6.1
This chapter considers evidence from providers, peak bodies, workers and their representatives, academics, and others on how to improve job security in aged care and the disability care sector. Proposed reforms are considered in light of their potential impacts—both positive and negative—on workers, care recipients, and providers of aged and disability care services.
6.2
The chapter considers the relative roles that providers, workers, unions, and government, as the primary funder of aged and disability care, need to play to bring about meaningful reforms. It concludes with the committee's views and recommendations.
Aged care
Inadequate 'working time security'
6.3
A majority of inquiry participants―workers and their representatives, as well as aged care providers, academics and others―agreed that the way employment is currently structured in the aged care sector provides inadequate 'working time security' for a large proportion of workers.
6.4
As detailed in Chapter 2, only around 5 per cent of aged care workers who provide direct care are employed in permanent full-time positions; between 50 per cent (in the Home Care Packages Program) and 71 per cent (in residential care) are in permanent part‑time positions; and between 32 per cent (across home care) and 19 per cent (in residential aged care) are casuals or fixed-term contractors (mostly casuals)—a further 2 to5 per cent are estimated to be 'employed as agency staff or sub‑contractors'.
6.5
This means almost 95 per cent of direct care aged care workers are employed on either part-time, casual or agency contracts, with a large proportion of the part-time employees on low minimum-hours contracts, generally working more hours than they are contracted for.
6.6
It is important to note that, under existing awards, these additional hours are 'paid at ordinary rates'—in other words, these workers receive no over-time pay or casual loading.
6.7
While the 2020 Census found casual rates between 19 and 32 per cent, the use of casuals appears to be much higher in some parts of the aged care sector. For instance, not-for-profit aged care provider Bolton Clarke employs less than 10 per cent of its care staff as casuals; but at private, for-profit provider TriCare, over 30 per cent of staff are casuals.
6.8
National Secretary of the Health Services Union (HSU), Mr Lloyd Williams, criticised the existing arrangements, arguing that workers in the sector 'need the security of known hours', predictable income and the ability 'to organise their lives'.
6.9
HSU Aged Care Division Secretary, Ms Lauren Hutchins, asked; 'Why can't we have full-time workers in aged care?' It is true that providers want flexibility, but residents need continuity of care. Ms Hutchins said that if 'continuity of care' was a 'requirement in aged care, you would see more full-time workers' in the sector, delivering 'better outcomes for residents'.
How did we get here?
6.10
There were varying views among unions, workers and academics as to why providers use so many part-time contracted workers and casuals. However, most believed that there are two key reasons:
(a)
it is cultural—a historical legacy of the way the sector has evolved over time, perhaps related to the devaluing of the work as 'women's work'; and
(b)
as a way of trying to keep costs down in order to deliver care within inadequate budget allocations.
6.11
Ms Melissa Leahy, Chief People Officer of Bolton Clarke, pointed out the irony that, while 'the nature of aged care work' requires 'a secure and permanent workforce', the sector has failed to adopt 'practices that lead to a secure workforce'. Instead, there is 'a history in the sector of the following practices':
Employing a high percentage of casuals and adopting a 'try before you buy' approach
Staff progressing through from casual, to minimum hours contract, to increased hours contracts over time
Minimum hour contracting practices as a standard approach with rostered hours not reflecting contract hours
Hours worked above minimum hour contracts do not attract any penalties, effectively using a permanent part time workforce as casuals.
6.12
According to the HSU, the insecure and precarious employment models that dominate aged care are primarily a 'cultural hangover' and don't really benefit providers long-term. However, in the short-term providers may benefit from 'having a highly compliant workforce' that can be flexed up and down—'like a casual workforce with seven days notice' and no requirement to pay a 25 per cent casual loading.
6.13
Mr Gregory Reeve, Chief Executive Officer (CEO) of Heritage Care, said the models developed over time, were designed around students and visa holders who are limited to working 40 hours per fortnight. However, Mr Reeve said 'at this point in history' this is 'not where I want us to be':
I believe in working with the unions and the people on having a core group of at least 70 to 80 per cent of full-time equivalent staff in each home who have the capacity to belong to what they see is a community and the certainty and surety of full-time employment. The spin-off of that is to the benefit of the residents, the local community, the staff members and, frankly, the organisation.
6.14
Explaining why providers might adopt these practices, Ms Leahy said providers are 'impacted by':
Low wages and insufficient funding to aged care organisations (employers) to make any meaningful changes … keeping overheads and wage costs within externally determined funding parameters that do not keep pace with real costs of providing care (including appropriately remunerating staff)
Highly mobile workforce focussed on customer care rather than a sense of loyalty to any one organisation
A large number of employees choosing to work as a casual for penalties or choosing to work multiple jobs to make ends meet
Poor workforce planning, rostering and scheduling systems and capability in a highly complex environment
Skills shortage with an insufficient pipeline of new graduate talent and pool of experienced hires, further impacted by current sector perception and COVID-19 pandemic.
6.15
In the long-term, HSU National President, Mr Gerard Hayes said the model is inefficient, forcing providers to run the same training multiple times, adding administrative burden and reducing the quality of care: 'Why wouldn't you want to enhance and support the people that you've got working for you?'
6.16
Ms Carolyn Smith from the United Workers' Union (UWU) in Western Australia (WA) suggested the employment practices 'go to the skinniness of the funding model':
… if a resident dies and a bed is empty for a week, we don't want to have to employ people. … If, literally, the week or two that it takes to fill a bed is going to wreck the budget, that's a real problem. So having a funding model that allows for that sort of thing I think is incredibly important.
6.17
Providers use large numbers of low-hours part‑time workers (as opposed to smaller numbers of full-time workers) to manage costs within very tight budgets:
Providers will staff to the minimum hours they need. The mornings are really busy because people are getting out of bed, being showered, having breakfast and having their medications, so the providers want the majority of people working from six in the morning to maybe 12. Things get—not quiet, because it's never quiet in aged care, but they're not as hectic. They do not want to employ a person for an hour where they're not running. I think that is really why that model is used.
6.18
This theory was supported by evidence from Professor Sara Charlesworth at RMIT University, who described it as 'an employer strategy': 'If you keep workers hungry for hours, you know that they are less likely to call in sick… You've got a very minimum amount of sick leave if you're a permanent part‑time worker, so you're very reluctant to lose hours'. Similarly, the HSU said keeping workers on minimum-hours contracts means they are 'far more likely to behave and be compliant'.
6.19
Mr Collins from the HWU submitted that this form of precarious work was the 'business model' of many aged care providers, who 'manipulate the hours' to keep workers 'lean and mean'.
6.20
Bolton Clarke submitted that its 20-hour per fortnight minimum-hour contracts are 'directly related to the RSL Care Enterprise Agreement which is the historic industrial instrument applicable to QLD and NSW'. Despite the low-hours contracts, Ms Leahy said, 'employees do work regular and systematic hours', with 'ninety percent … working, on a regular basis, more hours than those minimum-hour contracts ... once employees are working and settled'.
6.21
Ms Leahy added that the status quo is upheld by legacy IT platforms and poor rostering practices. When someone leaves the organisation, their shifts are broken up and distributed to existing workers, and new workers are offered the same low-hours contracts—thus the system of insecure work is perpetuated.
