A significant pay rise for mostly female social and community sector workers will help attract qualified, valuable employees to the caring sector, Prime Minister Julia Gillard says.
Some 150,000 low-paid workers were awarded a pay rise by the industrial umpire on Wednesday in a landmark test case.
Fair Work Australia granted an equal remuneration order sought by several unions, including the Australian Services Union, which was supported by the federal government.
About 120,000 of the workers are women with jobs in the social and community sector.
As a result of the decision, they are set to receive pay rises of between 23 and 45 per cent.
"These are workers who make a difference every day for the most vulnerable in our community and (they) deserve to be properly rewarded for their efforts," Ms Gillard said in a statement on Wednesday.
She described the successful pay equity claim as "a significant advance for equal pay for women".
"Importantly, the decision will also help part of the social and community services sector attract and keep qualified, valuable employees," Ms Gillard added.
She maintained the federal government would partly fund the pay increases, and called on state and territory governments to do the same.
The pay increases will be phased in over eight years from December 1.