CHAPTER 8
Impact on the economy
8.1
The committee received evidence suggesting that, while the Act imposes
some economic costs, eliminating sex discrimination and sexual harassment has
economic benefits both for individual businesses and the Australian economy as
a whole. However, some submissions and witnesses expressed concern about the
complexity of the existing system of anti-discrimination legislation. There was
particular concern about the complexity produced through each jurisdiction
having its own anti-discrimination legislation. To address this, some
organisations expressed in principal support for harmonising
anti-discrimination laws. In addition, business groups argued that there is
inconsistency between the obligations of employers under anti-discrimination
laws and their obligations under unfair dismissal laws.
Impact on individual businesses
8.2
ACCI submitted that implementing anti-discrimination and anti-harassment
measures “has not been done without imposing significant costs and challenges
for employers.”[1]
ACCI stated that:
[S]ome of the costs imposed by anti-discrimination laws on
business are in training and educating staff, responding to and investigating
complaints and engaging legal and specialist assistance where necessary, in
addition to the costs that arise from any litigation.[2]
8.3
Nevertheless, ACCI noted that “[t]here is a strong business case for
diverse and inclusive workplace cultures which possess clear norms against
discrimination.”[3]
In particular, ACCI acknowledged that there are:
...benefits to employers in achieving recognition as an employer
with a discrimination-free culture. Those benefits can accrue in staff well
being, high quality job applicants, productivity, lower absenteeism, fewer
conflict issues requiring resolution, and higher rates of retention.[4]
8.4
Several other submissions also pointed to the economic benefits of
removing discrimination in workplaces. For example, Australian Women Lawyers
noted the benefits of introducing flexible work measures include improved staff
retention, increased productivity and reduced absenteeism.[5]
8.5
The Diversity Council of Australia provided several specific examples of
companies obtaining significant commercial benefits through the introduction of
initiatives such as paid parental leave, more flexible work practices and
work-based childcare.[6]
More generally, the council noted research by the Catalyst organisation that:
...indicates that Fortune 500 companies with the highest
representation of women board directors attained significantly higher financial
performance, on average, than those with the lowest representations of women
board directors. This related to return on equity (companies with the highest
percentages of women board directors outperformed those with the least by 53%),
return on sales (by 42%), and return on invested capital (by 66%).[7]
8.6
The Diversity Council of Australia also noted the corollary that the
failure to eliminate discrimination imposes significant costs on businesses.
The council pointed to direct costs such as legal fees and damages awards but
noted that:
Less easy to quantify are the “hidden” costs, including, for
example unplanned absenteeism, reduction in work team cohesion and
productivity, reduction in staff morale, lost management/employee time
(investigations, hearings etc.), resignations and labour replacement costs,
workplace accidents, stress and illness claims, damage to the company's
reputation, and/or political and industrial relations impacts.[8]
8.7
Ms Penny Thew of the Law Council of Australia told the committee that
legal firms are aware of the costs involved in failing to address sex
discrimination:
From my experience for at least the last 10 or 15 years I think
the firms have been getting that input themselves, that the cost to them of
losing female employees at the five, or seven or nine-year mark and continually
replacing them, as many of the firms around edge of the cities do, is very
high. There is the cost of losing the relationships that those solicitors had
with the clients.[9]
8.8
In relation to the cost of sexual harassment to businesses, HREOC
submitted that:
[T]here is a strong business imperative to eliminate sexual
harassment. Sexual harassment presents a significant cost to employers through
lost productivity, absenteeism, workers compensation, staff turnover, drop in
staff morale and reputational damage.[10]
8.9
HREOC conducted a review of sexual harassment in employment complaints
in 2002 and found that only 7 per cent of complainants were still working for
the organisation where the alleged harassment occurred.[11]
Referring to this review, Mr Mathew Tinkler of PILCH noted:
A 2002 survey by HREOC suggested that ...only seven per cent of
people who had made a complaint had returned to the employer to which the
complaint related to. In terms of business, 93 per cent of people ...are
leaving the business. So there is a real commercial and business imperative to
improve the way we handle this. It is not in business’s interest to lose its
well-trained employees.[12]
Overall economic impact
8.10
The Diversity Council of Australia argued that beyond the costs and
benefits to individual businesses there are wider economic implications of
failing to eliminate discrimination:
Not only does discrimination adversely impact upon individuals,
groups, and organisations, it also incurs costs to the broader community. The
United Nations estimates that discrimination against women has cost
Asia-Pacific billions of dollars every year. The Economic and Social Survey for
Asia and the Pacific 2007 identified that barriers to employment for women cost
the region $42 billion to $47 billion annually. Other research has demonstrated
a direct relationship between higher sex discrimination in particular nations
and lower output per capita.[13]
8.11
More specifically, HREOC submitted that the Act has had a positive
impact on the Australian economy:
The SDA has made a substantial contribution to Australia’s
increasing productivity and economic prosperity in the last 24 years. In
particular, legal protection from discrimination in the workplace, implemented
through access to complaints mechanisms, and through HREOC’s education and
awareness-raising activities, has assisted in removing barriers to workforce
participation for women.[14]
8.12
HREOC pointed out that increasing participation by women in the
workforce is closely linked to economic growth:
Enabling skilled women workers to participate in and retain
labour force attachment – particularly following childbirth – is essential in
order to get a maximum return on Australia’s significant public and private
investment in women’s education and training.
