Hunter Employee Relations Review – June 2026

The following is a quick user-friendly update for employers on Government legislative changes and Fair Work Commission test cases.

2026 - Annual Wage Review Handed Down This Morning

The Fair Work Commission Annual Wage Review Full Bench has this morning increased minimum Award rates by 4.75%. The increase will take effect from 1 July 2026.

The increase applies at the Award rate of pay. The increase may be absorbed into any over award payment above the Award rate in an applicable classification.

The decision states the increase took into account the following factors:

The rate of inflation and the impacts of the Reserve Bank monetary policy. The RBA is forecasting the CPI will max out at 4.8% for the year to June 2026.
The Middle East conflict and direct impact on costs such as fuel.
The decrease in real wages following the inflation spike after COVID.

In the decision the Full Bench also stated that the C13 level in the Award system will be merged upwards into the C12 wage rate of pay – thereby eliminating C13. The C13 and C12 classification levels are the lowest levels (just above the C14 entry level) in the Manufacturing and Associated Industries and Occupations Award. They are used by other Awards as a wage rate standard against which their rates were initially set. This may result in the lowest levels in certain other Awards being impacted upwards above the 4.75% increase.

The National Minimum Wage, which only applies to employees not covered by an Award or an Enterprise Agreement, has increased to $26.74ph.

Next steps

In the next few weeks the Fair Work Commission will publish updated wage tables in all Awards as a result of this Annual Review decision. These will incorporate the 4.75% increase.
Employers should check which of their employees are covered by an Award.
For Award covered employees compare their current wage rate with those in the updated wage tables in the Award. You may need to adjust their wage rate.
Check applicable allowances which may well also increase.
For Agreement covered employees compare the current wage rates in the Agreement with the Award rates to ensure Agreement rates do not fall behind.
Pay particular attention to employees at the lowest levels if the elimination of the C13 wage rate as mentioned above flows into your relevant Award.

Employers requiring assistance with the above steps should contact Hunter Employee Relations.

Fair Work Commission - $ per km Travel Allowance Increase Pending

An application is currently being heard in the Fair Work Commission where the ACTU is seeking significant increases to the km allowance across all Awards. This is response to recent increases in the cost of fuel following events in the Middle East.

The current allowance is 99cents per kilometre with about 40% of that designated to cover fuel costs. This allowance has traditionally been increased on an annual basis along with other allowances.

The ACTU application seeks a 10cents per km increase as well as requesting the Commission to review the allowance on a monthly basis rather than annually.

Keep an eye out for an increase to the allowance across all Awards.

AI & Employer Introduction of Change Obligations

Employers need to be conscious that the introduction of Artificial Intelligence in the workplace may trigger consultation requirements built into Awards or Enterprise Agreements.

All Awards or Agreements have a clause often titled ‘Consultation About Major Workplace Change’. The clause from the Fair Work template states the following

If an employer makes a definite decision to make major changes in production, program, organisation, structure or technology that are likely to have significant effects on employees, the employer must …..

The clause then places specific requirements on employers to consult and how this must occur.

The question the above clause raises – does the introduction of AI result in ‘significant effects’. The template clause defines ‘significant effects’ as follows:

significant effects, on employees, includes any of the following:

termination of employment; or
major changes in the composition, operation or size of the employer’s workforce or in the skills required; or
loss of, or reduction in, job or promotion opportunities; or
loss of, or reduction in, job tenure; or
alteration of hours of work; or
the need for employees to be retrained or transferred to other work or locations; or
job restructuring.

The Australian Services Union recently sent an assertive (open) letter to the CEO of QANTAS, Vanessa Hudson, after she spoke about the benefits of the introduction of AI across multiple operational aspects of the airline at a public conference. The union stated it had previously tried to include AI protections during Enterprise Agreement negotiations but had been refused.

Other Agreements have been negotiated with explicit restrictions on the introduction of AI.

Government Sets Up Tripartite Artificial Intelligence Body

The Government has set up a new tripartite body to regulate artificial intelligence in Australian workplaces. The intention of the body is to set guardrails for the introduction of AI while not allowing unions to veto its introduction.

The Workplace Relations and Employment Minister, Amanda Rishworth, has stated the Government is looking for a balance between increasing productivity while protecting workers.

As a first step the Minister has initiated a gap analysis as to whether existing legislation is able to deal with the introduction of AI or whether new legislation is needed.

The new tripartite body, known as the AI Employment and Workplaces Forum, has representatives from the union movement and executives from the Business Council of Australia, the Australian Industry Group and the Australian Chamber of Commerce and Industry. Its purpose is to chart a path on how AI is adopted, ensure productivity gains are shared with workers and whether current laws are fit for purpose.