6.22
The HSU argued this legacy model is no longer appropriate, if it ever was:
In this day and age, when we have an ageing population and when many aged-care facilities cannot handle the demand that's currently there, there's no reason at all to have minimum-hours contracts or indeed have people working across three or four sites to make ends meet when they could have a full-time job in one particular site, which, from a safety point of view, particularly in this period, would be a far better thing to be doing and a far better business model.
How can we fix it?
6.23
Regardless of how these practices evolved, there was a general consensus that it would be very difficult for providers to change them without some wider reform—most likely through regulation and the provision of additional funding.
The role of providers
6.24
CEO of the Aged Care Industry Association (ACIA), Mr Luke Westenberg, said providers want to give staff 'more hours', 'if there were capacity in the system to enhance staffing'. However, there is not currently the funding:
… over time, the increase in the indexation of funding has failed to match the increase in the cost of staffing or services. So there has therefore been—and a number of reports demonstrate this—increasing pressure on the providers to continue to pay appropriate and attractive wages to their staff within the funding envelope, but in real terms it is not increasing as rapidly as pay scale.
6.25
Representatives from the Aged Care Services Association (ACSA) observed that it may seem paradoxical that providers say they cannot get enough workers, while individual workers say they are unable to get enough hours. ACSA CEO, Ms Patricia Sparrow, said:
Sometimes our providers will say they want to offer more hours, but the workers aren't necessarily there to take the hours. That might be to do with an overall lack of staff available, but sometimes what we hear providers say and what the workers themselves are saying don't quite add up, so I think there is further unpacking to do there. I think that the fact that we are struggling financially adds to that.
6.26
Executive Director of ASCA, Mr Malcolm Larsen said location may be a factor, with members reporting that 'in regional, rural and remote Australia it's far more difficult, at times, to fill employment positions'.
6.27
Bolton Clarke submitted that it has been 'working proactively with union representatives' to 'remove' the practice of minimum-hours contracting, recently agreeing on 'a process to review worked hours against contract hours annually or at the request of an employee'. Bolton Clarke said it anticipates 'improved rostering systems will allow [it] to move away from the practice of minimum hour contracting over time'.
6.28
Professor Charlesworth noted that employers are 'currently pushing the federal government to introduce the Pacific Labour Scheme', in order to bring women from the Pacific Islands to work in aged care in Australia, 'on the grounds that we simply don't have enough aged-care workers'. Providing more secure, full-time jobs, and part-time jobs with more hours, could help avoid the need for more migrant workers in the sector—though wages would still likely need to be increased. Wages are addressed further on this chapter.
6.29
Mr Ray Collins, Industrial Organiser from the Health Workers Union (HWU) in Victoria suggested providers are deeply wedded to current practices. When the HWU tried to work with providers to stop multiple-site work during the COVID outbreaks in Victoria during the second wave, providers were resistant and didn't understand how it could work.
They couldn't make any sense of it, because they originally said, 'How would that work? You won't be able to do that.' I said, 'No; I may not be able to because we have to tell the members that we're going to cut their hours back.' In the end, with negotiation, the employer groups—the guild, as such—and the federal government came to the realisation, in respect of the spread, that it was the way to go, and it worked.
6.30
The HWU impressed upon the committee that if single-site employment can work during COVID, it should be able to work all the time: Why 'have people working across three, four or five sites as casuals … give them permanent' work at one site.
A role for regulation
6.31
A number of inquiry participants argued that the current employment practices in aged care that cause working time insecurity will not change without government intervention.
6.32
The UWU supported the development of a regulatory framework for aged care providers to move to 'more secure jobs'. Coordinator of Member Power at the UWU, Ms Ffion Evans said 'one job should be enough for every worker in aged care'. By providing more full-time and higher-hours contracts, and reducing casual shifts, providers could 'easily' create more secure jobs—which is what 60 per cent of workers surveyed by the union want.
6.33
Mr Williams (HSU) said providers will not 'organically' move to employing more people on a full-time permanent basis because the 'funding models are so tight'. There is a need 'to regulate the staffing arrangements' because, without regulation, 'there will always be an incentive for employers to put profit before the care outcomes which the aged-care royal commission has identified and to carve up hours to save costs'.
6.34
The HSU urged the committee to recommend that the Australian Government support both wage increases and changes to provider reporting requirements. Ms Hutchins said:
… it's not just good enough to report on minutes of care; we have to look at the breakdown in terms of the roster—how many people are delivering that care?—so you can look at an average, or employers must produce a breakdown of their workforce and the hours being worked, by individual, so there is some understanding of what is actually happening in aged care.
6.35
Ms Leahy said providers struggle to balance 'consumer needs with employee needs', and that 'standards should be set by government and should be enforced by government', with 'a level of flexibility in how we apply different practices for both the workers and the clients'.
6.36
Professor Charlesworth reported that the government in New Zealand has recently made a number of changes to aged care, including: wage increases; introducing 'a mechanism for guaranteed hours'; payment 'for client cancellations'; and 'an availability allowance'. While it is leading to positive outcomes, Professor Charlesworth noted that 'the national government there didn't fund it quite enough, so there've been some teething problems'.
6.37
Dr Katherine Ravenswood from Auckland University of Technology, who appeared in a private capacity, confirmed that the wage increases in New Zealand have 'made a huge difference to … workers' lives', allowing workers to 'afford to go to the GP or to maybe have a day off to spend time with grandchildren'. However, New Zealand's care and support workers 'still experience job insecurity'. While wages have improved, workers continue to report 'irregular weekly hours', 'fluctuating weekly rosters', 'financial instability' and 'underemployment'. Dr Ravenswood argued this is due to the 'failure to remove historic, ongoing gender discrimination from the system'.
6.38
The Queensland Nurses and Midwives Union (QNMU) said the problem of working time insecurity could be solved by mandating over-time rates for hours worked over contracted hours:
In terms of the solution, if employers were required to pay overtime to part-time staff for any hours in excess of their contracted hours, then employers, in order to avoid paying the overtime, would increase the contracted hours to the number of hours that they actually want their employees to work. The payment of overtime in excess of contracted hours would essentially solve the problem.
Amend the awards
6.39
Aged care workers are generally employed under either the Aged Care Award 2010, the Social, Community, Home Care and Disability Services Industry Award 2010 or the Nurses Award 2010.
6.40
In 2012 the Fair Work Commission issued an Equal Remuneration Order (ERO) for the Social, Community, Home Care and Disability Services Industry Award, which provided pay increases of between 23 per cent and 45 per cent over a period between 2012 and 2020, in recognition of the gendered nature of low pay in those sectors.
6.41
Australian Services Union (ASU) Victorian and Tasmanian Branch Secretary, Ms Lisa Darmanin said the ERO 'was in recognition of the low levels of bargaining in the sector, and the sector still doesn't bargain: 80 per cent of workers are not on enterprise agreements'. Ms Darmanin added that if the bargaining issue is not addressed, workers in care sectors will continue to slip behind: 'you can't run an equal pay case every 10 years to fix a wage gap'.
6.42
The HSU NSW/ACT/QLD submitted that, aside from acknowledging that part‑time employees 'may agree to additional hours', the Aged Care Award 'is silent' on the topic of working additional hours above those contracted, and 'lacks provisions to facilitate the monitoring of hours actually worked by part‑time workers'. The Award provides no additional compensation for hours worked over those contracted—no loading or penalty rates, and no compensation if these are suddenly cut.
