CHAPTER 2
Key issues
2.1
The committee is aware that discrepancies in pay come about in a number
of different ways. First and most straightforward are discrepancies in remuneration
for equal work, where the gap between male and female earnings may vary across
industries and organisations. These are attributable not only to base salaries,
but also to differences in other aspects of remuneration, such as bonuses and
benefits.
2.2
However, the other significant cause of discrepancy is related to the
lack of equal opportunity to access employment in a variety of fields, to progress
out of non-managerial and into senior management roles, to cease the overrepresentation
of women in part-time rather than full-time roles, and to be able to balance
work and family responsibilities without having to sacrifice either, all of
which result in a limitation of career progression and consequently on income.
2.3
In the twenty first century, closing the gender pay gap is ultimately
about ensuring that men and women have similar career and family choices
available to them. As recently put by the Department of Families, Housing,
Community Services and Indigenous Affairs (FaHCSIA):
Gender equality is about enabling women and men to reach
their potential to contribute to, and benefit from, full economic, social,
cultural and political participation.[1]
2.4
Overall, support for the Equal Opportunity for Women in the Workplace
amendment Bill 2012 (the Bill) was very strong among most submitters.[2]
Notwithstanding extensive consultation and efforts to balance competing
priorities, amendments were suggested by employee and employer advocates. A
minority did not support the Bill, while some challenged the assertion that a
significant pay gap between men and women even exists. This chapter will
address the founding premise of this Bill and examine key issues identified by
submitters.
The pay gap statistics
2.5
Despite significant advances, gender inequality continues to be a
feature of Australian workplaces. In 2004, the Australian Bureau of Statistics
(ABS) reported that average weekly total earnings for male employees were
$974.90, and for women $828.[3]
In 2011 it was estimated that women in full-time paid employment earn
17.8 per cent less than men in similar conditions.[4]
According to the Organisation for Economic Co-operation and Development (OECD),
the overall gender pay gap in Australia is 12 per cent.[5]
2.6
As enunciated by the Australian Council of Trade Unions (ACTU):
The amendment to the EOWW Act is much needed. Australia is
not performing well on many equity measures. Despite the introduction of the
affirmative action act 26 years ago women continue to be disadvantaged in the
workplace. For example, despite making up half the workforce, women in
full-time paid work still earn 17.8 per cent less than men in full-time paid
work amounting to over $1 million less over a lifetime. Women are now more
likely to have a tertiary qualification than men but women graduates will earn
$2,000 less than male graduates and $7,400 less by the fifth year after
graduation. Fewer than three per cent of ASX 200 companies have a female chief
executive officer, 8.4 per cent of board directors are women and only eight per
cent of executive managers of Australian companies are women. Women retire with
less than half the amount of savings in their superannuation accounts than men,
and women are four times as likely to experience sexual harassment and
discrimination in the workplace compared to men...Clearly, the current EOWW
legislation has been inadequate to successfully address old, persistent
inequities and is in need of updating to effectively address current equal
employment opportunity concerns.[6]
2.7
For many women, the pay gap begins upon graduation from university,
where women represent 64 per cent of university graduates but earn median
starting salaries of $50,000 versus $52,000 for men.[7]
2.8
Over the course of a career, employees in the private sector today will
work in a number of organisations, where, of course, most are unaware of how
their salary compares to that of colleagues. Variations in the gender pay gap
exist between employers and industries, but range from, for example, 6.8 per
cent in the retail industry,[8]
to 29 per cent in the finance sector.[9]
2.9
An Australian Bureau of Statistics table showing weekly, full-time
ordinary time earnings for male and female workers by industry is illustrative:
Source: Australian Bureau of
Statistics: Catalogue 6302.0, November 2011 (released 23 February 2012), p. 13.
2.10
Although these figures no doubt fluctuate, the pay gap between male and
female full-time workers across all industries currently sits at over 17 per
cent. Obviously, the difference in some industries is higher than that.
