SCHADS Shake Up

Just in case you feel there has not been enough change in the disability sector of late, there has been yet another announcement set to rock our world. But this time, for once, it is not the NDIA that is responsible, and this one could lead to some fundamental changes to the ways that supports are organised and delivered. The Fair Work Commission is looking at making some pretty big changes to the Social, Community, Home Care and Disability Services Industry Award (SCHADS Award). Many will know the SCHADS Award for its regulation of the wages paid to workers, but it covers much more than that, and changes to the Award can have implications for both providers and participants. So, we decided to take a look at what is changing and what the implications might be for different parties.

What is the SCHADS Award and why is it changing?

The SCHADS Award outlines the minimum wages and conditions that employees in the sector are entitled to. While the NDIA is responsible for setting maximum prices in the Price Guide, it’s the Fair Work Commission (FWC) that writes the rules for worker wages and conditions. They review these awards every four years, in consultation with unions and other employee groups. 

As you might have guessed, we are at the four-year mark once again. The FWC has released a comprehensive decision which proposes significant changes to the Award rate. 

What are the key changes?

The changes proposed in this review are very wide ranging, improving worker conditions across 12 different areas. We’ve linked an extended summary of the decision at the end of this article but the tl;dr (too long; didn’t read) version of the key changes are below:

• Minimum engagements: Under the new Award, workers will need to be paid for a minimum of two hours. The FWC is still considering whether this should include staff meetings and training.

• Remote response work: There is a global shift towards giving workers the “right to disconnect” when not at work, and the FWC is right on trend, proposing that workers should be paid a minimum of 30 minutes (or 60 minutes at night) for any instance of work outside their scheduled work hours, including: 

  • Responding to phone calls, messages, or emails

  • Providing advice (“phone fixes”)

  • Arranging call outs or rosters of other employees

  • Remotely monitoring or addressing issues by phone or computer

• Broken shifts: A broken shift is when a worker has a break between shifts (other than a meal break). The FWC is proposing to cap workers to three broken shifts per day, with additional allowances payable for each subsequent shift. 

• Travel time: Everyone agrees that workers should be paid for travel time, but the FWC is still uncertain about how to mandate this. 

• Roster variations: Rosters can be changed to allow employees to swap shifts with their colleagues.

• Clothing and equipment allowance: Employers should provide reimbursement of reasonable costs associated with cleaning or replacing clothing that is damaged or soiled on shift.

• Overtime for part-time and casuals after eight hours: The new Award will make it clearer that overtime is optional for workers and establish a process for part-time workers to increase their regular hours where necessary.

Most of these changes are in line with changes to worker expectations and rights around the world. Everyone should be entitled to completely switch off from work or be paid for times when that separation can’t happen. And Royal Commission hearings from the past 12 months have highlighted how insecure and fractured work can be for some frontline disability support workers, so more security should always be a goal for the sector. Given the recruitment and retention challenges that so much of the sector regularly grapples with, a strong Award (in theory) gives employees more reasons to stay in the sector. But these changes could have a seismic effect on service delivery, so let’s explore some of them.

Will NDIS adapt prices and plans to account for these changes?

There’s no way around it – these changes will cost money. In a perfect world, the NDIA would increase the hourly rate to reflect the additional costs to providers with these changes, and everything would be equal for participants. But it probably won’t surprise you to learn that the NDIA has a habit of making providers and participants share the cost of these adjustments. Typically, it does this by increasing prices after a significant delay, going only part of the way, or changing what providers can charge without increasing participants’ budgets accordingly. 

What's the potential impact for these changes?

These are currently at the proposal stage at the FWC, so there may yet be changes to the final version. But if some of the big-ticket changes (like minimum two-hour shifts, a limit on the number of broken shifts in a day, and more rigorous overtime processes) make it through to the final version, there will be some significant impacts. Without knowing how quickly or comprehensively the NDIA might accommodate these changes in its pricing models and participant plans, it’s hard to know the full impact of these changes. But we can take some educated guesses:

For participants

• This could significantly reduce the affordability and flexibility of some supports. In particular, the requirements for a minimum two-hour shift and paying workers for all contacts made between shifts would seriously eat into participant budgets.

• These changes seem to position the Award in the middle of choice and control and participants and providers. What happens if someone only wants a one-hour shift? Will workers feel obligated to fill the other hour with busy work or other tasks that the participant might not actually want or value?

For providers

• Unless the NDIA finds a way to fully absorb these changes into its pricing models, this will result in increased costs for providers that are already running on fairly thin margins. It’s interesting to consider this in light of the current debate around gig economy workers in the sector who are not bound by the Award and are routinely paid below it as is. If these changes are enacted, we’d likely see more participants making use of these platforms to engage workers outside the Award, which is not exactly a win for labour rights.

• If a provider decides that shifts shorter than two hours are essential to its service model (and there are a lot of those shifts out there right now), it has limited choices. Many providers would start down the path of developing, negotiating, and agreeing to an Enterprise Bargaining Agreement or EBA (an alternative to the Award that must pass a number of tests, including assessing whether workers are Better Off Overall under the EBA than the Award), but this takes time and money. 

• These changes seem to collide with some of the fundamental elements of the billing rules in the Price Guide, specifically the idea that providers are only billing for what they deliver. If there is a minimum two-hour wage payment in the Award, but the support actually delivered is under two hours, what wins out? So, there would also need to be some amendments to the Price Guide if these Award changes take effect.

For workers

• Under the proposed changes, there would be some scenarios where people would be restricted from working the way they prefer (for example, working one-hour shifts or more than three short shifts per day) but by and large, these would be very positive changes for workers, particularly those that work part time.

Is there still time to comment?

Yes! Here’s how:

• The FWC is asking interested parties to file submissions and evidence about the proposed changes by June 22nd. 

• The FWC is running a teleconference on May 27th to specifically discuss travel time, remote response work, and clothing and equipment claims.