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COMMONWEALTH OF AUSTRALIA

Official Committee Hansard

SENATE EMPLOYMENT, WORKPLACE RELATIONS AND EDUCATION

LEGISLATION COMMITTEE

Consideration of Additional Estimates

WEDNESDAY, 12 FEBRUARY 2003

CANBERRA

BY AUTHORITY OF THE SENATE

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Wednesday, 12 February 2003 SENATE—Legislation EWRE 1

EMPLOYMENT, WORKPLACE RELATIONS & EDUCATION

SENATE

EMPLOYMENT, WORKPLACE RELATIONS,

AND EDUCATION LEGISLATION COMMITTEE

Wednesday, 12 February 2003

Members: Senator Tierney (Chair), Senator George Campbell (Deputy Chair), Senators Barnett, Carr, Johnston and Stott Despoja

Senators in attendance: Senators Buckland, George Campbell, Carr, Collins, Eggleston, Johnstone, Kirk, Robert Ray, Sherry, Tierney, Webber and Wong

Committee met at 9.04 a.m. EMPLOYMENT AND WORKPLACE RELATIONS PORTFOLIO

In Attendance Senator Alston, Minister for Communications, Information Technology and the Arts

Department of Employment and Workplace Relations Whole of Portfolio

Dr Peter Boxall, Secretary Mr Bob Correll, Deputy Secretary, Employment Mr John Lloyd, Deputy Secretary, Workplace Relations Ms Malisa Golightly, Chief Financial Officer, Financial Management Group Mr Craig Symon, General Manager, Corporate Mr Jeremy O’Sullivan, Assistant Secretary, Legal & Risk Branch, Corporate Mr Darren Hooper, Assistant Secretary, Business Services Branch, Corporate Mr Brian Quade, Assistant Secretary, Parliamentary, Public Affairs & Performance

Branch, Corporate Ms Anya Moore, Assistant Secretary, Client Strategies Team, Corporate

Outcome 1 An effectively functioning labour market Mr Finn Pratt, Group Manager, Job Search Support Group Mr Michael Manthorpe, Assistant Secretary, Work Experience Branch, Job Search Support

Group Mr Stephen Moore, Assistant Secretary, Transition Programmes Branch, Job Search

Support Group Mr John Manthey, Director, Budget & Performance, Transition Programmes Branch, Job

Search Support Group Ms Jo Caldwell, Group Manager, Intensive Support Group Ms Kylie Emery, Assistant Secretary, Indigenous Employment Programmes Branch,

Intensive Support Group Ms Kerren Thorsen, Assistant Secretary, Employment Services Performance Branch,

Intensive Support Group Mr Ken Douglas, Group Manager, Employment Analysis & Evaluation Group Mr Graham Carters, Group Manager, Employment Policy Group

EWRE 2 SENATE—Legislation Wednesday, 12 February 2003


Mr Bruce Whittingham, Assistant Secretary, Participation Policy Section, Employment Policy Group

Mr Peter Hade, Group Manager, Employment Services Purchasing Group Outcome 2 Higher productivity, higher pay workplaces

Mr Rex Hoy, Group Manager, Workplace Relations Policy & Legal Group Mr James Smythe, Chief Counsel, Workplace Relations Policy & Legal Group Ms Diane Merryfull, Assistant Secretary, Legal Policy Branch 2, Workplace Relations

Policy & Legal Mr Alex Anderson, Assistant Secretary, Strategic Policy Branch, Workplace Relations

Policy & Legal Mr David Bohn, Assistant Secretary, Legal Policy branch 1, Workplace Relations Policy &

Legal Ms Amanda Grey, Assistant Secretary, Safety, Compensation and International Branch,

Workplace Relations Policy & Legal Ms Sue Sadauskas, Assistant Secretary, Wages and Conditions Policy Branch, Workplace

Relations Policy & Legal Ms Barbara Bennett, Group Manager, Workplace Relations Implementation Group Mr Ted Cole, Team Leader, Advocacy Mr John Rowling, A/g Group Manager, Workplace Relations Services Group Mr Michael Maynard, Assistant Secretary, Employee Entitlements Branch, Workplace

Relations Services Group Ms Anna Clendinning, Assistant Secretary, Remuneration Tribunal Services, Workplace

Relations Services Group Mr Mark Jasprizza, Assistant Secretary, Trades Recognition Australia, Workplace

Relations Services Group Mr Brien Armstrong, Director, Employee Entitlements Branch, Workplace Relations

Services Group Mr John Burston, Chief Information Officer, IT Services Group Mr Nigel Hadgkiss, Director, Building Interim Taskforce

Office of the Employment Advocate Mr Jonathan Hamberger, Employment Advocate Mr Peter McIlwain, Deputy Employment Advocate Mr John Burnett, Deputy Employment Advocate Mr David Rushton, Senior Legal Manager

National Occupational Health and Safety Commission Mr Robin Stewart-Crompton, Chief Executive Officer Mr Tom Fisher, Senior Executive Manager

Equal Opportunity for Women in the Workplace Agency Ms Susan Biggs, Deputy Director

Comcare Mr Barry Leahy, Chief Executive Officer Mr Noel Swails, Deputy Chief Executive Officer Mr Terry Langton, General Manager, Corporate Management Ms Leone Moyse, General Manager, Claims, Policy and Systems Improvement Mr Stewart Ellis, General Manager, OHS (CE) Act Policy and Support



Ms Maureen Trevanion, Investigator Defence Force Remuneration Tribunal

Mr Chris Wallace, Chief Executive Officer, Defence Force Remuneration Tribunal Office of the Employment Advocate

Mr Jonathan Hamberger, Employment Advocate Mr Peter McIlwain, Deputy Employment Advocate Mr John Burnett, Deputy Employment Advocate Mr David Rushton, Senior Legal Manager CHAIR—I declare open this public hearing of the Senate Employment, Workplace

Relations and Education Legislation Committee, which is considering the 2002-03 additional estimates. On 12 December 2002, the Senate referred to this committee the particulars of proposed additional expenditure for the year ended 30 June 2003 for the Employment and Workplace Relations portfolio. On 6 February 2003, the Senate also referred the Issues from the Advance to the Minister for Finance as a final charge for the year ended June 2002 for inquiry and report.