6.43
The QNMU commented on a case currently in progress at the Fair Work Commission: the Work value case—Aged Care Industry. The case, which is set to be heard at the Commission on 6 and 7 July 2022, involves applications by three unions and their members to vary the Aged Care Award 2010 in relation to:
Clause 14.1 Minimum wages—Aged Care Employee; and
Schedule B—Classification definitions.
6.44
As part of the case, the Fair Work Commission has requested information from the Commonwealth as to what wage increases it is 'willing to fund'. Mr Crank said the QNMU believes it is 'very important' the Australian Government commits to fully fund 'any wage increases awarded by the Fair Work Commission' as a result of this and other cases: 'We also have applications before the Fair Work Commission for 25 per cent wage increases in the Nurses Award and the Aged Care Award'.
6.45
The HSU NSW/ACT/QLD submitted that job security in aged care could be achieved by:
Increasing the rates of pay for aged care workers in line with the HSU’s Work Value Case before the Fair Work Commission to ensure that workers earn a wage that doesn’t force them to work for multiple employers and is appropriate to the value of the work being performed;
Amending the relevant industry awards to include a minimum part time engagement of 20 hours per week, while allowing workers to enter into genuine flexible work arrangements with their employer should their personal circumstances mean they need to work less than this minimum;
Amending the relevant industry awards to include a six-monthly review of part-time hours, and where additional hours beyond contracted hours are being performed on a regular basis, employers should be required to amend contracted hours accordingly;
Requiring all recipients of federal aged care and [National Disability Insurance Scheme] NDIS funding (residential and home care), as part to their accreditation and/or registration, to provide evidence that all work performed in the delivery of services is paid in accordance with the relevant award;
Increasing regulation on aged care and NDIS platform businesses to ensure that at least award rates are paid, worker and client safety is ensured, and both aged care and NDIS quality and safety standards are being met.
Increase direct, permanent employment
6.46
Aged care providers said they use casual employees mainly to cover for planned and unplanned absences. However, for-profit provider TriCare reported that over 30 per cent of its staff are casuals.
6.47
Not-for-profit provider, Bolton Clarke reported having recently reduced its casual workforce from around 20 per cent to around 10 per cent, which Ms Leahey said is Bolton Clarke's 'ideal casual number'. Without sufficient availability of casuals, Bolton Clarke reported that it has to rely on agency staff, which is not its 'preference'.
6.48
At a hearing, Ms Leahey said Bolton's Clarke's casual employees had an average tenure of around two years with the organisation. However, on notice, Bolton Clarke submitted that the actual average length of service for its casual employees is 4.57 years. This indicates that casual staff are not simply 'filling in'—they are a long-standing, critical part of any aged care workforce.
6.49
Per Capita proposed that more direct employment is needed in aged care to maintain quality, because in a 'third-hand' employment arrangement 'the responsibility for the performance and development of the workforce is not within the employer's remit':
By outsourcing the recruitment and retention of staff, it makes it very difficult, if not impossible, I would say, for there to be a standardised national accreditation system that is monitored and provided directly by employers to their staff and where the development of staff and their ability to meet those standards is monitored directly through the direct employment relationship.
6.50
Professor Charlesworth said that Ms Lynelle Briggs AO, one of the Aged Care Royal Commissioners, 'recommended that aged-care workers be directly employed'—a recommendation the professor thinks is 'absolutely crucial'.
6.51
Mr Westenberg said providers in the industry generally prefer the idea of workers engaged on a permanent basis, if it can 'be managed in such a way that it was able to meet operational needs and requirements of the residents'. Similarly, Ms Leahy said Bolton Clarke wants its staff to 'transition into permanent part-time or full-time work over time'. However, low wages and challenging workloads are a disincentive: 'We talk about the shortage in labour and workforce coming through the pipeline, but really, as a sector, what we need to be focusing on are retention initiatives'.
Casual conversion
6.52
Casuals in aged care commonly work for many years with the same employer. However, workers may not want to—or may not be able to—convert from casual to permanent.
6.53
Mr Williams explained that existing casual conversion provisions frequently do not apply in the case of aged care workers, because 'it's all shiftwork' and 'employers have a lot of scope to change and mix the hours'. This means workers can easily fail the test of working 'a regular pattern of hours'.
6.54
The Australian Nursing and Midwifery Federation (ANMF) said that, in its view, changes made to the Fair Work Act 2009 by the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Act 2021 are 'likely to increase the number of casual employees, rather than encourage employers to offer permanent work at the time of engagement'. The ANMF argued that the casual conversion provisions in the Act 'are not adequate':
The ANMF is particularly concerned about the impact new s15A [which defines the meaning of a 'casual employee'] may have in the aged care sector. Consistency of care provision in residential care is an important factor in ensuring quality and safe care can be delivered; staff who are familiar to residents and who know residents are better able to care for those residents.
6.55
Mr Collins said employers want to retain their casual workforce. The HWU often adds casual conversion clauses into enterprise agreements it negotiates with providers—'where, if you work a certain amount of hours over a period of time on a regular systemic roster, you can convert to part time'—but the union finds these clauses are 'not complied with'. Inevitably, Mr Collins said, the employer 'will indicate an excuse and break the chain so they don't get converted to part time or, subsequently, full time'.
6.56
Mr Kevin Crank from the QNMU said that even if some casuals in aged care do benefit from casual conversion, that will not help 'the vast bulk of the aged care workforce', which 'is labelled as permanent part-time but treated as casuals'—'they'll get no benefit whatsoever from the casual conversion provisions in the legislation'.
Increase wages
6.57
Without an increase in wages, inquiry participants argued that initiatives to increase job security in aged care would likely fail.
6.58
Ms Hutchins explained that even if providers offered full-time rosters 'with complementary part-time workers', on the current wages, full-time workers would 'have to supplement their income elsewhere':
If you're still on $23 an hour and you're living in a metropolitan area, that's not going to be enough. We need better rosters, full-time rosters, plus a wage increase so that workers can stay in one job, and it can be a good job that delivers for them and delivers for residents.
6.59
According to Professor Eagar, the Royal Commission recognised that wages in aged care are 'substantially' lower than they need to be 'for attracting and retaining the workforce we need'.
6.60
This section considers proposals for how to achieve wage increases in aged care in a way that would build secure jobs for the future.
The role of providers
6.61
Ms Sparrow said the members of ACSA would like to pay higher wages but simply cannot: ‘The funding that we receive to deliver services is less than the value of the service that we provide'. While ACSA believes the workforce is 'undervalued', and this needs to be addressed, it is 'very difficult' for providers to "balance the books":
By way of illustration, currently, 64 per cent of all residential-care facilities are operating at a loss, and that rises to a whopping 78 per cent of all rural and remote residential-care facilities in the bush. So it makes it very difficult for us to increase salaries and pay these workers what we think they are worth.
6.62
Similarly, Mr Westenberg said 'an increasing proportion of providers are running at a loss operationally'—'not an environment conducive to increasing wages'.
6.63
Mr Westenberg pointed to surveys that show aged care employers 'would be very happy to support an increase in wages', but only 'if given an increase in funding':
I know that members do seek to provide appropriate individualised arrangements for their workplace. I think it's also certainly true that one of the constraints upon further increases in wages is the funding envelope...
6.64
Ms Leahy observed that the minimum wage 'increased in total by 13.95 per cent' between 2016 and 2020, while the Aged Care Funding Instrument 'increased by 5.5 per cent' over the same time period:
… so aged-care providers are becoming more and more challenged to meet wage expectations. The wages in our enterprise agreement have eroded against the federal minimum wage increases over the last five years.
