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Education and Employment Legislation Committee
03/10/2018

BARKLAMB, Mr Scott, Director, Workplace Relations, Australian Chamber of Commerce and Industry

SMITH, Mr Stephen, Head, National Workplace Relations Policy, Australian Industry Group

Evidence from Mr Barklamb was taken via teleconference—

[13:59]

CHAIR: Welcome. I understand that information on parliamentary privilege and the protection of witnesses and evidence has been provided to you. I now invite you to make an opening statement and then we will ask you some questions.

Mr Smith : The Australian Industry Group welcomes the opportunity to appear before the inquiry today. Family and domestic violence is of course unacceptable. It is a community problem and the whole community has a role to play in addressing it. Certainly, employers have a role as well. In fact, many large employers have policies in place to assist employees who experience family and domestic violence. Some of those policies are related specifically to domestic violence; others are broader but would cover that topic. Smaller employers typically don't have written policies in this area but they typically adopt a reasonable and compassionate approach when their employees suffer genuine hardships.

The bill implements a safety net entitlement—in our view, an appropriate entitlement. Of course, different employers have different capacities to provide assistance to employees who experience family and domestic violence; it is impossible to compare a small business with a couple of employees and a major national organisation in terms of their capacity to provide assistance. The provisions in the bill closely align with those in the Fair Work Commission's model award clause, which became operative in all model awards from 1 October this year. The award clause was the outcome of the commission's major family and domestic violence leave case, which AI Group and the ACCI were heavily involved in. The case continued for over two years. There was a vast amount of evidence and lengthy submissions. The final decision was made by a full bench of the commission headed by Justice Iain Ross, the president of the commission when the final decision was made.

The bill is a sensible legislative change that would extend the five-day unpaid leave entitlement that is in the commission's model award clause to all employees, including award-free employees and employees covered by enterprise agreements. The close alignment between the provisions in the bill and the provisions in the award clause is very important. If the bill was to deviate from the terms of the award clause, there would obviously be a lot of confusion and uncertainty for not only employers but employees. The unions and others are arguing that the bill should reflect the union's claim in the case—10 days paid leave. But in the case the unions were unable to provide any evidence at all of where they got that 10 days from, other than that that was their claim. It had no relationship at all to any of the evidence in the case. In fact, in the commission's decision, the commission points to the evidence, and that is that, on average, an employee who takes leave due to family and domestic balance takes between two and three days of leave, not 10 days of leave.

The provisions in the bill build upon the various existing entitlements and protections in the act. There are a lot of those entitlements. There are various forms of paid and unpaid leave. There are the general protections in the act, which provide very extensive protections where an employee has a workplace right—and this would constitute a workplace right once it is incorporated into the National Employment Standards. There are the unfair dismissal laws. There are the rights of employees to request flexible work arrangements for the purposes of dealing with family and domestic violence in section 65 of the act. We support the bill and we urge the committee to recommend that the bill is passed.

CHAIR: Thank you, Mr Smith. Mr Barklamb.

Mr Barklamb : Firstly, can I thank the committee for the opportunity both to appear and to do so via telephone. In June this year, I was in Geneva for historic discussions at the International Labour Conference on violence and harassment at work which included consideration of the interaction between workplaces and family violence. Listening to governments, unions and employers from around the world, two things struck me.

The first is that Australia is clearly a world leader, if not the world leader, in tackling family violence at the community level. There is more to be achieved, of course, and the incidence of family violence remains absolutely unacceptable, but, in terms of law, recognition, promotion, support and services, Australia is pursuing world-leading initiatives. I'll truncate this, but I have down here: acknowledgement of the efforts of the Victorian government and the Victorian royal commission, and also announcements like those today from the Minister for Women and the minister for families to extend the Stop it at the Start program, which shows that this commitment has been delivered on, under an agreed framework under the National Plan to Reduce Violence against Women and their Children by both national and state and territory governments.

