Mixed reaction to National Fair Pay Case

Last week Fair Work Australia upheld a pay equity claim for 200,000 community services workers in the National Community Services pay claim case but has fallen short of ordering an equal pay order, instead calling on the unions to show how much of the pay gap is caused by gender discrepancies.

Not surprisingly the decision by Fair Work Australia in the  has generated mixed responses, as outlined in this extract from an article that first appeared in Pro Bono News.

The Australian Not for Profit sector has reacted to the long-awaited ruling by Fair Work Australia in the equal remuneration case with a mixture of optimism and caution, saying it is now up to the government to commit to funding a pay rise for community sector workers.

With many in the sector hoping Fair Work Australia would finally award an equal remuneration order for 200,000 social and community sector workers, the decision by FWA to delay ordering a wage rise for workers was seen by some as an anticlimax.

Fair Work Australia upheld the pay equity claim for community services workers, saying it does recognise that there is not equal remuneration for SACS workers when compared with state and local government employment.

However FWA fell short of issuing an equal remuneration order, saying the extent to which this is based upon gender is not yet clear. FWA has instead calling on the unions to show how much of the pay gap is caused by gender discrepancies.

UnitingCare Australia says Fair Work Australia’s decision today to extend its inquiry into community sector wages is a bit of an anticlimax.

National Director, Lin Hatfield Dodds says with additional submissions due by August this year, the sector expects an outcome by Christmas.

Community services peak body the Australian Council of Social Service says that the tribunal’s finding validates the claims of those working in the sector that they do not receive equal remuneration for the work that they do, and that gender has been an important factor in creating these conditions.

ACOSS CEO Cassandra Goldie says she congratulates Fair Work Australia for getting it right.

With FWA calling for further evidence on the extent to which lower wages are due to gender considerations, Dr Goldie says ACOSS would like to see a final ruling in line with the 2009 Queensland decision that awarded pay rises to community workers of 18-42% per cent.

She says this is the bar if wage equality is to be achieved in the community sector

Community sector employer group Community Employers WA received the FWA decision with a mixture of optimism and caution.

Community Employers WA’s Executive Director, James Lawton says they still strongly caution that any increases that may be awarded by Fair Work Australia, following the next series of submissions and hearings, must be accompanied by a guarantee by the Federal and State Governments to fund these increases.

Lawton says while they are pleased that the process is continuing and the issue of fair and just pay is still on the agenda, they cannot underestimate the disastrous effect of increased pay, without a corresponding increase in funding, on the sector.

He says if this funding is not provided, there will be a reduction in community services and staff who provide those services, resulting in the most vulnerable members of the community being the real losers.

Federal Member for Melbourne Adam Bandt has backed calls for the Government to commit to funding any pay rise awarded by FWA, saying the tribunal had made a clear statement that government funding was the problem.

The Federal Budget and the not for profit sector

The Gillard Government's Federal Budget contains a raft of proposals relevant to the Australian not- for -profit sector. A detailed guide to the measures can be found here.

Third Sector e-news identifies three major provisions in the Budget relevant to the regulation and governance of the sector:

These provisions are: the introduction of a statutory definition of 'charity' to be used in all Commonwealth laws to take effect from 1 July 2013, the establishment of an Australian Charities and Not for profits Commission and the implementation of a not-for-profit income tax.

‘Charity’ definition The definition of ‘charity’ will be based on the 2001 Report of the Inquiry into the Definition of Charities and Related Organisations, taking account of the findings of recent judicial decisions, such as Aid/Watch Incorporated v Commissioner of Taxation. The Government will also consult with the states and territories with the intention of developing and introducing a definition of 'charity' that can be adopted by all jurisdictions.

Not-for-profit Commission $2.8 million over the next four years will be contributed to the new Australian Charities and Not for profits Commission. It is expected that the commission will develop guidance for the sector, implement system changes, and re-assess the charitable status of entities on the basis of the new statutory definition. It is also expected that the Commission will reduce red tape and improve transparency and accountability of the sector.

Not-for-profit tax reform Tax reforms will be introduced to ensure that concessions provided to not-for-profit entities are targeted only at those activities that directly further altruistic purposes. As such, any income retained from commercial activities that is not directed towards altruistic work will not be tax exempt. The new arrangements will commence on 1 July 2011 and will initially affect only new unrelated commercial activities that commence after 10 May 2011

Of particular interest is that the Gillard Government has allocated $53.6 million  to establish a single independent national regulator for the not-for-profit sector.

The Federal Government's Office for the Not for Profit Sector reports that:

The Australian Charities and Not-For-Profit Commission (ACNC) will improve the accountability and transparency of the sector while removing reporting overlap for general reporting requirements at the Commonwealth level.

The ACNC will be responsible for determining charitable, public benevolent institution and other NFP status for all Commonwealth purposes. It will provide education and support to the sector and implement a report-once use-often general reporting framework.

An implementation taskforce will be operational from 1 July 2011 to prepare for the commencement of the ACNC on 1 July 2012 and consult with the public, the sector and state governments on general reporting and public information portal requirements.