Historically feminised industries and occupations, including those in the care sector, have been at the forefront of social, economic and political debate over recent years. In this Insight, we consider some of the landmark decisions which have been handed down in the aged care and early childhood education and care (ECEC) industries – including a recent landmark multi-employer supported bargaining agreement – and how these decisions will impact employers.
The Work Value Case – aged care
The Fair Work Commission’s Work Value Case[1] in the aged care industry was heard over 3 stages. As part of the Fair Work Commission (FWC) stage 3 decision, significant changes to employees’ terms and conditions of employment took effect from 1 January 2025.
The most significant of these changes were those recently made across 3 modern awards, as a result of lengthy proceedings before the FWC involving the Health Services Union and the Australian Nursing and Midwifery Federation. The FWC decisions have brought about changes to:
- the Aged Care Award 2010 (Aged Care Award);
- the Nurses Award 2020 (Nurses Award); and
- the Social, Community, Home Care and Disability Services Industry Award 2010 (SCHADS Award).
A further shake-up of the aged care industry is looming, with the Aged Care Act 1997 (Cth) set to be repealed and replaced by the Aged Care Act 2024 (Cth).
All of these changes have, and will continue to have, wide-reaching implications across the aged care sector and other parts of the care industry.
So, what has changed?
The stages 1 and 2 decisions of the Work Value Case resulted in a 15% wage increase for many aged care workers, which came into effect on 30 June 2023.
The third and final stage decision was handed down on 15 March 2024 which varied the Aged Care Award, Nurses Award and SCHADS Award. These changes largely came into effect on 1 January 2025 and include:
- adding a definition to the Aged Care Award for ‘direct care’ employees to clarify their role in the aged care sector;
- a new classification structure for direct care workers under the Aged Care Award;
- a new classification structure for direct care aged care workers under the SCHADS Award which better aligns with the classification structure for direct care workers under the Aged Care Award;
- updates to the indicative duties and qualifications for general and direct care employees under the Aged Care Award;
- the transfer of nursing assistants working in residential care settings in the aged care industry from coverage under the Nurses Award to coverage under the Aged Care Award; and
- increases to the minimum pay rates for direct and general care workers covered by the Aged Care Award and aged care employees covered by the SCHADS Award.
There will also be a second increase to the minimum rates of pay for some aged care employees on 1 October 2025.
While these changes only apply to select cohorts of employees, the new classification structures should provide some clarity over how employees are classified in the industry.
A new Aged Care Act from 1 July 2025
In addition, the Aged Care Act 1997 (Cth) is set to be repealed and replaced by the Aged Care Act 2024 (Cth) (Aged Care Act), which will bring about further changes to the aged care sector from 1 July 2025.
Under the new Aged Care Act, aged care providers will (among other things):
- need to ensure their actions are guided by the newly introduced Statement of Rights;
- register with the Aged Care Quality and Safety Commission and have any residential care homes approved;
- need to comply with a revised set of provider obligations, including conditions on registration and new financial and prudential standards;
- need to ensure their workforce meets revised worker screening requirements;
- be subject to new statutory duties aimed at protecting the health and safety of individuals to whom the provider is delivering services to; and
- be subject to expanded whistleblower protections intended to ensure that aged care workers, and those in care, their families and carers can raise concerns or report information without fear of unfair treatment or reprisal.
With so many changes in play, it’s important that aged care providers ensure that they are across the amendments and have implemented the necessary changes across their operations.
Landmark ECEC decision – ‘first of its kind’ supported bargaining agreement
As part of the FWC’s gender pay equity research, one of the findings made was that work performed by ECEC employees has been historically undervalued in much the same way as the work of aged care workers.
To that end, a significant decision was handed down by the FWC on 24 January 2025, resulting in 20,000 additional ECEC workers being able to access a 15% pay rise over a two-year period, under a landmark multi-employer supported bargaining agreement. A further 33 employers applied to the FWC to be covered by the ECEC Multi-Employer Agreement 2024-2026 (Agreement), which is underpinned by the Children’s Services Award 2010 and the Educational Services (Teachers) Award 2020.
The supported bargaining agreement is the first of its kind, with now a total of 60 employers covered, making them eligible to apply for the federally-funded Education and Care Worker Retention Payment grant.
The aim of the grant is to attract and retain early childhood education and care workers nationally. It is a requirement of the grant that a workplace have a workplace instrument that applies to its employees. Employers may apply to join the Agreement to satisfy this condition. Importantly, ECEC employers have until 30 September 2026 to apply for the grant.
Key Takeaways
Aged Care employers
In light of the aged care industry changes, it is important that all employers within the sector:
- review worker rates of pay to ensure that they remain complaint with award minimums;
- ensure that employees covered by enterprise agreements which incorporate the awards remain better off overall;
- ensure that employees are correctly classified under the new classification structures;
- provide notice of any classification changes to affected employees;
- bear in mind the impending increases to minimum rates of pay to take effect on 1 October 2025; and
- begin considering the impacts the new Aged Care Act will have on their business and prepare accordingly.
ECEC employers
Employers in the ECEC sector may wish to consider their eligibility for the Education and Care Worker Retention Payment grant and whether they would like to opt-in to the scheme. Meeting the conditions for receipt of the grant may take some time, so ECEC employers should consider these matters as soon as possible, if they haven’t done so already.
[1] Aged Care Work Value Case [2022] FWCFB 200; 319 IR 127; Aged Care Work Value Case [2023] FWCFB 40; Aged Care Work Value Case [2024] FWCFB 150.
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The views expressed in this article are general in nature only and do not constitute legal advice.
Please do not hesitate to contact us if you require specific advice tailored to the needs of your organisation in relation to the implications of these changes for your organisation.