Blog«Slow Wages Growth and Penalty Rate Cuts
Slow Wages Growth and Penalty Rate Cuts
26 June 2019
27 September 2023
5.26 minutes


Dear Members,

The Fair Work Commission (FWC) recently increased the Minimum Wage to $19.49 an hour (starting 1st July 2019), or $740.80 a week for those of us lucky enough to be able to get a full-time job. The increase in pay will apply to workers that have their pay determined by the National Minimum Wage or a Modern Award.

The Australian Council of Trade Unions recommended a $42 per week increase, almost twice the amount of $21.60 a week that the Fair Work Commission decided on. Although we welcome any wage rise, wage growth across Australia has been low for almost a decade.

In fact, according to a recent analysis of wage growth by the Treasury (Australian Government), “Real wage growth – wage growth relative to the increase in prices in the economy – has also been low.” Over the past five years, annual real wage growth has averaged 0.4%, in stark contrast to 1.0% in the previous decade.

In 2017 The Fair Work Commission decided to cut workers Penalty Rates. In fact, almost 700,000 workers had their penalty rates cut!  Their take home pay was slashed by about $70 a week.

At the time, Sunday penalty rates for retail, hospitality, fast food and pharmacy workers were as much as twice the normal, or weekday hourly wages. The reductions were to take place on 1 July each year from 2017, with full-time and part-time workers both affected.

At the time, Maurice Blackburn lawyers reviewed the FWC 2017 decision and found that the Commission’s findings of fact and law are all findings potentially applicable to other awards.  In other words, workers within the health and community sectors could also have their penalty rates cut.

Penalty rates will be cut again on the 1 July 2019. This cut will be the third penalty rate cut since the Fair Work decision in 2017. The Australian Council of Trade Unions reported that workers will ultimately be $6,000 worse off a year.

This is unfair and unacceptable! The Penalty Rate CUTS will hurt the most vulnerable people in our society. If you think about it, many workers have been given a Minimum Wage Rise in one hand and have had it taken away from their other hand via Penalty Rates cuts!

In contrast, Politicians and Public Servants will receive a Pay Rise on the 1st July 2019. Yes, it’s not a joke!  Our Prime Minister will get an $11,000 pay rise on the same day that the average worker will have their penalty rates cut! In fact, Scott Morrison’s current salary will rise from $538,460 to about $550,000!!

Many already highly paid workers will receive a pay rise on the 1st July 2019. For example, Federal Members of Parliament, public offices in the Tribunals’ jurisdiction (for example Administrative Appeals Tribunal Officers) and federal judges.

The Health Workers Union has written a submission in response to the FWC decision to cut penalty rates. We recommended that the Federal government introduce legislation to federal parliament to protect penalty rates from the Fair Work Commission decision to cut Sunday and Public Holiday penalty rate pay.

If you work in Victoria’s Health Services, then the Health Workers Union is your Union! We urge current members to be more active with the HWU campaigns. We also encourage all members to talk to non-union members about joining the Health Workers Union.

We can achieve our desired outcomes and benefits if we unite and make our voices heard at work. History has taught us that we have more power when we act together!

Kamal Bekhazi

Senior Research and Project Officer

Health Workers Union

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