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Autumn 2004

Aged Care crisis for carers, nurses and support staff

HACSU represents over 2000 members working in the aged care sector. We represent all categories of employees in the sector.

Today, the industry itself is now calling the current situation in aged care a crisis. From the perspective of the union there is definitely a crisis in the industry.

In our view this crisis has its genesis in the 1997 funding changes introduced by the current Howard Government.

One of the key issues for HACSU members and the industry is the disparity in wage levels between employees in the aged care sector and those in the acute care sector. Carers in aged care are paid approximately 8% less than their counterparts in the acute hospital sector, both public and private. This disparity will get worse over the next three and a half years, when public sector employees will benefit from the just recently negotiated wages agreement which will deliver 14% to these workers.

Negotiations with private hospitals are currently in progress and outcomes in the vicinity of 4% per annum are likely.

In the same period, aged care workers will be forced to rely on increases arbitrated by the Australian Industrial Relations Commission in the National Wage Case.

Last year the increase granted was $18 per week, which equated to 3.5% for an ECA level 3. This was the highest increase granted by the Commission for some years. The norm has been in the vicinity of between $10 and $15 per week.

I can only guess what the outcome this year will be, as in all national wage cases the outcome is arbitrated, and the Federal Government and employer organizations always oppose increases.

Nevertheless, even if the outcome is as it was last year, the disparity between aged care workers and their counterparts will continue to grow.

There is not the capacity to negotiate pay rises through enterprise bargaining in this industry. Unless homes receive increased funding that reflects realistic wage increases, these workers will continue to fall behind in their wages.

I ask what would happen if we pursued a claim for wage increases of the order of 14% over three and half years, how would it be paid for? No doubt through reductions in care. There is little capacity to generate income and the Federal Government will not fund wage increases other than those obtained through the national wage cases.

Herein lies a significant problem.

Indexation of wage costs is based on wage increases granted by the Australian Industrial Relations Commission and then flowed on through the Tasmanian Industrial Commission. These increases are referred to as Safety Net Adjustments, and are paid to employees who, for one reason or another, are unable to obtain wage increases through enterprise bargaining.

However, there is a further catch for Tasmanian aged care services. The Federal Government's move to uniform national subsidies has disadvantaged Tasmanian services significantly.

Tasmania's indexation factor is discounted by this process as it is argued that Tasmanian has historically received higher levels of subsidy than other States. To address this Tasmania receives less in indexation than other States.

For example, last year indexation was approximately 1%, yet wage increases were 3% and the superannuation contribution paid by employers increased by 1%. So, wage costs increased by 4% yet funding was increased by only 1%. Given that wage costs are about 70% of total costs, it is little wonder that aged care services are struggling.
The situation for nurses is no better, and it is no surprise that aged care is facing the full brunt of the shortage in Nursing.

Whilst the last enterprise bargaining agreement between ourselves, the ANF and the industry reduced to some extent the wage disparity between nurses working in aged care and those in the acute care sector, this disparity is again starting to widen with bargaining outcomes in private hospitals coming on line.

The aged care sector is once again under considerable pressure to match wage increases achieved in the acute care sector to remain competitive. Recent difficulties in reaching agreement on a wage increase demonstrates the pressure being faced by aged care providers.

In a survey of homes conducted by the Aged and Community Services Tasmania, more than 60% stated it was beyond their capacity to pay increases commensurate with increases obtained in the acute care sector. Yet 70% of respondents stated that they had difficulty in recruiting nurses and 90% state that a gap in wages between aged care and acute will make it harder to recruit nurses.

Wage disparity is the obvious issue but there are other issues, which are just as important.
Working conditions are an important aspect of working and we have found that working conditions are declining in the aged care industry. I am not necessarily talking about conditions such as leave provisions and that type of thing. I am referring to matters such as workload, job satisfaction, knowing that at the end of the day you have done the best you can for the residents because the overwhelming majority of employees in the aged care industry are in it to improve the lives of the residents.

In March last year HACSU surveyed its members in the industry.
The results showed that:

• 76% stated that their workload had increased in the last twelve months;

• 64% said that there are insufficient staff rostered to meet the expected workload;

• 53% report that job satisfaction has decreased over the same period;

• 72% believe that staff morale has decreased;

• 72% state that the "Ageing in Place" policy has increased workloads;

• 65% state that funding changes introduced in 1997 by the Federal Government have had a negative effect; In particular members believe that the impact has been on staffing levels and resources available to do the job properly,

• 35% stated that they work unpaid overtime;

• 82% stated that increased documentation requirements have increased their workload.

These results indicate that employees are facing higher workloads and fewer staff to do the work. This leads to short cuts being taken. There is not enough time to spend with residents, and workers are struggling to get through their workloads, let alone sit down with a resident and have a chat.

This in turn leads to lower job satisfaction and reduced morale, and a less personal touch in the care of the residents.

There is one other issue I wish to touch on and that is the frequent restructuring which has occurred throughout the industry over recent years.

The survey results indicate that staff turnover is not high in the industry, indicating a level of stability. However, the constant funding pressure has resulted in a number of restructuring exercises in a number of facilities.

These restructures are not about achieving greater efficiencies, working smarter and the like. These restructures are about cutting staff hours to match decreasing budgets.

On several occasions over the past two years we have been forced to face the fact that facilities do not have sufficient funds to maintain the level of care provided.

Whilst in the past we have cooperated with the industry and assisted with reducing staff hours. We have sought an equitable process, which has meant that employees share the pain.

Over more recent times we have taken a stand against these cuts to staff hours, on two grounds; one, that employees should not have to bear the brunt of inadequate funding, and two, the level of care provided cannot be reduced further.

Our members have taken a strong stand against further reductions in care and will continue to argue that care will be compromised if there are further cuts in staffing hours.

In summary, the industry is facing a crisis and this crisis has an industrial face.

The co-operative arrangements between employers and HACSU will continue to be eroded by constant restructuring to match care needs with inadequate funding; The industry will continue to have difficulties in recruitment and retention, as long as they are the poor cousin of the health and community services industry.

The morale and commitment of staff will continue to decline as workloads increase and pressure builds on staff to do more with less.