The committee has to report to the Senate by 19 March 2003. The committee has agreed that answers to questions on notice must be lodged with the committee by Tuesday, 18 March 2003. Witnesses are reminded that evidence given to the committee is protected by parliamentary privilege. I also remind you that the giving of false or misleading evidence to the committee may constitute a contempt of the Senate. I welcome officers from the Office of the Employment Advocate and observers to this public hearing.

[9.07 a.m.]

Office of the Employment Advocate Senator CARR—I would like to start with the issue of the difference between the

operation of the Specified Partner Program and the OEA partners program. Could you explain the difference between those two?

Mr McIlwain—The OEA partners program has two components: some partners are community partners; some partners are industry partners. The Specified Partner Program involves a subset of OEA industry partners. The program is designed to provide a very efficient and speedy process for the lodgment, filing and approval of Australian workplace agreements.

Senator CARR—Can you explain to me why it is necessary to have two programs?

Mr McIlwain—It is not an absolute necessity to have two programs, but the Specified Partner Program is a way of providing an enhanced service to partners who are considered by the Deputy Employment Advocate or by the Employment Advocate to meet the criteria for that enhanced level of service. So it is not a necessity; it is simply another service that the OEA provides to a subset of its client group.

Senator CARR—Are these industry partners you speak of essentially employer associations?

Mr McIlwain—No, they are not essentially employer associations. Many partners are employer associations or industry groups; however, I believe a majority of partners are not organisations of that nature. They may be solicitors, accountants, business advisers, human resource consultants and people in private business. Some of them would be sole operators; others would be, in the case of legal firms, very large organisations.



Senator CARR—But, by and large, or by definition, they are employers, are they not? Is that what you mean by ‘industry’?

Mr McIlwain—They are not employers in the sense that they lodge AWAs on their own behalf. They provide advice and assistance to employers wishing to make AWAs with their employees.

Mr Hamberger—We also have partners whose job is to provide assistance to employees. There are two components to the partnership program. There are partners who provide advice to employees and partners who would predominantly provide advice to employers. We actually provide funding to the ones who provide advice to employees. Those mainly consist of community legal centres—organisations like Job Watch in Victoria—and also working women centres. The partnership program encompasses both people who provide advice to employers and people who provide advice to employees.

Senator CARR—Could I have a list of the two categories, specified as to which category they fit into, the number of grants that have been made to those organisations and the duration of the contract arrangements between those parties? For instance, are many AWAs fast-tracked through the working women’s centres?

Mr Hamberger—It would be unusual—though I do not say that it has never happened— that a community partner, one of the ones that provides advice predominantly to employees, would actually be lodging AWAs. The way the legislation works, it is the employer who actually sends the AWAs in. That is the way the act is constructed. With respect to the role of the community partners, if an employee has been offered an AWA, we advise the employee that, as well as getting advice from us, they can go to one of our community partners. So while they are certainly involved in providing advice and assistance to employees in relation to Australian workplace agreements, they would not normally be lodging the AWAs or helping the employee lodge, because that is just not the way the act works.

Senator CARR—So tell me: what do they do for their money?

Mr Hamberger—We can certainly give you a lot more detail on notice. They provide advice and assistance to employees, particularly with a focus on employees and their disadvantaged bargaining positions—particularly women, young people and people from a non-English-speaking background. It may be to give them a view about whether or not the AWA is in their interests. They do provide advice beyond AWAs. We do not fund them to only provide advice on Australian workplace agreements; we provide funding for them to provide broader advice on employment matters generally.

The funding they get is mainly used to take on additional staff—usually legally qualified staff—to provide advice to employees who come to them or are referred to them by us or anybody else, on issues to do with employment matters. It might be unfair dismissal, award matters or discrimination matters. Certainly, we ask them to give priority to Australian workplace agreement matters, because that is obviously the particular thing we want them to help people with, but they do use that funding to provide advice and assistance elsewhere. We have a national network of these centres.

Senator CARR—An organisation like Job Watch does a very good job. It exposes exploitation of workers and the plethora of abuses that workers endure. How many AWAs have they referred or sent on to you?

Mr Hamberger—As I said, they do not normally send AWAs on to us. Their role would normally be to—

Senator CARR—So ‘none’ is the answer.



Mr Hamberger—That is not their role. It depends on what you mean by ‘referred’. To lodge an AWA or to file an AWA with the Office of the Employment Advocate you have to be an employer. That is how the legislation works. So Job Watch could not have filed an AWA with us. That does not mean that they have not provided a lot of advice to employees about their AWAs, and they may well have talked to us about individual AWAs.

Senator CARR—I have dealt with them and they have drawn to my attention people being ripped off with regard to employer incentive arrangements for New Apprenticeships. Do you assist in workers launching prosecutions against employers for that sort of thing?

Mr Hamberger—As well as through community partners, such as Job Watch, which we provide substantial funding for, we also provide quite a lot of assistance on the issue of apprenticeships and traineeships for the apprentices and trainees.

Senator CARR—What is the form of the assistance that you provide for apprentices and trainees?

Mr McIlwain—It varies. For example, at the moment, we are developing a model clause for AWAs relating specifically to traineeships which can be used by employers and employees and be promoted as best practice in that area. In some states we are trialing a close and direct relationship with the relevant state approving authorities. In one state, in particular, we are looking at a joint protocol between the approving authority and the OEA to ensure that there are appropriate and timely responses to any alleged or potential breaches of AWAs where there is a traineeship contract in place. In one state, we have already developed as a pilot an information statement for parents of trainees—specifically trainees under the age of 18. That is in fact at the printers at the moment.