2.11
Nonetheless, organisations such as the Australian Federation of
Employers and Industries (AFEI) disagreed with this premise, citing research
which suggests that the gender pay gap in Australia is actually as low as 2.3
per cent:
First, there is a debate about what the gap is and how the
measurement of that gap is conducted. There are studies that say that the gap
is as low as 2.3 per cent, and yet the whole discussion at the moment is about
the fact that it is said to be around 17.5 or 17.6 per cent as a gap.[10]
2.12
This view was not common. The overwhelming evidence to the committee was
that there is indeed a significant pay and workforce participation gap between
men and women.[11]
2.13
A 2009 University of Canberra study commissioned by FaHCSIA found that
not only has a gender pay gap existed for decades, but that the gap has, in
fact, been widening:
Analysis of Australian Bureau of Statistics earnings data
confirms that Australia has a persistent gender wage gap. Data from the Average
Weekly Earnings Survey show that between 1990 and 2009, the gender wage gap
remained within a narrow range of between 15 and 17 per cent. Indeed over the
last four years the gap has steadily increased within this range from a low of
15.1 per cent in February 2005 to 17.0 per cent in February 2009.[12]
2.14
The Women's Electoral Lobby suggested that the notion that a
significant gap does not exist could stem from a lack of detailed measurement
of the indicators by employers:
[I]n order to understand what is happening in terms of gender
equality in the workplace, you need to look at the numbers and in the absence
of numbers you might think things are fine. Many organisations, for example,
believed they did not have a pay equity issue until they looked at the data. It
is easy—and I think people are broadly well-intentioned, even if they have made
no effort in regard to general equality—to assume that things are going well.
It is very difficult to make any kind of analysis unless you have actually dug
in and had a look at where people sit and what they are being paid.[13]
2.15
Ms Ruth Medd, Executive Chair of Women on Boards and Director of the
National Foundation for Australian Women, went further, pointing out that there
is ignorance, or even denial, about the existence of the pay gap in some quarters:
The Financial Services Industry Association does an annual
survey. They did one for last year and they are doing it now at the moment.
Their data was that generally the males thought that everybody was equal in the
workplace and the females thought they were not. When you look at the data, the
gender pay gap in the financial services sector is the largest of any sectors.
So there is absolutely a misunderstanding by a large portion of the workforce
of that the issues.
Generally, males who tend to be in more senior roles have a
more rose-tinted view of the prospects of women. Then you talk to women who,
for example, discover that they do not get paid the same as the males. It is
quite hard in many organisations to discover that for pay scales are hidden. But
when they do find out they are usually quite shocked.[14]
2.16
Of course, as outlined, the gender pay gap varies between industries and
employers, with women often overrepresented in part-time employment and
low-paying jobs and industries.[15]
However, addressing this lack of measurement over time is precisely one of the
key aims of this Bill.
Cultural obstacles to male and
female participation
2.17
Gender equality is about more than remuneration. It is about dealing
with and overcoming the multifaceted barriers and prejudices that exist and
favour men's workforce status over that of women.
2.18
Research appears to indicate that certain 'exclusive' corporate cultures
may cause some of the most significant barriers for some employees, both male
and female. These are corporate cultures that encourage and reward long working
hours, impose significant travel demands and:
...a 24 hours 7 days a week mentality, leadership 'sameness'
and 'clubby' social networking.[16]
2.19
Workplaces with these cultures attract and privilege employees without
family responsibilities, and negatively impact family and community life. These
organisational cultural norms, Victorian Women Lawyers contend, 'work to the
advantage of men and the detriment of women seeking leadership opportunities.'[17]
2.20
This is borne out in many industries and workplaces, where the number
of women employed tends to decline towards the upper echelons of senior
management:
[T]the next great issue is women in senior management roles
and the old cliff issue—that we start with 50 per cent and we have lost almost
all of them by the time you get to top management. The data there is fairly
sparse as well, and I would have thought that one of the real benefits of this
legislation is that we might get a picture across the economy of women's
participation in management—not just the very unrefined categories that are
available from the ABS at present but at different levels in organisations.
