value grounds (ANMF
work value application). The key aspect of the application is that the minimum rate of pay for
a degree-qualified Registered Nurse Level 1, Pay Point 1 is sought to be increased to $1472.60
per week — an amount virtually the same as the benchmark rate proposed in the Stage 3 Aged
Care decision for a four-year-degree-qualified RN which, as explained in that decision, is in
turn the same as the minimum rate for a four-year-degree-qualified and registered teacher under
the EST Award and almost the same as for a four-year-degree-qualified social and community
services employee under the SCHADS Award and the ERO. The ANMF’s application was one
of the reasons why the Full Bench in the Stage 3 Aged Care decision determined not to finalise
the pay rates and classification structure for registered and enrolled nurses in aged care as part
of that decision. Those matters will be the subject of a separate hearing yet to be programmed.
Priorities in eliminating gender undervaluation in awards
[111] Considered together, the Stage 1 and Stage 2 reports, the Stage 3 Aged Care decision
and the other developments described above make it possible to identify the priority areas for
attention in eliminating gender undervaluation in modern awards. We can exclude from priority
consideration for present purposes 10 of the 29 occupations set out in Table 17 above which
are large and highly feminised:
(1) Early Childhood (Pre-primary School) Teachers, Primary School Teachers
(Primary Education) and Primary School Teachers (Combined Primary and
Secondary Education) covered by the EST Award were recently the subject of a
full assessment of work value in the 2021 Teachers decision. The rate for a four-
year-degree-qualified and registered teacher now aligns with the C1 rate and also
with the rate for a four-year-degree-qualified social and community services
employee under the SCHADS award and the ERO. As a result, as the Stage 2
report shows, there are no indicia of gender undervaluation for the award rates of
pay for these occupational categories.
131 Ibid.
132 Commonwealth of Australia, Budget 2024–25: Budget Strategy and Outlook (Budget Paper No. 1, 14 May 2024) 31.
133 Ibid.
134 Matter AM2024/11.
https://budget.gov.au/content/bp1/download/bp1_2024-25.pdf
https://www.fwc.gov.au/hearings-decisions/major-cases/work-value-case-nurses-and-midwives
[2024] FWCFB 3500
48
(2) Nursing Support and Personal Care workers in Aged Care and Residential
Services covered by the Aged Care Award have been the subject of a
comprehensive work value assessment in the aged care work value proceedings,
culminating in the Stage 3 Aged Care decision. The pay rates determined for such
employees in that decision establish, as discussed earlier, a benchmark rate for
female-dominated caring work at the Certificate III level.
(3) Registered Nurses in Aged Care and Residential Services have been the subject
of a full work value assessment in the aged care work value proceedings. As
discussed above, a benchmark rate has been identified, with the finalisation of a
new classification structure being the outstanding issue. Midwives, Enrolled and
Mothercraft Nurses, Registered Nurses and Nurse Managers in Hospitals, and
Registered Nurses in General Practice Medical Services are the subject of the
ANMF work value application which is, broadly speaking, founded on the same
benchmark rate. These matters will be separately programmed for hearing, as
earlier explained.
[112] Of the remaining occupation categories, the results of the Stage 1 and Stage 2 reports
make apparent that there are seven categories covered by four awards which merit priority
attention in our consideration of the elimination of gender undervaluation. First, Child Carers
in Preschool Education and Child Care Services covered by the CS Award are comprised of
133,520 employees who are 96–97 per cent female. Of these employees, 51.4 per cent in
Preschool and School Education and 75.2 per cent in Social Assistance Services have their rates
of pay set in accordance with the minimum rates of pay in the CS Award. This means that, if
the rates of pay in the CS Award undervalue the work of Child Carers for gender-related
reasons, that undervaluation directly affects approximately 88,000 employees, nearly all of
whom are women.
[113] The Stage 2 report shows that the C10 Metals Framework Alignment Approach has been
applied to the CS Award on the basis that the initial rate of pay for a Certificate III-qualified
Children’s Services Employee is aligned with the C10 rate in the Manufacturing and Associated
Industries and Occupations Award 2020135 (Manufacturing Award) (currently $995.00 per
week or $26.18 per hour), and the rate for a diploma-qualified Children’s Services Employee
is aligned with the C5 rate in the Manufacturing Award. For the reasons explained in the Stage
1 Aged Care decision,136 the Stage 3 Aged Care decision and the AWR 2023 decision, that is an
indicium of gender undervaluation. The rates of pay in the modern CS Award were primarily
derived from the pre-modern Children’s Services (Australian Capital Territory) Award 2005
and the Children’s Services (Victoria) Award 2005. The rates of pay in these pre-modern
awards were the subject of a work value assessment in the 2005 ACT Child Care decision.137
The fact that this work value assessment has taken place should, prima facie, be a negative
indicator of gender undervaluation. However, as explained in the Stage 3 Aged Care decision:
135 MA000010.
136 Aged Care Award 2010; Nurses Award 2020; Social, Community, Home Care and Disability Services Industry Award 2010
[2022] FWCFB 200, 319 IR 127 (‘Stage 1 Aged Care decision’).
137 Application by Australian Liquor, Hospitality and Miscellaneous Workers Union [2005] AIRC 28, PR954938 (‘ACT Child
Care decision’).
https://www.fwc.gov.au/document-search/view/2/aHR0cHM6Ly9zYXNyY2RhdGFwcmRhdWVhYS5ibG9iLmNvcmUud2luZG93cy5uZXQvYXdhcmRzL01vZGVybkF3YXJkcy9NQTAwMDAxMC5kb2N40?sid=&q=MA000010
https://www.fwc.gov.au/documents/decisionssigned/html/2022fwcfb200.htm
https://www.fwc.gov.au/documents/decisionssigned/html/pr954938.htm
[2024] FWCFB 3500
49
[92] A Full Bench of this Commission observed in Application by United Voice and the
Australian Education Union that the ACT Child Care decision only considered the qualifications
and training required and did not purport to otherwise compare the nature of the work or the
level of skill and responsibility involved in performing the work. This is, we consider,
illustrative of the way in which the C10 Metals Framework Alignment Approach constrained
the proper work value assessment of female-dominated work by requiring, as at least as the
prima facie position, alignment with the classifications for male-dominated work in the Metal
Industry Award based on a bare comparison of training qualifications. The Full Bench in the
ACT Child Care decision made it tolerably clear, in our view, that unconstrained by the C10
Metals Framework Alignment Approach it would have assessed the key classifications in the
early childhood education and care awards under consideration as having higher work value
than the identified equivalents in the Metal Industry Award.
[114] Indeed, the ACT Child Care decision made it explicit138 that it was applying the
approach to the fixation of minimum rates established by the National Wage Case August
1989139 and confirmed in the Paid Rates Review decision.140 Thus, the constraint effected by
the C10 Metals Framework Alignment Approach upon the work value assessment conducted
in the ACT Child Care decision is an indicator of gender undervaluation.
[115] As stated above, an important feature of the findings concerning the work value of
personal care workers, home care workers and assistants in nursing in the Stage 1 Aged Care
decision and the Stage 3 Aged Care decision was that they performed caring work involving
the exercise of ‘invisible’ skills.141 This might otherwise be described as work which is subject
to the ‘Five Vs’ indicators of gender undervaluation. It is probable that the work performed by
Child Carers covered by the CS Award likewise involves the exercise of ‘invisible’ caring
skills. It is sufficient for present purposes to refer to evidence accepted in the ACT Child Care
decision that the role of a Child Carer includes:
• Providing a nurturing environment and interacting with the children in such a way
that each individual child's emotional needs are met.
• Providing environments and experiences which are appropriately stimulating and
engaging and interacting with the children in such a way that each child's
cognitive, language, and creative development is stimulated.
• Providing experiences and environments that are supportive of children’s social
development and facilitating the interactions of children in such a way that their
social development in a diverse environment is encouraged.