The OECD has noted that workforce participation of women is a
key economic issue for Australia. As well as boosting Australia’s overall
labour market participation rate, women’s increased workforce participation has
boosted family living standards and, by driving up the demand for goods and
services and expanding the size of the domestic market, enabled the Australian
economy to continue to grow.
...At a time of skills shortages across a number of industries,
women workers are invaluable to the current labour market.[15]
8.13
Similarly, the Association of Professional Engineers, Scientists and
Managers Australia argued that there is an economic imperative to retain
skilled and experienced women in the technical professions but that this is
unlikely to be achieved unless all forms of discrimination including systemic
discrimination are eliminated.[16]
Lack of consistency between federal, state and territory
anti-discrimination laws
Impact of inconsistency
8.14
Submissions from business groups suggested that the lack of consistency
between federal, state and territory anti-discrimination legislation as well as
inconsistency with obligations imposed by other legislation causes considerable
difficulty for businesses. VACC noted that:
[C]urrent differences between the Federal and State sex
discrimination legislation impose a myriad of regulatory obligations that can
be challenging and confusing for small and medium size businesses. The
existence of multiple regulatory jurisdictions and the inconsistencies in State
and Federal legislation encourage forum shopping and create uncertainties.[17]
8.15
Mr Daniel Mammone of ACCI also submitted that the complex array of
anti-discrimination obligations under federal, state and territory laws poses a
problem for employers:
The main problems that employers face is that they may have a
set of circumstances that will give rise to a possible multiple legal action,
one part of which could be a possible breach of the SDA. Others could be
breaches of contract agreements. ...The same set of circumstances can give a
claimant the possible opportunity to take action, say, in Victoria at the
Victorian Equal Opportunity Commission under the Victorian act or under the SDA
perhaps. If they have been dismissed they may also take proceedings, in some
cases, to the [Australian Industrial Relations Commission] for unfair dismissal
proceedings or commence proceedings at the Federal Magistrates Court or the
Federal Court for unlawful termination ...depending on the factual matrix. ...[I]t
is concerning that an employer has to navigate through that legal minefield.[18]
8.16
In addition, ACCI pointed to the difficulties employers face reconciling
their obligations under anti-discrimination legislation with the laws
prohibiting unfair dismissal or unlawful termination.[19]
ACCI provided five examples of cases in which employers were ordered to
reinstate employees who had been sacked as a result of the employer seeking to
enforce its policies in relation to sexual harassment. These were two decisions
of the Australian Industrial Relations Commission and three decisions made by
the New South Wales Industrial Relations Commission.[20]
ACCI stated that:
There is considerable authority now from the decisions of
tribunals (e.g. the Australian Industrial Relations Commission) to suggest that
even when an allegation of sexual harassment is sustained on the basis of a
thorough investigation, and the conduct is serious, this will not mean that
termination of the employment of the harasser will be considered fair or
reasonable by a tribunal. This is a highly invidious position for an employer
to be in.[21]
8.17
ACCI argued that this is a form of ‘double jeopardy’ for employers. Mr Mammone
told the committee:
This is a real concern because employers are trying to comply
with their anti-discrimination legal obligations but at the same time they do
not know whether they will be made subject to further litigation down the
track.[22]
8.18
Mr Barklamb of ACCI suggested that there should be a presumption of
fairness where a dismissal is the result of an employer seeking to meet its obligations
with respect to sexual harassment:
It would be useful to us if action were taken in direct response
to formal complaints for harassment or actions that are being taken by us in
furtherance of compliance with other areas of law had some presumption towards
fairness in dismissal or were matters that any determining body was directed to
take into account.[23]
8.19
In response to questions from the committee on this issue, the
Attorney-General’s Department advised that two of the cases referred to by
ACCI, which were determined by the Australian Industrial Relations Commission,
had been overturned on appeal. While in two of the cases determined by the New
South Wales Industrial Relations Commission, the commission had expressed
reluctance to make the finding that the employees had been unfairly dismissed.[24]
The Department submitted that:
Generally, in all the cases outlined in ACCI’s submission, the
applicable Commission considered a range of factors, including longevity of
service, behavioural record of the employee and the gravity of the misconduct.