Senator CARR—Which state is that in?

Mr McIlwain—It is in South Australia.

Senator CARR—And which was the previous state you referred to?

Mr McIlwain—South Australia.

Senator CARR—So this ‘one state’ you referred to is in fact one state—South Australia.

Mr McIlwain—Both of those initiatives make up a pilot program that we have in place currently in South Australia, with the intention of course—based on the evaluation of that program—of rolling it out to other states. Of course, because of the differences in state arrangements for traineeships, the program would have to be modified to make it relevant to each state. We also have an information statement for employers of trainees.

Previously, we expended one-person year—that is, two OEA officers working on secondment for six months each with the former Department of Employment, Training and Youth Affairs—to develop a joint approach to the handling of AWAs where New Apprenticeships are involved. That project delivered training on New Apprenticeships and their nexus with AWAs and there were OEA staff involved in considering AWAs where traineeship contracts are in place. A model clause at that time was developed to cover employees who were not trainees at the time of entering into an AWA but who might subsequently enter into a training agreement in the course of an AWA.

Our approach in the past has been to ensure that we understood as an organisation how the traineeship system worked, that we also gained an understanding of the differences in the various state arrangements, that we developed links with New Apprenticeship centres, that we provided our staff with appropriate training and that we included in our AWA procedures guide, appropriate direction on how to consider, for the purpose of an NDT, an AWA where a



training contract was involved. As I said a moment ago, we are currently piloting in South Australia a much more direct relationship with the approving authority and other relevant organisations.

Senator CARR—Which approving authority are you referring to?

Mr McIlwain—I believe the relevant government agency in South Australia is the Accreditation and Registration Council, ARC. The other body is the training and apprenticeship management branch, known as TAM. It is responsible for managing and administering the contract of training system in South Australia, and it operates under delegated authority from the ARC.

Senator CARR—How many new apprentices in Australia are on AWAs?

Mr McIlwain—We can give you some figures for the calendar years 2001 and 2002. In 2001 our system recorded 1,663 AWAs for new apprentices; in 2002, our system recorded— these are approvals in that year—3,178. So the total for calendar years 2001 and 2002 is 4,841. That constitutes, as a percentage of total approved AWAs in those two calendar years, 3.43 per cent.

Senator CARR—Approved AWAs?

Mr McIlwain—That is right.

Senator CARR—As a percentage of New Apprenticeships, though, it is considerably less than three per cent.

Mr McIlwain—That may be so.

Senator CARR—I cannot recall offhand what the precise number is, but we will be talking about several hundreds of thousands of New Apprenticeships signed every year. How would you measure the effectiveness of this program?

Mr McIlwain—My answer would be that an AWA, in some circumstances, may be a very effective employment instrument for a young person entering into a New Apprenticeship or a traineeship. For example, some state awards provide no scope within the award for the employment of a trainee, so in those circumstances an AWA provides an option that might not have been there. Also, part-time employment under some state awards is not a possibility. I understand that a proportion of traineeships are part-time, so that is another circumstance where an AWA is a very useful fit for both the employer and the employee entering into the training contract.

Senator CARR—So an individual—17 or 18 years of age—sits down and negotiates with the employer for an AWA. Is that what you are suggesting to us?

Mr McIlwain—Any employee offered an AWA must be given information about the AWA. They must have explained to them the effect of the AWA. I am unable to say whether employees in individual cases seek to negotiate terms different from the AWA that has been offered.

Senator CARR—But you provide money for those persons to negotiate—for instance, with Coles?

Mr McIlwain—I did not catch the question.

Senator CARR—Do you provide financial assistance for those 17-year-olds who are undertaking a traineeship to negotiate with, say, Coles?



Mr McIlwain—As the Employment Advocate has said, we provide not inconsequential funding each year to a range of community organisations that specialise in employment law. We publicise their existence in all of our written material. The information is available prominently on our web site. We provide funding for community organisations to provide advice and assistance on AWAs to young people in particular, having regard to our special responsibilities under the legislation.

Senator CARR—With regard to the number of apprenticeships last year, I have a figure in the back of my mind of well over 400,000. If that is the case, then the number of apprentices taking up AWAs is a pretty miserable effort, isn’t it?

Mr Hamberger—That is a subjective judgment. I would be a bit surprised at 400,000 New Apprenticeships, but I do not have the figures.

Senator CARR—Just check on the number.

Mr Hamberger—I guess the point is that often what they are doing—and this is probably true of AWAs more generally—is providing a niche to deal with a particular situation. In most cases there is plenty of scope to do a traineeship under an award or under the relevant certified agreement, but in some cases it is not possible or it is difficult. In South Australia it has been the case that a lot of that state’s awards are relatively restrictive on the issue of part-time traineeships, for example. In most other states, and certainly in the federal system, there has been a joint employer-union agreement to introduce scope for part-time traineeships into awards. My experience is that that generally has not happened in South Australia. School based traineeships are part of the whole New Apprenticeships system, but it is very difficult to do them in South Australia without using an AWA.

Senator CARR—I would have thought that, over two years, 4,800 AWAs was not a huge success rate. How many of those who applied for AWAs failed the no-disadvantage test?

Mr McIlwain—We do not have that figure with us.

Senator CARR—Do you apply a no-disadvantage test?

Mr McIlwain—Absolutely. All AWAs to be approved must, amongst other things, meet the no-disadvantage test.

Senator CARR—How do you apply it to a New Apprenticeship, particularly if the kid is at school?

Mr McIlwain—The standard requirement and analysis of the terms and conditions of the Australian workplace agreement, when compared with the terms and conditions of the award overall, do not provide for a disadvantage. The same provisions that apply to every other AWA going through a no-disadvantage test apply to AWAs where the employee has also signed a training contract.

