Stakeholders slam plan to delay pay rises

The government’s proposal to defer fully funding pay rise adds to the workforce crisis, say providers and unions.

The government’s proposed timeline for funding the latest pay rises is “disappointing” and will “slow the urgent tasking of attracting and retaining staff” and “only add to the workforce crisis in the sector”, stakeholders tell Australian Ageing Agenda.

In a submission to the Fair Work Commission on Friday, the Albanese government has committed to funding the latest outcomes of the Fair Wok Commission case announced last month – which include:

  • 3 to 7 per cent for non-direct care workers in residential aged care
  • 18 to 28.5 per cent for personal care workers and assistants in nursing in residential aged care inclusive of the 15 per cent raise they received in July last year
  • 13 – 26 per cent for home care workers inclusive of the 15 per cent already received.

But not immediately nor, like its plans for the Stage Two increase, in one go for all staff. The government’s commitment includes funding the increase in full for non-direct care staff from January 2025, and in two stages for their direct care counterparts with half from January 2025 and the remaining half 12 months later. Oncosts are included in all cases.

The government considers that this timing is appropriate to ensure adequate time for accurate calculations and legislation and system updates and “would result in those increases having a non-material impact on business and employer costs,” according to the submission.

Stakeholders – including Whiddon chief executive officer Chris Mamarelis – have praised the government’s commitment to fund the increases, but not the rest. Mr Mamarelis does not welcome the delayed start date – particularly for non-direct care staff yet to receive any increase and already feeling “left behind” – nor the subsequent impact on employers.

Chris Mamarelis

“The timeline is disappointing to say the least,” Mr Mamarelis told AAA. “Following the interim increase awarded to direct care employees in July last year, our indirect care staff were asked to wait an additional nine months to learn the quantum of their increase.

“We were all disappointed with the outcome of this announcement – which peaked at 6.8 per cent – and now we are asking these same team members to wait until January 2025 for this to flow through to their pay packets.

“What sort of message are we sending to our people in these critical roles? Obviously, it is now up to employers to do what they can to recognise our indirect care staff and the immense value they bring. The irony of this outcome, is that the system and structure put in place to protect these team members, has left them behind again,” said Mr Mamarelis.

The reasons behind the government’s decision to phase in the increase for direct care staff, according to its submission, include concerns a large one-off wage increase could draw workers from other sectors also facing worker shortages.

This has been rejected by stakeholders – including Aged and Community Care Providers Association CEO Tom Symondson – who say the delay will exacerbate the aged care sector’s challenges for recruiting and retaining staff.

Tom Symondson

“Increased wages will be invaluable for attracting much-needed workers into aged care [and] any delays will only add to the workforce crisis in the sector,” said Mr Symondson in a response to questions from AAA.

Last time, the FWC rejected the government’s timeline to phase in the 15 per cent increase in its decision. And the government subsequently funded the pay rise in full.

Mr Symondon is among stakeholders calling for the government to act similarly this time if the same situation occurs. .

“We expect the government to honour its pre-election commitment to fully fund the wage increases, as it did in Stage two of the FWC case. ”That promise acknowledges the sector can only afford the increases with matching government funding, said Mr Symondson. “We see it as absolutely critical that the government funding commence from the operative date for these increases in wages.”

Gerard Hayes

Gerard Hayes, national president of the Health Services Union – which lodged the landmark work value case with the FWC in 2020 – called for a faster implementation to ensure competitiveness with other sectors.

“A phase in will maintain pressure on the sector and slow the urgent tasking of attracting and retaining staff,” Mr Hayes told AAA.

“We’re not talking about getting a few more people into the sector – we’re talking about preventing the sector from haemorrhaging. With the full increase aged care will become competitive with public health. That’s completely necessary.”

Peter Hoppo

With the FWC’s decision highlighting the historical undervaluation of aged care staff, the timing is “perplexing”, said Aged Care Industry Association CEO Peter Hoppo.

“The commission’s decision underscores the need for immediate action to correct the long-standing undervaluation of aged care workers and to support the sustainability of quality care,” he said.

“We call on the government to ensure that no aged care provider is left financially burdened should the Fair Work Commission set an earlier effective date for the wage increases.”

Comment on the story below. Follow Australian Ageing Agenda on LinkedInX (Twitter) and Facebook, sign up to our twice-weekly newsletter and subscribe to our premium content or AAA magazine for the complete aged care picture.  

Tags: chris mamarelis, FWC, Gerard Hayes, peter hoppo, Tom Symondson, work value case,

Leave a Reply

Your email address will not be published. Required fields are marked *