Bosses demand six-year delay in gender pay

In a new industrial relations flashpoint, employers are pushing for gender pay rises of up to 31 per cent for thousands of health professionals to be phased in over six years.

Australian Industry Group chief executive Innes Willox.

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Employers are pushing for gender pay rises of up to 31 per cent for thousands of health professionals to be phased in over six years, sparking a fresh battle with ­unions that want wage increases implemented as soon as possible.

In a new industrial relations flashpoint, the Australian Industry Group said employers did not have an endless capacity to deliver “dramatic” pay rises and ­“ultimately these costs will need to be borne by the broader community”.

The Ai Group urged the Fair Work Commission to impose a one-year freeze on wage rises flowing from the tribunal’s April ruling before phasing in the pay increases over a further five years.

Following a historic review into the undervaluation of wages in feminised industries, the commission recommended significant pay rises for 175,000 low-paid workers covered by five awards, including a 14 per cent rise for pharmacy workers in three ­phases by 2027 and a 27.8 per cent for early childhood workers phased in over five years.

It called for submissions from employers and unions on the proposed operative dates and phasing in for the remaining workers, including health professionals, who it recommended receive pay rises of up to 31 per cent.

Ai Group chief executive Innes Willox said many impacted employers wanted to pay employees more but were understandably anxious about how they would be able to afford the scale of wage increases in the care sector.

“The decision will affect employers in the early education and community services and disability sectors, including many small not for profit organisations, who simply don’t have capacity to absorb dramatic cost increases or pass those costs on to the often vulnerable people and communities they service,” he said.

In its decision, the commission said it did not expect its recommendations would require any significant extra NDIS funding by the commonwealth.

Mr Willox said many disability sector employers were already struggling to remain viable under NDIS funding arrangements that failed to adequately take into account all the costs employers needed to meet under the applicable award.

Addressing the private health sector’s capacity to pay wage increases generally, the commission said labour costs were the largest operating expense of private hospitals but they were substantially constrained in their capacity to increase charges.

While the private hospital sector recently suffered from reduced profit margins and costs rising faster than revenue, private hospitals would benefit from growing demand for health services from an ageing population, which was likely to improve revenue and profits.

The direct effect of increases to award minimum wage rates on the sector was also significantly limited by the fact that a large proportion of employees were paid above-award rates either through enterprise agreements or individual arrangements.

Mr Willox said the commission decision would impact healthcare providers such as private hospitals and “there will undoubtedly need to be changes to government funding arrangements and health insurance premiums to pay for the additional costs”.

“We can’t treat employers impacted by the decision like a magic pudding with an endless capacity to deliver dramatic wage rises. They simply can’t. Ultimately these costs will need to be borne by the broader community,” he said.

“The catalyst for the proposed increases were legislative changes introduced during the last term of government. Industry will accordingly be eagerly awaiting guidance from the government regarding how it will support employers to meet the costs.

“That information and assurance will address a key barrier to implementing any increases.”

The ACTU said the Ai Group proposal would see health professionals continue to be undervalued on the basis of gender for a further six years, accusing the employer group of not providing to the commission any basis beyond general assertions as to why the delay was appropriate or necessary.

ACTU secretary Sally McManus on Sunday said the commission had found “lots of jobs in Australia had their value unfairly suppressed because they have been overwhelmingly done by women”.

“This has cost working women, and men in these roles, significant amounts over a long time and is a key factor in the gender pay gap,” she said. “Finally it is being addressed because the Albanese government reformed our laws. We want to see this injustice rectified as soon as possible.”

ACTU secretary Sally McManus. Picture: Monique Harmer/NewsWire

Employment and Workplace Relations Minister Amanda Rishworth. Picture: Jason Edwards/NewsWire

Employment and Workplace Relations Minister Amanda Rishworth on Sunday said Labor supported the commission’s work of addressing gender undervaluation in the award system.

“The FWC will seek views on its proposed approach, as well as issues such as operative dates and phasing, before any final decisions are made,” she said.

The government will make a submission to the proceedings.

Mr Willox said ultimately the commission would need to balance the imperative to implement its decision “with the need to do so in a manner … fair to employers”.

Ramsay Health Care told the commission the operative date and phasing in of wage increases should allow time for private hospital operators to obtain extra funding to support the increased expense, noting the primary source of funding was from private health insurers, with whom agreements were generally negotiated on a multi-year basis.

Ramsay said government funding was limited and the federal government had not committed to providing any funding.

The United Workers Union said given the commission’s finding that wages had not been properly set due to gender-based undervaluation, the proposed increases to minimum rates of pay for health professionals, pathology collectors and dental assistants should be implemented in full as soon as possible.

“The increases should not be phased in,” the union told the commission. “Were the expert panel minded to implement a form of phasing, any phasing should be limited to only that which is absolutely necessary to meet relevant objectives under the Fair Work Act.”