Senator CARR—So, where there are no awards, there is no no-disadvantage test? Is that how it works?

Mr Hamberger—There are designated awards.

Mr McIlwain—Where there is no relevant award, as the advocate reminds us, the legislation provides that the OEA can designate an award for the purpose of the test. It is worth saying also that in some cases the relevant award will be the national training wage award.

Senator CARR—Senator Wong, why don’t you ask some questions while I get some figures. I am staggered by these statistics.



Senator WONG—Mr Hamberger, I would like you to clarify an answer you gave earlier. I think Senator Carr asked how many of these AWAs had been filed by employees.

Mr Hamberger—I think he was asking about the community partners and whether they had filed AWAs. Under the act, the system is based around the employer filing the AWA.

Senator WONG—Is there any legislative requirement or prohibition against an employee or their agent filing an AWA? In my recollection of the act there is not, but it is some time since I looked at it.

Mr Rushton—I do not think there is.

Senator WONG—As a matter of practice, though, it tends to—

Mr Hamberger—The way the legislation is constructed, the assumption is that the employer files the AWA. The employer has to make a declaration when an AWA is submitted. When filing receipts and approval notices are issued, the employer has to provide copies to the employees. An employee could get an AWA, get the employer to sign the declaration and mail the AWA to us. When it comes back to them they would have to hand the AWA and the filing receipts and approval notices to the employer. It may not be prohibited specifically, but it would be very tricky to do it that way under the legislation, which is not constructed around employees filing AWAs. It does not mean that an AWA may not be initiated by an employee, but the legislation is not constructed that way.

Senator WONG—How many do you think were initiated? Do you keep track of that?

Mr Hamberger—We did a survey some time ago—I do not have the figure off the top of my head—that gave some guidance on AWAs initiated essentially as a response to a request from an employee.

Senator WONG—Can you provide that?

Mr Hamberger—We will provide it on notice.

Senator WONG—Equally, have you investigated whether, in terms of the community partner program, any of the AWAs filed were initiated at the request of the community partner?

Mr Hamberger—I doubt whether we would have any statistics on that.

Senator WONG—The reality is that they generally would not do it, would they?

Mr Hamberger—I do not know; I cannot say.

Senator WONG—Is there no prohibition on employees or their agents actually making an application for an AWA?

Mr Hamberger—There is probably no specific prohibition in the act, but the legislation is not constructed around that happening.

Senator WONG—The legislation simply requires certain declarations and so forth by the employer.

Mr Rushton—Basically, the employee would need the cooperation of the employer in lodging an AWA.

Senator WONG—Could you provide that? I would appreciate knowing how many employees actually seek it themselves.

Mr Hamberger—We will give you what information we can, and there is some evidence.



Senator CARR—Mr Hamberger, I am advised that the number of persons with New Apprenticeships in March 2002 was 334,370. If one were to take it over a two-year period, as you have done, one would presumably get a much higher figure than that. You have 4,800 people in this program. I take it that that is individuals?

Mr Hamberger—Yes.

Senator CARR—I would say to you that that is a pretty miserable effort. What is the value of this exercise? That is what I would like to know. Have you done an evaluation of this at all?

Mr Hamberger—The main benefit, as I was suggesting before, is this: where there is an obstruction or an obstacle to entering into a traineeship, using an AWA can be an effective way of overcoming that obstacle. It may be that in many cases it is not needed or is not particularly valuable—it may be quite unnecessary. But there might be niche situations where it might be quite important.

Senator CARR—They are certainly very small niches. You would have to agree with that.

Mr Hamberger—It is significant for those who are affected.

Senator CARR—You did indicate at the beginning of this discussion that the support to various community groups, such as Job Watch, was not really about providing support for the AWAs, although you say that that is a priority. It was about providing assistance in a range of areas. Would that be a fair assessment of what you have told us today?

Mr Hamberger—We do not constrain the community partners to using the funding we provide to give advice and assistance solely on the issue of Australian workplace agreements. We do require that they give priority to that, but we provide more funding, quite frankly, than they would need just to do that. There is limited financial support from government for community based organisations, including community legal centres, to provide advice on employment matters, and we are supposed to have stepped into that breach to some extent.

Senator CARR—What is the total value of the program?

Mr Hamberger—It is something in the order of $650,000 a year. In addition to that, we are continually providing advice and assistance to employees directly. This is an additional arm of our advice and assistance services.

Mr McIlwain—The total figure we have reported for the full operation of the combined program from 1 September 2002 to 31 August 2004—a contract period—is $1.479 million.

Senator CARR—That it is quite a significant amount.

Mr Hamberger—It is a significant part of our budget.

Senator CARR—Are you able to give me a breakdown of how that money is expended?

Mr Hamberger—Yes.

Senator CARR—I appreciate that. I take it that this money could also be used for the recovery of underpayment of wages?

Mr Hamberger—Yes, it could be used for that. This is in addition to what the OEA is doing directly. The OEA has, for example, a national telephone advisory service that provides advice and assistance. We take about 180 calls a day, most of which come from employees, so there is continual advice and assistance directly from the OEA. If we get a complaint in relation to an AWA of an underpayment of wages, we investigate that, and we have regularly recovered amounts of money where there has been an underpayment.



Senator CARR—How much money have you recovered?

Mr Hamberger—I do not know that figure off the top of my head. There was one case where I think we got agreement to refund something between $30,000 and $40,000. That was an unusual case—it was a very large underpayment.

Senator CARR—Can I have a list of all underpayments that you have been able to secure?

Mr Hamberger—We will provide as much information as we can. It may not be possible to provide every single one in detail.

Senator CARR—You do not keep records for that sort of thing?

Mr Hamberger—We will see what we can provide, and we will provide as much information as we can. We can certainly provide some information.

