Why Fair Work Australia’s community sector pay decision is a huge misstep: Kohler

Yesterday’s equal pay decision for female social and community workers has been hailed up and down the land and described by both the Minister for Industrial Relations and the prime minister as “good for the sector, good for caring workers, good for women, good for families and good for the economy”.

So God help any chap who criticises it. Well, here goes.

The first thing to note is that the comparator for the claim for equal pay for women was not male workers, but other carers who work in the government sector – mainly females.

This was, in fact, a comparative wage justice decision, not an “equal pay for women” one. It was a throwback to the old days before modern enterprise bargaining.

With yesterday’s decision Fair Work Australia has removed an entire industry from enterprise bargaining for many years, possibly forever.

Most workers in the social and community services industry are women, but their union and the ACTU have not actually made a case that they are underpaid for that reason, that they are the victims of gender-based
undervaluation.

Their pay is determined entirely by the amount of funding the sector gets, mainly from state governments.

In effect, FWA has allowed itself to be used as a vehicle for lobbying state governments to increase that funding. If they don’t, the organisations that operate in this industry will have to cut staff.

There is every reason why the workers in this industry should be paid the same as their counterparts who work for the federal government, and of course they should be paid the same as men who do the same work.

And it’s entirely understandable that the workers were cock-a-hoop yesterday after their claim for wage rises of 18-41 per cent over eight years succeeded, but the question remains whether extra funding will
follow. Let’s hope it does.

The main problem with the decision is the precedent it sets. Here is what the dissenting judge, Justice Graeme Watson, said:

“The consequences of this are clear. If the claim in this matter is granted, it is inevitable that there will be very little or no enterprise bargaining in the entire SACS industry for very many years, probably decades.

“To selectively extract an entire industry from the enterprise bargaining legislative framework is a change of mammoth proportions.

“It is significant enough for the SACS industry alone. The precedent it creates for many other industries who cannot afford to pay significantly above the award and are female dominated highlights the need for great caution. It is not an overstatement to suggest that the future status of enterprise bargaining in this and other industries with similar attributes is at stake.”

Of course women carers should get equal pay to men doing the same job, and the same as other women doing the same job as well – as long as their employers have the money.

That’s the way enterprise bargaining works: the capacity of the employer to pay is taken into account.

Removing an industry from enterprise bargaining potentially creates a “mammoth” precedent, as Graeme Watson says.

This article first appared on Business Spectator.