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Pay equity and increasing female participation in the workforce

CHAIR (Ms Jackson) —I welcome representatives of the Victorian government to today’s hearing. Although the committee does not require you to give evidence under oath, I advise you that this hearing is a legal proceeding of the parliament and therefore has the same standing as proceedings of the respective houses. We have received your written submission to this inquiry. I am very grateful for that, as I know other members are too. Do you wish to make any additional submission or an opening statement?

Mr Bancroft —I have a general opening statement.

CHAIR —Feel free to start whenever suits you and then the committee will, no doubt, have some questions for you.

Mr Bancroft —The Victorian government welcomes the opportunity to appear before the committee of inquiry into pay equity and associated issues related to increasing female participation in the workplace. The Victorian government submission of 26 November 2008 addressed each of the specified terms of reference and provided details of supporting evidence, policy programs and Victorian legislative developments. I want to talk a little about Victorian government policy in relation to pay equity.

The Victorian government is committed to promoting equal remuneration for work of equal value and recognises this as a fundamental principle guiding work in Australian society. The principle of equal remuneration for work of equal value forms a central part of the Victorian government’s blueprint for a fair industrial relations system, which is the Victorian Workplace Rights Standard. This standard guides Victorian government policy. Principal 6 of that standard states that there should be continued protection of the principle of equal remuneration for work of equal value, enforced by the Australian Industrial Relations Commission as an independent umpire.

My colleague Sarah Tuberville will present on the Victorian government policy response to pay equity.

Ms Tuberville —We believe the Victorian government has demonstrated its commitment to advancing pay equity through a range of innovative policy responses targeted at the industry and workplace level. This is including supporting and facilitating industry partnerships to undertake pay equity audits at the National Australia Bank and in the Victorian local government sector. The outcomes of these audits have demonstrated the mutual benefits to an employer, the employee, their representatives and industry associations. We believe a pay equity audit is a vehicle for exploring and promoting sustainable and flexible workplace practices in the interests of increasing job satisfaction and therefore productivity. An employer, its employees, the trade union and an employer association can all collaborate on conducting a pay equity audit. This we believe is the headline benefit and demonstrates that all parties can work together to advance fair and flexible workplace practices.

We believe the landmark case study on pay equity audits is the National Australia Bank and the Finance Sector Union. In the case of the National Australia Bank and the Finance Sector Union the audit came from the foresight of both parties during the enterprise bargaining process. Provision of an audit is a clause in their March 2006 agreement. NAB and its enlightened management recognised that this clause within the scope of that agreement was one part of establishing the bank as an employer of choice. NAB is now represented on the Victorian government’s Working Families Council.

In the case of the FSU this represented the interests of their membership base, the majority of whom are women working in roles such as tellers. The FSU have also had a long-standing call for measures to redress the historical gender wage gap, which is particularly pronounced in the finance sector.

Both parties saw the shared benefits in undertaking this project that stemmed from: recognition that pay equity is a shared objective, not an us-and-them issue; no-one would support unequal outcomes based on gender; a genuine concern to understand whether there are pay gaps and if so why; a conviction that there is no reason to hide the facts, if there is a gap it needs to be fixed; a good fit with business commitment to improve performance by drawing as broadly as possible on available talent; and a chance to understand better the impact of overt policies and initiatives targeting cultural change already in place in the bank.

For the Victorian government this was an opportunity to demonstrate how pay inequity can be tackled at the workplace through the joint initiative of an employer and the employee representatives. The audit demonstrated how an audit could contribute to promoting innovative and cooperative workplace practices, which address the need for fairness and flexibility when managing a diverse workforce. From the audit the NAB and the FSU developed an action plan, which included a commitment to conduct another audit two years after.

The overall observations and lessons that can be drawn from this case and can be applied to others are that the enterprise agreement provided a vehicle to commit formally to undertake and report on the pay equity audit; that clarity and transparency are principles that underpin the decision to embark on the audit; that clear commitment and leadership by senior management were essential; that upfront agreement that the NAB and the FSU were equal partners to the audit was also important; that the parties shared a commitment to ensure equitable pay outcomes; and that undertaking an audit as a joint exercise with the union reinforced employee engagement and a commitment to transparency.

I turn to pay equity in local government, which is coming to fruition at the moment. Having learned from our involvement in the landmark NAB-FSU case we were able to approach other industry players. The local government sector expressed a strong interest in this particular workforce challenge. The Victorian government established a local government working party with the remit to address pay equity with representatives from the Municipal Association of Victoria, the Australian Services Union, the Victorian Employers Chamber of Commerce and Industry, and regional employer representation. Consequently, Victorian local government employees, the City of Greater Bendigo and Malvern City Council, working with the Victorian government, undertook audits in 2008.

The local government audits identified three central themes as follows. Firstly, job segregation. Local government employment distribution reflects a distinctly segregated workforce, with the majority of women concentrated at the lower end of the pay scale. Secondly, working hours. Flexible work arrangements are an attractive benefit of working for local government. Many women appreciate working for an employee who allows them to structure their work arrangements around family responsibilities. Jobs offering less than full-time hours are dominated by women and are concentrated at the lower end of the pay scale. Thirdly, reward and recognition. Challenges in attracting and retaining staff are driving new approaches to designing jobs and packaging rewards. Although the local government sector remains one of the more tightly prescribed industries it is joining industry wide trends to increase flexibility in structuring pay and conditions, particularly for senior positions. As local government employers adopt more flexible approaches to structuring pay and conditions it is important to ensure that more flexible pay and conditions do not translate into larger gaps in earnings.

