Landmark Ruling Set to Bridge the Gender Pay Gap for Thousands

The Fair Work Commission has recognised that the pay rates in five industrial awards, predominantly female-dominated professions, do not ensure equal pay for comparable work.

This notable decision is poised to reduce the gender pay disparity.

The Commission has advocated for marked increases in award wages affecting a vast numbers of professionals, including pharmacists, early childhood educators, psychologists, physiotherapists, and other healthcare workers.

The five “priority” awards, reviewed by an expert panel, include:

• Aboriginal and Torres Strait Islander Health Workers and Practitioners and Aboriginal Community Controlled Health Services Award 2020
• Children’s Services Award 2010
• Health Professionals and Support Services Award 2020
• Pharmacy Industry Award 2020
• Social, Community, Home Care and Disability Services Industry Award 2010.

The review followed legislative amendments to the Fair Work Act in 2022, requiring the Commission to factor in gender equality while establishing modern award pay rates.

Evidence revealed that pay rates in these awards fail to reflect the true value of the work performed in these female-dominated roles. The Commission concluded that the pay rates are not on par with comparable work, primarily because women predominantly fill these roles.

Soft skills, usually essential in caregiving and supportive roles, have historically been undervalued compared to hard skills inherent in male-dominated technical roles.

Prior efforts to address gender pay disparity were largely ineffective, mainly due to the necessity of proving discrimination, which included comparing women’s roles to men’s. The revised Fair Work Act enables the commission to evaluate the value of skills in feminized jobs without needing male job comparisons.

The Commission’s ruling of a 14% hike in award rates for pharmacists will be implemented progressively from July 2025.

Proposals for pay increases for other awards, such as a 23% rise for Certificate III childcare workers, remain preliminary and will undergo consultation in May.

What this means?

Employers can refer to the updated award, determine the applicable new rate, and make necessary payroll changes. For those using all-inclusive pay rates—which combine base pay with loadings, penalties, allowances, and overtime—there may be a reduced buffer to cover these entitlements after the update.

Reclassification of employees, however, is often more complex. Employers need to carefully review the award to match an employee’s primary duties with the appropriate classification. This requires assessing job responsibilities and aligning them with the definitions provided in the award.

Incorrect classification or failure to update classifications can expose employers to significant legal risks, including breaches of the award, underpayment claims, and potential breach of contract allegations. If the misclassification relates to discrimination or denial of workplace rights, it could also lead to general protections claims.

Next step?

To reduce the risk of such disputes, it’s important to regularly review position descriptions, ensure that job titles and duties are accurately reflected, and maintain clear documentation on how classification decisions are made.

HR teams play a critical role in supporting business leaders through these changes by ensuring compliance and aligning changes with operational and financial priorities. Providing informed guidance and clearly explaining the impact of award updates helps ensure a smooth and strategic implementation.

If you have any further questions about how these award changes may affect you, contact Preston HR today.