The aged care compact – FAQs

The aged care workforce compact was announced on 5 March 2013 by the Minister for Ageing Mark Butler. Here are some explanations of the detail in the compact.

Why is the Compact important?

This long awaited action on the problem of low wages in aged care is crucial in an industry which determines the quality of life of over 250,000 older Australians – a number which will rapidly increase in the coming years. Calls for action have been made by several Productivity Commission reports, the last being the Caring for Older Australians Report in 2011, which set the platform for the Gillard Government’s aged care reform package Living Longer.Living Better in April 2012.

The recently published 2012 National Aged Care Workforce Census and Survey Report (see Table 3.3. below) shows the continuing decline of Registered and Enrolled Nurses in the aged care workforce – at the very time that the age acuity and frailty of residents is increasing and they have more complex care needs.

Table 3.3: Full-time equivalent direct care employees in the residential aged care workforce, by occupation: 2003, 2007 and 2012 (estimated FTE and per cent)

Occupation 2003 2007 2012
Nurse Practitioner n/a n/a 190 (0.2)
Registered Nurse 16,265 (21.4) 13,247 (16.8) 13,939 (14.7)
Enrolled Nurse 10,945 (14.4) 9,856 (12.5) 10,999 (11.6)
Personal Care Attendant 42,943 (56.5) 50,542 (64.1) 64,669 (68.2)

The Compact is a vital first step to improving both the wages and careers of aged care nursing staff and the quality of care for older Australians. These two things go hand in hand. If we are to have enough staff with sufficient skills to look after the rapidly aging population then we must provide professional pay and reasonable conditions.

Will the Compact solve the problem of low wages in aged care and help recruit and retain RNs and ENs?

No, it is just a start. Remember that while $1.4 billion over four years sounds like a lot, it is spread over almost 200,000 residential aged care workers and 100,000 home and community care workers. So it can’t do more than begin to address the problem of low wages. However, it is a good down payment and we now await the recently established Aged Care Financing Authority to undertake its work on the true cost of care, including what reasonable wage levels should be.

The Compact won’t solve the current attraction and retention issues in the industry, especially for Registered and senior Enrolled Nurses – the gap between the new rates and public/private sector acute hospital rates of around $200-$300 per week is just too great.

What wage increases does the Compact deliver?

Every aged care worker will receive at least a 1% additional wage increase on top of employer funded increases in each of 2013, 2014 and 2015 , and a 0.5% increase in 2016. By the end of the Compact in 2016 aged care workers and nursing staff will have received a significant boost to wages of about:

  • $29 per week or $1510 a year for personal care workers/AINs
  • $35 per week or $1820 a year for enrolled nurses, and
  • $46 a week or $2390 a year for registered nurses

These figures are based on average national enterprise agreement rates across the three classifications of $762, $908 and $1203 per week respectively. These higher rates will flow to other allowances and shift and weekend penalties. Employers must absorb the on costs as they normally would when wage increases are awarded.

How are the Compact wage increases delivered?

For employers in residential aged care and home and community care who have current (or recently expired enterprise agreements) or are a residential provider of 50 beds or more, then they must have a current enterprise agreement (approved by fair Work Australia) which contains all elements of the Compact, in order to access the Compact money.  Residential providers of less than 50 beds, or home and community care providers without a current or expired enterprise agreement, must enter into a binding contract with the Department of health and Aging committing to implement all of the requirements of the Compact.

The ANF will be seeking to ensure that providers who have both residential and home and community care operations bring all workers under the one enterprise agreement

Why through an enterprise agreement?

Because as a legally enforceable document it is the only way we can ensure that employers will pass all of the money on to aged care nurses and carers.

In the past Commonwealth Governments introduced CAP payments, part of the purpose of which was to improve the wages of aged care workers. Unfortunately, the employers never flowed that money to their employees. We can’t let that happen again.

The proposed contract between small residential providers and HACC providers with DOHA is a second best option and not one preferred by aged care unions. Why? Because neither you, as an individual worker, or the ANF on your behalf, can initiate legal action should the employer breach the contract. Only DOHA, as the other party to the contract, could do that and it is unlikely that it would.

What does the employer have to pay nurses and aged care workers?

In addition to the 1% Compact money, employers must provide annual employer funded wage increases of at least 2.75% per annum or the Fair Work annual wage review increases whichever is higher.

What if we have a current Agreement that has not expired?

The employer will have to sit down with members and the ANF to vary the current agreement so that it complies with the Compact requirements. Until that is done the employer won’t be able to get the money through the CAP to pass on to employees.

Where an agreement has a considerable period to run it is not the intention that it be opened up for complete renegotiation. The variations will be minimal to ensure implementation of the Compact.

