Fair Work Act 2009
s.157—FWC may vary etc. modern awards if necessary to achieve modern awards objective

Social, Community, Home Care and Disability Services Industry Award 2010
(AM2020/100)

Social, Community, Home Care and Disability Services Industry Award 2010 – Equal remuneration case.

Background

[1] On 16 May 2011, the Commission 1 issued a decision2 for an equal remuneration order under Part 2-7 of the Fair Work Act 2009 (Act) in the social, community and disability services industry throughout Australia. In that decision, the Full Bench summarised their findings as follows:

‘[291] we have concluded that for employees in the SACS industry there is not equal remuneration for men and women workers for work of equal or comparable value by comparison with workers in state and local government employment. We consider gender has been important in creating the gap between pay in the SACS industry and pay in comparable state and local government employment. And, in order to give effect to the equal remuneration provisions, the proper approach is to attempt to identify the extent to which gender has inhibited wages growth in the SACS industry and to mould a remedy which addresses that situation. We have reached some preliminary views about how that might be done, recognising that simply adopting the pay rates resulting from the Queensland Equal Remuneration decision is not appropriate. It is desirable, however, that we give the parties the opportunity to make further submissions on the matters.’ 3

[2] On 1 February 2012, the Commission issued a further decision 4 in which the majority of the Full Bench concluded as follows:

“[55] In the May 2011 decision, having indicated that we intended to make an equal remuneration order, we recommended that the parties enter into discussions with a view to reaching agreement on the terms of an order. The Joint Submission contains an agreement between the Commonwealth and the applicants on the main elements of an order. Although the Commonwealth is not a SACS industry employer, it plays a very important funding role, both directly and through the provision of funds to the states.

[56] An important, though provisional, view expressed in the May 2011 decision is that any equal remuneration order we make should take the form of an addition to rates in the modern award. In light of the submissions we have now received, we confirm that conclusion...

[61] ...we have decided that any equal remuneration order we make should be based on the wages in the modern award. The proposals in the Joint Submission are consistent with that requirement. Importantly, the percentage additions to the modern award wages, as varied from time to time in annual wage reviews, will provide an ongoing remedy for the part gender has played in inhibiting wages growth in the SACS industry...

[66] The percentages we have decided on at the various modern award levels in response to the proposals set out in paragraph 5 of this decision are as follows:

Level 2—19%

Level 3—22%

Level 4—28%

Level 5—33%

Level 6—36%

Level 7—38%

Level 8—41%

[67] These percentages are in line with the proposals in the Joint Submission. As we have already indicated, however, we have decided to extend the length of the agreed implementation period. The percentage loadings will be introduced over eight years, in nine equal instalments, commencing on 1 December 2012 and ending on 1 December 2020. This extends the implementation period proposed in the Joint Submission by two years. This extension is in recognition of the potential effects of the equal remuneration order on employment and service provision, and on state finances...

[68] We deal now with the proposal for cumulative annual loadings of 1 per cent over the first four years of the implementation period. The parties to the Joint Submission proposed, under the heading “Minimum wage adjustments and transitional arrangements”, a loading of 1 per cent per annum in December of each of the years 2012, 2013, 2014 and 2015 to recognise impediments to bargaining in the industry and to provide national consistency with the position in Queensland. It was said that these amounts would “provide short term compensation for the SACS industry for its historical inability to bargain while it transitions to the new funding and workplace relations environments.”

[69] We have already indicated that the percentages proposed at each level are too close to current public sector wage levels. For this reason and because of the concerns we have already expressed about the potential impact of the order, we have decided that the proposed loadings, totalling a 4 per cent addition to wages, should be subject to the same implementation arrangements as the percentage additions to wages at each level. Therefore our order will provide for a loading of 4 per cent to be introduced in nine equal instalments over the period 1 December 2012 to 1 December 2020...

[73] We are prepared to make an equal remuneration order in the terms indicated. Such an order will ensure that for the employees to whom the order will apply, there will be equal remuneration for work of equal or comparable value. The percentage additions at each wage level and the further 4 per cent loading will be introduced in nine equal instalments on 1 December in each of the years 2012 to 2020…

[77] The next matter is whether the order should provide for the absorption of overaward payments. There was general support for absorption. We think it is appropriate that the order should include a provision similar to clause 2.2 of the modern award.