• Supporting the needs of children and families from socially, culturally and
linguistically diverse backgrounds, facilitating understanding of that diversity and
providing an environment where all children and families feel valued and
included.
• Observing babies and children sensitively and accurately and using a
developmental analysis of those observations to assist in planning and caring
appropriately for each child.
138 Ibid [142]–[155].
139 [1989] AIRC 525, 30 IR 81, Print H9100.
140 [1998] AIRC 1413, 123 IR 240, Print Q7661.
141 See, eg, Stage 1 Aged Care decision [2022] FWCFB 200, 319 IR 127 [759]–[857], [893]–[896]; Stage 3 Aged Care decision
[2024] FWCFB 150 [156].
https://www.fwc.gov.au/documents/decisionssigned/html/H9100.htm
https://www.fwc.gov.au/documents/decisionssigned/html/Q7661.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2022fwcfb200.htm
https://www.fwc.gov.au/documents/decisionssigned/pdf/2024fwcfb150.pdf
[2024] FWCFB 3500
50
• Planning appropriate programs for individual children and groups of children for
all areas of their development and well-being.
• Guiding children's behaviour and managing situations where a child’s behaviour
is difficult and challenging.
• Communicating appropriately and sensitively with families in a way that is
supportive of the child’s well-being and development.142
[116] Without making any finding about the issue at this stage, it is in our view apparent that
consideration needs to be given to whether the benchmark rate for female-dominated ‘caring’
work identified in the Stage 3 Aged Care decision (see paragraph [106] above) should be
applied to the CS Award. We also take into account that the Budget has allocated contingency
funding for pay increases in the ECEC sector relating to the gender equality objectives of the
FW Act.
[117] The second priority occupation for consideration is that of disability workers under the
SCHADS Award. They are identified in the Stage 1 report as part of the occupation of ‘Aged
and Disabled Carers’ covered by the Aged Care Award and the SCHADS Award. Insofar as
aged carers are concerned, they have as earlier discussed been the subject of a comprehensive
work value assessment in the aged care work value proceedings. The subcategory of such
workers covered by the SCHADS Award is ‘Home Care Employee—aged care’, and the
outcome of the Stage 3 Aged Care decision is that they will have a classification structure, and
pay rates, equivalent to those of personal care workers in residential facilities covered by the
Aged Care Award.143 Prior to the interim 15 per cent wage increase awarded to aged care
workers as a result of the Stage 1 Aged Care decision, the SCHADS Award made no distinction
between home care workers servicing aged care clients and those servicing disability clients;
there was a single classification stream of ‘Home care employee’. The award of the interim
increase for aged care workers required this classification stream to be split up between those
involved in aged care and those in disability care.
[118] The result is plainly anomalous. In the Stage 1 Aged Care decision and the Stage 3 Aged
Care decision, the work of home care workers in aged care covered by the SCHADS Award
was found to have been the subject of gender undervaluation having regard to the female
domination of that occupation, the existence of the indicia of gender undervaluation in their
history of award regulation and the nature of the ‘invisible’ caring skills exercised in their work.
As the Stage 1 and Stage 2 reports indicate, there is no reason to think that the position of home
care workers servicing disability clients is any different. Indeed, as found in the Stage 3 Aged
Care decision, some employers and employees covered by the SCHADS Award undertake a
mixture of aged and disability home care services. In our view, that warrants a priority
consideration of whether the classifications and rates of pay for Home Care Employees—
Disability Care under the SCHADS Award should return to alignment with those for Home
Care Employees— Aged Care on the basis of the outcome determined in the Stage 3 Aged Care
decision.
[119] Indeed, we consider that a broader review of all classifications in the SCHADS Award
is timely. As the Stage 2 report demonstrates, the development of the SCHADS Award during
142 [2005] AIRC 28, PR954938 [211].
143 [2024] FWCFB 150 [199]–[201].
https://www.fwc.gov.au/documents/decisionssigned/html/pr954938.htm
https://www.fwc.gov.au/documents/decisionssigned/pdf/2024fwcfb150.pdf
[2024] FWCFB 3500
51
the award modernisation process involved an amalgam of provisions from various pre-modern
and State awards covering various different parts of the social services sector. This resulted in
the SCHADS Award containing three different classification streams, which has itself caused
difficulty in the application of the award at the workplace level. This has been exacerbated by
the operation of the ERO rates upon one of the streams and now the application of the aged care
wage increases on part of one of the other streams. In our view, consideration needs to be given
to whether the classifications in the SCHADS Award can be integrated, or at least aligned, on
the basis that the whole of the coverage of the award is female-dominated and is likely to
involve the exercise of ‘invisible’ caring skills. This would require consideration as to whether
the ERO rates should be incorporated into the SCHADS Award and the ERO itself revoked.
[120] The third priority area we identify is made up of the occupations of Medical
Technicians, Dental Assistants and Psychologists covered by the HPSS Award and also Dental
Assistants covered by the Aboriginal and Torres Strait Islander Health Workers and
Practitioners and Aboriginal Community Controlled Health Services Award 2020.144 The Stage
2 report identified indicia of gender undervaluation in respect of these two awards, and there
are a range of other overlapping issues arising under these awards including the possibility that
some degree of caring-type work is involved and the non-application of the C1 alignment to
classifications requiring an undergraduate degree. A consideration of the HPSS Award may
also need to involve an examination as to whether the professional classifications in that award
generally (not just psychologists) should be aligned with the C1 rate in accordance with the
methodology adopted in the Teachers decision and the Stage 3 Aged Care decision.
[121] Independent of the Stage 1 and Stage 2 reports, we consider that there is a fourth priority
occupation for consideration, namely Pharmacists covered by the Pharmacy Industry Award
2020145 (Pharmacy Award). Almost two-thirds of pharmacists are female.146 In connection with
the issue of the potential gender undervaluation of award classifications requiring an
undergraduate degree due to a failure to align such classifications with the C1 rate in the metal
industry framework, the AWR 2023 decision stated:
… it was observed in the [2018] Pharmacy Decision that the minimum wage rate for a degree-
qualified pharmacist was (at the time of the decision in 2018) less than the C3 classification rate
in the Manufacturing Award payable for an employee holding an Advanced Diploma or
equivalent training, with the Full Bench stating that this constituted a potential work value
issue.147
[122] On 20 December 2022, the Association of Professional Engineers, Scientists and
Managers, Australia lodged an application to vary the Pharmacy Award to increase the rates of
pay for pharmacy interns. The application was the subject of conferences conducted by the
presiding member on 28 February and 5 June 2023. On 9 June 2023, the presiding member
published a recommendation in respect of the matter which referred to the discussion of the C1
alignment issue in the AWR 2023 decision, including the specific reference to the Pharmacy
Award, and went on to state:
144 MA000115.
145 MA000012.
146 Stage 1 report Table A.5: 64.3 per cent.
147 [2023] FWCFB 3500, 323 IR 332 [134].
https://www.fwc.gov.au/document-search/view/2/aHR0cHM6Ly9zYXNyY2RhdGFwcmRhdWVhYS5ibG9iLmNvcmUud2luZG93cy5uZXQvYXdhcmRzL01vZGVybkF3YXJkcy9NQTAwMDExNS5kb2N40?sid=&q=ma000115
https://www.fwc.gov.au/document-search/view/2/aHR0cHM6Ly9zYXNyY2RhdGFwcmRhdWVhYS5ibG9iLmNvcmUud2luZG93cy5uZXQvYXdhcmRzL01vZGVybkF3YXJkcy9NQTAwMDAxMi5kb2N40?sid=&q=MA000012
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb3500.pdf
[2024] FWCFB 3500
52
[11] … my recommendation is that the parties engage in a more holistic reconsideration of the
classification structure in the Award involving the coordinated resolution of three intersecting
issues:
(1) The establishment of a benchmark classification for a four-year degree qualified,
fully practising pharmacist with a properly-fixed rate of pay aligned with the
notional C1 classification in the Metal Industry Award classification scale. The
Full Bench decision in Application by Independent Education Union of Australia
… provides the methodology for this exercise.