The outcomes of the local government audits have now been developed as industry wide guidance material and this will be disseminated by the Australian Services Union, the Municipal Association of Victoria and VECCI during the first half of 2009. The main aim here is for other local government employers to undertake a similar exercise or to address some of the workforce challenges that have been identified in the pilot audits.

To reinforce the ongoing commitment to advancing pay equity, in 2007 the Victorian government established a Working Families Council. It was the first of its kind in Australia, comprising employer, union and industry representatives. This council’s terms of reference included advising on the further development of pay equity strategies and initiatives. The council’s key task this year is to establish an employer recognition program to formally recognise good employer practices in promoting pay equity and work and family balance. The Working Families Council judging panel comprises employer, union, academic and government representatives. Indicative selection criteria for an employer to be recognised as fair and flexible include—and this is not necessarily an exhaustive list—policies and procedures that provide flexible start and finish times, flexible use of leave, job-sharing arrangements, quality part-time work, employee-choice rostering, working from home arrangements, pregnant staff being able to stay in touch with the workplace, the promotion of pay equity, childcare support programs and other creative practices to help employees balance work and family needs.

The Employer Recognition Program comprises an annual call for nominations for an initial run of 12 months. The program was launched on 12 March 2009. Nominations close on 9 April. Recipients of this award will be announced in late June 2009. We believe fair and flexible employment should be visible. Employers who act to promote it will be recognised and rewarded through the use for 12 months of a brand mark icon which recognises their achievements and promotes their status of employer of choice. We will be telling the employer’s story on our Ways to Work website on the government’s Work and Family Balance portal. There will be a formal presentation at an awards evening with the Minister for Industrial Relations announcing and promoting the employer’s new award.

I will move to the adequacy of current data to reliably monitor employment changes. The Victorian government believes that policy decisions aimed at promoting pay equity should be supported by sound evidence. The Australian Bureau of Statistics collects a range of labour market and industrial relations data which provides highly useful information to identify policy needs and evaluate policy implementation. However, the ABS data is limited in what it is able to tell us about organisational characteristics, workplace industrial relations and human resource management practices and firm-level performance in relation to pay equity or any other workplace issue for that matter. The Victorian government has recognised the need for additional workplace industrial relations data and has conducted comprehensive surveys in 2002, 2006 and 2008. The Victorian Workplace Industrial Relations Survey, or VWIRS, provides valuable information to track employment and workplace changes over time and how these might influence pay equity issues.

The key findings related to women in the workplace from the VWIRS conducted in June 2008 and also from the ABS employee earnings and hours data from May 2006 were as follows. Employees in workplaces with a high proportion of female workers were more likely to work fewer hours than employees in workplaces with a majority of male employees. Female workers were more likely to be part-time or casual. For example, while casual employees comprise 25.2 per cent of all employees in the workplace, female employees accounted for almost 60 per cent of casual employees. Workers in predominantly female workplaces were more likely to be award dependent or covered by individual agreements. In contrast, workers in predominantly male workplaces were more likely to receive over-award payments or to be covered by collective agreements. The method of setting pay is an important determinant of men’s and women’s wage rates. Registered collective agreements in Victoria delivered the highest rates of pay for men. The highest rates of pay for Victorian women were under common-law contracts followed by registered collective agreements. Women who were then on Australian workplace agreements, or AWAs, were faring poorly in terms of wages and working hours, with the aggregate effect of their hourly earnings being 10 per cent less than that of their counterparts on collective agreements. The gender pay gap is greatly exacerbated when overtime earnings are accounted for. The widest gap in overtime earnings was found for tradespersons and related workers.

Comprehensive datasets are necessary to track performance over time and the Victorian government supports the continued collection of data on employee earnings and hours, or EEH, currently conducted every two years by the ABS. So, in order to enable the collection of national workplace and employee level data to monitor comprehensively employment and workplace changes influencing such things as pay equity, the Victorian government recommends that the Commonwealth government conduct an Australian workplace industrial relations survey, or AWIRS.

The Victorian government’s pay equity inquiry of 2005 recognised a need for pay equity education and information among employers, employees and trade unions and it made a number of recommendations. Subsequent research undertaken by the Victorian government demonstrated this is a continuing need. These research findings indicated that employers, employees and their representatives were unclear about what constituted pay equity and were therefore unclear about what could be done to ameliorate pay inequity.

The findings of this qualitative research indicated that pay equity is a poorly understood term. Employers believe that pay inequity is not a concern in their particular industry, and where men and women are undertaking same or similar work and there is a pay gap, employers believe that this should be rectified. Pay equity was defined variously as a financial term like shares, as the opportunity to get paid more and, sometimes, as equal pay for equal work, but rarely was it associated with gender pay inequity. Pay equality was considerably better understood and came closer to the meaning ‘equal pay for equal work’ but, again, the connection with gender was not self-evident. Those working in the public sector were considerably more familiar with the term ‘pay equity’, defining it as the comparative pay of people doing the same job and, in particular, the wages for men and women in equivalent jobs.

Most people were not surprised that there is an overall discrepancy between the ordinary earnings of men and women. Some were surprised that the gap was as small as it is. Most accepted that there are systemic problems, often historically linked. More challenging was the gap between perceptions of the overall statistics and employers’ managers’ perception of their own practices. Employers’ managers were unable to understand that inequity might exist in their own workplace and most employers’ managers were also adamant that gender was not an issue in their workplace and that they paid people for the work they did. Therefore, while all accepted the principle of pay inequality, by no means did they feel an impetus or incentive to examine the matter in their own organisation.

