Circular 2021/04: Application of Wage Price Index to agency industrial instruments from 1 September 2021

Purpose

1. The purpose of this Circular is to inform agencies of the applicable private sector Wage Price Index (WPI), for annual remuneration adjustments in agency industrial instruments between 1 September 2021 and 31 August 2022, under the Australian Government’s Public Sector Workplace Relations Policy 2020 (the Policy).
2. Please note this Circular prevails over any inconsistency with any WPI publications issued by the Australian Bureau of Statistics (ABS) and may be replaced at a later date.
3. This Circular applies to agencies with remuneration proposals and industrial instruments approved under the 2020 Policy containing wage adjustments capped at private sector WPI. This Circular does not apply to remuneration proposals and industrial instruments approved under earlier Government policies, which will continue to operate in accordance with their existing arrangements which pre-date the 2020 Policy.

New WPI figure

4. The annual percentage change in private sector WPI for the year to June 2021 quarter is 1.9%.
5. This figure was published by the ABS on 18 August 2021, under the June 2021 “Wage Price Index, Australia” release (Catalogue Number 6345.0). A copy of the ABS publication can be found here.

Application of the 2020 Policy

6. Paragraph 21 of the Policy requires that annual remuneration adjustments approved under the Policy are to be capped in line with the (seasonally adjusted) annual percentage change in private sector WPI from the most recently released June quarter.
7. Some instruments may include a cap on remuneration adjustments at a level below the June 2021 private sector WPI figure. The cap must apply even if the new private sector WPI figure is higher. 
8. Agencies are not required to seek re-approval from the APS Commissioner to vary a determination made under the Policy, which includes a placeholder for the June quarter 2021 WPI figure.
9. For the avoidance of doubt, all SES and equivalent employees are also covered by the Policy and the June 2021 WPI figure.

Application of the WPI figure

10. The new WPI figure only applies to remuneration adjustments in applicable 2020 Policy-approved remuneration proposals and determinations made by Agency Heads. In practice, the 1.9% WPI figure applies to the following Policy-approved instruments:

1. enterprise agreements automatically applying a wage adjustment between 1 September 2021 and 31 August 2022, as per the terms of the agreement (where the enterprise agreement was approved under the 2020 Policy and includes a wages cap tied to private sector WPI);
2. determinations made in lieu of enterprise bargaining (agencies must amend existing determinations to include wage adjustments for the period 1 September 2021 to 31 August 2022, in accordance with the new WPI figure); and
3. remuneration proposals for common law contracts, which identify an unspecified remuneration adjustment between 1 September 2021 and 31 August 2022 (where the remuneration proposal was approved under the 2020 Policy and includes a wages cap tied to private sector WPI).

Other considerations

11. Once agencies have implemented the new WPI into their instruments, they should advise the APSC Workplace Relations Group and provide a copy of the adjusted salary tables.
12. Going forward, the 1.9% WPI figure also applies to any new industrial instruments and remuneration proposals Commonwealth entities are seeking to make, with a remuneration adjustment between 1 September 2021 and 31 August 2022.
13. Agency Heads are responsible for managing SES and equivalent employees’ remuneration provided under individual arrangements consistent with the Policy, including applying WPI capped remuneration adjustments.

Further information

14. Agencies seeking further information should contact their APSC Relationship Manager or WorkplaceRelations@apsc.gov.au.