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[60]
[2025] FWCFB 283
General information, not legal advice.
Fair Work Commission (Full Bench)
2025-12-10
Original judgment source is linked above.
s.157 - FWC may vary etc. modern awards if necessary to achieve modern awards objective
Gender-based undervaluation - priority awards review - Children's Services Award 2010
Gender-based undervaluation - priority awards review - Children's Services Award 2010 - variation of the award on the Commission's own initiative - finalisation of variations to the award.
[3] Our provisional views as set out in the April decision can be summarised as follows:
(1) A new and simplified wages and classification structure should be introduced substantially based on an alignment with the Caring Skills benchmark rate (then $1269.80 per week, now $1314.30) for a Certificate III-qualified CSE.[3] Updated for the minimum wage rate adjustments made in the Annual Wage Review 2025,[4] the proposed new structure is as follows:
An employee whose primary role is to work directly with children and who has less than 12 months' experience as a CSE.
An employee whose primary role is to work directly with children and who has at least 12 months' experience as a CSE.
An employee whose primary role is to work directly with children and has obtained an approved Certificate III-level early childhood education and care qualification.
An employee whose primary role is to work directly with children, who has obtained an approved Certificate III-level early childhood education and care qualification and has obtained four years' post-qualification industry experience as a CSE Level 3.
An employee whose primary role is to work directly with children and who has completed a diploma-level early childhood education and care qualification or an equivalent approved qualification for out of school hours care.
An employee who has been appointed as a Lead Educator or Room Leader in accordance with relevant legislation or regulation.
and who has completed an AQF Level 5 or Level 6 Diploma in Children's Services or equivalent or is deemed by the employer or relevant legislation to hold such qualification or possess such experience as appropriate or required for the position.
An employee who is appointed as the Director of a Service and has completed a relevant degree or other qualification or is deemed by the employer or relevant legislation to hold such qualification or possess such experience as appropriate or required for the position.
(2) In conjunction with the above new classification structure, we set out at [560] a proposed translation table for the transition from the current CSE classifications in clause 14.1 of the CS Award to the new classifications together with the percentage minimum wage rate increases which would apply. These increases range from 9.4 to 27.8 per cent.
(3) The above minimum wage rate increases should be phased in over a period of five years, in annual increments, with an initial increase of 5 per cent operative from 1 August 2025.[5]
(4) The current qualification allowance in clause 15.6 applicable to Directors or Assistant Directors holding a Graduate Certificate in Childcare Management or equivalent should be abolished, as the new CSE Level 7 and 8 classifications operate on the basis that it is the work of the role itself, and not any qualification that a person in the role may hold, for which the minimum wage rate has been set.[6]
(5) The CS Award should be varied so that cooks who are required to hold an early child education and care (ECEC) Certificate III qualification, or to be actively working towards that qualification, and who may be required to work 'on the floor' at any time to maintain the ratio of educators to children, are paid the rate for CSEs holding (or working towards) that qualification for all hours worked.[7]
[4] Following the publication of the April decision, a member of this Expert Panel conducted a number of conferences in an endeavour to gauge the response of interested parties to our provisional views and to seek consensus as to the variations which should be made to the CS Award arising from the April decision. A draft determination was developed by staff of the Commission to facilitate discussion at these conferences, which were conducted on 10 June, 24 June, and 7, 8 and 15 July 2025. On 18 July 2025, we issued directions requiring parties with an interest in the CS Award to file submissions in relation to the provisional views stated in our April decision, any draft determination to give effect to those views or to otherwise give effect to the findings, and any evidence they relied upon in support of these matters. We subsequently reserved 20 October 2025 for any hearing required in relation to the CS Award.
[5] Arising from the above process, on 29 August 2025 the Australian Childcare Alliance (ACA) filed a draft determination (with an accompanying submission) which reflected a consensus position reached between the ACA, the United Workers Union (UWU) and the Australian Industry Group (Ai Group) in relation to all matters arising from the provisional views other than the phasing-in of the minimum wage rate increases and the operative date for the first increase. This consensus position was supported by Australian Business Industrial and the New South Wales Business Chamber Ltd (ABI) and the Community Child Care Association and Community Early Learning Australia (CCCA and CELA). The parties submit that the consensus position is largely consistent with our provisional views, but with amendments which are said to be necessary to give effect to those views or clarify particular matters. No party opposed the consensus position.
[6] The hearing on 20 October 2025 dealt with the contested issues of operative date and phasing-in of the proposed increases.
