NOLAN, Mr Peter, Director, Workplace Relations, Australian Industry Group

VACCARO, Ms Genevieve, Senior Adviser, Workplace Relations Policy, Australian Industry Group

[11:27]

CHAIR: Welcome. We have received your submission, for which we thank you. I now invite you to make some opening remarks, to be followed by questions from the committee.

Mr Nolan : Ai Group welcomes the opportunity to express its views about the Equal Opportunity for Women in the Workplace Amendment Bill 2012. The bill seeks to amend the Equal Opportunity for Women in the Workplace Act by changing the focus of the legislation to promote and improve gender equality in the workplace for both men and women. We support this focus and the appropriate amendments being made to be equal opportunity act. Included with this reform is a new reporting framework for employers. It is employers who will need to implement and comply with the legislation—not unions or special interest groups—and therefore the views of employer representatives such as Ai Group on the workability of the bill need to be given substantial weight.

Ai Group was heavily involved in the development of the bill and we have been an active member of the government's implementation advisory group. We have made direct representations to the government on several occasions about the bill expressing some major concerns we have about proposals being pressed by unions, various special interest groups and others. We acknowledge the extensive efforts made by the government since to address the concerns of Ai Group and other industry representatives. Despite the extensive consultation by the government and their efforts to balance the interests of many parties, we remain concerned about some aspects of the bill and we urge the committee to recommend the amendments proposed in our submission. Ai Group's areas of concern include proposed gender equality indicators, the setting of minimum standards, the clear definition of remuneration, information relating to remuneration and the enforcement framework proposed under the bill. Due to Ai Group's strong and continuous involvement in the workplace relations system at the national, state, industry and enterprise level over many years, Ai Group is well qualified to comment on the Equal Opportunity for Women in the Workplace Amendment Bill 2012.

CHAIR: ACCI suggested to us in their submission and again verbally earlier this morning that the objectives of the legislation can be met without introducing new legal obligations. What is your view on that?

Ms Vaccaro : I have not had the opportunity to look at the ACCI submission in great detail.

CHAIR: I will re-word the question then because I was not really asking you to comment specifically on their submission but on the concept that we can achieve gender equity in workplaces without a legal requirement to do so. That is the argument they are putting forward. I guess the counterargument I would like you to comment on, which I put to them this morning, is that we have had this as an objective for a long time, yet here we are, we still have quite substantial gaps in gender equity across a number of different categories. We have not got it by voluntary compliance or voluntary will up until now, so what makes them think—and I am sure many of your members think—that we can actually achieve gender equity without putting in the compliance framework?

Ms Vaccaro : There have been quite a few mechanisms introduced over many years, since the original act in 2008, which have tried to achieve gender equity or close that gap. This, I guess, is merely one mechanism. A lot of organisations are very willing and open to gender equity. They recognise the productivity benefits of it and why would you shut yourself off to half of the potential workforce? It is very clear, particularly in the larger organisations, that gender equity is something they should focus on. The difficulty has primarily been, given the history of our workforce—women on boards, for example—women have not had the opportunity or the time to progress into senior ranks of management as men have because men have been in the workforce much longer than women. I think give it more time and then we will see, as more men drop off boards, as they leave their positions or retire, more women will move into senior management and onto boards.

CHAIR: But it is not only about the higher level. That is one element but many may argue that it is quite a small element. It is opening up many other areas where there are barriers in place for gender equity.

Mr Nolan : I think it would be fair to say that, as in our opening remarks, we make the point that we support gender equity and we support a lot of the measures in the bill. I have identified some of the areas of concern we have. We would see this as a progressive step to assist in the achievement of gender equity and I must say as well that I really have not seen ACCI's submission in relation to whether they say there should be no additional legislation at all or whether they are saying something similar to us, that it is a positive thing but there are concerns we have about it. So from the Ai Group's point of view we see the legislation as progressive and we see it as potentially assisting in the achievement of gender equality but subject to the concerns that we have about certain aspects of the bill.

