National Wage and Safety Net Claims and Outcomes 1991-2005
E-Brief: Online Only issued 2 May 2002 - updated 21 June
Economics, Commerce and Industrial Relations Section
The term, 'awards acting as a safety net', is used in the
Workplace Relations Act
1996 (WR Act) under sec.88A, and reference is made to
the 'award safety net' in the Objects of the WR Act. But the
award safety net has a colloquial meaning as well. It refers to the
level of wages and conditions which an employee will expect to have
access to in the absence of another ‘superior’
instrument, e.g. a collective or certified agreement or individual
contract. The award safety net thus includes federal and State
This brief considers federal awards and the (defacto) annual
review of award wages called the Safety Net Review (SNR). It
also reviews the transition to a two tier system of wage
determination based on enterprise agreements and individual
contracts with awards as a residual, from the 1980s. It reviews
submissions to the current SNR hearings. The outcome of the
SNR cases is also provided in detail, in the table attached to the
brief. It includes the claims and counter claims by the major
parties: the Australian Council
of Trade Unions (ACTU), the employers, mainly Australian Chamber of Commerce and
Industry (ACCI) and the Australian Industry Group (AIG)
and State and Federal governments.
The use of a term such as the safety net gives rise to a
question about how 'safe' is the net? In the financial collapse of
the telecommunications company One.Tel, it was revealed (SMH 5 June
2001) that its 1,400 employees were not covered by an award or any
registered agreement. According to the relevant union, the CPSU,
the company subsequently agreed to meet the terms of the standard
award redundancy clause (only) for the purposes of paying employee
redundancy entitlements. So when references are made to the
'award safety net' it should by no means be assumed that this is a
universal or inviolable net, applicable to all employees. Indeed
another object of the WR Act is to enable employers and
employees to choose the 'most appropriate form of agreement for
their particular circumstances, whether or not that form is
provided for by this Act ...'. (sec. 3(c) of the WR Act). The
employment arrangements used at One.Tel may thus be seen as not
inconsistent with this object of the WR Act, even though a further
object (sec.3(d) of the WR Act) refers to the maintenance
of 'an effective award safety net of fair and enforceable
minimum wages and conditions of employment' yet One.Tel workers
The process of making a federal award is initiated by a
registered union under its rules and on behalf of its members or
future members. The union serves a log of claims upon a group of
employers under the jurisdiction of the WR Act. These claims are
required by law to create an ambit for a 'paper' industrial dispute
under the Constitution's conciliation and arbitration power
(s.51(35)). A finding of a dispute will be made. This then allows
the resolution of the claims made through the creation of an
initial award by the Australian Industrial Relations
Commission (AIRC). Under sec.111 of the WR Act, the AIRC has
power to make an award (or avail itself of other options). The
award prescribes a range of pay levels and conditions of
employment, such as hours of work, annual leave, redundancy, family
care leave and other specified matters (sec.89A of the WR Act).
However in each of the steps of making a federal award, there are
opportunities to thwart the outcome. Thus, evidence of a structured
pay and conditions system in place within an enterprise may
persuade the AIRC not to make an award, after a log of claims has
been served and other formalities met. The Coalition Government
regards the procedures of making a federal award as somewhat
anachronistic, and the Hon Peter Reith MP released a number of
documents in 2000 criticising the federal award making process and
proposed fundamental reform to the formalisation of wages and
conditions arrangements under the federal jurisdiction, but
indicated awards would still be an option for this purpose.
Gridlock canvasses the use of the Constitution's corporations
power (s.51(20)) in underpinning the relation of corporate
employers and their employees. With the ability to make the
industrial law changes previously denied, the Prime Minister the
Hon John Howard made a statement to the Parliament on 26 May 2005,
which, inter alia, foreshadowed that the AIRC's wage fixing role
would be largely taken over in the functions of a proposed
Australian Fair Pay Commission. New legislation to make these
changes is expected to be presented to the Parliament in the latter
part of 2005.
The ABS updated data on the employee numbers covered by awards
in May 2004 (Employee Earnings and Hours Cat. No. 6306). The most
common methods of setting pay for all employees were registered
collective agreement (38.3 per cent, just on 3.1 million employees)
and award only (20.0 per cent or 1.6 million employees).
Unregistered collective agreement (2.6 per cent) and registered
individual agreement, such as Australian Workplace Agreements
(2.4per cent) were the least common methods of setting pay.
Under the Workplace Relations and Other Legislation Amendment
Act 1996, existing federal awards are required to be simplified so
that they address the 20 allowable matters prescribed by s.89 of
the WR Act. The simplification of awards under the auspices of the
AIRC has led to awards being set aside, and the 3222 awards of 1996
have been reduced to 1509 by early 2004.
