Minority Report
Introduction and Summary of Coalition Members’ Position
On Thursday 26 June 2008 the Acting Minister for Employment
and Workplace Relations, The Hon Brendan O'Connor MP, asked the Committee to
inquire into, and report on, pay equity and associated issues related to
increasing female participation in the workforce.
The Committee has heard extensive evidence from a large
number of witnesses in accordance with the Committee terms of reference which
required this inquiry to look into the causes of any existing disadvantages in
relation to women's participation in the workforce.
In broad terms, the evidence presented to the Committee
confirmed that there is indeed a divergence between the experiences of male and
female persons within the Australian workforce. The evidence confirmed that
participation rates, remuneration outcomes and other conditions within the
workforce can in fact be linked to gender. Where such a link can be
established, females often experience outcomes that are inconsistent with the
same outcomes experienced by males.
In short, as the Government majority report observes in
detail, Coalition committee members recognise that there is in fact work to be
done to appropriately address pay equity and related matters to increase the
rate of female participation in the workforce. The Government majority report
makes a large number of recommendations which are framed as being avenues to
consider on the path towards addressing issues within the Committees scope of
reference.
While the Coalition accepts that these recommendations, if
adopted, might facilitate their stated aims, we believe that there are other
factors of relevance that have prevented us from accepting all of them
unreservedly at this time.
Those relevant factors are discussed within this report and
primarily include recent legislative and other developments associated with the
Fair Work Act 2009, the future system of paid maternity leave and a
broad desire to ensure the implementation of options that are effective and
without unintended or adverse consequence.
Coalition members believe that the issue of pay equity and
increased female participation in the workforce is much too important to be
addressed with anything but a considered and strategic approach. The evidence
before the Committee demonstrates that achieving pay equity and increasing the
rate of female participation in the workforce has been a arduous journey thus
far and that there remains a long way to go.
Simply put, there is no ‘quick fix’ to this issue and
therefore any recommendations should be considered as solid building blocks to
achieve and consolidate equity rather than an artificial structure that may be
ineffective or counter productive in the long term.
Evidence provided to the Committee
The nature and content of evidence provided to the Committee
has been exhaustively detailed within the Government majority report and does
not require reproduction here.
Coalition members do note, however, that the majority of
evidence adduced came from organisations, individuals or groups who can be
categorised as being more likely to be aware of issues related to pay equity
and workforce participation. Such evidence is particularly valuable and helpful
to Coalition members as it enabled succinct opportunities to examine the
nature, causes and effect of existing equity and participation issues.
This evidence also resulted in a number of recommendations
contained within the Government majority report. However, such recommendations
are, in many areas, intended to operate in a manner that will impact on all
stakeholders and not just those who are particularly aware of the issue at
hand.
To this end, Coalition members note the comparative absence
of evidence from other relevant stakeholders, particularly those in the private
sector. This is, of course, understandable and it is traditionally rare that,
for example, a small retail business will possess the resources and time to
attend such a parliamentary enquiry and provide a considered submission.
Notwithstanding this observation, many of the recommendations contained in the
Government majority report will, or are likely to, affect and impact private
sector business, particularly small business.
Coalition committee members believe that it would have been
valuable to hear more evidence from private sector stakeholders. While it may
be eminently practicable and feasible for a non-private sector stakeholder,
such as local government, to implement and comply with various recommendations,
the same cannot also be said for those in the private sector.
Fair Work Act 2009
A great deal of evidence presented to the Committee has
focussed on the issue of workplace relations. This is unsurprising given the
role and purpose of workplace relations legislation within a context of pay and
workforce participation.
A number of recommendations made in the Government majority
report also focus on alterations that can be made to our workplace relations
legislation.
Coalition members of the Committee are mindful that Labor’s
new workplace system, underpinned by the Fair Work Act 2009, is in its
infant stages. The Act commenced on 1 July 2009 and will only take full comprehensive
effect on 1 January 2010. It introduces a number of concepts that are new
to Australian workplaces, such as an expanded set of National Employment
Standards (NES), a new award system (modern awards) and a new good faith
collective agreement bargaining architecture. In short, the new Act represents
a fundamental change to the underpinning structure of the Australian workplace
system.
At the time the Fair Work Bill 2008 was introduced,
and subsequent thereto, the Government and the Minister for Employment &
Workplace Relations have variously described the intention and aim of the new
laws. It is unnecessary to repeat that narrative verbatim, except to note that
much has been made of the alleged failings of the Workplace Relations Act
1996 and how the Fair Work Act 2009 addresses those failings.
