Community sector pay cuts: four things we learned at the Fair Work hearings

The view was wonderful. But the signals from the Fair Work Commission’s (FWC) “expert panel” were far from reassuring. In late October, I sat in on two days of public hearings in Sydney. The commission was taking submissions on its April interim decision to rewrite the pay scale and classifications of workers in the Social and Community Services (SACS) sector.

The commission’s stated intention is to address “gender undervaluation”. So it’s astonishing, as well as appalling, that 73 percent of roles in this female-dominated sector would face pay cuts if the interim decision were implemented in full, according to an analysis commissioned by the Australian Services Union (ASU).

I’ve previously written, in September and October, about this gob-smacking attack on pay rates in the community sector. But in the last week of October, I had a chance to see how the process works up close. In a way, there was nothing dramatically new. But the hearing provides insight into what to look for when the commission issues its final decision, likely sometime in the next week or two. It also shows something about the workings of the commission—and what’s needed in the fight ahead. Here are four things I learned.

1. The view is pretty nice from the fifteenth floor of the Fair Work Commission building in Sydney

It’s probably even nicer if you’re paid $10,000 per week to enjoy it—which, according to the remuneration tribunal, is the total annual remuneration for deputy presidents of the commission. The FWC expert panel for this case is made up of three deputy presidents on $533,550 per year, one vice-president on $659,000, and President Adam Hatcher, whose total package is $661,000, plus a judges’ pension. They’ve all had a pay rise of at least $12,000 in the past year—around $240 per week.

It all feels a long way from a disability support worker with five years’ experience and no formal qualifications, whose award pay rate is threatened with a $107 cut (to just $1,248 per week) under the FWC interim decision. Or a caseworker in a community mental health, alcohol and other drug service with five years’ experience and a Cert IV, whose award rate faces a cut of 20 percent—some $364 per week. Or any of the other 138,000 workers in the community sector whose award pay rate will be cut if the commission’s interim decision is implemented in full.

In serious court cases, we might expect our fate to be decided by a jury of our peers. But in this case, the decision makers are paid five or ten times the rate of those who will cop the consequences.

2. Some members of the Fair Work Commission seem to believe that many community sector workers are “over-classified” rather than under-classified, among other concerning views.

There was a series of concerning opinions expressed by members of the commission at the hearings in late October. Everyone agrees that the existing classification structure in the SACS sector is a mess. There’s a lot of woolly and ambiguous language involved—more than 6,000 words of it, in fact. Workers can be classified at a particular level (and therefore at a particular pay rate) according to four distinct criteria: their formal qualifications; their experience; the extent of supervision the worker receives from their manager; and the amount of supervision the worker gives to others.

A study commissioned by the ASU as part of its “Skilled, Respected, Equal“ campaign found that two-thirds of all staff in the sector are under-classified on at least one of these measures. But, notably, the FWC’s April interim decision describes this problem not as “under-classification” but as “misclassification”. And in the public hearings in late October, FWC Vice-President Ingrid Asbury took this a step further.

Asbury said that, “at first blush”, some of the workers in case studies tendered as evidence by the ASU “appear to perhaps be over-classified”—that is, paid at a rate that’s higher than they should be, based on the SACS classification schedule in the Social, Community, Home Care and Disability Services (SCHADS) award.

It shouldn’t surprise us that this alleged “over-classification” worries Asbury. After all, she was a senior manager at a pro-business lobby, the Australian Industry Group, before being appointed to various industrial tribunals from 2000, and to the Fair Work Commission in 2013.

But it’s a concern for anyone who cares about maintaining or even improving pay rates in the community sector. And it’s doubly concerning that FWC President Adam Hatcher commented along similar lines in the October hearings, saying that “the current structure in effect allows the employer to pick the classification and then justify funding on the basis that it’s an award classification without any objective criteria actually applying”.

The horror. Imagine workers in a demanding, not-well-paid industry being paid a bit more than the absolute minimum interpretation of what’s allowed under the award, without “objective criteria actually applying”. Presumably, “objective criteria” were “actually applied” in setting Hatcher’s pay rate of well over $600,000 per year.

