Up to 300,000 aged care workers in the country will receive a 15 per cent interim pay rise — an extra four dollars per hour.
The interim decision, handed down by the Fair Work Commission (FWC) last Friday, has not determined when the rise will be implemented.
Aged Care Minister Anika Wells said it is a “promising first step” in reforming the sector that was “desperately needed”, since the existing minimum rates do not “properly compensate employees for the value” and something the workers “thoroughly deserved”.
In March 2021, Royal Commission into Aged Care Quality and Safety recommended a 25 per cent increase to aged care workers, after finding low pay contributed to staff shortages.
Unions sought a 25 per cent pay increase — an additional $5 an hour, though the FWC has laid open the likelihood of recommending further increases.
FWC’s 300 page-decision said that work in feminised industries had historically been undervalued.
“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,” the report read.
The decision “made it clear that the interim increase does not conclude its consideration of the unions’ claim for a 25% increase for other employees.”
Many hope the rate will be increased, with the decision clarifying: “nor was the full bench suggesting that the 15% interim increase necessarily exhausts the extent of the increase justified”.
“Whether any further increase is justified will be the subject of submissions in Stage 3 of these proceedings,” the decision read.
Prime Minister Anthony Albanese welcomed the announcement, saying it would help close the gender pay gap in the aged care sector, where 85 per cent of workers are female.
“The interim report of the aged care royal commission was titled with one word, ‘neglect’,” he told reporters in Queensland last week.
“It documented over half of the aged care residents not getting the nutrition they need.”
“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.”
“That is one of the explanations for why wages have been held back.”
Albanese’s government hope to legislate the latest changes. If they are successful, workers from different employers across a sector will be able to collectively negotiate their salary with more ease by the end of the year.
Jennifer Westacott, chief executive of Business Council of Australia also welcomed the announcement.
“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.”
“It shows that the awards system can lift the wages of hundreds of thousands of Australians when it works.”
“The determining factor in many feminised industries like aged care and childcare is government funding, so we welcome the government’s commitment to paying for this increase.”
“We want low-paid people to earn more and the awards system is the best place to do it.”
National president of the Health Services Union, Gerard Hayes described the interim decision as “a downpayment”.
“But nobody should be mistaken, this will not fix the crisis,” he told The Guardian.
“We still have massive unfinished business in aged care. 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.”
The aged care director of the United Workers Union, Carolyn Smith, insists on the speedy implementation of the pay rise, since its decision recognises aged care workers “have been underpaid for performing work that has not been properly valued for decades, if ever”.
“The Fair Work Commission’s order of pay rises of 15 per cent for direct care workers in aged care – including nurses, AINs, personal care workers and home care workers – is a historic moment, and starts addressing systemic underpayments that have caused a crisis in the sector,” she said.
Smith added that any exclusion of other kinds of care workers from the interim decision, such as lifestyle workers or other aged care support workers, would leave those people “gutted”.
“Anyone with knowledge of aged care knows lifestyle, laundry and catering are essential to delivering the quality care residents need,” she said.
“It is a bitter pill for these workers that decisions on their pay rise have been put off for further consideration.”
Workplace minister, Tony Burke, said “Aged care work is hard work – but it’s undervalued work.”
“This result is the first step in changing that,” he said. “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.”
FWC granted further time for joint employers and the federal government to make submissions regarding the timing and implementation of the increase, with hearings to be scheduled for late November.