[7] The parties support the simplified classification structure and the accompanying translation table and related arrangements set out in the April decision, subject to the following amendments:
(1) References to 'Lead Educator' and the term 'in accordance with relevant legislation or regulation' should be removed from the proposed classification definition for CSE Level 6. ACA submits that these amendments will remove the possibility of confusing 'Lead Educator' with 'Educational Leader' which are distinct roles, will simplify the definition by referring to a common term used in the ECEC sector, and will remove reference to defunct legislation.
(2) Existing Levels 3A and 4A must be accommodated in the translation table. In the April decision, we assumed that these classifications were obsolete, but the parties agree that there are still employees classified at these levels. It is proposed that Levels 3A.1 and 3A.2 should translate to the proposed CSE Level 2 classification, on the basis that the current Level 3A classification applies to an employee who does not hold a Certificate III qualification (or equivalent). Acceptance of this position would result in a wage increase of 18.7 per cent for employees currently classified at Level 3A.1 and 16.9 per cent for employees at Level 3A.2. As for Levels 4A.1-5, it is proposed that they should translate to CSE Level 6.
(3) The proposed CSE Level 6 classification descriptor does not have relevance to the out-of-hours school care (OSHC) environment. Consequently, it is proposed that the classification descriptor for CSE Level 6 should be amended as follows:
An employee who has been appointed as a Room Leader (or in out of school hours care, to assist a CSE Level 7 or CSE Level 8 employee).
(4) The classification descriptor for proposed CSE Level 8 should be amended to cover an OSHC environment where an employee with responsibility for administration and management of a service may not be referred to as a 'Director'. The proposed amendment is:
and has completed a relevant degree or other qualification or is deemed by the employer or relevant legislation to hold such qualification or possess such experience as appropriate or required for the position.
(5) For cooks whose employers require them to hold or be working towards an ECEC Certificate III qualification to enable them to assist as an educator 'on the floor' with children when needed, a new minimum wages rates provision should be included in clause 14 of the CS Award, with the minimum wages rates table being split into three sections for CSEs, Support Workers and 'Support Worker - ECEC Qualified Cook'.
(6) Current clause 14.2 should be deleted because the specified mode of progression between classifications in the existing structure of CSEs will not be relevant to the proposed new classification structure.
[8] We do not consider that the fifth amendment identified above is necessary. It will duplicate minimum wage rates which appear in the new CSE classification structure. Our provisional view concerning cooks who have, or are working towards, an ECEC qualification and who work 'on the floor' is better implemented by a separate provision which identifies that they will be paid as a CSE and not as a support worker. We accept the other proposed amendments as appropriate for the reasons advanced by the parties. Subject to these amendments, we confirm the provisional views as set out at subparagraphs (1), (2), (4) and (5) in paragraph [3] above.
[10] As earlier indicated, there was no consensus position concerning the operative dates and phasing-in of the minimum wage rate increases that will follow from the implementation of the proposed new CSE classification structure.
[11] The ACA proposes a five-stage phasing-in arrangement as follows:
(1) An initial increase for all classifications from 1 March 2026.
(2) For CSE Levels 1-3, 4A and 8, further increases on 1 July 2026, 1 July 2027, 1 July 2028 and 1 July 2029.
(3) For CSE Levels 4 and 5-7, further increases on 1 July 2026, 1 July 2027 and 1 July 2028.
[12] Because the total minimum wage rate increases envisaged in the provisional view vary as between the existing classifications, and the translation involves the 30 existing classifications being compressed into eight new CSE classifications, the ACA proposes different wage increases being applicable to each classification at each stage of the phasing-in timetable. The ACA's submissions set out a detailed methodology by which this is to be done, based on setting a current classification/increment as the reference point to establish the rate for each level in the new classification structure. At the initial stage, the majority of classifications will receive a 5 per cent increase, but some employees will get less than this or will have a preserved rate of pay in order to avoid a reduction. For the later stages, each increase will be equal except for the final stage. As an example, CSEs with a Certificate III qualification currently classified at Level 3.1 who will move to the new benchmark classification of CSE Level 3 will receive under the ACA's proposal 5 per cent from 1 March 2026, a further 5 per cent from each of 1 July 2026, 1 July 2027, and 1 July 2028, and a final 1.2 per cent from July 2029. There is consensus among the parties that the ACA's proposed methodology should be adopted.
[13] In relation to the operative date of the initial increase, the ACA submitted, based on the evidence given in the witness statement of Paul Mondo dated 29 August 2025, that its members would require at least three months to prepare for the implementation of the new classification structure. This would allow employers sufficient time to communicate with employees about the changes to their classification levels, review and update internal systems and processes to be compliant with the CS Award, and seek external advice.
