Fair Work Commission overrules government on incremental aged care workers’ pay rise

The Guardian, 22 February 2023

Federal government had planned to split increase over two years, as union eyes push for further increase

The Fair Work Commission has ruled that a 15% pay rise for aged care workers needs to be introduced in one hit from July this year, rebuking the federal government’s plans to split the increase over two years.

Unions representing aged care workers have praised the move, as well as the commission’s move to extend the pay rise to a larger range of professions within the industry, but will continue pushing for even larger wage increases as they warn of widespread resignations as staff seek better-paying jobs.

In a decision published late on Tuesday afternoon, the FWC said the 15% interim increase it had previously ruled on should “take effect from 30 June 2023”. It also ruled the pay rise should apply to more people working in aged care than previously decided, with the Health Services Union and others backing an extension to include personal care workers, recreational officers and chefs.

The Fair Work Commission last November announced an interim decision to increase aged care pay by 15%, accepting the workforce “has been historically undervalued” because of gender-based reasons. Unions had sought a 25% increase, after recommendations from the aged care royal commission, which found low pay was contributing to staff shortages.

In December, the government was heavily criticised by unions and the Coalition opposition for announcing an intention to split the 15% rise over two years; 10% in 2023 and 5% more in 2024. The aged care minister, Anika Wells, blamed the decision on the government facing “significant fiscal challenges”.

As recently as this month, the health minister, Mark Butler, had backed the plan, saying it struck the right balance.

The president of the HSU, Gerard Hayes, said Tuesday’s decision was an important step and believed it would “help stave off the collapse of the workforce”, but said unions would continue campaigning to extend the pay rise further.

“To prevent aged care from collapsing, every link in the chain must be strengthened. There’s no point lifting wages for direct care workers if large chunks of the workforce miss out … we will continue to push to have the entire aged care workforce covered,” he said.

Two weeks ago, Hayes warned that aged care was “crumbling” and that workers could get paid more to work at KFC or Bunnings.

The Aged and Community Care Providers Association, which represents care facilities, has backed pay rises but said the commission’s decision didn’t align with the government’s funding intentions. The CEO of the association, Tom Symondson, called on the government to reevaluate its decisions and to fully fund the pay rise, to avoid aged care providers being responsible for the higher wages.

“With seven out of every 10 aged care providers already losing an average of $21 per resident per day, this decision of the commission changes everything,” Symondson said.

Wells was approached for comment.

The government will now consider whether it will meet the commission’s ruling and implement the pay rise all at once.

The federal secretary of the Australian Nursing and Midwifery Federation, Annie Butler, also stressed the government must meet the cost of the full wage increase.

“The order to pay the full 15% this year not only recognises the severe undervaluation of aged care workers under the current award system, but also acknowledges the rising cost of living pressures these workers continue to face, whilst receiving chronically low wages,” she said.

There is another phase of the Fair Work Commission’s decision to come, with the potential for the 15% increase to be further increased.

The United Workers Union said it would continue pushing for a higher increase.