Collective Regulation of Wages and Conditions in Aged Care: Beyond Labour Law

Abstract

This article considers the collective regulation of wages and conditions in the highly feminized residential aged care workforce. It argues that the traditional regulation of wages and conditions through industrial instruments such as awards and collective bargaining agreements has failed to produce adequate or sustainable outcomes. Continuing low pay is exacerbating labour supply issues in a sector set to experience exponential growth in the coming decades. The ability of traditional labour law to deliver optimal outcomes for aged care workers is limited not only by low levels of collective representation, but also by funding constraints within the sector. This article explores regulatory alternatives and suggests that the integration of labour standards and outcomes into the existing accreditation standards and funding mechanisms for residential aged care warrants policymakers’ attention.

Keywords

aged care labour law regulation women and work

Introduction

The past decade has been characterized by significant changes in labour law in Australia. Much of that change has been preceded by debate over ‘deregulation’ of the labour market (Howe, 2006a). It has, however, obscured the reality of a ‘re-regulation’ (Ellem, 2006) of this market away from established centralized systems and instruments towards regulation at the workplace expressed through ‘human resource management policies and procedures that vary from one enterprise to another’ (Mitchell and Arup, 2006: 18). This change in emphasis has prompted greater consideration of the regulation of work beyond traditional ‘command and control’ mechanisms towards more ‘responsive’ regulatory forms (see Arup et al., 2006; Howe and Landau, 2009). In particular, in Australia there has been recognition of the need to use a broad definition of regulation in an attempt to understand the layered complexity (Bray and Waring, 2005) of labour regulation beyond simply labour law. Allowing for a broader definition of regulation also acknowledges the role of indirect, informal regulation, which emanates from a variety of sources of which the state is but one. In the case of residential aged care, that broad definition of labour regulation has allowed for the examination of a number of regulatory forms influencing labour standards. These include social norms, the location of services, the nature of the market and aged care-specific legislation (Kaine, 2009; Palmer and Eveline, 2010).

This article explicitly acknowledges the link between the regulatory environment and employment relations outcomes in residential aged care; specifically, how this environment influences wages and conditions. In so doing, it asserts that the regulation of employment conditions need not be left solely to the realms of traditional labour law mechanisms such as awards and enterprise bargaining agreements. Rather, it is necessary to conceive of labour regulation in much broader terms, allowing particularly for the impact of mechanisms such as the Aged Care Act 1997 and to recognize the potential for industry-specific regulation to provide an avenue for the collective regulation of wages and conditions. In residential aged care, an opportunity exists to utilize the accreditation framework as the foundation for the regulation of labour standards. Industry-specific regulation of this kind is not without precedent in Australia and internationally. By reviewing examples of other industries in which labour standards have been regulated by methods other than simply labour law, this article asks what alternatives there are to regulating labour standards in residential aged care in order to ensure a sustainable supply of labour and quality care for the aged. It also explores the regulation of labour standards in residential aged care. While it is acknowledged that the community aged care sector is growing in significance, community aged care services are not subject to the same accreditation framework as residential aged care, and as such the discussion and recommendations in this article are specific to the residential aged care workforce.

The article is structured as follows. The first section provides an overview of the aged care workforce, emphasizing the gendered nature of care. The second section examines the characteristics of traditional labour law and its impact on women in aged care. The third section explores government procurement processes as a ‘light touch’ alternative to labour law. The fourth section extends the analysis of procurement to consider the potential role of aged care accreditation in regulating labour standards. The fifth section suggests some options for the development of a framework of responsive regulation of labour standards using the proposed recommendations of the recent Productivity Commission (2011) report into the aged care sector. The final section provides some concluding observations about the regulation of labour standards in the sector with a view to influencing subsequent policy discussions and decision-making.

Profile of the Aged Care Workforce

The size and composition of the Australian aged care workforce is coming under increasing scrutiny as concerns grow about the ongoing sustainability of the sector given the growth of the aged population. Current estimates suggest that, by 2050, Australia’s population will be approaching 36 million, with 22.5% over 65 years of age (Productivity Commission, 2011: 37). As a consequence, the aged care workforce will be required to at least double to meet demand, needing to reach 980,000 by 2050. According to the Productivity Commission (2011: xxxvii), this expansion of the workforce is problematic given that it will be occurring ‘at a time of “age induced” tightening of the overall labour market, an expected relative decline in family support and informal carers, and strong demand for workers from other parts of the health and disability systems’.