Senator CARR—You do keep records of recoveries?

Mr Hamberger—Yes.

Senator CARR—Do you have a benchmark figure which you would apply as a guideline for the recovery of moneys? Do you have minimum figures for recovery?

Mr Rushton—No, we don’t.

Senator CARR—So if money is owed, you go after it.

Mr Hamberger—We would almost always be able to get it through voluntary compliance, in the same way that happens in the award system. We do not normally have to take people to court to get recovery wages.

Senator CARR—I know there is a great deal of voluntary compliance. Did you make a submission on the recovery of wages to the royal commission?

Mr Rushton—No, I do not believe so.

Senator CARR—On how many occasions have you actually secured recovery of underpayments of wages in the last year?

Mr McIlwain—We do not have those figures to hand. We will take that on notice.

Senator CARR—Of course, there will be no way of knowing how many times you have failed to secure the recovery of moneys.

Mr McIlwain—We will see what information we can provide.

Mr Hamberger—We are normally successful. If we think there has been an underpayment, we will take it further if someone just point-blank refuses to pay.

Senator CARR—As part of your work with the South Australian department, have you reached a conclusion or made any recommendations to that department as to whether there should be a linkage between the operations of an AWA and the payment of government moneys?

Mr Hamberger—The issue of payment of moneys and government incentives for traineeships is not an issue that we have any direct say in.

Senator CARR—Has there been any discussion between your office and state agencies about the application of, for instance, codes of conduct?

Mr Hamberger—I have had some discussions personally, and I think we have had further discussions at a regional office level, about ways of facilitating both organisations doing their job effectively. Obviously, the role of the state training authority is a bit different from ours



but there is information that they need to ensure that they are able to do their job effectively. We have looked at ways of improving that sort of sharing of information and assisting each other, and that has been an ongoing process.

Senator CARR—But there has not been a discussion about making payments of moneys by the Commonwealth by way of employer incentives or other payments for training as part of a package of compliance with any codes of conduct?

Mr Hamberger—No, not that I am aware of.

Senator CARR—That is good. In regard to the Specified Partner Program, can you describe that to me again? You say that it is a subset of the industrial partners program. How many industrial partners have you got?

Mr McIlwain—As at a couple of weeks ago, there were 82 industry partners.

Senator CARR—And you say half of those are employer associations?

Mr McIlwain—Looking at the list, I would say under half would be employer associations.

Senator CARR—How many are employer associations?

Mr McIlwain—If you could indulge me a few minutes, I will count them for you.

Senator CARR—Thank you.

Mr McIlwain—Very quickly, counting state branches, if you will allow me, perhaps, one or two—

Senator CARR—Yes, I understand it is rough, because you will be providing me with a list.

Mr McIlwain—Including state branches of the same organisation, I make it 45, so in fact I was mistaken. Including the state branches, it would be more than 50 per cent.

Senator CARR—These industry partners get special treatment, don’t they? You call it an ‘enhanced service’ by the OEA.

Mr McIlwain—They are provided with an enhanced service, that is true. We provide them with, for example, a partners webpage, which keeps them up to date on, amongst other things, legal developments in the area of workplace relations. We invite them, on a regular basis, to national and regional forums where they are able to meet each other and discuss issues of mutual interest. We provide assistance to them in servicing their clients with advice on making Australian workplace agreements.

Senator CARR—Do you provide them with strategic advice on industrial disputes, that sort of thing?

Mr McIlwain—No, we do not.

Senator CARR—Legal advice on how to manage their industrial relations?

Mr Rushton—What Mr McIlwain is referring to is more general legal advice on recent cases that have come up, and summaries of those cases—recent developments in the law. It is more generic.

Senator CARR—Industrial law?

Mr Rushton—Yes, industrial law.

Senator CARR—Do you provide them with a legal service about the way to prosecute cases against unions?



Mr Rushton—It is more generic than that.

Senator CARR—What is the nature of this generic advice?

Mr Hamberger—Keeping them abreast of recent case law.

Senator CARR—It is essentially a free legal service, is it?

Mr McIlwain—It is a legal digest service. We provide that information to our own staff. The legal staff have a watching brief on developments in workplace law and prepare a legal digest on a monthly basis. That legal digest is also provided to our industry partners.

Mr Hamberger—We provide a similar service to our community partners as well. In fact, a senior legal officer from the OEA recently travelled around the country, visiting and providing legal training and legal advice to the community partners.

Senator CARR—On new apprenticeships and things like that?

Mr Hamberger—On a range of things.

Mr Rushton—On a range of current developments in the law.

Senator CARR—In what part of your budget is this program?

Mr Hamberger—That kind of training and support?

Senator CARR—How much is the total expenditure on the industry partners program?

Mr Hamberger—We do not provide any funding to those partners. To the community partners we provide in addition to other kinds of support—

Senator CARR—This is a grant made.

Mr Hamberger—We do not provide that to industry partners.

Senator CARR—How much does it cost you to run the program?

Mr Hamberger—It would be quite difficult. We could try to do an estimate.

Senator CARR—You must have staff associated with it. You must have a budget line within your administrative arrangements.

Mr McIlwain—We have one staff member in our national office, who has, as a significant part of her duties, responsibility for the coordination of the partner program—both community and industry partners.

Senator CARR—One person provides the legal digest. Who prepares the legal digest?

Mr McIlwain—The legal digest is prepared by the legal staff in any event and, indeed, it has been from the inauguration of the OEA. It is a publication we had in any case. It is made available to our partners on that basis.

Senator CARR—Is it made available to the public? Is it a public document?

Mr McIlwain—At this stage, no, it is not made more generally available.

Senator CARR—Why is that?

Mr McIlwain—We have taken the decision, at this stage, to offer certain services as an incentive to organisations interested in partnership, and that is one of the certain services. I was about to say that it costs us no more to provide that than it costs us to produce it already.

