As part of the 'Gender-based Undervaluation - Priority Awards Review', the Fair Work Commission Expert Panel (Panel) has recommended an overhaul of the classification structures in the Social, Community, Home Care and Disability Services Industry Award (SCHADS Award). In the recent decision delivered on 16 April 2025, it was recommended that the Classification in Schedules B to F in the Award be replaced with a single, simplified classification structure for all employee types. In this article, we review the proposed changes and consider their potential impact for employers in the care sector. The Panel is seeking submissions. After reviewing this article, you might consider how you can contribute to the review process. 

As part of the pay equity reforms introduced by the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022, the Fair Work Commission (Commission) is required to consider gender equality when setting minimum rates of pay. This includes ensuring equal pay for work of equal value, and addressing the gender-based undervaluation of work — where roles in female-dominated industries are undervalued due to gendered assumptions about the nature of the work.

Since the legislation came into effect, the Commission has examined how gender undervaluation affects modern awards. On 7 June 2024, it launched the 'Gender Undervaluation – Priority Awards Review' to assess whether award classifications have been undervalued on gendered grounds.

On 16 April 2025, the Panel issued its first decision, identifying several award classifications that are currently impacted by gender undervaluation, including the SCHADS Award. 

Currently under the SCHADS Award, there are separate classification structures for each of the following: 

• Social and Community Services Employees (Schedule B)

• Crisis Accommodation Employees (Schedule C)

• Family Day Care Employees (Schedule D)

• Home Care Employees - Disability Care (Schedule E)

• Home Care Employees - Aged Care (Schedule F)

In its decision, the Panel was satisfied that the minimum wage rates prescribed by the SCHADS Award in Schedules B, C and E do not accurately reflect the value of the work being performed, for reasons related to gender.

Further, it concluded that 'the current system of classifications and rates of pay in the SCHADS Award is not fit for purpose' further suggesting that the classifications are overly complex and contribute to the widespread misclassification of employees. 

In the decision, the Panel expressed the provisional view that: 

• the current separate classification structures (Schedules B to F) and the accompanying wage rates in clause 15 to 17 of the Award, should be replaced with a single, simplified classification and wage rate structure; and 

• the simplified structure should not include family day care employees (Schedule D), with those employees to be covered by the Children's Services Award 2010.

On 6 May 2025, the Panel published a discussion paper outlining the proposed changes and identifying four principles to guide the development of the new classification structure, namely: 

1. The classification structure should be defined in terms which render compliance practicable. The Panel emphasised that classifying employees should be a straightforward process that does not require complex evaluative judgements. The classification structure should not attempt to completely describe the skills, duties, responsibilities and working environment of individual job roles. 

2. The classification structure should be structured on the basis of the 'Caring Skills' benchmark rate. 

3. The classification structure should appropriately recognise the acquisition of qualifications at each level, and allow for the recognition of equivalent experience and training, including through 'lived experience'.

4. Annual pay increments currently provided for should not be retained in the new structure. 

In the next step of its review, the Panel will seek to ascertain the nature and scope of any issues interested parties may wish to raise in response to the provisional views outlined in the Decision.

Where the Commission has invited interested parties to raise issues, now is the time for SCHADS Award affected employers to make their position and concerns known. Particularly in relation to affordability, funding models, the impact of the proposed changes on the delivery of services to vulnerable people, and the viability of the sector going forward. 

The proposal will fundamentally change how employees are classified and paid under the SCHADS Award. 

Employers should take steps now to understand the impact of reclassification and make their voices heard by the Panel:

• Making submissions: if these proposed changes are approved, and will impact on the viability of your business, your ability to provide services, and the number of people you employ. Consider making a submission to the Panel about the effects and any solutions you suggest. If you consider other changes are needed, let the Panel know. We can assist you with preparing submissions.

• Reviewing current classifications: the Panel's criticisms of the current classification structure within the SCHADS Award is a stark reminder of the difficulties currently faced by employers in the care industry. We recommend employers regularly review employee classifications to ensure they are correct.

• Staying informed: monitor updates from the Commission, peak bodies and industry associations, to stay informed about how these changes may impact your workers. 

• Engaging with staff early: if the proposals are approved, communicate clearly and  transparently with employees about the changes, and ensure employee engagement documentation is updated appropriately. 

If you require further clarification regarding the proposed changes to the SCHADS Award, or need assistance reviewing your current employee classifications or making submissions, please do not hesitate to contact the Employment & Safety team for expert legal advice.