Main Content

Aged care wages – a brief history

Aged care wages – a brief history

Change the rules rally, 23 October 2018. Photo by Chris Hopkins

The recent Fair Work Commission work value case decision has highlighted the fact that there are significant variations in actual wages paid to employees doing the same work in different environments, with the consequence that the Fair Work decision delivers different percentage increases to different workplaces.

This is because the work value case was about increasing minimum award rates, but very few members are actually paid the minimum award rates.

Why aren’t we all paid the same no matter where we work?

Believe it or not, everyone was paid the same, in aged care as in hospitals, in public sector and private sector. This was in 1993, when Awards of the then Industrial Relations Commission set wages and conditions for everyone.

So what changed?

In the early 1990s, Enterprise Bargaining was introduced as the primary mechanism for determining wages and conditions across most of Australia. Awards took a back seat and were stripped back during the era of the Howard Coalition Government and have never recovered. They now form legal minimums, rather than actual wages and conditions, for most of our membership.

Enterprise bargaining required employees (typically via their union) and employers to reach agreement, at each individual ‘enterprise’ or employer. To support this change, industrial action became legal when bargaining, and in many industries was and remains a common feature of the bargaining process.

Industrial action is of course easier or more palatable to take in some industries than others, and aged care is one of those industries where the taking of industrial action is difficult.

Nevertheless, we have successfully bargained with almost all aged care employers in Victoria, in some cases including taking protected industrial action, and we have achieved enterprise bargaining agreements – or EBAs as they are commonly known – in almost all Victorian residential aged care facilities.

However, the outcome of that bargaining is not always the same. In fact the concept of bargaining for identical terms and conditions across employers is known as ‘pattern bargaining’ and largely outlawed in industrial relations laws. Similarly, laws prohibit the taking of industrial actions to secure EBAs that apply to more than one employer.

An award does not apply to an employee who is covered by an EBA. But the Fair Work Act does require that the minimum hourly rate in the award apply if the EBA rate is lower, which may happen for some members in aged care as a consequence of our work value case.

This means that, since 1993, the disparity in wages for aged care vs hospital care, and private sector vs public sector, have grown significantly despite the value of that work being largely comparable.