Major Aged Care case alert – Pay rises of up to 28.5% for direct care employees

In this stage of the proceedings, the Full Bench (comprised of an expert panel) considered:

• whether historical underpayments had occurred in the aged care sector due to assumptions based on gender;
• whether any further wage adjustments were justified (on work value grounds) for the employees who received the Interim Increase;
• whether any wage adjustments were justified (on work value grounds) for ‘indirect care employees’; and
• the classification definitions and structures in the three awards as they applied to aged care sector employees.

Gender Inequality

Put simply, the expert panel considered whether employees in the aged care sector had historically been undervalued due to gender inequality. The Decision provided an overview of the statutory framework and focused on a new provision requiring the ‘consideration of work value reasons to be free of assumptions based on gender’.

The expert panel found that the work of aged care sector workers had been historically undervalued, due to assumptions based on gender. In examining the historical gender assumptions in wage fixations in awards, the expert panel noted the following assumptions were common:

• that male employees had dependents, and accordingly they required a ‘family wage’;
• that female employees did not have dependents (an assumption made on the basis they were part of the workforce and therefore did not have a husband to take care of them nor a family to support);
• that an increase for young, unmarried females would disturb the economy in a manner that would ‘disadvantage the married basic wage worker and his wife and family’;
• equal pay based on the male basic wage would put an intolerable strain on the economy; and
• the work required in sectors like the aged care sector involved ‘inherently female traits’. This meant the workforce was likely to be female and the skills came naturally to them (in other words, the workforce was largely ‘unskilled’).

Direct Care Employees

The expert panel was satisfied there were ‘work value’ reasons for the award rates to be increased beyond the Interim Increase. For some employees, this Decision will result in a pay rise of up to 28.5% (inclusive of the Interim Increase).

The expert panel also went on to set a benchmark pay rate for a key classification. From there, it formed new and uniform classification structures (on the basis of that benchmark).

Interestingly, while the Commission maintained its view that the increases were both necessary and long overdue, it also highlighted the importance of ensuring the increases were conducive to a ‘stable award system’. In other words, the Commission cautioned that, while the increases must be free of (and recognise) gender bias, they should not result in ‘leapfrogging’. Employers may wish to take the same approach in any pay rises they award employees (in addition to the ones mandated by the Decision).

Indirect Care Employees

Indirect care employees are generally those engaged in administrative services or food services. Without diminishing the importance of this work, the expert panel concluded that, as these workers do not perform work of equivalent value, there was no justification for equal rates of pay.

Despite this decision, the expert panel identified two areas in which work value changes had occurred. These areas included:

• infection prevention and control measures, and dementia; and
• Aged Care Quality Standards and other training requirements.

In light of the above, the Decision held that the rates of pay should be increased by 3% for indirect care workers.

The expert panel then went on to make the following conclusions regarding indirect care workers:

• HCWs covered by the SCHADS Award (who perform non-personal care work) will be covered by the general wage applicable to personal care HCWs;
• laundry hands, cleaners and food services assistants interact regularly with residents. As this work constitutes a work value reason for an additional adjustment to their rates of pay, these employees will be moved from ‘level 2’ to ‘level 3’ in the Aged Care classification structure for indirect care employees. This would result in a total pay increase for these workers of 6.69% (inclusive of the 3% increase awarded above); and
• there would be no further increase for head chefs/cooks. In other words, there was no justification to provide an increase beyond the Interim Increase for these employees.

Classification Structure

In determining the new classification structure(s) for direct care employees, the expert panel held (amongst other things):

• there is a fundamental difference between the work value of direct care employees and other employees engaged in residential aged care. Accordingly, it would be inappropriate to mandate a single integrated classification structure in the Aged Care Award;
• the purpose of the classification descriptors in awards is to identify which categories of workers are entitled to the minimum rates, not to serve as comprehensive ‘position descriptions’; and
• the classification structure(s) should include a supervisory level.