The Federal Government yesterday announced a $1.2 billion funding boost to the aged care sector aimed at increasing employee wages as part of the Government’s overall strategy to increase funding for the sector, under the Living Longer, Living Better Aged Care Workforce Supplement.

Increased funding is available from 1 July 2013 and will be paid to eligible aged care providers by way of a federal wage supplement, which must be passed on to employees in the form of higher wages.

To be eligible to receive the increased federal funding, an aged care provider:

  1. must have an Enterprise Agreement in place, prior to 1 July 2013 that delivers at least 1% additional wage increase on top of the employer funded increases for 2013/2014/2015 and 0.5% in 2016 and provides for additional training, union representative rights and arrangements to manage part-time and casual workers;
  2. sign on to the Federal Government scheme; and
  3. agree to take part in the Federal Department of Health’s workforce census.

Eligible aged care providers that apply for the Workforce Supplement will receive staged increases of up to 3.5% of the basic subsidy/funding agreement.

It is expected that by the time the Federal funding expires in 2016, aged care workers and nursing staff will receive an annual wage increase of up to $2390 for registered nurses, $1820 for enrolled nurses and $1510 for personal care workers/assistants in nursing.

How it affects your organisation

All aged care providers who currently do not have an enterprise agreement or pay only award-rates need to be carefully looking at their employment arrangements and determining what changes need to be implemented to ensure eligibility for the funding increases.

If your organisation doesn’t currently have an enterprise agreement or has a non-compliant enterprise agreement, expect the ANF to be knocking at your door soon.

The ANF have indicated that wage increases through the form of enterprise bargaining negotiations are a crucial first step in improving both the wages and careers of aged care nursing staff.

Even employers who historically have avoided enterprise bargaining with the ANF are not immune. Employers should expect the ANF to rely on right of entry provisions in the Fair Work Act to enter your premises and hold discussions with staff about employment matters during breaks.

Employers can also be forced to bargain in good faith for an enterprise agreement if the majority of employees want an enterprise agreement and they make an application to the Fair Work Commission.

What you should do

It is critical for employers to:

  • examine your organisation’s employment framework and identify how the government funding increases affect you;
  • devise a strategy for managing union right of entry issues; and
  • determine how your organisation will manage enterprise agreement negotiations