INTRODUCTION AND OVERVIEW
1. Federal minimum wages in Australia can be traced back to the Harvester decision of November 1907[1], in which the Conciliation and Arbitration Court was called to interpret and apply the expression “conditions as to the remuneration of labour which…are fair and reasonable”[2] .
2. In Harvester, The Court, constituted by Justice Higgins, expressed the following view about the expression “fair and reasonable”:
“The provision of fair and reasonable remuneration is obviously designed for the benefit of employees in the industry; and it must be meant to secure them something which they cannot get by the ordinary system of individual bargaining with employers. If Parliament meant that the conditions shall be such as they get by individual bargaining with employers – if it meant that those conditions are to be fair and reasonable, which employees will accept and employers will give, in contracts of service – there would have been no need for this position. The remuneration could safely have been left the usual, but unequal, contest, the “higgling of the market” for labour, with the pressure for bread on one side and the pressure for profits on the other. The standard of “fair and reasonable” must therefore be something else; and I cannot think of another standard appropriate than the normal needs of the average employee, regarded as a human being living in a civilised community”[3]. (emphasis added)
3. The Panel is variously directed by the relevant provisions of the Act to maintain “fair and relevant” minimum wages, as opposed to the “fair and reasonable” criteria that was central to the consideration in Harvester. However, there is a close connection between the two concepts insofar as they envisage doing more for employees than “the higgling of the market” might offer, as is evident by the Panel’s acceptance last year[4] of our submission that:
“..it cannot follow that ‘relevant’ centrally determined minimum wages – minimum wages that are suited to contemporary circumstances – must always follow, predict or seek to reproduce the trends observed in market wages. Rather, contemporary circumstances may demand that the intervention enabled by the legislation be exercised to a much fuller extent, including an extent that results in a major disparity between market wage movements and movements in minimum wages”.
4. However, on numerous occasions (and most pointedly in last year’s review[5]) the Panel has observed that the considerations that it is explicitly directed to take into account in reaching a judgement about what is “fair and relevant” require it to balance competing interests. Indeed, the Panel explicitly gave the example that the requirement to take into take into account both “the performance and competitiveness of the national economy…” and “relative living standards and the needs of the low paid” involves striking a balance “between competing interests”[6]. The Panel’s observation occurred in the context of considering a submission that the statutory framework for the setting of national minimum wage was beneficial legislation. Although the Panel did agree that the framework should be so characterised:
“We accept that it is appropriate to characterise the statutory provisions relating to the variation of the NMW as remedial or beneficial provisions. They are intended to benefit national system employees.”[7]
it stipulated that the extent to which those provisions are to be given a ‘fair, large and liberal’ interpretation in support of their beneficiaries “..is constrained by the fact that the relevant provisions seek to strike a balance between competing interests”[8].
[1] (1907) 2 CAR 1
[2] Excise Tariff Act 1906 s. 2
[3] Ex parte H.V. Mckay (1907) 2 CAR 1 at 3
[4] [2017] FWCFB 3500 at [145]
[5] [2017] FWCFB 3500 at [141]-[142]
[6] [2017] FWCFB 3500 at [141]
[7] [2017] FWCFB 3500 at [134]
[8] [2017] FWCFB 3500 at [142]