Data regarding the workforce in aged care were scarce until the publication of the National Institute of Labour Studies (NILS) 2004 report, commissioned by the Commonwealth Department of Health and Ageing (DoHA). The NILS study found that there were about 156,000 employees in Australian aged care facilities in 2003, with 115,660 being direct care workers (Richardson and Martin, 2004). This latter figure consisted of 24,019 registered nurses, 15,604 enrolled nurses, 67,143 personal carers and 8895 allied health workers (Productivity Commission, 2011: 352).

A follow-up study conducted by Martin and King (2008) found that, by 2007, there were 262,000 people working in the sector, with 175,000 of those in residential aged care. Close to 80% of workers in both community and residential aged care were involved in the provision of direct care services (Productivity Commission, 2011: 350). The 10% growth in the residential aged care workforce since 2003 has largely been among this direct care workforce, notably personal carers. Table 1 shows a breakdown of occupation types for direct care workers in residential aged care, with a comparison between 2003 and 2007 figures.

Table 1

Residential aged care employees, working as direct care workers

Occupation type	Number of employees
Occupation type	2003	2007
Registered nurse	24,019	22,399
Enrolled nurse	15,604	16,293
Personal carer	67,143	84,746
Allied health employees	8895	9875
Totals	115,660	133,314

Note: Adapted from the Productivity Commission report (2011: 352, Table 14.1).

Source: Martin and King (2008).

Table 2 shows that by 2007, 60% of the direct care workforce was over 45 years of age and the vast majority (93%) of workers in residential aged care were women (Martin and King, 2008), with 69% working part time (Productivity Commission, 2011: 350).

Table 2

Characteristics of the residential aged care workforce (2007)

Total numbers working in residential aged care	175,000
Percentage of whom are in direct care services	79%
Percentage of workers who are women	93%
Percentage over 45 years	60%
Percentage working part time	69%

Sources: Martin and King (2008) and Productivity Commission (2011).

These figures have contributed to the construction of the profile of a typical worker in residential aged care as:

… female, Australian born, aged about 50, married, in good health, has at least 12 years of schooling and some relevant post school qualifications and works 16–34 hours per week. She is likely to be a Personal Carer, working a regular daytime shift. (Richardson and Martin, 2004: 3)

This profile is indicative of the impact of the social construction of care on the aged care workforce resulting in:

… the social undervaluation of the skills of care work and to other, less tangible forms of exploitation of care workers. Because their skills are ‘naturalized’ as feminine attributes typically exercised in the private domain, care workers, the vast majority of whom are female, receive lower pay than their skills and task warrant. (Meagher, 2006: 37)

This ‘social undervaluation’ of caring skills is significant in a sector that faces a trend towards labour supply shortages (Productivity Commission, 2008).

In recent years, employment in the residential aged care sector has grown and changed. While the gendered nature of care provision remained constant, the sector experienced employment growth of just under 20,000 jobs between 2003 and 2007. Given this growth, concerns are being raised as to the sustainability of the workforce. In particular, the link between remuneration and the retention and attraction of staff is emerging as one of the most significant issues in the aged care sector (see Productivity Commission, 2008, 2011). According to Martin and King (2008), there has been a sharp increase in the proportion of residential aged care facilities reporting full-time equivalent job vacancies for direct care workers. In 2003, 37% of facilities reported at least one such vacancy. By 2007, this had grown to 50%. In identifying workforce challenges in the aged care sector, the Productivity Commission (2011: 357) cite Martin and King’s (2008) research, which shows that the overall turnover rate in aged care is high, with close to a quarter of the personal care workforce being employed in their current job for less than a year. The statistics for residential aged care specifically reveal turnover rates that are ‘one third higher than for the health care and social assistance industry and slightly higher than for the economy in general’ (Productivity Commission, 2011: 357). Any attempt to address these issues needs first to recognize the characteristics and limits of traditional approaches to setting labour standards in aged care.

