Wage increase not in anyone’s interest: AiGroup

AiGroup has for the first time in 30 years argued there should be no increase to the minimum wage, setting scene for an IR brawl.

People queue up outside a Centrelink office in Melbourne.

Unions are sticking by demands for a $30 weekly rise in the minimum wage despite warnings from business it would hamper the economic recovery from the COVID-19 pandemic.

With Scott Morrison pushing for a consensus on industrial relations reforms, business and unions on Sunday traded blows over the Fair Work Commission’s upcoming wage review.

The Shop Distributive and ­Allied Employees Association has demanded a freeze on planned cuts to penalty rates if the FWC agrees with business and blocks pay rises for hundreds of thousands of workers.

ACTU secretary Sally McManus criticised business groups for arguing there should be no ­increase to the $740.80-a-week minimum wage this year.

“Business has consistently ­opposed real wage increases for working people — now they are advocating a real-terms pay cut,” Ms McManus said.

“Undermining wage growth makes economic recovery harder and hurts our communities.”

AiGroup chief executive Innes Willox said a minimum-wage rise this year “would not be in anyone’s interests”, declaring it would disadvantage low-skilled workers who had lost their jobs during the pandemic.

“This is the first time in the past 30 years that AiGroup has completely opposed a minimum-wage increase, but a wage increase in the current circumstances would make no sense,” Mr Willox said.

“Awarding a minimum-wage increase in this year’s review would not be in anyone’s interests — certainly not in the interests of low-skilled workers who would be much more likely to lose their jobs, or in the interests of the hundreds of thousands of workers who have joined the dole queues.

“Over the months ahead, during the recovery from the pandemic, the priority needs to be on assisting businesses to retain as many employees as possible and encouraging businesses to take on employees.”

If the Fair Work Commission did decide to increase the minimum wage at its annual wage ­review this month, Mr Willox said the pay rise for hundreds of thousands of low-paid workers should be delayed until January.

The Prime Minister last week urged all sides of the industrial ­relations debate to “put their weapons down” as he unveiled a plan for the government to convene meetings between unions and business to reach consensus on workplace reform.

Industrial Relations Minister Christian Porter on Sunday said the better-off-overall test (BOOT) — mandating that every employee is better off under a new enterprise agreement than the relevant award — needed to be reviewed.

“I think the BOOT test is something that needs to have a really, really fine look at because the way it’s being applied at the moment is, I think, causing fewer and fewer enterprise agreements to be concluded,” Mr Porter said.

“Enterprise agreements were meant to be agreements between businesses and their workers which pay people more than awards and awards were meant to be the safety net.

“What’s happened over time is that the enterprise agreement system has become so difficult to navigate, the tests so legally ­applied that there’s more people now on awards. Now that must mean they’re missing out on better wages ­because they are not on an enterprise agreement which is meant to pay you more than an award.”

In May the Australian Chamber of Commerce also urged the FWC to keep the minimum wage at $740.80 a week until mid-2021, declaring the economy could not afford any increase given the country was facing an “unprecedented economic and jobs crisis”.

Mr Willox noted the FWC Act allowed the commission to delay a minimum-wage increase under “exceptional circumstances”.

The AiGroup submission also opposed allowing different wage outcomes for workers in businesses that have been eligible for the JobKeeper scheme.