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Employment Services (Consequential Provisions) Bill 1994



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House: House of Representatives

Portfolio: Employment, Education and Training

Commencement: The provisions of the both Acts will commence on Royal Assent or on proclamation.

Purpose

The Employment Services Bill 1994 (the Bill) provides for the regulation and reform of services to the unemployed. The main feature of the Bill is that it sets up a case management system to assist people in finding employment. Elements of the scheme include;

. providing a system of accreditation for case managers, including those with expertise from the private sector;

. creating a government-owned case manager;

. establishing a statutory authority to regulate and promote the system.

The Employment Services (Consequential Amendments) Bill 1994 (the Consequential Bill) makes amendments to the Social Security Act 1991 and the Employment, Education and Training Act 1988 to ensure that the new system established in the Bill dovetails with existing arrangements. The Consequential Bill also amends Commonwealth legislation dealing with administrative law to allow for the external review of the actions of the accredited case managers.

Background

The Bill gives effect to the Government's commitment to make far reaching changes to labour market policy announced in Working Nation. 1 The policy is aimed at reducing the unacceptably high level of long term unemployment. Long term unemployment is considered to be an important factor in reducing the efficiency of the labour market and overall economic growth.

The Government has described the reforms as 'a radical restructuring of labour market programs and their delivery to improve their impact and their efficiency'. 2

An important part of the proposal is the introduction of a 'Job Compact'. This is intended to ensure that people who have been in receipt of certain allowances for more than 18 months have access to paid work or a work placement in specified labour market programs. It is also intended that the job provided is one for which participants are adequately equipped, and will last for 6 to 12 months. There is a reciprocal obligation on the unemployed person to accept the offer of work or lose access to income support for a period. 3

The Job Compact also involves the 'case management' of people who have been unemployed for a long term. Case management is the provision of an individual service to the unemployed person to identify activities (such as training, work experience, or participation in a labour market program) which will assist in obtaining work. Details of the case management system are dealt with in the Main Provisions.

A novel feature of the proposed scheme is allowing (non-government) contractors to be involved in the delivery of case management services to unemployed people. Under existing arrangements the CES has a monopoly on providing free services designed to assist unemployed people to gain access to the paid workforce. While private organisations may provide such services many of those who have been unemployed for a long period would not have the ability to purchase the service. The new system will allow a range of organisations to provide the services with the assistance of government funding.

The government anticipates that community groups, State and local governments, private organisations and training institutions may be interested in, and qualified to provide, case management services. 4 Many of these organisations are currently involved in the delivery of labour market programs in association with the Department of Employment, Education and Training (DEET). The Bill recognises the continuing role of Government in the provision of case management services with the establishment of Employment Assistance Australia (EAA), as an organisation within DEET which provides these services.

The expectation is that around 10% of people in need of case management services will have access to them through non-CES sources in 1994-95, with the proportion rising to 20% in 1995-96, and up to 30-40% in subsequent years if evaluation of the program demonstrates that it is working well. 5 The system is expected to improve services provided through the CES by encouraging competition.

Because of the vulnerable position of many of the clients who will require access to these services careful regulation of the system through a new statutory body known as the Employment Services Regulatory Agency (ESRA) will temper the effect of a 'free market'. In contrast with EAA, which is part of DEET, ESRA is an independent statutory authority which will be directed by a Board appointed by the Governor-General, and managed by a Chief Executive Officer. There is provision for the Minister to notify the ESRA Board of general policies of the Commonwealth Government that are to apply to ESRA. 6 These mechanisms are designed to ensure that ESRA will be directly responsible to the Minister, independently of DEET. 7

An increase in funding to pay for these and related measures was provided for in the 1994-95 Budget. The annual spending on labour market programs in DEET is expected to rise from $1,342 million in 1993-94 to $2,385 million in 1996-97, largely as a result of the Job Compact. In addition, a real increase of $124.8 million will go to employment services reflecting the initiatives in relation to case management, as well as the increased workload in CES with additional labour market programs and new information technology requirements. 8

Main Provisions of the Employment Services Bill 1994

Commencement

Clause 2 deals with commencement. The provisions of the Bill establishing the agencies which will provide and regulate the case management services will commence on Royal Assent. The provisions which set out the details of the case management scheme, and provide for monitoring, investigating and reviewing compliance with the scheme, will commence on proclamation. This is to allow the agencies some time to plan and implement the scheme after Royal Assent.

If no proclamation is made, there is a default subclause which ensures that the Act will be fully operational within six months of Royal Assent.

Aim and definitions

Clause 3states that the aim of the Act is to promote full employment by providing free employment services to job seekers.

Many of the terms used in the Bill are defined in clause 4. A 'case manager' is defined a 'contracted case manager' or Employment Assistance Australia (an organisation within DEET established under clause 14). The term 'contracted case manager' refers to the individuals, corporations, associations and authorities which are accredited and engaged, to provide case management services to unemployed people.

