Fair Work Commission plans giant pay cut for community sector workers

More than 100,000 workers in the community sector—three quarters of them women—face the prospect of their award pay rates being cut by up to 33 percent. The cuts are part of an interim decision made by the Fair Work Commission (FWC) in April this year and are proposed to be implemented following hearings in late October.

The Australian Services Union has called a national day of action for 23 October to oppose these attacks. It’s crucial for workers in the social and community services sector, and well beyond, to make this a major mobilisation in support of equal pay.

There’s a lot of money at stake. A submission from the ASU to the FWC in mid-September includes a series of examples of workers currently in the sector, whose position would have the award rate of pay cut significantly:

• A disability support worker with five years of experience and no formal qualifications currently has an award pay rate of $1,355 per week. The interim decision by the FWC cuts this rate by $107 to $1,248 per week—a reduction of 7.8 percent.
• A residential youth support worker employed by an Aboriginal and Torres Strait Islander agency is currently paid $1,575 per week, if they have four years of experience and a Certificate IV qualification. This is cut by $155 per week—nearly 10 percent—by the FWC interim decision.
• A caseworker in a community mental health, alcohol and other drug service with five years of experience and a Certificate IV qualification is currently on an award rate of $1,783 per week. This rate is cut by $364—20 percent—to $1,419 per week by the interim decision.
• A team leader of a Targeted Care Packages program (designed to help prevent young people subject to a child protection order becoming institutionalised) at an Aboriginal and Torres Strait Islander service is currently paid $2,211 per week if they have eight years of experience and a social work diploma. Under the new structure, this role would suffer a $739 weekly pay cut—a massive 33 percent.

The extent of the proposed pay cuts, as well as their size, is staggering. An analysis of 1,816 workers in the community sector, conducted for the ASU by University of NSW Associate Professor Natasha Cortis, has found that 73 percent of all positions would lose pay if the rates in the FWC interim decision were implemented across the sector tomorrow.

“Extrapolated to the industry, this amounts to direct wage reductions for over 138,000 positions”, according to Cortis. Three quarters of positions held by women would face a pay cut, compared with 62 percent of those held by men. Forty six percent of all surveyed positions stand to lose more than $200 per week, while one in nine (11 percent) would lose more than $500 per week.

The FWC interim decision states that no existing employee should have their wages reduced in the transition to a new pay scale. However, “grandfathering” or “savings” provisions such as this only apply to existing employees in their current roles, not to staff entering the industry or changing jobs. Anyone changing jobs would face being classified at new, significantly lower, pay rates under the new structure.

And the FWC proposal is even worse than this. FWC staff have produced a discussion paper showing how existing employees would be applied to a new pay structure under the FWC interim decision. A detailed examination of this paper by Natasha Cortis for the ASU shows that the FWC’s favoured transitional arrangement would still result in 28 percent of all current staff in the sector losing pay: 14 percent would lose more than $100 per week. And this proportion would rise in the months and years ahead, because workers entering the industry or changing roles would not get even get this level of protection from the effect of the new pay scale.

Some social and community sector workers have their pay rates and classifications written in to enterprise agreements, which will preserve their pay even if the award rate is cut. However, these pay rates will come under pressure if the FWC confirms its interim decision. Enterprise agreements are required to pass a “Better Off Overall Test”, where the agreement is measured against the relevant award. So if the pay rate in the award falls, the benchmark for any new agreement is also lowered. And, of course, in a government funded sector, where contracts are often awarded via competitive tendering, organisations with lower pay rates will tend to pick up more work.

Perversely, this interim decision to impose dramatic pay cuts on a female-dominated industry is the product of a FWC process which is supposed to address gender-based undervaluation of women’s work.

Yes, you read that right. Unless the FWC decides to reverse course following hearings in late October, tens of thousands of women will be threatened with significant cuts to their pay—in the name of gender equity.

The FWC is involved in a years-long process to address the sexist undervaluation of women’s work in a series of industrial awards, which set minimum wages and conditions in every industry. While the equal pay victories of the late 1960s and 1970s addressed different pay rates within particular awards, in the 2020s many awards still have lower pay rates as a whole because the industry covered by the award mainly employs women.

The sexist reasoning which led to these outcomes was expressed in one typical ruling from the Conciliation and Arbitration Court in 1950, which asserted that “the productivity, efficiency and the needs and the responsibilities etc. of females were substantially less than that of males in this community”. According to the court, this meant the basic wage for female-dominated industries should be set at 75 percent of the rate for male-dominated industries. These lower pay rates, still embedded in many awards, have been largely unchallenged until very recent years.

From 2009, a campaign of mass protests by social and community services (SACS) workers organised by the ASU challenged the entrenched low pay of the mainly women workforce in this sector. Thousands marched at regular days of action. This was the biggest union push for equal pay since the 1970s, when a long campaign by left-wing unions culminated in radical actions such as Zelda D’Aprano chaining herself to the Arbitration Commission doors, and a series of strikes among the majority-women workforce in the insurance industry.