Labour Law, Women and Aged Care

Before considering regulatory alternatives, it is necessary to examine how women have fared under the traditional systems and instruments of labour law. The formal industrial regulation of residential aged care has traditionally been through state-based industrial relations systems. This regulation has taken the form of state awards which contained minimum conditions and were known as ‘common rule awards’, meaning that all employers within an industry were bound to comply, not just those organizations involved in the negotiation of the award. This mirrored the broader system of industrial regulation in Australia – a system that could be held at least partly responsible for the undervaluation of ‘women’s work’ and, consequently, the prevalence of low wages in caring industries like aged care (Frances, 2000).

More recently, a series of pay equity enquiries and government reports (House Standing Committee on Employment and Workplace Relations, 2009; New South Wales Industrial Relations Commission (NSWIRC), 1998; Queensland Industrial Relations Commission (QIRC), 2001) ‘have all demonstrated the historical undervaluing of women’s work’ (Palmer and Eveline, 2010: 2) and shown that ‘the institutional determinants of low pay in women-dominated occupations such as the work value assessment mechanisms [have been] built into the industrial award system’ (Palmer and Eveline, 2010: 19). The centralized conciliation and arbitration system dominating Australian industrial relations for much of the last century was based on gendered notions of work and skill (Baird, 2003). Until the 1970s, women’s pay was ‘based on assumptions about family structure, gender roles in the family, and gender attachment to the workforce’ (Strachan and Burgess, 2001: 54). Despite gains being made in the area of equal pay in the 1970s and 1980s, by the 1990s, neoliberal economic and labour market policies were being favoured by governments of all colours, resulting in a shift of emphasis away from collectivized, centralized instruments and institutions.

While for much of its history the centralized system had entrenched gender pay differentials, it had offered some protection for women in industries with little capacity to engage in bargaining (Frances and Nolan, 2008). The move away from this towards a system based on bargaining power, either individual (as seen under the Workplace Relations Act (WRA) 1996) or collective (as in the Fair Work Act (FWA) 2009), has raised serious issues for women who predominate in low-paid, low-status, low-skilled and poorly unionized jobs.

The introduction of the WRA for the first time allowed the use of statutory individual contracts with the introduction of Australian Workplace Agreements (AWAs). While information on the content of AWAs was scarce (Peetz and Preston, 2007), a national study investigating the effects of the 2005 Work Choices amendments to the WRA revealed that low-paid women workers experienced a reduction in bargaining power with very little capacity for genuine negotiation with employers about pay and conditions (Elton et al., 2007).

The current legislation (the FWA) abolished individual contracts and encouraged collective bargaining at a workplace level. However, there are still concerns over its ability to improve wages in sectors such as aged care for the following reasons. First, the Act has effectively eliminated state awards (in the private sector). In the majority of states, these had provided minimum conditions for many industries, including residential aged care. The modernized national awards mandated under the FWA have consolidated state awards, in some cases resulting in inferior conditions for workers (Cooper, 2010a). Second, while the FWA encourages ‘productivity and fairness through an emphasis on enterprise-level collective bargaining’ (FWA 2009, s. 3), this is best suited to workplaces and industries with high unionization and high levels of full-time employment. These types of workplaces are generally male-dominated (Cooper, 2010b). None of these characteristics are typical of the residential aged care sector. Third, the public funding of the residential aged care sector means that the federal government has a significant impact on the operating budgets of aged care providers, thus constraining the capacity of providers to improve wage outcomes through collective bargaining or otherwise.

These barriers to bargaining prompted United Voice (formerly the Liquor Hospitality and Miscellaneous Workers’ Union (LHMU)) and the Australian Workers’ Union Queensland to make an application under the Low Paid Bargaining provisions of the FWA (Division 9) to vary the wages of non-nurse aged care staff by allowing for bargaining to take place at an industry level with the potential to involve the major funder of the sector – the Commonwealth government. This provision was an innovation of the new FWA and was designed to assist workers in low-paid industries, who have historically had difficulties bargaining, by giving them access to a centralized system of bargaining allowing multiple employers to be involved (FWA 2009, Division 9, s. 241).

