SUMMARY Fair Work Australia has handed down a decision to increase wages for community workers.

Many community sector workers in Australia should soon see an increase in their pay following the outcome of the Equal Remuneration Case.  In early February 2012, Fair Work Australia, in what has been hailed a “landmark decision”, found in favour of the social, community and disability services (SACS) industry in their application for equal remuneration pay rises.

In a May 2011 decision, Fair Work Australia concluded that there was not equal remuneration for workers in the SACS industry compared to workers in government employment for work of equal or comparable value.  The Court then invited submissions from stakeholders to address the situation.

The applicant and the Commonwealth lodged a joint submission to the Court which proposed a series of increases by percentages to the modern industry award rate over a span of six years.  The increases were justified in the joint submission based on calculations which revealed, on average, the public sector award rates were higher than the modern award rate.

Submissions were also made by each state government in relation to the application and joint submission.  While some states were critical of the methodologies used in the joint submission, no state government expressed any opposition to the proposed increase in wages for the SACS industry.  A number of employer groups also made submissions with many raising concerns about the need for increase government funding for community workers in the event that there are wage increases.

The Court took the submissions of the stakeholders on board and by majority, came to the following conclusions:

  • While the gap between pay in the sector is not entirely attributable to gender (it is acknowledged that the majority of community sector workers are women), there is no doubt that gender has an important influence.  The percentage additions to the modern award wages would provide an ongoing remedy for the part gender has played in inhibiting wages growth in the SACS industry.  The percentage increase to the modern award rate for the sector will range from 19% to 41%.
  • While there were concerns about funding issues, it is clear that there is widespread support for the proposed increase to wages for the sector.
  • The Court notes the effect of the proposed wage increases on the finances of a number of states and so has decided to extend the length of the implementation period.  The percentage increases will be introduced over eight (rather than the proposed six), years commencing on 1 December 2012.
  •  A cumulative annual loading of 4% will also be introduced in nine equal instalments commencing on 1 December 2012.

Reactions to the decision have been noticeably positive.  As noted by Pro Bono News the Federal government has already committed at least $2 billion over six years to fund the increase in wages for the sector and it will be essential for state governments to commit to increase funding.