Ref: D No.100/2014

31 July 2014

Committee Secretary Senate Standing Committee on Community Affairs Legislation Committee PO Box 6100 Parliament House Canberra ACT 2600

deeply concerned about the potential impact of these bills.

Dear Committee Secretary

Re: Business Services Wage Assessment Tool Payment Scheme Bill 2014 and Business Services Wage Assessment Tool Payment Scheme (Consequential Amendments) Bill 2014

The ACTU is the peak body representing 47 unions and almost two million working Australians. We welcome the opportunity to provide a submission to this inquiry, and are also supportive of the submission made by the AED Legal Centre.

The union movement has been a longstanding advocate of disability reform, since the adoption of the Disabled Workers Charter at the ACTU Congress in 1981. All workers, including those with a disability, should be able to benefit socially and economically from decent work. Decent work is work that is inclusive and provides workers with a safe, fair and friendly workplace, fulfilling social interactions, freedom, dignity, opportunity, a fair wage and economic security. The decent work agenda was adopted by the International Labour Organization (ILO) in 2002, and is endorsed by the ACTU and our affiliates. We believe that working life should promote social inclusion by engaging people within their communities, cultivating self-esteem and self-efficacy, enabling financial independence, and improving physical and mental health outcomes. These values underpin our approach to improving the economic inclusion of workers with disability in society and inform our response to this inquiry.

In Nojin v Commonwealth of Australia [2012] FCAFC 192 (21 December 2012) (the Nojin decision), a Federal Court full bench majority found that the Business Services Wage Assessment Tool (BSWAT) unfairly discriminates against workers with an intellectual disability. The BSWAT is the most frequently used tool within the supported employment services (SES) sector, and is commonly used by Australian Disability Enterprises (ADEs) to assess the wage levels of workers in the supported employment system.

The Impact of the Nojin Decision on Australian Disability Enterprises

The Nojin decision found that two ADEs were in contravention of the Disability Discrimination Act as a result of their use of the BSWAT to assess wage levels. The main concern with the BSWAT is that it relies on a hybrid model of assessment, measuring both competency as well as productivity. However, the assessment questions used to determine competency are often arbitrary with no real impact on a worker’s ability to do their job properly.

For example, as part of a BSWAT assessment, a worker may be required to describe the jobs that other employees do at the workplace. This is not something that most employees without a disability, in open employment, are expected to know, nor is it relevant to the work that most ADE employees carry out.

Workers with an intellectual disability are particularly disadvantaged by competency assessments when compared with workers with a physical disability. As the Nojin decision demonstrates, this amounts to indirect and unlawful discrimination of workers with an intellectual impairment. This may lead to a situation where two disabled workers with the same productivity levels may be paid differently, with the worker with a physical disability paid more because they are able to correctly answer more of the competency questions in their assessment. These workers are already paid significantly low wages, often around $2-3 an hour, and workers are unable to request a wage increase unless they meet a range of core and industry competencies which are often irrelevant to the work they actually do.

The ACTU has held longstanding concerns about wage determination for employees with disability. From the beginning, the ACTU was involved in the establishment of the supported employment system and participated in the BSWAT Reference Group. However, our opposition to the BSWAT has always been made clear, and we raised concerns about the design and implementation of the BSWAT in a 2005 submission to the BSWAT Post- Implementation Review. The BSWAT has not undergone any significant changes since its introduction, and the Nojin decision indicates it is past time for a thorough review of the wage assessment system.

Following an unsuccessful appeal of the High Court decision in May last year, the Federal Government lodged an application with the Australian Human Rights Commission for a three-year exemption from the Disability Discrimination Act. Instead, a one-year extension was granted on the proviso that ADEs transition to the Supported Wage System (SWS, the ACTU’s preferred wage assessment tool) or ‘another tool approved by the Commission’ as soon as possible. The ACTU is working with unions who are active in these industries to attempt to come to some agreement with ADEs in relation to an orderly transition onto the SWS or some other productivity-based tool.

In the meantime, as a result of the Nojin decision, all wage assessments for workers within Australian Disability Enterprises have been suspended, leading to uncertainty about their wage rates and delaying future wage increases.

We are not opposed to government setting aside funds to assist ADEs comply with their legal obligations arising from the Nojin decision, but that is not what the proposed scheme does. If enacted, the BSWAT Payment Scheme Bill 2014 (the BSWAT Bill) could serve to marginalize a large number of vulnerable workers by requiring them to forgo their legal rights to participate in an upcoming class action which, if successful, could result in the payment of full back pay for workers with an intellectual disability assessed under the BSWAT.

Our main concern in relation to the Bill is the inadequacy of the proposed payment. Section 8(3) of the BSWAT Bill provides that the amount a person should receive, if they accept an offer of compensation, should be approximately 50% of the excess of a productivity-scored wage over an actual wage. That is, a worker who would reasonably be entitled to receive compensation as a result of being unlawfully discriminated against in the competency

• component of the BSWAT, will only receive half of the compensation they could reasonably have expected to be paid. If the worker accepts such an offer, they will no longer be eligible to take part in any legal proceedings and will therefore not be entitled to receive the full compensation amount that may result from the class action which AED Legal Centre is currently pursuing. We are concerned that the proposed payment scheme fails to provide an adequate remedy for workers who have been discriminated against. This is a matter of wage justice – these workers are already paid extremely low wages, and their legal right to a fair wage should be recognized and respected, instead of undermined.

In addition, and without detracting from our fundamental and principled opposition to the Bill, we are concerned about a potential lack of access to information for affected workers, and the impact this will have on their ability to make an informed decision. All workers, including those with disability, have certain legal rights and should be suitably informed of those rights in order to make a reasoned decision about whether to accept an offer of compensation or not. Whilst the provisions in section 36 and 37 detail a requirement for the worker to receive legal and financial advice prior to accepting an offer, it is not clear who would provide this advice and how they might be expected to pay for it. These provisions would only work if the government agrees to reimburse workers for the costs of obtaining such financial and legal advice. Any advice received must be independent to avoid potential conflicts of interest with the Department or with ADEs.

The provisions in relation to the appointment of a nominee are not the solution to the problem of informed choice. In particular, we are concerned about the potential conflict of interest inherent in having a nominee appointed by the Departmental Secretary. If a disability.

In conclusion, for the reasons outlined above, the ACTU opposes the BSWAT Bill and urges the committee to recommend against its enactment.

Yours sincerely

Tim Lyons Assistant Secretary

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