Senator CARR—It would be available under FOI, I suppose, would it?

Mr McIlwain—It would be available under FOI, perhaps.



Mr Rushton—I will have to check on that. It probably would be available under FOI.

Senator CARR—The difference being the inconvenience in cost of FOI as distinct from having it given to you as a service. That would be the main difference, wouldn’t it? If it were to be made publicly available, there would not be the cost and inconvenience of having to go through an FOI application.

Mr McIlwain—For the FOI applicant, yes.

Mr Hamberger—We should also stress that we are continually providing advice and assistance on legal matters to a range of people—both employers and employees—who write to us. We have an email inquiry service. So an employee who wants to send an email seeking advice can get that. As I said, there are nearly 200 calls a day, mainly to employees, providing general advice to solicitors.

Senator CARR—The other part of the service is to fast-track AWAs. Is that right?

Mr McIlwain—The purpose of the Specified Partner Program, which is a subset of the industry partnership program, is to provide a guaranteed quick turnaround of AWAs lodged under the program.

Senator CARR—Who are the specified partners?

Mr McIlwain—Eight partners have been accredited so far as specified partners.

Senator CARR—Who are they?

Mr Hamberger—Can we give that to you on notice? I do not think we have it here.

Senator CARR—You don’t have it? Take it notice, but it would assist me to know what sorts of firms we are talking about.

Mr McIlwain—We are talking about companies that are specialists in the area of employee relations advice.

Mr Hamberger—It would be a subset of our industry partners—it would be fairly similar.

Senator CARR—Yes, but who are they?

Mr Hamberger—They would include a couple of industry associations—

Senator CARR—It seems to me that it is not such a big thing to ask what these eight companies are.

Mr McIlwain—We have reminded ourselves that this was a question on notice at the supplementary estimates of 21 November. Senator Wong asked the question and our response was that, as at 21 November, the Australian Mines and Metals Association, Industrial Mediation Services, the Housing Industry Association—

Senator CARR—What is the question number?

Mr McIlwain—W221_03.

Senator CARR—I will get that out. It will help me greatly. I am sorry, I did not realise that that had been provided. Has there been any change to that list since 21 November?

Mr McIlwain—No, there has been no change.

Senator CARR—How many AWAs have been filed under the SPP?

Mr McIlwain—Approximately 2,270 AWAs have been approved under the program.

Senator CARR—How many applications have you had for special treatment under the Specified Partner Program that have failed the no disadvantage test?



Mr McIlwain—I do not believe any AWAs submitted under that program have failed the no disadvantage test.

Senator CARR—How many have been approved with undertakings?

Mr McIlwain—I do not believe any have been approved with undertakings. They are only approved with undertakings if they fail the no disadvantage test when they are submitted.

Senator CARR—What is the shortest time it has taken you to have an AWA approved under this program?

Mr McIlwain—The guaranteed turnaround is 16 days. I believe that would also be the shortest period of time taken to have an agreement approved, from the date the AWA was received to the date the agreement was approved. You need to note that 14 days of that 16 days is the period of time we offer to an employee to respond to our genuine consent letter. That is the letter that goes to every employee providing them with more information about the process and asking them to contact the OEA if they have any concerns. That genuine consent period comprises 14 days of that 16-day period.

Senator CARR—During that time, do you check the no disadvantage test?

Mr Hamberger—Yes.

Senator CARR—That is the processing period that you take?

Mr Hamberger—It may not take us that long.

Mr McIlwain——As the advocate says, it may not take 14 days to complete the NDT. In fact, it is rarely necessary these days to expend 14 days on the test.

Senator CARR—What is the shortest time you have taken to check the no disadvantage test?

Mr McIlwain—We cannot say. Speculatively, were an AWA to incorporate—as some have—all of the award terms and conditions, it would take less than a minute to conduct the NDT.

Senator CARR—Fair enough. What is the average time it takes you to approve an AWA under this program? Do they all take 16 days, bearing in mind they all require a two-week genuine consent period?

Mr Burnett—It would most likely still be a 16-day period because you have the 14-day genuine consent period in between, during which time the employee has time to alert us to any concerns that they might have. It would still take 16 days from the time of receipt; that is not counting postal service times and those sorts of things.

Senator CARR—So what is the longest time it has taken you?

Mr Burnett—I do not have that figure. When I look at the records I may change this answer but, anecdotally, I would have to say 16 days again.

Senator CARR—So they are all done in 16 days; it is universal?

Mr McIlwain—One of the purposes of the Specified Partner Program is to offer a guaranteed turnaround time of 16 days, so that accounts for the—

Senator CARR—I appreciate the point. It is part of the service that you can guarantee that this will be done in 16 days. They are all done in 16 days, but for some of them the administrative work undertaken by you in doing no disadvantage test might only take a minute. That would be a fair summary of what you have said.



Mr McIlwain—It would be fair if you went on to say that that was a speculative case which I gave you, where the AWA simply incorporated all of the terms and conditions of the award.

Senator CARR—Okay. How long has this program been operating?

Mr McIlwain—Approximately a year.

Senator CARR—In the last year, how many AWAs have been processed for the Australian Mines and Metals Association under the SPP?

Mr McIlwain—We will take that on notice.

Senator CARR—I thought you said that there were no employer organisations under the SPP.

Mr McIlwain—I was corrected by the Employment Advocate; I was wrong on that point. There are, as we have reminded ourselves by looking at the answer to the question on notice, four.

Senator CARR—Four of the eight are, in fact, employer organisations.

Mr McIlwain—Yes.

Senator CARR—Let us go through it. How many AWAs have the Mines and Metals Association put through?

Mr McIlwain—We will take that on notice.

Senator CARR—You do not have that figure with you?

Mr McIlwain—No, I do not.

Senator CARR—Is Industrial Mediation Services, an employer agent, one of the eight?

