By Yasmin Noone
Aged care workers on an enterprise bargaining agreement could see their wage sky rocket by up to 30 per cent over the next four years, following a federal government move to subsidise conditional pay increases by three and a half per cent, provided employers foot the rest of the bill.
The stalled Workforce Compact agreement between the government, trade unions and employers, which was due for public release well before the end of 2012, was finally announced by the Minister for Mental Health and Ageing, Mark Butler, at a press conference this morning.
Minister Butler detailed that the $1.2 billion of funding earmarked for the compact in Living Longer. Living Better (LLLB) package will start to flow from this July, in the form of a ‘Workforce Supplement’ that will go directly towards aged care worker pay rises.
The money will subsidise wage increases of three and a half per cent over the next four years. One per cent will be provided per year for the next three years before it is reduced to half a per cent in 2016.
“I think [the funding] will make a big difference to aged care workers,” Mr Butler told AAA.
Minister Butler stressed the fact that the $1.2 billion is a “bridging supplement” which is not meant to solve all of the sector’s wages woes. But he said, and aged care trade unions agree, it is a start. Provider peak bodies and individual employers however are not convinced (more to come on AAA online).
AAA previously reported that, according to some industry figures, the Workforce Compact was ‘dead in the water’. This is still the view of our sources, as the compact announced today does not resemble the ideal outcome that all the parties intended to agree upon at the start of negotiations last year.
“…I’ve been frank today: this is not the end of the story as there is much to do in the future years around workforce issues and wages,” Minister Butler said.
“So I think this is an important start but there’s so much to do to ensure [the sector] is able to attract and keep a substantial number of new aged care workers in future years.”
“This is a really important milestone in the LLLB package. We heard a clear message from the community, providers and unions that we had to start to lift the wages of staff in the sector.
“We are very glad that we are able to make a start on that.”
At the moment, the award wage for a personal care worker - the lowest paid worker under the aged care banner- is around $18.20.
The fine print
To be eligible for the funding, providers must first adhere to the terms and conditions of the compact and negotiate enterprise agreements for workers.
The Workforce Supplement must be paid, in full, to workers as a wage increase. And, in addition to the government-subsidised wage increase (of 3.5 per cent over four years), employers must also foot an additional minimum pay increase.
The government press release does not detail all of the other compact conditions and, at the time of writing, there was no corresponding ‘Workforce Compact’ document (apart from the press release), available in the public domain which specified all of the compact’s requirements.
However, AAA understands that eligibility conditions will require an employer to phase in (over the four years) a three per cent wage increase above the award rate of pay for personal care workers; 8.5 per cent for enrolled nurses; and 12.6 per cent increases for registered nurse. Plus, participating employers will be required to deliver all workers on enterprise bargaining agreements a minimum pay increase of 2.75 per cent per year over four years. The wage subsidy of 3.5 per cent from the government will be on top of the rates mentioned above.
“This means a personal care worker currently paid the award rate and who is employed by an aged care provider that meets the requirements would effectively see a pay rise of up to 18.7 per cent over four years,” Minister Butler said.
“Enrolled nurses would receive 25 per cent higher pay and registered nurses 29.9 per cent higher pay in the same situation.”
Minister Butler made the following statement about required Workforce Compact employer contributions to wage increases on ABC Radio today:
“Well, if their workers are still on the minimum award rate, which for a carer is about $18.50 an hour, then we're also expecting them to lift that award rate by three per cent over a couple of years and to also make sure that there's a minimum yearly increase in addition for the money that we're paying,” he said.
“So this means that in the first couple of years a personal carer on a minimum award rate will be getting a yearly increase of about 5.25 per cent, which is a significant increase, to make sure they're up to a rate which we think the market would reflect.”
Mr Butler said the initiative was aimed at addressing workforce pressures with the aged care workforce needing to almost triple in size by 2050 to support Australia’s ageing population.
“A better paid, better skilled and better trained workforce will underpin a more responsive system that provides older Australians with quality care, when and where they need it.
“..We know that most Australians who pursue a career in aged care do it for much more than the financial reward, but pay rises of that level are a big incentive to work in this growing industry.”
The second part of the Addressing Workforce Pressures Initiative is the Aged Care Workforce Development Plan, which will begin in mid-2013.
An expert advisory group will be established to focus on better ways to support the aged care workforce.
This group will seek to ensure that – on top of wage increases – aged care workers get the other benefits, including improved career structures, better training and education and better work practices including lowering the high rate of workplace injuries in aged care.
Please note: The minister's office called AAA on the morning of Wednesday 6 March, after this article was published on the afternoon of Tuesday 5 March, to explain how the government calculated the total wage increases. The above article was therefore ammended and updated on the morning of Wednesday 6 March with the new information available. AAA publishes this comment for transparency and accuracy.