6.65
Mr Reeve said Heritage Care is working on a new Enterprise Agreement 'with the unions' in NSW and Victoria, and while he strongly believes the care staff 'are deserving of a significant increase in salary or hourly rates', current funding makes it very difficult to achieve that. The added imposition of COVID regulations and requirements (for good reasons) has further exacerbated the situation, according to Mr Reeve, adding an estimated '$7.50 per resident per day in unfunded costs'—making it even harder for providers to offer any payrises independently of funding increases.
6.66
Mr Westenberg said aged care providers and staff 'do their best every day to provide excellent care within the regulatory and funding structure within which we operate'.
6.67
However, Mr Crank claimed that private providers could pay more. They are driven to keep wages low by their need to make a profit. Mr Crank said carers employed in the public sector are 'typically … paid more for the same work':
That gap is exaggerated in aged care, where the gap between what a nurse performing aged-care work in the public sector in Queensland, which happens—there are aged-care facilities run by the Queensland government, for example, who are staffed by employees working for Queensland Health. Those public sector employees are paid dramatically better than nurses working in private aged care and have dramatically more employment security in the public sector for nursing in aged care compared to the private sector.
6.68
State-run aged care may have better wages and better job security, and have handled COVID better too, but Professor Charlesworth pointed out that 'public sector involvement in aged care … sits at only 10 per cent'. While the majority of funding comes from government, the aged care sector is predominantly run by for-profit and not-for-profit profit providers.
6.69
However, the Commonwealth Government is 'effectively the lead employer in the sector', as it provides the funding. Professor Charlesworth said this gives the Commonwealth 'a great opportunity to actually address job insecurity' in aged care: 'You can't say that for retail and you can't say that for hospitality, but the federal government is in the box seat to actually do something about job insecurity in the sector'.
The role of government
6.70
All participants agreed the system is underfunded. In January 2020, Ms Sparrow commented that Australia's expenditure on aged care is 'at the bottom of the barrel' compared with other OECD countries at 1.2 per cent of GDP, and Professor Charlesworth said 'we will certainly have to spend more money' to reach an adequate standard of care. Asked if Australia should increase taxes if necessary to cover the additional funding, Professor Charlesworth said:
Yes. It's a public good. Aged care, child care, disability—they're all public goods. These are something that government provides, and it is absolutely different in every quality from other goods and services.
6.71
Mr Hayes from the HSU said the $17 billion the government has promised over the next four years to reform aged care is welcome, but it is not enough—the numbers 'just don't add up to really what it needs if we're fair dinkum about trying to fix this'. The $17 billion allocated is split over residential and home care, and Mr Hayes pointed to economic modelling which says $20 billion is required just to 'deal with' residential aged care:
[T]hat would give a 25 per cent pay increase, which would effectively be $5, it would promote an extra 59,000 jobs within the Australian communities and it would promote an extra 90 minutes of direct care hours. That's what it would take over a four-year period to get to that level.
6.72
According to Ms Hutchins, a 0.5 per cent increase in the Medicare Levy 'would fully fund residential aged care' to the minimum standard. Research conducted by Monash University 'indicated, overwhelmingly, that people were … prepared to kick in'.
6.73
The HSU NSW/ACT/QLD submitted that this reform would lift quality by attracting more carers to the sector and 'retaining a caring and skilled workforce by lifting wages above the minimum wage': 'High quality, safe and decent care for older Australians can be achieved if we can agree as a society to lift the Medicare Levy from its current level of 2 per cent to 2.5 per cent'.
6.74
Per Capita argued for a 'care-led recovery' from COVID-related economic downturns. The proposal would see government stimulus directed towards investment in health care and social assistance, which Per Capita argued has been shown to provide 'a significant return in creating jobs not only in that sector but more broadly and an economic return that exceeds similar investment in the construction sector by two to one'.
6.75
Ms Leahy said 'minimum wages need to be reflected in the award' and 'flow into' enterprise agreements. Providers need to balance competing demands—from improving the quality of food, of cleaning and of staff numbers—so if 'we want to get that funding through to our frontline employees, I think we need to see that in the awards'.
6.76
Ms Smith pointed out that a rise in wages, while critical, would not necessarily address income insecurity without other measures; as workers may still not be able to secure enough shifts to make a living wage.
6.77
Dr Ravenswood submitted that an inherent problem in aged care is fragmentation―of the system and of regulation. The solution in Australia, as in New Zealand, is to make the system 'less complicated and … less fragmented'; that is to standardise it. Dr Ravenswood argued for an over-all increase to aged care funding, standardised funding mechanisms, 'enforceable minimum standards', and standardised 'health accreditation of aged care providers' across the nation.
Mandate staffing levels
6.78
The Department of Health does not mandate minimum staffing levels for residential aged care in Australia. The Aged Care Quality Standards currently require all aged care services 'to have and use a skilled and qualified workforce, sufficient to deliver and manage safe, respectful, and quality care and services'.
6.79
A number of inquiry participants argued that without clear, measurable and enforceable minimum staffing levels, providers could continue to understaff their facilities—even if funding were increased.
6.80
The QNMU advocated for 'legislated minimum ratios and skill mix across all sectors, including aged care to ensure that members can deliver safe and effective care'.
6.81
Dr Ravenswood said 'enforceable minimum standards are important'. Options for enforcing minimum staffing levels include through procurement policy and/or accreditation. That is, government could mandate a 'minimum amount' of expenditure on staff in its procurement tenders. It could also make minimum staffing levels a requirement for accreditation:
That procurement, if it was specific to the aged-care sector, could also very specifically include safe staffing levels and safe workloads, which makes it easier to monitor and easier to report on.
6.82
The HSU commented that the makeup of the workforce is also critical:
… so that you have the right amount of carers, the right amount of allied health professionals, the right amount of nurses, the right amount of doctors visiting and so forth becomes a good outcome for a resident. Otherwise, if we just say the word 'ratio', it doesn't really get into the detail of what we need to get a positive outcome for people in aged care.
6.83
Ms Hutchins said that the Government's response to the aged care royal commission 'actually went below what was recommended in terms of staffing'. As discussed in the section below on 'the Government's plan to reform aged care', the Government has committed to mandating face-to-face care at 200 minutes per day per resident, including 40 minutes with a registered nurse, by 1 October 2023. Ms Hutchins said this 'doesn't even meet the three‑star international standard', which is defined as adequate care.
Increase transparency and reporting
6.84
The HSU raised concerns that a current lack of transparency and reporting of how funding is spent has led to a two-speed system, where some not‑for‑profits have been forced to close, as they can't meet compliance costs, while some private providers 'skim [profits] right off the top' of the funding:
I understand there's a $10-a-day nutrition allowance … but, again, there's no clear indication of where that money would be spent or how it would be spent. I think it is the same thing with wages … people with $159 million net profits and others driving Ferraris. Transparency of funding has to be absolutely critical in this.
6.85
Professor Eagar argued that governments should regulate to require that government funding provided to aged care facilities 'actually be spent on care', because under current conditions:
… there is no need to acquit the funding that you receive on care. You can either take that as profit or go and spend it on real estate or whatever you want to do with it.
6.86
Asked how the government could be sure that funding increases would lead to wage increases, Mr Westenberg said:
… the cost of staffing in aged care is, depending on the source, somewhere between two-thirds and three quarters of the cost of the total provider expenditure. So increases in funding are largely going to go to the largest component of expenditure.