CHAIR: Let me put the acid right on you: if you were not to get the amendments that you are seeking, would you still be supportive of the bill as it is?

Mr Nolan : No.

CHAIR: So without amendments you would oppose the bill?

Mr Nolan : That is correct.

CHAIR: Ms Vaccaro, you mentioned the productivity benefits of gender equity. Can you talk about that. It occurs to me that maybe there are benefits—I personally agree that there are. We do acknowledge there are probably many thousands of companies that have embraced this and done a very good job in promoting gender equity and now have some of the benefits. But we also know that, in contrast, there are probably hundreds of thousands of employers who have not embraced it as much as many of us might like them to. If there are productivity benefits and other benefits, why haven't employers across the board embraced gender equity issues?

Ms Vaccaro : I am of the view that many of our members have the capacity to embrace gender equality. Some have done so and some are now in the process of doing so. In terms of productivity improvements, if you are talking about smaller organisations, with only a few employees, that is a really—

CHAIR: I want to keep the conversation on those organisations that the bill would apply to, so 100 employees and over.

Ms Vaccaro : I think that those larger organisations are aware of this issue and it has just been a slower process. This bill, as Peter mentioned, is a progressive way forward. I guess the role of the agency there is to be more educative. The agency needs to be given more resources to assist employers achieve gender equity in their workplaces. There is also a role for industry groups, such as the Ai Group, to help with that as well. The bill and the amendments that we seek will be a positive step in that educative process.

CHAIR: I want to take you to the reporting mechanisms. It appears to me to simply be a logical consequence of looking at your internal workforce and the issues of gender equity, of being the first step to identifying whether in fact you do have a gender equity problem. We have had some anecdotal evidence put to the committee that there will be many companies out there simply assuming that they do not have a gender equity problem. It is not until they collect data and look within their company that they realise there is a problem that needs to be addressed. I am putting to you a proposition that data collection is really one of the foundation stones of building on gender equity and without that very little will happen, anyway. My broader question is: is it an essential element of moving forward? I am not asking you to answer any specific stuff but rather to comment on that general theme.

Ms Vaccaro : I guess there are two arms in the bill in respect of data collecting. You have the minimum standards, which we oppose but then, on the other hand, you have the benchmarks that the agency will publish. My understanding is that the benchmarks will be based on information in reports, broken down into industry sectors. We think that will be very useful for companies, particularly those companies that you mentioned that might not know they have a gender equity problem. They will be able to go to the agency and compare themselves with their competitors and see where their competitors sit. That is part of the educative process that we are looking for. If businesses are able to identify where their holes are—and they can—in my opinion, they would be willing to fix them.

Senator BILYK: Can I just ask a follow-on question from Senator Marshall's question. In response to one of Senator Marshall's questions you said that a number of your clients, for lack of a better word, were actually working to improve their equal opportunity. I am just wondering how you know that. Have you done any surveys or anything like that which the committee might be able to access?

Ms Vaccaro : We do not have any survey data; it is more our on-the-ground experience. Just to give an example: at our last employment relations—PIR—conference, we ran a workshop on gender equality and workplace diversity, and we had members attend that and seek interest in how they could better their gender equality and diversity processes within their businesses. Also, we field those calls from businesses that seek to implement processes.

Senator BILYK: How many members does your organisation have?

Mr Nolan : With affiliated organisations, we represent about 60,000 businesses in Australia.

Senator BILYK: How many of those organisations would have been able to access that workshop? Was that just done in one place, or—

Ms Vaccaro : That was just done in one place, so the businesses that attended that conference were able to attend that workshop. We are running a similar workshop at the next one which we have coming up, but, generally, when those questions come through from members, regardless of whether they attended the conference or not, they get dealt with and we seek to assist our members with where they can get the resources, or perhaps we can assist them with our resources, to implement gender equality. We also run an EEO session for many of our members. They are run twice a year; or quite often.

Senator BILYK: Twice a year in one place?

Ms Vaccaro : All over—

Senator BILYK: I am presuming that you have members across Australia. I am a senator from Tasmania. How, for example, would your Tasmanian members get access to those workshops on how to implement equal opportunity in the workplace or gender equity in the workplace?

