Pay Equity Case

In what has been hailed as a victory for workers in the social and community services (SACS) industry, Fair Work Australia (FWA) last week handed down its long-awaited decision in the Pay Equity case.

In May 2011, FWA determined that the Australian Services Union (ASU) and its Equal Pay Case partners had established that SACS industry workers in the not-for-profit sector are underpaid at least in part because of gender. FWA concluded that ‘employees in the SACS industry are predominantly women and are generally remunerated at a level below that of employees of state and local governments who perform similar work'.

However, rather than issue an equal remuneration order immediately, FWA invited the unions to make further submissions on the extent to which wages in the SACS industry are lower than they would otherwise be because of gender considerations.

Last week, FWA ordered that the historical underpayment of SACS industry workers, be rectified. Over an eight-year phase-in period and over nine equal instalments, salary rates in the sector will increase from between 19 and 41 per cent. The percentages of overall wage increase at the various modern award levels will be as follows:

  • Level 2-19%
  • Level 3-22%
  • Level 4-28%
  • Level 5-33%
  • Level 6-36%
  • Level 7-38%
  • Level 8-41%

A critical issue arising out of this order is whether the sector will be able to maintain services at current levels with the forthcoming wage increases. While the federal government has committed $2 billion to fund the wage increases, no state government has indicated a similar commitment. It is uncertain how SACS organisations that do not receive federal government funding will be able to withstand the impact of pay increases. PilchConnect will be following the issue and provide updates as they come to hand.

For the transcript of the decision, see below:

- Web Link Icon Fair Work Australia Decision - Equal Remuneration Case.