Cost of caring increases: shockwaves from fuel shortages and surging fuel prices

Care workers are typically reimbursed for vehicle expenses through award-regulated kilometre allowances, enterprise agreements or internal policies and procedures. These rates are not designed to respond dynamically to fuel price volatility. As a result, care workers are increasingly subsidising service delivery through personal fuel expenditure. 

With profit margins already compressed, especially for not-for-profit and government-funded providers, employers have limited ability to absorb reimbursements quickly. This creates a real risk that workers, particularly the highly casualised workforce, will be more likely to decline shifts involving travel, reduce the geographic spread of their services or exit mobile roles in their entirety. 

We anticipate more union scrutiny and industrial activity, particularly with respect to whether reimbursements remain ‘appropriate’ in current market conditions. Employers should be aware of the increased risk of grievances, union activity and potential constructive dismissal arguments that may arise if increasing fuel expenses render employment untenable. 

Unions are already intensifying pressure for urgent relief for essential workers as the fuel crisis worsens, with the Australian Services Union seeking higher fuel allowances for disability workers, the Health Services Union calling for immediate government support for health, aged care and disability workers, and the United Workers Union urging for fuel vouchers for in‑home aged care staff that reflect the rising cost of fuel. At the same time, the Australian Council of Trade Unions has applied to the Fair Work Commission for an immediate 10c per kilometre increase to award vehicle allowances. 

Providers have reported staff are travelling long distances to find available fuel, sometimes visiting multiple towns before they can refuel. ^[1]

NDIS workers cannot unilaterally increase fuel charges as they must abide by NDIS Pricing Arrangements and Price Limits and Service Agreements. ^[2] Employers should brace for an increase in workforce shortages as fuel price spikes deter new entrants and deepen retention challenges in an already understaffed industry. Aged care support, hospital in the home services, after-hours community nursing and home and disability outreach models remain acutely exposed to these constraints. We anticipate that the fuel price surge will result in increased overtime, casual labour reliance and uneven shift allocation. 

Employers should also carefully review and comply with hours of work and overtime provisions under applicable awards and enterprise agreements; consider potential adverse action claims arising from preferential or uneven shift allocation; and assess continually assess and mange risks to work health and safety.

Employers implementing commercial solutions to deal with these concerns including:

• reducing travel between clients through clustering shifts by geographical location;

• limiting service catchment areas;

• shortening or cancelling mobile services;

• shifting elements of mobile care delivery to online services or centre-based delivery; or

• auditing or reducing discretionary fuel allowances in internal policies,

should be mindful of the risks associated with these strategies to avoid contraventions of their applicable awards or enterprise agreements, breach employment contracts or non-compliance with policies and procedures. To minimise risks and disputes and ensure compliance with applicable consultation provisions in awards, enterprise agreements and requirements under work health and safety laws, it is recommended employers consult with care workers and unions before implementing changes. If the changes are inconsistent with employment contracts, they should be varied in writing by agreement with affected care workers.

If workers believe that their shifts, hours or the terms of their contracts have been reduced significantly (without agreement), employers may be liable to pay redundancy entitlements to affected workers. 

Many employment contracts will provide for duties to performed at a particular location in addition to ‘any other location reasonably requested by the company.’ Disputes may arise depending on how reasonable it is for certain services to be provided in adjusted formats eg reasonableness of a psychologist appointment being provided online versus occupational therapy. In addition, risks arise if workers believe that their duties have been significantly altered without consultation where modes of service delivery are suddenly modified to cope with rising service costs. 

Employers must consider work health and safety obligations and the safety risks arising from care workers working significant overtime, longer shifts or covering large geographic areas. Risk assessments should be undertaken regularly, and action should be promptly taken to control or eliminate those risks so far as is reasonably practicable. 

Given increased regulator intervention relating to psychosocial hazard in the workplace including workplace change, directors and officers who have due diligence obligations and are personally exposed to liability under work health and safety law should be briefed on a regular basis and involved in approving strategies implemented to the extent they may impact work health and safety.

Care workers will be facing the flow-on effects of the fuel price spike most acutely, especially where pricing structures are inflexible and incapable of accommodating short-term cost surges. 

These models will force frontline workers to bear the increased mobility costs personally with limited capacity for employers to recover these costs from participants, patients or funding bodies. The concentration of financial burden on care sector workers is likely to increase:

• withdrawal from mobile care services;

• reduced coverage in regional and outer-suburban areas; and

• overwork, burnout and attrition. 

We anticipate heightened provider turnover, reduced service availability and increased pressure on an already under resourced health, disability and aged care system as price volatility persists. 

The government is considering a four-phase security plan to protect critical services in light of fuel security concerns. There are renewed calls for frontline disability, health and aged care workers to be recognised as essential users for the purposes of any fuel rationing measures. 

Providers operating fuel-dependent services may wish to take proactive steps to increase their chances of seeking exemptions from rationing should the government’s contingency powers under the Liquid Fuel Emergency Act 1984 be triggered. For further information on how to best position your business for an ‘essential user exemption’, please see our recent article ‘Fuel shortages in Australia: planning for an uncertain future’. 

To retain a stable and reliable workforce, providers should:

• audit whether currently travel payments adequately compensate care workers in light of the fuel price surge;
• ensure strict compliance with any applicable awards and enterprise agreements;
• carefully document reimbursement decision making processes; and
• keep up to date with latest changes, decisions and developments that may arise, particularly given active lobbying from unions on this issue.

To minimise the risks and exposures, providers should:

• engage transparently with care workers and their unions about about operational changes;
• consult before making material alterations to duties, rosters or service models;
• document consultation processes;
• undertake risks assessments regarding potential hazards and controls to manage or eliminate those risks as far as reasonably practicable; and
• involve directors and offers in risk assessment and decision making.

Providers should be prepared for continuity risks, including potential fuel rationing measures, particularly where mobile care delivery is critical to participant safety.