6.87
Asked if the industry would support 'enforceable, transparent measures that tie wages to funding', Mr Westenberg responded that, while a 'huge majority of funding goes to wages', and there was unlikely to be 'a whole lot of objection', but 'the devil is in the detail'.
6.88
Ms Sparrow said ACSA would support 'greater transparency' alongside 'a proper uplift in the system'. A genuine increase in funding—'not just tinkering around the edges'—that would allow providers to meet their costs.
6.89
While for-profit aged care providers have claimed that they are unable to fund wage increases or more secure work arrangements for their employees, this conflicts with evidence provided to the committee and in media reports.
6.90
One for-profit aged care provider, TriCare, received $103 million in Commonwealth funding in the 2019–20 Financial Year. At an 81-bed Toowoomba facility, TriCare received more than $6 million, equivalent to approximately $75 000 in funding per bed, before incorporating fees charged to residents.
6.91
The committee heard that TriCare is domiciled in the tax haven of Norfolk Island, while TriCare’s owners, the O’Shea Family, are among the richest families in Queensland and are major political donors.
6.92
In August 2021, investigative journalist Anthony Klan reported that TriCare has been based on Norfolk Island for tax purposes since 1971, with its headquarters listed as a small accountancy firm on the island. Mr Klan wrote:
[TriCare has] been physically based in Brisbane since it was founded in 1968 by accountant Paul O'Shea, who had bought some nursing homes in the Sunshine State.
Three years later, O'Shea, a Queenslander, signed a few forms and registered the company—then called Nursing Centre of Australia—as being based (on paper) on Norfolk Island, which had five years earlier become the first tax haven in the Pacific Islands.
TriCare has been "based" on Norfolk Island—and using its associated tax and accounting loopholes—ever since.
6.93
TriCare responded to this evidence, acknowledging 'the registration status of the TriCare group of companies', but saying the profits from its businesses are 'taxed in Australia', and that neither 'TriCare nor its shareholders have received any tax benefit in relation to Norfolk Island'.
6.94
Similarly, the lavish lifestyle enjoyed by the owners of for-profit provider Heritage Care have been extensively reported on since the tragic COVID-19 outbreak at its Epping Gardens facility in Melbourne.
Explore market-driven solutions
6.95
Inquiry participants were asked to consider market-driven solutions, including increasing competition in the sector and increasing contributions by private citizens.
6.96
Asked if more private sector competition in the aged care market might lead to an increase in wages and an improvement in conditions for workers, Professor Charlesworth said research has shown the introduction of 'consumer directed' home care services―ostensibly to promote competition and choice—has in fact led to 'a diminution of the quality of care' and 'no improvement of wages'.
6.97
According to the Aged Care Financing Authority (ACFA) occupancy rates are falling in residential aged care―'down to 88.3 per cent in 2019‒20 from 89.4 per cent in 2018‒19 and 90.3 per cent in 2017‒18'. These falls are due to an increase in the promotion of the home care model and are putting more financial strain on residential care providers.
6.98
In relation to the Commonwealth's procurement of private residential aged care services, Professor Charlesworth argued that insufficient funding and a lack of transparency from providers means there is 'no evidence that competition in the market provides higher wages or better quality employment'.
6.99
Mr Westenberg was asked if a solution to increasing wages and job security in aged care might be to increase consumer contributions. Mr Westenberg agreed and noted there is 'a lot of support across the sector for increased consumer contributions as a means of assisting in increasing funding':
I would think that, from a public policy perspective, it's quite reasonable for taxpayers to anticipate that consumers with significant assets or other sources of income would make a contribution to what can be, in some cases, very expensive care. So I think a mix of private and public would make sense.
6.100
Mr Westenberg explained that the current funding system places 'restrictions on the means-tested fee', an annual and lifetime fee 'cap', and dictates that 'the consumer cannot pay more than those caps', and accommodation deposits are capped. The Legislated Review of Aged Care 2017 (Tune report) recommended 'the abolition of the lifetime and annual caps with the means-tested fee' and looking at 'some exclusions of assets which therefore lead to a lower deemed capacity to pay for some people—for example, whether the family home is included because other family members are living there'. Mr Westenberg concluded there are 'a range of areas' in which more consumer contributions could be sought, 'but it is currently regulated and consumers don't have the freedom to offer to enter into that arrangement with an aged-care provider'.
6.101
Dr Ravenswood was asked if the system in New Zealand allows aged care facilities to use private sources of revenue to 'facilitate higher pay to attract workers and provide high-quality care'. There is nothing in New Zealand's legislation which 'prevents' an employer paying wages that are higher than the regulated minimums. However, Dr Ravenswood clarified, 'they would not be funded publicly for the higher wages'. Providers could, under the regime, 'provide a higher standard of care and charge extra on top of what is seen as the standard level of care that is publicly provided'.
6.102
Ms Leahy said more consumer contributions are 'definitely an option … for consideration', and, while she did not hold an opinion on whether that would be 'the right model or not from a sector perspective', either way, 'we definitely need to get more funding into aged care'.
Facilitate sector-wide bargaining
6.103
Unions that participated in the inquiry argued that bargaining in the sector is constrained by the fact that workers are not able to bargain with the party that 'holds the purse strings'. Ms Smith said:
We're talking to providers who get money, so they do hold a particular purse, but it's not like bargaining. … providers will say to us, 'We want to do this, but we have not got the money.' A lot of employers have told me over many years that they haven't got the money, but I think there is information via the royal commission and via some of the work that's done backing that up. … The Fair Work Act means we can only talk to providers, not to the government, which is the ultimate funder. … if we don't have the government at the table, we don't have the decision-makers at the table.
6.104
Ms Annie Butler, Federal Secretary of the ANMF said with over two‑and‑a‑half thousand aged care facilities and over 900 aged care providers, it is 'a disparate, fragmented industry'. Providers have varied understanding of industrial relations and HR expertise, so 'there are a whole lot of contributing factors that have allowed these employment models to persist'.
6.105
The QNMU added that aged care workers have traditionally been reticent to strike or take industrial action, as they are focussed on caring. This has disadvantaged these workers in bargaining.
6.106
Mr Williams said the bargaining framework in Australia 'simply does not work for aged care or disability workers' for two reasons:
aged and disability care workers 'are unable to bargain collectively across their industry'; and
the government is the primary funder, but workers and unions are 'unable to bring the funder to the table in order to bargain'.
6.107
Dr Ravenswood said Australia has found itself in this 'situation' because the government, 'as the economic employer', has 'kept several steps away from the actual employment relationship between the aged-care provider and the worker'.
6.108
The HSU argued that 'funded sectors, like aged care and disability care, should be able to bargain across the sector', and that the bargaining framework should be updated to ensure that the funder, or the 'economic employer', can be compelled to participate in the negotiations:
When you have the funder of services sitting outside the system dictating the price, it puts a cap on bargaining. What we find is that the aged care and the disability care sectors are more reliant on the minimum award system, because all of the funding is based on the minimum award. … It makes the bargaining process extraordinarily difficult because, if you seek to negotiate better outcomes on wages or career structures or training and professional development that enhances those career structures, the response from the employers in both the aged care and disability sectors is: 'We would like to do those things because we believe they add quality, but we're unable to because of the funding models that we're constrained by.' The economic source dictates the bargaining outcome.
