State Wage Case 2024 – Review of Minimum Rates Awards [2025] NSWIRComm 1004 - NSWIRComm 2025 case summary

Industrial Relations Commission (NSW)|2025-02-03

Statement

On 3 June 2024 the Fair Work Commission delivered a "National decision" within the meaning of s 48 of the Industrial Relations Act 1996 (NSW) (IR Act), namely, Annual Wage Review 2023-2024 Decision [2024] FWCFB 3500. Consequently, on 14 June 2024, the Commission, acting on its own initiative pursuant to s 50 of the IR Act, issued a Summons to Show Cause to interested parties (the terms of which were revised in a further Summons issued on 5 July 2024), summonsing them to appear before the Commission to show cause why the Commission should not take action pursuant to Part 3 of Chapter 2 of the IR Act and cl 4 of the Wage Fixing Principles as determined by the State Wage Case 2022 [2022] NSWIRComm 1081, as it considers appropriate and why it should not review the Wage Fixing Principles published in that case.
In State Wage Case 2024 [2024] NSWIRComm 1, the Full Bench comprising the Presidential Members of the Commission identified the Commission's intention to deal with the matter in two distinct stages: the first stage concerning the adoption of the National decision for the purposes of ss 50 and 52 of the IR Act in respect of three categories of specific awards; and the second being a broad review of the form and content of the Commission's Wage Fixing Principles.
The Commission, comprising the Presidential Members together with Senior Commissioner Constant and myself, delivered its decision in respect of the first stage of the proceeding on 9 October 2024 in State Wage Case 2024 (No 2) [2024] NSWIRComm 6. In that decision the Commission determined to increase the rates of pay and pay-related allowances by 3.75% in line with the National decision, from 1 July 2024 in respect of "Category 1" awards and from 1 September 2024 in respect of "Category 2" and "Category 3" awards. However, for reasons I will now reiterate, the Commission also identified a need for all of the awards identified in the three categories to be reviewed to establish first, their ongoing utility and second, whether the rates provided for in the awards require adjustment to ensure they represent fair and reasonable wages in conformity with the Commission's statutory mandate.