Using award and agreement coverage data presented to the AIRC's
Safety Net Review Wage case by the
Joint Coalition Governments Submission 2000, it can be
inferred that the fewer number of federal awards cover about 3
million employees directly or indirectly; indirectly, because
federal awards underpin certified agreements via the 'no
disadvantage test'. Where an enterprise is not covered by an award
for the purposes of this test, one can be 'designated'. Some States
have similar provisions regarding awards and certified
agreements, thus the influence of the award safety net tends to be
greater than its direct coverage (note that there are generally
more federal certified agreements and more employees under them,
compared to those in the State jurisdictions). Note however
that the Prime Minister’s May 2005 statement foreshadows
discarding the current ‘No Disadvantage Test’ replacing
it with a new NDT based not on a relevant or designated award but
based on a minimum wage, and four conditions: annual leave,
personal leave, parental leave and hours of work provisions, which
will have the effect of enticing employers to move employees off
awards and on to workplace agreements.
Safety Net Review Wage Cases (SNR) adjust federal award rates of
pay and related allowances. They have been held, more or less
annually since 1993. The cases are conducted by the AIRC, upon
applications (usually) from unions to increase award wages.
Employers and governments also use the forum to submit their views
on awards and the economy. Employers most often oppose the union
applications and in their recent submissions have proposed some
dramatic counter initiatives. Community groups also may make
submissions to SNR hearings on issues such as income distribution
and social hardship. SNR Cases have succeeded or replaced National
Wage Cases (NWC). This brief uses the term safety net review
instead of ‘living wage’, as the legislation refers to
the safety net.
For the period since the basic wage was replaced by total award
rates (1967), National Wage Cases have been a regular and effective
device for spreading award wage increases across the labour force.
NWC were not the sole mechanism for increasing wages, as
'over-award' negotiations between individuals and/or unions and
employers and work value cases have had an important role as
By the late 1980s, union disillusionment with a system of formal
and informal rules in what had become known as the Accord wages
system prompted a search for alternative pay system. The popular
view of the disillusionment was that:
- pay agreements were determined from above by senior union and
- union leaders became divorced from their members, especially as
union amalgamations took place
- unions were forced to comply with wages outcomes by virtue of
the 'no extra claims' commitment required by the AIRC to gain award
- industrial action was circumscribed.
Unions envisaged that enterprise agreements would provide access
to pay increases particularly in sectors which were profitable and
where productivity changes were not being rewarded by the
prescribed wage limits outlined by the Accord partners. The
resentment of the constraints of the Accord
(Long, Stephen. AFR, 18 March 2000) over restricted
access to wage increases is still referred to in union quarters
some ten years later. The National Wage decisions between 1986 to
1989 had opened opportunities for employers to pursue workplace
efficiencies. By 1989, a comprehensive plan to realign the
relativities of award pay rates had been accepted by the AIRC (see
H9100). The revised pay relativities were to be accompanied
with a wider range of duties for the streamlined
The political context behind the moves away from the award
system was one of:
- sustained critique of the award system,
- ridicule of the centralised award system by the 'IR' Club
- derision at associated complexities of the system.
A comprehensive account of these
episodes over the 1980s has been provided in a speech by former
AIRC Deputy President George Polites. The Business Council of
Australia (BCA) was particularly influential in the late 1980s,
arguing in its bulletin that the award system had outlived its
usefulness, and indeed was a hindrance to making Australian
In late 1990, a Full Bench of the AIRC contemplated the gravity
of moving from a system of awards to a system of enterprise
bargaining. It presented a questionnaire about the consequences of
a move to enterprise bargaining, which the parties to the NWC were
required to answer (Print
The AIRC’s questionnaire exercise highlighted the very
dramatic changes to the national system of wages should enterprise
bargaining be substituted as the principal mechanism for adjusting
wages. It asked for views, for example, on the implication of
distributing the benefits of productivity growth on an enterprise
basis. Hitherto, the AIRC had accepted since the 1960s, that
productivity benefits would be distributed on a national basis and
so would be available to the bulk of the workforce in the form of
improved pay and conditions. One implication (amongst others) was
that this would no longer be the case under enterprise bargaining.
More likely, the benefits of productivity would be enjoyed by the
workforce of an enterprise (and by shareholders and customers).
