This chapter summarises certain key areas of interest raised during the
committee's consideration of additional estimates for the 2016-17 financial
year for the Employment portfolio.
On 2 March 2017, the committee heard evidence from Senator the Hon
Michaelia Cash, Minister for Employment, along with officers from the
Department of Employment (the Department) and agencies responsible for
administering employment and workplace policy, including:
Fair Work Commission (FWC);
Fair Work Ombudsman (FWO);
Australian Building and Construction Commission (ABCC);
Safe Work Australia;
Workplace Gender Equality Agency (WGEA); and
Asbestos Safety and Eradication Agency (ASEA).
On 30 March 2017, the committee held a spill over hearing. On this
occasion the committee heard further evidence from Senator the Hon Michaelia
Cash, Minister for Employment, along with officers from the Department of
Employment and the Fair Work Commission, including its President, Justice Iain
Fair Work Commission
The committee asked for an update on the approval of workplace
agreements in the construction industry and how the Commission would cope with
an influx of proposed agreements. Ms O'Neill, General Manager, advised that:
[w]e will continue to monitor the resources needed and make
adjustments to the extent that we can. For example, rather than not being able
to deal with the applications, it may lead to some increase in the timeliness
within which agreements are approved, but that happens over time in the normal
course of events.
The committee inquired about the process for terminating workplace
agreements. Ms O'Neill outlined various aspects of the process, including in
what circumstances protected action would not be permitted and the mechanisms both
parties may use to persuade the other to adopt proposed variations.
Committee members inquired about investigations into the Australian
Workers' Union's membership reporting.
Mr Enright informed the committee that the General Manager was conducting inquiries,
and that if any irregularities were found, the FWC may commence action against
a member or an official of a registered organisation in the Federal Court.
There was examination of the application process for right-of-entry
permits. In particular, information relating to the application of an
individual who had a history of domestic violence was sought.
Mr Enright elaborated on the procedure for managing a non-routine application,
such as the one in question, and on the safeguards that have been put in place
to ensure applicants and those who sign off on applications are fit and proper
There was discussion of the tests used by the FWC in assessing
agreements for employees who have gone through a bargaining process,
particularly the better‑off-overall test. Ms O'Neill stated:
[i]t is very common in the fast food sector, in the retail
sector and in many sectors affected, that agreements are negotiated where
penalty rates are reduced either for a loaded rate or some other benefit.
The committee sought clarification whether the better-off-overall-test
was applicable to the workers who would be affected by the FWC's recent
decision to reduce penalty rates. Ms O'Neill clarified that the test was not
applicable because the decision related to the award, not to an individual
There was examination of Justice Ross' involvement in the Victorian
Country Fire Association's enterprise bargaining dispute with the United
Justice Ross outlined the extensive correspondence, meetings and phone calls he
had been party to in the lead-up to hearings conducted by the FWC.
There was also discussion about the statutory retirement age and
pensions of FWC members.
Justice Ross tabled a prepared statement, which detailed the retirement ages
and entitlements of recently retired members, and paraphrased it for the
Committee members sought further information about FWC members' remuneration
and pension entitlements, especially in relation to taxation concerns influencing
a member's decision to retire before they are eligible for the maximum pension.
Ms Leon, Secretary, undertook to provide relevant correspondence on notice.
There was discussion about the appointment process for replacing senior
members, particularly in relation to replacing Deputy President Acton with
Justice Ross advised the Senator:
I did consider making an appointment purely based on
seniority. That would have been perhaps the conservative and safe course to
adopt. But I deliberately chose not to do so. I chose to make the appointment
on merit. Commissioner Jones had had 10 years experience in litigation at the
bar, and this was a role that called for expertise in case management of
litigation. I was also conscious of the fact that, if I had gone on seniority,
a male would have been appointed, which would have given rise to a
predominantly male based leadership group within the organisation. The
subsequent performance of the commissioner in her role vindicated my decision
to appoint her. I have continued a pattern of appointment based on merit, not
Further to this, the committee examined the responsibilities of senior
members. Justice Ross elaborated on the more onerous aspects of being a senior
member, including presiding over a full bench, hearing appeals, and presiding
over particular panels, such as the termination of employment panel.
Fair Work Ombudsman
Senator McKenzie expressed her appreciation for the FWO's engagement
which was discussed during the Supplementary round.
Committee members sought information regarding activities arising from
the FWO's 2015 national construction campaign report on apprentices.
Ms McAlary‑Smith, Executive Director, Proactive Compliance and
Regulation, detailed the FWO's actions, including the development of
educational resources and social media campaigns, and undertook to provide more
information about enforcement actions on notice.
There was examination of the transfer of functions from the FWO to the
Australian Building and Construction Commission. The Ombudsman, Ms James,
tabled correspondence in relation to her discussions with the ABCC
Committee members pursued questions relating to the referral of
complaints to the ABCC by the FWO.
Ms James and Mr Campbell, Deputy Fair Work Ombudsman, explained the delineation
of each agency's functions,
and reiterated their commitment to ensuring the parliament's intentions in re-establishing
the ABCC were fulfilled.
