I rise tonight to speak on the issue of the social and community services pay equity case. A principle that is strongly held by the Australian Labor Party is that workers who perform equal work should receive equal pay. This is particularly the case for pay equity between men and women, as there has historically been, and remains, a significant gender pay gap in Australia.
In 2010, women in Australia, on average, were earning 18 per cent less than men. The 2009 modelling by the National Centre for Social and Economic Modelling found that, while there are a number of contributing factors behind the pay gap between men and women, gender was the cause of 60 per cent of the difference between men’s and women’s earnings. In other words, women are earning less simply because they are women. The Gillard government takes the principle of equal pay for equal work very, very seriously. In fact, we take it so seriously that we enshrined the principle of equal pay for equal work in legislation. Section 302 of the Fair Work Act states:
FWA may make any order (an equal remuneration order) it considers appropriate to ensure that, for employees to whom the order will apply, there will be equal remuneration for work of equal or comparable value.
Contrast this with Work Choices, which actually entrenched pay inequity.
The first application made for an equal pay order was brought by the Australian Services Union, the Health Services Union, the Australian Workers Union, United Voice and the Australian Education Union, who were seeking amendments to the Social and Community Services, or SACS, award. The SACS award covers workers engaged in a variety of jobs, including social, welfare, youth, recreation, disability and community development services. A very unusual, but pleasing, feature of the SACS pay equity case was that almost all interested parties—including employer groups and governments—supported the claim put forward by the unions.
While pay equity represents a significant cost to employers in the SACS sector, most of which are not-for-profit community organisations, these employers face another cost, and that is the challenge of attracting and retaining skilled employees. In fact, the Australian Council of Social Service, ACOSS, found in its annual Community Sector Survey that the attraction and retention of staff was the biggest challenge facing not-for-profit community services.
The sector competes with all levels of government for skilled workers but struggles to offer comparable wages. The Productivity Commission’s 2010 report into the contribution of the not-for-profit sector recommended market based wages for community workers, recognising that wages are a major factor in the successful recruitment and retention of staff. There are a number of reasons why retention of skilled staff is important, but I will mention just two. Firstly, clients of community services do not just connect with a service; they connect with a worker providing that service. They develop a rapport with that worker and the worker gains that person’s trust. The trust that builds over time in community services is critically important to the continued engagement of clients.
The combination of low pay and challenging working conditions provides little incentive for skilled workers to stay in their jobs and not move on to higher paid government jobs. Often, in community services, we have the unfortunate situation where a client has just started to establish a trusting relationship with a worker, only to find they have left the organisation. The client needs to develop a new relationship with a new worker, and that is a process which may take several months.
A second major reason why attracting and retaining skilled workers is important is to retain the best possible workers. SACS workers often deal with people who are disadvantaged or in crisis—and they can change lives. When you are dealing with services that could change a person’s life and alter the course of their future forever, it is vital that the most qualified and most talented workers are delivering those services. Many of these workers are outstanding but society undervalues them and, as a result, they leave for a job where the pay they receive matches their skills and abilities. These are just two of the many reasons why the SACS pay equity case is so important, not just to the workers but to the clients of these services.
For over a decade, I worked as an industrial officer with the Australian Services Union, the lead union pursuing the SACS pay equity case. I have worked with and represented many of the workers affected by Fair Work Australia’s ruling in the SACS pay equity case, and I understand exactly how hard they work and the passion they have for their work. I also understand that working in the SACS sector can be very challenging. We are talking about people who often work with disadvantaged or at-risk clients. In many of these jobs, it is easy to get burnt out, particularly when you are passionate about the work you do and care about the people you are trying to help and support. To give you an idea of the challenges this work can involve, some of the jobs in the SACS sector include counselling families in crisis, running shelters for the homeless and working with people with disability or victims of family violence and sexual assault. It is not easy work, but I believe it is important work because it is an integral part of the Australian spirit that we look after the most vulnerable people in our community.
The SACS pay equity case application was lodged on 11 March 2010 and the order was made on 22 June 2012, so it has been a long process—a bit over two years. The order made by Fair Work Australia will provide pay rises of between 23 per cent and 45 per cent for 150,000 SACS workers. This will be phased in over a period of eight years starting from 1 December 2012. Importantly, 120,000 of these workers are women.
I spoke earlier about the gender pay equity gap, and the pay differences between men and women was actually a key argument in the application and featured quite heavily in subsequent hearings. It is significant that the pay differences between men and women were also recognised in Fair Work Australia’s decision. In fact, at the very beginning of their decision they stated:
We consider gender has been important in creating the gap between pay in the SACS industry and pay in comparable state and local government employment.
I explained before that the costs of equal pay in the SACS sector are to be borne by not-for-profit community organisations. One of the major sources of funding for the services delivered by these organisations is government grants, so, to help the sector meet the costs of this order, the Australian government needs to increase their contribution to these organisations. We estimate that, until June 2021, the additional cost of providing Commonwealth funded social and community services as a result of this order will be about $3 billion. Two bills introduced by my Tasmanian colleague Julie Collins, the member for Franklin and Minister for Community Services, established a special account to quarantine this $3 billion to ensure that the Commonwealth’s contribution to these pay rises can be met.
This includes not only programs directly funded by the Australian government but programs indirectly funded through payments to the states and territories such as National Partnership payments and national specific purpose payments. By establishing the special account, the government is ensuring that the funds can only be used to provide supplementation to organisations so they can provide eligible workers with increased equal pay. Funding will be drawn from the special account by eight Commonwealth agencies that directly or indirectly fund services provided by organisations with employees covered by the pay equity arrangements.
The decision to create the special account demonstrates the Gillard government’s commitment to SACS workers and the historic pay equity case as well as providing certainty to the SACS sector. I would like to congratulate the unions that supported the equal pay case and recognise their hard work on behalf of the 150,000 SACS workers affected by this decision. I know my former colleague Linda White from the Australian Services Union National Office was particularly instrumental in running this case; however, there are many other people throughout the organisation, including staff in the national office and the state and territory branches, who have been involved in the campaign.
I think we should pay particular tribute, however, to the grassroots union members. A number of my parliamentary colleagues and I met with SACS workers who travelled to Canberra to explain the importance of their work, to share their passion for the communities they were delivering services to and to explain how the lack of pay equity was affecting them. In addition to this, thousands of workers in the SACS sector wrote to me and other members and senators and lobbied fervently for equal pay, and it was my great pleasure to be able to assist them. It just goes to show that unions are successful when their membership is active and when the workers are united in their cause and organised in pursuit of a just cause.
I would also in my last few moments like to recognise that this Labor government has supported this cause all the way through. Not only did we provide the legislative provisions that allowed equal remuneration orders to be given; we also supported the case in submissions to Fair Work Australia and we have contributed the funding that meets our commitment to a strong and sustainable social and community services sector—a well-deserved win by those unions and members of unions involved.