Mr Nolan : It would be fair to say that the organisation's membership in Tasmania is not high. We would normally service that out of Victoria, and I—

Senator BILYK: Say I am based in Ballarat or Perth or somewhere—

Mr Nolan : Being a national organisation we recognise that we do have members in the mainland states, so the sorts of sessions that Ms Vaccaro has been talking about are available not only in the capital cities; we have a regional base in Ballarat—you used that as an example—as we do in a number of other areas, and we provide that sort of training and the representative meetings that we hold with members in all of those areas as well. So it is not that we run them just in one location or just in capital city areas; they are done across the board.

Senator BILYK: But you do not have any statistical analysis to give to the committee in regard to the comments you made earlier that employers are actually working on this?

Mr Nolan : Statistical information—no, we do not.

Senator BILYK: Have you thought about doing anything like that? Part of the legislative changes-is to act as an educator to employers with over 100 employees in their need to comply with this. Surely that is a good thing.

Mr Nolan : Quite obviously the organisation needs to take decisions on those sorts of things, particularly in relation to surveys of members. We can take it on notice, if you like, and respond to you.

Senator BILYK: The general gist of the question is: isn't it a good thing if employers are forced to look at things and realise where they have gaps, for example?

Mr Nolan : Forced to look at things or made aware of their obligations and what those obligations are; we do not disagree with that proposition.

Senator BILYK: Do you see any benefits to business in regard to the new legislation?

Mr Nolan : Our concern is more what we see as the concerns of business in the amendments that we are seeking to the bill. One thing we say business does not need is another layer of regulation that imposes obligations and responsibilities on it, but we—

Senator BILYK: But standardisation should reduce that.

Mr Nolan : see the bill as being a progressive step. Yes. We are not anti-advancement on the issue, but—

Senator BILYK: I was not quite sure.

Mr Nolan : we are facing purely towards the business concerns.

Senator BILYK: I have looked at your submission but, sorry, I can't remember—was the AiG involved in the consultations?

Ms Vaccaro : We were involved in the implementation of the advisory committee that was set up by the minister. We attended all of those meetings and were in close contact.

But, just to add to something that Mr Nolan mentioned when you said that standardisation should reduce the burden: it is not entirely clear in the bill whether it will or not. The minimum standards are yet to be set—if any are to be set—so we are unsure whether it will increase the burden or not. It is dependent on what type of information the minimum standards will be seeking.

Senator CASH: Mr Nolan, you said that AiG does not support the bill in its current form and you have proposed a number of amendments.

Mr Nolan : Yes, indeed.

Senator CASH: You also talk about the negative effects if the amendments are not made. What are the negative effects on business if the bill is passed in its current form without the AiG amendments?

Mr Nolan : We believe it will add another layer of regulation, when business is currently subject to a whole lot of legislation that they have to comply with. We think that, unless these amendments are considered in a positive way, it just adds another burden on business. I am not sure if Ms Vaccaro wants to add anything more to that.

Ms Vaccaro : Following on from the regulatory burden focus, we have argued in our submission that that should be an objective of the bill. So a focus would be—

Senator CASH: Yes, this is one of the points: the bill actively seeks to reduce the regulatory impact on business.

Ms Vaccaro : That is right. That is a very important point and we would really like to see that in the objectives. But as to the other disadvantages that would flow on through the gender-equality indicators as they currently stand, there was not much consultation at all on what they would look like in that part of the bill. We would prefer further consultation on what they would be. In their current form it is very difficult to imagine how fair minimum standards would be set in response to them so, depending on how those minimum standards are set, the regulatory burden could skyrocket. It could also impact harmony within the workplace.

Senator CASH: In the event that there is an increased regulatory burden on business, as a result of what, as you say, is currently unknown becoming known, what is the ultimate effect on business—in particular, in relation to achieving the objectives of the act?