The Relevant Awards

Principles 4.1 and 4.2 of the Wage Fixing Principles made in State Wage Case 2022 provided: "4.1. Following the completion of an Annual Wage Review by the Fair Work Commission, the Commission will issue a notice to show cause why that decision should not be flowed on to relevant New South Wales awards (as per 4.2 of this Principle) in the New South Wales industrial jurisdiction. 4.2. Unless the Commission determines otherwise, the following New South Wales awards: (1) Security Industry (State) Award ("Security Industry Award"); (2) Miscellaneous Workers - Kindergartens and Child Care Centres, &c. (State) Award; (3) Health, Fitness and Indoor Sports Centres (State) Award; (4) Transport Industry (State) Award; (5) Clerical and Administrative Employees (State) Award; (6) Local Government (Electricians) (State) Award; (7) Entertainment and Broadcasting Industry - Live Theatre and Concert (State) Award; (8) Local Government Aged Disability and Home Care (State) Award; and (9) Nurses' (Local Government) Residential Aged Care Consolidated (State) Award 2021 (collectively "Relevant Awards") will be varied to include a State Wage Case adjustment by the making of one or more orders of the Commission pursuant to s 52, and where relevant, s 146C of the Act, subject to the following: …."
The "Relevant Awards" are what are referred to as 'minimum rates' awards, that is, they prescribe a floor, but not a ceiling, for remuneration to be paid to employees covered by such awards. Such awards are in contradistinction to 'paid rates' awards, which represent the majority of awards made by the Commission, and which prescribe rates an employer is obliged to pay to employees and which in practice will be the actual remuneration received by the employee.
State Wage Case 2024 (No 2) was the Commission's determination referred to in sub-principle 4.2 arising from the FWC's 2024 Annual Wage Review.
The Full Bench in State Wage Case 2024 (No 2) at [3], categorised the Relevant Awards into three groups as follows: Category 1 1. Security Industry (State) Award; 2. Miscellaneous Workers - Kindergartens and Child Care Centres, &c. (State) Award; 3. Health, Fitness and Indoor Sports Centres (State) Award; 4. Transport Industry (State) Award; 5. Clerical and Administrative Employees (State) Award; Category 2 1. Local Government (Electricians) (State) Award; 2. Entertainment and Broadcasting Industry - Live Theatre and Concert (State) Award; Category 3 1. Local Government Aged Disability and Home Care (State) Award; and 2. Nurses' (Local Government) Residential Aged Care Consolidated (State) Award 2021
Category 1 are awards covering employees in service of the Crown, where the Industrial Relations Secretary is the statutory employer and where such employees were previously subject to the Industrial Relations (Public Sector Conditions of Employment) Regulation 2014 (Regulation) (and its 2011 predecessor) and the now superseded Public Sector Wages Policy, which together imposed what was commonly referred to as the "wages cap". As has been well published, the "wages cap' was abolished on 1 September 2023 when the Regulation was repealed.
Pursuant to r 6.7 of the Industrial Relations Commission Rules 2022 the Registrar must keep a record, referred to as a 'party card', in relation to each award, which includes particulars of the parties to the award and the State peak councils in relation to the award. The party cards for the Category 1 awards record that the Industrial Relations Secretary and Unions NSW are affected parties in respect of all of the awards. In addition, the following parties are also recorded as affected parties in respect of the following awards: 1. Security Industry (State) Award 1. United Workers' Union, New South Wales Branch 1. Miscellaneous Workers - Kindergartens and Child Care Centres, &c. (State) Award 1. United Workers' Union, New South Wales Branch 1. Health, Fitness and Indoor Sports Centres (State) Award: 1. Local Government NSW 2. New South Wales Local Government, Clerical, Administrative, Energy, Airlines & Utilities Union 3. The Australian Workers' Union, New South Wales 1. Transport Industry (State) Award 1. NSW Business Chamber Limited 2. Transport Workers' Union of New South Wales 1. Clerical and Administrative Employees (State) Award 1. New South Wales Local Government, Clerical, Administrative, Energy, Airlines & Utilities Union
Categories 2 and 3 are awards which cover or have the potential to cover, certain employees employed by Local Councils. Category 3 concerns specific awards covering employees employed in aged care, this being a sector which receives some funding from the Federal Government.
The party cards for the Category 2 and 3 Awards record Local Government NSW and Unions NSW as affected parties. In addition, the following parties are also recorded as affected parties in respect of the following awards: 1. Local Government (Electricians) (State) Award 1. Electrical Trades Union of Australia, New South Wales Branch 2. New South Wales Local Government, Clerical, Administrative, Energy, Airlines & Utilities Union 1. Entertainment and Broadcasting Industry - Live Theatre and Concert (State) Award 1. Media, Entertainment and Arts Alliance New South Wales 1. Local Government Aged Disability and Home Care (State) Award 1. Aged & Community Care Providers Association Ltd 2. Health Services Union NSW 1. Nurses' (Local Government) Residential Aged Care Consolidated (State) Award 2021 1. Aged & Community Care Providers Association Ltd 2. New South Wales Nurses and Midwives' Association
On 20 December 2024 the Full Bench finalised and published new "Award Making Principles", replacing the Wage Fixing Principles set in 2022, following the completion of stage 2 of the State Wage Case 2024: State Wage Case 2024 (No 4) [2024] NSWIRComm 25. Principle 6 of the 2024-2025 Award Making Principles concerns "State Wage Case Adjustments' and sub-principles 6.1 and 6.2 provide: 6.1 Following the completion of an Annual Wage Review by the Fair Work Commission, the Commission will issue a notice to show cause why that National decision should not be adopted wholly or partly and with or without modification for certain minimum rates awards and for paid rates awards that apply to the public sector, which will be determined at a State Wage Case hearing. 6.2 In the State Wage Case hearing the Commission will determine a minimum rates adjustment for the following awards: 1. Security Industry (State) Award ("Security Industry Award"); 2. Miscellaneous Workers - Kindergartens and Child Care Centres, &c. (State) Award; 3. Health, Fitness and Indoor Sports Centres (State) Award; 4. Transport Industry (State) Award; 5. Clerical and Administrative Employees (State) Award; 6. Local Government (Electricians) (State) Award; 7. Entertainment and Broadcasting Industry - Live Theatre and Concert (State) Award; 8. Local Government Aged Disability and Home Care (State) Award; and 9. Nurses' (Local Government) Residential Aged Care Consolidated (State) Award 2021. and vary them to give effect to that minimum rates adjustment, provided that each award contains the following clause: "The rates of pay in this award include the adjustments payable under the State Wage Case for the relevant year. These adjustments may be offset against: (i) any equivalent over award payments, and/or (ii) award wage increases other than State Wage Case adjustments."
It is expected that the FWC Commission will deliver its Annual Wage Review for 2024-2025 in or around June 2025 following which Principle 6 will be engaged.