There were two principles which received strong support from virtually all employers, managers and employees. This indicated that the concept of equal pay for equal work is strongly valued. These two principles are that, while there are many historical reasons why pay inequality continues to exist, there is no place in the Australian workforce for unequal pay for those doing the same work and that where pay inequality for the same work is found to exist it should be rectified immediately.

The notion of equal pay for work of equal value was harder for some to grasp, particularly as employers did not consciously see they were discriminating on any grounds. Some employers also confused pay equity as a potential impediment to being able to reward high-performing staff. It therefore can be inferred that, in order for employers’ managers to better understand to pay equity, it may be necessary to talk as much about what pay equity is not as about what it really represents. Mentioning state-wide data is not enough to help them recognise a problem in their own workplace. Demonstrating inequity at an industry level had more meaning for employers and managers: it brings it closer to home and is more likely to encourage them to examine their own practices.

The Victorian government therefore believes that effective education, information and training campaigns will be an important component of any Commonwealth government activity to address gender pay inequality. However, increasing awareness of pay equity does not always need to be undertaken through a formal information campaign. The Victorian government has demonstrated that working in partnership with employers, employees and their representatives to conduct a payroll audit provides a successful means to educate and inform industry, employers and employees. The pay equity audits conducted by NAB and local government employers serve as models for conducting audits, with dissemination of information through industry channels.

I will move on to current structural arrangements in the negotiation of wages that may impact disproportionately on women. Victoria is unique among the Australian states in having referred most of its industrial relations powers to the Commonwealth. Victoria’s capacity to impact on structural arrangements is limited, given that the workplace relations in the state are largely regulated by federal IR legislation. The Victorian government welcomes the changes contained in the Fair Work Bill which enhance the pay equity principle. The enhancements properly capture the option to assess comparable worth when evaluating jobs and remove the need to show discrimination at the threshold. We therefore look forward to the outcomes of this inquiry and the further developments that will flow from this.

Drawing on experience in a range of international pay equity regulatory regimes, the Victorian pay equity inquiry identified how such regimes can be distinguished: whether they are located through industrial employment based tribunals or human rights type frameworks; whether they are complainant based or proactive in nature and, if the latter, whether they are voluntary or mandatory; whether the remedies are limited to an individual or group of individual complainants, a single workplace or employer, or industry and occupation; whether the remedies are capable of providing retrospective relief; the capacity to examine disparate areas of work; and the capacity to examine market rates of pay.

Australian research has examined the influence of wage structure and wage setting on earning differences. Generally, the research indicates that pay compression favours women. Greater income dispersion may also mean that improvements in the gender pay equity ratio may arise because of a relative fall in men’s earnings. That is, the narrowing of the gap may be caused by a reduction in earnings for men and not an increase in women’s earnings, which does not represent a positive outcome for men or women.

In its submissions to the Australian Fair Pay Commission the Victorian government established that, amongst other things, those workers in low union density, in smaller workplaces and in particular industries such as hospitality are more likely to have their pay determined by informal arrangements. Women work predominantly in such workplaces. The Work Choices legislation, which tended to favour individualised arrangements over collective ones, exacerbated the unacceptably wide gap in women’s and men’s pay and did little or nothing to ameliorate the state of pay inequity.

The Victorian government inquiry concluded that in advancing a more effective legislative model for equal remuneration the Queensland model could be the starting point. This model comprises legislative provisions with an equal remuneration principle applying when the AIRC makes, amends or reviews awards, certifies agreements, makes orders, arbitrates industrial disputes about equal remuneration, and values or assesses the work of employees in feminised industries and occupations. The equal remuneration principle utilises undervaluation rather than discrimination to identify areas worthy of investigation. This legislative model identified by the inquiry is reflected in and is consistent with principle 6 of the Victorian Workplace Rights Standard. The Victorian inquiry concluded that an industrial regulatory framework is a necessary component if pay equity is to be addressed. An appropriate mechanism would be one where an opportunity to raise the issue exists, it is properly investigated and a determination is made regardless of workplace arrangements.

In addition, the Victorian government’s four submissions to the Australian Fair Pay Commission have consistently expressed the need to address pay equity in its wage determinations. The Victorian government notes that the AFPC’s decision of 8 July 2008 states that ‘further research in gender pay differentials is warranted’. The critical issue for women is their greater reliance on award earnings and lower participation in workplace bargaining. Women are more likely to depend on minimum wage regulation in certain industries and occupations and are not properly remunerated for overtime and weekend work through over-award payments or collective bargaining.

The Victorian government’s 2009 submission to the AFPC submits that achieving pay equity is a fundamental aspect of wage determination in Australia. Historically, the reduction in the gender wage gap requires ongoing corrective action through the industrial relations system. It is recommended that the AFPC provide an assessment of the pay equity implications of that decision. The Victorian government submits that the AFPC is uniquely placed to address this important economic and social issue by using the pay equity principle in the determination of minimum wages.

To reiterate, we therefore welcome the changes contained in the Fair Work Bill which we believe enhance the pay equity principle. We also therefore look forward to the outcomes of this inquiry and the developments that will flow from this. Again to reiterate, the Victorian government considers the Queensland model a good starting point.