While this industry approach may to some extent address issues of power imbalance during the bargaining process, it does not deal with problems associated with the enforcement of bargained outcomes or, indeed, the development of appropriate voice mechanisms for aged care workers. The subsequent decision by Fair Work Australia to apply a low-paid bargaining authorization to award-reliant employees only (Fair Work Australia, 2011) limits the potential of this mechanism to provide a sector-wide solution to low pay. Furthermore, while the unions sought the inclusion of the federal government (as the major funder) in the low-paid bargaining process, the decision does not compel the government to reach a new funding agreement. Indeed, the employer submissions to the low-paid authorization case argued that ‘while the tribunal could direct the Government to attend a conference, the Government cannot be compelled to make more funds available and that it is unlikely to do so’ (Fair Work Australia, 2011: para. 33). The outcome of the low-paid bargaining application suggests that even the more innovative aspects of current labour law may only partially improve wages for non-nurse carers in aged care.

Various incarnations of labour law have arguably undervalued the skills of aged care workers (Palmer and Eveline, 2010). Traditional instruments of labour law have benefited skilled males in high-paid sectors of the workforce, and delivered poor results to vulnerable workers, such as those in the highly feminized aged care sector (Cooper, 2010a). Additionally, women’s ability to have their skills valued appropriately has been undermined by the location of women in the labour market; that is, women have been ‘typically employed in industries which were labour intensive, demanding of cheap labour, not subject to major technological change and difficult to unionise’ (Frances, 2000: 85).

In the residential aged care sector, wage rates are further constrained by government procurement decisions. As the federal government is the major funder of aged care services, not only do industrial instruments need to be changed, but the government also needs to commit more funds if wages are to be improved. Consequently, it could be argued that traditional avenues for regulating the wages and conditions of aged care workers (which ignore larger funding issues) are not capable of addressing the most profound issue facing the sector – the development of labour standards that result in a sustainable supply of workers to ensure quality care to the aged.

Alternatives to Labour Law

While labour law is the most common means of regulating wages and conditions (as discussed earlier), it is not the only method. Nor is labour law simply about what happens in workplaces. In considering the future of labour law in the United Kingdom, Ewing (2008: 103) expresses concern that traditional labour law has become ‘principally a tool of economic policy’ that encourages the ‘re-commodification of labour, rather than the protection of workers’. This is echoed by Howe (2010: 1), who suggests that: ‘economic globalization has among other things, reduced the political willingness and ability of governments to safeguard the welfare of workers and communities through the maintenance of conventional labour law systems’.

Increasingly, these limitations of labour law have prompted greater consideration of other mechanisms for the regulation of labour standards. This interest has been expressed through the growth in literature considering the move away from ‘command and control’ regulatory methods to more ‘responsive’ or ‘reflexive’ regulation. This type of regulation is often characterized by involvement of a range of key stakeholders and a blend of public–private monitoring and enforcement mechanisms (Ayers and Braithwaite, 1992; Howe and Landau, 2007; Weil and Mallo, 2007).

The use of non-traditional labour regulation in the private sector is seen in industries such as textile manufacturing, transport and contract cleaning, where complex supply chains devolve responsibility for labour conditions away from those organizations with the greatest capacity to improve wages and conditions. Under these conditions, industrial instruments based on the direct relationship between employer and employee are inadequate and, consequently, more recent attempts to regulate wages and conditions in these circumstances have been based on industry-specific regulations (Kaine and Rawling, 2010; Nossar, 2006). The degree of control exercised by an economically dominant agent in a private-sector supply chain is reminiscent of the residential aged care sector, where the Aged Care Act 1997 creates a quasi-monopsony in which the Commonwealth government acts as the dominant purchaser of services. Consequently, any attempt to improve the wages and conditions of workers within the sector requires the involvement of the Commonwealth government.

Given the widespread outsourcing of the provision of goods and services by governments in the developed world over the past two decades, government procurement has become a source of potential ‘light touch’ regulation of labour standards. Howe (2006b: 169) notes that:

[Formal] [r]egulation is not the only means by which the state seeks to alter the behaviour of external actors. Other techniques rely on sources of government power which are distinct from its ability to change behaviour through legal command. The finances of the state are a key resource deployed by the state for the purpose of altering the behaviour of others.