The second realisation I had, listening to international experiences, is that Australia is a clear leader in addressing the interaction between the personal experiences of domestic violence and the workplace—more on that shortly. It's in this context that, like my colleague, I want to reiterate the unambiguous support of my network for reducing domestic violence throughout our community and its impact on women and children in particular. At all points in this process, employers have been supportive of no longer sweeping domestic violence under the carpet and better protecting women and families. What we've worked through in recent years is appropriate means to do so relating to work and workplaces.

In this instance, an award test case, for want of a more accurate term, was run in the Fair Work Commission between 2015 and 2018 as part of the long-running four-yearly award review process. This case was a substantial, well-considered and independently-determined arbitration of the need for a domestic violence leave standard in Australia, what that standard should be and how it should operate. The commission rigorously exercised its functions—the functions this parliament has entrusted to it—and set a new standard, following 17 days of hearings, 26 witnesses and thousands of pages of carefully considered evidence. They received 68 written submissions from 27 parties. The commission drew on over 100 articles and reports referred to in submissions, and got 40 additional sources from its own internal research. So the case was extensive, rigorous and well-evidenced, and it comprehensively traversed the necessary range of considerations relating to family violence, its interaction with work and how our employment safety net should address this interaction.

The ACTU sought an award entitlement to 10 days' paid domestic violence leave. This was not accepted. The commission found, ultimately, that: 'We are not satisfied that the ACTU has made out a case for 10 days' paid leave to all employees. We've also formed the view that the ACTU's proposed definition is too broad in scope and would be difficult to apply.' The commission continued, 'Those conclusions do not, however, negate the need for a protective unpaid provision.' And the commission further accepted evidence that employees who experienced domestic violence suffer economic harm. However, it wasn't satisfied that it needed to award paid leave to overcome this disruption or disruption to their work. It specifically felt that the provision of an unpaid leave entitlement would mean that employees would not have to make a choice to leave the workforce.

Employers, on our behalf, opposed the inclusion of domestic violence leave in awards, but this also wasn't accepted by the commission. The commission ultimately determined it was necessary to change awards to provide for domestic violence leave and awarded the five days' unpaid leave standard and the model that now appears in awards.

The point of recounting this is that the systems worked. The independent arbiter our parliament empowers under the Fair Work Act has set a standard to provide a modern and up-to-date safety net, and that standard should now be flowed on—again a simplification, but be flowed on—for non-award and agreement-covered employees.

The final point of note in the decision is that it builds in a review after three years, which, we say, is an indivisible part of the decision reached. I will briefly read you another quote from the end of the decision of 26 March 2018.

We have decided to defer our consideration of whether employees should be able to access paid personal/carer’s leave for the purpose of taking—

Sorry; I apologise—that's the wrong quote. I will say that the commission determined that after three years it should review the duration of leave or the need for any payment. We say that's quite explicit in the final paragraphs of the decisions that the commission made.

Turning towards the bill before the committee, we see it as fairly straightforward. The system, as I said, had successfully processed this issue into an award standard that is now operational for more than three million employees. Following the adversarial stage of this process, the unions, ourselves and Mr Smith's organisation embarked on far more pragmatic post-decision stage that saw the successful settlement of a standard clause. The legislative stage should be approached as a further one of pragmatic finalisation and the application of what has been determined, not as any reopening of that determination.

As the Commonwealth's submission indicates, the bill would extend the domestic violence leave standard from awards to non-award and enterprise agreement-covered people, by way of replicating the standards set by the commission in the National Employment Standards in the Fair Work Act. It is not every award standard or test case decision that should be or could be replicated in the NES. However, in this instance, domestic violence does not discriminate based on someone's award agreement or non-award status. It is in this situation that we say that a universal entitlement and a common entitlement are important. This means our members can communicate policies and procedures consistently to their employees; it means payroll can be administered consistently; and, perhaps more importantly, a single standard means those experiencing domestic violence can get a pretty accurate understanding that there is a safety net available to them and how it will work.