In October 1991, the AIRC agreed to the concept of allowing
enterprise agreements to be registered as schedules to the parent
K0300). Some foresaw that a change of this magnitude would
essentially weaken the award system as it then operated. Thus the
predecessor of the Australian Industry Group, the Metal Trades
Industry Association questioned its ongoing commitment to the award
system as the primary means of settling pay disputes, although it
had been suspicious of enterprise bargaining where this involves an
industry wide claim and industrial action.
Industrial Relations Reform Act
1993 introduced the award safety net prescribing that
awards (other than paid rates awards) act as a safety net of
minimum wages and conditions of employment underpinning direct
bargaining. It did this by amendment to the principal law, the
Industrial Relations Act
1988. For some years prior to the 1993
amendment, governments, unions and employers grappled with the
possible opportunities and consequences of moving from the award
system to decentralised wage bargaining. They initially attempted
to have the rules or principles made by the AIRC modified to
recognise workplace or enterprise agreements.
While the AIRC did concede to the pressure and developed an
enterprise bargaining principle as part of its wage fixing
principles in 1991, the Government sought to further cement
enterprise bargaining via legislation in the
Industrial Relations Legislation
Amendment Act 1992. The Act restricted
the veto powers of the AIRC in the approval process of
single-enterprise agreements (i.e. where these agreements would
conflict with a public interest test) and introduced a strong no
disadvantage test. The
Industrial Relations Reform Act
1993 allowed non-union agreements to be certified
(where employees were employed by constitutional corporations), in
addition to union agreements. These agreements continue (WR Act
The initiatives toward decentralisation and enterprise
agreements raised the issue as to what role might be performed by
awards and the award structure in a system where employment
conditions and remuneration are determined largely under an
alternative system to awards. The answer envisaged at the time was
that awards were to assume more of a safety net role. Prime
Minister Keating outlined this reserve function for safety net
awards in an address to the Australian Institute of Company
Directors in 1993, quoted in a
speech by the Hon Peter Reith MP:
The safety net would not be intended
to prescribe the actual conditions of work of most employees, but
only to catch those unable to make workplace agreements with
employers. Over time the safety net would inevitably become
simpler. We would have fewer awards, with fewer clauses.
The then Government used these reviews to enunciate a framework
for future core award conditions, as noted the account by Deputy
President Polites. The following ‘core award
conditions’ were nominated by the Government submission in
the September 1994 safety net review (Print
L4700). They were identified as:
- minimum wage,
- key leave elements,
- hours of work,
- TCR (termination, change and redundancy),
- superannuation (as per the test case),
- public holidays (as per the test case),
- mode of employment,
- union right of entry,
- dispute settlement procedure,
- support of the principle for equal pay for equal work and
- industry specific conditions identified on an award by award
basis reflecting widely accepted standards justified by important
industry and other specific circumstances.
In other words, as enterprise agreements were to expand both in
respect of the subject matter they covered and the proportion of
the workforce covered by them. Awards were intended to recede both
in respect of the scope of their provisions and the numbers of
employees covered directly under them. Since awards were no longer
intended to be the principal instrument that described actual pay
and conditions of employment in most enterprises, awards would
become safety net awards. The reduction of provisions under awards
has been facilitated through sections 88 and 89 of the
Workplace Relations Act, and through the
transitional provisions (items 49-51 of the Act which
‘created’ the WR Act - the Workplace
Relations and Other Legislation
Amendment Act 1996). Currently, 20
allowable matters are listed under s.89A(2) many of which reflect
the award matters proposed in 1994, although union right of entry
is not one.
Award rates act as a foundation for enterprise bargaining
agreements, in the federal jurisdiction these are referred to as
certified agreements (CAs) and are collective agreements, (usually
negotiated with a union or an enterprise workforce) and Australian
Workplace Agreements (AWAs, which are individual agreements). Part
V1E of the Workplace
Relations Act 1996 sets out the
‘No Disadvantage test’ (initially separately provided
for in the 1993 legislation) which applies both to CAs and
Section 170XA(2) stipulates that an agreement disadvantages
employees if it results in the reduction of overall terms and
conditions of the employees under the relevant (or designated)
awards. SNR decisions assume an importance by having an influence
on enterprise and individual bargaining given that they act as the
base for setting actual pay rates received by employees under these
other arrangements. So, if award rates are increased due to a SNR
decision then it will be all the more difficult to set rates of pay
at or below the new award rates in certified or other agreements
(although not impossible e.g. in the case of 'short term' business
In short, SNR decisions underpin bargaining for those in the
workforce who may be entitled to higher pay rates than those
expressed in their awards, and for those who cannot access
bargains, then the awards provide a basic standard of living. The
AIRC has traditionally had a primary role in determining award
wages and the principles by which these are made and varied. It
follows that the process of setting these award rates will be the
source of contention between employers, governments and unions and
will also be one factor in the distribution of national income.
