News Article

latest news in employment law

What Does Pay Equity Settlement Deal Mean For Employers?

Published 15 Jun 2017

Last month the Government entered into a ‘pay equity’ settlement deal in relation to Government-funded service sectors of aged residential care, home support and disability services. 
The settlement recognises that these jobs are paid at a lower rate because they are predominately undertaken by women.  In other words, because these roles are traditionally fulfilled by females, the roles are undervalued and the rate of pay does not match what the positions would receive if the roles were predominately fulfilled by males.   
To ensure pay equity between male and female roles the Government will now:

  • Introduce a pay scale which reflects employee’s skills, qualifications and experience (previously employees with years of experience could still receive the minimum wage).
  • Give employees a pay rise of between 15-49%, depending on their qualifications. 
  • Increase care workers wage from the minimum of $15.75 per hour to a minimum of $19.00 per hour. 
  • Increase other affected Employees wages between $19-$27 over five years.
  • Support the creation of incentives to help care and support workers gain formal qualifications.

What does this mean for other Employers?
The Government settlement agreement has set a benchmark for Employers in the wider private care sector and it is likely that Unions will seek the same pay increases for privately employed workers.   Private providers may face similar pay equity claims and find it difficult to recruit and retain good employees who would be higher up on the Government pay scale.
Pay equity claims are also expected to ripple across to other female-dominated sectors with low wages.  It is understood that the Government is already having similar discussions with special education support workers, social workers and midwives.
In consideration of these expected claims, the Government is seeking to provide Employers with practical guidance on how to address the claims and introduce pay equity through the Employment (Pay Equity and Equal Pay) Bill.   The Bill is aimed at creating consultation for pay equity claims and avoiding litigation for Employers.  The Bill provides for

  • Any Employee to raise a pay equity claim;
  • An obligation on Employers to assess and determine the merit of any claim based on set factors;
  • The Employee and Employer to enter into pay equity bargaining and the principles which should guide this bargaining, the assessment of the work and the suitable occupations to compare the role to.

The Bill is currently undergoing public consultation and we expect it to be introduced later this year.