It is clear the COVID-19 pandemic is continuing to change the industrial relations landscape. Given this, Victorian Chamber members are urged to contact the Workplace Relations Advice Line, subscribe to your modern award, and access articles via the news tab on the Victorian Chamber Website.

The substantive changes and decisions made during June included:

• the increase to the National Minimum Wage
• the Commission’s decision to stagger the wage increase into three award groups
• the increase to the high-income threshold
• the Commission’s decisions in relation to a variety of applications to reduce redundancy pay
• the Commission’s decisions regarding extending COVID-19 specific modern award schedules
• updates in relation to the status of WorkPac Pty Ltd v Rossato [2020] FCAFC 84 which concerns casual employees seeking permanent employment benefits and entitlements.

Wage increase announcement

On 19 June 2020, the Commission announced a 1.75% increase to minimum wages. For employees who are not covered by an award or agreement, the new National Minimum Wage will be $753.80 per week or $19.84 per hour and will apply from the first full pay period starting on or after 1 July 2020.

The timing of the wage increase will depend on the businesses pay cycle. For example, if your pay cycle is from Monday 25 June to Sunday 8 July, the wage increase for the Group 1 modern awards will not apply until the next pay cycle. Therefore, Monday 9 July to Sunday 22 July would be considered the first full pay period in July and the first time the new wage rates are payable.

Award covered employees

For employees covered by awards the effective date of the increase will depend on which award applies. Essential services workers will be the first to receive the increase, however, the Commission has staged the increase for those in other industries. All 122 modern awards have been placed into three groups. Each group has a different operative date ranging from 1 July 2020 to 1 February 2021.

For essential services workers in Group one, the pay increase applied from the first full pay period starting on or after 1 July 2020.

For a complete list of each group please click here.

National Training Wage

The operative date of wage increases for employees undertaking a traineeship under the National Training Wage will be in accordance with the operative date for the Group One, Group Two and Group Three Awards (as above). This means, the wage increases for trainees and apprentices will also be staggered in line with applicable award.

The Victorian Chamber is currently in the process of updating our wage information documents. Final versions will be uploaded to the relevant award subscription page on the website, and members who subscribe to particular awards will be notified as soon as the information becomes available.

High-income threshold

In order to bring an unfair dismissal claim in the Commission an employee must be covered by a modern award or an enterprise agreement. If neither apply, the employee must have an annual rate of earnings of less than the high-income threshold.

From 1 July 2020, the high-income threshold will increase from $148,700 to $153,600.

In accordance with section 332 of the Act “earnings” includes wages and can include a monetary value of a non-monetary benefit, for example, personal use of devices such as mobile phones, laptop computers, iPads, motor vehicles, life insurance policies etc. Generally speaking, “earnings” will not include commissions, incentives, bonus payments or overtime (save for guaranteed overtime). Compulsory superannuation contributions are also excluded.

Redundancy decisions

In June, the Commission heard applications from two businesses to vary redundancy pay. The first business made four individual applications to the Commission after finalising redundancies due to a site closure.

The business applied to have the redundancy pay for each employee reduced due to the precarious financial position of the business. Notably the business only had $38,000 available in the bank and was unable to meet the redundancy payments and ongoing wage obligations. The Commission was satisfied the business’ financial situation was exacerbated by the COVID-19 pandemic amd subsequently ordered reductions in the amount of redundancy pay owing to the four individual employees.

By comparison, a printing company with less than 20 employees made a similar application to the Commission. The company sought to reduce the amount of redundancy pay owing to the redundant employee by 80% due to the business being affected by COVID-19.

Importantly, the Commission considered the financial situation of the employer and their capacity to pay. The Commission noted the business’ liabilities were almost double its debtors.

The Commission also took into consideration the business had approximately $120,000 in the bank and the operations managers statement that it “seemed like the business was going under”. Ultimately the Commission did not consider it appropriate to reduce the redundancy pay.

Notably, at the time of the application the business did have the money to meet its obligation. Additionally, the Commission considered an order to reduce the redundancy pay would limit the employee’s ability to seek payment of any unpaid entitlement through the Fair Entitlements Guarantee scheme if the business ultimately became insolvent. Therefore, the claim was rejected.

Important information for employers

These two cases demonstrate the careful approach the Commission takes in determining whether it is appropriate to reduce redundancy pay. Importantly the Commission will have regard to the financial status of the company whereby “it is not sufficient to demonstrate that it is merely beneficial to reduce the amount.” If businesses seek to reduce the amount of redundancy pay owing the onus rests on the employer to satisfy the Commission that the business is not financially competent and has no reasonable source of funds. Similarly, the Commission will consider other criteria including the effect on the remaining employees and impacts on their rights and entitlements under government run schemes.

[2020] FWC 3080
[2020] FWC 3081
[2020] FWC 3082
[2020] FWC 3083
[2020] FWC 3128

COVID-19 award Schedules

In the original determination the award Schedules dealing with award flexibility during the COVID-19 pandemic were to conclude operation on June 30. The Commission has heard and approved three applications to extend these schedules.

Schedule I under the Restaurant Industry Award 2020 and Schedule J in the Hospitality Industry (General) Award 2020 has been extended until 27 September 2020. Similarly, Schedule I under the Vehicle Repair, Services and Retail Award 2020 has been extended till 31 July 2020.

Employers under these awards are urged to check the updated provisions as the Commission has made changes. For the Restaurant Industry Award 2020 and Hospitality Industry (General) Award 2020 these changes include:

• Instructions for how directions in relation to hours of work for part time and full time employees are to be given;
• Exclusions for employers qualified for the JobKeeper Scheme where the employee is an ‘eligible employee’ under the Coronavirus Economic Response Package (Payments and Benefits) Rules 2020; and
• Instructions pertaining to annual leave requests by employers.

For the Vehicle Repair, Services and Retail Award 2020 these changes include:

• Deletion of the clause relating to classifications and duties for RS&R employees; and
• Deletion of the clause relating to close down.