Under the three Safety Net Reviews from 1993 to 1995, an
increase in award rates of $8.00 per week was awarded in each case,
with the first subject to an 'absorption' test. This meant that
where actual pay rates were higher than prescribed under the new
rate which included the $8.00, the increase need not be paid in
part or full. As noted, the reviews of 1994 and 1995 also allowed
the parties to express their views on the future of the award
The 1997 safety net decision (Print
P1997) established a federal minimum award wage at that time of
$359.40. The ACTU put the argument for a uniform minimum rate as
part of its 'Living Wage' claim. This claim also sought successive
increments to lift award rates to a minimum of $12.00 per hour
phased in over 3 stages, as well as pay increases for those who had
not had these since 1996. In its response the ACCI suggested
reviving the dormant minimum wage which was calculated to be about
$260.00, being a 'not elsewhere employed' classification in the
Metal Industry Award. ACCI suggested a small increase to this
minimum rate. Instead the AIRC increased award rates by $10.00,
while Deputy President Ross issued a dissenting decision containing
higher rates. The eventuality was that a federal minimum wage of
$359.40 was set, being the existing lowest actual paid adult rate
in the Metal Industry Award including the proposed $10.00.
The 1998 safety net review commenced with the ACTU seeking to
modify its 1997 Living Wage submission for a two-part increase of
the minimum wage to $418.00. In the 1998 safety net decision
Q1998) AIRC awarded $14.00 for those on award rates to
$550.00, $12.00 for those between $550.00 and $700.00 and for rates
over $700.00, $10.00. The minimum wage was increased to
The 1999 safety net review commenced by the ACTU making an
application for $26.00 for award rates up to $527.80 and for all
award rates above that level. The federal and Coalition State
Governments agreed to a modest increase of $8.00 and capped at the
C10 rate of the Metals Award (i.e. $465.20). The Victorian
employers organisation (VECCI) used the 1999 Review to try to
significantly extend the minimum wage as the principal rate by
which all classification rates in agreements would be compared
with. This proposed role of the federal minimum wage according to
the AIRC would be to:
- operate as the "benchmark wages comparator" for the
purpose of the no-disadvantage test set out in s.170XA of the
- provide that the federal minimum wage will not be used to
calculate overtime, penalty rates and allowances
- break the current link between the federal minimum wage and the
award wages system
The AIRC refused the VECCI request. The 1999 safety net decision
R1999) increased award rates up to and including $510 pw by
$12.00, and by $10.00 for award rates above $510 and a new minimum
rate of $385.40.
However a similar proposal was put by VECCI in its 2000
submission. On this occasion VECCI proposed an award clause which
is designed to apply to businesses who would be covered by the
award but who have not employed anyone. Such an employee would be
paid the federal minimum wage for up to 6 months and
indefinitely if the new employees sign an AWA or are covered by a
Certified Agreement. The claim was couched in terms of assisting
the reduction in unemployment by encouraging business growth in the
services sector, particularly the restaurant and hospitality
The ACTU claimed $24.00 for award rates up to and including the
C7 rate in the Metal Engineering Award ($537.80) or 4.5 per cent
increase in rates above this. The Coalition governments supported
an $8.00 increase for awards up to the C10 level ($477.20). The
2000 safety net decision (Print
S5000) given by the AIRC on 2 May 2000 allowed award rates to
be increased by $15.00. This raises the federal minimum wage to
$400.40. The increase is to apply to all award rates.
The 2001 safety net decision (PR002001)
was derived from an initial ACTU claim of $28 per week for
classifications up to and including the C10 classification in the
Metal Engineering and Associated Industries Award 1998 (Part 1),
and a 5.7 per cent increase for classifications above that level.
(The C10 classification applies to a base tradesperson's rate of
$492.20 as at April 2001). The claim also sought appropriate
increases in related allowances. The Joint Coalition Governments
opposed the claim but supported a flat money increase and capped to
the C10 level. The State Labor Governments supported the ACTU
claim, but in the alternative proposed an increase in line with
what the evidence put to the AIRC indicated. The ACCI submitted
that any increase be limited to the minimum wage (then $400.40).
The AIG was concerned at the compression of pay rates across skill
levels, which came about from awarding flat money increases.