Ms Vaccaro : There are two arms to that: there is the enforcement arm and there is the regulatory burden arm. If you take the example of having to collate data on whether you have equal remuneration in the workplace—that is one of the gender-equality indicators—how do you set a minimum standard for equal remuneration, and how do you collect data on that? You would have to look at somebody's hours of work, somebody's performance, somebody's qualifications, somebody's skills. So, just practically collating all that data on each individual employee and making a value judgment as to whether that employee is paid fairly or not and then submitting that data to the agency, and then the agency making a value judgment as to whether there is equal remuneration in the workplace, makes it very difficult. It becomes very convoluted. On the other hand, you have the regulatory or enforcement process where you lock out. One of the things proposed would be locking companies out of government procurement contracts. That is very damaging and we would really like to see that—

Senator CASH: Why is that damaging? Is it damaging in terms of, for example, workforce participation, in particular by women, if you lose a contract?

Ms Vaccaro : I remember reading the MBA submission and the points that they identified. That is a reality. If you take the construction industry as an example, it is a male dominated industry. If they are given unrealistic standards to follow—and the manufacturing industry is much the same—then you would see a lot of organisations that rely on government projects locked out of them and that would really impact on their business and their ability to keep their workforce.

Senator CASH: That is obviously an adverse effect of the legislation. The MBA makes the point—and this picks up on something that you have just said—that if employers spend more time on compliance they spend less time on genuinely trying to make things happen in the gender equality space. Do you have a comment on that submission? It again goes to: what is the effect of increased regulatory burden on business?

Mr Nolan : I might like to deliberate a little bit on that. I will take it on notice and get back to you.

Senator CASH: That is not a problem at all. You have both said that this bill is a progressive way forward. I assume you mean if your amendments are accepted. In the event that your amendments are not accepted and the bill is passed, what you see the impact will be on business?

Mr Nolan : We feel there will be an overall adverse impact because—

Senator CASH: What is that adverse impact? How does it manifest itself?

Mr Nolan : It manifests itself—and I mentioned this earlier—in that it is another layer of regulation that business has to comply with. There is so much that they have to comply with at the moment that we see this as an added burden, and that would be an adverse effect.

Senator CASH: Is it an adverse effect for business purely in terms of its bottom line or is it an adverse effect in terms of trying to achieve the objects of the legislation, or is it both?

Mr Nolan : I think it is a bit of both, to be honest.

Senator CASH: Senator Marshall took you to the submission by ACCI and put to you that ACCI said that gender equality can be achieved without a legal requirement or framework. I would dispute that is what they have said. I prefer to put to you a paragraph from their submission. On page 7, at point 25, it says:

Business is currently subject to a multitude of laws governing antidiscrimination, sexual harassment, hours of work, and flexible work requests. These laws are comprehensive in coverage (one would say there is now a case for rationalisation of some laws), and span federal and state/territory jurisdictions. This is a real regulatory and compliance issue for employers, in seeking to comply with multiple jurisdictions and sometimes conflicting duties which may lead employers into double-jeopardy ...

Do you have any comments on the double jeopardy submission by ACCI?

Mr Nolan : We agree with that.

Senator CASH: Would you say that there are currently laws in place that endear gender equality in the workplace?

Mr Nolan : Yes.

Senator CASH: What are those laws?

Mr Nolan : The existing act.

Ms Vaccaro : That is right. If we firstly go to the discrimination acts, the discrimination acts are designed to operate very differently to what the bill and the current act are designed to do. You have the discrimination acts. At Commonwealth level there is a process at the moment where the government is considering consolidating those acts. It has already identified that there are too many acts in the federal sphere. There has also been talk of perhaps in the future making the state acts mirror the federal acts in the discrimination sphere. Then we have got the discrimination legislation in some ways imported into the Fair Work Act. So you have got those obligations as well. They are really focused on enforcing different types of obligations on business, as opposed to this bill. So you have got two different sets of obligations running parallel to each other that businesses need to meet.

Senator CASH: Have any of your businesses raised with you the potential for conflict between the current laws that are already in place with which they must comply and the new act? If so, what have they raised with you?

