27/11/2025
BACKGROUND
The 2023-24 Annual Wage Review identified 5 awards it recommended be prioritised in addressing gender-based undervaluation, including the Social, Community, Home Care and Disability Services Industry Award 2010 (SCHADS Award). Gender-based undervaluation refers to a situation where the minimum rates of pay in an award have been established based on the undervaluation of the relevant work for gender-related reasons. In practical terms, awards that cover traditionally female-dominated industries have lower minimum rates of pay that reflect gender-based assumptions about relative work value.
An Expert Panel was formed to conduct a review into gender-based undervaluation. An initial decision expressing a provisional opinion was handed down in on 16 April 2025.
The initial decision found that social and community services (SACS) employees, crisis accommodation employees and home care employees in disability care covered by the SCHADS award have been the subject of gender-based undervaluation. These findings constitute work value reasons justifying the variation of the modern award minimum wage rates applying to each category of employees.
The initial report set out the Expert Panel’s provisional views on appropriate award variations to remedy gender-based undervaluation and the FWC has since commenced consultation on those proposals.
The proposals relevant to the SCHADS award were:
- Abolish the five separate classification structures and implement a single, simplified classification structure based on an alignment with the ‘Caring Skills’ benchmark rate; and
- Revoke the Equal Remuneration Order (ERO) as part of the implementation of this new classification structure.
CLASSIFICATION STRUCTURES
Differing pay rates in the SCHADS award are the result of an Equal Remuneration Order (ERO) applying to SACS and crisis accommodation employees, and Aged Care work value proceedings. The aged care work value proceedings led to the significant increase in pay rate for aged care workers in home care. The Expert Panel found that the division between home care workers in aged care and disability care is nonsensical given the work conducted by them is near identical.
The review stated that there has never been proper recognition of the skills involved in undertaking the work covered by the SCHADS award when setting award wage rates and this has operated to the disadvantage of a highly-feminised workforce.
The current system of classification and rates of pay is not fit for purpose. The classification structure is confusing and makes it difficult to determine at what level an employee should be classified and paid which results in widespread misclassification of employees.
The Expert Panel stated that any new classification structure should provide common minimum wage rates for work of equal or comparable value that apply to all the types of work covered by the award.
The provisional view is based on four fundamental principles:
- Classifications should be defined in terms that render compliance, as far as practicable, a straightforward matter.
- The new classification structure should be structured on the Caring Skills benchmark rate and C1(a) benchmark rates respectively identified in the Stage 3 Aged Care decision – namely a weekly rate of $1,269.80 for Certificate III qualified employees, and $1,525.90 for degree qualified employees.
- The new classification structure should appropriately recognise the acquisition of relevant qualifications at each level, whilst making allowances for the recognition of equivalent experience and training.
- The current annual pay increments should not be retained as they are not properly based on work value.
The Expert Panel also expressed the view that Family Day Care employees should be covered by the Children’s Services Award 2010, not the SCHADS Award.
The Fair Work Commission provided a provisional classification structure for discussion between interested stakeholders that condensed the existing classifications into a single structure with 9 classification levels.
SUBMISSIONS FROM STAKEHOLDERS
All evidence and submissions from interested parties were due on 15 October 2025. The submissions reflected broad support for addressing gender-based undervaluation and a simplified classification structure. However, there were many concerns with the provisional view expressed by the Expert Panel. The main themes that came up consistently were:
- Concern about the additional administrative and financial constraints and that any wage increases must be accompanied by a corresponding increase in funding;
- The structure proposed fails to capture the nuance and sophistication of work conducted in the social services sector and undervalues both industry and lived experience;
- Concern about wage reductions for certain classifications and the administrative burden any grand-fathering arrangements may have on organisations; and
- Concern that the proposed structure will not remedy the existing systemic workforce challenges and may have unintended consequences for workforce attraction and retention.
NEXT STEPS
A hearing on the provisional view expressed by the Expert Panel was held on 27 and 28 October 2025. It was clear that there were a number of outstanding issues that needed to be resolved before a final decision could be made. The matter was listed for conference for 4 days in November. The final day of the conference is listed for 26 November 2025, after which the Expert Panel will decide if a further hearing is necessary, or if the matter can proceed to a final decision.
Due to the number of issues identified and a work value case being concurrently run by the ASU, the consensus is that the substantive changes should not begin phasing in until 1 July 2027 with an interim wage increase for Schedule E employees to take effect on 1 July 2026 to address those classifications that are most impacted by gender-based undervaluation.
If you are concerned about what these changes mean for your organisation, reach out to our team of employment law experts to discuss further.