6.109
CEO of TriCare, Ms Kerin McMahon agreed that the current framework makes bargaining 'really challenging':
… you are trying to come to the table and determine what types of workplace conditions and agreements you can afford and bargain on when you've got that destabilised funding environment happening in the background. Plus there is also a modern award better-off concept to overcome as well.
6.110
Ms Smith said that 'sector-wide bargaining' is 'the only answer to the problems of aged care'. With providers being funded in the same way, from the same source, Ms Smith argued 'it's just ridiculous' to continue with the current outdated bargaining model, which requires bargaining 'provider by provider'.
6.111
Ms Smith said the UWU wasn't proposing there be no focused or specialised bargaining―'We have to be sensible about it'―but argued that:
There are some very clear segments of the industry that are very similar and can get similar economies of scale, and we should be bargaining with them as an industry. There are probably 10 to 20 big players in each state who are about the same size and with whom I think you could bargain with. It would make sense to begin with them, and maybe you could then bargain with smaller providers and more specialist providers.
6.112
Professor Charlesworth said in New Zealand the process of increasing wages and improving conditions in aged care:
… was overseen by a really important collaboration between unions, aged-care providers, the national government, advocacy groups and, interestingly, their Human Rights Commission, which was very important in getting through to the populace the idea that the human right to be have a dignified old age was really important, as was the human right of workers to have dignified work.
6.113
Ms Leahy from Bolton Clarke was asked if she was supportive of the idea of sector-wide bargaining, with the government as a party 'at the table', she confirmed that she was, saying: 'we've definitely got to all work together to find that solution'. Ms McMahon from TriCare also supported a sector-wide approach, with the government taking part in discussions.
Response to the Royal Commission
6.114
The Aged Care Royal Commission made 148 recommendations—123 were joint recommendations and 25 were specific to the individual Commissioners. The Morrison Government accepted, or accepted in principle, 126 of the recommendations.
6.115
Key recommendations from the Royal Commission included Recommendation 84, Recommendation 86 and Recommendation 87. Recommendation 84 called for an 'increase in award wages':
Employee organisations entitled to represent the industrial interests of aged care employees covered by the Aged Care Award 2010, the Social, Community, Home Care and Disability Services Industry Award 2010 and the Nurses Award 2010 should collaborate with the Australian Government and employers and apply to vary wage rates in those awards to:
(a)
reflect the work value of aged care employees in accordance with section 158 of the Fair Work Act 2009 (Cth), and/or
(b)
seek to ensure equal remuneration for men and women workers for work of equal or comparable value in accordance with section 302 of the Fair Work Act 2009 (Cth).
The Government noted the recommendation, saying the 'matter is currently being considered by the Fair Work Commission', and decisions of the Commission 'are independent of Government'. The Government stated that it 'will provide information and data to the [Commission] as required'.
6.116
Recommendation 86 called for a 'minimum staff time standard for residential care' that would mandate:
From 1 July 2022, the minimum staff time standard should require approved providers to engage registered nurses, enrolled nurses, and personal care workers for at least 200 minutes per resident per day for the average resident, with at least 40 minutes of that staff time provided by a registered nurse.
In addition, from 1 July 2022, the minimum staff time standard should require at least one registered nurse on site per residential aged care facility for the morning and afternoon shifts (16 hours per day).
From 1 July 2024, the minimum staff time standard should increase to require approved providers to engage registered nurses, enrolled nurses, and personal care workers for the average resident for at least 215 minutes per resident per day for the average resident, with at least 44 minutes of that staff time provided by a registered nurse.
In addition, from 1 July 2024, the minimum staff time standard should require at least one registered nurse on site per residential aged care facility at all times.
The Government accepted this recommendation, stating that the new funding model to be introduced on 1 October 2022 would provide 'additional funding … to support services to meet the Royal Commission’s recommended minimum 200 minute care time standard'. However, the minimum care time standard is not set to become mandatory until 1 October 2023.
6.117
Recommendation 87 highlighted the Commissioners' view that direct employment should be the default and dominant mode of work in the aged care sector. It said that the Australian Government should require all aged care providers to:
(a)
approved providers: have policies and procedures that preference the direct employment of workers engaged to provide personal care and nursing services on their behalf
(b)
where personal care or nursing work is contracted to another entity, that entity has policies and procedures that preference direct employment of workers for work performed under that contract.
6.118
The Government did not accept Recommendation 87, instead referring it to yet another Commission—the Productivity Commission—for further examination.
The plan to reform aged care
6.119
In May 2021, in response to the Royal Commission's recommendations, the Australian Government published, Respect, care, dignity: A generational plan for aged care in Australia (the Plan), which outlined a roadmap to deliver a $17.7 billion aged care reform package.
6.120
The Plan laid out spending and initiatives from 2021 to 2025. It included a number of initiatives to build the size of the workforce, which are not detailed here. Initiatives that have the potential to help to boost job security in the workforce are listed below:
$18.4 million to improve pricing transparency and put pressure on rising administrative charges;
$3.2 billion to support aged care providers to deliver better care and services through a new Government Basic Daily Fee supplement of $10 per resident per day, while continuing the 30% increase in the homeless and viability supplements;
$189.2 million to implement the transparent funding model, the Australian National Aged Care Classification (AN-ACC) and the increase in residential respite funding which it will bring for around 240,000 senior Australians accessing residential aged care and 67,000 accessing residential respite care each year;
$49.1 million to expand the Independent Hospital Pricing Authority to help ensure that aged care costs are directly related to the care provided;
$3.9 billion to increase the amount of front line care (care minutes) delivered to 240,000 aged care residents and 67,000 who access respite services. By 1 October 2023, this will be mandated at 200 minutes per day, including 40 minutes with a registered nurse;
An additional $27.3 million to fund 1,650 new training places, including the Aged Care Transition to Practice Program (150 places) and Aged Care Nursing Scholarship Program (1,200 places). Allied health professionals will also be eligible for postgraduate scholarships (300 places)
$25.1 million to expand the Rural Locum Assistance Program, ensuring continuity of clinical care and strong clinical leadership, so aged care providers in regional and rural areas will have increased access to a surge workforce. An incentive scheme for permanent placements in regional and remote areas will also increase staff retention
An additional 33,800 training places for personal care workers to attain a Certificate III in Individual Support (Ageing). Both new and existing personal care workers will be encouraged to obtain this qualification.
6.121
According to the Plan, the new 'transparent funding model' for residential aged care, called the Australian National Aged Care Classification (AN-ACC) model, was 'independently developed by the University of Wollongong'. This model will replace the current Aged Care Funding Instrument.
6.122
The Plan also includes $200.1 million to introduce a new Star Rating system in Australia, which will 'highlight the quality of aged care facilities, better informing senior Australians, their families and carers'. The Plan states that:
The new funding system will be introduced with a significant funding uplift, supporting better care for residents and greater transparency through reporting of staffing levels and a Star Rating system. …
$3.9 billion in additional funding from October 2022 will further support face-to-face care time for each resident. This will be monitored, and each provider will need to report their care staffing minutes commencing with their annual financial return in October 2021 and moving to quarterly reporting from 1 July 2022.
6.123
Recommendation 76 included a recommendation from Commissioner Briggs that the Aged Care Workforce Industry Council should:
… lead the Australian Government and the aged care sector to a consensus to support applications to the Fair Work Commission to improve wages based on work value and/or equal remuneration, which may include redefining job classifications and job grades in the relevant awards.
