The ACTU says the case will help save Australia’s social security system

UC says strikers’ demand to tie pay to housing costs could have ‘overwhelming’ cost impacts, in what is likely to be a landmark case for Australia’s union movement.

In 2012, the Victorian government, in its budget, tried to reduce the amount that workers earning more than the so-called’minimum wage’ – $28.75 an hour – can claim while taking into account the number of children taken out of work.

The government said that if unions were successful at the Industrial Relations Court in the action they were preparing, the government would have to increase the minimum wage by 15 cents an hour, over the next two years.

The government, in its original budget, said it wanted to achieve the savings by cutting the number of hours workers were required to work.

The unions wanted the court to take the government to task and rule that the government was going too far with the changes, according to the Australian Council of Trade Unions (ACTU), which helped the Australian Workers’ Union (AWU) prepare the matter before the court.

The union has been arguing that the case will change Australia’s social security system, but it is now likely to be the biggest case to test that system since the High Court ruled in the 1980s that union-organised workers were entitled to a minimum wage.

In a statement, the ACTU said unions had supported the move to try and save the budget.

They said it was unfair and “unjustified”. They said the government, “has a duty to protect the basic conditions of work”.

“This case is likely to have a profoundly beneficial impact for workers and industry if it is successful. In particular, a ruling in the ACTU’s favour would be a significant step towards strengthening the social security system and ensuring that workers have a basic level of protection against the worst impacts of inflation.”

The court will have to answer three questions.

The first is whether the increase to the minimum wage imposed by the government breaches the Fair Work Act.

The second is whether there are good reasons for having a “minimum” hourly wage, given that employers can vary the rates or not need to pay any minimum at all.

The third is whether the minimum wage imposed by the government is “reasonable” and, if not, what other legal provisions can protect workers from being overpaid.

On the first issue, the court will hear on Friday morning from the union and the government.

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