The deployment of government wealth as a regulator of social standards, specifically labour standards, is not without precedent internationally (McCrudden, 2007) or in Australia at both federal and state levels (Howe, 2010). In addition to direct funding, there are other ways for governments to deploy financial resources to promote a particular labour outcome. Examples include procurement policies seeking to enforce labour standards and financial incentives to industries and organizations in exchange for guaranteed job creation (Howe, 2006b).

In recent years, the Australian government has demonstrated its knowledge of how this financial power may be exercised to impact labour outcomes. The Higher Education Workplace Relations Requirements (HEWRR) was initiated in 2004 and sought to link higher education funding to compliance with workplace policies promoted by the Howard government, such as the offering of AWAs to all new and existing employees (Howe, 2006b). Likewise, in 2005, the Building and Construction Industry Improvement Act (BCII Act) and its associated regulations sought to improve ‘workplace relations practices in the building and construction industry in the federal jurisdiction’ (Commonwealth of Australia, 2005).

The current federal government has also illustrated awareness of the potential for procurement policies to influence labour outcomes in particular industries through the Fair Work Principles (FWPs). The purpose of these principles is to ‘ensure that procurement decisions promote fair, cooperative and productive workplaces’ and recognize the government’s ‘public responsibility to provide a model of fairness in the workplace for those who are performing work for the Commonwealth whether as employees of a Commonwealth agency, or as employees of a contractor to the Commonwealth’ (Department of Education, Employment and Workplace Relations, 2009: 1).

The FWPs also contain provisions specific to particular industries and sections of the workforce, namely, contract cleaning and textile outworkers. This represents an acknowledgement by the government that certain industries require specific regulatory frameworks due to the vulnerability of the workforce to exploitation. This distinguishes the FWPs from HEWRRs, which made funding contingent upon implementing ‘flexible working arrangements’ and improvements in productivity (Howe, 2006b: 175), and the BCII Act, with its emphasis on regulating trade union activities (Howe, 2006a: 162). The need for sector-specific regulation is further recognized in the Low Paid Bargaining Stream of the FWA (Division 9, s. 241). This provision acknowledges that the collective bargaining regime that the FWA mandates is not appropriate for every industry.

There has been one recent attempt to influence labour standards through the financial incentives offered by the federal government in aged care. In 2004, the Conditional Adjustment Payment (CAP) programme became available to aged care providers. The CAP is a payment available to eligible providers of residential aged care. It was initiated to ‘improve the quality, accessibility and sustainability of the aged care sector’ (DoHA, 2008). It specifically targeted financial management and corporate governance arrangements in the aged care industry, with a focus on workplace training opportunities for their staff (DoHA, 2008).

However, the scheme has been criticized for not delivering appropriate outcomes. In particular, the Australian Nursing Federation (ANF) argued that because the CAP programme was not linked to wage increases, it failed to make aged care competitive with other areas of health, ‘exacerbating the ability to recruit and retain staff and ultimately the viability of the sector’ (ANF, 2008: 6). Despite criticisms of the CAP programme, the following sections argue that there are other options for influencing labour standards through existing aged care regulatory processes.

Accreditation: The Missing Link in Regulating Labour Standards

The Aged Care Act 1997 (the Act) details the mechanisms through which the government controls the allocation of beds, limits service prices and accommodation bond charges, allocates funding, and assesses the eligibility of clients to attract subsidies (Productivity Commission, 2008). Formal regulation also extends to quality of care. The Act is the overarching legislation articulating the goals of the sector including accreditation (ch. 4.1, s. 54.2). Accreditation is one of the most significant formal regulatory processes with which aged care providers must comply. It is the process by which standards of care are assessed. With the introduction of the Aged Care Standards and Accreditation Agency in 1998, residential aged care facilities were compelled to seek accreditation in order to maintain government funding. Ongoing receipt of government subsidies is dependent on all four Accreditation Standards (as established in the 1997 Quality of Care Principles), and their associated 44 outcomes, being met (DoHA, 2007a). Failure to comply with the standards potentially results in the revocation of the approved provider status of the home, thereby terminating federal government subsidies or the suspension of government funding for newly admitted residents (Braithwaite et al., 2007). Accreditation and possible sanctions for non-compliance loom large in the minds of aged care administrators. The response of aged care providers to accreditation and its associated processes has been well documented in Braithwaite et al.’s empirical study of compliance with standards in the aged care industry, which explores the issue of accreditation and the deterrence effect of regulation:

Voluntary compliance is underwritten by deterrence, but not in a way that often leads the nursing home operator to calculate about the actual levels and probabilities of deterrent threats. Because of this, even when these actual levels and probabilities are zero, orchestration of an appearance that they are non-zero will often be enough to do the job. (2007: 129)

The deterrent effect of accreditation to aged care providers explains the priority it is given in the administration of aged care facilities and suggests that there is an opportunity to improve labour standards (and, consequently, improve attraction and retention) through linking labour outcomes more closely to the accreditation process. The significance of the accreditation process and the associated deterrence effect suggests its potential as an effective form of indirect labour regulation.

Currently, the four broad areas covered by the accreditation standards are: management systems, staffing and organizational development; health and personal care; resident lifestyle and physical environment; and safe systems (Australian National Audit Office (ANAO), 2003). The management systems, staffing and organizational development standard contains nine expected outcomes, two of which are directly related to staff: outcome 1.3 ‘education and staff development’, which states that ‘Management and staff have appropriate knowledge and skills to perform their roles effectively’; and outcome 1.6 ‘human resource management’, which states that ‘There are appropriately skilled and qualified staff sufficient to ensure that services are delivered in accordance with these standards and the residential care service’s philosophy and objectives’ (Aged Care Standards and Accreditation Agency (ACSAA), 2011). While it is recognized that the accreditation system contributes to the maintenance of quality care in Australia, there has been criticism that the accreditation and quality control system is process- rather than outcomes-driven (Productivity Commission, 2011).¹ It could also be argued that the use of accreditation standards to secure minimum levels of service that are ‘deemed adequate by society’ (Productivity Commission, 2008: 104) is problematic in the area of labour standards. Reliance on minima rather than ‘above the floor’ (Howe, 2010) standards is contributing to labour supply, attraction and retention issues as such legal minima are less than those available to workers in other health sectors (Productivity Commission, 2011). The purpose of the accreditation system is to ensure a ‘minimum level of quality of services’ (Productivity Commission, 2008: 104) and not a sustainable supply of workers. However, the two issues are inextricably linked. In a submission to a Senate inquiry into aged care, the ANF cited findings by the ACSAA in 2008, showing that:

… a significant proportion (of non-compliant homes) did not maintain appropriate numbers and types of staff, with many of them not being able to ensure that staff skills and qualifications were the right fit for the work required and to reflect their residents’ needs.

A strong causal link was found between homes that were non-compliant with Human resource management (1.6) and deficiencies in other service systems, in particular Clinical care (2.4), Specialised nursing care needs (2.5), Medication management (2.7), Behavioural management (3.7) and Information systems (1.8). …

… in homes where workloads are unrealistic, or where staff are unqualified, poorly trained or poorly deployed, then process malfunctions will occur across a wide range of expected outcomes. Employment of staff without appropriate skills may exacerbate any staff shortages as this may lead to inefficiencies in time and effort and place greater work related stresses on staff. (ANF, 2008: 3)

These findings highlight a need to reconsider how the accreditation system might be utilized more effectively to promote labour standards, not just resulting in better quality of care for residents, but simultaneously improving the wages and conditions of aged care workers and going some way to tackle the problem of labour supply.

Industry Regulation of Labour Standards: The Way Forward for Residential Aged Care?

In August 2011, the Productivity Commission released its ‘Caring for older Australians’ report in response to a federal government request to ‘undertake a broad-ranging inquiry with the aim of developing detailed options for redesigning Australia’s aged care system to ensure that it can meet the challenges facing it in coming decades’ (Productivity Commission, 2011: 3). The report contains recommendations for reform across a number of aspects of aged care. In particular, it has made a recommendation that, if implemented, changes the regulatory features of the aged care sector through the establishment of a new overarching body, the Australian Aged Care Commission (AACC). This new body would consolidate the regulatory functions previously undertaken by the DoHA and ACSAA. The report also recommended that the new commission ‘when assessing and recommending scheduled care prices, should take into account the need to pay fair and competitive wages to nursing and other care staff delivering approved aged care services’ (Productivity Commission, 2011: 366). What this means in practice is as yet unknown as there is no detail in the report about the method the AACC might adopt to ensure that the need for fair and competitive wage rates are factored into care prices.