Ms Vaccaro : I would probably have to take that question on notice and get back to you. Actually, there is an example in our submission about labour hire sectors.

Senator CASH: Can you take us through that?

Ms Vaccaro : I will take you to that. Where we speak about the labour hire sectors is in reference to the minimum standards. It is on page 5 of our submission with respect to item 17, the definition of minimum standards. What we say there is that if we are looking at minimum standards being set for different industries, it becomes very difficult to set a minimum standard for the labour hire industry because you have companies in the labour hire industry that place construction workers, which is predominantly male dominated, and then you have labour hire industries that place nurses, which is predominantly female dominated. How then do you set a minimum standard for the labour hire industry?

Senator CASH: Well, if you do, you have a problem in terms of someone actually meeting that minimum standards, and that within itself means that you may not actually achieve the outcomes that are intended under the act.

Mr Nolan : That is correct.

Ms Vaccaro : And you might actually have good gender equality processes and procedures in your business, but that does not come through.

Senator CASH: It has also been given in evidence that it must be recognised that regulation or extra rules do not in and of themselves guarantee equality and positive equity outcomes, attitudes of the community, workers, employees et cetera and that the extent of collaboration and trust between employers and workers ultimately drives such outcomes. You represent business. Do you have any views on that particular submission?

Ms Vaccaro : I will pick up on that part that talks about alienating business or business wanting to comply. We made notes on that within our submission that it is important that the agency needs to work with business and fosters the trust of business for business to want to be able to provide as much information as it can to the agency. In our view, the enforcement of mechanism that is currently in the bill will only alienate business. So you would probably find that some business might only want to respond to the absolute minimum rather than being facilitative and cooperating with the agency. There are positive parts within the bill that open up the agency's mechanisms to be able to be more consultative, but the regulatory system or enforcement system sort of shuts that down and creates an 'us versus them' situation.

Senator CASH: One of the other issues that you raise is in relation to section 3(1), the definition of remuneration. You say:

It is extremely important that “remuneration” is defined, and in broad terms.

There is obviously a definition of remuneration in the proposed legislation, and it is the ILO convention concerning equal remuneration for men and women workers et cetera. Why do you say that is not adequate and why do you say it needs to be more broadly defined?

Ms Vaccaro : The reason for that is that remuneration data is excluded from the public reports. So it is very important that remuneration data is not disclosed to employees and any other members of the public, because it just would create disharmony within the workplace. The broader definition of remuneration you have—and of course the agency would be provided this information; it just goes into the public report—the less likely that any form of remuneration would be captured in the public report. So it is just making sure that bits and pieces of remuneration that might not fit within that ILO convention somehow are not found to be within that definition and find themselves in the public report.

Senator CASH: What would happen if the definition went ahead as currently defined? Can you give an example of what could potentially occur if that information made its way into the public arena?

Ms Vaccaro : I would probably have to do a bit more research and look at that in more depth. I will take that on notice and get back to the committee.

Senator CASH: ACCI suggest that the objectives of the legislation can be met without introducing new legal obligations. What is your view on this?

Mr Nolan : Senator, when you talk about obligations, in our view it would depend on whether that in fact is going to provide an adverse outcome for business in the sense of additional regulatory burden. I think we revert back to our opening statement in that we are supportive of the bill. There are various aspects that we do not agree with and that we strongly submit should be taken into account with the passage of the bill. I am not sure whether there is much more I can say about that particular comment. We do not want to be seen as—and we are not—an organisation that does not have a progressive view about gender equality. That is why we are supportive of the bill, except the particular items we have mentioned in our submission.

Senator CASH: Have you undertaken an analysis of how many more women will be employed in the workforce as a result of this bill?

Mr Nolan : I suggest no, Senator, we have not.

Senator CASH: In the event that the bill is passed in its current form minus your amendments, have you undertaken an analysis of how many women may not be employed as a result?

Mr Nolan : No, we have not.

Senator CASH: Thank you. I will put further questions on notice.

CHAIR: I thank the witnesses for their presentation to the committee today.

Proceedings suspe nded from 12:03 to 12:52