6.124
While the Government indicated that it 'accepts' Recommendation 76 in its response, the Plan does not include any reference to changing the award or redefining job classifications.
6.125
Critics have said that $17.7 billion over four years is 'about half' of what economic modellers say is needed to address the recommendations of the Royal Commission.
6.126
ANMF analysis of the Plan concluded that apart from the 'retention bonus' for aged care nurses, 'the Morrison Government did not provide anything specific in the Federal Budget to boost wages':
Rather than a one-off bonus, ANMF supports a significant wage rise for the private and not-for-profit aged care workforce, including nurses and personal care workers, that reflects their value and the importance of their work.
6.127
The ANMF further noted that it has made an application in the Fair Work Commission 'seeking a 25 per cent wage increase for aged care registered and enrolled nurses, and personal care workers', and is seeking, 'in the next round of enterprise bargaining to bring private and not-for-profit aged care nurses’ and carers’ wages in line with public sector aged care'.
6.128
The HSU submitted estimates from Equity Economics that a pay rise for aged care personal care workers of 25 per cent, provided 'over four years in real terms would increase the cost of aged care by $2.2 billion over four years', and increase spending on residential aged care in Australia 'from 0.94 per cent of GDP to 0.98 per cent of GDP over four years'.
Disability care
6.129
While many of the issues affecting aged care are relevant across the care sectors, inquiry participants made a number of proposals for reform specific to disability care.
6.130
The ASU recommended government procurement rules around competitive tendering and the funding of service providers be reformed to mandate that:
Wages for all workers, cannot be lower than the [Social, Community, Home Care and Disability Services Industry Award 2010] rates …
Provision will be made in the price for accrual of portable leave entitlements …
Adequate overhead costs for all workers, regardless of the nature of their employment …
End of contract considerations for all workers, who do not receive a casual loading …
Continuity of service provisions … [and]
Providers [be] required to comply with industrial law.
6.131
The Australian Services Union (ASU) proposed a portable long service leave scheme for the NDIS. Ms Lang suggested that the NDIS should be viewed more like a single employer, and presents an opportunity for the government to 'pilot what portable entitlements, such as portable long service leave, could look like at a national level'. Noting that portable long service leave entitlements schemes are in place in other jurisdictions, such as in the Australian Capital Territory, Queensland and Victoria, Ms Lang said these schemes have 'proven to be very successful in attracting and retaining those workers'.
6.132
As well as portable long service leave, the ASU proposed the development of 'a comprehensive and ongoing training system for the industry' which would provide disability support workers—'especially those working for multiple employers or moving to new positions'—with the ability to 'accumulate recognised and portable qualifications'. The ASU said such a training strategy could play 'an important role in stabilising and uplifting' employment levels and practices in the sector, especially in rural and regional areas.
6.133
The National Foundation for Australian Women (NFAW) endorsed calls to increase direct employment in aged care and submitted that '[c]orresponding measures be taken to address the growth of contracting and gig economy employment in the disability sector'.
6.134
In addition the NFAW recommended that any national labour-hire licensing scheme implemented at the Commonwealth level 'should at a minimum identify home-based care in both the disability and aged care sectors among the high-risk sectors to be covered by the scheme'.
6.135
The UWU recommended that the government 'commit to resourcing and investing in sustainable and secure caring industries of the future, specifically aged care, disability support and early childhood education and care'.
Committee view
Aged care
6.136
Aged care is largely publicly-funded: the Commonwealth contributes over two-thirds of the funding and the total amount is rising year-on-year.
6.137
Aged care is a large employer—with an estimated 434 107 individuals working in the sector in 2020, aged care employs roughly the equivalent of the population of Canberra. Health Care and Social Assistance—the industry category that aged care sits within—is Australia's biggest employer, with 1 809 700 individuals employed in the sector in February 2021. By way of comparison, Public Administration and Safety employs around 848 400 people, Transport, Postal and Warehousing employs around 673 900 people, Agriculture, Forestry and Fishing employs around 325 400 people, and Mining employs around 252 100 people.
6.138
The need for skilled and dedicated aged care workers is constant, and it is also growing fast. Around 500 000 additional workers will need to join the workforce over the next decade.
6.139
At the same time primary care workers in the sector are some of the lowest‑paid, poorly-recognised and financially-insecure workers in the country. Rates of casualisation have increased since 2016 and the widespread use of low minimum‑hours contracts, with no over-time pay or casual loadings, means part‑time staff are treated as a quasi-casual workforce and enjoy no working time security.
6.140
Residential aged care workers are chronically overworked in understaffed facilities, and many of them are working multiple jobs—across multiple sites—to stitch together living wage.
6.141
It does not have to be this way.
6.142
The problems with the way the workforce is structured have developed over time. They are driven by economic, practical and cultural factors and are deeply entrenched.
6.143
Service providers may value the flexibility offered by these arrangements—they may save a dollar here and there on wages—but this inquiry has demonstrated that ultimately no one is benefitting from the status quo. There are workforce retention issues, inefficiencies in training and human resources, risks for patient safety, and negative impacts on patient care.
6.144
During this inquiry, we have asked workers, unions and providers—why don't you just change this situation? Resoundingly these parties have told us that they would like to change the situation, but they do not 'hold the purse strings'—they are limited in what they can do to resolve these issues on their own.
6.145
The committee accepts these claims, notwithstanding that there appears to be spectacular rorting of the public purse by for-profit aged care providers, as evidenced by the lavish lifestyles of the super-wealthy owners of TriCare and Heritage Care. It is particularly grotesque that public aged care funding is being diverted to tax havens at the expense of aged care workers and recipients.
6.146
While the committee believes individual employers, particularly for-profit providers, could be doing more to increase job security at the facility or service level, we agree that the sector cannot resolve these issues without leadership from the Australian Government.
6.147
Regardless of the model of care provision, the primary funder of aged care is the Australian Government. As the economic employer of the aged care workforce, the government inevitably drives industrial relations outcomes through regulation, as well as through financial incentives and disincentives.
6.148
Aged care workers earn close to minimum wage, despite their skills, qualifications, and the immense social value of their work. This is a travesty and reflects the historical undervaluation of so-called 'women's work', despite its significant value and contribution to society.
6.149
It is up to the Government, as the economic employer of aged care workers in this country, to work with providers, unions and the sector to finally provide aged care workers—the vast majority of whom are women—with decent wages and conditions. This will benefit not only workers, their families and communities, but care recipients, and the Australian economy more broadly.
6.150
As the primary funder of health care and social assistance—the largest employment sector in Australia—the Commonwealth has great influence over the labour market. Aged care reform should be seen as a driver of economic prosperity and a way to help lift female workforce participation and prevent hard-working women from retiring in poverty.
6.151
Instead of being insecure, low-paid and undesirable, aged care jobs need to offer workers financial security and independence. With decent wages and conditions, aged care workers would be better able to contribute to the prosperity of their local economies and help rebuild the national economy post-COVID.
6.152
The Government's response to the Aged Care Royal Commission falls short of what is needed to fix the problems in aged care and lets down aged care workers by failing to provide the wage increases they have been waiting far too long for.
6.153
The response is a starting point but much more remains to be done. The committee acknowledges and supports the announcement of the minimum staff time standard. However, it should be implemented from 1 July 2022, as the Royal Commission recommended, not left until October 2023. In addition, the Government must explain why it has not responded to the Commission's suggested additional staff time increase, proposed for 2024.