[15] The Ai Group also made further submissions regarding funding considerations for the implementation of the April decision. Specifically, the Ai Group highlighted that labour is the biggest cost for ECEC employers, and that employers' costs had increased due to cost pressures from labour force shortages, Annual Wage Review increases, and increases to the costs for caring for children with disabilities, leading to 25 per cent of ECEC services that are structured as companies making almost no profit or running at a loss. The Ai Group submitted that these factors demonstrated how an increase in wages without an increase in funding would have a materially detrimental effect on ECEC employers, and noted that the WRP scheme's ameliorative effect should be weighed against the facts that not all service providers are covered by the scheme, there are costs associated with applying and maintaining eligibility for the scheme, and the Commonwealth has not committed to any funding past 30 November 2026.
[16] The CCCA and CELA's position is that the phasing-in of increases to minimum wage rates should be balanced with the availability of funding under the WRP scheme, particularly considering those services who are not eligible to receive additional finding. On this basis they propose the following phasing-in schedule:
(a) 5 per cent from 1 March 2026
(b) 5 per cent from 1 July 2026
(c) 5 per cent from 1 December 2026
(d) 5 per cent from 1 July 2027
(e) Remaining increases from 1 July 2028.
[17] The UWU proposed (in a submission lodged on 29 August 2025) that there should be an initial increase of 10 per cent operative from 31 October 2025, an additional 5 per cent increase from 1 December 2025, and any further increases should be phased in by 30 November 2026. The UWU submits that approximately 70 per cent of services operate under the WRP scheme and that the CS Award may become a valid instrument for participation in the WRP scheme, making it easier for services to access the grant. The UWU also submits that the WRP scheme funds centre-based day care and OSHC, which together make up the majority of the sector, while kindergartens and preschools are predominantly funded by the States and family day care is representative of only 20 per cent of services. The UWU also highlights the impact that implementation of the April decision will have on employees, particularly providing financial relief to workers.
[18] The Commonwealth submits that the operative date of the initial increase should be 1 January 2026, with a phasing in timetable as follows:
(a) an initial increase of 5 per cent from 1 January 2026;
(b) a further 10 per cent increase from 1 December 2026;
(c) a further 5 per cent from 1 July 2028; and
(d) any final increases from 1 July 2029 (with the total increase for each classification aligned to the provisional view).
[19] The Commonwealth submits that the initial operative date of 1 January 2026 would increase rates in the short term whilst also allowing more time for service providers to apply for the WRP scheme. The second phase would avoid those employees receiving a 15 per cent wage increase pursuant to the WRP scheme from going backwards after 30 November 2026 when the current funding for the scheme expires. It is further submitted that the remainder of the suggested increases will appropriately allow the provisional view to be fully implemented in stages up to 1 July 2029. The Commonwealth did not provide any further information on whether funding for the WRP scheme will continue after 30 November 2026 or whether it would provide additional funding by any other means. In oral submissions, the Commonwealth confirmed that it could not provide advice on a timeline as to when or if a decision would be made in this regard.
[21] Due to the passage of time, an initial operative date of 1 August 2025 is obviously not viable (with no party suggesting that any increase should operate retrospectively). We accept the ACA's submissions and evidence to the effect that a period of about three months is necessary to allow employers to make the administrative arrangements to transfer employees from the current to the new classification structure. We note however that, for a significant majority of employers, there will be no actual cost associated with the initial wage increases since they will already be paying CSEs at least 15 per cent above the CS Award rates because of their participation in the WRP scheme and the associated Early Childhood Education and Care Multi-Employer Agreement 2024-2026 (ECEC Agreement) or will otherwise be already paying above-award rates of pay pursuant to other enterprise agreements or individual arrangements. For these reasons, and because ECEC employers have been on notice since the April decision as to the broad form of the new classification structure, we think the later operative date of 1 July 2026 proposed by the Ai Group is unnecessary. We therefore determine that an initial operative date of 1 March 2026, as proposed by the ACA, is 'appropriate' (within the meaning of s 166(2) of the FW Act).
[22] No party identified any relevant change to the considerations we took into account in forming our provisional view in the April decision. All parties accepted that there should be a phasing-in arrangement of some form, with the issues in contention being the length of the phasing-in timetable and the increases to apply at each stage. The UWU and Commonwealth proposals effectively 'front-load' the increases on the basis of the extent of industry participation in the WRP scheme, which to date has funded a wage increase of 15 per cent. While this consideration has a degree of weight, it does not take into account the interests of that minority of employers that have decided not to participate in the WRP scheme and otherwise pay their CSEs at or close to the CS Award rates. There is no evidence before us as to the reasons for such employers not participating in the WRP scheme, but there is no basis for us to conclude that their reasons are not legitimate. The UWU and Commonwealth proposals would place too heavy a burden on such employers at the early stages of the phasing-in timetable.