Then you can see the attrition between level 1, level 2 and level 3 and that
sort of thing, and it is then starkly obvious that women are somehow or other
missing out.[18]
2.21
At the higher end of the business spectrum, KPMG estimated that in 2009
women comprised only 7 per cent of executives in ASX200 companies despite
accounting for 42 per cent of the total workforce.[19]
2.22
Men also suffer the consequences of these cultural barriers. Often those
who would like to are less able to access flexible working arrangements to meet
caring responsibilities. As a result, men are more likely to be hired and
retained in jobs which demand long hours and extensive travel, which in turn
impacts on their ability to fulfil family responsibilities. Effectively, men
and women are subject to what the Women's Electoral Lobby referred to as 'broad
occupational segregation':
That occupational segregation is further entrenched by terms
and conditions of employment, so women stay in women's jobs because women's
jobs tend to be casual and part-time and therefore they can—and that flows
through to pay arrangements because people get paid less because they are tied
into those occupations. There is a supply-demand factor there and so on. So you
can actually get greater allocative efficiency—that is to say, people who want
to become nurses, men who want to become nurses, will have better access to nursing;
women who want to become heavy machinery drivers in the mining industry in
Western Australia will be able to do that.
When you have things that are segregated, an impact on one
half of the segregation affects the other half of the segregation. For example,
if employers increase people's access to work and family arrangements and if
that ceases to be stigmatised, then men will be more willing to access those
arrangements as well. If you look at some of the research that has been done,
it finds that in fact employers tend to say no more often to men who are trying
to access work and family arrangements than to women because they are locked
into that same sort of set of assumptions about it.[20]
2.23
As pointed out by the Finance Sector Union of Australia, this Bill,
along with human rights and sex discrimination legislation, aims to address the
fact that many jobs discriminate against people, not just women, with caring
responsibilities:
[I]f we are operating in a sophisticated labour market we can
no longer say, 'You've got caring responsibilities, therefore you can't work in
these jobs.' We have to be more creative around that. I will give another
example of NAB. They are open, as part of this current project, to go forward
once we have finished and have a look at redesigning jobs with this in mind. So
it can be done. It may not be able to be done for every job and it is not the
only cause of the gender pay gap.[21]
Economic incentives
2.24
In its 2009 report cited above, KPMG identified the gender pay gap as a
source of potential economic gain:
...given that many of the factors underlying the gap are
driven by labour marker rigidities which, if removed, could benefit the
Australian economy through increasing overall economic output.[22]
2.25
In this vein, the committee heard that Treasury modelling suggests that
lifting women's participation rates would have a noticeably positive effect on
Australia's economic performance. Greater gender equality would also directly
benefit business productivity and efficiency:
A modest 2.5 per cent increase in labour participation rates
would support an additional nine per cent increase in economic output by 2022.
Gender equality also has the capacity to flow on to other aspects of the labour
market. Evidence suggests that high levels of representation of women in senior
management benefits the productivity of organisations.[23]
2.26
The Women's Electoral Lobby cited modelling by Access Economics, which
indicates that 'boosting women's workforce participation could realise an
increased national output of around $100 billion by 2040.'[24]
2.27
Another analysis, a study conducted in 2009, indicates that lowering the
gender pay gap by one percentage point, from 17 to 16 per cent, would increase gross
domestic product (GDP) per capita by approximately $260. This would equate to around
0.5 per cent of total GDP, or around $5,497 million. Eliminating the gender pay
gap, the same study concludes, could be worth around $93 billion, or 8.5 per
cent of GDP.[25]
2.28
As well as increased efficiency and productivity, employers stand to
benefit in other ways from implementing effective equal opportunity strategies.
These include retention of skilled employees, higher workplace morale,
reduction of discrimination complaints, reduced employee turnover and
absenteeism and positive public relations. These potential gains all suggest
that pursuing equal opportunity strategies is a worthwhile economic investment.[26]
Is legislation necessary?
2.29
The committee heard arguments against regulating gender equality
performance from submitters who would have preferred an incentive and
education-based approach to progressing change. The Australian Chamber of
Commerce and Industry (ACCI) posited:
ACCI supports workable and sensible policy measures which
have the capacity to make a real improvement to enhancing gender equality.
