Correction - Reporting on pay increases for Naval Group Australia employees
8 May 2020
Contrary to media reporting, Defence did not provide explicit approval for the recent pay increases made by Naval Group Australia to its employees.
Under the Strategic Partnering Agreement, Defence is required to approve the aggregate increase in salaries and wages that the Commonwealth will fund over a 12-month period. This is standard practice for all major Defence contractors. This approval process is conducted annually, and is informed by a number of factors including the benchmarking of remuneration rates across Defence industry and similar industry sectors, the ABS Wage Price Index, and economic forecasts.
In December 2019, Defence approved the aggregate increase in salaries and wages for Naval Group Australia that it would fund during 2020.
The timing of any pay increase authorised by Naval Group Australia is a company decision, as is the case for any commercial entity operating in Australia. The decision is not dependent on explicit Defence approval, noting any increase to be funded by the Commonwealth must conform to the aggregate increase previously approved by Defence.
Naval Group Australia has advised Defence that it authorised recent pay increases in the interests of supporting its workforce during the current COVID-19 period.