I can add for completeness that we understand the commission extensively considered the range of enterprise agreement provisions in the case, including those providing for paid leave in handing down what was ultimately an unpaid standard. We see no basis for this committee to conclude other than the bill would strengthen and support the operation of domestic violence leave across the system and in existing enterprise bargaining agreements and extend the entitlement where enterprise bargaining agreements are silent.

We lodged a short submission with the committee, submission No. 10, which addresses some matters of detail and application. Senators, the commission has arbitrated a standard that applies to some millions of award-covered employees. That standard needs to be extended further to non-award and enterprise agreement-covered employees to properly provide this important protection across the working community. Just as domestic violence is not restricted to any one section of our community, the need for leave and the leave standard should not differ between different cohorts of employees, save of course where bargaining delivers some higher entitlement, which is what our act intends.

Thank you very much for your time and for the chance for us to speak in support of this additional standard being added to our employment safety net. I look forward to any questions senators may have.

CHAIR: Thank you both very much for your time here today. Is it a fair summary from both your organisations to say that following the decision of the Fair Work Commission and the reflection of that decision firstly in modern awards but now extending that further to the National Employment Standard that this reflects a reasonable and balanced approach to the implementation of this issue?

Mr Smith : Yes.

Mr Barklamb : And, yes for us, too.

CHAIR: I'm very keen to get to the issue of the impact on smaller business of a paid domestic violence leave arrangement. Before that, particularly from the Australian Industry Group's perspective, Mr Smith, have you got any idea of how many of your members offer a more generous entitlement?

Mr Smith : Not in terms of our membership specifically, but in our submission there is a link in the table to AI Group's main submission in the case. As part of that submission, there was a detailed analysis done and a witness statement attached to that of all of the enterprise agreement provisions dealing with domestic violence. That included leave and other entitlements. That was information from the Department of Employment's workplace agreements database, so they're the official statistics. There's a brief summary in our submission of what that finds, but it shows that some of those clauses deal with paid leave, some with unpaid leave. Some have a small amount of paid leave. Some have unlimited paid leave. But it's very diverse, and that reflects the differences in size of employers, industries and so forth.

CHAIR: We've heard from previous witnesses—particularly the unions, in advocating for their position—for whom I feel that there is an inherent assumption that we're dealing with large workplaces with many hundreds, many thousands, of employees. Mr Barklamb, could you talk for a moment about the potential impact on smaller businesses—coming from my background, I'm particularly thinking about businesses in rural and regional Australia, businesses with fewer than 10 employees, businesses without, necessarily, high cash flow or large turnover—and the potential impact on those businesses and the difficulties that could arise?

Mr Barklamb : I think this came up either in our earlier discussion or one I overheard earlier: small businesses have the power of pragmatism, common sense and empathy to bring to these types of situations. We think that there is a lot of strength to the approaches that small businesses will bring to the practical management of these things day to day, quite distinct from what any award says. However, the financial capacities of small businesses—particularly, as you say, those in rural and regional Australia—are, in the overwhelming proportion, very limited. Small-business people often take out of their businesses amounts that are not materially different or significantly higher than those that their employees get, and they are certainly not high-income earners, under any stretch of that definition. The idea that there would be scope to assume an additional paid leave entitlement of 10 days, in addition to already paying four weeks annual leave, annual leave loading, public holidays and, potentially, 10 days personal leave, is not a tenable one. We say that was one of the considerations that were taken into account in the case. The ACTU and its supporters in the case extensively, energetically and quite rigorously prosecuted a case for paid leave, but the independent arbiter—the umpire we ask to do these things on behalf of our employment law system in relation to awards—based on precisely the types of considerations wrapped up in your question, rejected that claim on its merits. That goes exactly to the point, Senator, that is wrapped up in your question.

