budget constraints won’t limit pay rises, says Fair Work Chief Justice Iain Ross

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Justice Ross told the parties that he was not “particularly convinced that affordability would factor into determining the level of any particular increase”.

“It seems to me that fundamentally an assessment of the value of work…is a statutory assessment,” he said.

“To come to a different view, it would seem to me that it would be delegating our function to the government of the day depending on the funding they wanted to provide.”

He said the commission would form an opinion on the appropriate rates based on the evidence. He would then direct parties to funding issues to decide how rates should be phased in, rather than whether funding should limit wage increases to a certain level.

Employers’ groups lawyer Nigel Ward said employers “agreed” with the commission that ability to pay was not relevant to setting rates under the law.

“Even if a raise is unfunded, that’s hardly a reason not to give appropriate rates.”

The hearing comes as older workers represented by the United Workers Union are set to take notice of an unprecedented strike later this week in support of a wage hike and ahead of the election.

Uniform wage increase “unsustainable”

Unions and employers agree that older workers, who earn as little as $22 an hour, have historically been undervalued and need a significant wage increase in light of industry changes, including including a dramatic increase in the number of residents with complex health conditions.

However, the two sides disagree on the size of the increase and which workers it should apply to.

HSU is asking for a 25% wage increase over four years not only for personal caregivers, but also for restaurant, cleaning and administrative staff.

But Mr. Ward, representing Aged & Community Services Australia and Leading Age Services Australia, said a “uniform 25% increase is, respectfully, unsustainable”.

He played down the consensus on a pay rise for the unions’ case, saying “many employers in the sector would be happy to pay any raise at any level as long as it was fully funded in perpetuity.”

“It’s irrelevant for setting minimum wage rates,” he said.

Mr Ward also warned the commission not to be ‘distracted’ by arguments about labor shortages and attracting and retaining staff, which he said was a problem in the industry but was irrelevant for a case of labor value.

However, Justice Ross said that while ordinary employers were responding to labor market demands by paying above the agreed minimum, the fact that aged care was a funded sector made that proposition “more difficult”.

“Providing an overpayment may not be an option for them,” he said.

“The only option for them might be to increase attraction and retention through minimum wage.”

‘The Opportunity of a Lifetime’

HSU lawyer Mark Gibian, SC, said the FWC was faced with a “historic” decision and should heed the report of the Royal Commission on Aged Care last year, which found that most of the workforce were not receiving pay reflecting their skills, and said the royal commission was a “once in a lifetime opportunity to see how this country can look to a better system for older workers”.

The union said residents with complex needs had quadrupled in the area, from 13% in 2009 to 52% in 2019.

The skills and responsibilities of workers have increased in response to care needs and staff changes, including less supervision and fewer trained nurses.

However, they had been undervalued in part because the sector was “massively female-dominated and the nature of the work has historically and unfortunately been characterized as women’s work”, Mr Gibian said.

The Australian Federation of Nurses and Midwives, calling for pay rises for registered nurses, said the royal commission had recommended the Morrison government work with unions and employers to vary pay rates to reflect the value of employee work.

“Unfortunately, the Commonwealth Government has not been involved in this collaborative process,” the union’s lawyer told the hearing.

The hearing will continue until mid-May, with the parties due to make further submissions in June.

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