Such measures do not necessarily involve additional or new
legal obligations. Simple and effective measures including national campaigns,
working with industry to develop voluntary codes and guidelines, further
education to the wider community, and building capacity for industry to develop
their own tailored arrangements that meets the unique circumstances of the
industry and enterprise.[27]
2.30
AFEI, among others, indicated a preference for achieving the desired
goals through individual flexibility agreements agreed between the employer and
employee.[28]
AFEI added that many employers were already promoting gender equality and did
not require strengthened regulation to do so:
Criticism of the proposed regulations should not be taken as
an indication that our members do not support the notion of equality and
voluntary initiatives. Many of them are involved in that already and are doing
things. They do not necessarily even think about, 'Will I employ a man or will
I employ a woman?' for a particular position; they think about getting good
people for jobs that will make their businesses function effectively,
efficiently and competitively.[29]
2.31
ACCI argued that since business is already subject to multiple laws
governing anti-discrimination, harassment, hours of work and flexible work,
having to comply with legislation in multiple jurisdictions could result in a
double jeopardy situation for employers. This view was shared by AFEI.[30]
2.32
However, the committee received no evidence indicating that there is any
real tension between the Bill and any existing legislation. Nor did the
committee receive satisfactory evidence indicating that adequate gender
equality improvements were being made and outcomes achieved voluntarily,
without strengthened regulation. In fact, as pointed out by the Finance Sector
Union of Australia, workplace strategies may indeed exist, but are often not in
practice applied in a fair and equitable way:[31]
Our clear view is that voluntary regulation, for want of
another word, does not work. As I have referred to previously, with equal
opportunity for women in the workplace and employer of choice citation, we
think there are fairly weak criteria that sit within all that. The key element,
if I could summarise, is that what is happening in policy and what people are
reporting do not, in our view, reflect what actually happens in the workplace.
There have been years and years of trying to do this in some sort of gentle
way. I think that without, firstly, union and employee involvement and, secondly,
regulation you are not going to get a real answer about what is happening on
the ground, so real workplace change will not occur. You need to measure how
these gender equality indicators change and improve over time.[32]
2.33
Ultimately, submissions to the committee overwhelmingly favoured
promoting positive gender equality outcomes by strengthening regulation, citing
supporting research and overseas examples:
A recent study by the OECD found that relying on market
forces, the effluxion of time or improvements in women's human capital are not
enough to remedy discrimination in employment terms and conditions. Action is
required from government.[33]
It is also quite clear from overseas that other countries, in
Europe in particular—Norway is the oft-quoted example—are working to be more
regulatory about insisting on more women on, for example, boards. They came to
the conclusion that, without regulatory impost, nothing would change. So we are
not alone in looking at that argument.[34]
2.34
As put by Victorian Women Lawyers, specific equality indicators are
pivotal to driving real improvement in outcomes:
We think that clearly defined, transparent metrics in
relation to the gender makeup of organisations will increase pressure on
organisations to improve and will drive positive change within organisations.[35]
2.35
The ACTU also pointed out that although some businesses recognise that
they benefit from fostering gender equality, many others require additional
discipline in pursuing an affirmative action program:
A number of senior people have talked about the benefit of
that within their business and that they probably would not do it if they were
not required to do it under the legislation. I have had regular meetings with
the corporate HR director from Woolworths, for example, who were actually
waived from reporting but she insisted that they continue to collect the data
on an annual basis and to be pursuing their affirmative action program because
they could see the benefit of doing that as a business. But not all businesses
would necessarily take that approach. So having this framework provides some
sort of discipline. In addition there are a lot of benefits for the broader
industry in terms of an industry sector and the workforce to be collecting this
sort of data as a basis for comparison, as a basis for showcasing best practice
and as a basis for improvement.[36]
2.36
Mrs Marie Coleman, representing the National Foundation for Australian
Women, deftly put the case for legislated regulation:
[T]he process of relying on self-regulation and the rather
wet lettuce slap of potential naming and shaming has seen a period of wage
equity going backwards...I think the evidence is there that, sometimes, to
bring about behaviour change requires the possibility of sanctions.[37]
2.37
While the Department of Education, Employment and Workplace Relations
(DEEWR) explained that the proposed regulatory framework would establish gender
equality indicators and measure performance on these, it would not dictate to
employers how to achieve the minimum standard.[38]
Coverage of the Act
2.38
The Bill would expand the coverage of the Act to include both men and
women.[39]
As pointed out by the Australian Human Rights Commission, this expansion is
consistent with the Sex and Age Discrimination Legislation Amendment Act, which
came into effect in June 2011 and which strengthens protection against gender
discrimination by:
- establishing breastfeeding as a separate ground of
discrimination;
- extending protections from discrimination on the grounds of
family responsibilities to all areas of employment; and
- ensuring the [Sex and Age] Act applies to men and women equally.[40]
Why the Bill does not cover the
public sector
2.39
The Bill's focus is on the private sector; public sector employers are
not covered. This seeming discrepancy was raised by a number of submissions,
including the Chamber of Commerce and Industry of Queensland.[41]
2.40
ACCI, for example, expressed dissatisfaction with what it saw as:
...a disparity between what we are told is good for business
and what standards the government and its agencies have set for themselves.[42]
2.41
However, the committee heard that the Act, in its current and past
forms, has always focused on the private sector.[43]
Equal employment opportunity for government departments and statutory
authorities is regulated by the Public Service Act 1999 and Equal
Employment Opportunity (Commonwealth Authorities) Act 1987 respectively.