CHAIR: We've had some suggestion that we should look at amending some of the definitional aspects in this bill. It seems to me that that would potentially significantly undermine the goal of having a minimum safety net standard across the NES and the awards. Would either of you care to talk for a moment to the potential of getting those two things out of alignment?

Mr Smith : I think the first thing there is that there was an exhaustive analysis of definitional issues in the case. They were amongst the most heavily-focused-on issues: what is the definition of family and domestic violence; what are the circumstances when leave should be able to be taken; what is the appropriate set of family members and so on? After all of that, there was an outcome on that issue. We've had a look at the bill, and we've had a look at the definitions in the clause, and we don't have any difficulty with the definitions in the bill. I think ACCI have raised perhaps a minor issue on this point; Mr Barklamb will be able to deal with that. But we would be very concerned about a significant departure on any of those definitions, because it will create a huge amount of confusion.

CHAIR: Mr Barklamb?

Mr Barklamb : I'm going to re-read something I mentioned in the introduction from the 3 July 2017 decision, from the full bench in this case:

We have also formed the view that the ACTU's proposed definition is too broad in scope and would be difficult to apply.

The definition that emerged from the finalisation of this case is a mix or a meld of the arbitration of the definition, as Mr Smith has described, in the competing claims, mixed with what I describe as a change of gear: out of adversarialism and into pragmatism and the constructive process of actually settling the final wording of the clause. So, what you see before you is not just the will of the commission; it's actually also the goodwill of Mr Smith's organisation, my own and the ACTU, coming together to determine and settle the final wording of the clause.

It would be distinctly difficult were we to have competing definitions of access to this clause in terms of persons and the various definitions—and I'm just looking at the clause itself. In the award terms, as I say this, you've got definitions of 'family and domestic violence', definitions of 'family member' and the like. It would be very difficult were there to be any material departure in the statute from the one that's in the awards. To clarify what we said in our submission—and to be clear, we have described I think the various usages of the different terms—ultimately we support the definition that has been inserted in the bill as an appropriate one that will operate consistently with the clause.

CHAIR: Mr Smith, in your submission you outline some of the reasons it may be necessary for an employer to disclose information about domestic violence situations. Could you just expand on that?

Mr Smith : In the case there was a lot of focus on the confidentiality aspect, and in the process that Mr Barklamb's talking about—the settlement of orders process—there was a lot of focus on it as well. One of the issues that the employers raised—everyone accepts that employers should have an obligation to do what is reasonable in this area and should adopt a sensible and caring approach, but there are some practical issues associated with it. An employer will have a payroll system. There will be a need for someone to approve leave, so there need to be some processes associated with leave approval with the overlay that the employer needs to do what is practicable to keep information confidential.

There's also the very practical issue of keeping people in the workplace safe. If a violent partner is wanting access to the workplace, the employer needs to take steps that might be necessary to brief security staff, to make sure that the receptionist perhaps is aware of the risk, to look at the security on the building et cetera. There's a whole host of practical issues here. That's why the commission stopped short of making it a blanket confidentiality obligation and why ultimately AiG, ACCI and the ACTU agreed on a sensible confidentiality provision that is reflected in the bill in very similar terms.

CHAIR: Okay, because obviously the information needs to be shared within organisations to some degree to make sure that other employees are potentially protected, kept safe, and in order to facilitate the actual granting of leave.

Mr Smith : Yes. There should be a confidentiality obligation but only to the extent that is practicable and with the constraints that are there in the wording in that clause, because of those very practical aspects that I've identified.

CHAIR: How is that being dealt with by your members that currently offer a domestic violence leave entitlement?

Mr Smith : We're not aware of any problems coming up in this area. We have many large members that have policies in place. I'm yet to meet a small business owner that has a formal policy in place in this area. This confidentiality issue was a focus of the case, because of the union's claim in that area, but in practice, in our experience, it hasn't been a big issue, because employers are sensible, compassionate and they wouldn't expose people to adverse disclosure of information. They would do everything that they could.