Commonwealth Employment Service

Clauses 8 - 10 establish the Commonwealth Employment Service (CES) as an entity within DEET. Clauses 11 - 13 allow the Minister to establish advisory committees at a national or regional area to advise the National Director of the CES on the operations of the CES. Appointments to any committees are to be made by the Minister. There is a requirement that committee members disclose direct and indirect pecuniary interests in any matters considered by the committee. After such a disclosure is made the member must absent themselves from discussions and deliberations on that matter.

The CES and advisory committees are currently established under the Employment, Education and Training Act 1988. Transitional provisions appear in the Employment Services (Consequential Provisions) Bill 1994, dealt with below.

The Government-Owned Case Manager - Employment Assistance Australia

Employment Assistance Australia (EAA) is established under clause 14. EAA is part of DEET and will be the principal government provider of case management services. The National Director of the EAA is the Secretary of DEET.

The operation of EAA will be monitored and reported on by the Employment Services Regulatory Authority (ESRA)(also established in this Bill and discussed below).

The Case Management System

Chapter 4 of the Bill deals with the case management system under which 'case managers' provide services to the unemployed people who are referred to them.

Who can participate?

Under clause 21 a person can access the case management system only if they are registered with the CES as being unemployed, and included in a specified class of person by a written determination of the Minister. The use of a written determination to set out who can participate in the scheme is designed to allow flexibility in the application of the scheme. These determinations are subject to Parliamentary disallowance.

At this stage it is intended that the determination will include long term unemployed people, people at risk of becoming long-term unemployed and people eligible to receive the youth training allowance. 9

Referral to case manager

Clauses 23 - 28 deal with the referral process. The CES is responsible for referring unemployed people to a particular case manager. This involves the CES writing to the unemployed person stating that they will become a participant in the scheme, and requiring them to attend a compulsory interview with the CES. Failure to attend an interview without reasonable excuse may lead to job search or newstart allowance being cut off ( clause 24).

At the interview the person is given information about the case management system and the option to nominate a preferred case manager (if there are a number of suitable case managers available).

Within 24 days of the interview the CES is required to refer the participant to a case manager. The referral decision takes into account any preference that the unemployed person has expressed for a particular case manager, and other appropriate matters.

Clause 26 allows for referral to a new case manager in some cases.

Notice of a referral goes to the participant and the case manager as soon as practicable ( clause 28).

Case Management Services and Activity Agreements

A person who is referred to a case manager will receive certain services. Clause 30 provides that the provision of 'case management services' involves assisting a participant to find employment. The ESRA Board may determine that specified services are, or are not, 'case management services' for the purpose of the Act.

The main effect of being referred to a case manager is that the person is required to enter into a Case Management Activity Agreement (Agreement). Failure to enter into an Agreement, or unreasonably delaying the entry into an Agreement, means that the person may lose their qualification for receiving job search or newstart allowance under the Social Security Act 1991 (see subclause 29(2) and clause 34).

The Agreement will require the person to undertake one or more activities directed at securing employment. Clause 32 sets out the range of approved activities which include a job search, vocational training course, training for searching for work, paid work experience, measures to reduce any disadvantage the person has in the labour market, a labour market program, a rehabilitation program, an activity proposed by the person such as voluntary work.

The Agreement also provides that a person who is eligible for the Job Compact is required to accept any offer of suitable paid work, or any offer of a placement under one of number of specified labour market programs administered by DEET [ subclause 32(2)]. Eligibility for the Job Compact depends on written determinations made by the Minister, which are disallowable by Parliament.

The terms of an Agreement are to be approved by the Secretary of DEET (or his or her delegate). In approving the Agreement, the Secretary must have regard to the persons capacity to comply with the Agreement, including matters such as the persons skills, age, education, experience, physical condition, the labour market in a locality, and training opportunities.

Clauses 35 and 36 integrate the new system with existing arrangements under the Social Security Act 1991. Provision is made for compliance with the Agreement to be a relevant factor in determining whether job search allowance or newstart allowance are payable.

Case Managers

Part 4.5 provides for the engagement of case managers and allows for greater involvement of community and private sector agencies in the provision of services for the unemployed. The type of entity that can be accredited includes an individual, a body corporate, a partnership, an unincorporated association, an authority of the Commonwealth, a State or Territory, or a government Department. 10

Accreditation

Clause 39 provides that the accreditation scheme will be formulated and administered by ESRA, the statutory authority created under Part 4.6 of the Bill. The scheme must be in written form and will be disallowable by Parliament. The scheme may include the charging of application fees and must provide for a register of accredited entities to be kept. ESRA must also provide free copies of the accreditation scheme on request.