[78] The final matter is whether the order should form part of the award or stand alone. Most parties took the view that the order should stand alone. Of the parties who addressed the operation of the better off overall test for enterprise agreements, most took the view that the benefit of the order would be protected by the terms of s.306 of the Act regardless of the operation of the better off overall test. We agree. The order should stand alone. Steps will be taken to include a notation in the modern award alerting readers to the existence of the order...

[82] We require the applicants to file draft orders to give effect to this decision within 21 days.”

[3] On 22 June 2012, the Commission issued a further decision and an equal remuneration order, 5 in which the Full Bench characterised the order in the following terms:

‘[5] …Amongst other things, it is a stand alone order that takes into account the full and ongoing remedy the majority indicated it was prepared to make. It also takes into account the current minimum wages for the relevant employees under the Social, Community, Home Care and Disability Services Industry Award 2010, including those in relevant transitional minimum wage instruments and/or award based transitional instruments, as well as the outcome of annual wage reviews. Subject to the absorption of overaward payments, it ensures each relevant employee receives the benefit of the remedy from the commencement of the phase-in period, throughout a year and in the nine equal instalments decided. The instalment date of the first full pay period on or after 1 December each year is administratively consistent with the decision. The quantum of each of the nine equal instalments is dependent on the difference between the current minimum wages and the full remedy. This evens out the overall cost impact over the nine instalments, making for an appropriate overall cost impact in any one year. It also provides for salary packaging.’

Next steps

[4] At present the existence of the equal remuneration order is noted in the Social, Community, Home Care and Disability Services Industry Award 2010 (the SCHADS Award). From 1 December 2020, the transitional provisions of the equal remuneration order will have been implemented. As at 1 December 2020, the final instalment from the equal remuneration order (modern award rate plus the final equal remuneration payment) will apply for Social and Community Services and Crisis Accommodation classifications which are found in Schedules B and C of the SCHADS Award.

[5] It is our provisional view that the final rates of pay from the equal remuneration order be incorporated into Schedules B and C of the SCHADS Award. Attachment A to this Statement includes a draft determination setting out the final equal remuneration rates of pay that we propose to insert into Schedules B and C of the Award. We also propose to delete the note in clause 15 of the SCHADS Award which currently states:

‘2. An equal remuneration order [PR525485] also applies to employees in the classifications in Schedule B and Schedule C of this modern award’.

[6] Interested parties have until 4.00 pm on Monday 21 December 2020 to provide submissions on our provisional view. Parties are also asked to comment on the draft determination at Attachment A to this Statement. All submissions are to be sent to chambers.ross.j@fwc.gov.au and amod@fwc.gov.au.

PRESIDENT

Printed by authority of the Commonwealth Government Printer

<PR724877>

Attachment A

MA000100  PRXXXXXX

DRAFT DETERMINATION

Fair Work Act 2009
s.157—FWC may vary etc. modern awards if necessary to achieve modern awards objective

Social Community, Home Care and Disability Services Industry Award 2010
(AM2020/100)

SOCIAL COMMUNITY, HOME CARE AND DISABILITY SERVICES INDUSTRY AWARD 2010
[MA000100]

Social, Community, Home Care and Disability Services Industry Award 2010 – Equal remuneration case.

A. Further to the Decision [[2020] FWC XXXX] issued by the Fair Work Commission on XX Month 2021, the Social, Community, Home and Disability Services Industry Award 2010 is varied as follows:

1. By deleting the note: “2. An equal remuneration order [PR525485] also applies to employees in the classifications in Schedule B and Schedule C of this modern award.” appearing in clause 15.

2. By inserting clause B.9 as follows:

NOTE: The final equal remuneration rates are regarded as part of an employee’s ordinary rate of pay.

3. By inserting clause C.5 as follows:

NOTE: The final equal remuneration rates are regarded as part of an employee’s ordinary rate of pay.

4. By updating the cross-references accordingly.

B. This determination comes into operation on 1 February 2021. In accordance with s.165(3) of the Fair Work Act 2009, this determination does not take effect in relation to a particular employee until the start of the employee's first full pay period that starts on or after 1 February 2021.

PRESIDENT

Printed by authority of the Commonwealth Government Printer

 1   Then called Fair Work Australia.

 2   [2011] FWAFB 2700.

 3   Ibid at [291].

 4   [2012] FWAFB 1000.

 5   PR525485.