(2) The recognition of any work value changes likely to arise as a result of pharmacists
being authorised to prescribe certain medicines.
(3) The establishment of an appropriate relativity between the Pharmacist or
benchmark classification and the Pharmacy Intern classifications.148
[123] There has been no advice received that any action has been taken in response to the
above recommendation. Because the work value issue concerning pharmacists was identified
as far back as 2018 and has gender implications, we consider that the matters identified in the
presiding member’s recommendation must now be addressed.
[124] We set out our conclusions about the appropriate course of action to be taken in respect
of these priority areas later in this decision.
[125] The ACTU, in response to the Stage 1 and Stage 2 reports, made a detailed submission
concerning what steps should be taken in this Review concerning the issue of gender
undervaluation. The submission identifies a number of occupational groups covered by modern
awards which, in the ACTU’s view, require priority attention. To a significant extent, the
ACTU’s proposed priority awards overlap with those we have identified above. However, the
ACTU priorities also include the following:
• Veterinary Nurses and Veterinary Surgeons covered by the Animal Care and
Veterinary Services Award 2020.149
• Education Aides covered by the Educational Services (Schools) General Staff
Award 2020.150
• Clothing Retail Assistants and Retail Managers covered by the General Retail
Award.
• Hairdressers and Beauty Therapists covered by the Hair and Beauty Industry
Award 2020151 (Hair and Beauty Award).
• Receptionists and General Clerks covered by the HPSS Award.
[126] The Flight Attendants’ Association of Australia (FAAA) submitted that,
notwithstanding that it was not dealt with in the Stage 1 or Stage 2 reports, the Aircraft Cabin
148 AM2022/34 Recommendation, 9 June 2023.
149 MA000118.
150 MA000076.
151 MA000005.
https://www.fwc.gov.au/documents/awards/variations/2022/am202234-recommendation-090623.pdf
https://www.fwc.gov.au/document-search/view/2/aHR0cHM6Ly9zYXNyY2RhdGFwcmRhdWVhYS5ibG9iLmNvcmUud2luZG93cy5uZXQvYXdhcmRzL01vZGVybkF3YXJkcy9NQTAwMDExOC5kb2N40?sid=&q=MA000118
https://www.fwc.gov.au/document-search/view/2/aHR0cHM6Ly9zYXNyY2RhdGFwcmRhdWVhYS5ibG9iLmNvcmUud2luZG93cy5uZXQvYXdhcmRzL01vZGVybkF3YXJkcy9NQTAwMDA3Ni5kb2N40?sid=&q=MA000076
https://www.fwc.gov.au/document-search/view/2/aHR0cHM6Ly9zYXNyY2RhdGFwcmRhdWVhYS5ibG9iLmNvcmUud2luZG93cy5uZXQvYXdhcmRzL01vZGVybkF3YXJkcy9NQTAwMDAwNS5kb2N40?sid=&q=MA000005
[2024] FWCFB 3500
53
Crew Award 2020152 (ACC Award) should be the subject of review on the basis that it was
subject to indicia of gender undervaluation, including that it had not been the subject of work
value consideration for many decades, contains low rates of pay, arose from a previous history
of gender-based award coverage, and covers a workforce which is female-dominated. The
FAAA also submitted more specifically that the classification of ‘Cabin Crew Member’ in
clause 14.2 of the ACC Award, for which a Certificate III qualification is required, has a
minimum weekly award rate of pay ($975.60) that is less than the C10 rate ($995.00). In this
respect, it submitted that we should award a 2 per cent increase as part of this Review to rectify
this.
[127] Professor Meg Smith and Dr Michael Lyons of Western Sydney University also made
an independent submission that it is highly likely that the minimum rates of pay for Education
Aides under the Educational Services (Schools) General Staff Award 2020 are subject to
gender-based undervaluation due to the application of the C10 Metals Framework Alignment
Approach and the lack of any past work value assessment. They pointed to the making of a new
award for public sector school administrative and support staff in NSW by the Industrial
Relations Commission of NSW in 2019 pursuant to the equal remuneration principle applicable
in that jurisdiction which involved a restructuring of classifications and significant pay
increases.
[128] We do not consider that the additional occupational categories identified by the ACTU,
the FAAA, and Professor Smith/Dr Lyons warrant the same degree of priority consideration as
the occupations we have earlier identified. It is less apparent that employees in the above
categories exercise ‘invisible’ caring skills of the same kind or degree as those considered in
the Stage 3 Aged Care decision. However, that should not be taken as constituting the
expression of any view as to whether the award rates of pay for the above occupations have
been the subject of gender undervaluation. In the case of Education Aides and aircraft cabin
crew covered by the ACC Award, the level of modern award reliance is not high. These
occupations may arise for further consideration once the priority matters we have identified
have been dealt with.
[129] We emphasise that our identification of priority matters is not intended to constrain the
capacity of any party with standing under s 158 of the FW Act to make an application to vary
the minimum rates of pay in any of the above modern awards outside of the annual wage review
process on work value grounds. In the case of the matters raised by the FAAA, the Commission
will undertake a research project concerning the history of the ACC Award which might assist
in informing any future proceedings to vary that award.
5.3 Female participation in the workforce
[130] The female participation rate has increased slightly since the AWR 2023 decision, and
has remained at a historically high level. This has caused the overall participation rate to also
increase slightly, together with a smaller increase in the male participation rate. This represents
a continuation of the trend over the last decade whereby the male participation rate has remained
largely stable or fallen but the female participation rate has continually increased and been the
main driver of increases to the overall participation rate.
152 MA000047.
https://www.fwc.gov.au/document-search/view/2/aHR0cHM6Ly9zYXNyY2RhdGFwcmRhdWVhYS5ibG9iLmNvcmUud2luZG93cy5uZXQvYXdhcmRzL01vZGVybkF3YXJkcy9NQTAwMDA0Ny5kb2N40?sid=&q=MA000047
[2024] FWCFB 3500
54
Table 20: Participation rate by gender, seasonally adjusted
Males (%) Females (%) Persons (%)
April 2014 71.0 58.5 64.7
April 2023 70.7 62.4 66.5
April 2024 70.8 62.8 66.7
Source: ABS, ‘Labour Force — April 2024’ (16 May 2024).
[131] However, it is clear that there remain significant impediments to the fuller participation
of women in the workforce. The gap between male and female participation rates remains
significant. Moreover, women are far more likely to work part-time hours than men, with 43.4
per cent of women working part-time hours compared to only 19.9 per cent of men.153 That this
is not simply a matter of gender preference is demonstrated by the underemployment rate: the
rate is 8.0 per cent for women compared to 5.3 per cent for men (with an overall rate of 6.6 per
cent).154 This is to be compared to the unemployment rate, where the female rate is lower than
the male rate.155
[132] In the AWR 2023 decision,156 the Expert Panel said that because the cohort of modern
award-reliant employees is female-dominated, it is possible that increases to modern award
minimum wages which exceed those produced by the labour market generally may attract more
women into those award-reliant industries and occupations. We consider that this effect is more
likely if, through rectification of gender undervaluation in award minimum rates of pay,
occupational groups which are feminised to a very high degree and are significantly award-
reliant receive higher wage increases than workers generally.
6. Job security
[133] In the context of this Review, the relevance of the consideration concerning the need to
improve access to secure work across the economy (s 134(1)(aa)) is primarily whether the
review outcome might affect the capacity of employers in the future to continue to offer, or
maintain permanent employment.157 As discussed earlier, the labour market remains healthy,
albeit not quite as strong compared to the position at the time of last year’s Review. However,
the composition of growth in employment has shifted away from a predominance of full-time
jobs to one of part-time jobs.