The Bill sets out some compulsory elements for accreditation. These include:

. copies of all Agreements must be sent to the CES as soon as possible after approval [ subclause 42(2)];

. information about compliance with Agreements must be provided to the CES [ subclause 42(3)];

. agreement to repay any overpayments which are made by ESRA ( clause 43);

Some prospective case managers are automatically disqualified from accreditation under clause 45. This occurs where a person who is applying, or involved in an entity which is applying, for accreditation has committed one of a number of specified offences, mostly involving fraud or dishonesty. Subclause 45(9) ensures that the disqualifying provisions do not reduce the protection under the Crimes Act 1901 relating to the disclosure of spent convictions.

Payment and control of contracted case managers

After an entity has been accredited it may be engaged under contract by ESRA for the provision of case management services. The contracts will, under clause 47, provide for payments by ESRA to the contracted case manager.

Under clause 50, ESRA may issue advisory codes of practice in relation to the provision of services. Any codes of practice will be monitored and evaluated by ESRA. Codes must be published and are treated as disallowable instruments for the purposes of section 46A of the Acts Interpretation Act 1901.

Clause 51 provides that the CES may be required to provide assistance to case managers. Where information technology assistance is provided by DEET, a charge in relation to the assistance may be made, provided it does not amount to taxation ( clause 52).

Clauses 55 and 56 provide for rules concerning archives and secrecy, which apply to Government Departments, to also apply to case mangers in relation to documents connected with case management services.

The Employment Services Regulatory Authority

Part 4.6 of the Bill establishes a statutory authority called the Employment Services Regulatory Authority (ESRA).

The functions of ESRA under clause 56 are to:

. regulate, monitor and evaluate the case management system;

. promote competition in the provision of services; and

. report to the Minister on the operation of the system.

The Minister may give directions to ESRA, and notify ESRA of the general policies of the Commonwealth Government which are to be applied ( clauses 58 - 60). This is intended to ensure that ESRA will be directly responsible to the Minister, independently of DEET. 11

Clauses 61 - 77 deal with the ESRA Board. Board members are appointed by the Governor-General. The provisions deal with remuneration and conditions of appointment for board members, disclosure of interests, the conduct of meetings. The provisions are unexceptional.

Clauses 78 - 90 deals with the position of Chief Executive Officer. Again, the provisions are unexceptional.

Clauses 91 - 96 cover various financial matters. The provisions allow for appropriations to be made to fund ESRA. Estimates of spending are to be provided to the Minister ( clause 92). The provisions of the Audit Act 1901 will apply in relation to ESRA's finances.

Investigations by ESRA

Part 4.7 sets out the investigation power of ESRA. Clause 104 provides that ESRA may investigate matters including:

. CES referrals to case managers;

. the provision of case management services;

. contravention of conditions of accreditation and breaches of contracts of engagement;

. contraventions of directions given under the Act, including codes of practice; and

. contravention of the secrecy or archives requirements.

Investigations may be initiated by a complaint, by ESRA, or by the Minister ( clauses 105 and 106). Under clause 107 ESRA makes a preliminary inquiry to determine whether a complaint comes within its power.

If a complaint is outside power it is referred to the Secretary of DEET or the Department of Social Security for action. Clauses 111 - 113 allow complaints to be referred to the Ombudsman, the Trade Practices Commission or the Privacy Commissioner, as appropriate. Further provision is made in relation to these referrals in the Employment Services (Consequential Provisions) Bill 1994, dealt with below.

ESRA may conduct its inquiries as it sees fit [ subclause 109(2)]. A person who is being investigated must be told of the investigation [ subclause 109(1)] and given an opportunity to make a submission if an adverse finding is to be made [ subclause 109(4)]. If a complaint is not to be investigated ESRA must tell the complainant and the respondent of such a decision and the reason for the decision.

Reports on investigations may be provided to the Minister under clause 115 and will be kept on a publicly available register under clause 117. These provisions appear to allow for an appropriate level of public scrutiny of ESRA investigations.

Monitoring Compliance - search and seizure powers

The Chief Executive Officer of ESRA is given power to appoint inspectors to monitor compliance by case managers with the conditions of accreditation and terms of contracts of engagement ( clauses 118 and 121).

The provisions allow for the search of premises where records relating to case management services are kept. Residential premises are exempt, unless a warrant for the search has been issued by a Magistrate [ subclause 121(3)] .

Search and seizure powers exist under clause 122 and may be exercised where it is suspected an offence has occurred and a Magistrate issues a warrant. In addition, inspectors may require a person to answer questions or produce documents when conducting a search ( clause 123). Failure to comply with such a request is punishable with a maximum fine of 30 penalty units ($3000). A person is not required to comply if the answer or document requested would tend to incriminate the person or expose them to penalty.