I will move to the adequacy of current arrangements to ensure fair access to training and promotion for women. The Victorian government believes that an effective balance between work and family creates a productive workplace and a rewarding family life. To achieve this, there is a need to respond to the changing labour force composition, increase workplace flexibility and retain a skilled workforce. While it is arguable that at various times in their working lives women may choose to engage in casual and/or part-time employment in order to accommodate their family responsibilities, it is equally the case that factors such as availability and affordability of child care and flexible working arrangements associated with ongoing full-time jobs limit the options available to working mothers. Historically, differences in education and workforce experience have also been factors contributing to the gender pay gap. However, as women have increased their participation in both education and the labour market, these factors have become less significant. Access by part-time employees to on-the-job training and promotional opportunities remains limited and continues to be an important cause of pay inequity.

The Victorian government has recognised this need and has developed a range of evidence based policy initiatives on flexible working arrangements, including quality part-time work and promoting women’s workforce participation and engagement generally, including the Quality Part-Time Work Project. This included the development and promotion of industry agreed guidelines in retail, hospitality, local government, nursing and law, setting out what is a quality part-time job. Ways2work is an online toolkit to assist parents and carers who enter and re-enter the paid workforce and also to assist employers. In the 2007-08 budget the Victorian government allocated $1.2 million over four years to develop, promote and build upon the online toolkit.

Women’s financial literacy is also an issue. Financial security is a significant issue facing Victorian women of all ages. In the 2007-08 budget the Victorian government allocated $1 million over four years towards providing practical information that encourages and assists women to think and plan for their financial future. Twenty-six workshop programs were delivered across the state in August and September 2008.

Returning to Earning is an initiative which is supporting parents returning to the workforce, recognising that parents who have been out of the workforce for some time may need to upgrade their skills to return to work. Returning to Earning grants help meet the costs associated with retraining, such as books and materials, course fees, transport and child care. A total of 12,000 grants were released over four years at a cost of $13.2 million.

There are also Workforce Participation Partnerships. As at 31 August 2008, over 1,400 women have achieved an employment outcome through Workforce Participation Partnerships. Examples of projects targeted at women include Women 4 Work, which assisted women exiting prison or from community correctional services to gain employment through individualised pre-employment support, training and placement support. We also have a program for construction trades apprenticeships for women. This created employment and apprenticeships for women within the construction industry, in trades such as electrical, carpentry and plastering.

There is a need for further legislative reform to address pay equity in Australia. The Victorian government recognises that in the regulatory arena both industrial and human rights based mechanisms have been available for some time to address the issue of discrimination in the workplace. The Victorian pay equity inquiry noted the limitations on advancing pay equity through individual complaint based mechanisms. Consistent with the direction envisaged in the Attorney-General’s justice statement of October 2008, the inquiry working party supported the development of broader measures such as representative complaints, non-complaint based investigations and other proactive measures being available under the Victorian Equal Opportunity Act 1995 to address pay equity issues. Consequently, the Victorian government has undertaken a review of the EO Act. The options paper to that review set out five key issues for reform, including ways to restructure the framework of the EO Act so it could better address systemic discrimination. Pay inequity is one example of such discrimination, where there is a need to remove barriers and to achieve equal opportunity.

The equal opportunity review final report An equality act for a fairer Victoria was released on 31 July 2008. This is known as the Gardner report. The Victorian government is now considering whether the Victorian Human Rights and Equal Opportunity Commission should be given powers to launch its own investigations and to enter into enforceable undertakings and issue compliance notices rather than relying on individuals to pursue a complaint. The first stage of the implementation has commenced; the Equal Opportunity Amendment (Governance) Bill was passed in parliament on 31 March 2009. The bill creates a new governance structure for the commission that provides clear lines of responsibility and accountability, creates a new commissioner position and creates a board with sufficient capacity to provide strategic oversight of the commission’s broad responsibilities under the act, the Charter of Human Rights and Responsibilities Act 2006 and the Racial and Religious Tolerance Act 2001.

It is expected that the new legislation will be introduced late in 2009 or early in 2010. That covers the remaining recommendations in the Gardner report that are accepted by government concerning the scope of the act, the powers, functions and duties of the commission, dispute resolution, enforcement, offences and penalties. The Victorian government is pleased that the Fair Work Bill will not exclude state and territory laws dealing with antidiscrimination and equal opportunity.

Mr Bancroft —I would like to conclude our presentation by saying that the Victorian government is committed to promoting equal remuneration for work of equal value and recognises this as a fundamental principle guide for work in Australian society. The Victorian government has demonstrated its commitment to advancing pay equity strategies in industry in workplace levels and looks forward to the outcomes of the Commonwealth government’s important and timely inquiry. That concludes our presentation. We are more than happy to address any questions that the committee might have.

CHAIR —Thank you very much, Russell and Sarah. That was a very comprehensive submission, and I congratulate the Victorian government on its activity in this area. I have a few questions and I am sure other members of the committee will have some as well. From your submission I was not clear on whether or not you had applied the pay equity tool to the Victorian Public Service.

Ms Tuberville —Not directly. There are provisions in the VPS agreement for pay equity monitoring. I cannot recall them.

CHAIR —So unlike the exercise that you have been through with local government or that went through the National Australia Bank, you have not done something—

Mr Bancroft —In terms of the pay equity audit, there has not been, as far as I am aware, a formal process.

Ms Tuberville —But there is an existing provision within the agreement for the CPSU to have data on the pay equity profile of employees in the VPS.

CHAIR —On the issue of statistics, I congratulate you on your Victorian workplace industrial relations survey. I think that your recommendation that we reinstitute the Australian workplace industrial relations survey is a view that is fairly widely held by a number of people who have appeared before the committee, but I am conscious of what appears to be a slight difference in the collection of data between those two. I could have sworn one of you said that women actually receive the highest rate of pay under common law contracts. Did I mishear that?