Employment equity in federal government bodies is administered by the
Australian Public Service Commission (APSC), which releases an annual report
reflecting the status of employment equity for women in the Australian Public
Service (APS).
2.42
In addition, a number of states have introduced their own equal
employment opportunity legislation regulating their respective public sectors.
2.43
On top of this, public sector workplaces tend to outperform private
sector counterparts in terms of employment equality indicators.[44]
Women comprise 44.2 per cent of the private sector workforce, and 59.4 per cent
of the Australian Public Service (APS). The figures are even more disparate in
senior management roles; women represent 8 per cent of executive managers in
the private sector, and 38.2 per cent in the APS.[45]
2.44
Given that public sector employment is already regulated by schemes comparable
to the EOWW Act, and that gender inequality is not as pronounced in the public
sector as it is in the private, the committee is of the view that the Bill's focus
on the private sector is appropriate.
Gender equality indicators
2.45
The reporting framework established by the Bill is underpinned by the
concept of gender equality indicators (GEIs). These are described in Chapter 1
and consist of:
(a) gender composition
of the workforce;
(b) gender composition of
governing bodies of relevant employers;
(c) equal remuneration
between women and men;
(d) availability and utility of
employment terms, conditions and practices relating to flexible working
arrangements for employees and to working arrangements supporting employees
with family or caring responsibilities;
(e) consultation with
employees on issues concerning gender equality in the workplace; and
(f) any other
matters specified in an instrument made by the Minister.[46]
2.46
Under subsection 13(3), the Minister must by legislative instrument
specify matters in relation to each gender equality indicator, ultimately
creating a long term data set which will provide evidence-based insight into
equality outcomes at the workplace, occupational and industry level. The data
set will also help inform research and policy development.[47]
2.47
Many submissions expressed strong support for the introduction of these
indicators as a means of identifying gaps in order to measure that which needs
to be improved. In a joint submission, Women on Boards, the National Foundation
for Australian Women and YWCA opined:
It is quite clear from our experience that the exercise of
reporting gender composition is the trigger for the realisation that there is a
way to go in providing a gender equitable workplace.[48]
2.48
Others, such as the Finance Sector Union of Australia, saw an
opportunity to use the indicators to measure 'in a detailed and transparent
way' gender equality progress over time.[49]
Minimum standards
2.49
The proposed legislation would empower the Minister to set minimum
standards in relation to specified GEIs, relevant employers and reporting
periods by legislative instrument, by 1 April 2014.[50]
2.50
Some submissions, such as that from ACCI, expressed concern regarding
the minimum standards, specifically in relation to perceived uncertainty about
their nature, given that they are to be set at a later date and are as yet
unknown.[51]
The Australian Industry Group (AIG) had a more reserved position, stating that
it was impossible to know whether the burden on business would increase until
the minimum standards were known.[52]
2.51
The Minerals Council of Australia (MCA) echoed:
MCA is concerned that the Bill grants any future Minister a
head of power to set as-yet-unknown minimum standards. Although the long lead
time in terms of these was something of a concession to industry, the full
impact of the minimum standards and the Bill itself will not be known until
they are published. Industry consultation in drafting them has been promised.[53]
2.52
A strong objection was expressed by AFEI:
[O]ne of our significant objections is that the proposed
legislation proposes to introduce mandatory minimum gender equality standards,
the reporting and auditing against those standards, penalties for failure to
improve against those standards, and the fact that the standards themselves,
which are completely unknown to us presently, are to be determined politically,
effectively, with absolutely no explanation at this point anyway how all of
this is going to work.[54]
2.53
However, the Bill specifies that minimum standards are to be set by the
Minister by legislative instrument with regard to recommendations from
the Agency, and after consultation with the Agency and key stakeholders.[55]
This means minimum standards will actually be developed in consultation with
the Agency, employers, industry bodies, employee organisations and
industry-specific experts.[56]
2.54
The committee is therefore satisfied that appropriate measures have been
taken to ensure that a consultative process is applied in setting minimum
standards.