Mr Barklamb : It's not a new proposition to us that we have to deal with sensitive information regarding our employees. We have long been privy to medical information to some extent on why people are accessing leave. We may know that people have had their wages garnished. We may know other things about their interactions with the legal system that would be sensitive for them were it known more widely in the workplace. We, I think, would fairly say that it is part of the inherent professional practice of human resource administration to not share employee information of a personal or confidential nature any more widely than is needed for the type of approvals and workplace health, safety and security matters that Mr Smith mentioned.

The other important point to mention here is that employers have a critical moment of interaction with organisations like those in my network, and Mr Smith's, where they ring us up, and they will particularly ring us up in relation to this new entitlement because they won't know how it works, and it is at that point that the type of sensible, pragmatic and sensitive type treatment of that information that Mr Smith outlined would be commended to an employer. Looking at the standard clause there is no need or case to depart from it, noting, as we said, that is the arbitrated standard that the umpire set based on the evidence in the case as to what was necessary to support the clause.

CHAIR: Beyond what you've just stated, what feedback are you getting from your members and from business, particularly small business, about the Fair Work Commission's decision?

Mr Barklamb : I think it would be fair for us to say to you that this is a very new proposition. It has been in since the start of August. I've been privy to round table conversations with employers that have had domestic violence leave in agreements for some time. My members have suggested to me that they believe there is a far wider exposure of their employees to domestic violence than they see raised with them. So we still have some degree of reticence for a lot of people to request to use the new standard mixed with a lack of familiarity that it's even there. It is a fairly significant change in the system for most workplaces and that's got to flow through. Employees have to understand it and employers have to understand it. Employees have to be confident to use it.

I can recount only one story that I was given without any identification, and that is that an employee was the only case within this major employer where it was part of their enterprise agreement. The only case they'd had was where the woman's workmates became aware that she was experiencing domestic violence and in a nice and caring way, as her friends and peers, pushed her to use the entitlement. This is certainly not something that is well known or well used to date.

CHAIR: Thank you very much.

Senator WATERS: Thanks for being here today. Just on that last point, do you think that people aren't using unpaid leave because they can't afford to go without pay for a week?

Mr Barklamb : As I understood it, it's not framed necessarily as a solid week off; it is able to be used for the various purposes that are provided there, many of which are not of a nature where there would be multiple days off. Some people would need multiple days off, a lot of people would not, depending on their usage. The other thing is it's also provided in part-days. But, to go to my earlier comments, I think the flowthrough has yet to be such that you could make any judgement to that effect. It would be vastly premature. It's been in there for approximately eight weeks. My contention to you is that there is as yet a lack of familiarity with the availability of that leave on both sides—employer and employee—and a lack of the necessary cultural change for people to actually be willing to ask for it. So, no, I think that would be a premature judgement.

Senator WATERS: Do either of your organisations represent small business?

Mr Smith : Yes, certainly. We have a large number of small businesses as well as larger businesses.

Senator WATERS: What size?

Mr Barklamb : Sorry, Senator—we overwhelmingly represent Australia's small sector as well as large.

Senator WATERS: Can I get an indication of the size of the smaller ones that your bodies represent?

Mr Smith : It's everything from a couple of employees up to multinational companies. There's a very broad spread.

Senator WATERS: How about for you, Mr Barklamb?

Mr Barklamb : It would be the same. Perhaps I can most usefully illustrate that to you by recounting to you some of my members. We've got people like the HIA—small-housing builders; there's a significant predominance in their membership. We have the Australian Retailers Association, small shops and the Restaurant & Catering Industry Association. So you can see there that you're getting to businesses of anything from two or three people, as Mr Smith mentioned, right through to the common size of a small business which is operating in a couple of shifts, which might take you to 10 to 20. We are represented right throughout the size structure, from the smallest to the largest.

Senator WATERS: Thank you, that's helpful. Have either of your organisations actually asked your members whether they would support paid family and domestic violence leave?