After many twists and turns, in 2012 Fair Work granted an Equal Remuneration Order. Though the phase-in was outrageously slow (spread over nine years), the result was a pay rise of between 23 and 45 percent for each classification on the SACS pay schedule in the Social, Community, Home Care and Disability Services (SCHADS) award.

In late 2020, the Health Services Union applied to the FWC to spread the sort of pay rises won by SACS workers through the Equal Remuneration Order to the grossly underpaid, mainly women workforce in aged care. The FWC’s final decision on the Aged Care Award in 2024 addressed some of these gross underpayments, lifting many aged care workers involved in “direct care” by up to 25 percent in several stages. Many other unions have now applied to FWC to spread these pay rises to other awards covering majority-women workforces. The recent FWC interim decision is part of this process.

So what could go wrong?

The FWC is known for good reason as a “bosses’ court”. The FWC “expert panel” overseeing the gender-based undervaluation review consists of three Deputy Presidents of the commission, each paid a total of $521,000 per year; one Vice President on $643,000; and FWC President Adam Hatcher who was paid $634,000 in 2023-24. The whole history of arbitration and “Fair” Work is one of limiting workers’ wages and conditions to a level that doesn’t encroach on business profitability. The FWC’s decision to slash weekend penalty rates for retail and hospitality workers in 2017 is one notable example. Workers are unlikely to win much of value at the commission unless we have an industrial and political campaign that can put pressure on bosses and governments.

So it’s a problem that, though unions have put significant resources into their FWC cases on gender undervaluation, up until now there has been almost no attempt to mobilise the workers who will actually be affected by the decisions coming out of this process. This means the highly-paid “experts” who make up the FWC “expert panel” on gender undervaluation have had a relatively free hand to shape the pay of millions of workers, without any pressure from those workers themselves. This goes some way to explain the quite mixed results of the current review of awards to address gender-based undervaluation.

Many aged care workers, especially those involved in “direct” care, received a 15 percent pay increase in 2023 and a series of smaller increases totalling around 10 percent by August 2026. However other essential staff in aged care didn’t fare so well. Eighty one percent of food services assistants in aged care are women. So are 88 percent of cleaning staff and 88 percent of laundry staff. Yet aged care workers in these three occupational groups received pay rises totalling just 6.96 percent from the FWC gender undervaluation review in the aged care sector.

A pay guide for 2025 produced by the United Workers Union demonstrates this point. Many “direct care” workers in aged care got a welcome pay bump of 30 percent between 2022 and 2025, bringing their hourly rate up from $24.76 to $32.14 at the start of this year. However, “support workers” in aged care only got a 17 percent increase, to $27.66 per hour. This is barely above inflation, which was 14.5 percent over the calendar years 2022-24. And even those who get the maximum pay rise under the Aged Care Award will be left more than $5 per hour (around $200 per week) behind the current Australian median wage of $40 per hour.

Similarly, a pay guide produced by the Australian Nursing and Midwifery Federation early this year notes that the FWC ordered a 15 percent pay rise for all nurses in aged care as of July of 2023. However, when it came to the final, “stage three” decision, the commission rejected the ANMF case for a further 15 percent increase for all grades. Instead, the FWC decided on a revised pay scale which dramatically reduced the number of increments or pay grades for nurses in aged care, which had the effect of cutting one of the top award rates by $459 per week. This was despite the ANMF pointing out in a submission that “[n]o evidence has ever been led by any party with a view to demonstrating that those grades should be eliminated”.

Most grades received a pay increase from the FWC decision—ranging from a few dollars for some nurses at the top of level three, to 4 or 5 percent for many other grades, to 21 percent for the small minority of nurses at level five, grade one. However, the highest rate of pay for level four nurses in aged care (the level for an assistant director of nursing in a facility) was reduced from $2,239 to $2,141 per week, and the highest rate for a level five (director of nursing) was cut from $2,871 to $2,412.

Existing staff on those grades were to have their pay preserved. The number of affected staff in this case would be very small. But the commissioners who make up the “expert panel” (on a pay rate, let’s remember, of $10,000 or more per week) demonstrated with this decision that they were quite prepared to cut some award pay rates, based on their own say-so and zero actual evidence, in a way that no one—even employers or governments—had actually asked for.

Which brings us to the current extraordinary assault on wages in the SACS sector.

As the name implies, the Social, Community, Home Care and Disability Services (SCHADS) award covers a mish mash of occupations and industries. It has five different pay schedules covering workers in the SACS sector: family day care; crisis assistance and supported housing; aged care in the home; and disability care in the home. The schedule setting the pay for in-home aged care assistance has already been increased in line with the aged care decision. It’s not rocket science that the pay schedule for disability work in people’s homes is also due for a similar pay increase.

The ASU submission to the commission regarding SACS workers was quite minimal. The pay rises from the Equal Remuneration Order won in 2012 should be formally incorporated into the award rates for SACS staff, rather than sitting in a separate schedule. And in the medium term, the union advocated for a joint effort with employers and government to revise the classification schedule for SACS workers, to remove ambiguities that fuel an epidemic of under-classification in the sector (an extraordinary 66 percent of staff in the sector are under-classified, according to the Skilled, Respected, Equal study conducted for the ASU).

