Award wages up 3.75% but timeline for step change in educator pay pushed out considerably

Despite confirmation that Modern Award wages, including those covering the early childhood education and care sector, will rise by 3.75 per cent as of 1 July 2024 new details provided by the Fair Work Commission (FWC) have prompted a re-calibration of more meaningful educator pay increase timelines. 

Alongside its Annual Wage Review decision the Fair Work Commission (FWC) has now confirmed that it expects to complete its gender equity research project by the “the time of next year’s review” implying that policy makers will wait a further twelve months before progressing step change wage increase discussions. 

From an early childhood education and care (ECEC) perspective this new roadmap pushes out the likely implementation of an educator wage increase by at least twenty four months, with a further twelve months after the report is completed being needed to finalise the terms and put in place the systems to deliver it. 

This news is likely to come as a disappointment to multiple stakeholders across the ECEC sector, particularly those that have been involved with negotiations under the enterprise bargaining pathways made possible by the current Federal Government’s “Secure Jobs, Better Pay” legislation who have worked hard to find a consensus and progress the ECEC wage reset. 

Expectations were running relatively high prior to both the Budget and the subsequent commentary from the Fair Work  Commission (FWC) that a commitment from Government would be forthcoming this year, with the Independent Education Union of Australia NSW/ACT branch, a participant in the process, noting earlier this year that they “were encouraged by the discussions and significant progress was made on the Commonwealth’s contribution towards a wage increase.”

However, despite the positive commentary emerging from negotiations, a favorable aged care outcome released from the FWC and encouraging words from Prime Minister Albanese it now seems clear that expectations for a quick resolution to the wage question were misplaced.

Absence of tangible financial commitment in Budget 2024 provided first clues of deferral

A notable precursor to the FWC gender equity research project timeline was the unwillingness of the Federal Treasurer to offer anything other than a verbal commitment to increase wages in the Budget 2024. 

“The Government is also getting wages moving again through supporting award wage increases for aged care workers and committing to providing funding towards a wage increase for ECEC workers, with details to be settled following FWC processes,” Federal Treasurer Jim Chalmers said. 

Now that the FWC has provided a more meaningful roadmap to the completion of the processes referred to by the Treasurer it is more understandable as to why no financial commitments had been made in the Budget and also why more recent comments from Dr Anne Aly MP, Minister for Early Childhood Education prior to the announcement were also somewhat non-committal. 

Looking ahead, educators, advocacy groups, peak bodies and providers will now be forced to recalibrate their expectations for a wage reset for at least the next two years, a less than satisfactory outcome for a community that has worked so hard for so long for change.

Modern Award wages, including ECEC, to rise by 3.75% on July 1, 2024

Although the long term timeline to a more meaningful educator wage increase has now become uncertain educators and teachers on the Children’s Services Award 2010 and Educational Services (Teachers) Award 2010 will see a 3.75 per increase from July 1, 2024 after the FWC’s annual wage review. 

This year’s result is lower than last year’s 5.75 per cent increase, with the FWC noting that a range of factors including a more subdued inflation outlook and upcoming tax cuts as factors that mitigated a higher increase and outweighed ongoing concerns around cost of living pressures for low income households. 

The increase is expected to see a Certificate III in Children’s Services Level 3.1 educator now earning $27.14 an hour (up from $26.16 last year) and a Diploma in Children Services Level 4.1 educator earning $32.00 an hour (up from $30.84 last year.) 

Level 1 Early Childhood Teachers are expected to see their weekly rates increase to $1,342.69 (up from $1,293.85) after the introduction of the new Award structures. 

“We consider that it is not appropriate at this time to increase award wages by any amount significantly above the inflation rate, principally because labour productivity is no higher than it was four years ago and productivity growth has only recently returned to positive territory,” the Commission said.

To read the FWC Annual Review release click here.