The law attempts to balance the rights of employees to be protected against
discrimination and harassment in the workplace with the right of employees to
be protected from being dismissed unfairly.[25]
Options for harmonisation
8.20
There was qualified support for harmonisation of anti-discrimination
legislation in the evidence received by the committee. HREOC outlined the benefits
to be gained from the harmonisation of equality and discrimination laws for
both applicants and respondents:
Under the existing state of affairs, whilst the various laws are
largely similar, some significant differences exist. Accordingly, individuals
face a difficult decision as to where to commence their action without
prejudicing their prospects of success, which is complicated further by
restrictions against swapping between jurisdictions mid-stream. Likewise,
respondent organisations and bodies, particular[ly] those that operate in more
than one State or Territory, face the complex task of ensuring that their
actions, policies and operations comply with overlapping obligations under
multiple pieces of legislation that all seek to address the same social wrong.[26]
8.21
However, given existing differences in state, territory and Commonwealth
anti-discrimination legislation as to grounds and coverage, some organisations
cautioned against harmonisation that produces ‘a lowest common denominator’
approach.[27]
For example, Ms Kate Eastman of the Law Council noted that some provisions in
state and territory legislation provide greater protection than Commonwealth
anti-discrimination legislation. She told the committee:
I think that the states would probably be concerned about losing
those provisions that work effectively and appropriately in their
jurisdictions. I have particularly in mind the Northern Territory act, which of
course has special provisions to deal with its Indigenous community. Much
consideration has been given to ensuring that the Northern Territory act is
responsive to those particular issues in the territory. I think this process of
harmonisation needs to look at the best features of all of the legislation, not
just a lowest common denominator approach to harmonisation.[28]
8.22
Consistent with this view, the Anti-Discrimination Commissioner of Tasmania
noted that Tasmanian legislation provides broader protection against
discrimination than Commonwealth legislation and supported harmonisation
provided comprehensive protection is maintained.[29]
8.23
Similarly, the New South Wales Government considered that efforts to
harmonise anti-discrimination laws should not limit existing protection
provided against discrimination.[30]
The government’s submission outlined the broader protection available under the
Anti-Discrimination Act 1977 (NSW) in relation to carer responsibilities
and transgender people and stated:
The New South Wales Government considers it essential that any
reforms to anti-discrimination law to promote consistency across jurisdictions
do not operate to limit existing protections from discrimination, including
those provided to transgender persons and carers under NSW legislation.[31]
8.24
ACCI considered that harmonisation or simplification of
anti-discrimination laws may produce regulatory and equity benefits.[32]
While cautioning that related reviews and inquiries should be allowed to
finalise before any wide ranging reform of anti-discrimination laws, ACCI
acknowledged that:
[T]here is merit in considering a review of the existing
structure of Federal and State/Territory discrimination laws to identify
opportunities to rationalise, harmonise or streamline where appropriate.[33]
8.25
As noted in chapter 2, SCAG has established a working group which will
advise Ministers on the harmonisation of state, territory and Commonwealth
anti-discrimination laws. The working group has representatives from all
jurisdictions apart from South Australia.[34]
An officer of the Attorney-General’s Department advised the committee that the
working group is considering options for harmonisation of anti-discrimination
laws in three stages:
Stage 1 is options that could be identified and progressed in a
...non-legislative manner fairly quickly. We are looking at bringing those
options to ministers later this year. Stage 2 is more medium-term, slightly
less-significant legislative and procedural reforms and they are ...into the
next year. Stage 3 is to identify longer-term more structural, more substantive
options to reform the discrimination laws.[35]
8.26
In light of the SCAG review of options for harmonisation, ACCI submitted
that the committee should defer making any conclusive findings or
recommendations in relation to harmonisation or proposing a particular model
for harmonised anti-discrimination laws.[36]
Navigation: Previous Page | Contents | Next Page