18 April 2012
By Trish Babu, Workplace Relations Advisor
In this year’s submission to Fair Work Australia's Minimum Wage Panel, the Association highlighted the fact that many members are suffering the effects of a combination of factors, which are having an adverse impact on their trading conditions. This is consequently affecting employment levels and hours of work available to certain employees.
In keeping with this view, the Association recommended that the FWA passes on an increase of no more than 2.25 per cent, which is lower than last year’s 3.4 per cent wage increase.
Several key issues of concern were addressed by this submission, which formed the basis of the recommendation. These are summarised as follows –
- The Association recommended that FWA puts in place a legally binding wages/superannuation trade-off. The employer superannuation guarantee will increase from 9 per cent to 12 per cent from 2013-14 to 2019-20. Since superannuation is a part of an employee’s total remuneration package, an increase in superannuation must be factored into an increase in wages;
- Refrain from applying a “one size fits all” approach across all industries when applying the annual wage review. Industries experiencing little or no financial growth should be exempt from modern award minimum wage increases;
- Consider the effect of any increase on small and medium-sized employers that are primarily effected by increases to the minimum wage;
- Carefully review the capacity for the unemployed and low paid to obtain and remain in employment as the unemployment rate remains low, at 5.2 per cent as at February 2012;
- Consider the compounding effect an increase in minimum wage has on payroll in the accommodation sector which operates 24 hours per day, seven days per week and therefore must pay penalty rates on the majority of the working days;
- Look at the compounding effect an increase has on a sector that is award reliant and, due to the highly regulated modern hospitality award part-time provision, has a large amount of casual employees on loaded rates; and
- Many members have to make additional payments, including administrative costs, as they transferred to the modern hospitality award.
The submission further highlighted that the accommodation sector is extremely vulnerable to a high Australian dollar as it makes Australia a less attractive holiday and corporate (business travel) destination.
Additionally, we see a greater need for wage increases in addition to superannuation costs, to be offset by productivity increases so that employees’ take-home pay can grow, but not to the detriment of the business and their long-term employment prospects.
On the basis of the above reasons, the Association emphasized in its submission that a substantial increase to minimum wages will significantly impact on the accommodation industry’s ability to retain staff at current levels, which will in turn impact on unemployment statistics and the productivity of the Australian economy.
18 April 2012
By Trish Babu, Workplace Relations Advisor
In this year’s submission to Fair Work Australia's Minimum Wage Panel, the Association highlighted the fact that many members are suffering the effects of a combination of factors, which are having an adverse impact on their trading conditions. This is consequently affecting employment levels and hours of work available to certain employees.
In keeping with this view, the Association recommended that the FWA passes on an increase of no more than 2.25 per cent, which is lower than last year’s 3.4 per cent wage increase.
Several key issues of concern were addressed by this submission, which formed the basis of the recommendation. These are summarised as follows –
- The Association recommended that FWA puts in place a legally binding wages/superannuation trade-off. The employer superannuation guarantee will increase from 9 per cent to 12 per cent from 2013-14 to 2019-20. Since superannuation is a part of an employee’s total remuneration package, an increase in superannuation must be factored into an increase in wages;
- Refrain from applying a “one size fits all” approach across all industries when applying the annual wage review. Industries experiencing little or no financial growth should be exempt from modern award minimum wage increases;
- Consider the effect of any increase on small and medium-sized employers that are primarily effected by increases to the minimum wage;
- Carefully review the capacity for the unemployed and low paid to obtain and remain in employment as the unemployment rate remains low, at 5.2 per cent as at February 2012;
- Consider the compounding effect an increase in minimum wage has on payroll in the accommodation sector which operates 24 hours per day, seven days per week and therefore must pay penalty rates on the majority of the working days;
- Look at the compounding effect an increase has on a sector that is award reliant and, due to the highly regulated modern hospitality award part-time provision, has a large amount of casual employees on loaded rates; and
- Many members have to make additional payments, including administrative costs, as they transferred to the modern hospitality award.
The submission further highlighted that the accommodation sector is extremely vulnerable to a high Australian dollar as it makes Australia a less attractive holiday and corporate (business travel) destination.
Additionally, we see a greater need for wage increases in addition to superannuation costs, to be offset by productivity increases so that employees’ take-home pay can grow, but not to the detriment of the business and their long-term employment prospects.
On the basis of the above reasons, the Association emphasized in its submission that a substantial increase to minimum wages will significantly impact on the accommodation industry’s ability to retain staff at current levels, which will in turn impact on unemployment statistics and the productivity of the Australian economy.