The 2001 SNR decision awarded a three tier increase:
- $13.00 per week increase in award rates up to and including
- $15.00 for classifications above $490 to $590
- $17.00 for classifications above $590
- the federal minimum wage increased to $413.40
In May 2002, the SNR decision (PR002002)
increased federal award rates by $18.00. In part, the decision
corrects the 2001 SNR decision in which the AIRC considered the
economy less able to afford a higher increase. However in 2002, the
much more buoyant economic conditions were relied on to base a
higher increase. In the course of submissions, evidence was
presented showing GDP growth to increase by more than 3 per cent in
2001-2002 and the rate of unemployment appears to be declining. The
Federal Government introduced the result of econometric modeling
which showed a possible increase in unemployment should the full
ACTU claim be granted.
In the 2003 SNW hearings, ACCI submitted that the ACTU's claim
should be rejected because it was ill-timed, economically
irresponsible and not industrially justified. It submitted that the
award safety net is not currently in need of adjustment and that
there should be no increase at this time. In the alternative, if
the Commission awarded an increase it should be moderate. The
Australian Industry Group and the Engineering Employers
Association, South Australia (jointly AiG) supported an increase of
$11 per week to award rates of pay, subject to the principle of
absorption. AiG submitted that the increase of $24.60 claimed by
the ACTU would result in an overall net detriment for both
employers and low-income earners, although it conceded that some
low-income earners would benefit. The National Farmers' Federation
(NFF) also opposed any increase. However, it submitted in the
alternative that if the Commission was inclined to award an
increase the detrimental impact of drought on rural businesses
should be given substantial weight in determining the amount of the
increase. It also sought a modification to the Commission's
Economic Incapacity Principle to the effect that qualification for
the Commonwealth's "exceptional circumstances" assistance for
employers affected by the drought ought to be taken as satisfying
the requirements of that principle.
The AIRC rejected the claim for drought- and hardship-affected
farmers to be automatically given a 12-month extension on paying
the safety net rise. However, it said the NFF's proposed criteria
would definitely be a "relevant consideration" for the Commission
when deciding if particular enterprises should get relief. The AIRC
recommended the Federal Government conduct an authoritative survey
on the employment effects of safety net adjustments in Australia.
On 6 May the AIRC awarded a $17 safety net increase (up to $731.80
a week - the level C2A ) while those above this rate receive $15.
The strong productivity growth of 3.8% in the past year, on the
back of continuing growth during the current economic cycle,
provided no support for any suggestion that safety net increases
have a negative impact on productivity.
In the 2004 SNW case, ACCI, the AIG and the Federal Government
supported a $10 increase in the federal award safety net in
response to the ACTU's $26.60 claim (capped at the C10 level),
although the AIG backed a $10 rise in all award classifications.
The AIG proposed a new wage principle of a commitment to continuous
improvement in productivity and efficiency in response to poor
labour productivity gains. AiG also proposed a test case to
establish an award safety net for the newly-referred Victorian
common rule award system (now underway). ACCI sought a 28-day
notice period before employers are obliged to pass on any 2004
safety net increase.
The bench refused to accept submissions from the Federal
Government and others that the ACTU claim would discourage
workplace bargaining. The bench said bargaining was not a
"practical possibility" for workers with no bargaining power, who
are those protected by safety net rises. It also noted that the
recent substantial safety net increases had been "accompanied by a
steady growth in the number of employees covered by agreements".
The AIRC raised "serious doubts" about the reliability of evidence
on the employment effects of minimum wage increases (i.e.
allegations that the 2003 SNW decision cost 14 000 jobs). The bench
said the economy presented no barrier to awarding a substantial
increase, with GDP remaining strong, a recovery in the rural
sector, inflation low, unemployment creeping "steadily lower",
productivity increasing at satisfactory rates (3.2%), profits
remaining high and economic expansion continuing. The AIRC noted
that "for certain household types the federal minimum wage is
significantly below the amount which is necessary to provide a
modest living standard for those households in the context of
living standards generally prevailing in the Australian community",
but did not accept an ACTU proposal to review minimum award pay
The 2005 SNW hearings were conducted in the context of
ministerial announcements that federal wage fixing and
agreement-making were to change significantly after the Government
gained control of the Senate from July 2005. Nevertheless, the data
presented to the AIRC showed that its minimum wage increases had
been moderate in the context of general economic performance.
Between May 1996 and May 2004 average weekly earnings of
full-time adults had increased by $277.10 per week or 41 per cent.
In the same period the minimum wage, the rate for the C14
classification level, increased by $118 per week or 34 per cent.
The award wage for a tradesperson, the rate for the C10
classification, increased by $120 per week or 27 per cent and wages
at the higher classification levels had increased by
proportionately lesser amounts. Over the same period average weekly
ordinary time earnings for full-time adults had increased by 16.6
per cent in real terms, while the minimum wage only increased by
10.5 per cent in real terms. Real unit labour costs had fallen by
5.1 per cent since 1996-97. GDP per hour worked in the market
sector increased by 24.3 per cent over the period, while employment
increased by 19 per cent and the number of unemployed decreased by
26 per cent to 5.1 per cent currently.