Mr Smith : Yes. In fact, there was a lot of evidence in the case about the views of employers, the impact on employers. That was the purpose of having a case—to look at all of those issues.

Senator WATERS: Was that as a result of survey work that you'd conducted of your members?

Mr Smith : We are very close to our members. In fact, we're governed by our members, and our members set our policy. So at numerous forums within AI Group's governing structures and at endless meetings of members this issue was on the agenda. Our position wasn't something that the staff dreamt up; it was developed very closely with our membership.

Mr Barklamb : Can I add to that? Likewise. The way our processes work internally is—and I wasn't here, but I say this with confidence—we receive a claim or proposition from the ACTU in this process. Our members formally meet to consider it in one of our policy committees, and they develop and evaluate a position based on the instructions of their members. So there's a democratic flowthrough of information on policy positions, in the same way our union colleagues work, as we understand it, in assessing things that come up. But I'll make one important clarification. We don't oppose paid domestic violence leave. Where employers agree to it at the workplace level in a negotiation for an agreement, or, to go back to your small business example, where there is some degree of paid domestic violence accommodation, just based on the pragmatic day-to-day management of employee relations in small firms—we'll never be able to observe a soft or informal level of accommodation that may be occurring. Our organisations don't oppose employers providing that leave. That would be to misunderstand us. It's whether it should appear in either statutory or award standards.

Senator WATERS: Do you support paid leave?

Mr Barklamb : Paid leave where it is able to be agreed between employers and employees as part of a bargaining system or as an informal accommodation should certainly be part of the system.

Mr Smith : What we support is that there be a safety net reflecting the five days of unpaid leave, and that employers are able to provide any benefits beyond that safety net that they are able to and wish to do. Many do provide more generous entitlements through the bargaining system—that analysis that I identified before is there—or through company policies.

Senator WATERS: So, why is it that an employee should be more safe if they're employed by a larger organisation than by a smaller organisation?

Mr Smith : They wouldn't be more safe. Leaving aside the recent change, there is a raft of protections in the law quite separate to this one that relate to people who would be experiencing family and domestic violence—the general protections and various types of leave. I mentioned some of them before—the unfair dismissal laws, for example.

Senator WATERS: On that point, I've got a quote from the 2011 national domestic violence and the workplace survey: 'Research indicates that women who experience family violence have a more disrupted work history, are on lower personal incomes, have had to change jobs frequently and are more often employed in casual and part-time work compared to women with no experience of violence.' Obviously, that cohort of women would be far less likely to be able to be eligible for unfair dismissal rules. What do you say to that?

Mr Smith : All of those issues were looked at in great detail by the full bench of the commission, and this was the outcome as a starting point, with a review after three years. All of that evidence was looked at in great detail.

Senator WATERS: Do you have your own view on whether the fact that those workers might not be able to avail themselves of unfair dismissal rules means that we should have more availability of paid leave, or do you think the commission always gets it right?

Mr Smith : No. All of those issues were key areas of argument and coverage within the submissions of the ACTU and others. The commission did look at the incidence of people who had been dismissed because they needed to take leave for family and domestic violence purposes. It was almost unheard of, but the evidence was looked at in great detail.

Senator WATERS: With respect, we're not bound by the same parameters that the commission are. In fact, they did make a clear judgement, that they thought 10 days paid leave would be a desirable outcome. They accepted that employees who experience family and domestic violence faced financial difficulties as a result of family and domestic violence, they accepted that having to lose pay at the same time because of the need to attend to the consequences of that violence would add to the financial burden and they said, 'We have no difficulty in concluding that the provision of paid leave would be desirable.' The fact that there was a second hurdle that they felt was not met—that doesn't bind the parliament; we can depart from that. What is your view? Should we?

