Aged care workers will receive an average pay rise of 23% after the Fair Work Commission delivered its decision in a long-running work value case.
The commission’s expert panel said those involved in direct care including nurses and home care workers deserved pay rises “substantially” higher than the interim 15% pay rise ordered in November 2022.
It adopted a new benchmark pay rate of $1,223.90 a week – or $63,642.80 a year – for certificate III qualified employees.
“The total wage increase which will be produced by the adoption of this benchmark rate, inclusive of the interim increase, will be 23%,” it said.
Personal care workers will receive an increase of between 18.2% and 28.5%, inclusive of the 15% already ordered, depending on their skill and qualification level.
The decision will trigger billions of greater investment in aged care, on top of the $11.3bn allocated over four years in the 2023 budget for the 15% interim pay increase.
The Health Services Union secretary, Gerard Hayes, said the pay decision was “one of the best outcomes this union has ever achieved”.
Hayes said the pay rise would make “aged care competitive with the public health system”.
“Dignity matters when it comes to aged care. Older people will not be treated as commodities. They will be cared for in their older years.”
The Fair Work Commission expert panel found that the work of aged care sector employees has historically been undervalued because of assumptions based on gender.
Minimum pay rates for nurses failed to properly recognise the addition to work value effected by the transformation of nursing into a profession, it found.
The new benchmark rate was “appropriately justified by work value reasons” and would ensure aged care employees “have an entitlement to a minimum award wage rate which properly reflects the value of their work, including their exercise of ‘invisible’ skills, and which has been assessed on a gender-neutral basis”.
The panel predicted similar applications in other industries, noting there is “likely to be further consideration of the question of whether female-dominated ‘caring’ work covered by other modern awards has been the subject of gender undervaluation”.
As a result of Friday’s decision, assistants in nursing will get between 17.9% and 24.5%. Home care workers will get between 15% and 26.1%.
The expert panel found that indirect care employees, such as administrative workers and those providing food services, “do not perform work of equivalent value to direct care employees” justifying equal rates of pay.
Indirect care workers were awarded a 3% pay increase reflecting some higher duties such as infection prevention and control. Laundry hands, cleaners and food services assistants who interact with residents significantly more regularly were awarded 6.96%.
Hayes said the result was in some respects a “mixed bag” and there was “more to do” for support services.
In the next phase of the case, the Albanese government can make submissions about the “operative date and phasing in” of the new pay rises.
Hayes acknowledged the prime minister, Anthony Albanese, for having undertaken to fund the outcome of the case, saying it would have been “very hard” to achieve the result without that commitment.
Ministers Tony Burke, Mark Butler and Anika Wells said “aged care work is highly skilled and provides incredible rewards for workers who make life-changing contributions to older Australians”.
“We have committed to provide funding to support increases to award wages made by the Fair Work Commission in this matter,” they said in a statement.
“Our government wants people to earn more and keep more of what they earn – that’s why we’re fighting for a better future for aged care workers.”
Aged care workers and their unions launched the work value case in November 2020, seeking a 25% pay rise on the basis pay in sector was not an adequate “safety net” and that care work has been historically undervalued for gender-based reasons.
On Tuesday the government released the aged care taskforce report, recommending that older Australians with more wealth should have to pay more for the cost of their care.