153 Statistical Report — Annual Wage Review 2023–24 (Fair Work Commission, 16 May 2024) Chart 6.8.
154 Ibid Chart 6.3.
155 Ibid Chart 6.2.
156 [2023] FWCFB 3500, 323 IR 332 [141].
157 Ibid [142].
https://www.abs.gov.au/statistics/labour/employment-and-unemployment/labour-force-australia/apr-2024
https://www.fwc.gov.au/documents/wage-reviews/2023-24/c2024-1-statistical-report-awr-2023-24-version-6.pdf
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb3500.pdf
[2024] FWCFB 3500
55
Chart 8: Change in full-time, part-time and total employment by gender, April 2023 to April 2024
Source: Statistical Report — Annual Wage Review 2023–24 (Fair Work Commission, 16 May 2024) Chart 6.10; ABS, ‘Labour
Force — April 2024’ (16 May 2024).
[134] This has not led to any significant change in the proportion of the workforce overall who
are casual employees, which has only increased slightly from 22.1 per cent in February 2023 to
22.4 per cent in February 2024.158 However, as we earlier observed, there appears to have been
a significant increase in the proportion of award-reliant employees who are casuals over the
most recently measured two-year period (May 2021 – May 2023).159 Because this data predates
the AWR 2023 decision, it obviously cannot be the result of the increase awarded in that
decision. One possible explanation may be that, because of the strength in the labour market in
the period measured, permanent employees have had a greater capacity to move to above-award
wage levels.
[135] The disproportionate extent of insecure casual employment amongst award-reliant
employees requires sensitivity to the possibility that a higher level of increase to minimum
award wage rates arising from this Review, in the context of a weakening labour market, may
affect the number of hours of work assigned to such employees and thus diminish their income
security. However, the main factor bearing upon the strength of the labour market, and hence
the job security of employees, will continue to be the direction of monetary policy and the
consequences this has for economic growth.
7. Collective bargaining
[136] Insofar as, in respect of modern awards, we are required to consider the need to
encourage collective bargaining (s 134(1)(b)), this requires attention to be given to whether the
exercise of modern award powers may affect the extent to which enterprise bargaining is
occurring.160 The trend since 2012 has been a reduction in enterprise bargaining, measured in
terms of the number of enterprise agreements approved each quarter by the Commission, the
158 Statistical Report — Annual Wage Review 2023–24 (Fair Work Commission, 16 May 2024) Chart 12.1.
159 Ibid Table 7.5.
160 AWR 2023 decision [2023] FWCFB 3500, 323 IR 332 [148].
81.0
28.7
109.6115.3
169.4
284.7
196.3 198.1
394.3
0
100
200
300
400
500
Males Females Persons
'000
Full-time Part-time Total
https://www.fwc.gov.au/documents/wage-reviews/2023-24/c2024-1-statistical-report-awr-2023-24-version-6.pdf
https://www.abs.gov.au/statistics/labour/employment-and-unemployment/labour-force-australia/apr-2024
https://www.abs.gov.au/statistics/labour/employment-and-unemployment/labour-force-australia/apr-2024
https://www.fwc.gov.au/documents/wage-reviews/2023-24/c2024-1-statistical-report-awr-2023-24-version-6.pdf
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb3500.pdf
[2024] FWCFB 3500
56
number of employees covered by agreements, and the proportion of the workforce which has
its pay set by a collective agreement.161 In relation to the last measure, the proportion has,
according to EEH data, declined from 41.1 per cent in May 2014 to 34.0 per cent in May 2023.
Chart 9: Method of setting pay
Source: Statistical Report — Annual Wage Review 2023–24 (Fair Work Commission, 16 May 2024) Chart 7.1.
[137] The number of enterprise agreements approved, and the number of employees covered,
were disrupted by the COVID-19 pandemic, but in 2022–23 stabilised at levels broadly
comparable to 2018–19.
Table 21: Number of enterprise agreements and employees covered, 2018 to 2023
Number of enterprise agreements approved Employees covered (‘000s)
2018 3864 668.5
2019 5283 933.3
2020 3281 521.5
2021 4363 546.7
2022 4166 837.6
2023 4108 836.0
Source: Statistical Report — Annual Wage Review 2023–24 (Fair Work Commission, 16 May 2024) Table 10.1; Department
of Employment and Workplace Relations, Trends in Federal Enterprise Bargaining, December quarter 2023.
[138] More recently, the Commission’s own data concerning the number of applications for
approval of enterprise agreements shows that there was a significant increase in the number of
such applications in the December quarter 2023 and the March quarter 2024 compared to the
equivalent quarters in the year before and the five-year average for those quarters.
161 Ibid [149]–[151].
18.8
20.6 21.0
23.0 23.2
41.1
38.5 37.9
35.1 34.0
36.6 37.3 37.3 37.8 38.7
3.4 3.6 3.8 4.1 4.1
0
5
10
15
20
25
30
35
40
45
2014 2016 2018 2021 2023
Per cent
Awards Collective agreements Individual arrangements Owner manager of incorporated enterprise
https://www.fwc.gov.au/documents/wage-reviews/2023-24/c2024-1-statistical-report-awr-2023-24-version-6.pdf
[2024] FWCFB 3500
57
Table 22: Number of applications for approval of enterprise agreements
Quarter 2023–24 2022–23 5-year
average
% difference —
previous year
% difference —
5-year average
September 1,131 1,138 1,155 -0.6 -2.1
December 1,542 1,267 1,328 + 21.7 + 16.1
March 909 696 737 + 30.6 + 23.3
[139] We affirm the view stated in the AWR 2019 decision,162 the AWR 2021 decision163 and
the AWR 2023 decision164 that the long-term decline in enterprise bargaining is likely to be the
result of the impact of a range of factors but that the available data does not establish a causal
link between this decline and annual wage review decisions over the last decade. No party in
this Review advanced any analysis based on the data that suggests we should revisit this
conclusion. Nonetheless, various parties in various ways submitted that the need to encourage
enterprise bargaining supported an increase to minimum award wage rates that was significantly
less than the CPI. Most notably, the ACCI submitted that ‘…further increases in the minimum
and modern award wages above the rate of average wage growth will disincentiv[ise] enterprise
bargaining…’.165 We take this to be a reference to the AWR 2023 decision, which did increase
the NMW and modern award wage rates by an amount above the rate of average wage growth.
The data in Table 22 above, which suggests that a significant increase in enterprise bargaining
has occurred since the AWR 2023 decision, does not support the ACCI’s submission. In the
AWR 2023 decision, the Expert Panel said that the major amendments to the enterprise
bargaining and enterprise agreement approval provisions of the FW Act effected by the Secure
Jobs, Better Pay Act constituted ‘[t]he factor most likely to influence the extent of enterprise
bargaining over the next 12 months’.166 We consider that this factor is a plausible explanation
for the data in Table 22, but we emphasise that it is too early to tell whether the trend exhibited
in that data will be sustained.
8. Consideration
8.1 General conclusions
[140] Our overall assessment of economic conditions is that the Australian economy is ending
2023–24 with good prospects of realising a ‘soft landing’: avoiding a recession while lowering
inflation and preserving the labour market at or near full employment. A sharp tightening in
monetary policy commenced in May 2022, with the official cash rate target rising from 0.10 to
4.35 per cent. While interest rates have not risen as much in Australia as in comparable
economies, the effect of monetary policy is more pronounced here because of comparatively
high levels of household debt and the high proportion of that debt which is subject to variable
interest rates.167
162 Annual Wage Review 2018–19 [2019] FWCFB 3500, 289 IR 316 [372].
163 Annual Wage Review 2020–21 [2021] FWCFB 3500, 307 IR 203 [160].
164 [2023] FWCFB 3500, 323 IR 332 [152]–[154].
