Aged care update: Royal Commission and Work Value case

April 29, 2021

2020 was a challenging year for the care sector; from the agile response required to manage the coronavirus pandemic to an ongoing Royal Commission. There has been a great deal to contend with.

And in 2021, there’s been no respite for the industry with the Royal Commission report being handed down and a Work Value claim being made in the Fair Work Commission.

In this update, we outline the major changes that will affect aged-cared workplaces in 2021 and beyond.

Final report by the Royal Commission

On 1 March 2021, the Royal Commission into Aged Care Quality and Safety published its final report.

The report makes a large number of recommendations that relate to every aspect of the sector, however, I set out below those that relate to industrial relations and workplace relations.

1. Shortage of workers and workforce planning

The Royal Commission concluded that there are currently not enough workers in the industry to be able to provide ‘high quality, person-centred care’.

It was concluded that the shortage of workers leads to failures to consistently and appropriately match workers to the caring needs of older people and contributes to a lack of quality in care. The Commission has described this as a ‘virtuous circle where an asserted lack of quality of care is directly linked to the quality of jobs which is relevant to working conditions, management, work culture, education and training, career development and job satisfaction’. The shortage of workers in the industry directly contributes to the perpetuation of the ‘circle’.

This impact of the shortage of workers will worsen in the next 30 years as Australia’s population of elderly people increases.

By 2050 an estimated 130,000 additional workers will be needed to meet the demand which demonstrates the need for workforce planning to be implemented to meet this demand. The recommendation is made that the Australian Government establish an ‘Aged Care Workforce Planning Division’ which would be responsible for monitoring the distribution of workers to meet the demands of the industry.

2. Education and training

In addition to the shortage of workers, the Royal Commission concluded that workers do not receive adequate education and training, especially in relation to providing care to older people with dementia and in palliative care.

Did you know that 70 per cent of older people in residential care are living with dementia? The Royal Commission concluded that a large proportion of workers do not have a full understanding of the symptoms and needs of older people. The Royal Commission suggested that alike skill shortage is also evident in the palliative care sector.

The Royal Commission concluded that staff do not have a ‘full understanding’ because they are ‘underqualified’ and suggests that workers should be able to easily access ongoing training and development opportunities to upskill and educate them.

The Royal Commission recommended that the Skills National Cabinet Reform Committee fast track the development of accredited and nationally recognised courses for the aged care industry. It was recommended that these courses should reflect the changing needs of the industry and the residents of the facilities.

3. Career development

The Royal Commission concluded that career development and progression should be a major focus for workers in the sector to increase the quality of care. In addition, the Royal Commission recommended that the Australian Government establish a National Registration Scheme to include the key features:

1. Mandatory minimum qualifications of a Certificate III;
2. Ongoing training requirements;
3. Minimum levels of English language proficiency;
4. Criminal history screening requirements; and
5. A code of conduct and power for a registering body to investigate complaints into breaches of Code of Conduct and take appropriate disciplinary action.

It is hoped by the Commissioners that the implementation of the above training will increase skills, attract more workers to the sector and build enthusiasm for a long, fulfilling, and rewarding career.

4. Remuneration

The Royal Commission identified a wage gap between workers in the aged care industry when compared to workers performing equivalent work in the acute health sector.  In 2018 the Aged Care Workforce Strategy Taskforce recommended that ‘the industry develop a strategy to support the transition of personal care workers and nurses to pay rates that better reflect their value and contribution to delivering care outcomes’.

Two recommendations were made to close this gap:

1. The Australian Government, aged care providers, and unions collaborate on a Work Value case and equal remuneration application. This application has already been made and we refer to the        paragraphs below for a high-level explanation of what is at stake; and

2. Wage increases should be a policy objective for aged care funding and a Pricing Authority should be established to set prices for high quality and safe aged care.

Work Value Case

A major recommendation of the final report of the Royal Commission was that a Work Value case is heard in the Fair Work Commission to significantly increase wages paid in the sector.

A Work Value claim is made where the applicant believes that the classification descriptors and the remuneration paid to employees no longer reflects the work being performed and the value of the work being performed by the employees.

Work Value Case – Aged Care Award

On 12 November 2020, the Health Services Union filed an application in the Fair Work Commission seeking that the weekly wages paid to employees for aged care employees to increase wages in all classifications:

(Click the image to enlarge)

The HSU asserts that the current Award ‘wage rates do not recognise the nature of work, the level of skill and responsibility involved in performing the work or the conditions under which work is performed by employees covered by the Award and working in personal care services, general and administrative services and food services’.

The minimum wages under the Award have not been considered or assessed since the Award started operating in 2010, other than by Annual Wage Reviews.

The Award undervalues the work of individuals covered by the award by 25 per cent and the proposed new rates of pay are an increase of wages by 25 per cent.

The Application is intended to also replace Schedule B of the Award, which is the classifications sections of each level, to accurately reflect the value and necessary skills for each award classification.

The amendments to the classifications of the Award are to provide additional pay levels for personal care workers who have completed specialised training in a specific area in which specific skills need to be utilised.

What should employers expect?

This will be a major case within the Aged Care sector for both employers and employees and is expected to continue into 2022. The case will likely see 40 to 60 witnesses on both sides of the Application.

If the Union is successful in its application, the new Award rates will become effective with employers paying employees 25 per cent more.

This is in addition to other recommendations of the Royal Commission involving staffing levels and contact time which if implemented would significantly increase staffing costs across the sector.

The Health Services Union filed its evidence and other material on 1 April 2021. Employers are required to respond to this evidence by no later than 16 August 2021.

In the event that you as a facility provider or your business would like to respond to the Application on behalf of the industry, please contact FCB Group – we have a team of litigation experts who can assist.  

Update prepared by Jessica Fisher Law Partner, Marie Sherry, Michal Roucek, Senior Associate & Marie Sherry, Workplace Relations Consultant.