Mr McIlwain—Industrial Mediation Services is a private organisation.

Senator CARR—Mr Chair, can you ask government senators to keep the noise down to a loud scream. I am having trouble following the witnesses.

CHAIR—Order at the table, please.

Mr Hamberger—I think that particular company provides advice to employees as well as employers.

Senator CARR—They would represent a lot of unions, wouldn’t they?

Mr Hamberger—I do not know whether they represent unions, but I know they have done work on behalf of employees.

Senator CARR—The Housing Industry Association, that is the HIA that we normally deal with, isn’t it? That would be another workers organisation, wouldn’t it? Who are Livingstones Australia?

Mr McIlwain—They are an employee relations company.

Senator CARR—Agribusiness Employers Federation, are they associated with the National Farmers Federation or is it separate again?

Mr McIlwain—It is a separate organisation.

Senator CARR—Civil Contractors Federation, that would be another employers organisation, wouldn’t it?

Mr McIlwain—That is correct.



Senator CARR—Haycroft Industrial Management Pty Ltd, are they consultants?

Mr McIlwain—An employee relations consultancy.

Senator CARR—Is Heelan the same thing?

Mr McIlwain—Yes.

Senator CARR—Okay. I would appreciate it if you could assist me with that material; it would be very helpful.

Mr Hamberger—Just to reaffirm the point that this program relates to lodgment of AWAs and it is invariably the case that AWAs are lodged by an employer or somebody acting for that employer.

Senator CARR—Yes, thank you. Do they pay any fees for your assistance or is it a free service?

Mr McIlwain—There is no fee for this service.

Mr Hamberger—What we obtain in exchange is that they give us their guarantee that AWAs lodged under the program have been checked to make sure that they pass the no disadvantage test. As we have discussed previously, that does not say that we do not then go and do the same exercise, but obviously we want to maximise the number of AWAs that are lodged with us that pass the no disadvantage test before they come to us. There is an extra onus on them to ensure that these AWAs pass the NDT. That is the incentive for us.

Senator CARR—I see. So you get the employers to check the no disadvantage test. That is what you are saying, isn’t it?

Mr Hamberger—In this case, it is their advisers or their industry body.

Senator CARR—But four of these eight—

Mr Hamberger—That does not mean that we do not check it as well, but obviously what takes the most time for the OEA, and indeed it has other negative consequences for the employer and the employees, is when an employer submits an AWA to us that do not pass the no disadvantage test.

Senator CARR—But none of them have. None of them have had any qualifications put on them whatsoever, let alone a rejection.

Mr Hamberger—That is the point. What we are saying to these people is, ‘To submit AWAs under this program, you have to make sure, before you send them in to us, that they will pass.’ We will still check but you would be worried if they were sending ones—

Senator CARR—But you have explained to us how thorough you are in that checking, too. That would be a very onerous sanction, wouldn’t it, to have you check employers?

Mr Hamberger—We do check. We would have, maybe, six, seven, eight per cent of AWAs that, in fact, we find do not pass the no disadvantage test.

Senator CARR—Yes, but not these ones.

Mr Hamberger—But not these ones.

Senator CARR—These ones get special treatment, don’t they?

Mr Hamberger—Because they are people who have that extra onus on them and—

Senator CARR—That you have a special relationship with.



Mr Hamberger—It is not just that we have a special relationship with them. Part of that relationship is that they give us a legal undertaking that they will do the checking, whereas there is no obligation on an employer who submits AWAs to the OEA to make sure they pass the no disadvantage test before they come to us.

Senator CARR—No, of course.

Mr Hamberger—It would obviously be preferable.

Senator CARR—What is the nature of the legal sanction that you would impose on them if they were to have found that one of these special arrangement AWAs did not meet the no disadvantage test?

Mr Rushton—If they have made a declaration to us, it may well constitute a breach of the Commonwealth Crimes Act in providing information to a Commonwealth officer. So the sanction would be a criminal sanction.

Senator CARR—That is a serious matter, isn’t it?

Mr Rushton—Indeed.

Senator CARR—That has never applied, has it?

Mr Rushton—It has not applied to date.

Senator CARR—With regard to employers who put in bodgie AWAs to you, what sanction applies to them?

Mr Hamberger—When you say ‘bodgie’, could you—

Senator CARR—That is, the ones who make a statement that they do meet the NDT. I presume you ask them, ‘Do these AWAs meet the no disadvantage test?’ You don’t even ask them?

Mr McIlwain—No, that is why, obviously, we expend so many resources on conducting the no disadvantage test.

Senator CARR—Let us have a look at what that means in practice, because I am interested in pursuing that. If we were to take the case of the no disadvantage test, does it, for instance, place any restriction on cashing out of annual leave?

Mr McIlwain—No.

Mr Hamberger—It is obviously a global test, so overall the employee cannot be worse off.

Senator CARR—I see.

Mr Hamberger—Within that confine, the only real restriction is that you cannot do anything to override entitlements—virtually all entitlements—because it is Commonwealth legislation.

Senator CARR—Let us go through this. There is no specific restriction on cashing out annual leave or sick leave. What about carer’s leave?

Mr Hamberger—None.

Senator CARR—Bereavement leave?

Mr Hamberger—None. As a general rule, you can cash out pretty much anything you like unless otherwise specified in the Workplace Relations Act.



Senator CARR—So even if it is in a statute, an award or a certified agreement, you do not—

Mr Hamberger—The legislation says you can override entitlements under state laws, with certain exceptions. For example, health and safety, apprenticeships, and there is something else as well. There are certain things that you cannot change or override through an AWA. They are exactly the same provisions as apply to certified agreements.

Senator CARR—So you would approve an AWA for a permanent employee who had cashed out all their leave entitlements—that is, holiday leave, sick leave, carer’s leave and so on—provided that such an AWA passed the no disadvantage test in money terms?

