Health & Community Law Alert: is the status quo out of step with community expectations? Fair Work Commission to hear case seeking pay rise for aged care employees

Aged care providers and their employees have been under unprecedented pressure and scrutiny during the COVID-19 pandemic. Attention has been drawn to the fact that many employees in the sector have had to work across multiple residential aged care facilities and home care services to support themselves financially, which can increase the risk of COVID-19 infections spreading to those most vulnerable. Last week, the Health Services Union launched a case seeking to raise the minimum wages of all aged care employees covered by the Aged Care Award 2010 by 25%.

Position of the Health Services Union

Mr Hayes also told Workplace Express that unless a significant boost in pay is provided, the sector faces a workforce crisis as 40% of employees are planning to exit within five years.

What will the Union need to prove to succeed?

The Union filed an application with the Fair Work Commission (Commission) to vary the Aged Care Award 2010 under section 158 of the Fair Work Act 2009 (Cth) (Act), Workplace Express reported.

For an application seeking to vary an Award’s minimum wages to succeed, the Commission must be satisfied by the criteria set out in section 157(2) of the Act:

(a) the variation must be justified by ‘work value reasons’; and

(b) it must be necessary to make this determination outside of the system of annual wage reviews in order to achieve the Award’s objective.

These ‘work value reasons’ are defined in 157(2A) as the reasons justifying the amount employees should be paid and are related to:

(a) the nature of the work;

(b) the level of skill or responsibility involved in doing the work; and

(c) the conditions under which the work is done.

The Commission must also consider the objective of minimum wages as detailed in section 284 of the Act. That objective is to establish and maintain a safety net taking into account factors such as promoting social inclusion through increased workforce participation as well as the relative living standards and the needs of the low paid.

Government response

The Federal Government has resisted calls to support the pay rise, particularly until after the final report of the Royal Commission into Aged Care Quality and Safety is released.

However, the interim report noted that the aged care sector ‘suffers from severe difficulties in recruiting and retaining staff’ and that ‘pay conditions are poor, signalling that working in aged care is not a valued occupation’.

Counsel assisting the Royal Commission recommended that employee organisations representing aged care workers should work with the Federal Government and employers to vary wage rates under the Award to reflect work value as well as to ensure equal remuneration for equal work for female and male workers.

Key takeaways for employers

This application affects all employees under the aged care awards, including:

• personal care workers;
• recreational activities officers;
• catering staff;
• cleaning staff; and
• administration and other support staff.

If this application is successful, this could significantly raise employee costs for aged-care employers, further straining the sector. However, it may also operate to improve retention and offer more financial security for the predominately female workforce of more than 200,000 aged care employees.

In July, the Commission varied the Award to provide two weeks’ paid pandemic leave to employees who are required to self-isolate because of COVID-19 symptoms or close contacts. The Commission, in making this decision, noted that if required to self-isolate:

As the Commission is alert to the link between controlling the pandemic and the financial circumstances of aged care employees, this application will be one to watch. Hall & Wilcox will monitor developments and provide updates as this case develops.