Mr Bancroft —I think the point we were making is that common law contracts are more prevalent amongst women. I do not believe any study we have done has shown that women actually receive more under common law contracts.

Mr HAASE —Weren’t you saying that the pay gap was less under common law contracts for women?

CHAIR —Women receive the highest rates of pay under the common law contracts. It does not necessarily follow—

Ms Tuberville —It does not necessarily mean that it is particularly high. It is a combination of the fact that women are more likely to be on common law contracts and in particular industries where common law contracts predominate. The highest rates of pay for anybody generally are for men under collective agreements.

CHAIR —Where some lack of clarity is creeping in for me is in relation to changes in the structure. An academic alerted us to this only a couple of weeks ago. The Australian Bureau of Statistics has made, for whatever reason, changes to their categories of payments. There are collective agreements, individual agreements, award agreements, common law contracts and something called informal agreements, which, in the old days of ABS statistics, was simply referred to as ‘overaward arrangements’. I assume the change was made because not all arrangements were over award and there was in fact an ability to go below that. However, I do not know that as a matter of certainty. Everything else that we have read indicates that when agreements or the pay arrangements for women are based at, near, around or on an award, they do better. Are you talking about a common law contract based on an overaward payment or—

Ms Tuberville —I do not think we can definitely say from the data. We recognise that there was that change in ABS terminology. I would have read informal arrangements as a mixture of common law contract.

Mr Bancroft —I think it is also important to remember that the rate of pay is one thing but that the overall package of benefits is another thing. Quite often individual agreements, whether they be AWAs or common law contracts, may provide a higher base rate of pay, but that is in return for reductions in other benefits such as overtime payments, penalty rates or annual leave loading—benefits that are usually found under awards or collective agreements. So, quite often, we are not comparing like with like, and the statistics in that respect may be misleading if they are looked at just on face value.

Ms Tuberville —We have generally come to the view that women are more disadvantaged by individual arrangements than male employees in similar occupations. Whether that has something to do with our negotiating skills or because we value other things more highly than wages or because we are not well informed about what the market rate is, we are not quite sure.

Mr Bancroft —I think we mentioned in our submission that the highly feminised industries such as hospitality and retail are much more award reliant industries. There is very little collective bargaining in those industries compared to, say, construction or mining. Certainly individual arrangements are more prevalent in those industries. I think it is an industry phenomenon more than a gender phenomenon. It just happens to be those industries which are currently—

CHAIR —It was Barry who first coined the phrase ‘industry pay gap’ or pay equity issue as opposed to just a gender one. In industries like aged care, child care and hospitality, the pay rates are low; it is not just—

Ms Tuberville —That is where women work.

CHAIR —It is a chicken and egg thing as to which came first: low rates of pay because women worked there or—

Mr HAASE —It is because of the egg, Sharryn!

Mr RAMSEY —During your presentation you said that, where industries have high female representation—and this is also the case more generally across industries—women work fewer hours than men. It seems to me that one of the great inequities that we talk about all the time is whole-of-life earnings. The way to fix this up—that is, women working fewer hours than men—is either to get men to work fewer hours or to get women to work more hours. I do not know that in either case it would be a productive outcome. It is one of the great conundrums. If women are generally working fewer hours than men, do they want to work more hours across the board, or do men want to work less?

Ms Tuberville —A point that we made a little later recognised that. Why do women work part-time and why do they leave the workforce? It is quite often for child-caring responsibilities. It is about the working hours of women, but there is also the factor about breaks from employment and how women return to work and whether they can get back to a similar position or the same position they had before they left their employment for their child-caring responsibilities and also whether they can actually maintain their, as you say, lifetime earnings after having had that break. There has been some work done around superannuation, and I think the information that came out yesterday from NATSEM makes that point. Not only is there a reduction—

Mr RAMSEY —There has been a great deal made of the superannuation gap, and we understand that. It is a question of fixing the problem.

Ms Tuberville —That is right. It is a matter of fixing it.


Mr Bancroft —Our submission is not suggesting that those sorts of arrangements change. It is a fact of life that women do leave the workforce to have children and to look after them. What we are very keen to see is that they are not disadvantaged in doing that and that they are able to return to the same position or to a similar position.

Mr RAMSEY —I think we would all agree with that. But, at the end of the day, unless we address something else in the system, a woman who works fewer hours in her life than a man is likely to have some sort of pay equity gap.

CHAIR —That is for paid work.

Mr RAMSEY —Yes, I appreciate that. The other thing I want to touch on is in conjunction with a witness who appeared before the committee late yesterday. He urged us to look closely at the statistics that we are fed on this issue. He alleged that they were incomplete in a lot of ways and that we should have more detail on them. I am drawn back to something that you said about the hospitality industry having many individual workplace agreements. The tables on page 16 of your submission show that the pay equity gap decreased between May 2004 and 2006. We have had a lot of references to Work Choices over this period. If you are talking about individual agreements, I would say that you are actually talking about AWAs in the workplace. They go back far further than Work Choices. Why would we have seen that narrowing of the gap in this highly segregated industry during that period of time?

Ms Tuberville —Which industry specifically?

Mr RAMSEY —This is hospitality. Accommodation, cafes and restaurants went from 96.2 per cent to 100 per cent. As I said, in this highly segregated industry where people are making individual workplace agreements, why do the statistics go the other way?

