Major Aged Care case alert – Pay rises of up to 28.5% for direct care employees

On 15 March 2024, the Fair Work Commission (Commission) handed down its decision in the ‘work value case’ (Decision), which resulted in a significant uplift in pay for award covered direct care employees. The Decision concerned three applications to vary modern awards to increase the minimum wages of aged care sector staff covered by the:

  • Aged Care Award 2010 (Aged Care Award);
  • Nurses Award 2020 (Nurses Award); and
  • Social, Community, Home Care and Disability Services Industry Award 2010 (SCHADS Award).

Ultimately, the Decision confirmed that (in addition to the wage increase awarded in stage 1 and confirmed in stage 2) further wage increases in the aged care sector were both necessary and imminent.


In November 2022, the Full Bench issued an initial decision that found the award minimum wage rates for ‘direct care employees’ did not properly compensate for the value of the work performed. Accordingly, the Commission ordered an interim increase of 15% (Interim Increase) in the award minimum wages for the following ‘direct care employees’:

  • personal care workers (PCWs) under the Aged Care Award;
  • home care workers (HCWs) who work in the aged care sector under the SCHADS Award; and
  • registered nurses (RNs), enrolled nurses (ENs), assistants in nursing (AINs) and nurse practitioners who work in the aged care sector under the Nurses Award.

In February 2023, the Full Bench handed down a further decision. This decision confirmed the Interim Increase was necessary to achieve the modern awards and minimum wage objectives. The Full Bench further determined that the Interim Increase should be extended beyond direct care employees to include:

  • head chefs/cooks; and
  • recreational activities officers/lifestyle officers,

under the Aged Care Award.

This Decision

In this stage of the proceedings, the Full Bench (comprised of an expert panel) considered:

  • whether historical underpayments had occurred in the aged care sector due to assumptions based on gender;
  • whether any further wage adjustments were justified (on work value grounds) for the employees who received the Interim Increase;
  • whether any wage adjustments were justified (on work value grounds) for ‘indirect care employees’; and
  • the classification definitions and structures in the three awards as they applied to aged care sector employees.

Gender Inequality

Put simply, the expert panel considered whether employees in the aged care sector had historically been undervalued due to gender inequality. The Decision provided an overview of the statutory framework and focused on a new provision requiring the ‘consideration of work value reasons to be free of assumptions based on gender’.

The expert panel found that the work of aged care sector workers had been historically undervalued, due to assumptions based on gender. In examining the historical gender assumptions in wage fixations in awards, the expert panel noted the following assumptions were common:

  • that male employees had dependents, and accordingly they required a ‘family wage’;
  • that female employees did not have dependents (an assumption made on the basis they were part of the workforce and therefore did not have a husband to take care of them nor a family to support);
  • that an increase for young, unmarried females would disturb the economy in a manner that would ‘disadvantage the married basic wage worker and his wife and family’;
  • equal pay based on the male basic wage would put an intolerable strain on the economy; and
  • the work required in sectors like the aged care sector involved ‘inherently female traits’. This meant the workforce was likely to be female and the skills came naturally to them (in other words, the workforce was largely ‘unskilled’).

Direct Care Employees

The expert panel was satisfied there were ‘work value’ reasons for the award rates to be increased beyond the Interim Increase. For some employees, this Decision will result in a pay rise of up to 28.5% (inclusive of the Interim Increase).

The expert panel also went on to set a benchmark pay rate for a key classification. From there, it formed new and uniform classification structures (on the basis of that benchmark).

Interestingly, while the Commission maintained its view that the increases were both necessary and long overdue, it also highlighted the importance of ensuring the increases were conducive to a ‘stable award system’. In other words, the Commission cautioned that, while the increases must be free of (and recognise) gender bias, they should not result in ‘leapfrogging’. Employers may wish to take the same approach in any pay rises they award employees (in addition to the ones mandated by the Decision).

Indirect Care Employees

Indirect care employees are generally those engaged in administrative services or food services. Without diminishing the importance of this work, the expert panel concluded that, as these workers do not perform work of equivalent value, there was no justification for equal rates of pay.

Despite this decision, the expert panel identified two areas in which work value changes had occurred. These areas included:

  • infection prevention and control measures, and dementia; and
  • Aged Care Quality Standards and other training requirements.

In light of the above, the Decision held that the rates of pay should be increased by 3% for indirect care workers.

The expert panel then went on to make the following conclusions regarding indirect care workers:

  • HCWs covered by the SCHADS Award (who perform non-personal care work) will be covered by the general wage applicable to personal care HCWs;
  • laundry hands, cleaners and food services assistants interact regularly with residents. As this work constitutes a work value reason for an additional adjustment to their rates of pay, these employees will be moved from ‘level 2’ to ‘level 3’ in the Aged Care classification structure for indirect care employees. This would result in a total pay increase for these workers of 6.69% (inclusive of the 3% increase awarded above); and
  • there would be no further increase for head chefs/cooks. In other words, there was no justification to provide an increase beyond the Interim Increase for these employees.

Classification Structure

In determining the new classification structure(s) for direct care employees, the expert panel held (amongst other things):

  • there is a fundamental difference between the work value of direct care employees and other employees engaged in residential aged care. Accordingly, it would be inappropriate to mandate a single integrated classification structure in the Aged Care Award;
  • the purpose of the classification descriptors in awards is to identify which categories of workers are entitled to the minimum rates, not to serve as comprehensive ‘position descriptions’; and
  • the classification structure(s) should include a supervisory level.

What comes next

The Decision included draft determinations varying the relevant awards, upon which the parties may now make submissions.  The Commonwealth and others may also make submissions concerning the operative date and phasing in of the Decision before the variation determinations are finalised.

In early April, the Commission will also consider the Australian Nursing and Midwifery Federation’s application to increase wages by up to 35% for an estimated 250,000 nurses, nursing assistants and midwives. It is anticipated this ‘work value claim’ will build on the landmark findings in the Decision, and extend the recognition to other healthcare employees.

An obvious concern for employers in the aged care sector will be how these increases are to be funded.  Given the existing financial constraints on aged care providers, it seems appropriate that Government funding be increased to cover these additional costs.  In light of the recent recommendations by the Aged Care Taskforce, greater co-contributions by care recipients with sufficient financial means may also play a role in the future.


The Decision, rightly labelled a ‘major case’, made significant findings that will have far-reaching consequences. While the increases have yet to be finalised in the awards, we recommend employers in the aged care and retirement living sectors seek advice on:

  • the classifications of their current workforce;
  • updating employment contracts;
  • implementation of any further wage increases (in addition to the ones mandated by the Decision), to ensure they do not perpetuate the gender pay gap recently examined; and
  • managing differential award increases between different categories of employees, from a staff retention/satisfaction perspective.

To view the new classifications and percentage wage increases for direct care employees, click here. 

If you have any questions in relation to the above, please contact Sam McIvor or Stuart Lowe.

This article was written by Partners, Sam McIvor and Stuart Lowe, and Solicitor, Bronte Jackson.

“The content of this publication is for reference purposes only. It is current at the date of publication. This content does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.”
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