The Commonwealth also contended that "Australia now has the
highest minimum wage compared with median earnings . . . in the
OECD", a proposition which was generally accepted. However the AIRC
noted that this relationship was not a recent development, it was
more or less the case for almost 20 years (A number of European
countries notably France have had similar ratios at different
times). More importantly, the AIRC noted that despite the
‘high’ minimum wage v median earnings allegation, the
relationship between the minimum wage and median earnings had been
in decline since 1996, indicating falling value of the minimum
On the vagaries of econometric modelling, the AIRC pointed to
last year’s reliance by the Commonwealth upon a study which
showed an elasticity of demand for labour of -0.21 per cent, while
in 2005 it urged the AIRC to accept a study which showed an
elasticity of -0.63 per cent. As the 2005 decision noted: ‘We
do not draw attention to this inconsistency to be critical of the
Commonwealth but to underline the need for a cautious approach to
estimates of the employment effects’.
The AIRC was critical that the Commonwealth could not provide
data concerning the proportion of the workforce to which the
minimum wage adjustment applied in 1997 and 2004, as the AIRC
observed: ‘It is a matter of significance that while the
Commonwealth has criticised the Commission's past decisions because
of their employment effects, the most basic of information about
safety net adjustments and the minimum wage-how many people are
affected by them-is apparently not available to the
The wage determination system has moved from centralised
determination through National Wage Cases towards an enterprise
bargaining framework in which the national determinations form part
of the safety net and apply only to those (mainly low paid) workers
who are unable to secure wage increases under enterprise
bargaining. To most observers the 'system' appears to generate the
best of both enterprise agreements and centralised wage
determination, and appears to be a very Australian solution to
wages policy at this point.
The question of constitutional authority for federal law is central
to the Government's workplace agenda. In the run-up to the
Australia’s federal election in 2004 the Minister for
Employment and Workplace Relations has revived a proposal to extend
the federal jurisdiction using the Australian Constitution's
corporations power (i.e., the constitutional power which allows the
Commonwealth to regulate the trading activities of corporations;
see earlier Discussion Papers on this proposal)
While the AIRC retains the authority to conduct safety net reviews,
this function could be replaced under a regime where Parliament set
these conditions, or Parliament could determine that a hybrid
system be used instead of the AIRC. The Government has previously
considered a review of the conduct of safety net review cases with
the aim of adding to the AIRC Full Bench, members of the
Productivity Commission and the Reserve Bank to form a new 'panel'
(letter to the Prime Minister). The continued role of the safety
net review in its current form should not be expected. Indeed the
Prime Ministerial statement of May 2005 foreshadowed legislation
which is intended to terminate the AIRC’s safety net award
In the meantime it can be concluded that, as would be required, the
AIRC has complied with its legislative directive to maintain a
safety net of minimum wages and conditions in the context of living
standards generally prevailing in the Australian community. Through
its SNR decisions it has, in all likelihood, acted as an offset to
the trend of widening wage dispersion.
National Wage and Safety Net
Claims and Outcomes 1991-2004
||CAI/ACCI and AIG/MTIA
||Move by ACTU to implement Accord 6 via
enterprise bargaining, essentially outside the AIRC.
November: ACTU claim for $12.00 from 16 May 1991, + additional
3% superannuation from 1 May.
||Sept: AIRC issues decision
acknowledging enterprise bargaining Print J4700
||(follows from above) claims)
||The ACTU claims were supported by the
Commonwealth Government and the Governments of Victoria, Western
Australia, South Australia, Tasmania and Queensland.
The CAI opposed the $12.00 per week across the board increase.
It argued that the Commission should defer consideration of the
claim until closer to the date sought by the ACTU (May 1991)
MTIA and MTFU agreed on a $12.00 per week increase, plus 2
payments of 2.5% plus an increase of Employer Superannuation
contributions of 1%
|16 April 1991: $12.00 refused –
2.5% available from 16 April Print K7400
October 1991: enterprise bargaining adopted via s.112/115
agreements. Print K0300.