There is a danger that the AACC takes a minimalist approach to labour standards in the sector and only considers wages when reviewing scheduled care prices and, as such, would perpetuate the existing weaknesses of the current system of labour law. Should this occur, then an opportunity to fundamentally address key labour issues would be missed. What needs to be explicitly recognized through the new AACC is that the federal government is at the apex of the supply chain for aged care services. Currently, the government makes procurement decisions about its spending capabilities with few obligations for it to meet the responsibilities (beyond the FWPs) associated with exercising the economic power it exerts in the supply chain. What is required is a much more nuanced understanding and deployment of the government’s economic footprint to improve the labour outcomes in aged care. This would begin with recognition of two related issues. First, reliance on minimum legislated labour standards constructed by historically gendered assumptions exacerbates the pressing labour supply shortages facing the sector. Second, there is potential through the procurement process to supplement the minimum labour standards of traditional labour law resulting in labour outcomes ‘above and beyond those required by law’ (Howe and Landau, 2007: 377).

Through its report, the Productivity Commission is advocating a system of ‘responsive regulation’, suggesting that ‘regulators need to be responsive to different industry structures as well as opportunities for the effective self-regulation of businesses’ (Productivity Commission, 2011: 11, Appendix E). What is missing from the Productivity Commission’s report is consideration of how responsive regulation might be employed to address the labour standards–labour supply conundrum. One method to explore is that of a mix of public and private regulatory techniques.

In considering the regulation of the supply chain in the US garment industry, Weil and Mallo (2007: 796) argue that combining public enforcement and private monitoring in the regulation of labour standards allows for ‘traditional government-based regulatory authority’, with the advantages of more flexible and innovative self-regulation measures. There are a number of ways in which such a hybrid public–private regulatory system could work in aged care. One option would be to adopt an approach similar to the Victorian Government Schools Cleaning Program (VGSCP). This programme established an accreditation system for cleaning contractors in which contractors are assessed through the Contract Cleaning Assessment Committee (CCAC). A key feature of the CCAC is that its members are drawn from key stakeholder groups, such as unions and employer associations, not merely the Victorian Government (Howe and Landau, 2009). In their study of the VGSCP, Howe and Landau (2009: 578) conclude that the structure of the CCAC reflects one of the key elements of responsive regulation, that ‘the regulatory process facilitates the involvement of the state, business and employee representatives in developing and setting standards, monitoring compliance and so on’. However, United Voice (the union representing school cleaners) provided a robust critique of this model in their 2010 report into Victorian Cleaning Contracts. The key problem identified by the union was that compliance mechanisms had failed to ensure cleaners were receiving legal entitlements as the structure and scale of the industry had made adequate monitoring problematic (LHMU, 2010). This problem of monitoring is relevant across a range of sectors and is also a weakness in the FWPs.

Howe and Landau also identified that while the CCAC contributed to the ‘legitimacy of the Program from the perspective of participants’ (2009: 585), the regulatory model of the VGSCP would have been made more responsive through a ‘formal, well-resourced and tripartite monitoring system’ (2009: 586). Such a monitoring system is seen in the textile clothing and footwear industry in Australia (through the Homeworker’s Code of Practice) and in the Victorian Owner Drivers and Forestry Contractors Act 2005, both of which involve key industry stakeholders in the development of mandatory industry codes of practice, which are implemented through industry-specific legislation or through ministerial regulations (Howe and Landau, 2007, 2009).