Reporting on GEIs
2.55
In a change from the current regulatory regime, reporting obligations in
the amended Act would focus on the outcomes employers produce to achieve
substantive gender equality in the workplace, rather than on the methods they
use to progress equality:
Outcome-based reporting will generate greater knowledge about
the extent to which change is actually being achieved within the workplace. It
will provide a more accurate representation of the extent of real reform within
workplace profiles, conditions and cultures.[57]
2.56
If the Bill is passed, relevant employers will be required to report on
the gender equality indicators. The legislation would require employers to
prepare a public, written report outlining information about how the
organisation performs in relation to the gender equality indicators. Reports would
need to be signed by the chief executive officer (however described) of the
employer in question.[58]
2.57
Employers would be required to lodge reports annually. The reports would
be publicly available, 'subject to exceptions for information that is personal
information, information which relates to remuneration and information of a
kind specified by the Minister.'[59]
2.58
These reporting requirements are, according to the National Foundation
for Australian Women, timely and necessary:
[D]uring the period when we have had voluntary reporting and
voluntary compliance without any sanctions we have seen the gender wage gap
increase. That seems to me to be a fairly disturbing piece of data.[60]
Are reporting requirements an undue
burden on business?
2.59
Some industry representatives argued that the reporting requirements
could represent an undue, added regulatory burden on business.[61]
The Australian Industry Group (AIG), for example, described the legislation as
'another layer of regulation'.[62]
AFEI's felt similarly:
The Bill imposes additional reporting requirements for
employers requiring them to make public reports generated for the purposes of
complying with the new legislative scheme. They are required to make the public
reports accessible to employees and shareholders, inform union that a public
report has been lodged and notify all parties of the opportunity to comment on
the public report.[63]
2.60
Due to this requirement, AFEI argued, employers would incur both additional
financial costs and the 'cost and complexity of notifying and providing reports
to shareholders and unions.'[64]
2.61
The Minerals Council of Australia recognised the government's view that
the legislation would not increase the regulatory burden on business, but
nonetheless retained concerns about the possibility of additional red tape.[65]
2.62
This view was challenged by the ACTU, which argued that achieving greater
gender equality would ultimately be money well spent for business, and that
employers were not being asked to provide data they do not, or should not,
already have:
I do not think it is an undue regulatory burden. Given all
the advantages of improved diversity in workplaces, I think, whatever financial
burden may occur would be a good investment both for the business and for the
community. I did happen to hear the previous speaker saying that most large and
small employers do not currently collect the information envisaged by the bill.
I would dispute that. I do not know any employers who do not know how much they
pay their people, including their on-costs. They know that very well. I pointed
before to the information required under the Fair Work Act that employers
provide as a matter of course. If employers do not know how many sexual
harassment and discrimination cases are occurring in their business then that
is an area of concern. They should be gathering that information if they are
not already. I do not agree that this is an undue burden for employers.[66]
2.63
Furthermore, as pointed out by Dr Kathleen MacDermott of the Women's
Electoral Lobby, the reporting requirements on business would not differ
markedly from those under the current legislation:
With respect to the gender equality indicators if the
minister's instrument when it is made includes all of the matters in the
proposed subsection 3(1) and if these matters are specified in the form
indicated in the explanatory memorandum, they will only add one piece of data
to the current reporting regime. That piece of data is the:
... gender composition of governing bodies of relevant
employers;
This is not a difficult piece of data to identify or to
collect. The other data items are the same as those called for in the current
report form although the current report form has a mix of numerical and
discursive responses. This is not, in our view, a significantly enhanced
reporting requirement.[67]
2.64
AFEI also reiterated its view that being required to provide employee
organisations with copies of reports would be difficult for employers, as they
could not readily identify which employee organisations were active in their
particular workplace:
[E]mployers...even with low levels of union membership or
involvement in their workplace, will have to identify each employee
organisation that has members who are employees and provide them with copies
[of reports] within seven days. Employees are under no obligation to disclose
union membership to their employer.[68]
2.65
This position was rejected by the Financial Sector Union (FSU), which
argued that employers should be aware of which employee organisations pertain
to their workplace:
I think there is certainly an argument to say, where there is
a union presence and an effective threshold number of people working in the
business, that [identifying organisations] should be achievable.[69]
2.66
The National Foundation for Australian Women did not see a reason for
employers 'to get overanxious' about the reporting requirements, saying that
the requirements are far from excessive and 'are in fact derived from current
requirements.'[70]
2.67
FaHCSIA added that one of the key new provisions of the Bill would
enable the Agency to examine the impact of regulation on reporting employers.[71]
Committee view
2.68
The committee is cognisant of the fact that regulatory burdens should be
closely linked to the objectives of the regulation itself. The key objective of
the proposed legislation is to progress substantive gender equality in the
workplace. Where employers are currently required to report on their methods
and processes for promoting equality, the amended Act would qualitatively
improve reporting, rather than simply demand that more reports be produced.
