By Angus Thompson
Aged care workers will receive a 15 per cent pay boost after the Fair Work Commission handed down its decision in the high-profile wage case backed by the government.
The Health Services Union called for a 25 per cent pay rise, comparable to $5 an hour, for aged care workers and nurses after a royal commission into the haemorrhaging sector called on the Commonwealth and providers to overhaul the historical underpayment of the feminised workforce.
The Fair Work Commission has handed down its decision over the wages of aged-care workers.
In a highly anticipated decision handed down shortly after 4pm on Friday, the industrial umpire concluded staff involved in the direct care of Australia’s elderly were entitled to a 15 per cent pay rise but said it didn’t necessarily exhaust “the extent of the increase justified”.
Workplace Relations Minister Tony Burke said the result signified a first step in changing the undervalued nature of aged-care work.
“We fought for this pay rise because our government is committed to getting wages moving again, particularly in low-paid, female-dominated industries like this one,” Burke said.
Fair Work said “the evidence establishes that the existing minimum rates do not properly compensate employees for the value of the work” they perform.
Another hearing will be held later this month to determine the timing of the pay rise, and whether it is to be phased in. The commission said the question of “whether any further increase is justified” would be the subject of submissions from employers and the government.
The government backed an increase in aged-care workers’ wages and has promised to fund the pay rise, telling the commission pay rates in the sector should be “significantly higher” without nominating a figure.
Comment has been sought from the government about whether it will fully fund the 15 per cent increase. The government put money away in the recent federal budget’s contingency reserve to help cover the ultimate cost.
Treasury modelling accompanying the government’s submission found a 25 per cent wage rise could boost labour supply by between 5 and 10 per cent.
However, it warned that in the current economic environment, such a lift in wages could further push up inflation if it prompted workers in other sectors to seek similarly large pay increases.
Ministers argued low pay provided little incentive for people to work in the area, leading to chronic workforce shortages that jeopardised the care of Australia’s ageing population.
The government submitted that “the current award rates significantly undervalue the work performed by aged care workers, for reasons related to gender”.
The commission said in its decision “gender-based undervaluation of work in Australia arises from social norms and cultural assumptions that impact the assessment of work value”.
“The disproportionate engagement by women in unpaid labour contributes to the invisibility and the under-recognition of skills described as creative, nurturing, facilitating or caring skills in paid labour,” the commission said.
HSU national president Gerard Hayes said the decision was “moving in the right direction, but there is still a lot more to do”.
“At this point in time, the 15 per cent won’t resolve the attraction-retention issues,” he said, referring to the volume of people leaving the sector.
Hayes said the union wouldn’t rest until “we get some semblance of decency and sustainability into aged care”.
“Fifteen per cent is a downpayment but nobody should be mistaken. This will not fix the crisis. We still have massive unfinished business in aged care,” he said.
“For the last decade, this industry has relied on the goodwill of an exploited, casualised workforce. Today represents progress, but the legal, political and industrial fight continues.”
Modelling prepared for the royal commission estimated the number of direct care workers needed to maintain staffing levels would be approximately 316,500 full-time equivalent workers by 2050, an increase of 70 per cent.
Aged and Community Care Providers Association head Tom Symondson welcomed the decision but noted it did not cover staff not involved in direct care such as kitchen, laundry, recreation activities and administrative workers.
“We look forward to a further decision by the commission which addresses their pay,” he said.
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