2022 Wage Increase FAQ’s

The recent wage increase decision from the Fair Work Commission (FWC) and the resulting Award changes have caused some confusion amongst employers in the baking industry. We have therefore put together the following FAQ which provides some answers to the most popular queries.

If you have further questions or require assistance with this area please call the NBIA Member Hotline (1300 557 022) or email the Membership Officer.

I thought the wage increase was 5.1% but the new rates don’t match that amount. Why?

The wage increase awarded by the FWC was actually $40 per week or 4.6% whichever was greater for the Award classification. The way it ended up, the $40 per week was paid for all levels below the “Trades” level (Level 4 in the Retail Award) and the 4.6% applied to the trades level and above. The mention of 5.1% came during the election campaign as a result of the release of the CPI at that time which amounted to 5.1%. No-one actually received a wage increase of 5.1%.

My staff are covered by the Restaurant Industry Award, but we haven’t received any wage increase details yet. Why not?

The Restaurant Industry Award was one of a handful which received a delayed increase due to the lingering effects of the Pandemic. Their increase is the same amount as everyone else but it will not apply until the first full pay period commencing on or after 1 October 2022. Updated wage schedules will be released closer to that date.

What is happening to the shiftwork provisions in the Retail Award as they keep changing?

All Awards have to go through a review process every four years and this process can take up to three or four years, believe it or not. One of the recent reviews involved the rewording and recalculating of all shift provisions in many Awards. One of those was the Retail Award. As a part of this review the penalties for weekends were reduced, some shift penalties for non-production employees were increased, and the definition of certain shifts were amended.  This has resulted in a bit of confusion over who gets paid what and why.

We have gone through all the methodologies in the Award and updated all of our pay schedules to account for those changes and believe they are correct and fully in accordance with the current Award. We anticipate however that further changes will be made (and indeed some are necessary) and will keep members up to date with any changes as they occur.

I have a part time retail worker who starts at 4am and works until 11.30am getting the shop ready and packing. What should I be paying them in regard to the wage increase?

Let’s assume that this employee is level 1. 

Under the Retail Award a Night Shift (for non-production workers) is a shift which commences after 8pm and finishes before 5am, so this is a bit complicated because, as set out above, the current clause has been changed to the point that it no longer makes any sense. 

From 4am to 5am they would be paid shift rates which are currently $36.24 per hour. They can’t be paid for any more than that because there is no shiftwork after 5am.

From 5am to 7am they would be paid as overtime (no superannuation or leave accruals) which is time and a half. This is currently $40.92 per hour for two hours because day work is not possible before 7am and as above, there is no shift work after 5am.

Then from 7am to 11.30am they would be paid the casual day rate of $29.23.

Technically speaking, the above shift is not actually possible, but there are bakeries out there who need staff to work these hours, and this is the only way it is possible without paying overtime for every hour after 5am. This is why we need to change the Award.

I don’t understand whether I have to pay leave loading or shift penalties when my staff go on Annual Leave. How does this work?

The Award provides for two calculations to be conducted when an employee goes on annual leave. 

The first calculation asks you to work out what the employee would have been paid if they had continued to work their usual roster whilst they were on annual leave (if they don’t have a “usual” roster you will have to average out their earnings over the last six months). This means you add up their ordinary rate of pay, weekend penalty rates, and shift penalties. Do not include any regular overtime.

The second calculation is the number of ordinary hours they are employed to work (38 for a full-time employee), multiply that by their base rate of pay (hourly day rate) and add 17.5% loading.

You then compare the two results and pay the employee the highest of the two. Nobody is entitled to receive their usual shift rates plus annual leave loading.