The Need for a Review

Despite being given the opportunity to do so, no party filed any evidence in respect of the first stage of the State Wage Case 2024. Only Unions NSW, Local Government NSW and the Industrial Relations Secretary filed submissions. Those submissions gave rise to two concerns: first, that some of the Relevant Awards may be obsolete, as there may be no current employees covered by one or more of the awards and no current intention by the relevant employer to employ persons in positions covered by such awards; and second, that the rates prescribed in the Relevant Awards, even after the uplift awarded in State Wage Case 2024 (No 2), may not represent fair and reasonable wages in conformity with the Commission's obligation, pursuant to s 10 of the IR Act, to make awards setting fair and reasonable conditions of employment for employees. The Full Bench found, at [25], that at least over the last five years, the increases awarded to the minimum rates in the Category 1 Awards have been insufficient to keep pace with inflation, such that they have decreased in real terms, and to a degree greater than the reduction in the real value of rates under federal modern awards. The Full Bench expressed a concern that the wages for Category 1 awards may have fallen behind federal modern award minimum rates in real terms, including most concerningly, the National Minimum Wage Order as determined by the FWC, possibly due to the wages cap.
In the circumstances, the Full Bench considered that a comprehensive review of the rates in the Relevant Awards is warranted, explaining, at [31] - [32]: [31] … Such a review should be directed to ensuring that these rates represent fair and reasonable wages in conformity with the Commission's statutory mandate. After their decline in real value during the last five years, due in large part to the operation of the former wages cap, the Commission can have no confidence that its statutory mandate is fulfilled simply by applying the AWR 2024 increases to the Category 1 awards from 1 July 2024. [32] In addition, we are concerned that the absence of any evidence of the impact of increasing wage rates may reflect the limited application of the Category 1 awards, or even the potential obsolescence of one or more of those awards (including potentially awards in Categories 2 and 3). This concern is reinforced by the question raised [by LGNSW] over the Entertainment and Broadcasting Industry - Live Theatre and Concert (State) Award referred to in [10] above and the absence of any employees currently engaged in the classifications [in the Category 1 awards] referred to in [27] above. The review should also ascertain the extent to which these awards have practical application, and to deal with them appropriately, whether by rescission of one or more awards or by further adjustments to the wage rates contained in them.
To facilitate the review the Full Bench referred the matter for me to report to the Full Bench pursuant to s 156(5)(a) of the IR Act.

The Review

I propose to provide the affected parties with an opportunity to file any evidence and submissions as to: 1. whether the Relevant Awards, being the awards listed at [6.2] of the 2024-2025 Award Making Principles, have any ongoing utility or whether they should be rescinded pursuant to s 17 of the IR Act; and 2. if the Relevant Awards or some of them, are to be retained, whether the rates contained therein require adjustment to ensure they set fair and reasonable remuneration having regard to: 1. any failure of the Commission to pass on the full effect of a National decision and the reason why that occurred; 2. Principle 8 of the Award Making Principles and the minimum rate of pay set by the current National Minimum Wage Order as made by the Fair Work Commission; 3. the minimum rates in any equivalent federal awards; 4. the mandatory considerations set out in Principle 2 of the Award Making Principles; and 5. any other relevant matter.
I will also hear from the parties as to whether they seek an oral hearing before me before I prepare my report to the Full Bench.
To enable the matters referred to in the preceding two paragraphs to occur I make the following directions: 1. The matter is set down for directions on 10 February 2025 at 2pm in Parramatta. 2. The Registrar shall provide a copy of this Statement to all the parties named on the cover sheet being the affected parties to the Relevant Awards. Janet McDonald Commissioner

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 03 February 2025

State Wage Case 2024 – Review of Minimum Rates Awards [2025] NSWIRComm 1004

At a glance

Court

Decision date

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Judgment (5 paragraphs)

Legislation Cited (1)

Cases Cited (5)