Ms Tuberville —I think there is probably a mix there. It is a diverse industry. There are large firms and small firms. There is a diverse range of employers who have different capacities to pay. In that industry women are more award reliant. You would expect that the gap to be narrower; it is always narrower under awards. What you do not have under awards is high rates of pay; however, you have a narrow pay gap. If there is an AWA or an individual arrangement effect there, the research commissioned by the Victoria government around—

—This could be one of those areas where men’s pay went down.

Ms Tuberville —That is also possible, and that may well be the case because there is that compression of pay in certain industries such as retail and hospitality.

Mr Bancroft —We also found that in Victoria between 1996 and, probably, 2004 with the award-free employees—the ones who we call the schedule A employees—who did not work covered by a federal award but were covered by five minimum conditions. We did some research in 2000—an independent industrial relations task force—which found that there was a very small pay gap there, but that was because, basically, everyone was getting very low rates of pay so there was less scope for there to be much of a gap. As I think we say in our submission, one way that pay inequity has been addressed is simply by lowering men’s wages rather than increasing women’s wages.

Ms Tuberville —So you might find in that industry that they are award reliant and that, where there are on informal arrangements—for want of a better word—or individual contracts, there may be that pay compression anyway for men and women, and that is probably contributing to relatively low pay gaps.

Mr RAMSEY —There may be. That was my original point—picking it up. This gentleman said we should be very critical—I do not mean critical in a derogatory sense—of the statistics that we look at on this issue, and I was just picking up on that as an instance.

Mr Bancroft —We agree. Obviously there are different ways to interpret those statistics, but we think that other evidence—anecdotal evidence and other studies that we have done, and also our Victorian Workplace Industrial Relations Survey—tends to support the assertions we are making that the reason why there are not huge pay differences in some industries is simply compression rather than any other reason.

Ms Tuberville —I think that goes to why we made the particular recommendation about AWIRS. The ABS range of data sets are commendable and they are very comprehensive, but the issue is that they are aggregate and they do not pick up the workplace characteristics—that more nuanced data that can start to go to some of the causes. Answering your question, for example, the ABS data will not necessarily do that for us, so you need almost a compendium of data—and qualitative data as well, of course.

Mr SYMON —I am very interested in that. It is good to see something that is quite comprehensive put before us, and you certainly explained a lot. There are some questions I would like to ask. In relation to the VWIRS, I noticed it did not cover public administration. Was there a reason that it left out government itself?

Mr Bancroft —I am not sure if there is any specific reason. The VWIRS is of approximately 600 businesses. The survey is conducted by the University of Sydney. We have no say in who is chosen to participate in that survey. It is a cross-section of business. As to why it does not show government, it may well be because it is felt that the public service statistics will distort the overall result given the unique nature of public sector employment.

Mr SYMON —Okay. That leads me on to ask: do you have figures for any gender pay gap in the Victorian Public Service? Again, I have the problem with the ABS stats that they do not show that.

Ms Tuberville —No.

Mr SYMON —Is there a gap at the moment and can you quantify it?

Ms Tuberville —The State Services Authority certainly did some work some time ago around this issue.

Mr Bancroft —We can endeavour to find out whether there is any material available and provide that to the committee.

Ms Tuberville —We can provide you with that information.

Mr SYMON —That is fine. I am happy to take that on notice. That is good.

Ms Tuberville —I do know—and we found this in local government as well with the local government audits—that the pay gap in the public sector is generally narrower. It is quite narrow in local government compared with, say, the finance sector, which is at 66 per cent. I think the pay gap in local government is something around 96 per cent, so it is quite a narrow gap. But, as the local government audits pointed out, there were some areas of particular concern; I think there were some concerns around work value.

Mr SYMON —Okay. I am merely asking for that because there are these intangibles we keep coming up against that might have been solved in some areas. I think that, if we get more evidence of how it is done in industries where there is a lesser gap, it may lead us to come to some conclusions that can help.

Ms Tuberville —Sure. Our State Services Authority does have some publicly available work on that question.

Mr SYMON —Going on from that, I also noticed that on a table in your submission the gender pay gap in education between 200 and 2006 went backwards.

Ms Tuberville —Yes.

Mr SYMON —You put a question in your submission which I am going to ask you: do you have an explanation for that?

Ms Tuberville —We could speculate.

Mr SYMON —Certainly the majority of people in education are in the public side—not all, of course.

Ms Tuberville —Not all in Victoria.

Mr SYMON —But the majority of education is state based.

Ms Tuberville —That is right. There is probably something going on around career movement or movement of men and women.

CHAIR —Does that correspond with the timing of the introduction of the level 3 key teacher qualification? Would it reflect the extraordinary outcome that more men than women might have been promoted to that highest skilled teaching position? Wouldn’t that be an irony!

Mr Bancroft —It is probably safer if we do not speculate.

Ms Tuberville —We do not have any more information about it.

CHAIR —So you do not necessarily follow up on an anomaly in the Victorian workplace industrial relations survey. Is it not the practice, if you are getting this additional survey and information, to have a disaggregated look at what is happening in the Victorian industrial relations scene and to follow up an anomaly like that?

Mr Bancroft —I suppose it is a question as to what we can do about them. The information is particularly provided to the people who have participated in the survey, but the information is also public. We are very keen to work with industry stakeholders to address any concerns or issues they have. Certainly if a particular pay gap was identified in an industry we could do something similar to the NAB or like a government audit. But, given that we do not have any direct industrial relations powers, we could not legislate or make any other determination to address that issue. It is the Commonwealth’s responsibility in that respect.