Employers would be encouraged to use resources to report on outcomes, rather
than processes.
2.69
Furthermore, the objectives of the Bill are of such paramount importance
to closing the gender income gap, creating more flexible workplaces and
boosting women's participation (and with it economic output), that progress in
this matter should not be left to incentive-based voluntary employer action.
Evidence before the committee from individuals and organisations with many
years' expertise in the field indicates that gender equality is best brought
into focus by way of strengthened regulation.
2.70
In a similar vein, the committee rejects the notion that the objectives
of the Bill could be pursued through individual flexibility agreements instead
of the proposed legislation. The committee is of the view that such individual
agreements skew the balance of power disproportionately in favour of the
employer over the employee, putting all but the most in-demand employees in a
vulnerable negotiating position. Equally, individual agreements do nothing to
address structural and cultural workplace issues which impede gender equality,
nor can they address unequal remuneration, discrimination and harassment
problems, or unequal access to training and development.
2.71
The committee believes that the limited burden on business presented by
regulation is justified by the significant social and economic benefits of the
amended Act, and could be mitigated through targeted use of existing business resources.
The committee is therefore not of the view that the Bill would create an undue
burden on business.
The compliance framework
2.72
Under the current regulatory system, compliance is not tied to an
employer's standard of equitable employment outcomes, but is instead associated
with failure to provide information to the Agency. Sanctions for non-compliance
are limited. Non-complying organisations are identified by the Agency in reports
which are tabled in Parliament and published on the Agency's website, while the
Australian Government Procurement Guidelines prevent non-complying
organisations from entering into contracts with, or buying goods and services
from, the Commonwealth. In practice, the Agency does not presently have the
power to initiate action on employers' gender equity outcomes, but instead
relies heavily on cooperative relationships with organisations.[72]
2.73
The Bill clarifies compliance obligations and the consequences of
non-compliance by providing for employer performance to be measured against the
previously outlined minimum standards. Examples of non-compliance are:
- when an employer gives false or misleading information;
-
when an employer fails to improve against the minimum standard;
- when an employer fails to lodge a public report on time;
- when an employer fails to inform employees, shareholders or
members that a public report has been lodged; and
- when an employer fails to inform employees and employee
organisations that a report has been lodged, or fails to provide them with the
opportunity to comment.[73]
2.74
The compliance framework would be strengthened through the requirement
to have public reports signed by each organisation's CEO or equivalent. In
addition, the Agency would be given new powers to request information from
employers which pertains to compliance with the Act, or the employer's
performance against the minimum standards. At the same time, the Agency would
endeavour to help employers avoid non-compliance.[74]
2.75
A number of industry representative groups contended that employers
would suffer from increased exposure for non-compliance due to the bolstered
reporting requirements set out by the Bill. The Chamber of Commerce and
Industry of Western Australia, for example, called for details of
non-compliance to be published when non-complying employers are named by the
Agency.[75]
2.76
Others, such as Master Builders Australia, posited that employers could
be found to be technically non-compliant by committing an unintended process
error and subsequently subject to non-compliance measures contained within the Bill.[76]
This view was echoed by ACCI.[77]
2.77
FaHCSIA, however, pointed out that the non-compliance measures remain
largely unchanged from the current Act:
Contrary to some submissions and some reporting in the press,
the regulatory model underpinning the reform is in essence unchanged from the
1999 review and, indeed, some parts go back even further, to the original
affirmative action act. Sanctions for noncompliance linked to government
procurement policy were first introduced through a direction from the minister
for finance in 1993, and naming has been a part of this legislation since its
introduction in 1986.[78]
2.78
FaHCSIA also explained that sanctions for non-compliance would only be
applied after two years of intensive support from the Agency. Therefore,
employers would have 24 months to improve and comply with the Act before being
named or deprived of the ability to tender for government contracts.[79]
2.79
The committee is therefore of the view that, should the Bill be passed,
non-complying organisations will not be subject to unwarranted or unprecedented
sanctions, and will have more than adequate time to improve their performance
against before any sanctions are applied.
