Easier pay rises for workers in women-dominated industries under new Labor plan

Labor will enshrine gender pay equity into law as a principle guiding the Fair Work Commission (FWC) and remove barriers to equal pay applications in women-dominated industries if elected.

Under changes announced on the last day of Labor’s national conference in Adelaide today, the capacity of the FWC to order pay increases for workers in industries such as early childhood education, aged care and disability services will be strengthened.

Labor wants to change the Fair Work Act to establish pay equity in law and create an equal remuneration principle that will guide FWC consideration on whether workers in feminised industries are paid fairly.

This will include establishing a pay equity panel, overseen by a second FWC president, to consider equal pay cases brought before the commission.

Currently, workers or representatives making equal pay cases to the commission are required to compare women’s wages with those of men in similar roles within that industry, but it is understood the new panel would lower barriers by scrapping that test.

In a joint media statement, Opposition Leader Bill Shorten, Deputy Leader Tanya Plibersek and Industrial Relations Spokesperson Brendan O’Connor said workers shouldn’t have to rely on “fighting complex, expensive legal cases to secure a decent wage rise”.

Changing the rules

Labor is concerned the current equal pay system doesn’t adequately consider woman-dominated industries are paid less than male-dominated ones across the board.

Of the 21 equal pay applications made under Australian workplace laws since 1994, only one equal remuneration order has been made by the FWC, Labor said.

“We don’t need to compare female-dominated jobs with male-dominated jobs to know that female-dominated industries are often poorly paid,” Plibersek, Shorten and O’Connor said.

“We will change the Fair Work Act to make it clear that establishing undervaluation of female-dominated industries does not require a male comparator.”

“Proactive” policy

Australian women working full-time are paid on average 16.2% less than men, according to Workplace Gender Equality Agency (WGEA) data released several months ago.

The WGEA research also found workers in women-dominated industries attract lower wages, while Labor said the average woman in Australia’s most feminised industries is paid about $30,000 less than the average man working in the most male-dominated industries.

The policy has been welcomed by Adore Beauty founder Kate Morris, who says its great to see political leadership on pay inequity.

“The policy sounds really proactive, especially in terms of targeting the poorly-paid female-dominated industries like early childhood,” she tells SmartCompany.

Pay rise “not sustainable”

However, with the commission set to receive greater capacity to order pay increases in women-dominated industries, Blisscare Health co-founder Igor Statkevitch is worried about the potential impost on business.

“If wages go up you’ll shut down businesses … healthcare workers are getting paid pretty good money,” he tells SmartCompany.

Statkevitch says he has one pay structure for both men and women and targets rates about 40% above the award to attract talent.

“Government has cut funding so revenue is reduced, and then if they want wages to increase, it’s not sustainable,” he says.

Devil in the detail

Workplace lawyer Peter Vitale tells SmartCompany the policy would change the manner in which the FWC would assess pay equity, but Labor has yet to reveal many of the details.

“The question is going to be ‘what is the new test going to be and what’s it going to bring to the table’,” he says.

“It may mean the commission develops principles about applying higher annual wage reviews in those types of industries as a matter of course during annual pay reviews.”

The pay equity policy follows an earlier announcement Labor will spend $400 million if elected to provide women with superannuation payments during their Commonwealth-funded maternity leave.

Labor will also be considering a raft of industrial-relations related policy on Tuesday, including further discussion on the future of enterprise bargaining.

Brendan O’Connor said last week Labor was considering enhancing multi-employer bargaining, making clear Labor’s view the current system is not working for many low-paid Australians.