Mr SYMON —At point 5.6 on page 10 of your submission you talk about how the Victorian inquiry into pay equity concluded that an industrial regulatory framework is a necessary component to address pay equity. With the Fair Work Bill about to come into place, have you any suggestions as to what is needed at a Commonwealth level to achieve that, above and beyond what is already contained in the bill?

Ms Tuberville —The inquiry concluded the Queensland model was the gold mark standard at that time, so that would be our practical suggestion.

Mr SYMON —So from state to state and then a state model applied across the Commonwealth.

Ms Tuberville —Possibly.

CHAIR —And still individual complaint based.

Ms Tuberville —I think you have picked up comparable worth in the Fair Work Bill. I suppose at a legislative and a policy level the Commonwealth would need to think about how that is advanced and how that is promoted.

Mr Bancroft —Today responsibility for addressing pay inequity issues rests in part with the Australian Fair Pay Commission. In our submission to the commission we have raised the issue of pay equity again, as we have every other year. Now the responsibility for the determination of minimum wages will pass to Fair Work Australia, and certainly Fair Work Australia will have some scope to address pay equity. In our submission to Fair Work Australia next year I am sure we would again raise that issue, and we are hoping that Fair Work Australia will be able to address it through its determinations.

Mr SYMON —Thank you.

Mr HAASE —I am wondering whether or not your department—let’s call it department—funding has increased over time in the last decade, say.

Mr Bancroft —Our funding? I should point out that Workforce Victoria, which Sarah and I are employed by, is part of the Department of Innovation, Industry and Regional Development. It is a large department. We are one small component of it. I am not quite sure of the point of the question.

Mr HAASE —Have your resources improved over the last decade?

Mr Bancroft —We are funded annually, and we are funded to address certain projects and identify gaps.

Mr HAASE —Have you been taking on more projects over the last decade than previous decades?

Mr Bancroft —We have certainly been taking on different projects. I cannot talk about what happened 10 years ago.

Mr HAASE —Could you comment on the size of the workforce within the division that is responsible for addressing the gender pay equity gap?

Mr Bancroft —I am not able to address that question specifically.

Mr HAASE —I am just trying to get a sense of the significance to the Victorian government of the whole issue.

Mr Bancroft —Pay equity is a significant issue.

Mr HAASE —How do you know?

Mr Bancroft —The Victorian government has developed a workplace rights standard, which our industrial relations policy is based on. The workplace rights standard does in part focus on pay equity.

Mr HAASE —Do the stats that you have indicate a closing of the gender pay gap?

Mr Bancroft —Certainly Victorian government policy is supportive of—

Mr HAASE —No, no. Do the stats you have indicate a closing of the gender pay gap?

Ms Tuberville —The pay gap in Victoria is actually relatively low. It is around 16 per cent.

Mr HAASE —Do they indicate a closure of it?

Mr Bancroft —I think our statistics have shown that the pay gap does close and that it can then open up again.

Mr HAASE —So nothing changes? For the effort that you are putting in, nothing changes?

Mr Bancroft —The trend has been I think over time for that pay gap to close.

Mr HAASE —Surely, if it is your part of ship, you know; you do not have to think. What is the efficacy of your efforts and the efforts of the Victorian government in closing? This is what we are all here about.

Ms Tuberville —The pay equity program of the Victorian government is also part of the broader Working Families Program. We talk about that in the submission. We try and pick up some of the things—and you mentioned them earlier—around child care and flexible working arrangements, recognising that the notion of pay equity cannot be isolated from working arrangements and flexibility of anybody. The gender pay gap in Victoria is narrowing, but it is slowly narrowing. It is sitting at around 16 per cent at the moment.

Mr HAASE —It says here:

Conclusion The Victorian Government is committed to promoting equal remuneration for work of equal value …

Have you achieved that?

Ms Tuberville —We do that in various ways. We do that through—

Mr HAASE —No. Have you achieved it? I am asking very specific questions. What are the indicators? You are asking us to take great note of your statistics and you want us to interpret those statistics and form a conclusion. That is clear; otherwise, you would not have supplied them. What is your conclusion from the statistics?

Mr Bancroft —Our conclusion from the statistics is that there is a gap. That gap has narrowed slowly over time. We are under no illusion that that gap will close overnight. It is a long-term project.

Mr HAASE —Okay. You cannot answer the question. Tell me this then. On the survey, I am very impressed that you have carried out the audit. In saying that, I have to say that other evidence we have received suggests that there ought to be fewer agencies and one national agency concerned with this issue. That might give you cause for reflection. What was the experience of those conducting this audit? Others have suggested there ought to be even a mandatory audit.

Ms Tuberville —So you are going to the experience of the actual audit.

Mr HAASE —What was the experience of those companies that were requested to carry out this audit? I am looking at what cost there was to them and what resources had to be placed to achieve it et cetera.

Ms Tuberville —In the case of the NAB and the FSU it came out of their joint agreement through their EB. The Victorian government obviously showed some interest in that. The Victorian government and the FSU have worked over a period of about nine months, I think, on a major audit. It has been very comprehensive, and the NAB and the FSU can tell you the same as they are coming to this hearing.

Mr HAASE —That is a point.

Ms Tuberville —I think that the NAB and the FSU and the Victorian government all agreed that it was actually very positive and it was very beneficial for the parties.

Mr HAASE —I will ask them directly, but you do not have a sense of the significance of or the size of the hurdle in their production to attend to this audit? This is the sense that I am trying to get. How much of a bloody nuisance was it to them to carry out the audit?