The Minister has stated that the forum will not give unions the power to veto AI introduction at workplaces.

Its early days on what initiatives will result from this forum.

Workplace Delegates Rights Expansion – Federal Court Decision

The Fair Work Act 2009 includes detailed rights for workplace union delegates. These are also included in all Awards – about 3.5 pages of specific delegates rights and protections.

Award provisions normally relate to entitlements and rights between the employer and the employees that work for that employer.

However, following a recent decision of the Full Federal Court, workplace delegates are not confined to only representing the employees of their employer. They can also represent third party labour such as contractors and labour hire ‘workers’ at the employers workplace.

Additionally, the Court stated that delegates communication is not limited to matters of representation. They are entitled to communicate with members or potential members about anything that relates to their industrial interests. The Court stated that a delegate’s rights are not subject to an obligation on the part of the delegate to comply with their duties and obligations as an employee.

Employers seeking clarity on the rights of delegates in their workplace should contact Hunter Employee Relations.

Underpayment of Award Covered Managers

Kmart recently found itself at the centre of a legal class action for underpayment of wages of supervisory and management staff.

The claim states that managers, who are covered by the General Retail Award, were underpaid against a range of entitlements in that Award.

The alleged actions included:

Kmart managers were regularly required to work through their meal breaks.
They were required to come in early and work late to complete their duties without additional compensation.
They were not paid penalty rates where they worked shifts which entitled them to additional remuneration.
Managers backfilled at a higher level while being paid their normal classification rate of pay.
Managers being required to complete administrative tasks after hours at home without payment.

Employers may not be aware that many Awards have supervisory or management classifications which may cover their managers – particularly middle managers.

If you wish to check whether your senior managers are covered by an Award and whether they may have Award entitlements please contact Hunter Employee Relations.

McDonalds’ Employees Denied Paid Rest Breaks

The Shop, Distributive and Allied Employees' Association has initiated Federal Court Action in respect to McDonalds employees who were denied their 10 minute paid rest break when working four hour shifts. The SDA is seeking compensation for workers as well as penalties being imposed against McDonalds franchises and its corporate office as an accessory.

The SDA is claiming this could affect 300,000 current and former employees. The obligation arose from the McDonalds 2013 Enterprise Agreement and the Fast Food Industry Award.

This Federal Court action is separate from another SDA action where it is seeking overtime compensation for McDonald’s managers not paid for work before or after their scheduled shift.

National Employment Standards Review Continues

The House of Representatives Standing Committee on Employment, Workplace Relations, Skills and Training is continuing its review into the National Employment Standards. Although the original standards were first introduced in 2010 additional entitlements have been introduced as part of the NES over the years. The intention of the public hearings is to determine whether the standards (intended to be a ‘universal safety net’) are adequate in contemporary Australian workplaces.

Key areas of review are hours of work, expansion of existing leave and various new leave, and redundancy entitlements. Additionally, the Committee is looking at rostering practices in relation to roster changes, caring responsibilities, mental health with particular emphasis on part-time and casual employees. Increasing calls for baseline stability and predictability of hours of work.

Unions are pushing for standards to include a range of health, cultural and family obligations and to update long standing entitlements to align with modern patterns of work and care responsibilities.

Unions are also pushing for 10-12 days per year of paid reproductive leave. Under the union proposal all employees (regardless of gender) would be able to access paid leave to manage health issues related to reproduction. This would include peri/menopause, menstrual pain, miscarriage, medical terminations of pregnancy, PCOS, endometriosis, IVF or fertility treatment, vasectomy and hysterectomy recovery, and breast and prostrate screening.

Payday Super – 1 July 2026

In case you’ve missed the long lead up – payday superannuation commences from 1 July 2026. In short employers are required to pay an employee’s superannuation entitlements each pay day and the funds should be received by the superannuation fund within 7 business days. For more information, please check out the ATO website.

The March 2026 headline inflation surged to 4.6% in the 12 months to March 2026. The recent increase was largely driven by substantial increases in fuel prices. In the 12 months to February 2026 the inflation rate was at 3.7%.

Overall Wages growth remained steady in the March 2026 quarter increasing 0.8% resulting in an annual increase of 3.3% for the previous 12 months.

Check out the latest SafeWork NSW Bulletin here. This SafeWork resources page will also be useful to small employers who do not have dedicated WHS expertise in house.

Kind Regards

Michael Schmidt

M 0438 129 728

[email protected]

www.hunteremployeerelations.com.au