In contrast to the monitoring issues experienced in the VGSCP, the aged care sector has the potential to use established monitoring and compliance systems through the existing regulatory architecture. This architecture includes accreditation standards and the Aged Care Workforce Committee (ACWC) (comprised of key employee and employer stakeholders) reporting to the Minister for Ageing and advising the federal government on workforce issues (DoHA, 2007b). However, the remit of the ACWC and aspects of the accreditation standards would need some modification. Under the auspices of the proposed AACC, the role of the existing ACWC could be strengthened and take the form of an independent tripartite body similar to the CCAC or the Transport Industry Council (constituted under the Victorian Owner Drivers and Forestry Contractors Act 2005). It could be charged with a number of functions including, but not limited to, determining the level of ‘competitive wage rates for the AACC as it ‘takes into account’ the need to pay ‘fair and competitive wages’ when assessing and recommending scheduled prices for care services (Productivity Commission, 2011: 366).

A further function of the reconstituted ACWC would be to consider the role of the accreditation process in improving labour standards. There is potential for such standards to exceed the basic minima and to be flexible to movements in the labour market and in community standards. These expanded labour standards could then be included in existing accreditation standards through the development of a ‘Code of Practice’. The Code would not need to be included in the accreditation standards proper but could become formally articulated and implemented through ministerial regulation. This would allow the code to be varied more frequently than the accreditation standards themselves and, consequently, to be more responsive to the changing demands of the sector. In circumstances where the ACWC cannot reach agreement, it may be useful to include an arbitration and conciliation process similar to one outlined by Quinlan and Wright (2008) in their report on remuneration and safety in the heavy vehicle industry; that is, it may be appropriate to consider a specialized body established under industry-specific legislation, with powers to determine fair and competitive wage rates and related matters, to ensure the sustainability of the sector.

The Productivity Commission (2011) recommends that the AACC have three full-time commissioners with varied responsibilities. It would be possible to expand this to include a fourth commissioner of Workforce Issues and Development. This Commissioner need not be full time, but might be seconded from Fair Work Australia as needed. All of the parties represented on the ACWC would have the right to take a matter to the Commissioner and be bound by the Commissioner’s decisions, which would be based on principles consistent with the delivery of quality care. Enforcement of the Code would be part of the general accreditation process that is undertaken by the Aged Care Standards and Accreditation Agency. However, to maximize efficiencies and streamline the regulatory process, it would be beneficial for existing aged care accreditation inspectors to become accredited workplace inspectors through Fair Work Australia. The type of monitoring facilitated by this framework commends this as a regulatory option in contrast to more general options available through the FWA (such as the pursuit of a pay equity case), which would lack the deterrence and enforcement dimensions already available through the accreditation framework.

What would such a system of regulating labour standards mean for women working in the residential aged care sector? By lifting labour standards through a Code of Practice determined by employers, employees and the major funder (in this case, the federal government), this regulatory model has the potential to overcome some of the most significant barriers preventing the effective participation of aged care workers in processes linked to traditional labour law, such as collective bargaining; that is, should such a code be implemented, aged care workers may become less reliant on their ability to bargain at the workplace level.

Conclusion

The gendered notions of work and its value inherent in historical industrial relations law and instruments in Australia have seen caring work undervalued. More recent moves away from this system have meant that improvements in wages and conditions are dependent on bargaining power, either individual or collective. Neither of these bargaining frameworks resulted in significantly improved outcomes for women working in aged care. Consequently, it is necessary to look for alternatives, and ask the question: how could the existing aged care regulatory regime be used to overcome the barriers faced by women in traditional labour law systems and processes?

International scholarship draws attention to the possibility of lifting labour standards through industry-specific regulation. This article has argued that the existing regulatory architecture in aged care provides such an opportunity in an Australian context. The Productivity Commission’s (2011) report champions ‘responsive regulation’, and the proposed recommendations provide an opportunity for a ‘responsive’ regulatory framework to be applied to labour standards in aged care using existing consultative mechanisms and the accreditation standards. Such an approach would allow for the development of a ‘Code of Practice’ by key parties. This Code has the potential to lift labour standards above and beyond statutory minima and, in so doing, recognizes that the task facing the sector is not only confined to improving the wages and conditions of the largely female aged care workforce. Equally, it is about guaranteeing the sustainability and quality of this rapidly expanding sector as it faces continuing labour supply issues due to its struggles to attract and retain workers.

Footnotes

Funding

This research received no specific grant from any funding agency in the public, commercial or not-for-profit sectors.

Acknowledgements

The author would like to thank Madeleine Dignam for assistance in the research of this article.

Note

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