WorkChoices legislation & the Australian Fair Pay Commission

Analysis

WorkChoices legislation & the Australian Fair Pay Commission

The WorkChoices legislation refers to the establishment of a new wage-setting body called the Australian Fair Pay Commission (AFPC).

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The WorkChoices legislation refers to the establishment of a new wage-setting body called the Australian Fair Pay Commission (AFPC). The introduction of this organisation has created some controversy, as it will be the body responsible for setting the minimum wage and other rates and loadings, which will apply as a minimum standard to all those employees employed by an incorporated body.

These wage-setting functions had previously been the exclusive responsibility of the Australian Industrial Relations Commission.

Overview

Under the WorkChoices legislation the Australian Fair Pay Commission will:

  • set and adjust the federal minimum wage ($12.75 per hour or $484.50 per week for a 38 hour week, with respect to full-time and part-time employees);

  • set and adjust minimum award classification rates of pay (award classifications to be the subject of a recommendation by the Award Review Taskforce);

  • set and adjust federal minimum wages for juniors, trainees (including school based apprentices) and employees with disabilities. In setting minimum wages for trainees (including full-time and part-time apprentices) the AFPC will be required to ensure there are appropriate specific rates established for each category of trainee. The legislation also includes wage provisions based on existing federal award wage arrangements for school based New Apprenticeships that have been approved by the AIRC;

  • set and adjust minimum wages for piece workers; and

  • set and adjust casual loadings (the proposed legislation prescribing a default casual loading of 20%).

Wage reviews

The WorkChoices legislation does not provide for an annual review (or any other period of time) by the AFPC of the minimum wage and the other minimum wage rates. At this stage, it is understood that the AFPC will first sit in the September quarter of 2006. The AFPC may determine the following:

  • the timing and frequency of wage reviews;

  • the scope of particular wage reviews;

  • the manner in which wage reviews are to be conducted;

  • when wage-setting decisions are to come into effect.

For the purpose of performing its wage-setting function, the AFPC may inform itself in any way it thinks appropriate, including by:

  • undertaking or commissioning research; or

  • consulting with any other person, body or organisation; or

  • monitoring and evaluating the impact of its wage-setting decisions.

AFPC amendments - commencement of operation

The provisions dealing with the establishment, operations and wage fixing powers of the AFPC have been moved to a schedule which will commence from the date of Royal Assent, which is 15 December 2005. This means that not only can the AFPC be established ahead of the commencement of the WorkChoices legislation but it also allows the AFPC to commence information gathering and research that it can use later in its wage fixing role.

Related

Federal IR changes 2005/2006
 

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