165 Australian Chamber of Commerce and Industry submission (28 March 2024) 2.
166 [2023] FWCFB 3500, 323 IR 332 [155].
167 International Monetary Fund, World Economic Outlook: Steady but Slow: Resilience amid Divergence (Report, April
2024) 54–5, Figure 2.12.
https://www.fwc.gov.au/documents/decisionssigned/html/2019fwcfb3500.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2021fwcfb3500.htm
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb3500.pdf
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb3500.pdf
https://www.imf.org/-/media/Files/Publications/WEO/2024/April/English/ch2.ashx
[2024] FWCFB 3500
58
[141] Higher interest rates have forced many households to reappraise their financial
circumstances and find means of containing or reducing their spending. During 2023,
household consumption growth steadily fell and is forecast to be near zero over 2023–24, which
is notable when set against a backdrop of very high population growth. Weak consumption
growth is the main factor that explains the slowdown in economic activity, from 2.4 per cent in
2022 to 1.5 per cent in 2023. This slowdown is likely to have reached a trough in the first half
of 2024, with forecasts of a pick-up in economic activity in 2024–25.
[142] Whether the monetary policy tightening cycle has peaked depends upon the trajectory
of inflation over coming months. Annual inflation reached a high of 7.8 per cent over the year
ending December 2022, its highest rate since 1990, and has since fallen each quarter to reach
3.6 per cent over the year ending March 2024. While inflation has fallen by more than half from
its peak, it remains above the RBA’s target band of 2–3 per cent. There are some concerns that
it may persist above the band for longer than set out in official forecasts. The government is
forecasting that the CPI could reach 3 per cent or lower by the end of 2024, assisted by Budget
measures which lower the out-of-pocket costs to consumers of electricity and renters in receipt
of Commonwealth Rent Assistance. However, we note that the RBA’s latest forecast made
ahead of the Budget is that inflation will persist above its target band for longer.
[143] A falling rate of inflation for goods has been countered by persistently high inflation for
services. Rising nominal labour costs, the highest in many years, have been a major factor
contributing to higher services inflation. That said, the concern expressed by some
commentators that Australia was heading for a wage-price spiral episode did not eventuate, and
recent evidence is that wages growth may have peaked. In aggregate, wage increases have
lagged inflation until very recently, with annual wage growth nudging above inflation only in
the past two quarters. Most workers have experienced a steep decline in real wages whether
covered by awards, collective or individual agreements, and irrespective of their position in the
wage distribution.
[144] In normal circumstances, the inflationary impact of increases in labour costs are
attenuated by productivity growth, but recent productivity patterns have been abnormal. There
were solid gains in GDP per hour worked during 2020 and 2021, but these were more than fully
eroded over the course of 2022 and 2023, returning productivity levels to what they had been
prior to the pandemic. The pandemic explains some of this abnormal pattern, as lockdowns saw
a reduction in hours worked by lower-productivity workers pushing up productivity growth,
which was then thrown into reverse as restrictions were lifted. More recently, the spurt in
population growth following the reopening of the borders to migrant workers has made the
economy less capital-intensive, lowering productivity. Official forecasts are for productivity
growth to return toward its long run trend of 1.2 per cent a year, but there is a greater degree of
uncertainty around these forecasts than is common.
[145] The slowdown in economic activity has, to date, not come at the cost of appreciably
higher unemployment. There has been some softening in labour market conditions, with the
adjustment coming in the form of a decline in hours worked — 0.8 per cent less over the year
ending April 2024 — rather than in jobs. Employment has grown at a similar rate to the labour
force — 2.8 per cent and 3.2 per cent, respectively. As a consequence, the unemployment rate
has drifted up slowly to reach 4.1 per cent in April 2024. There are, as always, differences
across industries, with some industries that are more award-reliant than others having seen a
[2024] FWCFB 3500
59
sharper drop in labour demand. There were cuts to employment as well as hours in
Accommodation and food services, and a decline in employment in Retail trade. These two
sectors alone employ over a third of all modern award-reliant employees. Official forecasts are
for employment growth to slow in 2024–25, with the unemployment rate to drift up further but
remain at a rate near full employment.
[146] Many workers and many households have seen a deterioration in their disposable
incomes in the past couple of years. Inflation has outpaced increases in wages, loan repayments
have risen for many homeowners with a mortgage, rents and energy costs have risen sharply,
and many workers paid more income tax. There are clear signs of a return to positive income
growth in the coming year. As mentioned, wages are now rising slightly faster than inflation,
and are expected to continue to do so. All households will benefit from the government’s energy
rebate, and all income taxpayers will face lower average tax rates than they did in 2023–24. It
is this rise in real disposable income that is expected to be the basis of the pick-up in economic
activity in 2024–25.
[147] Despite the increase of 5.75 per cent to modern award minimum wage rates in the AWR
2023 decision, the position remains that real wages for modern award-reliant employees are
lower than they were five years ago. This has undoubtedly placed financial stress upon such
employees who, as earlier explained, are disproportionately casual, part-time, low paid and
female and are therefore most vulnerable to adverse changes in economic circumstances. The
NMW was increased by a higher amount in 2023 and, as a result, to the extent that there are
any employees paid in accordance with the NMW, they have not suffered the same decline in
real wages over the last five years.
[148] Against the economic backdrop we have described, a number of the parties which have
made submissions to this Review have advanced specific proposals for wage adjustments. The
quantum of wage increases proposed vary widely. Although, as earlier stated, it is not our task
to adjudicate between the competing positions, it is appropriate for us to make some brief
comments about the main proposals. The ACCI proposed that there be a uniform increase to
the NMW and modern award minimum rates of no more than 2 per cent, which it characterised
as amounting to 2.5 per cent once the increase in the Superannuation Guarantee contribution
rate effective from 1 July 2024 is taken into account. This proposal would result in a further
significant real wage cut for modern award-reliant employees in circumstances where such
employees are already subject to financial stress for the reasons earlier explained. The ACCI’s
justification, as articulated at the hearing before us on 22 May 2024, was that ‘all parts of the
economy must play their role’168 in order for inflation to return to the RBA’s target range of 2–
3 per cent. The principal difficulty with this proposition is that it would require modern award-
reliant employees, who are by definition the lowest-paid group of employees in each industry
sector or occupation in which they are employed, to be required to take a real wage cut over the
forthcoming year. By contrast, it is forecast that wages growth in aggregate will exceed inflation
over the next 12 months. Because the wages of modern award-reliant employees constitute less
than 11 per cent of the national wage bill, the adoption of the ACCI’s proposal would have no
significant effect on the WPI or, as a consequence, on lowering the rate of inflation. Further,
the effect of the proposal would be to wholly or substantially negate the benefit of the cost-of-
living measures announced in the Budget which are intended to mitigate financial stress upon
168 Transcript, 22 May 2024 PN 322.
[2024] FWCFB 3500
60
households. Thus, we consider that the ACCI’s proposal gives inadequate weight to ‘relative
living standards and the needs of the low paid’ (ss 134(1)(a) and 284(1)(c)) and would not
maintain ‘a safety net of fair minimum wages’ (s 284(1)). Proposals advanced by other
employer bodies, including the Ai Group, most of which involved increases of less than 3 per
cent, suffer from the same difficulty.
[149] The ACTU’s proposal for a 5 per cent increase to the NMW and modern award wage
rates is directed at restoring losses in real wages in recent years and continuing progress towards
returning the NMW to being a ‘living wage’.169 However, an important aspect of the ACTU’s
claim is that the increase it proposes, which is well above the current and forecast rates of
inflation, would not be inflationary because labour productivity has returned to or exceeded
pre-pandemic levels and will be sustained because of strong growth in business investment and
the Australian Government’s productivity agenda.
