Minimum Standard for Remuneration for Public Sector and Local Government awards

On 16 May 2022, the South Australian Employment Tribunal (SAET) published its declarations and orders (Orders) from the State Wage Case 2021. The Orders affect the wages to be paid to employees whose employment is subject to most South Australian public sector or local government Awards and the Fair Work Act 1994 (SA). The Orders attach a full list of the affected awards.

With retrospective effect from 1 July 2021, the Minimum Standard for Remuneration in South Australia increased by 2.5% to $786.70 per week.

The State Minimum Award Wage was also increased to $786.70 per week, while existing adult wage rates under Awards were increased by 2.5%.

Proportionate adjustments will also apply to juniors, trainees, apprentices and other employees as set out in the relevant award.

The 2.5% increase is significantly higher than the 1.75% increase awarded in the 2019-2020 year.

In determining the rate of increase, the SAET adopted the Fair Work Commission’s (FWC) determination in its 2020-21 annual wage review that the National Minimum Wage should be increased by 2.5%. In its review, the FWC concluded that a variety of factors, including a markedly better economic environment as the economy adjusted to the uncertainty and challenges of COVID-19, and the scheduled increase in superannuation guarantee, warranted a higher increase than the 1.75% awarded for the previous year.

The SAET accepted that employers in South Australia are still facing significant difficulties as a result of the ongoing COVID-19 pandemic. However, the SAET saw no reason to diverge from the FWC’s approach, which the SAET considers to be ‘the most comprehensive study of the factors relevant to minimum wages in Australia’ in that it assesses evidence from a wide range of reports, forecasts and statements across all states and territories in Australia.

Impact for employers

All South Australian public sector and local government employers must ensure that Award-covered employees have been paid at least the applicable new minimum wage rate from the first full pay period on or after 1 July 2021. Failure to pay at least the applicable minimum wage rate can attract orders for compensation, as well as additional monetary penalties for employers.

In the local government context, while all Council Enterprise Agreements contain salaries that exceed the minimum Award wage rate, Councils should be mindful at the next round of enterprise bargaining negotiations of their negotiated salary increase in comparison with the Award.

For more specific information on any of the material contained in this article please contact Virginia Liu on + 61 8 8210 1279 or vliu@normans.com.au or Anastasia Gravas on + 61 8 8217 1331 or agravas@normans.com.au.