National Minimum Wage Decision 2025
The Fair Work Commission (FWC) national minimum wage decision is due again on 1 July 2025. An expert panel of the FWC conducts the annual review of minimum wages for employees in our national system every year. The review will determine what percentage increase will be applied to the national minimum wage rate from 1 July 2025 as required by the Fair Work Act 2009 (cth).
In terms of an indication about what to expect, the annual inflation rate in Australia for the same period (first quarter 2025) is 2.4%. For the annual review this year, the ACTU is recommending a 4.5% increase, with AIG Australia by contrast recommending a 2.6% increase for the national minimum wage. It is reasonable to predict that the increase to be applied will likely be somewhere in-between these recommended percentages.
As in recent years, the FWC decision will likely be communicated in mid-June and takes effect from the first pay period on or after 1 July 2025.
Amplify Alliance will issue an email once the decision % increase is announced and we will prepare our annual Pay Tables available for members to download from our website once the Fair Work Ombudsman (FWO) issues their tables in the week following 1 July accordingly.
Superannuation increase 1 July 2025
This is a timely reminder that compulsory superannuation being the superannuation guarantee (SG) rate for all national system employees, will increase to 12% on 1 July 2025 (currently 11.5%) and is the last proposed SG increase.
Approval of NHACE 2024 Agreement
On 22 May 2025 the Fair Work Commission (FWC) approved the Neighbourhood Houses and Adult Community Education Centres Collective Agreement 2024 (NHACE 2024). The agreement comes into effect on 29 May 2025 with a nominal expiry date of 19 July 2028. This multi-enterprise agreement covers some 178 employers known as ‘Neighbourhood Houses’ operating in Victoria as Not for Profit organisations which function as a community hub to deliver various services and programs.
The significant negotiation process represents a complex and protracted activity which Amplify Alliance has actively participated since May 2023 commencement of enterprise bargaining negotiations with Neighbourhood Houses Victoria Inc.
We will circulate a further update shortly about the NHACE 2024 agreement to clarify undertakings made about changes to the agreement (including Neighbourhood House (NH) employers covered by the agreement) as required by the FWC during the approval process.
Superannuation increase 1 July 2025
The Federal Court of Australia recently determined that where an employer fails to promptly pay out accrued annual leave entitlements to a terminated employee with the employer facing $17k penalty (along with additional damages). This decision establishes a significant precedent for employer to observe.
This ruling from the Federal Court clarifies uncertainties about the timing of when employers must fulfil specific entitlements to an employee post-termination – including payment in lieu of notice, accrued annual leave and redundancy pay.
The Fair Work Act 2009 (cth) (FW Act) does not stipulate a specific deadline or timeframe, except for the general requirement outlined in section 323 (1) regarding payments and salary frequency, which mandates that all amounts owed to an employee must be paid in full and at least monthly.
Federal Court Ruling
The Federal Court reviewed the FW Act section concerning the payment of accrued but unused annual leave and determined that it must be paid on the day of termination. The circumstances of Dorch v HEAD Oceania Pty Ltd [2024] FCA 16 involved payment 3 months post termination of employment resulting in a penalty ($10k) for breach of section 90(2) of the FW Act and general damages awarded to the employee acknowledging the significant impact the delay had on them. The Federal Court stated:
“All employers have an obligation to know and understand their obligations under the FW Act” – “Lack of care and ignorance of the law is no excuse”.
Regardless of whether an employee leaves voluntarily or is terminated, including due to redundancy, employers are obliged to compensate them for all unused leave entitlements. The employer claimed they paid the outstanding accrued leave entitlements once they were aware of their obligation (after 3 months) and due to inadequacies of their annual leave records.
Implications for all employers
This decision emphasis that negligence and ignorance of the law cannot serve as an excuse – and the Federal Court emphasised sending a clear message to the Australian community for general deterrence, that employers must be well-versed in and adhere to their obligations under the FW Act.
If uncertain about whether an entitlement is payable, an employer must take adequate steps or seek expert industrial advice.
For all Amplify Alliance members – employers are now on notice that accrued unused entitlements must be paid to the employee on the day the employment ends.
Outcome
For all Amplify Alliance members – employers are now on notice that accrued unused entitlements must be paid to the employee on the day employment ends.
Compliance
It is crucial to understand your obligations within the FW Act and relevant awards and agreements before initiating termination of employment procedures. Failure to comply with these obligations will constitute a breach of the FW Act and could result in financial penalties for your organisation.
As employers, you should ensure there is a valid reason and lawful reason when contemplating the termination of an employment contract (and where they are protected from unfair dismissal, that they have been provided with procedural fairness).
The terminated employee should be provided with written notice specifying the effective date of dismissal, along with the settlement of any due entitlements on termination. This includes outstanding wages, pay in lieu of notice, accrued annual leave, long service leave, remaining compensatory time off, and any applicable redundancy payment.
Amplify Alliance will continue to monitor decisions impacting members in relation to the application of the FW Act and any confirmation of compliance issues identified by Australian Courts and the Fair Work Commission.