Ms James was asked about the recent decision of the Fair Work Commission
on penalty rates. Ms James advised that the FWO's priority in the period after
this decision was to update their online pay tools.
The funding of working women's centres was examined, in particular the
rationale underpinning decisions in the new funding program and why the
Queensland Working Women's Centre had not received funding. Ms James replied
that the criteria for awarding funding had changed and that, in the view of the
FWO, an organisation that provided services for employees in the horticultural
sector had a stronger application.
Mr O'Shea, Executive Director, Migrant Worker Strategy and Engagement, also detailed
the organisations that made successful funding applications, and the FWO and
the Minister agreed to investigate whether the Queensland Working Women's
Service was facing closure as a result of not receiving funding.
There was also mention of allegations of underpayment of employees by
Domino's. The FWO undertook to provide information about their ongoing
investigations on notice.
There was discussion about the FWO's contract with the Transport Workers
Union and the Australian Road Transport Industrial Organisation to develop an
app. Ms James stated that ultimately the app was never provided and that this
was a 'suboptimal outcome' for taxpayers.
Ms James agreed to provide further information on notice about the performance
of the parties' contractual obligations.
Committee members probed the FWO about their role in the Migrant
Mr O'Shea and Ms James provided an overview of the taskforce's funding and
work. The FWO committed $50 000 to the taskforce, and are creating an online
tool which will be translated into 15 languages and which will allow migrant
workers to anonymously report exploitation.
Australian Building and Construction Commission
The Commissioner, Mr Hadgkiss, made an opening statement in which he
thanked Ms James and the rest of the Fair Work Ombudsman for their assistance
in transitioning functions under the ABCC Act.
There was examination of the ABCC's timeframes for assessment of
enterprise agreements in the commercial construction sector.
Ms Cato, National Manager Building Code, informed the committee that the ABCC
was building the capacity of the assessment team and may require additional
staff. Furthermore, Ms Cato stated that the ABCC was investigating an
appropriate model for computerised assessment,
and that they were also in the process of engaging lawyers from the firm Alternative
Legal Services to assist with the enterprise agreement approval process.
Committee members inquired about the strength of the Building Code's (the
Code) provisions for the protection of sub-contractors in the event of a building
company becoming bankrupt.
Mr Hadgkiss advised that the new Code had more protections than the previous Code,
and Ms Cato elaborated on the new Code's protections for security of payments.
There was discussion about the percentage of prosecutions relating to
the Construction, Forestry, Mining and Energy Union (CFMEU). Mr Hadgkiss
informed the committee that the CFMEU was involved in 57 out of 62 cases, and
that 110 CFMEU officials were facing 1078 contraventions in the court system.
Committee members pursued questioning relating to Mr Hadgkiss's salary
Mr Hadgkiss and Minister Cash emphasised that Mr Hadgkiss's salary was set by
an independent arbiter.
There was much discussion about Mr Hadgkiss's fuel allowance. Mr Hadgkiss advised
that he sometimes drives to interstate meetings rather than flying, and in
these cases he cannot make a claim for petrol expenses that is more expensive
than the cost of an airfare.
Inquiries were raised about Mr Hadgkiss's diary keeping arrangements. Mr
Hadgkiss advised that he did not keep a formal diary, but that his appointments
were listed in an Outlook calendar. After much discussion, he agreed to attempt
to make the calendar available on notice.
Safe Work Australia
Committee members questioned the agency's role in investigating the
death of a worker at the Royal Adelaide Hospital site in 2014. Ms Baxter
informed the committee that the matter came under the responsibility of state
regulators and she was unable to provide comment.
The committee also questioned Safe Work Australia's oversight role in
relation to the work health and safety regulations of other states. Mr Edwards,
the Federal Safety Commissioner, advised the committee that his office approves
the work health and safety practices of any builder or construction worker that
wishes to undertake Commonwealth funded work. In addition, Mr Edwards detailed
his investigative role, which 'is to engage with the company at the highest
levels' and to 'look at the work that was being undertaken at the time, looking
into the company's safety systems around that work that was being undertaken
and their practices to see if there are any opportunities to work together to
Workplace Gender Equality Agency
Senator Marshall asked: '[w]ould you characterise the work done in
female dominated industries, such as child care or health work, as undervalued?'
Ms Paterson, Advice and Reporting Executive Manager, agreed that such
work was undervalued, and Minister Cash added:
[t]here has to be a massively concerted effort on getting
more males into female dominated roles, because of what the evidence shows,
which is that, if you get males into female roles, there is the resultant
effect of a lift in salary. That is why, when we look at a number of the
government's priorities, for example investment in STEM—which is, obviously,
science, technology, engineering and mathematics—a lot of that is driven by knowing
that the higher-paying occupations need women, but at the same time you do need
to focus on getting more men into those other roles.
The effectiveness of the WGEA's campaigns to improve gender pay equity
was examined. Ms Paterson and Ms Clifford, Operations Executive Manager, provided
an overview of their campaign work, noting that Equilibrium Man was a
Ms Paterson also noted that targets are often a driver of change towards
pay equity within organisations, particularly in relation to women attaining
...for an employer to be an employer of choice for gender
equality they have to have in place a target for women in leadership as well as
women on their boards. As part of that process we interview CEOs to make sure
that, from the top, gender equality is driven through the culture. Certainly
those CEOs say that targets, on numerous occasions, have been the sole driver
around not only women in leadership positions but also the pay gaps within
their organisations. They have reached their target ahead of the endpoint of
the target. It has been a key factor in driving that change.
