Pay increase of 15pc for 300,000 aged-care staff

  • Published November 7, 2022

The Australian, 4 November 2022

More than 300,000 aged-care workers will get a pay rise of at least 15 per cent after the Fair Work Commission found their work had been historically ­undervalued and significant changes to the way they worked over the past 20 years justified the lift in wages.

The Albanese government immediately reaffirmed its commitment to fund the pay rise after the commission found an interim 15 per cent pay rise for aged-care nurses and workers in direct care roles was “‘plainly justified by work value reasons”.

The timing and phasing in of the pay rises is to be determined, and the commission did not rule out a further rise for direct care staff. It is also yet to rule on a union claim for a 25 per cent wage increase for administrative and support aged-care employees such as cleaning staff.

Aged care is one of the government’s biggest and fastest-growing spending programs, budgeted to cost $27bn this ­financial year and rising to ­nearly $35bn by 2025-26, even without incorporating the commis­sion wage decision.

A commission full bench, headed by president Iain Ross, said it was not suggesting the 15 per cent interim increase necessarily exhausted the level of pay rise for direct care workers, and whether any further increase was justified would be the subject of further submissions.

Aged-care workers covered by the interim award increase include those working in direct care roles in nursing homes and those providing in-home care.

About 210,000 workers are in direct care roles in residential aged-care centres, according to the most recent aged-care workforce census published last year, with another 124,000 providing in-home care services under government programs.

The full bench said it accepted the expert 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”.

“It is common ground ­between the parties that the work undertaken by registered nurses, enrolled nurses and Certificate III personal care workers in residential aged care has changed significantly in the past two decades such as to justify an increase in minimum wages for these classifications,” the full bench said.

“We also recognise that there is ample evidence that the needs of those being cared for in their homes have significantly increased in terms of clinical complexity, frailty and cognitive and mental health. In respect of direct care workers … the existing minimum rates do not properly compensate employees for the value of the work performed.”

While the evidence relating to support and administrative employees was not as clear and more submissions were needed, “we see no reason to delay an increase in minimum wages for direct care workers while that … takes place.”

The government confirmed it would fund the interim increase in line with its election commitment, saying better pay for aged-care workers was a critical step to attract and retain the numbers of staff required for the growing cohort of older Australians.

“Aged care is hard work, but it’s undervalued work,” Employment and Workplace Relations Minister Tony Burke said.

“This result is the first step in changing that.”

The Health Services Union welcomed the 15 per cent interim pay rise but said a “larger and broader increase is needed to stem the industry’s crisis”.

“This is a reasonable start but we need the commission to go further and permanently end the poverty wage settings that dominate aged care,” HSU national president Gerard Hayes said.

“Fifteen per cent is a down payment but nobody should be mistaken. This will not fix the crisis. We still have massive unfinished business in aged care.”

Aged-care providers welcomed the decision as a “substantial pay rise” but said key aged-care staff were not covered.

“We note the decision does not cover staff not involved in ­direct care such as kitchen, laundry, recreation activities and administrative staff, and we look forward to a further decision by the commission which addresses their pay,” Aged & Community Care Providers Association chief executive Tom Symondson said.

Analysis by the Grattan Institute said aged-care wages would rise by around $3bn a year if the 25 per cent increase was implemented this year for all workers under the claim.

The commission said it was “not persuaded that varying the relevant awards to give effect to the interim increase … will have any material effect on the national economy”.