This approach was rejected by the $2.8 million worth of “experts” assembled on the FWC “expert panel”. Instead, the commission decided to abolish the separate pay scale for SACS workers, and put everyone on a slightly revised version of the pay schedule in-home aged care workers. This schedule largely relies on qualifications to set award wage rates, rather than experience, job responsibilities, or degree of supervision. Along with the elimination of multiple pay grades and the abolition of the Equal Remuneration Order, the result is an interim decision which, if implemented, will see swathes of workers in the SACS sector facing significant cuts to their wages—many immediately, and many more in the months and years to come as people change jobs.

Within a week of the FWC interim decision in April, the ASU wrote to the FWC to point out that the decision would result in punitive wage cuts. The commission could have responded by retreating from their proposals—but they didn’t. Instead, FWC staff issued a further discussion paper in May, which emphasised that existing staff should be somewhat protected by the transitional arrangements. However, the actual figures in this document confirm that even many existing staff will face a pay cut, depending on what transitional arrangements are adopted. Nothing the FWC has said since April changes the fact that the interim decision represents a serious attack on the underlying award pay rates for many roles in the sector.

Ahead of the FWC hearings scheduled for late October, multiple submissions from the ASU, various levels of government and employers in the sector have rejected the FWC proposal. The Australian Industry Group (AIG), which lobbies for big business, seems to be the only group not rejecting the changes outright—though even the AIG notes that the FWC interim decision doesn’t “capture the nuance and sophistication of work conducted in the social services sector” and fails to recognise “the diverse and complex nature of work undertaken” by workers in the sector. Nevertheless, the AIG proposes making the interim decision even worse, for instance by scrapping entirely the idea that existing employees shouldn’t have their wage cut.

Whatever the content of the formal submissions, there are no grounds for complacency—given that the FWC “experts” have proposed massive historic pay cuts off their own bat, have form in cutting some award rates in previous decisions, and have shown little inclination to listen to the ASU. So the most crucial thing right now is to repeat the kind of actions that led to winning the Equal Remuneration Order in the first place: mobilisations of as many workers as possible in support of equal pay and in opposition to the pay cuts in the FWC interim decision.

Clearly, an all-out effort is needed to mobilise for the ASU’s national day of action on 23 October ahead of FWC hearings the following week. Some union materials are available on the union’s “Skilled, Respected, Equal” website. The ASU is writing to employers in the sector requesting assistance in enabling workers to attend the rallies, repeating the union’s approach during the SACS equal pay campaign of 2009-2012.

There are other steps that could be borrowed from this campaign. Committees of delegates played an important role, as did mass meetings of union members. Adam Bottomley and Cecilia Judge, two Socialist Alternative members who were prominent rank and file leaders in the campaign, noted the role of the mass meetings in a 2012 article in Marxist Left Review. The mass meetings were held at least twice per year: “These were often basic workshops on how to recruit to the union or explain the campaign to other people. Later in the campaign they became strategising forums where important questions about the tactics of the campaign, its relationship to the ALP, and industrial action and EBAs were debated out by an increasingly informed and opinionated layer of active members.”

These debates were important. Equal pay was opposed by employer bodies such as the Australian Industry Group, and the Murdoch press. In response to this pressure, in November 2010 the Gillard Labor government declared it wouldn’t support lifting SACS pay rates, preferring to balance the federal budget instead. A heated argument ensued, with some Labor-aligned figures in the union reluctant to embarrass Prime Minister Julia Gillard. Nevertheless, the protests went ahead, with Adam and Cecilia noting that “On the day of the protests Labor released a letter “clarifying” their support for equal pay and stating that their ability to balance the budget should not be a factor in the case”.

Unfortunately, most of this infrastructure of delegates committees and regular, sector-wide mass meetings withered without the impetus of a mass campaign. Nevertheless, there were important battles in the aftermath of the Equal Remuneration Order as employers moved to “restructure” the award and re-classify many jobs down to a lower rate. Workers at the Tenants Union of Victoria and Mind Australia went on strike to stop management from pocketing much of the benefit of the order in this way.

It’s important to remember that it’s not just gendered assumptions from decades ago that entrench low pay in SACS and many other sectors. Cut price competitive tendering of the crucial services that the community sector provides, and the constant squeeze on government spending, drive a race to the bottom which has often seen wages and services cut to the bone. Governments “partner” with the sector to bandage over the gaping wounds inflicted by decades of neoliberal assault—but then fail to fund services at anything like the rate that is needed. One current example is in Victoria, where the state Labor government’s current attacks on government services are accompanied by a continuing squeeze on the community sector as well.

SACS workers turning out in their thousands on 23 October should be a first step in an ongoing fight to address the crisis in the community sector. Defeating the Fair Work Commission’s attack on pay in the SACS sector is the crucial priority—and should also be a springboard for further action.