Asbestos Safety and Eradication Agency
The committee asked ASEA for an update regarding efforts to combat the
importation of products containing asbestos.
The CEO, Mr Tighe, detailed the measures in place across the whole of government,
ASEA and the Australian Border Force cooperating with each other
and with stakeholders in the industry to apply a zero tolerance policy in
relation to asbestos-containing materials;
an interdepartmental committee looking at the issue; and
the broadening of the terms of reference of a Senate Economics Committee
inquiry to include the issue.
There was also discussion of specific cases, such as the discovery of
products containing asbestos at the Fiona Stanley Hospital site in Perth. Mr
Tighe suggested that case involved a supply chain issue, and that a holistic
approach was needed to prevent future incidents.
Committee members asked ASEA about its survey work in relation to
stakeholders and the agency's operational plan. Mr Tighe detailed work done in
these areas and undertook to provide further information on notice.
Department of Employment
Committee members inquired about the safeguards and assurance monitoring
for the PaTH program.
Ms Leon elaborated about the safeguards in relation to the 'recycling' of
[w]e monitor the use of the program by employers. We also put
in place up‑front requirements on them that are meant to draw to their
attention the significance of what they are agreeing to and the requirements they
have to fulfil in order to participate in the program, including signing an
agreement that they are not displacing existing workers in order to take on the
intern and that they are taking on the intern with a reasonable prospect of
there being a job at the end of it... if there appears to be a pattern of an
employer taking on interns and then not offering them a job at the end then
that employer would no longer be permitted to use the program.
Mr Hehir, Deputy Secretary, also advised that young people who are
participating in internships will be covered under insurance taken out by the Department,
however Ms Leon was unable to confirm whether the Department's insurance would
result in an intern being better or worse off under the Department's scheme
than if they were covered under a state or territory scheme because the
outcomes depend on the unique circumstances of each case.
The committee investigated matters relating to the safety of Work for
the Dole sites. The Senator raised the issue of a Work for the Dole participant
who was potentially exposed to asbestos at a site in Adelaide.
Ms Leon informed him that an investigation had taken place which confirmed that
the material was asbestos, and that the Work for the Dole activity at the site
Committee members asked further questions about a safety audit of all the sites
conducted by Ernst and Young.
Ms Leon assured the Senator that most of the sites deemed non-compliant
had minor issues that could be rectified with little difficulty, but
acknowledged that work had to be stopped at two sites because of safety
concerns arising from the audit.
Committee members inquired into the release of the report into the death
of a Work for the Dole participant. Minister Cash and Ms Leon advised that the
report had not been release to avoid prejudging the outcome of ongoing
There was examination of the effectiveness of the Work for the Dole
program in moving participants off welfare and into employment. Minister Cash
informed the Senator that 'the point of Work for the Dole is not to get an
employment outcome as such...[i]t is an activation activity.'
Ms Leon reinforced this point, advising the committee: '[a]s the minister says,
the principal purpose of Work for the Dole is around activation of jobseekers,
and the valuations that we have done indicate that it is very effective in that
respect and in increasing their confidence and motivation to get a job.'
Committee members also sought information relating to the incorrect
disposal of confidential records by Sarina Russo, an agency that is contracted
under the Jobactive program. Mr Hehir advised that an investigation had taken
place, and the Department was satisfied it was not a systemic error so a
financial penalty was not applied. The agency was however required to improve
their practices in this area.
Committee members pursued questions about the progress of establishing
the Registered Organisations Commission and appointment of a Commissioner.
Legal Counsel, Mr O'Sullivan, advised that the position had been advertised and
that a merit selection process was underway.
In addition, Ms Leon informed the committee that, even though the Registered
Organisations Commission will be within the Fair Work Ombudsman, '[t]here will
not be any reduction in services. It is simply a transfer to the Fair Work
Ombudsman of the functions and resources that go with those functions.'
Senator Cameron also inquired about staffing arrangements to support the
Registered Organisations Commission. Ms Anderson, Branch Manager, Workplace
Relations Policy Group, advised the committee that:
...the process of a machinery of government is basically that
any staff that are working on that function transfer with that role. Through
negotiations between the Fair Work Commission and Fair Work Ombudsman they have
identified 18 ASL, but 16 people have been identified out of that branch to
follow the work of Registered Organisations Commission.
There was also considerable discussion about the Department's response
to the Fair Work Commission's decision that weekend penalty rates be reduced. Dr Morehead
spoke about measures to protect workers' take home pay,
and advised that the FWC's reasoning for the decision was because 'of the
concept of disutility of working on a Sunday.'
The committee also examined the potential impact of a reduction in
penalty rates on women.
Dr Morehead advised there was no evidence before the FWC that a reduction in
penalty rates would disproportionately affect women.
Senator Bridget McKenzie
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