Fair Work Commission Minimum Wage Decision Recognises Economic Climate

The Australian Retailers Association (ARA) has welcomed the balanced approach the Fair Work Commission has taken on the Annual Wage Review, with the Commission acknowledging the impact of the COVID-19 pandemic on the retail sector by deferring a modest wage increase of 1.75% until 1 February 2021.

ARA CEO, Paul Zahra, said that while the ARA’s preference had been for no wage increase on account of the unprecedented economic challenges, deferring any increase in minimum wages until February for challenged sectors such as retail aligned with the ARA’s recommendation and will help preserve retail jobs and accelerate business recovery.

In its decision, the Commission acknowledged that the Australian economy is going through a significant downturn and that exceptional circumstances existed to justify the delay to the operative date of the modest increase for the retail sector.

“The ARA commends the Fair Work Commission on its careful and cautious decision today, which will help retailers get back on their feet and help people back into jobs,” he said. “We are pleased that the Commission has acknowledged the retail sector amongst the most highly affected by the pandemic and taken this into account by deferring the impact of a wage increase until after the critical Christmas trading period.”

“Whilst we are seeing some slow steps towards a retail recovery, it’s important to note that much of the current spending is underpinned by suppressed consumer demand and bolstered by JobKeeper payments. However, the pain is far from over for most retailers. The rest of the year is likely to remain challenging as retailers confront higher operational costs and lower foot traffic due to the drop-off in tourism, events and worker activity and lower discretionary spending. The anticipated end of JobKeeper in September will also have a dual impact on retail costs and reduced consumer spending.”

“Australia is experiencing its first recession in nearly 30 years, with GDP falling 0.3% in the March quarter and the unemployment rate jumping to 7.1 per cent in My. We need to make it easier for retailers to return employees to their normal hours of work or take on new employees – and the decision by the Commission today to defer the modest 1.75% increase until February for the retail sector today will certainly help in this respect.”

“The position taken by the Commission is balanced and delivers an outcome that is fair for those seeking employment, employees and small businesses. The decision today has rightly prioritised the need to support retail businesses in order to help them keep as many employees as possible and encourage them to employ new staff,” said Mr Zahra.

Despite this modest increase, the ARA is pleased that there has been no change to the last scheduled reduction in Sunday penalty rates under the General Retail Industry Award 2010, which is due to take effect on 1 July 2020.

Mr Zahra also said that the decision does not prevent businesses who have been less affected by COVID-19 and the bushfires from individually going above the determined wage increase or recognising their employees through other financial measures.

“Retail workers have done an incredible job over these past few months to support their community during these difficult times. Some of our members have already publicly announced additional financial incentives for their team members to recognise their efforts during the peak of the COVID-19 pandemic. What this decision acknowledges is that the pandemic has hit some harder than others and will help more vulnerable businesses who are unable to absorb an upward pressure on wages at this time without adversely impacting their staff,” he said.

ENDS…for more details: Tim Janczuk (m) 0431 045 373 (e) media@retail.org.au

About us: founded in 1903, the Australian Retailers Association is Australia’s largest retail association, representing a $325bn sector employing more than 1.3m people. As Australia’s premier retail body, the ARA works to ensure retail success by informing, protecting, advocating, educating and saving money for its 7,500 independent and national retail members. To learn more, visit www.retail.org.au or call 1300 368 041.

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