6.154
The benefits of continuity of care are clear. Secure, ongoing employment supports continuity of care—precarious and insecure work destroys it.
6.155
The Government should introduce workforce composition guidelines and targets, and require residential care providers to report against these targets, moving towards an increased proportion of full-time care staff over time.
6.156
The growth of indirect work arrangements, including on-demand platforms, labour hire, agency work and subcontracting in aged care, is of grave concern to both aged care workers and aged care recipients. This has already been recognised by the Aged Care Royal Commission through its Recommendation 87, which unfortunately still has not been accepted by the government.
6.157
The relevant awards must be reformed, with wages increased to reflect the value and importance of the work performed by aged care workers in Australia.
6.158
The loopholes in the awards that currently allow for part-time staff to be used as a quasi-casual workforce must be closed. The practice of low minimum‑hours contracting must be ended.
6.159
The Australian Government must facilitate sector-wide bargaining for aged care and disability care and must play a central role in the enterprise bargaining process. Employees in these industries are locked out of enterprise bargaining for a range of factors including large numbers of individual enterprises, historic undervaluation, reliance on government funding, reduced bargaining power and the goal of customer directed care. Enterprise bargaining in the care sectors cannot be conducted in a meaningful way unless government, providers, workers and unions, and sector peak bodies, are all at the table.
6.160
At over $21 billion a year and rising, the Commonwealth's investment in aged care is substantial. The Government must use this investment to drive an increase in stable, high-quality, on-going jobs that will strengthen families and communities, not leave them struggling in poverty.
6.161
The Royal Commission provided an opportunity for a total reset in aged care in Australia. Carers are the heart and soul of aged care—there can be no reset for aged care without an overhaul of its disastrously-structured, overworked and underpaid workforce.
6.162
Unfortunately, the Government's response, and its Generational plan for aged care in Australia, provides precious little for workers.
Disability care
6.163
The National Disability Insurance Scheme is a major public investment and has the capacity to create tens of thousands of new, high-quality jobs across all parts of Australia.
6.164
The committee acknowledges there are significant challenges in upscaling the disability workforce to meet the demands of the NDIS. The answer is not to be found in the 'Uberisation' of the care sector.
6.165
The committee notes with concern that the Government is 'considering pathways to price deregulation' under the NDIS. Deregulating the price paid for care can only lead to a 'race to the bottom' for the wages and conditions of workers and a lower standard of care for vulnerable Australians.
6.166
The government, and the pricing authorities, must learn the lessons from the failed Mable experiment during the pandemic. Aged and disability care services must be staffed by adequately-trained and supported personnel, backed up by fair pay and conditions.
6.167
Older Australians and those living with disability need and deserve a standard of care that can only be provided by a securely-employed workforce.
6.168
To begin to address the concerning shift towards even greater precarity in the sector, disability care workers need the capacity to bargain on a sector-wide level.
6.169
Far from deregulating prices, pricing authorities need to take into account the genuine costs required to provide high quality care when they determine pricing. This means setting prices that provide for wages and conditions sufficient to attract and retain a skilled workforce in the sector.
6.170
Related to this, the committee supports the establishment of a statutory Equal Remuneration Principle, backed up by strengthened powers for the Fair Work Commission, so that it may make orders for pay increases to rectify gender‑based undervaluation in sectors like disability care and aged care.
6.171
Finally, the committee urges the Government to review the NDIS with a view to reforming those aspects of the model that are leading to a proliferation of low-paid care workers engaged as independent contractors via online platforms. This issue will be revisited in the committee's final report.
Recommendations—Aged care
6.172
The committee recommends the Australian Government urgently responds to and supports the Aged Care Industry work value case lodged in the Fair Work Commission by the Health Services Union and the Australian Nursing and Midwifery Federation, to ensure that wages fairly reflect the work value provided by aged care workers.
6.173
The committee recommends that, as part of the Star Rating system, and any other relevant assessment or grading system, the Australian Government requires aged care providers to report on, not just their staffing levels, but also:
the proportion of staff in direct, permanent employment arrangements;
the staffing classification mix;
hours of paid training provided to staff; and
6.174
The committee recommends that the Australian Government requires, as an ongoing condition of holding an approval to provide aged care services, that aged care providers report on:
the proportion of staff that are full-time, part-time, casual, on-demand platform and agency/labour hire workers;
the number of contracted staff hours and rostered staff hours;
the staffing classification mix;
the proportion of spending on frontline staffing and employment costs, other operational expenses, profits and surpluses, and other key indices; and
non-minimisation and non-avoidance of Australian tax laws.
6.175
The committee recommends the Australian Government develops an aged care provider procurement policy that actively promotes job security in the sector, recognises the benefits of secure, on‑going permanent employment to the delivery of safe, high-quality aged care, and specifies that the establishment of secure, direct, and fair-paid jobs is a key criterion of aged care investment.
6.176
The committee recommends that the Australian Government adopts and extends Recommendation 87 of the Aged Care Royal Commission, requiring as a condition of holding an approval to provide aged care services that aged care providers have policies and procedures that preference the direct employment of all aged care workers. Aged care providers should be required to ensure all work, including through indirect work arrangements such as on-demand platforms, is paid in accordance with the relevant award, and this should also be enforced by the Aged Care Quality and Safety Commission and relevant unions.
6.177
The committee recommends that, in accordance with Recommendation 85 of the Aged Care Royal Commission, the Australian Government ensures that increasing remuneration to support attraction and retention of employees is an explicit objective of all pricing authorities in the care sector.
6.178
The committee recommends that the Australian Government implements a minimum staff time standard for residential aged care adequate to ensure high quality and support maximised hours rostering of staff.
6.179
The committee recommends the Australian Government requires that all aged care providers in receipt of public funding are domiciled in Australia for tax purposes, and do not engage in tax minimisation or avoidance.
Recommendations—Across the care sectors
6.180
The committee recommends the Australian Government considers a sector wide facilitated agreement making scheme to support fair wages and secure employment conditions, recognising the unique dynamics of the care sectors. The Fair Work Commission should be provided with the power to require the participation of relevant government/s as the economic employer/s in the sector.
6.181
The committee recommends the Australian Government works with unions, service providers and employers to amend relevant Awards to ensure the widespread practice of low minimum-hours part-time contracts is restricted, including consideration of:
specifying a minimum number of part-time hours that can be included in standard contracts;
requiring employers to pay over-time rates for hours worked over and above contracted hours;
including automatic mechanisms for review—for instance, if after six months an employee is consistently working above contracted hours, they should be offered the opportunity for the contract to be amended to reflect the actual hours worked; and
employees consistently working over 35 hours per week for 12 months or longer—regardless of the pattern of hours—should be offered full-time employment.
The committee also recommends that these provisions should be easily enforceable and include anti-avoidance mechanisms.
6.182
The committee recommends the Australian Government directs pricing authorities in the care sectors to consider all genuine costs required to provide high quality care when determining pricing, including wages and conditions that will attract and retain a skilled workforce, best practice skill mix, and paid training hours.
6.183
The committee recommends the Australian Government strengthen the powers of the Fair Work Commission so that it may order pay increases for workers to rectify gender-based undervaluation; including establishing a statutory Equal Remuneration Principle. For example, guiding principles making it clear that a male comparator is not required to assess whether workers in an industry are receiving equal pay for work of equal or comparable value.