Victorian Government Backflips On Equal Pay Promise

In a blow for community sector workers in Victoria, the Baillieu Government has backed away from its election promise to fund a pay rise for the community sector workforce should it be ordered by Fair Work Australia.

In its submission to Fair Work Australia in relation to the Equal Remuneration Case for Community and Social Sector Workers, the Victorian Baillieu Government warned of possible cuts to jobs and services if it has to fund a large pay rise for the female-dominated workforce.

And Victoria’s Not for Profit sector has reacted angrily, pointing to the election promise made by the Minister for Women’s Affairs and Community Services Mary Wooldridge to fund the pay rise even it went over the budgeted $200 million over four years.

The Australian Services Union brought the case before Fair Work Australia (FWA), and is seeking a pay rise for community and social sector workers – a workforce which is predominantly female. The case is based on a 2009 Queensland decision to award pay rises to such workers of up to 37 per cent over three years.

In its submission to FWA, the Victorian Government says that that contrary to the unions’ submission, it ought not be assumed that all governments have undertaken to fully fund the unions’ claim in the event that it is granted by FWA.

It says the Victorian Government estimates that this year it will provide $1,568 million funding for SACS workers wages.

It says the pay rise sought by the union means the cost to the Victorian government of funding SACS workers will be in the range of between $700 million over 4 years (if an 18% rise is ordered) and $1,700 million over 4 years (if a 37% rise is ordered).

The submission says the Victorian Government’s public commitment of $200 million over 4 years to support the decision by FWA is consistent with their election commitment of responsible management of the State's finances, which includes maintaining an operating surplus of at least $100 million each year without pushing up debt.

The submission says depending upon the extent of any wage increase granted and the prospect that any increase in wages may not be fully funded by the Commonwealth Government, this may mean that there will be a “gap” between the rates of pay prescribed by FWA and the funding of the sector.

It says this gap may result in a reduction in services which in turn may have an impact on the numbers of positions in the sector, and / or on the hours of work available to workers employed in the sector.

The Government submission says evidence provided by Lincoln Hopper from Mission Australia demonstrates that there is a possibility that the claim, if granted in full or in part, will have adverse effects on employment, hours of work and service provision in the SACS sector.

It says Mission Australia employs 1,052 people who would be affected by an equal remuneration order, which would see the organisations salary costs rise by a total of $3.735 million per year, affecting the organisations ability to employ people and resource projects.

In a pre-election interview with VCOSS, CEO Cath Smith just a couple of days out from the 2010 Victorian State Election, Liberal member for Doncaster, Mary Wooldridge said the Liberal Government would fund the pay-rise even if it cost more than the estimated $50 million per year.

In the interview, Wooldridge said the Victorian Coalition fully supported the pay equity case, and would support the decisions of Fair Work Australia and would be passing them through in their funding arrangement.

She said the Victorian Coalition was very clear that they believed this needs to happen and that they would be funding the outcome.

The Australian Services Union says the Baillieu Government backflipped on the election promise in their submission to Fair Work Australia, stating that any unfunded increases would have to be paid for by reducing services and jobs.

ASU Assistant Branch Secretary Lisa Darmanin slammed the recent announcement, saying it is an insult to hard-working, mostly women community workers who the Minister for Community Services Mary Wooldridge promised – on the eve of the state election – that a Coalition government would value their work by funding and supporting the equal pay claim at Fair Work Australia.

Darmanin says the Baillieu Government’s submission is effectively saying that equal pay for these workers needs to be paid for by cutting services to the most disadvantaged in our community, or make those working in it work harder by reducing staff.

VCOSS CEO Cath Smith says she expects the government to honour its pre-election commitments to community sector workers.

With the Victorian State Budget to see an estimated $46 billion in transaction revenue over the next 12 months, Smith says there must be room in the budget to fund this key election promise.

VCOSS’s comments were echoed by a coalition of leaders in the community and welfare sectors, including the CEO’s of MacKillop Family Services, Sacred Heart Mission, Berry Street, Anglicare, Centre for Excellence in Child and Family Welfare, Jesuit Social Services, Wesley Mission.

Julie Edwards, CEO of Jesuit Social Services says this is an issue of social justice and equality and is a sign of what and who we value in our community.

She says the pay equity claim needs to be supported by government and sector alike. If this doesn't happen it sends a clear message that they don't value staff and they don't value the people who most need care.

Micaela Cronin, CEO of MacKillop Family Services says community sector employees work with the most vulnerable people in Victoria, in some of the most challenging environments and this should be recognised with adequate remuneration and to do this, government support is critical.

View the Victorian Government's submission here: http://www.fwa.gov.au/sites/remuneration/submissions/Vic_Government_submission.pdf