What changes will there be in a varied agreement or a new enterprise agreement?

For both new and current agreements the Compact wage increases(1% in 2013-2015 plus 0.5% in 2016) will have to be reflected in both the wages clause and the wages schedule. We expect this will be in a separate column to the employer funded wage increases.

The new or varied agreement must provide for employer funded wage increases of at least 2.65% per annum (although most agreements will already provide for at least this amount).

In addition the agreement must provide that rates for Personal Care Workers/AINs and support staff must be at least 3% above the Aged Care Award 2010 and the agreement rates for Enrolled and Registered Nurses must be at least 8.5% and 12.65% above the Nurses Award 2010 respectively. This can be phased in over three years for RNs, two years for ENs and 1 year for PCWs/AINs and support staff as follows:

Classification 2013-14 2014-15 2015-16 2016-17
Personal and community care workers and other aged care staff 1.50% 3.00% 3.00% 3.00%
Enrolled nurses 2.50% 5.50% 8.50% 8.50%
Registered nurses 4.00% 8.00% 12.60% 12.60%

Rates below these margins will be rare in residential aged care but more likely in home and community care. In addition the varied or new agreement must contain a number of clauses agreed in negotiations with the employers that are not in the modern awards – the Nurses Award 2010 and the Aged Care 2010. These include:

  • a workload management clause
  • a disciplinary clause that allows for a system of warnings and a right to representation
  • an occupational health and safety clause
  • a general training clause; and
  • provisions allowing a casual worker to convert to permanent employment or for a part-time worker to have their hours reviewed to reflect actual hours worked.

Is it compulsory for an employer to sign on to the Compact and negotiate an enterprise agreement or a contract with DOHA?

No. Some employers, either for ideological other reasons will refuse to engage with the Workforce Compact and pass up the opportunity to help boost their employees wages. In these cases we will need to campaign on the ground to make them participate – just as we usually would to get a reluctant employer to bargain for an enterprise agreement.

There will be a handful of the 2750 residential aged care providers and a few HACC providers who believe they cannot commit to the minimum 2.75% per annum or the margins above the modern award for financial reasons. The ANF will work with these employers, where they are genuinely in trouble, to see what can be done.

Is there a deadline?

There is no deadline to sign up to the Compact. However, only those employers who have an enterprise agreement or binding contract with DOHA in place by 1 November 2013 will have the money back paid to 1 July 2013, when the first increases should flow to employees. After 1 November employers will only receive the money from they get their EA or contract with DOHA in place.

Are all stakeholders committed to implementing the Compact?

No. The employer groups involved in negotiating the Compact have not signed on to the final outcome and, apart from one, were not represented at the launch of the Compact by Aged Care Minister Mark Butler and Workplace Relations Minister Bill Shorten.

However in a letter to Minister Butler on 13 January key employer groups (such as Catholic Health, ACSA, LASA, Uniting Care and Aged Care Guild) wrote:

…we collectively agree that whilst we are not able to endorse the Compact in its entirety for reasons well established, we nonetheless seek to work within the parameters of your decision to the best of our abilities in the interests of both staff working within age care and the older Australian’s they care for.

The ANF intends to hold all employers to these sentiments. Where employers choose not to implement the Compact and access these wage increases for employees then ANF, together with other aged care unions, will campaign in the workplace to change the employers mind.

What about Mr Abbott and the Opposition?

We do not know whether the Opposition, the possible future Government after the election on 14 September 2013, will continue to implement the Compact outcomes through enterprise agreements or at all.

They have not declared their hand. However, in Parliament on 17 September 2012 Coalition Shadow Minister for Aged Care, Senator Fierravanti-Wells, said the Compact was simply a way of forcing employers to have enterprise agreements and boost membership of the HSU! She continued, “If the minister really wants to help the sector, why doesn’t he give them back the money as a conditional adjustment subsidy like under the system that is already established?

The answer is that in the past money has been given to providers through CAP to supposedly ‘boost wages’. However, the employers have never passed it on. This time we were determined to have a legally enforceable mechanism in place which obliges the employers to pass all of the money from the Compact to workers.

No aged care worker is required to join a union because of the Compact or because there is a requirement for the money to be delivered through enterprise agreements. However, we don’t shy away from the fact that union members get better wages and conditions than non-members. It pays to belong to the ANF.

The ANF calls on the Opposition to commit to implementing the Compact should they win the federal election in September.

To help us achieve this please send an email to Opposition leader Tony Abbott and Shadow Minister for Aged Care, Senator Fierravanti-Wells by going to www.anf.org.au and our campaigns page.

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