Employers in 2023 Should Brace for Immediate and Increasing Wage Claims in Enterprise Bargaining

Based on widespread union claims and negotiations currently occurring in both the private and public sector, Australian employers this year should prepare for wage claims that both load wage increases in the earlier years of future agreements (typically first and second years) and claims that are likely to be in excess of the typical 2-3% annual increases that have dominated most sectors in recent years.

Key Australian unions, including the Australian Manufacturing Workers Union (AMWU), the Finance Sector Union (FSU), and the Australian Workers Union (AWU), have indicated they will seek higher increases partly as a correction following years of low wage growth, recent significant increases in the cost of living and to maintain pace with rising inflation.

Unions are also likely to cite the recent national wage case in June 2022, where the Fair Work Commission granted a $40 per week increase to the National Minimum Wage (NMW), amounting to an increase of 5.2%, in support of their argument for increasing wage claims. The NMW is now $812.60 per week or $21.38 per hour.

Commenting at the time of the decision, AWU national secretary Daniel Walton said, "the wage panel's evidence underscored what we have been saying for a long time: a significant correction on wages is long overdue".

Some examples of recent union claims include:

• The AMWU has indicated they are considering an 8% per cent wage claim against employers, and workers are prepared to consider industrial actions for any offers below 3%;
• The FSU is seeking annual rises between 4.6% to 5.2% in negotiations for new agreements covering Westpac and the National Australia Bank;
• Nurses in New South Wales voted in June 2022 to pursue a wage claim of 7%, more than double the 3 % increase offered by the government to public service employees.

An emerging common feature among some agreements is 'frontloading' or inflating pay increases in the early years of agreements.

Some recent examples include:

• A three-year non-union deal for waste contractor Cleanaway in Western Australia proposes a 15% increase over 3 years, with an initial 6% wage rise in the first year, followed by instalments of 4.5% in the second and third year;
• A four-year agreement for the GFG Tahmoor Colliery provides increases of 14% over four years, with a 4% increase on approval by the Fair Work Commission, a further 4% after 12 months, and subsequent increases between 2 and 3%.
• The Queensland government has revised their offer to nurses and midwives to 4% in the first year of the agreement, 4% in the second year, and 3%in the third year.

Another recent phenomenon is the inclusion in some agreements of potential additional increases linked to movements in the Consumer Price Index (CPI).

As part of the offer to Queensland nurses and midwives, the proposed agreement includes a top-up payment to the cost of living if inflation is higher than the wage increase at the end of each year. For example, if the inflation rate is 7% at the end of March 2023, employees would receive an additional payment of 3% based on their normal wage.

The GFG Tahmoor Colliery agreement also provides for some movement in wage increases in the latter years of the agreement in the event of changes to the CPI.

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For queries about agreements, wage projections, or other employment questions, please contact Dean Cameron at Workforce Advisory Lawyers – We Know Employment Law on 1300 925 529, 0417 622 178 or via email to [email protected]

Disclaimer: This information is provided as general advice on workplace relations and employment law. It does not constitute legal advice, and it is always advisable to seek further information regarding specific workplace issues. Liability limited by a scheme approved under professional standards legislation.