Mr Smith : Absolutely not. If parliament did, then the whole outcome of the test case is disturbed, because the National Employment Standards override awards. What would have been the point of having a case that went on for years with an exhaustive amount of evidence? It is sensible, fair and logical. We would submit for parliament to reflect the outcome of the decision and then look at the experience over that three-year period and decide if anything further needs to be done. As I said in the opening statement, 10 days was a union claim. It has no basis in any evidentiary material whatsoever. The experience around the world with domestic violence leave—before the New Zealand situation, the only country in the entire world that had paid domestic violence leave was the Philippines, and it's almost unheard of there. I was in New Zealand a couple of weeks ago. The legislation over there was introduced without any consultation with employers and, yes, of course, was based on the ACTU's claims. I think this issue of 10 days needs to be looked at in the correct context.

CHAIR: I would assume that the Fair Work Commission's decision was about providing an increased level of job security for people in this situation? Was that part of the reasoning?

Mr Smith : Yes—to protect people's job security.

CHAIR: Mr Barklamb, did you have something to add?

Mr Barklamb : I want to engage with the question from Senator Waters. Your question goes to the independence of the commission and it's ability to play the role accorded to it, not just under the current legislation, which is nearing its 10th year, but in fact the role that we've accorded to it and its predecessors across more than a century. It's either independent and it sets standards, or it does not. You are quite right that the parliament is not formally bound to apply a decision of the commission as such, but it is also rare that the parliament will overturn a merit-based arbitration on an entitlement, and the quantum to it. I have been looking here for any comments from your party to this effect—but I have understood you to be passionate defenders of the independent role of the commission in other contexts. We say that that should apply in this context as well and we should be flowing on the standard the commission determined.

Senator WATERS: You must have missed our announcement about legislating the minimum wage, after the commission failed to do a decent job on that one. But that's not a matter for today.

Mr Barklamb : Well—

Senator WATERS: My question goes to the independence of the parliament, not the commission. I'm not interested in the parameters the commission operates under. My point was simply that the parliament doesn't need to step over that two-stage hurdle in order to take a decision on what the appropriate amount of leave should be. It should be sufficient, in my view, for the parliament that it would be a desirable outcome. Perhaps we're getting into semantics.

Mr Barklamb : You are taking us into the abolition of the award system. Would you like us to have statutory minimum standards in this country set by the parliament, for everything?

Senator WATERS: I would like us to have 10 days of paid leave. I'm seeking to understand what your objection is to that?

Mr Barklamb : As we said, we traversed dozens of witnesses—significant evidentiary case. So, it can't be summed-up easily here. But the commission was provided—

Senator WATERS: That's a shame, because I wasn't at the Fair Work Commission but I'm at this inquiry.

Mr Barklamb : With respect, we say or we asked, or we urge, that this not be a re-opening of a merit decision reached by the independent umpire under our system that we empower to set these employment standards.

Senator WATERS: You said earlier, though, that you don't oppose paid leave. I'm not confused as to what your organisation's view actually is.

Mr Barklamb : Apologies. I believe I have been clear about this but I'm happy to say so again: paid leave is a matter that some employers and employees may firstly negotiate, and secondly, pragmatically on the ground in the smallest business. I am sure that in the day-to-day management of time and hours people are being accorded paid time off to deal with the consequences of their personal experiences of family violence. Our organisation has no opposition—we would not; it's nonsensical, absurd and contrary to the values of our members to say that any employer and employee would not be free to agree on that arrangement. This is about the safety net of universal and common entitlement. That's where we say we've had a standard set by merit following a rigorous examination that should be followed.

Senator WATERS: I hear you on that. But is your objection that the cost would be too great for smaller employers? What is actually the nub of your objection?

Mr Barklamb : The case was extensive and multilayered, but the issues went to cost, practicality, utility and accord with the award system. Mr Smith, jump in here if I have missed anything that would sum-up as the ground going through in the case.

