Fair Work Australia rules gender played role in lower pay for community sector workers, but wage hike in doubt

Fair Work Australia has ruled that gender has played a key role in workers in the social, community and disability services industry (SACS) generally being paid less than employees of state and local governments who perform similar work, in a landmark ruling looking at sectoral discrimination, but lawyers say across-the-board wage hikes aren’t a sure thing at this stage.

In a widely anticipated announcement yesterday, FWA concluded that there is a “large gap in many cases between the rates paid in the SACS industry and those paid in state and local government.”

“To the extent that the gap is gender-based we should take action to correct it if we can,” FWA, which sets Federal awards and conditions, said.

It has asked parties to make submissions on the extent to which gender has inhibited growth in the industry, and how to address that imbalance. Written submission are due by July 21, and FWA will sit again in early August.

Industrial relations lawyer Peter Vitale labels the FWA ruling an “important” one, looking at the effect of gender on sector-by-sector wages, rather than comparing salaries between men and women in the same industry.

“It establishes that the tribunal is prepared to make orders in circumstances where there is a positive demonstration that gender plays a part in wages being lower in a particular industry,” Vitale told SmartCompany.

But Vitale says there are a number of clues which suggest that business shouldn’t go into a panic about a flood of applications.

“First, the Full Bench has clearly identified that it accepts that the reasons for lower wages in the SACS sector include the fact that it predominantly employed women, but they also said that clearly that’s not the only factor, and that’s one of the reasons why it’s sent the parties away to reach an agreement on the extent to which that is the case,” Vitale says.

“It is also as part of that process has actually asked the parties to go and do some very hard homework to compare that sector against some similar male-dominated industry to try and identify what the differential is,” Vitale says, nominating local government as a comparable employer.

“The tribunal very consciously pointed out that whether or not it makes an order is within its discretion, so even though it may find that there’s some inequality, that doesn’t always means that it will make an order, particularly when you consider that it may have an impact on costs for employers and an adverse effect on employment.”

Business body the Australian Industry Group said after the decision that it supports the principal of equal remuneration, but it has “substantial concerns about the loose approach pursued by the unions and the potential for the unions’ claims to distort and destabilise Australia’s modest award safety net.”

AiG chief Heather Ridout said the case “stressed the need for a rigorous and careful approach” to assessing applications for equal remuneration orders.

“Ai Group intends to continue to take an active role in the proceedings to ensure that the equal remuneration provisions of the Fair Work Act are interpreted in a fair and workable manner,” Ridout said.

Last night, Assistant Treasurer Bill Shorten indicated the Federal Government would make the necessary adjustments to fund any wage increases in the sector, stressing the case could not have been heard under the Howard Government’s unpopular Work Choices legislation.

Unions have been pushing for a pay rise of up to 30%. The SACS industry includes residential care, social assistance, family services, disability, aged and disability care workers, social workers and community services managers.

Submissions to FWA suggest the SACS workforce is predominantly female and increasingly well-educated, with a high number of part-time and volunteer workers. The 150,000-strong workforce is ageing, however, with low participation rates for younger workers.

FWA said official figures showed that by the end of June 2009, there were more than 4,000 businesses in the SACS sector subject to the pay equity case, with most workers employed by not-for-profit organisations.

“We agree that it would be wrong to conclude that the gap between pay in the sector with which we are concerned and pay in state and local government employment is attributable entirely to gender, but we are in no doubt that gender has an important influence,” it said.

“Gender factors, particularly the “feminised” nature of work in the industry and the fact that it is carried out mainly by females, are a contributor to low bargaining power,” FWA said.