[150] We do not consider that there is a sound basis at this time to award wage increases that
are significantly above the CPI, which remains higher than the RBA’s target range. The position
concerning productivity growth remains highly uncertain, as the RBA and the Budget
emphasise. To date, there have only been two successive quarters of positive productivity
growth since the contraction which occurred in 2021–22 and 2022–23. As previous annual wage
review decisions have stated, productivity changes are best considered over multi-year cycles
since this tends to even out short-term fluctuations in the number of hours worked.170 The
position is that there has been no net growth in labour productivity for four years.
8.2 The NMW
[151] We have set out earlier in this decision the way in which we have taken into account the
matters prescribed by s 284(1) of the FW Act. Our conclusion is that the NMW should be
increased by 3.75 per cent in order to maintain a safety net of fair minimum wages. This is an
amount which will retain the real value of the enhanced NMW established in the AWR 2023
decision and will thus appropriately address the relative living standards and needs of those low
paid employees to whom the NMW may apply (s 284(1)(c)). As explained above, further
research undertaken since the AWR 2023 decision leads us to infer that the number of NMW-
reliant employees is significantly less than the 0.7 per cent of the workforce estimated in that
decision and also lower than the Australian Government’s current estimate of 0.25 per cent of
the workforce. That means that the increase we have decided to award will not have any
discernible macroeconomic effects or affect the level of workforce participation, thus rendering
the matters in ss 284(1)(a) and (b) of neutral weight in our consideration of the NMW. If the
gender balance of those employees who are NMW-reliant reflects that of modern award-reliant
employees, it is likely that the increase will disproportionately benefit women. However, for
the purpose of s 284(1)(aa), the practical effect upon the achievement of gender equality will
be negligible.
[152] In respect of s 284(1)(e), the special NMWs applicable to junior employees, employees
to whom training arrangements apply and employees with a disability who are award/agreement
free will be as set out in section 9 of this decision. The casual loading for award/agreement free
169 Australian Council of Trade Unions submission (28 March 2024) [4].
170 AWR 2023 decision [2023] FWCFB 3500, 323 IR 332 [87].
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb3500.pdf
[2024] FWCFB 3500
61
employees will remain at 25 per cent. Consistent with s 287 of the FW Act, the NMW order we
make by this decision will come into operation on 1 July 2024.
[153] In the AWR 2023 decision, it was envisaged that the NMW would be the subject of
further review having regard to, among other things, the budget standards research referred to
in that decision. As explained in paragraph [84] above, we do not consider that such a review
is practicable in the absence of anything which permits the identification of the categories and
characteristics of NMW-reliant employees, if any. We invite parties in next year’s annual wage
review to present any evidence or other material which might advance our understanding of the
practical scope of application of the NMW.
8.3 Modern award minimum wage rates
[154] The AWR 2023 decision stated the principle that ‘… in the medium to long term, it is
desirable that modern award minimum wages maintain their real value and increase in line with
the trend rate of national productivity growth’.171 We affirm that principle, which operates
subject to the implicit qualification that in the immediate circumstances of particular annual
wage reviews it may not be possible to adhere to that objective.
[155] In this Review, the cost-of-living pressures continuing to be experienced by modern
award-reliant employees, especially those who are low paid and live in low-income households,
is a primary consideration even though inflation is considerably lower than it was at the time of
last year’s Review. Modern award minimum wage rates remain lower, in real terms, than what
they were five years ago, notwithstanding the 5.75 per cent increase which resulted from last
year’s Review, and this has caused financial stress in employee households. The current CPI
rate, as we have earlier stated, does not fully capture the extent of this financial stress, since the
CPI inflation rate for non-discretionary goods is 4.2 per cent and the LCI rate for employee
households is 6.5 per cent. This weighs strongly against there being any further reduction in
real modern award wage rates resulting from this Review.
[156] At the same time, however, we do not consider that the current economic circumstances
provide a basis for a level of wage increase significantly above the CPI. In the AWR 2023
decision, the Expert Panel stated:
Future Reviews, if conducted in a lower inflationary environment, are likely to provide an
opportunity to make up the loss of real value in modern award minimum wages rates which has
occurred and return to the path of real growth which prevailed prior to the COVID-19
pandemic.172
[157] We do not consider that the opportunity referred to has yet arisen. Inflation remains
above the RBA’s target range and, as we have explained in respect of the ACTU’s submission,
there are as yet insufficient grounds for confidence that productivity growth has returned to its
pre-pandemic average level. The position for inflation and productivity remains somewhat
uncertain, and this calls for a degree of caution on our part. We also take into account that, on
the premise that there is no reduction in real wages for modern award-reliant employees
171 Ibid [179].
172 Ibid.
[2024] FWCFB 3500
62
resulting from this decision, their real household disposable incomes will increase over the next
12 months because of the Stage 3 tax cuts and the Budget cost-of-living measures.
[158] There is no basis to conclude that the increase of 5.75 per cent award in the AWR 2023
decision had any discernible disemployment effects. The slight weakening in a still-strong
labour market over the last 12 months, and the more marked weakening in employment in the
Accommodation and food services and Retail trade sectors, is primarily attributable to the
tightened monetary policy maintained by the RBA and its effect on household spending.
Accordingly, we have no reason to consider that any amount of increase to modern award
minimum wage rates within reasonable parameters will detrimentally affect the labour market
having regard to the RBA and Budget forecasts for employment growth, unemployment and
participation. However, because of the extent to which modern award-reliant employees are
casual or work part-time hours, it is necessary to pay close attention to any reduction in hours
worked in the sectors in which such employees are concentrated. The current circumstances in
the Accommodation and food services and Retail trade sectors have operated as a moderating
factor in our determination of the increase to be awarded.
[159] The solid profit growth in non-mining industries might suggest that the cost to business
overall of any reasonable increase flowing from this Review would not present as a major
concern. However, it is necessary to take into account two additional matters. First, profits fell
in the Accommodation and food services sector and were flat in the Retail trade sector in 2023
which, again, was a product of the reduction in discretionary household spending. Second, the
Superannuation Guarantee contribution rate will increase by a further 0.5 per cent effective
from 1 July 2024, bringing the total contribution rate to 11.5 per cent. This is a cost to employers
which, if they employ modern award-reliant workers, they will have to bear simultaneously
with the cost of modern award minimum wage increases flowing from this Review. We have
treated these matters as moderating factors.
[160] Having regard to and appropriately weighing the matters we are required to take into
account under ss 134(1) and 284(1) of the FW Act, the object of the FW Act in s 3, and the rate
of the NMW we have set, we have decided that all minimum wage rates in modern awards shall
be increased by 3.75 per cent. In accordance with s 286, the variations to modern awards to
increase minimum wage rates by this amount will come into operation on 1 July 2024.
[161] The increase we have determined to award is broadly consistent with projected wage
growth for the economy generally across 2024. Based on the analysis in paragraphs [36]–[39]
above, we estimate this increase will contribute approximately 0.4 of a percentage point to the
WPI for the 12 months to March 2025. This is consistent, in our view, with the forecast return
of inflation to the RBA’s target range in 2025.
8.4 The gender equality agenda
[162] Having earlier identified what we consider to be the priority areas for consideration in
respect of ‘the need to achieve gender equality’ (ss 134(1)(ab) and 284(1)(aa) of the FW Act),
it remains necessary for us to determine how these priorities should appropriately be actioned.
[2024] FWCFB 3500
63
[163] The ACTU submitted that, as part of this Review, an interim wage increase of 4 per cent
(additional to the 5 per cent general increase to the NMW and all modern awards it proposes)
should be awarded in the following two categories of awards:
(1) ‘Group 1’ adjustments to awards which cover female-dominated ‘caring’ work, as
an initial step in the application of the benchmark rate for such employees
identified in the Stage 3 Aged Care decision (see paragraph [106] above).
(2) ‘Group 2’ adjustments to awards containing classifications requiring an
undergraduate degree, as an initial step to aligning such classifications with the
C1(a) and C2(b) rates in the C10 Metals Framework, as per the approach taken in
the Teachers decision and endorsed in the Stage 3 Aged Care decision (see
paragraph [107] above).