Mr Smith : No, I think that does cover it. But, just for clarity purposes, Ai Group would very strongly oppose this bill being amended to replace the unpaid leave with a paid entitlement. The concept of paid leave is something that employers and employees are able to talk about at the enterprise level. In some workplaces, paid leave has been agreed upon, and that's a matter for the enterprise. But this is about what is the appropriate level for the safety net. Under the Fair Work Act, as clarified in section 134 of the act, the safety net reflects the National Employment Standards and modern awards. There are two planks of the safety net, and in both planks five days of unpaid leave is appropriate.

Senator WATERS: Have you had a chance to read the report drafted by the Australia Institute Centre for Future Work called Economic aspects of paid domestic violence leave provisions, by Jim Stanford, which has been referred to quite a bit today? The distillation of that is that it would cost 5c a day per worker to provide 10 days of paid domestic and family violence leave. That seems to me to be a fair investment in the safety of one's workers. Can you give me a response on that small amount of cost? If you say cost is one of your objections, how can you really argue that 5c a day per worker is too much to keep women safe?

Mr Smith : Cost was one of the issues that were focused on in the case. There were many assessments put to the commission of what the cost of a paid entitlement would be. These things are subject to different views. But the unpaid entitlement is an appropriate safety net entitlement. Some employers do provide paid leave, and that's entirely up to them. In terms of a safety net entitlement, this bill reflects an appropriate standard.

Mr Barklamb : I just want to jump in there. Domestic violence leave is a very localised thing. It doesn't happen commonly or homogeneously, thankfully, across our community. On the notion of averaging cost, think for a second about the example of a small business which is seeking to deal with its employee in the most difficult of personal circumstances for the person concerned. That localised cost, of course, is going to exceed 5c a day were you to have a paid daily leave entitlement or an additional daily paid leave entitlement.

Senator WATERS: Yes. On that point, some 2016 research found that particularly in the retail sector—in fact, it was the Retail Association that shared these figures with us, and I think you said they were one of your members—in fact there had been $62½ million in lost productivity, absenteeism and staff turnover as a result of their workers experiencing domestic violence, which equated to about $1,404 lost per store. It may well be that in fact that's more expensive than simply providing 10 days of paid domestic violence leave. Have you had a chance to have a chat with the Retail Association about those figures?

Mr Barklamb : I'm not aware of the data which you're citing to us there, but again we are far from convinced that the costs can be averaged out across the experience across the whole economy.

Senator WATERS: I accept your point about averaging, but my point now goes to avoided cost. By avoiding the absenteeism, the loss of productivity and the staff turnover, in fact it might be cheaper to simply provide the leave on an employer-by-employer basis, leaving the averaging question as a separate issue. What do you say to that?

Mr Barklamb : I'm just not familiar enough to the materials to be able to give you a response to that, but I will say that the commission opened a public examination which is not restricted to award parties in the way test cases may have been. It would have been open to any interest in our community to place evidence before the commission which supported a particular outcome. It's a little bit extraordinary, when that process was open for some time and there was a proper, rigorous, well-conducted and appropriately conducted investigation and arbitration, to re-examine it based on information that's come after the fact.

CHAIR: Unless you have a quick final comment, Mr Smith, we will need to leave it there.

Mr Smith : Just a very quick one in response to your last point, Senator Waters: these costs can't be averaged. An employer may have one employee or two employees, and the cost of their one or two employees going off for 10 days is obviously a very significant cost. It can't be averaged across the community.

Senator WATERS: Yes, and I've accepted that. If I can have one final question—

CHAIR: Very quickly.

Senator WATERS: my point is that it might in fact be financially beneficial to those smaller employers to simply pay the 10 days leave, rather than bear the cost of losing that employee or the lost productivity, the absenteeism. I would ask that rather than merely holding out cost as a problem you actually look at the evidence and form a view as to whether in fact it's cheaper to do the right thing.

CHAIR: I think that was probably a comment rather than a question.

Senator WATERS: Well, it was a request to examine those figures.

CHAIR: Okay, it was a request. Please take that on board. Thank you both very much for your time today. We will need to move on.