Direct Request (CEACR) - adopted 2006, published 96th ILC session (2007)

Minimum Wage Fixing Convention, 1970 (No. 131) - Australia (Ratification: 1973)

The Committee takes due note the Government’s detailed report and attached documents, regarding the application of the Convention both at the Commonwealth and the state/territory level. It notes, in particular, the adoption and entry into force of the Work Choices Act 2005, which introduces a number of major reforms including a new minimum wage-fixing institution. Given the extent of the legislative reforms and the difficulty of assessing their impact at such an early stage of implementation, the Committee will defer a full evaluation of the new minimum wage system until it comes fully into effect and more information of a practical nature becomes available.

Article 1, paragraph 1, of the Convention. Further to its previous comment regarding the significant drop of employees covered by federal and state wage awards and the considerable increase of those covered by certified collective or individual agreements, the Committee notes the Government’s reply that the role of awards has changed over the past 10-15 years from a primary mechanism for setting pay and conditions to a safety net of minimum wages and conditions in support of a bargaining framework. According to the Government, the recent legislative changes follow the same trend and seek to allow for more choices and flexibility by moving away from a centralized approach to one focused on agreement-making between workers and employers at the workplace and enterprise levels.

Concerning the minimum wage fixing mechanism at the federal level, the Committee notes the revision of the Workplace Relations Act 1996 by the Workplace Relations Amendment (Work Choices) Act, 2005 (Act No. 153 of 2005), which establishes a new national workplace relations system entered into operation as from 27 March 2006. Under the WorkChoices system, aimed at covering 85 per cent of employees and employers in Australia, the Australian Fair Pay Commission is established to set and maintain the Australian Fair Pay and Conditions Standard. The Standard provides for two frameworks fixing minimum wages: the Australian Pay and Classification Scales (APCSs) and the Federal Minimum Wages (FMWs). The APCSs provide by classification of workers for the guaranteed basic periodic rates of pay, the guaranteed basic piece rates of pay, and the casual loading rates for casual workers which is to be paid in addition to the guaranteed basic periodic rates of pay. For workers not covered by the APCSs, the FMWs apply, which consist of the standard FMW initially set at AUD12.75 per hour at the commencement of WorkChoices, and the special FMW for juniors, trainees, and disabled persons. A transitional system was established and will operate until 2011 during which enterprises not covered by WorkChoices must decide whether they opt for WorkChoices or the relevant state workplace system. The Committee requests the Government to keep it informed of all future developments concerning the implementation of the Work Choices Act and its corresponding Regulations.

Article 1, paragraph 2. The Committee notes the updated information provided by the Government on the initiative of the Government of New South Wales concerning clothing outworkers. It notes, in particular, that following the adoption of the Ethical Clothing Trades Extended Responsibility Scheme, which came into operation on 1 July 2005, and as part of the Behind the Label Strategy, the Ethical Clothing Trades Council was established to improve compliance with industrial law in New South Wales and advise the Government on ways to address the issues facing clothing workers. The Committee would appreciate receiving further information on the main elements of the Strategy, and any results achieved in ensuring minimum wage protection for outworkers.

Article 2, paragraph 1. Further to its previous comment on this point, the Committee notes the Government’s reply according to which the Australian Industrial Relations Commission (AIRC) conducted an inquiry between 1998 and 1999 on wage rates for junior workers under 21 years of age, and concluded that the existing discounted rates for junior workers were necessary for securing employment for young people. Under the new WorkChoices system, such reduced rate for junior workers is applied through a special FMW rate.

Regarding workers with a disability, the Committee notes that sub-minimum wage rates are applied to those who are assessed through the Supported Wage System (SWS) that they are unable to perform at the full minimum wage level. While it is an assessor who determines a rate to be applied to a particular worker, the SWS provides for a minimum amount payable, currently set at AUD62 per week, below which no worker with a disability can be paid. Under WorkChoices, the Fair Pay Commission is in charge of setting rates for workers with a disability through a special APCS or a special FMW, as provided for under sections 197 and 220 of the Act.

The Committee notes the Government’s explanations concerning both junior workers and workers with a disability that if they are to be competitive in the labour market, their minimum wages must reflect their average relative work value. In this connection, it also notes that the SWS was endorsed by the AIRC by virtue of its decision on 10 October 1994, while the system was evaluated by an external enterprise in 1999 and it was concluded that the SWS promoted the participation of employers and employees equally. In this connection, the Committee trusts that the Government will continue to review from time to time the rationale and advisability of fixing differentiated wage rates on grounds such as age or disability.

Article 4, paragraphs 2 and 3. The Committee notes that section 38 of the Work Choices Act provides that the Commissioners of the Fair Pay Commission must have experience in one or more areas including business, economics, community organizations, and workplace relations. It also notes the Government’s information that the Fair Pay Commission, as part of its first wage-setting exercise, is consulting widely stakeholders including employers’ and workers’ organizations at the industry round tables.

Article 5 and Part V of the report form. The Committee notes the statistical information on the number of collective agreements and the percentage of workers covered by collective agreements both at the federal and the state/territory level. It also notes the statistical information on the evolution of minimum rates of pay for New South Wales, Queensland (2005) and Western Australia (2002-05). It further notes the legislative and administrative arrangements for labour inspection in different states and territories, as well as the statistical information on the results of labour inspections in terms of the amounts recovered and the number of workers concerned. The Committee would be grateful if the Government could continue supplying up to date information in these matters.