Ms Tuberville —That was not a bloody nuisance for them. It was something that they were certainly committed to. It was something that they saw as beneficial. They saw it as a means to actually test their human resource management policies.

CHAIR —That is because they chose to do it, not because some federal government committee has mandated that every employer who employs more than 15 people shall conduct an audit.

Ms Tuberville —Sure.

Mr Bancroft —And they saw it as part of their aim to be an employer of choice. They had a goal they wanted to achieve and this was part of getting to that goal.

Mr HAASE —Going straight to that, what do you believe to be the desirability in their mind of this certification, award or prize, if you like, as employer of choice? Would you care to comment or is that something that I should ask them?

Mr Bancroft —In terms of the NAB and the FSU, you would have to ask them. If you are talking about the Victorian government’s just launched employer recognition program, it is a new program. We are hoping that it is something that all businesses will aspire to.

Mr HAASE —Why? I am not asking why you are hoping they will. Why will they aspire to it?

Ms Tuberville —We are actually making a link between what we call high-quality human resource management practices and productivity, and there is some research evidence that tells us about that.

Mr HAASE —More women returning to the workforce—yes?

Ms Tuberville —Partly. But in terms of attraction and retention there is a link with certain employment practices in the workplace, improved job satisfaction and employee engagement, and that then leads to higher productivity. In the academic literature this is known as the high-performance workplace. There are dual benefits. There are increases in job satisfaction and better quality work but also higher productivity. If you like, it is the sort of high road to—

Mr HAASE —You would be aware of our brief and our terms of reference and the motivation for them: to have a more skilled workforce and more Australians employed across all genders.

Ms Tuberville —That is right.

Mr HAASE —You mentioned very early in your delivery that quite clearly there was a great disparity when it came to overtime available to men and overtime available to women. Perhaps I am expressing that incorrectly and it is more work performed of an overtime nature for men than for women. Do you have an explanation?

Ms Tuberville —On the face of it, maybe men are more available for overtime work or there is overtime—

Mr HAASE —Did you not go into that at all? Is it that you have no opinion behind the stats?

Ms Tuberville —We can speculate again. It was for tradespersons. That was where the biggest gender pay gap was. We could imagine somebody working in construction, a tradesperson, who was working long hours. There is some evidence to say that men are working longer hours. But the consequence of that is not only are they working longer hours but they are earning more via overtime. Women are constrained perhaps in not having that option to work longer hours. Indeed, do they want to?

Mr HAASE —That is the question. You didn’t get an answer as to that? So you haven’t surveyed as to whether or not women want to work more overtime?

Ms Tuberville —Have we done one?

Mr HAASE —Yes. Have you done one?

Ms Tuberville —No, we have not done one.

Mr HAASE —Has the Victorian government asked the question—

Ms Tuberville —Actually there is some ABS data about preference under utilisation.

Mr HAASE —Okay. I was hoping you would be doing that interpretation; that is all. Has the Victorian government contemplated, or asked you for advice about, the cost of achieving the ambition of equal remuneration for work of equal value and therefore closing the gender pay gap?

Mr Bancroft —No.

Mr HAASE —That would be a Treasury issue I dare say, wouldn’t it? So it is not something that you have been asked to advise on?

Mr Bancroft —No.

Mr HAASE —That is all, Chair.

CHAIR —Thank you, Mr Haase. I have got a couple of follow-up questions. Were the universal access grants designed as $1,000 grants made available to women returning to work?

Ms Tuberville —Yes.

CHAIR —Are they available to anybody? If so, is there some sort of cap on them? Do they have restricted access?

Ms Tuberville —Is this under returning to earning?

CHAIR —I think it was referred to at 6.7 on page 40 of your submission.

Ms Tuberville —There are two funding streams. There is community access, which targets groups under-represented in the labour market. Those grants are provided by community organisations. There is universal access as well. All parents, via a website, can apply.

CHAIR —So any parent returning to work after caring for a child can access a payment of up to $1,000 from the Victorian government. Do you have any idea of what the take-up of that is?

Ms Tuberville —Between 2003 and 2007 the program helped more than 9,000 parents return to the workforce.

CHAIR —So you think it is a fairly well known program?

Mr Bancroft —We do not have any data on public recognition of that program.

CHAIR —Presumably Centrelink or Job Network providers would know about it and promote it to people?

Mr Bancroft —Once again, we are not directly familiar with how that program is provided. We can get that information—

CHAIR —Is that actually administered by you or is that administered by another agency or department?

Mr Bancroft —That is administered by us, our department.

CHAIR —Yes, if you could give me some idea of how it is promoted that would be very helpful. Nine thousand sounds like a lot over four years, but there are how many babies born each year? I do not have a state-by-state breakdown.

Mr RAMSEY —Chair, I have one very short question with a ‘yes’ or ‘no’ answer. I refer to the stats that you have extrapolated from the ABS. Are these Victorian? Are you looking at the Victorian experience or the Australian experience?

Ms Tuberville —I cannot remember. I think it may be Victorian. I can check that for you.

Mr RAMSEY —Yes, please.

Ms Tuberville —I think it is Victorian, but I can confirm that.

CHAIR —As there are no other questions, thank you very much for your attendance today. It was an extremely interesting submission and I am grateful for your presentation as well. I know you have been asked to provide additional information. If you are able to provide that, it would be great if you would forward it to the committee secretariat. You will be sent a copy of the transcript of your evidence to which you can make corrections as to grammar and fact. On behalf of the committee I would really like to thank you for coming along and making your presentation today. It was great and very interesting.

Mr Bancroft —Thank you for the opportunity.

[10.17 am]