Statements were made that the new laws would “….assist
employees to balance their work and family responsibilities by providing for
flexible arrangements…”[1] and provide “protection
and hope for a better future for the low-paid; a balance between work and
family life…”[2] and that “Employees
with carer's responsibilities will also now be protected from discriminatory
treatment.”[3]
In a recent doorstop interview, the Minister continued this
narrative:
“Work Choices was a regime that was bad for women, bad for
women workers because we didn’t have fair principle when it came to pay equity,
we didn’t have a recognition of work of comparable value and bad for women
workers because Australian Workplace Agreements could slash away pay and
conditions and all the evidence showed that it was women workers who paid the
price of that slashing.
We’ve now put a fair work regime in place, a safety net that
can never be stripped away, a fair bargaining system, a new bargaining system
for low paid workers, all of this is good news for women and we want there to
be a fair principle for recognising work of comparable worth. That’s what the
Fair Work Act provides and that’s what the test case will be about.”[4]
The test case referred to above is an even
more recent development. Announced on 4 November 2009, the case will involve a
test of the equal remuneration provisions in the Fair Work Act 2009.
Specifically, there will be a focus on workers engaged in the social and
community services sectors – a sector about which much evidence was presented to
the Committee.
The announcement of this test case was
reported as:
“The proceeding is likely to be divided into two parts, with
FWA first to set down the general principles governing the making of equal
remuneration orders, and then apply those principles to the SACS workers.
ASU assistant secretary Linda White says the
"landmark" case could pave the way for improved wages for low-paid
female workers across a range of sectors.
"This is historic because it's the first opportunity
under the Fair Work Act for the equal pay principles to be set - that is
significant for the women of Australia, and given that the 87% of employees in
the [SACS] industry are women and they are at the front line in seeking social
justice for others it is fitting that they are the ones to start the new
era," she says.
Labor's introduction of stronger equal remuneration
provisions, particularly through the new "comparable value" test, has
paved the way for the application, White says.”[5]
In a related interview about the test
case, the Minister said:
“I think change has come, a lot has changed for women workers
and we should remember that and our Fair Work Act is bringing some more
changes, some more flexibility to help people, particularly women workers,
balance up work and family life at the time that they have a child. Out paid
parental leave scheme will make a difference so change is being made step by
step, piece by piece.
There is more that needs to be done and this pay equity case
is part of the more that needs to be done.”[6]
From the above narrative, it is reasonable
to draw two succinct observations. Firstly, that the structure of the new Fair
Work Act 2009 as it relates to equal remuneration is considered to be an
improvement to the related provisions in the Workplace Relations Act 1996;
and secondly, that the impending test case will establish principles to address
pay equity and by default improve the levels of female participation rates in
the workforce.
It is against this background that the
Coalition members of the Committee are somewhat perplexed by the
recommendations of the Government majority regarding changes to the Fair
Work Act 2009.
Such recommendations can only represent an
acknowledgement that the Fair Work Act 2009 does not achieve the aims
and intentions stated by the Minister and others at the time of its passage
through Parliament.
In addition, it is clearly the case that
the recommendations were crafted at a time prior to the announcement of the
impending pay equity test case.
Regardless of what the recommendations
represent, Coalition members believe that it is simply too early to be
endorsing recommendations that alter the aims, operation and outcome of a
legislative regime that has yet to take full effect, or be appropriately
tested.
The narrative espoused by the Minister and
others would lead most to believe that the majority of the recommendations
affecting the Fair Work Act 2009 would be unnecessary. In addition, it
is likely that the impending test case will progress that task of addressing
issues of pay equity and levels of female participation in the workplace.
Coalition members believe that, given the
new nature of the new workplace regime, it should be given time to be appropriately
bedded down and then critically examined to determine its impact on the matters
falling within this Committees scope of reference.
Although the recommendations of the
Government majority may advance the cause of pay equity and female workforce participation,
it is premature to endorse them unreservedly at this time given the new
workplace relations regime and impending test case.
Maternity Leave
Recent discourse surrounding maternity
leave, particularly paid maternity leave, has also refocused public discussion
about the opportunities for females within the workforce.
Evidence before the committee noted a
relationship between maternity leave and pay equity/participation rate
discrepancies, observing that a female who takes maternity leave is likely to
earn less than a male who does not.
Access to unpaid maternity leave exists in
both State and Federal systems of workplace relations. The NES for maternity
leave, provided under the Fair Work Act 2009, expanded the previous
minimum entitlement and was described by the Minister in this way:
“Our new National Employment Standards will deliver that
flexibility and choice, giving mum and dad a choice to sequence their unpaid
maternity leave and unpaid paternity leave to have a parent at home with a newly
born child for the first two years of the child’s life. And our National
Employment Standards will also give the ability for one carer, usually the mum,
to request an extra 12 months of unpaid maternity leave and to request the
ability to return flexibly or part time. That’s part of our National Employment
Standards.”[7]
Once again, the NES for maternity leave
under the Fair Work Act 2009 remains in its infant stages and, should
the view of the Minister be correct, provides broader options for females than have
existed previously. This ought to have a positive influence on matters falling
within the scope of this Committees inquiry.
