As demonstrated by our current weekly poll, only three top-tier Australian law firms appear to still have pay freezes in place.
Since we broke the news that the Blake Dawson partnership needed to “take time” to consider lifting its pay freeze, and would do so on July 1, the firm spoke out in media and confirmed that pay would thaw on that date.
Meanwhile, we received the following comments from two anonymous AAR spies last week:
FYI re your poll! AAR has removed the pay freeze since last week!
And then this:
We were informed earlier in the week that the Allens Arthur Robinson partnership will lift the pay freeze in the new financial year. After the most offensive theft of my annual leave over the Christmas break, partners should be commended for moving in the interests of its long suffering employees, albeit many months too late.
If the anonymous AAR spies are to be believed, then it appears that Mallesons is the only major Australian law firm to announce the lifting of its pay freeze. And if the comments from our anonymous Mallesons spy below are true, early indications are that the firm will be a very reluctant mover on pay:
Mallesons to axe leave loading. Presentations are currently underway to those staff entitled to leave loading. It appears that as of 30 June 2010, all Mallesons employees currently entitled to Annual Leave loading will be losing their annual leave loading. Doesn’t take a genius to realise that it is a cunning ploy to disguise any pay rises for 1 July 2010. They will no doubt deduct the leave loading benefit and then spread it across the year and claim it as a payrise.
For the benefit of those unfamiliar with the term “leave loading”, we have extracted this definition from the Wageline Qld:
Annual Leave Loading
An award or agreement may provide for an extra payment by way of a loading (e.g. 17.5%) that is to be added to an employees ordinary current rate of pay during annual leave.
This entitlement was introduced to enable employees to share the benefit of the reduced cost to their employer (eg no use of workplace amenities) of them being absent from the workplace.
Leave unloaded! Does this mean that if you spread that 17.5% across the financial year, then the much publicized Mallesons Christmas Bonus of 3% just shrunk to something like 1.5%? Is it fair for partners to summarily axe hard fought employee entitlements after leaving pay stagnant for such a protracted period?
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Actually Mallesons has told professional staff at lawyer/partner lunches that the salary freeze will be lifted and pay will be reviewed based on “market” as part of the normal performance review process with pay increases to come on 1 July. The obvious question for underpaid junior lawyers is how much will the increase be? There is common knowledge amongst staff that they are underpaid compared to their peers, even taking into account the 3% bonus and the pay freeze.
In the last week Mallesons has secretly given pay increases to those lawyers who are performing well above budget. These increases were around a 5% increase in salary backdated to January 1. For those overworked the discontent remains – but a small rise gives hope of a bigger bounty to come in July.
The problem with Mallies is that you have a “two speed firm” – sections of lawyers busting their bums well above budget for the year and others billing well below. Those busting their bums expect good bonuses and pay rises or watch the mass exodus to the other large nationals knocking at the door.
Allens certainly have not lifted the pay freeze! Some graduates-2yr lawyers were granted small pay rises at Xmas, but they are still paid substantially less than Allens lawyers at the same level in years prior! Not only have AAR not lifted the pay freeze but there is some strong indication that salaries will be further based on a bell curve, calibrated grading/bonus system that noone has any faith in and lowers morale…, and not to forget Mallesons granted a Xmas bonus, unlike AAR!