||ACTU flagged a general wage increase
||ACCI responded that any general wage
increase would be bitterly contested, as unemployment was
||ACTU sought recision of the Oct 1991
principles and a wages system according to Accord Mk 7 which
included $8.00 for those not able to strike workplace
||Commonwealth supported Accord Mk
||ACCI/MTIA supported enterprise
bargaining but not Accord Mk 7. They also argued that awards should
be simplified to form a true basis for enterprise bargaining and
supported the removal of award-based superannuation provisions
||The Commission gave two decisions in
the October 1993 Review of Wage Fixing Principles, 25
October 1993 Print K9700, and 15 November 1993 Supplementary
decision, Print K9940, These decisions awarded an increase of $8
per week in award supplementary payments, but also revamped wage
||An $8.00 per week wage increase to
employees who have not received wage increases of this level (other
than Minimum Rates Adjustment or Structural Efficiency Adjustment)
since 1991. 2. Another safety net adjustment of $8.00 per week to
employees who have not received an increase through enterprise
A further safety net adjustment for employees of $8.00 per week
from the 1st July, 1995.
|The Commonwealth supported the ACTU
claim. Note that the Commonwealth supported an extensive review of
awards under s.150A, and proposed 'foundation' and non-foundation'
||ACCI: Defer the claim indefinitely.
perhaps until awards are fully restructured through s.150A reviews.
MTIA: No increase should be granted. Any consideration of the
safety net adjustment claim should be deferred.
|August 1994 Review of Wage Fixing
Principles: confirms 2 more safety net adjustments of $8.00
21 September 1994 Safety Net Adjustment and Review
||Third Safety Net Review
||The Commonwealth, New South Wales and
Queensland, supported the adjustment.
||ACCI and NFF were opposed to the
granting of the third arbitrated safety net adjustment.
MTIA, gave qualified support to the third arbitrated safety net
|October 1995 Third Safety Net
Adjustment and Section 150A Review. Print M5600: Confirmed
availability of 3rd $8.00
||ACTU seeks 'Living Wage' increases in
award rates, equivalent to 8.75%, this % includes the $20.00 claim
for those who have not had increases from enterprise bargaining,
beyond the $24.00 since Nov.1991.
||Joint Governments(Cth, ACT, WA, SA,
NT, Vic, Qld, Tas):
1) The claim should be rejected.
2)A flat $8 per week increase should be applied to minimum rates
New South Wales: The claim should be granted.
|ACCI: (1) The claim should be rejected
and no increase should be awarded.
(2) If the Commission decides to award an increase, an option
would be to award a special allowance e.g. $5 per week for
employees on award rates in the range of $350-388 per week.
|22 April 1997 Safety Net Review -
Wages: $10.00 awarded.
New Minimum Wage (lowest adult rate in Metal Industry Award) set
at $359.40. Print P 1997
Stage 1: effect from 22/4/98: minimum weekly rate of $380.00
($20.60 increase); $20.00 wage increase for all workers since 1
July 1996, or 3rd $8.00 which ever is later.
Stage 2: Effect from 22/4/99: Minimum wage of $418.00, through
either $38.00 increase, or 7.7% with commensurate increases for
|Joint Govts (Cth, ACT, WA, SA, NT,
Vic, Qld, Tas opposed the claim
Proposed $8.00 from 22/4/98 & 2nd $8.00 from
Increases should apply to the minimum wage;
No increases for those above metal tradesman classification
NSW: Stage 1 should be granted
|ACCI: claim should be rejected. If
this is not accepted, then a modest SN increase should apply with a
12 month space from the date of last increase in any award. The
increase can be absorbed; a programme re award simplification has
been established and the federal minimum wage is put into any award
which does not have it
MTIA: rejected claim. A flat $8.00 should apply to award rates
and minimum wage from 22 April 1998.
Decision 29 April 1998: Safety Net Review - Wages:
To award rates to $550 pw - $14.00 granted.
For award rates from $551 - $700 - $12.00
For award rates over $700 - $10.00.
Minimum Wage increased to $373.40. Print Q 1998
||$26.60 per week for all award rates of
pay up to $527.80 per week C7 in the Metal Industry)
5% for all award rates of pay above that level, Commensurate
adjustment of allowances and service increments,
|Joint Governments: (Cth, ACT, NT, SA,
WA, Vic):The ACTU's wage claim should be rejected. Instead there
should be an $8 per week safety net adjustment to C10 level.
NSW: Supports the ACTU's wage claim.
Queensland supports the ACTU's wage claim.
Tasmania supports the ACTU's wage claim.
|ACCI/NFF: The hearing of the ACTU's
wage claim should be deferred.
VECCI/AHA: the minimum wage should operate as the benchmark
wages comparator for the purposes of the no disadvantage test in
the certification of agreements
AIG: The ACTU's wage claim should be rejected. A flat adjustment
of $8 per week should be applied to all award rates of pay and to
the minimum wage.
The adjustment is to be payable not before 22 April 1999.