However, in addition to the NES, now we
have a commitment from the Government to introduce a system of paid maternity
leave (PML) available on and from 1 January 2011. It is understood that
consultations about the practical implementation of PML are currently underway
and yet to reach a final form.
Whatever the outcome, we are told that the
implementation of PML should have a positive effect on both pay equity and
female labour market participation rates.
Such a system of PML will require time to
be appropriately implemented and then critically examined and assessed to
determine the extent to which such a scheme delivers positive outcomes.
It is for this additional reason that the
Coalition members of the Committee do not unreservedly endorse the entire raft
of recommendations in the Government majority report. The impending system of
PML, combined with a new workplace relations regime, should be allowed time to
bed down and then be further assessed to determine the extent to which they
address the concerning evidence presented to the Committee.
Government must take the lead
Much of the evidence presented to the
Committee came from sectors that, in one form or another, are supported or
funded by State Governments, Federal Governments, or a combination of both.
This is particularly the case in the social and community services sector,
where the evidence presented to the Committee was most compelling.
We earlier noted our concern at the
comparative lack of evidence from the private sector regarding matters within
the scope of this committee’s inquiry. We take the view that while various
recommendations may be capable of easy compliance in the government sector,
this may not be the case in the private sector (or at least, there is not
enough evidence for the committee to make a considered decision.)
We are therefore in the position where many
of the recommendations contained in the Government majority report are
unsupported by evidence demonstrating that should they be adopted in the
private sector, that they would in fact achieve their stated aims.
To this end Coalition members take the view
that, were the Government mindful of adopting the recommendations in this
report, they should in the first instance be applied only to public
sector agencies to determine the extent to which they have a practical and
measurably positive impact.
There is, in our view, no benefit to be gained from requiring
private sector involvement in the recommendations until they can be
demonstrated as positively influencing pay equity and female workforce
participation.
Any future Parliamentary inquiries into pay equity and
associated issues should be tasked with evaluating the effectiveness of such
recommendations within the public sector, prior to any application to the
private sector.
Coalition members are mindful that the recommendations
considered in the Government majority report are capable of coming at a cost.
This cost is, currently, unquantifiable.
However the recent decision of the Queensland Industrial
Relations Commission about pay equity, which we understand to align with the
impending test case under the Fair Work Act 2009, delivered with it an
increase in wages for certain workers. Reports suggest that this decision alone
required the Queensland State Government to increase its funding for the social
and community services sector by $414 million dollars per year.
It follows that a similar decision at a Federal level will
also require an increase in the amounts allocated by all levels of Government
for the SACS sector.
Coalition members, therefore, believe that the Government
must take the lead in this area. Any recommendations made by the Government majority
report should be, in the first instance, limited to the public sector to allow
them to be appropriately monitored.
More information required
The Coalition believes that more research and impact
analysis should be undertaken to determine the effect of the Government recommendations
and the extent to which they are capable of compliance.
We acknowledge that many workplaces are sophisticated and
well resourced and would be able to accommodate and comply with many of the
recommendations contained in the Government report. However, there are equally
as many, if not more, that do not enjoy such a position and who may find it
difficult to comply with said recommendations should they be adopted.
From a practical and realistic perspective, it would be a
perverse outcome if the requirements so recommended act as a disincentive to
employment or an incentive to exacerbate existing problems associated with pay
equity. We do not want to see the pursuit of solutions to a problem create a
series of new and unintended problems.
Therefore a simple analysis of the cost and benefits should
be undertaken with respect to all of the recommendations to the extent that
they would apply to the private sector. Such analysis would have been a
requirement for Coalition members to unreservedly agree to the recommendations
in the Government majority report.
Conclusion
Coalition members are satisfied that there is a gap between
the workforce experiences of males and females and that there is work to be
done to reduce or eliminate this gap.
However, we are unable to unreservedly endorse the
recommendations of the Government majority at this time. Existing and
forthcoming developments within, and related to, the areas of workplace
relations legislation, paid maternity leave and other relevant considerations
cause us to believe that it would be premature to implement the recommendations
in total.
A better approach would be, in our view, to examine and
assess these developments once they have been completed to determine the extent
to which the gap has been reduced. We are hopeful that the problem confirmed by
the evidence would be far less at that time.
Mr Barry Haase MP
Deputy Chair
Mr Michael Keenan MP
Mr Rowan Ramsey MP
Dr Andrew Southcott MP