Issues of the Minimum Wage, Pay Equity and Solidarity

Suzanne HammondCPSU-SPSF National Women’s

Officer

Progress somewhat disjointed Does Fair Work Australia provide

opportunity for a more co-ordinated strategic approach?

Can expectations be fulfilled...........or Pollyanna?

Importance of Minimum Wage Deputy Prime Minister Gillard acknowledged the

relationship between minimum rates and pay equity:“When Labour announced its workplace relations policy

last year, Forward with Fairness, we said we would ask our new industrial umpire, Fair Work Australia, to consider pay equity matters. It would do that in the context of setting minimum wages”

(Gillard 2008) 

Equal Remuneration Provisions Low Paid Bargaining Recommendations of `Making it Fair’

Fair Work Australia Part 2-7 can make equal remuneration orders for equal work or comparable value

‘...any order it considers appropriate to ensure that, for the employees to whom the order will apply, there will be equal remuneration for work of equal or comparable value. FWA can only make an equal remuneration order if it is satisfied that, for the employees to whom the order will apply, there is not equal remuneration for work of equal or comparable value.’

The first ‘test case’ the ASU is seeking an equal remuneration order for the social and community services sector

The FWA s243 allows Fair Work Australia the opportunity to facilitate bargaining, call compulsory conferences and to make a workplace determinations and arbitrate an outcome at a multi-employer level

Protected industrial action is not available - this impinges the ability to exercise supporting collective action

The LHMU are the first to lodge an application under s243 for a low paid authorization enabling them to engage in multi enterprise bargaining

The application covers employees covered by the Aged Care Award and seeks to substantially increase the pay rates of what is a predominately female low paid workforce

The workforce bears all the hallmarks of work which is under paid because of gender related factors. The industry is female dominated, many are part-time, and skills are undervalued and unrecognised because of gendered concepts of work value. Many work in small workplaces, and there is a poor bargaining history with a reliance upon safety net awards and minimum wages. Rates are extremely low – with a minimum of $15.92 not much above the 2009 Federal Minimum wage of $14.28

As with the ASU equal remuneration case an important factor will be the issue of funding any pay rise in the sector. In this action the LHMU seeks to bring the Federal Government as the major funder of the sector to the bargaining table

The problem of satisfying the threshold requirements set out in Section 243(2) and the Act’s reliance on consent and where available a fairly `restricted’ right to arbitration looms as the elephant in the room

1.4 million workers affected by Minimum Wage Decisions 20% of women were award reliant compared to about 15% of

men close to 30% of part-time or casual employees were award

reliant compared to less than 10% of those on permanent or full-time contracts

casual employees were four times likely to be reliant on awards compared with a permanent or fixed term employee

the occupations most reliant on awards for pay setting were child care workers (69%) hairdressers (63%) hospitality workers (60%) labourers, cleaners and laundry workers (55.9%) and prison officers and security guards (48%)

there has been a 41% of growth in female employment between 1994-2008, two thirds of the increase in female employment was concentrated in the four low paid industries of retail trade, accommodation, health and community services and property and business. These industries account for more than two thirds of all award-dependent employees

What is an acceptable standard in Australian society? Is it acceptable to have a declining rate? Do we need to set some ‘standard’? Does the Commission see using the minimum wage

process as a means of addressing pay equity? In the recent Hearings, The Federal Department

argued that `pay equity was best handled through other mechanisms provided in the Fair Work Act, such as the equal remuneration orders and low paid bargaining stream and work value provisions’. (Kovavic at 272). This would seem at odds with the statement quoted above by the then Deputy Prime Minister

During GFC wages in general community fairly stable whereas decline in wages of low paid

It would seem that the failure of the Australian Fair Pay Commission to grant an increase has affected women workers in award reliant industries. Latest gender wage gap figures also confirm this with a further widening of the gap

Average Weekly earnings for males February 2010 $1330.90 females $1092.20 – the gender pay gap now at 18%

In 2006, the average weekly earnings of full time adult ordinary time workers was $1043.00 (ABS 6302.0), while the minimum wage was $511.86 or approximately 49% of that rate

In 2009, the average weekly earnings of full time adult ordinary time workers was $1223.00, while the minimum wage is $543.0 or approximately 44% of that rate

As a proportion of AWE the Minimum wage is about 5 % less than it was in 2006

The Final Decision denied an estimated 1.5 million workers who are reliant on minimum wage increases the ability to at least maintain relativity with workers in the general population and further exacerbated the pay equity problem

The Objectives of social inclusion, participation, employment, economic efficiency and relative needs are interlinked and form important components of the `pay equity’ outcome

A strong minimum wage would go some way in meeting these Objectives

Further considerations that go to the definition of the Objectives and how can the Panel satisfy them and bring them to life

The Objective of ‘relative living standards and the needs of the low paid’ needs clarification. Professor Richardson in examination during the panel hearings asks ‘what is relevant?’

Are we discussing what is relative to an award, relative to market rates, relative to average weekly earnings, relative living standards and what is the measure of the needs of the low paid?

Australia United Kingdom

New Zealand

United States

Average Weekly

Earnings$1,272.00 $499.00 $982.68 $781.81

Minimum Rate

$569.90 (15.00)

$225.34 $13.00 $7.25

Percentage minimum

45% 45% 45% 35%

Male Ordinary Time

Earnings$1,356.00 $538.00 $807.50 $824.00

Female Ordinary

Time Earnings

$1,130.00 $439.00 $722.00 $669.00

Percentage Gender Gap

84% 82% 89% 81%

Low Paid Bargaining Decision: Grants the right to commence multi-enterprise

bargaining in the residential aged care sector but excludes workers already covered by enterprise agreements.

Denies the union sector wide bargaining powers Would not extend the order to cover employers

covered by an existing enterprise agreement. That the provisions of the act were not to lift employees out of low pay but to facilitate bargaining where conventional bargaining at the enterprise level is ‘ineffective’

Historic Decision in the Federal jurisdiction in that first successful case

No need to have male comparators No need to prove discrimination Accepts pay inequality when compared with State

and local government sector who do similar work One factor is the feminised workforce – gender

related Funding also contributes to low pay Has instructed parties to make submissions

regarding classification structures and wage rates