Aged care workers set for pay rise after Fair Work Commission Ruling

Plans to push through a major pay rise for workers in one industry could be just the starting point for substantial wage increases.

Workers in aged care are set to receive a substantial pay rise, after a decision handed down by the Fair Work Commission confirmed a 15 per cent rise for the industry.

The decision, handed down by the Commission on Friday, comes more than 18 months after the tabling of a royal commission report, which recommended a 25 per cent increase to aged care workers.

The timing of the pay rise is set to be discussed later this month, with the FWC to take submissions from the federal government and employers and the government before handing down stages two and three of its decision.

The FWC said in their decision, which spanned more than 300 pages, that work in feminised industries had been traditionally undervalued.

The Fair Work Commission has decided on a pay increase for aged care workers. Picture: iStock.

“We accept the evidence that, as a general proposition, work in feminised industries – including care work – has been historically undervalued and that the reason for that undervaluation is likely to be gender-based,” they said in their decision.

Prime Minister Anthony Albanese said the “welcomed” announcement would help close the gender pay gap.

“We need to recognise that … it is many of the feminised industries, aged care, early learning, disability care that are dominated by women where women don’t have the same bargaining power as other sections of the workforce,” he told reporters on the Sunshine Coast.

“That is one of the explanations for why wages have been held back.”

The federal government set aside an unspecified figure in the budget’s contingency reserve to pay for the increase.

Pressed to outline exactly how much he anticipates the budget will have to fork out to pay for the increase, Mr Albanese said he would not say until the FWC handed down its final decision.

“We don't declare it, that’s why it’s called the contingency (reserve),” he said.

Last month’s budget forecast that federal spending on aged care services would rise by 50 per cent to $34.7 billion between the previous financial year and 2025-26, reflecting growth in improved residential aged care.

In it’s interim report, the commission made said it will continue considerations for some workers in the sector to get a bigger increase.

“We wish to make it clear that this does not conclude our consideration of the unions’ claim for a 25 per cent increase for other employees, namely administrative and support and aged care care employees,” they said.

“Nor are we suggesting the 15 per cent interim increase necessarily exhausts the extent of the increase justified by work value reasons in respect of direct care workers.”

Prime Minister Anthony Albanese addressed the decision on Saturday. NewsWire / Sarah Marshall

Business Council of Australia chief executive Jennifer Westacott seized on the announcement, using it push back against a push for multi-employer bargaining.

“This victory for the government, unions and the community calls into question the need for sweeping changes to Australia’s bargaining laws,” she said.

“What won’t deliver wage increases for Australians is an even more complex bargaining system that opens the door to industrial chaos, strikes and disruption.”

The Albanese government wants to legislate the changes, which would make it easier for workers from different employers across a sector to to collectively negotiate, by the end of the year.

Originally published as Aged care workers set for pay rise after Fair Work Commission Ruling