FWA Equal Pay Ruling

On 2 June 2011, we reported on the Equal Remuneration Test Case (Equal Remuneration Case; Australian Municipal, Administrative, Clerical and Services Union and others [2011] FWAFB 2700 (16 May 2011)).

In that decision, the Full Bench determined that an equal remuneration order should be made because there is not equal remuneration for men and women workers in the social and community services industry, for work of equal or comparable value in comparison with workers in the same industry but in state or local government employment.  The Full Bench called for submissions on the extent to which gender has inhibited wage growth in the industry.

The percentage increases and implementation period

On 1 February 2012, the Full Bench, with Vice President Watson dissenting, determined the following percentage increases to respective classification levels.

It was determined that the increases should be introduced over eight years, in nine equal instalments, commencing on 1 December 2012 and ending on 1 December 2020.

How were the percentage increases determined?

The percentage increases were determined having regard to the joint submissions of the applicants and the Commonwealth government.  The joint submissions determined the percentage increase by first comparing the rates payable to SACS workers with the rates payable to work of employees performing similar work in programs and services in state and local government employment.  The difference between those rates was identified as the ‘public sector pay differential’.

The next step was to identify what proportion of the ‘public sector pay differential’ was attributable to gender considerations.  The joint submissions utilised ‘caring work’ as a proxy for gender considerations.  By way of example, jobs at Level 2 were said to be comprised of 96% ‘caring work’ and jobs at Level 8 at 56% ‘caring work’.  The ‘caring work’ percentages were then applied to the ‘public sector wage differential’ in order to put a monetary value on the extent of gender-based undervaluation.

The additional loading

In addition to the percentage increases above, the Full Bench also determined that a loading of 4% should be applied to wages and implemented over nine equal instalments over the period 1 December 2012 to 1 December 2020.

The joint submissions sought this loading in recognition of impediments to bargaining in the industry and to provide national consistency with the position in Queensland.  It was said in the joint submissions that the loading 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.

Government funding

The Commonwealth government has given a commitment to fund its share of the increased costs arising from the percentage increases, and while some state governments are opposed to the increase, the Full Bench stated that no government has indicated it will be unable to fund its share.

Draft orders

The applicants are required to file draft orders to give effect to the Full Bench decision by 22 February 2012.  The orders will stand alone from the modern award, provide for salary packaging of the increases and allow for the absorption of the increases into over award payments.  Consideration will also need to be given to effect of the increases on the transitional arrangements in the modern award which will continue to apply.

We will prepare an update on this case when the orders are available.

If you would like more information about the case, please contact Carly Fielding or Jason Donnelly on +61 2 9233 3989.

National Workplace Lawyers

Note — this is for information purposes only and does not purport to be comprehensive or to render legal advice.