Calls to delay gender pay increases ‘deeply concerning’

The Australian Industry Group (Ai Group) is pushing for “landmark” gender pay increases to be delayed to allow for the sufficient time needed for funding negotiations and various adjustments to be made.

The Fair Work Commission (FWC) recently announced that workers across various women-dominated industries would receive pay rises after a wage review into “gender-based undervaluation”.

The finding of the review was that workers who fall under five priority awards deserve a pay rise for what was deemed as an extended undervaluation.

The decision means that pharmacists under the Pharmacy Industry Award 2020 will receive a 14.1 per cent increase in their pay over the next three years. Early childhood education and care workers will also see an award increase over the next five years, with a 5 per cent buffer to become operative from 1 August 2025.

On top of that, the commission also recommended a 35 per cent increase for some health professionals.

During the original review, the Australian Industry Group (Ai Group) opposed wage increases for NDIS-funded disability workers unless explicit government funding was pledged in support.

“It would go beyond mere rectification and lead to large cohorts of employees being reclassified at substantially higher rates of pay for which no funding commitment has been made by the Commonwealth,” said the Ai Group’s submission.

This stance was echoed by the commission itself during the review. It said that if the wage increases are not supported by Commonwealth funding for childcare workers, parents and caregivers could bear the brunt of the pay increases.

“The Commonwealth has made no commitment to or decision about increased funding … The likely outcome of a lack of a funding commitment on the part of the Commonwealth … is that providers will be forced to increase their fees, which will have consequences for the capacity of at least some parents with young children to participate in the workforce,” it said.

In the revised submission, the Ai Group pushed for a delay on some of the increases to 1 July 2026 or later to allow for funding negotiations, cost assessments, and operational adjustments – and then for the increases to be phased in over five years.

“Changes to awards that result in significant cost increases for employees are routinely implemented subject to sensible phasing and transitional arrangements,” said Innes Willox, chief executive of Ai Group.

“This undoubtedly will be necessary in this case as employers grapple with the complex and costly implications they will potentially face.”

“There are still many details of proposed changes to classifications and rates of pay that need to be carefully worked through and determined by the commission before it can set operative dates for the variations.”

Sabrina Scherm, customer success manager at HiBob, claimed that the delays proposed by Ai Group are “deeply concerning”.

“Hearing calls to delay crucial pay matching for historically undervalued, female-dominated sectors for six years is deeply concerning,” she said.

“While we recognise economic pressures, delaying long-time coming action sends the wrong message to a significant part of the workforce, ignores union demands for fairness, and risks entrenching the gender pay gap. It also risks eroding women’s trust and confidence in the work they do, and the companies they work for.

“Delaying warranted pay adjustments is a step backward. To attract and retain talent and build equitable workplaces, Australian businesses must commit to tangible, timely action now to close the gap once and for all – sooner rather than later.”

According to Willox, employers are anxious about the proposed changes, with many unsure of where the funds are going to come from to pay for the increased rates.

“Many impacted employers want to pay employees more but are understandably anxious about how they will be able to afford the scale of wage increases that are washing through the care sector,” he said.

“The decision will affect employers in the early education and community services and disability sectors, including many small not-for-profit organisations, who simply don’t have capacity to absorb dramatic cost increases or pass those costs on to the often vulnerable people and communities they service.

“We can’t treat employers impacted by the decision like a magic pudding with an endless capacity to deliver dramatic wage rises. They simply can’t. Ultimately, these costs will need to be borne by the broader community.

“Ultimately, the commission will need to balance the imperative to implement its decision with the need to do so in a manner that is also fair to employers.”