[164] The ACTU also proposed that, separate to this Review, the Commission should initiate
a work value assessment process to consider whether the C10 rate in the Manufacturing Award
is appropriate to be retained as the benchmark for female-dominated occupations that do not
prima facie involve ‘care’ work and, if not, to identify a new benchmark. The ACTU identified
the General Retail Award, the Hair and Beauty Award, the Legal Services Award 2020,173 and
the Pharmacy Award as awards falling into this category. It contemplates that process would
involve four steps. The first would be to identify priority awards by using data from the Stage
1 report to identify occupations at the 4-digit ANZSCO174 level comprising 70 per cent or more
female employees, cross-referencing to the 4-digit ANZSIC175 code in the Census data for
female employees, and mapping ANZSIC codes based on EEH data and the Commission’s
mapping exercise. The second step would involve targeted consultations concerning the
utilisation of invisible skills in the priority awards, with the aim being to establish a consensus
as to a common denominator of skills exercised, but not recognised, in the classification
structure of the relevant awards. The third step would be to assess whether the C10 benchmark
is appropriate and, if not, to establish (a) replacement benchmark(s) for proper valuation. The
final step would be to award interim adjustments to minimum wages based on the new
benchmark(s) where gender-based undervaluation is identified in steps 1–3.
[165] The UWU similarly submitted that the Stage 2 report had found indicia of gender-based
undervaluation in 12 awards and that, to deal with this, we should initially award an interim
increase to minimum rates in awards relating to the ‘care sector’ where there is evidence of
gender pay inequity, and then map out a process for addressing complex undervaluation beyond
the timeline of the Review.
[166] The employer organisations which made submissions to the Review generally opposed
the proposal advanced by the ACTU and the UWU that interim wage increases be awarded in
this Review as an initial step in rectifying gender-based undervaluation in modern awards. In
particular, the ACCI submitted that any re-examination of the appropriateness of the C10
Metals Framework Alignment Approach should occur separately to the Review to allow for a
thorough examination of its impacts and to consider whether changes are necessary, since a
173 MA000116.
174 Australian and New Zealand Standard Classification of Occupations.
175 Australian and New Zealand Standard Industrial Classification.
https://www.fwc.gov.au/document-search/view/2/aHR0cHM6Ly9zYXNyY2RhdGFwcmRhdWVhYS5ibG9iLmNvcmUud2luZG93cy5uZXQvYXdhcmRzL01vZGVybkF3YXJkcy9NQTAwMDExNi5kb2N40?sid=&q=MA000116
[2024] FWCFB 3500
64
lack of available data and resources makes it unclear whether that approach embedded gender-
based undervaluation across all awards. The ACCI also submitted that the Commission has, as
a result of the Secure Jobs, Better Pay Act, been empowered to make equal remuneration orders
on its own motion as well as upon application and, as such, the Review was not the appropriate
mechanism to address gender-based undervaluation issues that should rather be dealt with on
an industry-by-industry basis. The ACCI is amenable to these issues being dealt with in a
‘truncated process’ that might be completed within a period of 12 months.176
[167] The Ai Group accepted that gender-based undervaluation and consideration of ‘caring’
work are issues of significance for the Commission following the legislative change effected
by the Secure Jobs, Better Pay Act but submitted that the Review is not the appropriate forum
to resolve these issues. The Ai Group submitted that differences in terms and conditions in
awards do not alone establish gender-based undervaluation of work but are more likely to reflect
the varying operational circumstances of employers. Addressing gender-based undervaluation
of work requires factual findings upon which to proceed and, in the absence of evidence, the
Commission will not be able to make factual findings. The Ai Group submitted that it would
be inappropriate to make any adjustment to minimum rates without parties being afforded a
reasonable opportunity to advance evidence and that it would be more appropriate to consider
gender-based undervaluation issues holistically and comprehensively in separate proceedings.
[168] Australian Business Industrial and Business NSW (ABI/BNSW) submitted that the
proposition that certain awards may involve ‘caring’ work or may be affected by gender-based
undervaluation is not enough on its own to enable the identification in this Review of the extent
of the wage increase required to achieve the modern awards objective and the minimum wages
objective, and that it is unclear how that question could be answered without evidence for each
sector or modern award group. ABI/BNSW also submitted that the Stage 3 Aged Care decision
did not set a benchmark for Certificate III-qualified employees that could automatically be
applied elsewhere. The Stage 3 Aged Care decision involved a work value assessment of very
particular work in the aged care sector, and assuming its findings were automatically
transferable to all ‘caring’ or female-dominated industries might conflict with the statutory
requirements of the FW Act. ABI/BNSW accepted that, having regard to the findings in the
Stage 3 Aged Care decision and the Stage 2 report, it appears that rates have not been properly
set in certain modern awards because they have been ‘infected by gender-based undervaluation
and the slavish application of the C10 framework’.177 They proposed that this should be
addressed by way of the Commission establishing own-motion inquiries.
[169] As we have earlier related, the step taken in the AWR 2023 decision178 to address the
potential gender undervaluation issues identified in that decision was to undertake the two-stage
research project, with the intention that the outcomes of that project would be considered and,
if necessary, addressed, in either this Review or other Commission-initiated proceedings
depending on the timing. The publication of the Stage 2 report on 4 April 2024 has allowed the
parties to make some submissions concerning the conclusions in that report and the Stage 1
report, but we are concerned that there has not been a full opportunity for interested parties to
adduce evidence, and make submissions on the basis of that evidence, which might be necessary
176 Transcript, 22 May 2024 PNs 346, 353.
177 Australian Business Industrial and Business NSW submission (29 April 2024) [2.65].
178 [2023] FWCFB 3500, 323 IR 332 [139].
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb3500.pdf
[2024] FWCFB 3500
65
for us to properly afford procedural fairness and to proceed on a sound evidentiary foundation.
In relation to the proposals advanced by the ACTU and the UWU for interim wage increases,
we are particularly concerned that the publication date of the Stage 2 report has meant that these
proposals were advanced only in reply submissions filed on 29 April 2024, which has limited
the capacity for these proposals to be addressed and considered fully in the Review program.
While we accept that the proposals advanced by the ACTU and the UWU have substantial merit
on the basis of the conclusions of the Stage 1 and Stage 2 reports, the Teachers decision, the
AWR 2023 decision, the Stage 1 Aged Care decision and the Stage 3 Aged Care decision, we
do not consider that we can fairly or appropriately consider those proposals in the absence of
any proper opportunity for affected parties to call evidence concerning issues such as any
relevant distinctions that might exist between the work in question and the work considered in
the Teachers decision or the Aged Care decisions, the capacity of employers to pay wage
increases, and any related issue of government funding.
[170] The ACTU’s approach of seeking interim wage increases in this Review as a first step
to implementing a benchmarked wage rate also raises a wider question concerning the capacity
under the FW Act to move towards a targeted wage rate in particular modern awards over a
number of annual wage reviews. If we were to form a final conclusion in this Review that, in
respect of particular awards, we should implement staggered wage increases over a period of
time to reach the benchmark wage rates established in the Teachers decision and the Stage 3
Aged Care decision, that conclusion could not bind Expert Panels in future annual wage reviews
or serve as a ‘hard target’ because the FW Act requires consideration of the modern awards
objective and the minimum wages objective in each Review in the context of the circumstances
applying at the time.179 By contrast, in a proceeding under s 157 of the FW Act, the Commission
may, by a single decision, proceed to vary a modern award to provide for a final wage outcome
to be reached in stages over an extended period of time, provided the relevant statutory criteria
specified in s 157 are satisfied (see s 166). That means that the implementation of a
benchmarked wage rate of the type identified in the Teachers decision and the Stage 3 Aged
Care decision may be achieved in a single proceeding conducted under s 157.
