by David Bates

Last week, the Fair Work Commission (FWC) handed down its annual minimum wage decision, declaring that Australians paid at exactly the National Minimum Wage, or at exactly the applicable minimum Modern Award rate, will receive a 3% increase from 1 July. Can you hear the collective yawn?

The reason this ‘decision’ (if it can be described as a decision, given the FWC effectively just finds a middle ground between the demands of employer groups and unions) is of almost absolutely no relevance to anyone is because almost no employee in the county is paid at exactly the minimum rate by their employer.

Few employers would think it worthwhile (or commercially savvy) to pay an employee only the precise minimum that he or she is entitled to receive under law. At the very least, employers usually round up to the nearest dollar, or even the nearest five dollars, to make running their payroll each week or fortnight less of a chore.

And let’s not forget that the minimum hourly rates imposed by Modern Awards are just the beginning. There are additional ‘loadings’, ‘penalties’, ‘allowances’, and other monetary entitlements that are triggered in a hopelessly large, complex, and confounding range of situations by almost all Modern Awards.

Many employers accordingly pay ‘over-Award’ rates precisely to avoid the associated hassle of having to incorporate numerous separate, individual components into their employees’ wages. For them, the 3% increase is already ‘absorbed’ into the higher-than-legally-necessary rates they are already paying (providing this has been made expressly clear to employees, preferably in a comprehensive contract of employment).

While the Fair Work Commission, earnest (but largely misguided) employer associations, and angry (and generally out-of-touch unions) all spend months agonising over how much minimum wages should be increased – and while tens of thousands of tax payer dollars were spent supporting their deliberations – Australia’s employers simply and quietly and patiently got on with the job of trying to make a profit, keeping their customers happy, and keeping Australians employed.

What a shame our workplace relations system is so focussed on itself instead of the employers and employees who, everyday, make our nation’s communities stronger and keep our economy ticking along. If only the Commission, employer associations, and unions would spend the same amount of energy simplifying our employment laws and systems as they do on making sure they will all keep their own (highly-paid) jobs for many years to come.

I didn’t watch the Commission hand down its riveting minimum wage decision. I also don’t watch paint dry. I’m usually far too busy actually running a business in the real world.