The Full Bench of the Fair Work Commission (Full Bench) has ordered a 15% interim pay increase in minimum wages for aged care workers will be introduced in full from 30 June 2023 and has expanded the category of workers it will apply to. The decision was published on Tuesday 21 February.

As set out in our previous alert the increase applies to workers covered by the Aged Care Award 2010, Nurses Award 2020 and Social, Community, Home Care and Disability Services Industry Award 2010 (Awards).

The Full Bench is hearing applications by the Health Services Union and the Australian Nursing and Midwifery Federation to vary the Awards to increase the minimum wages of aged care sector workers by 25% in three stages.

In the Stage 1 decision, the Full Bench decided that an interim increase of 15% to the Award minimum wages of direct aged care workers was ‘plainly justified by work value reasons.’ The decision acknowledged that the workforce ‘has been historically undervalued’ due to gender-based reasons.

The timing of the increase was the key issue to be determined for Stage 2. In the Stage 2 decision the Full Bench confirmed that the 15% increase would apply to direct care workers, but that it should also apply to more people working in aged care than previously decided, including:

  • Head Chefs/ Cooks under the Aged Care Award; and
  • Recreational Activities Officers/ Lifestyle Officers under the Aged Care Award.

Federal Government Funding

In December last year the Albanese Government committed to fund a 10% pay rise to direct care workers on minimum award wages from 1 July 2023 and the remaining 5% from 1 July 2024. This decision was heavily criticised by the unions.

In its submissions to the Full Bench in February, the Federal Government stated that the Full Bench’s decision regarding timing of the 15% increase should not be contingent on their funding decision, but that any resulting impact on businesses should be considered. The submissions also clearly set out that their funding decision does not extend to funding back pay as set out in the union’s back pay proposal.

Next steps

In Stage 3 the Full Bench will consider whether the 15% increase should be further increased. The next stage will also consider in detail the classification definitions and structures in the Awards, as well as potential wage increases for the workers not already covered by the recent decisions (including support staff members).

The unions have indicated that they will continue to push the full 25% percent and for the pay rise to be applied to everyone working in the aged care industry.

Further written reasons from the Full Bench in relation to the Stage 2 decision are expected to follow shortly and we will continue to update you with key information.