Funding in the community sector is often based on what’s needed to pay staff an award wage at a particular classification level. So Hatcher’s comment, if carried into policy, would justify a large cut to both pay and funding across the sector. It’s appalling that someone who espouses these views has a central role in setting minimum wages for the entire country. And it tells us a lot about “Fair” Work.

At one level, Hatcher’s fixation with supposed “objective criteria” for setting wages is just make-believe. The most important “criteria” determining what workers get paid is simple: their class power. The rich and the powerful make sure that they’re amply rewarded, along with their most important functionaries (including FWC members). For most of the rest of us, if we’re getting more than a bare minimum, it’s because our unions have fought for and won it somewhere along the line.

At another level, though, Hatcher’s comments go to the issue at the heart of the current case: the ambiguities in the existing SACS classifications and what to do about them. As the ASU points out, the existing SACS classification descriptors are “archaic, complex and ambiguous”. Anyone who takes a look at the 6,000 words piled up in Schedule B of the SCHADS award will probably agree. Hence, the union’s wish to embark on a government-funded process to rewrite the schedule to eliminate, or at least significantly reduce, the risk of under-classification.

As anyone who has followed this case knows, however, the FWC has rejected this course. At the hearing in late October, Hatcher delivered a minor tirade involving rabbits and hats when barrister Leo Saunders, appearing for the ASU, advocated setting aside the commission’s April interim decision and waiting until the classifications could be rewritten in a way that didn’t cut pay.

Instead, the commissioners have taken a chainsaw to the whole structure—removing ambiguities in a way that will cut pay. The main way this has happened is by making qualifications the main criterion for determining a worker’s pay level. This would spell dramatic pay cuts for many thousands of community sector workers, many of whom have years or decades of practical experience but little in the way of degrees or higher qualifications.

A few hundred words of nerdy analysis are available here, detailing how this works. The short version is that the commission’s war against “ambiguity” in the name of “objective criteria” is, in large part, a war against clauses that workers, and sometimes employers, can use to justify a worker getting a living wage.

The ASU’s solution to workers going backwards (beyond urging the FWC to scrap their whole approach) is threefold: raising the rates, introducing greater progression across the various levels and including “equal remuneration order preservation clause”. This would apply not just to existing employees but to all employees. It would ensure that the applicable award rate is whichever is the higher of the new schedule and the existing schedule, plus the equal remuneration order won by a union campaign in 2012—adjusted for future wage increases. This idea didn’t get any five-star reviews from the commissioners. And Saunders freely admitted it would be “extraordinarily difficult to apply in practice”.

None of this, to put it mildly, is at all encouraging for workers in the sector.

3. There are still bad and not-as-bad results possible from Fair Work’s decision

As I’ve previously reported, and as was evident in spades at the commission five weeks ago, the commissioners aren’t at all inclined to accept the ASU’s primary submission. This is to abandon entirely the commission’s wage-cutting interim decision and instead start on a work value case, which the ASU hopes will lift wages in the sector.

So unless something dramatic has happened during the confidential conferencing process in November, we’ll see some version of the FWC’s interim decision, or the ASU’s secondary submission, or some mash-up of the two, emerge in the next couple of weeks. Everything we know about these proposals suggests there will be cuts to award rates across large parts of the sector.

There’ll be a fair bit of work to do sifting through the final decision to work out the details—how porous or rigid are the barriers between the levels? How strict is the wording regarding qualifications as the main factor in determining classification? Are there minimum classifications for particular roles?

Without detailed modelling, it will be very difficult to work out the overall impact of the final structure across the sector. But it should be possible for everyone in the sector to look at the FWC’s revised decision when it’s released, work out where they would be classified and compare that to their current pay rate. It’s not science, but it will give an indication of how things will play out for each workplace and each part of the sector when the implementation date arrives.

The implementation date of the new schedule is a crucial piece of the picture. The idea of a start date of July 2027, rather than 2026, for any new schedule setting SACS classification and pay was canvassed in the hearings in late October. Several parties, including both unions and the Australian Industry Group, favoured a later start date.

A later start date might enable the ASU’s work value case to be completed before the implementation of any changes to the current SACS schedule. At least in theory, this would have the potential to undo some or all of the damage to workers’ pay rates from the outcome of the case, even before the new schedule is implemented.