Modern awards objective and minimum wages objective
[24] We are satisfied that the variations to the CS Award which will be made arising from this decision are necessary to achieve the modern awards objective. Our overall assessment is that for the modern awards safety net to be 'fair and relevant' (s 134(1)), modern award minimum wage rates must properly reflect work value and be free of assumptions based on gender.
[25] In reaching this conclusion, we have taken into account the considerations specified in s 134(1) of the FW Act in the following way (using the paragraph designations in the subsection):
Paragraph (a): Using the measure of 'low paid' as being two-thirds of median adult ordinary-time earnings for full-time employees, the 'low paid threshold' may be quantified in two ways: $1139.65 per week (using the ABS Characteristics of Employment data for August 2024) or $1131.33 per week (using the EEH data for May 2023). The classifications of CSE Levels 1.1-3.2 currently have a rate of pay that falls below both of these measures. Accordingly, because the wage rate adjustments will have the result of lifting almost half of the current classifications in the CS Award above the low paid threshold, this consideration weighs in favour of the variations.
Paragraph (aa): There is no evidence before us that the variations will have any effect, detrimental or otherwise, as to the need to improve access to secure work. This is therefore a neutral consideration.
Paragraph (ab): As set out in our decision, the variations will rectify undervaluation in a female-dominated occupation and therefore aid in achieving gender equality, ensuring equal remuneration for work of equal value and eliminating gender-based undervaluation of work. This weighs significantly in favour of making the variations.
Paragraph (b): The variations we propose may encourage collective bargaining by encouraging employers to participate in the ECEC Agreement in order to access the funding under the WRP scheme. It is unlikely that employers who do not take up such an incentive would bargain in any event and this is, at worst, a neutral consideration.
Paragraph (c): It is possible that the variations, by implementing minimum rates of pay which fairly reflect work value, may attract more persons, especially women, to the ECEC sector over the longer term and thus increase workforce participation. It is likely that it will encourage existing CSEs to remain in the sector. Given that this is speculative, we will treat this as a factor weighing in favour of making the variations, albeit slightly.
Paragraph (d): We consider that the simplified classification structure, which recognises the caring skills that CSEs are required to exercise and their relevant underpinning qualifications, promotes flexible modern work practices and the efficient and productive performance of work. It is also notable that the classification structure has been developed with the input of the parties and reflects a consensus position. We will treat this as a matter weighing in favour of making the variations.
Paragraph (da): We do not consider that this is a relevant consideration in this matter.
Paragraph (f): The variations will clearly have some impact on employment costs for employers in the ECEC sector. As we have explained earlier, in the initial stages of the phasing-in timetable, only a minority of employers will face an actual cost impact, with the majority of employers likely to be in a position to absorb the initial increases into the above-award payments made pursuant to the ECEC Agreement and the WRP scheme or otherwise paid pursuant to enterprise agreements or individual arrangements. However, there will be a greater cost impact in the later stages of the phasing-in timetable, particularly once the increases extend beyond the 15 per cent total wage increase which has flowed from the WRP Scheme and the ECEC Agreement. This impact will be exacerbated if the Commonwealth does not extend the WRP scheme funding beyond November 2026, noting that it has made no commitment to do so. The extended phasing-in timetable and the methodology for implementing the new classification structure will operate to ameliorate the impact, but the cost to employers must nonetheless weigh against the making of the variations. There is no reason to think that the variations will affect productivity. The simplified classification structure, once implemented, will to some degree decrease the regulatory burden upon employers associated with classifying and paying CSEs, and this weighs in favour of the variations.
Paragraph (g): This consideration is largely irrelevant and will be given neutral weight.
Paragraph (h): There is no material before us which permits a proper assessment of whether the minimum wage rate increases are capable of having a material effect upon the national economy. There are potential positive effects, including that the wage increases operate to boost household consumption, and potential negative effects, including an increase in the price of ECEC services which feeds into the inflation rate. However, there is no modelling which would permit these potential effects to be measured. We therefore assign this factor neutral weight.
[26] We also consider that the variations are consistent with the achievement of the minimum wages objective in s 284(1) of the FW Act. In respect of the considerations in ss 284(1)(a), (aa), (b) and (c), we make the same findings as in relation to ss 134(1)(h), (ab), (c), and (a) respectively. Section 284(1)(e) is not relevant to this matter.
[27] A determination varying the CS Award to implement the revised classification structures, the first phase of the minimum wage rate increases and the consequential variations we have discussed is published together with this decision.
L Cruden for The Australian Industry Group, the National Outside School Hours Services Alliance and the Outside School Hours Council of Australia.
A Rafter for the Australian Childcare Alliance, Australian Business Industrial and the NSW Business Chamber.
V Bulut, counsel, for the Commonwealth of Australia.
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