The Association Represents Industry on Minimum Wage Review

CEO Richard Munro and Accommodation Association Legal Partner, Kathryn Dent of HR law firm People + Culture Strategies, are today appearing before a panel at Fair Work Australia to represent the accommodation industry on the annual minimum wage review. Consultations are taking place in Melbourne this morning and the Accommodation Association is amongst a select group of organisations to appear before the panel including the Australian Government, the Australian Chamber of Commerce and Industry, the Australian Industry Group and the Australian Catholic Council for Employment Relations. A video link will be made available for Sydney.

In the annual wage review submission to Fair Work Australia the Accommodation Association has recommended an increase of no more than 2.25 per cent, which is lower than last year’s 3.4 per cent wage increase.

The Association also recommended that FWA puts in place a legally binding wages/superannuation trade-off. The employer superannuation guarantee will increase from 9 per cent to 12 per cent from 2013-14 to 2019-20. Since superannuation is a part of an employee’s total remuneration package, an increase in superannuation must be factored into an increase in wages.

The submission also highlighted that the accommodation sector is extremely vulnerable to a high Australian dollar as it makes Australia a less attractive holiday and corporate (business travel) destination. With this in mind, several other key issues of concern were address by the submission:

• The need to refrain from applying a “one size fits all” approach across all industries when applying the annual wage review. Industries experiencing little or no financial growth should be exempt from modern award minimum wage increases;
• Consideration be given to the effect of any increase on small and medium-sized employers that are primarily effected by increases to the minimum wage;
• Consideration be given to the capacity for the unemployed and low paid to obtain and remain in employment as the unemployment rate remains low, at 5.2 per cent as at February 2012;
• The compounding effect an increase in minimum wage has on payroll in the accommodation sector which operates 24 hours per day, seven days per week and therefore must pay penalty rates on the majority of the working days;
• The compounding effect an increase has on a sector that is award reliant and, due to the highly regulated modern hospitality award part-time provision, has a large amount of casual employees on loaded rates; and
• Acknowledgement that many members have had to make additional payments, including administrative costs, as they transferred to the modern hospitality award. 

Additionally, the Association sees a greater need for wage increases in addition to superannuation costs, to be offset by productivity increases so that employees’ take-home pay can grow, but not to the detriment of the business and their long-term employment prospects.

On the basis of the above reasons, the Association, emphasized that a substantial increase to minimum wages will significantly impact on the accommodation industry’s ability to retain staff at current levels which will in turn impact on unemployment statistics and the productivity of the Australian economy. 

Source: Fair Work Ombudsman, 14 May 2012