Regardless of the start date, though, if the result includes any pay cuts—which seems certain—the ASU campaign will have to continue and ramp up. This should mean city protests; more delegate training to work out what the best pitch to members is, and how to battle against the effects of the decision in every workplace and across the sector; more collective spaces like delegates’ and activists’ meetings in which debates can be had.

Which gets to the final thought that kept distracting me on the fifteenth floor of the Fair Work Commission in late October.

4. We need more Zelda D’Apranos—and need to revive the movement she was part of

It’s perhaps the most famous worker action that’s ever happened in protest against a miserable result doled out by the Fair Work Commission or its predecessor organisations. It’s also the most dramatic and visible moment (so far) of the decades-long campaign for equal pay for women in this country.

On 21 October 1969, Zelda D’Aprano chained herself to the doors of the Commonwealth building in Melbourne, which housed the Commonwealth Court of Conciliation and Arbitration. Like community sector workers protesting today, she was appalled at the outcome of an award review, which had the supposed objective of ending the gross, sexist underpayment of women.

The award in question was the meat industry interim award. The female rate was $35.85 a week, compared to $44.25 for men. The ACTU and the Meatworkers Union ran a test case to abolish the lower, female, rate in the award and lift everyone up to the higher rate.

D’Aprano was a Communist Party member and a staunch unionist. Like many community sector workers today, she’d helped to organise demonstrations outside the hearing. She’d sat in on the sessions. But any hopes of justice from the arbitration system were in vain.

Socialist historian Katie Wood writes that the decision in the 1969 equal pay case “was a bitter disappointment for those involved in the campaign”. The Arbitration Court laid down nine principles to be considered when deciding which women would receive equal pay, which meant the decision would benefit only a minority of women. And each union had to apply separately, meaning it would be several years before the limited benefits flowed through via the arbitration system. D’Aprano records in her autobiography:

“[A] feeling of dejection and what can we do now prevailed ... knowing how people had become so despondent, [we] discussed the need for more dramatic action. I made a decision to protest against pay injustice meted out to women by chaining myself to the doors of the Commonwealth building, holding a placard which read: no more female and male rates – one rate only.”

It’s this moment which is now immortalised in bronze by a statue of D’Aprano outside Melbourne’s Trades Hall building. D’Aprano’s dramatic demonstration was part of making history. And the most crucial part of that struggle, of course, was in a very different arena to the Arbitration Court. Katie Wood records:

“The next battleground was not the courts but the metal shops. This reflected the limitations of the equal pay decisions and hostility from the bosses. Amalgamated Engineering Union members began local shop strikes to win equal pay, resulting in 90 percent of women members of the union receiving equal pay before the 1972 deadline. A corollary was of course the increase in female membership and activity in the union. The AEU journal declared:

“‘Large numbers of female workers in unorganised shops became interested, and as a result our female membership has increased by 300 over the last two months, and a number of new shops organised. We now also have an increased number of female shop stewards ... [A] feature of the activity was the readiness of the women concerned to take industrial action to support their demand.’”

All of this was in keeping with the times. Earlier in 1969, a mass strike had rolled around Australia, freeing union leader Clarrie O’Shea and smashing the anti-union penal powers. These laws had been used for decades to levy punitive fines on unions that dared to strike. In 1970, an epic five-week mass strike by builders’ labourers paralysed the construction industry in New South Wales. The result was possibly the fastest “work value” case in the history of the arbitration system, with building industry bosses begging the commission to quickly approve a massive pay rise to avoid further industrial unrest.

Of course, we can’t just close our eyes, click our heels and transport ourselves back to those times. But we can keep our eyes open, study those battles and apply the lessons in the here and now.

The experience of militant unionists and socialists in the ASU in 2009-12, when mass union protests played a crucial role in winning the equal remuneration order that significantly lifted wages in the community sector, contains many lessons. Veteran socialist and ASU member Adam Bottomley’s recent talk to a meeting of ASU Socialists, and an article co-authored by Adam with Cecilia Judge, are important material for both education and inspiration.

Adam and Cecilia wrote in 2012: “We have won an important legal and moral victory, but the campaign also shows that even in a sector with little union tradition it is possible to organise and make important gains”. It’s up to a new generation of unionists to make this history again.