2.80
It is also the committee's view that some stakeholders may be overlooking
the fact that the Agency is charged with helping employers meet and maintain
minimum standards, and that there is no benefit from making compliance
prohibitively difficult:[80]
The position the agency has always taken is that it works
very collaboratively with reporting organisations. While it has a regulatory
role, it also has a role to work and get people compliant but also educate and
assist those who have issues to resolve those issues. Nothing will change in
the way the agency operates under this new legislation. We consider our role to
support and educate organisations to be very important. So we will be working
very hard with those organisations—certainly, those that are struggling with
compliance, but with all organisations, as best we can within our resources, to
support them to achieve best practice.[81]
2.81
Provision of education and support for employers, and empowerment to
implement better strategies, are key features of the current Act, which would
be supplemented by the Bill's proposed increase in funding:
The amendment bill retains this as its focal point, and the
additional funding of $11.2 million over four years to the agency is aimed
substantially at providing increased support to business. The whole process of
transparent reporting, standardised data and education will drive sound
workplace practices, delivering gains to the economy, to individual employers
and to employees.[82]
2.82
The committee discussed this with Dr Kathleen MacDermott of the Women's
Electoral Lobby, who shared her experience of the Agency:
[M]y experience of the agency is that it does get calls from
people who want to get contracts and have never bothered reporting since 1986,
and the agency falls over itself. It shows them the form, it takes them through
the form and it gets them compliant and they go back and get the contract. The
agency is not an ogre. It is desperate to build links with employers and it
wants people to do something; it does not want to punish. You need to
understand that it falls over itself to assist people and to advise and to help
people through things. It is not out there to punish; it is out there for
compliance.[83]
Conclusion
2.83
These reforms aim to strengthen the laws and institutions that promote
gender equality in Australia's workplaces. The committee is of the view that
this legislation goes a long way toward achieving this aim.
2.84
The committee heard and carefully considered calls from some industry
representatives to focus on providing incentives for employers to address
gender equality issues rather than legislating for action. Incentives for
employers to comply do exist, however, in the form of long term productivity
benefits, workplace harmony and the opportunity to tender for Commonwealth
contracts. These incentives have been in place for some time, yet progress on
gender equality outcomes has stagnated. On the balance of evidence before the
committee, it appears unlikely that significant improvements to the status
quo would be made in the absence of legislative action.
2.85
Furthermore, as put by Mrs Marie Coleman of the National Foundation for
Australian Women, it is 'grossly inefficient in economic terms' to continue to
permit women, who represent around half the potential workforce, to be
underemployed and under remunerated.[84]
Given all the efficiency and productivity benefits to employers of workplace
diversity, investing in gender equality strategies can only be a positive
strategy for both business and the community.
2.86
The committee believes strengthening the capacity of both the Act and
the Agency to foster gender equality in the workplace is crucial if persistent
gaps in outcomes are to be addressed. If passed, the Bill would promote a regulatory
environment focused on tangible gender equality outcomes through the setting of
attainable standards and effective monitoring and support by the Agency.
2.87
The committee thanks everyone who participated in this inquiry by
sending written submissions and giving evidence at the committee's public
hearing. Their input was a significant and valued contribution towards building
a fairer, more equitable and stronger economy and society.
Recommendation 1
2.88
The committee recommends that the Bill be passed.
Senator Gavin
Marshall
Chair
Navigation: Previous Page | Contents | Next Page