NSW to abolish wages cap

The New South Wales government has introduced industrial reforms that are set to scrap for good the wages cap affecting essential workers in the state.

Industrial Relations Minister Sophie Cotsis introduced on Thursday to Parliament the Industrial Relations Amendment Bill 2023.

The reforms seek to repeal the Section 146C of the Industrial Relations Act 1996, which allows the government to regulate a wages cap for public sector employment.

The changes are expected to affect the wages of paramedics, nurses, teachers, police, firefighters, cleaners, among others who Cotsis said are "furious" after having their pay capped for 12 years.

"This reform stops that from happening again and delivers on Labor's election promise to scrap the wages cap once and for all," Cotsis said in a statement.

The move to abolish the wages caps for good comes after the government in June delivered a 4.5% pay increase to public sector employees in 2023-24, much higher than the cap that limited public sector pay rises to three per cent.

Mutual Gains Bargaining

With the wage cap to be lifted, the bill will also introduce a new Mutual Gains Bargaining that will see agencies and unions negotiating for mutually agreed improvements for the benefits of essential workers.

"Mutual Gains Bargaining is a new cooperative negotiation model for the government and the unions which represents the state's workforce," the NSW government said in a media release.

"It will be supported by the Treasury's productivity unit to link pay rises to innovation and productivity in the delivery of essential public services."

The government, however, noted that the Industrial Relations Commission is also mandated to consider the state's fiscal position and outlook in determining pay rises.

Industrial Relations Commission established

In addition, the bill will also establish a specialised Industrial Court and Commission, which will oversee workplace health and safety as well as underpayments.

The Industrial Court will also have the authority to bring unions and government agencies together at the negotiating table to resolve disputes.

It will also be capable of issuing orders to resolve disputes and issuing fines to ensure that the parties are compliant with the orders.

Cotsis said the passing of these reforms will improve schools, hospitals, and other public sector workplaces.

"These reforms won't just benefit the state's essential workers, they will improve workplace safety for millions in NSW by providing specialised health and safety judges," the minister said.