On 4 November 2022, the Full Bench of the Fair Work Commission (Commission) published its decision that it was satisfied that a 15% interim increase in minimum wages for direct aged care workers covered by the Aged Care Award 2010, Nurses Award 2020 and Social, Community, Home Care and Disability Services Industry Award 2010 (Awards) is ‘plainly justified by work value reasons.’
This decision dealt with three applications made under section 158 of the Fair Work Act 2009 (Cth) (Fair Work Act) to vary the Awards to increase the minimum wages of aged care sector workers by 25%.
Under the Fair Work Act the Commission may make a variation to achieve modern award objectives if it is satisfied that the variation is justified by work value reasons. Work value reasons are reasons justifying the amount that employees should be paid for doing a certain kind of work.
To determine whether an increase is justified, the Commission considered in detail the nature of the work in the aged care sector, the skills and responsibility involved and the conditions under which the work is done. Based on expert evidence, the Commission preliminarily accepted a number of propositions about the influence of gender biased assumptions on the valuation of work in the aged care sector. The Commission also concluded that the work undertaken by RNs, ENs and Certificate III PCWs in residential aged care had changed significantly in the past two decades, which justified an increase in minimum wages for these classifications. You can read the full decision here.
This case is a response to the findings of the Royal Commission into Aged Care Quality and Safety tabled in the Final Report of 1 March 2021. Specifically, the decision responds to Recommendation 84 of the Report, concluding that aged care employee unions should collaborate with the Australian Government and employers and apply to vary wage rates in those Awards to:
- reflect the work value of aged care employees; and/or
- seek to ensure equal remuneration for men and women workers for work of equal or comparable value.
This decision is one of three stages to determine the complex issues raised in the applications. The timing of the increase for direct aged care workers (including nurse practitioners, RNs, ENs, AIN/PCW/HCWs) will be the subject of a subsequent decision in Stage 2. Finally, Stage 3 is set to include a more detailed consideration of the classification definitions and structures in the Awards, as well as potential wage increases for the workers not covered by the recent decision (including support staff members).
The Commission made it clear that the 15% interim increase is not necessarily exhaustive of the extent of the wage increase justified by work values reasons in respect of the direct aged care employees. Whether a further increase may be justified will be considered in the following stages.
Once the wage increase is implemented, providers, even those covered by an enterprise agreement, will need to ensure that they pay their direct aged care workers at least the minimum base wage that they are entitled to under the relevant award. The extent of funding support is unknown at present however the Commission notes in the decision that the likely increase will be ‘ameliorated to the extent of Government funding.’
A Mention will be listed for Tuesday 22 November 2022 to issue directions in respect of Stage 2 of these proceedings and we will continue to publish alerts in relation to these decisions.
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