[171] Accordingly, we do not propose to award the interim wage increases proposed by the
ACTU and the UWU in this Review. Instead, in respect of the four priority categories of
occupations/awards identified in section 5 of this decision (paragraphs [112]–[123], the
Commission will immediately after the conclusion of this Review initiate proceedings pursuant
to s 157 of the FW Act to consider whether the minimum wage rates for the relevant
classifications in identified awards should be increased on work value grounds in order to
remedy potential gender undervaluation. This will give interested parties a proper opportunity
to adduce evidence in respect of all relevant issues. However, we emphasise two matters. First,
it is not intended for these matters to go forward as if they are a blank slate. They will proceed
on the gender undervaluation premises established in the Stage 1 and Stage 2 reports, the
Teachers decision, the AWR 2023 decision, the Stage 1 Aged Care decision and the Stage 3
Aged Care decision. Second, consistent with the priorities we have given them and the
imperatives of ss 134(1)(ab) and 284(1)(aa) of the FW Act, they will be dealt with to completion
in a time-critical manner. We certainly intend that they will be completed by the time of next
year’s annual wage review such as to permit that Review to move on to the consideration of
any further gender undervaluation issues.
179 Annual Wage Review 2016–17 Preliminary Decision [2017] FWCFB 1931 [45]–[60].
https://www.fwc.gov.au/documents/decisionssigned/html/2017fwcfb1931.htm
[2024] FWCFB 3500
66
[172] We consider that the approach we intend to be taken to resolve the priority gender
undervaluation issues identified in section 5 of this decision gives appropriate weight to the
considerations in ss 134(1)(ab) and 284(1)(aa) of the FW Act, and no other consideration in
ss 134(1) or 284(1) weighs against this approach.
9. Conclusion
[173] This section sets out the outcome of this Review and other relevant matters.
[174] The NMW order will contain:
(a) A national minimum wage of $915.90 per week or $24.10 per hour;
(b) Two special national minimum wages for award/agreement free employees with
a disability: for employees whose productivity is not affected, a minimum wage
of $915.90 per week or $24.10 per hour based on a 38-hour week, and for
employees whose productivity is affected, an assessment under the Supported
Wage System (SWS), subject to a minimum payment fixed under Schedule A to
the order;
(c) Wages provisions for award/agreement free junior employees based on the
percentages for juniors in the Miscellaneous Award 2020 applied to the national
minimum wage;
(d) The apprentice wage provisions and the National Training Wage Schedule in the
Miscellaneous Award 2020 for award/agreement free employees to whom training
arrangements apply, incorporated by reference; and
(e) A casual loading of 25 per cent for award/agreement free employees.
[175] The NMW order will operate from 1 July 2024, and will take effect in relation to a
particular employee from the start of the employee’s first full pay period on or after 1 July 2024.
[176] Modern award minimum wages will be increased by 3.75 per cent. The variation
determinations in respect of all modern awards, modern enterprise awards and State reference
public sector awards will operate from 1 July 2024 and take effect in relation to a particular
employee from the start of the employee’s first full pay period on or after 1 July 2024.
[177] The determinations necessary to give effect to the increase in modern award minimum
wage rates will be made available in draft form shortly after this decision. Determinations
varying the modern awards will be made as soon as practicable and the modern awards
including the varied wage rates will be published as required by the FW Act.
[178] Our determination in this Review is that the wage rates in all remaining transitional
instruments and copied State awards are also increased by 3.75 per cent. This determination
comes into operation on 1 July 2024 and takes effect in relation to a particular employee from
the start of the employee’s first full pay period on or after 1 July 2024. The Commission is not
[2024] FWCFB 3500
67
required to publish the rates of the wages in the relevant transitional instruments or copied State
awards as so varied, and accordingly we will not do so.
[179] In relation to the gender undervaluation conclusions stated in paragraphs [112]–[123]
and [169]–[172] above, the Commission will shortly initiate proceedings on its own initiative
pursuant to s 157 of the FW Act concerning the following awards:
• Children’s Services Award 2010;
• Social, Community, Home Care and Disability Services Industry Award 2010;
• Health Professionals and Support Services Award 2020;
• Aboriginal and Torres Strait Islander Health Workers and Practitioners and
Aboriginal Community Controlled Health Services Award 2020; and
• Pharmacy Industry Award 2020.
[180] We wish to express our appreciation to the parties who participated in this Review for
their contributions and to the staff of the Commission for their assistance.
PRESIDENT
Appearances:
M Cowgill, J Wettinger, I Redmond and J Bullen for the Australian Government.
K Burke, counsel, with T Greenwell, T Clarke and S Peldova-McClelland for the Australian
Council of Trade Unions.
L Harrison for the United Workers’ Union.
C Massy, counsel, with M Kavanagh and T Barnes for the Australian Catholic Council for
Employment Relations.
P Grist, J Tinsley and J Morrish for the Australian Chamber of Commerce and Industry.
B Ferguson and J Wilson for the Australian Industry Group.
Hearing details:
2024.
Sydney:
22 May.
OF THE FAIR WORK MISSION THE
[2024] FWCFB 3500
68
Appendix: Proposed minimum wage adjustments
Party Proposal
Australian Government
No quantum specified
(ensuring the real wages of low-paid workers do not go
backwards)
New South Wales
Government No quantum specified
Queensland Government No quantum specified
South Australian Government No quantum specified
Victorian Government No quantum specified
Western Australian
Government No quantum specified
Australian Council of Trade
Unions
5 per cent increase, and at least 9 per cent for selected
occupations, particularly in care and degree-qualified work
Australian Industry Group Should not exceed 2.8 per cent, applicable to all
Australian Chamber of
Commerce and Industry Increase no more than 2.0 per cent, applicable to all
Australian Council of Social
Service No quantum specified
Australian Catholic Council
for Employment Relations
4.9 per cent increase and a minimum 4.9 per cent increase
to the C13 to C10 rates
Australian Business Industrial
and Business NSW 2.5 per cent increase, applicable to all
Australian Retailers
Association 3.1 per cent increase, applicable to all
AUSVEG No quantum specified
Council of Small Business
Organisations Australia Between 2 to 3 per cent, applicable to all
Entrepreneurial & Small
Business Women Australia No quantum specified
Housing Industry Association No quantum specified
Laundry Association
Australia
No increase. If an increase is awarded, 2 per cent
applicable to all
Master Grocers Australia
Limited
2.7 per cent increase in the General Retail Industry Award
2020 and the Timber Industry Award 2020
National Farmers’ Federation No quantum specified
National Retail Association Increase no more than 2.5 per cent, applicable to all
Restaurant & Catering
Association Increase no more than 2 per cent to the NMW
South Australian Wine
Industry Association Increase no greater than 3.5 per cent for the wine industry
[2024] FWCFB 3500
69
Party Proposal
Australian Services Union 5 per cent increase, applicable to all
Flight Attendants’
Association of Australia
Supports the ACTU’s approach and calls for an immediate
increase of 2 per cent in the Aircraft Cabin Crew Award
2020, to bring it to 100 per cent of the C10 rate (with
internal award relativities maintained)
Shop Distributive and Allied
Employees’ Association 5 per cent increase, applicable to all
United Workers’ Union
Increase of at least 5 per cent applicable to all and, in
addition, an interim increase to minimum rates in awards
relating to the ‘care sector’
Retail and Fast Food Workers
Union Incorporated
Replace all rates currently lower than a ‘living wage’ (60
per cent of AWOTE) with a minimum base hourly rate of
at least $29.82 and a minimum base weekly rate of
$1133.28, ‘including in any retail, miscellaneous and fast
food Awards’, and junior, trainee, apprentice and
supported wage rates.
Professor Meg Smith and
Doctor Michael Lyons No quantum specified
Printed by authority of the Commonwealth Government Printer
PR002024
