The Fair Work Commission has ruled that home care and aged care workers will be paid a casual loading when working overtime, weekends or public holidays.
The decision has been welcomed by unions, but the nation’s peak body for providers says the move will constrain the services that providers can deliver for care recipients.
Casual workers to get 25% overtime, weekend and holiday loading
As part of its four-yearly review of Modern Awards, the Fair Work Commission has ruled that casual workers employed in aged care and social and community services (including disability) will be paid a 25 per cent casual loading in addition to overtime and penalty rates for working on Saturdays, Sundays and on public holidays.
As it stands today, casual employees under the award do not receive casual loading when working overtime, or on weekends or public holidays.
A boost to pay packets
The changes will mean a significant increase in the take-home pay of aged care’s casual workforce.
For a casual home care worker Level 2, the increase in wages when working overtime will be around $5.60 per hour.
For a casual disability support worker Level 2, the increase in wages when doing overtime will be around $6.90 per hour.
A “huge win”
United Voice, the union for care workers, says the decision is a “huge win”.
“Casual workers in home care and disability support will see an increase in their pay when they work overtime, on weekends or on public holidays,” they said in a statement.
United Voice’s National Secretary, Jo-anne Schofield, said, “This is a win for our hard-working members in home care and disability care.
“As this change is phased in, casual employees under the Social, Community, Home Care and Disability Services Award will be properly remunerated for working overtime, weekends and public holidays.
“There has been no legitimate reason why our members who work casual shifts should lose out on the casual loading when they work overtime, on weekends or on public holidays, and we welcome the Fair Work Commission recognising this.”
HSU National Secretary, Lloyd Williams, said, “This is a fantastic win for tens of thousands of the lowest paid workers in the country who do invaluable work supporting some of the most vulnerable Australian citizens.”
“Australia has some of the highest rates of casual and insecure work in the OECD, so it’s only fair that these workers are properly compensated for the sacrifice they make working weekends and public holidays.”
Decision will constrain the services providers can deliver: LASA
Aged care providers are already feeling the pinch, with the peak body for aged care providers, Leading Aged Services Australia (LASA), saying the decision will erode its capacity to deliver services for residents.
StewartBrown’s Aged Care Financial Performance Survey for the nine months to March 2019 revealed 45.1 per cent of residential aged care facilities recorded a loss. And in home care, revenues have fallen by an average of 6.1 per cent driving an overall reduction in profitability of 29.8 per cent.
LASA CEO Sean Rooney told HelloCare, “This decision will only further constrain their (providers’) ability to deliver the care their clients need and expect.”
“LASA supports industrial instruments that provide a fair and reasonable safety net of terms and conditions to employees… However, this has to be balanced with the ability of employers to fund the increases in employment costs and the needs of consumers.”
Mr Rooney said the government’s advisor on aged care finances, the Aged Care Financing Authority, found providers’ rising costs are outstripping income.
“A recent LASA survey found that financial pressures are already forcing some providers to consider withdrawing services, cutting jobs and reducing investment,” Mr Rooney said.
Mr Rooney called on the government to increase aged care funding.
“The Government must take urgent action to work with the sector to address the financial pressures facing providers to avoid further compromising their ability to meet the needs of older Australians and to support the ability of providers to fund improvements in pay and conditions for staff,” he said.
Loading compensates for lack of entitlements
In its findings, the Commission said casual loading is not to make up for casual staff working when others don’t, but to compensate for the fact they don’t receive the same entitlements as permanent employees.
“The casual loading is paid to compensate casual employees for the nature of their employment and the fact that they do not receive the range of entitlements provided to full-time and part-time employees, such as annual leave, personal carer’s leave, notice of termination and redundancy benefits,” the Commission said.
“Importantly, the casual loading is not intended to compensate employees for working overtime or for weekend work and public holiday work.”
An incentive to move workers to permanent roles
Ms Schofield said United Voice hopes the increase in casual pay rates will encourage employers to move casual staff over to permanent roles.
“Ensuring that casual employees are paid for the true cost of their labour… should act as some disincentive for employers relying on casual labour, and may encourage employers to offer permanent jobs that workers can count on,” she said.
“With casualisation and insecure work on the rise in Australia, too often casual workers have a lack of say at work over wages and conditions.”
The increases will apply to workers employed under both the Social, Community, Home Care and Disability Services Industry Award (SCHADS) and the Aged Care Award.
Workers with an enterprise agreement that is below the Modern Award rate will also be affected, according to the Health Services Union (HSU).
The timing of the rollout is only provisional at this stage, but the change is likely to be rolled out in stages between 1 December 2019 and 1 July 2020.