As well as the powers given to inspectors, ESRA may require the production of documents or provision of information in relation to its regulatory activities under clause 125. A person providing information may be paid reasonable compensation for the cost of complying with the request ( clause 126). Failure to comply with a request is again excused if the information would tend to incriminate the person. Otherwise, failure to accede to the written request may lead to a penalty of up to 6 months imprisonment, or if false or misleading information is provided a penalty of up to 12 months imprisonment ( clauses 127 - 129).

Review of Decisions

Decisions of the CES or DEET Secretary concerning the referral of unemployed people to case managers, and decisions relating to Case Management Activity Agreements are subject to review at three levels (Part 4.10).

Internal review is the first available option. If this proves unsatisfactory, a person may apply to the Social Security Appeals Tribunal (SSAT) and then the Administrative Appeals Tribunal (AAT). The provisions which will apply to SSAT and AAT appeals are set out in the Social Security Act 1991, subject to any modifications specified in the regulations ( clauses 132 - 139).

Decisions of ESRA related to the accreditation scheme, a condition of accreditation, or the disqualification from accreditation due to fraud or dishonesty are also reviewable. There is a two stage review process in relation to ESRA decisions. Firstly ESRA may be required to reconsider the original decision. Application can then be made to the AAT for review ( clauses 140 - 144). While there is no clause in the Bill providing for judicial review, section 44 of the Administrative Appeals Tribunal Act 1975, provides that a party to a proceeding before the AAT may appeal to the Federal Court on legal questions.

Miscellaneous

Clauses 145 - 158 deals with a range of technical matters including:

. the recovery by ESRA of overpayments made to case managers;

. the issuing of injunctions to prevent non-compliance with various requirements which will be imposed under the Act;

. the matters which will need to be established to demonstrate a corporation's state of mind in any prosecutions for offences under the Act; and

. rules relating to the service of documents.

Regulations

The Governor-General will be given power to make regulations under clause 159. The regulations may include penalties of up to 10 penalty units ($1,000) for offences against the regulations.

Main Provisions of the Employment Services (Consequential Amendments) Bill 1994

Commencement

The commencement provisions of the Employment Services (Consequential Amendments) Bill 1994 (the Consequential Bill) reflect those in the Employment Services Bill 1994 (the Bill).

Under subclause 2(1) the Royal Assent date for the Consequential Bill is taken to be the date of Royal Assent for the Bill. Where a matter in the Consequential Bill affects issues which are dealt with under provisions of the Bill which commence on proclamation, the relevant proclamation date for the Consequential Bill will be the proclamation date for the Bill.

Employment, Education and Training Act 1988

Clauses 4 - 9 ensure that the existing provisions in relation to the CES and advisory committees will be repealed when the new provisions of the Bill become effective. Transitional provisions make it clear that the new CES is a continuation of the earlier CES, and earlier appointments to committees continue.

Freedom of Information Act 1982

Clauses 10 - 13 apply the provisions of the Freedom of Information Act 1982 to some documents held by case managers. The documents which will be available are those relating to case management services and the performance of functions under the Bill.

Ombudsman Act 1976

Clauses 12 - 18 ensure that the Ombudsman has power to investigate complaints which are referred by ESRA. The power will only extend to complaints concerning the provision of case management services. Under clause 18 the Ombudsman is also given a discretion to refer a complaint to ESRA.

Privacy Act 1988

The provisions of the Privacy Act 1988 are also extended to apply to case management services and the performance of functions under the Bill by case mangers. Clause 23 ensures that if a case manager is not an individual the obligation to ensure privacy is maintained falls on the individual who is primarily responsible for managing the case manager.

Social Security Act 1901

Clause 28 allows the Secretary of DEET to disclose confidential information, relevant to the provision of case management services, to case managers. The Bill imposes related secrecy requirements directly on case managers, so that the security of the information is protected.

Clause 30 inserts a number of cross-referencing notes into the Social Security Act 1901. The notes refer to sections in the Employment Services Act 1994 which will modify the operation of the social security provisions.

Endnotes

1 Working Nation - Policies and Programs, AGPS, Canberra, 4 May 1994, at p 107.

2 Ibid, p 108.

3 Securing Jobs for the Future: White Paper Initiatives, issued by the Minister for Employment, Education and Training, May 4 1994, at p 3.

4 Working Nation, op cit, p 129.

5 Ibid, p 131.

6 See clauses 59 and 61.

7 Working Nation, op cit, p 130.

8 Budget Statements 1994-95, Budget Paper No.1, AGPS, Canberra, 1994, p 179.

9 Explanatory Memorandum to the Employment Services Bill 1994, p 17.

10 See definition of 'entity' in clause 4 of the Bill.

11 Working Nation, op cit, p 130.

Margaret Cotton (06) 277 2439

Bills Digest Service 16 August 1994

Parliamentary Research Service

This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.

Commonwealth of Australia 1994

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Published by the Department of the Parliamentary Library, 1994.