The adjustment is to be fully absorbable into overaward
payments, irrespective of whether they reflect formal or informal
agreements or individual arrangements.
|Safety Net Wages - Review
given on 29/4/99:
$12.00 for rates up to $510; $10.00 for rates above this. New
minimum award rate of $385.40. Print R 1999.
||ACTU claim for $24 in award pay rates
up to and including classification C7 (currently $537.80) in the
Metals Engineering Award, and 4.5% for classifications above this .
(lodged Oct 99)
||Federal and Coalition State
Governments oppose $24; agree that $8 should be awarded to below
trade classifications up to the C10 trade rate of $477.20.
State Labor Governments support the ACTU application
|ACCI: request the AIRC defer hearing
the claim. Submits that new employees in start-up businesses be
paid the minimum wage ($385.40) for up to 6 months and be paid the
minimum wage indefinitely if they are employed under a certified
agreement or AWA.
||AIRC decision increases
all rates by a uniform $15.00. Rejects VECCI
proposal for an induction wage.
Minimum wage: $400.40
2 May 2000. Print S5000
||ACTU claim for $28 for classifications
up to C10 ($492), and 5.7% above that
||Coalition Governments oppose the
claim. Proposed a $10 increase in rates to C10 level.
Labor States supported the ACTU claim, but in the alternative
supported an increase consistent with the evidence
|ACCI, AHA and NFF and others submitted
that a $10 increase be confined to the minimum wage. ACCI proposed
an additional 12 months delay between the times when awards are
varied for an SNR increase. AIG supported a flat $ amount.
||AIRC increased rates by:
$13 for rates to $490
$15 for rates over $490 to $590
$17 for rates over $590
Minimum wage $413.40
2 May 2001 PR002001
||ACTU claim for $25.00 for all award pay rates
||Labor States supported the claim. Federal Government proposed
$10.00 increase for all pay rates to the C10 level ($507)
||ACCI opposed ACTU claim and instead proposed $10.00 increase at
the minimum wage level ($413.40)
||AIRC granted $18.00 increase to all award pay rates.
Minimum wage $431.40
9 May 2002 PR002002
||ACTU claim for $24.60 in all award rates.
||Labor States supported an increase in award rates of
Commonwealth did not oppose an increase in award rates of up to
$12.00 but for award rates at the Metal Award’s C10 rate
($525.20), or below
|ACCI opposed the claim.
AIG proposed $11.00 subject to absorption.
NFF opposed any increase and argued a farmer’s status of
‘exceptional circumstances’ should satisfy the economic
$17.00 for award rates up to $731.80 [Metal Award’s C2(a)
rate] and $15.00 for rates higher than this. New Minimum Wage of
See decision PR002003,
6 May 2003
||ACTU claim for $26.60
||The Commonwealth relied on the Harding report on the effect of
minimum wage rises costing jobs. Labor state govts supported $20.
Cth agreed to a $10 up to the C10 level.
||ACCI and AiG supported a $10 increase, ACCI capped at the C10
level, AiG applying to all award rates. ACCI sought a 28 day notice
period for employers before passing on any increase in award rates.
AiG sought a new commitment to continuous improvement in
productivity and efficiency
The AIRC awarded increase of $19 for all awards on 5 May 2004:
PR002004 The minimum wage increases to $467.40, and the C10 rate is
||ACTU claim for $26.60
||State & Territory govts proposed $20 increase to all award
Cwth Govt proposed $11 for C14 to C10 rates.
|ACCI & NFF proposed $10 increase to equiv of C14 to C10
rates in the Metals award
AIG proposed $11 for all award rates.
The AIRC awarded a $17 on 7 June 2005 to all award rates
bringing the federal minimum wage to $484.40
P. Ewer et al., Politics and the Accord (Pluto Press
1991). Michael Easson and Tom Forrest: ‘Good while it lasted:
the position and prospects of Australian Unions in 1993’
The Economic and Labour Relations Review v.5,n.1 1994.
The IR Club
Gerard Henderson 'The Industrial Relations Club' in J. Hyde and
and J. Nurick, eds, The Wages Wasteland, (Hale and
Ironmonger, 1985). The 'Club' was made up of union officials,
employer association advocates, representatives of the federal
Department for Employment and Industrial Relations and the
Safety net awards
D. Peetz, 'The Safety Net, Bargaining and the Role of the
Australian Industrial Relations Commission', Journal of
Industrial Relations, v. 40, n. 4, 1998, p. 535
Labour market deregulation
Metal Trades Industry Association (MTIA) pamphlet:
Deregulation of the Labour Market: A Risky Business,
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