FWA decision: A win for employers?

What does the recent FWA decision mean for employers? For a start, it signifies a partial win given that the full bench took their side on one of the case’s most contentious points.

By Yasmin Noone

Aged care employers can now don a slight grin, having made significant leeway in the Fair Work Australia (FWA) low paid authorisation case, which sought to increase the wage of residential workers.

Late last week, the FWA full bench passed down the long-awaited decision that employers were legally obliged to enter into wage negotiations with United Voice and Australian Workers Union (Queensland), on behalf of the applicant’s members.  

The full bench however ruled in favour of the respondents (the employers) on one of the most contentious points of the case, excluding residential aged care workers covered by an enterprise bargain from the application and future negotiations.

When the application was initially lodged last year, AAA reported that employers were of the belief that, should the application go through, negotiations should only concern employees on an award wage.

The FWA ruling therefore marks a partial win for employers.

The decision stated: “We have concluded that where [enterprise] agreements do exist, they result in margins somewhere between five and 10 per cent over the award rate but that in many cases there are negotiated alterations in other award conditions which have an offsetting effect on the agreement rates.”

This ruling was made despite the full bench conclusion that “employees in the sector, on the whole, have a “relatively low bargaining power”.

“Employees may have low tolerance for negotiation and industrial action for a range of reasons such as: a high commitment to those in their care, they may work part-time, they may be conflict averse or they may not be disposed to challenge the commonly held view that the funding arrangements do not leave their employers any room for discretionary increases above the award rates,” the decision stated.

“Most of the indications are that, as a general rule, employers in the sector are in a stronger position than employees when it comes to negotiations on pay and conditions.”

Not long after the FWA decision was handed down, Aged and Community Services Australia (ACSA) – which represents not-for-profit aged care employers responding to the low paid authorisation application – announced that it fully supported the ruling.

ACSA’s acting CEO, Pat Sparrow, said that the organisation recognises the union’s need to enter into negotiations on behalf of its low-paid aged care members.

But, she said, although the case for improved wages is strong, one question remains– where will more money come from? It is for this reason that increased government funding for aged care is essential.

“ACSA values aged care workers and we have maintained that providers would be in a position to pay higher wages if the funding was available,” Ms Sparrow said.

“Future wage outcomes will mean that government must meet the costs with additional funding to ensure ongoing quality services for older Australians.”

Where to from here?

While increased federal funding sounds like an elusive wish, this low pay authorisation “test case” grants the unions and FWA a never before seen power – the ability to call the federal government to the negotiation table as a third party and major funder of the sector.

Assuming that the unions do not drop the application and proceed with negotiations to increase the award wage of residential aged care workers, and assuming that FWA supports employer groups which state they can not afford pay increases, the federal government could therefore be legally required to hand over more money.

Following the decision last week, the two unions are now required to prepare an amended draft list of employers who, they believe, will fall under the new application (those which pay award wages) and circulate it to the other parties who have appeared.

The list will then be filed together with a draft authorisation within 30 days. Should it be necessary to do FWA will then seek submissions on the draft prior to making the authorisation.

United Voice is also required to provide a confidential written report to the full bench’s Vice President Watson outlining progress in bargaining by 30 September 2011 with a copy provided to each employer covered by the authorisation and each bargaining representative.

Tags: acaa, acsa, aged-and-community-services-australia, aged-care, australian-workers-union-of-queensland, fair-work-australia, fwa, low-paid-authorisation, united-voice,

1 thought on “FWA decision: A win for employers?

  1. This ruling simply acts as a delay to those providers not covered under CA’s – it does not exclude encompassing them in the future. Effectively the FWA has said that anyone on an award is by definition low-paid. The decision has also completely left the Government “off the hook” in spite of recognising at [33] “The Australian Government plays a dominant role in the provision of funds” it concludes “that fact favours the grant of the application”. The FWA then goes on to effectively say that whether the Government increases funding is irrelevant to their decision. Prime Minister Gillard in her previous role was responsible for the legislation establishing the FWA and the legislation – she says that aged care is a priority issue in the second term of the Labor Government [viz that would be now] and yet she remains ominously silent on appropriate or sustainable funding. Now would be a good time for the PM to show her leadership to act.

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