The Full Bench of the Fair Work Commission has published its latest decision on the minimum rates of pay for aged care workers, signalling the increase of the minimum rates of indirect care workers and the further increase of the minimum rates of direct care workers.
This decision, published on 15 March 2024, is the third in a series of decisions known as the Aged Care Work Value Case, which began when the Full Bench received three applications to vary the Aged Care Award 2010, Nurses Award 2020 and Social, Community, Home Care and Disability Services Industry Award 2010 to increase the minimum wages of aged care workers.
In the Stage 1 decision, the Full Bench decided that an interim increase of 15% to the minimum wages in the Awards for direct care workers in aged care was ‘plainly justified by work value reasons’ acknowledging that the workforce ‘has been historically undervalued’ for gender-based reasons. Our previous alert covers this decision in more detail.
In the Stage 2 decision, the Full Bench confirmed the 15% increase would apply to direct care workers from 30 June 2023 and that the increase should also apply to aged care workers other than direct care workers, including cooks and chefs or those in recreational lifestyle roles.
The Stage 3 decision required the Full Bench to consider further wage adjustments on work value grounds not considered in the Stage 1 decision, and to review the classification definitions and structures in the Awards. The Full Bench concluded that the minimum wage rates in the Awards have historically been undervalued and became fixed due to embedded gender-based assumptions. This conclusion was reached by examining the historical development of the Awards, finding that the modern award system inherited historic gender undervaluation of female-dominated occupations.
Direct Care Employees
In this Stage 3 decision, the Full Bench has set new “benchmark rates” for Personal Care Workers (PCWs), Assistants in Nursing (AINs) and Home Care Workers (HCWs) ranging from 13.3% to 28.5% (inclusive of the Stage 1 interim 15% increase).
The Full Bench has further decided that new and uniform classification structures in the Awards are required for PCWs, HCWs and AINs to ensure equal remuneration for work of equal or comparable value, taking into account the levels of skill and responsibility exercised by these employees. Relevantly, the Full Bench decided that AINs and PCWs are functionally indistinguishable and that there is no justification for them to be covered by two different awards. As a result, AINs will be removed from the Nurses Award 2020 so that the Aged Care Award 2010 will solely cover the work of PCWs and AINs.
These new classifications and other relevant changes for the Awards are yet to be confirmed, having been set out in draft form in the draft determinations also published by the Full Bench on 15 March 2024.
Indirect Care Employees
The Full Bench has determined that indirect care workers will receive nominal increases on work value grounds, despite calls from unions and employee groups for parity with the wage increases for direct care workers.
Broadly, indirect care employees are those engaged in the “general and administration services” or “food services” streams of the Aged Care Award 2010 who work in residential aged care facilities. Some senior workers in the food services stream received an increase of 15% on their minimum rates of pay in the Stage 2 decision.
Without diminishing the value of indirect care for the proper function of residential aged care facilities, the Full Bench reasoned that their work is not equivalent to the work performed by direct care employees, who use specialised skills in providing care, and therefore they are not entitled to equal rates of pay.
However, in recognition of the additional obligations on indirect care workers in relation to infection prevention and control measures and other training requirements, the Full Bench concluded that an increase of 3% on the minimum rates of pay was warranted on work value grounds.
The Full Bench has also re-classified certain indirect care workers who interact with care recipients more regularly, including laundry hands, cleaners and food services assistants, in recognition of the use of skills analogous to direct care workers where such interaction is required. This re-classification equates to a further increase in the minimum rates of pay for those workers.
There are no further increases for Head Chefs and Cooks.
Next steps for the Aged Care Work Value Case
Though the Full Bench has reached a number of conclusions in its decision, these conclusions will not take effect until the draft determinations varying the Awards are confirmed and implemented. The Full Bench is accepting written submissions commenting upon the draft determinations and will consider those submissions in its final decision. Submissions are due by Friday 26 April 2024. The Government will also file submissions concerning the operative date and phasing in of the amendments to the Awards.
The Full Bench will then determine whether a further hearing is required to finalise the variation determinations, including in relation to the operative date and phasing in.
The Full Bench also expressed a preliminary view about changing the classification structure for registered and enrolled nurses in the Stage 3 Decision, but will ultimately deal with this separately following an application filed by the Australian Nurses and Midwifery Federation (which is expected to be determined later this year).
Impact for Employers and Employees covered by Enterprise Agreements
The Work Value Case does not just impact employers and employees covered by the relevant awards. Employers in the industry who have enterprise agreements in place will, once the variation determinations are finalised, need to consider if the rates in their agreements are high enough to meet the minimum award rates. While the awards do not generally apply in these workplaces, the rate in an enterprise agreement cannot be lower than the underlying award.
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Disclaimer
The information contained in this Alert is intended as general commentary only and should not be regarded as legal advice. Should you require specific advice on the topics discussed, please contact the firm directly.