Mr Hamberger—We are obliged to.

Senator CARR—Would you approve an AWA even it provided for no pay rises in its lifetime—that is, for up to three years?

Mr Hamberger—It would depend. You do not necessarily have to have pay rises through the term of the AWA, but in some cases pay rises would be required for it to pass the no disadvantage test—it would depend on what else was happening. For example, if an AWA was paying over the award by $20,000 a year, which quite a lot do, but it did not have built into it an increase of pay over the next three years, it would still pass the no disadvantage rule.

Senator CARR—You could still pass it even if it had no pay rises in the lifetime of the agreement,.

Mr Hamberger—Yes, absolutely.

Senator CARR—Perhaps you could help me here. In the judgment of your office, would it be difficult for a permanent employee without any leave entitlements to balance their work and family commitments?

Mr Hamberger—It would depend on their circumstances.

Senator CARR—So as far as you are concerned there would be nothing to prohibit the approval of an agreement of that nature.

Mr Hamberger—No, not inherently. But if somebody working 50 hours a week agreed never to take any leave, that would be interesting and extremely unusual. People have all sorts of different ways of balancing their work and life. As I mentioned before, the research conducted on a sample of employees who were on AWAs found that overall they were more likely to say that their work/life balance had improved than were people not on AWAs. So I do not think there is necessarily an inherent problem. As an example, you may be working three days out of seven under an AWA; you might not get any leave, but you have four days off every week.

Senator CARR—I work long hours—most politicians do. I can assure you that when school holidays come by, it is difficult. But under the AWA you are proposing—

Mr Hamberger—We are not proposing it.

Senator CARR—people would have a bit of trouble with their kids during school holidays, would they not, without any entitlements to annual leave or any other form of leave?

Mr Hamberger—Not necessarily. It depends on how the AWA is constructed. There are many AWAs that provide people with additional leave. The point is, it gives you the flexibility to design something that suits your circumstances. As I said, the research suggests that that has worked quite well—that overall, employees on AWAs are finding it easier to balance their work and life.



Senator CARR—May I have a look at the research you have on that matter?

Mr Hamberger—Yes.

Senator CARR—Thank you. I would appreciate it if you could provide it to the committee. If you had a sick child or parent, and no leave entitlements, how do you think you would get on?

Mr Hamberger—I would just make this point as well. I do not think that the Industrial Relations Commission, in applying the no disadvantage test, has taken the approach that you cannot cash out leave entitlements.

Senator CARR—I know; you have made that point. As far as you are concerned, it is not a problem. But I put it to you this way—

Mr Hamberger—It is not that it is not a problem. There may be situations where an employee would be making a mistake to cash out their leave entitlements.

Senator CARR—Are you familiar with section 83BB(2)(b) of the Workplace Relations Act?

Mr Hamberger—Yes.

Senator CARR—It requires you as the advocate, in performing your function, to have particular regard to: ... assisting workers to balance work and family responsibilities ...

Mr Hamberger—Yes.

Senator CARR—In approving AWAs that have no leave entitlements, aren’t you, in fact, arguably in breach of your own act?

Mr Hamberger—I do not think so at all.

Senator CARR—Why not?

Mr Hamberger—The point about having individual agreements, or even enterprise agreements, is the scope to design a package of pay and conditions that suits the needs of those particular people. It may be that having a formal leave entitlement, in the way that applies under most awards, may not be the most effective way of helping people to balance their work and life responsibilities. You cannot necessarily make a blanket assumption that that will be bad for people’s working life. It might be. I am not saying that that is necessarily the right thing to do. It would depend on the circumstances.

Senator CARR—But you would approve it?

Mr Hamberger—All other things being equal, the mere fact that you were cashing out certain leave entitlements would not mean that we would not approve the AWA any more than the commission would not approve a certified agreement.

Senator WONG—Is it the case that your office has approved AWAs which cash out all leave entitlements?

Mr Hamberger—I can give you an example where that technically may have happened. In the building industry, we have had a lot of people who traditionally have worked as subbies under PPS—the prescribed payment system. They basically worked as independent contractors not as employees. With changes in the new tax system, a lot of the people who engaged those contractors worked out that, in fact, they were no longer independent contractors and they should be treated as employees. When they were independent contractors, they were usually on a loaded hourly rate of pay, so they got paid $25 an hour



whenever they worked. They had to look after all their own workers compensation and all the rest of it. But if they did not want to work a particular day, they did not have to work that day.

Let us say that this may be fairly typical of a smaller employer in the housing industry. He may stop employing those people as subcontractors and engage them as employees. But what those employees want, based on discussions with many of them, is a lot of the same flexibility that they had when they were working as subcontractors. What they usually want is a set rate of pay for a set hour of work. So they get paid $25 an hour for whatever hours they work. They can have the flexibility to work 15 hours a week or 55 hours a week, but that is something that is flexible and they appreciate it. If they, for example, have a sick child or they want to take time off during school holidays, they can. They do not have any leave entitlements. These employees have cashed out all their leave entitlements under the award. They do not have a set amount of sick leave or carers leave. They do not have a set amount of annual leave, but actually they have a very flexible arrangement.

One of the reasons they want their arrangement—they have cashed out all their leave and they get a set hourly rate of pay, a consolidated rate of pay—is that they have the flexibility to deal with balancing their work life. This arrangement is quite common. What I am saying is that there is the assumption that people have cashed out all their leave, and you think, ‘Oh my God, that means they will be working 52 weeks a year; they will never have time off to look after their children if someone is sick or whatever.’ That is not right. In practice, giving people the flexibility to choose the way they construct their pay and conditions is most likely—based on the evidence, I believe—to maximise their opportunity to balance their work and life.

If we took a blanket approach—which I do not think we are allowed to under the act anyway, but let us say we did—and said, ‘We will not approve AWAs to allow people to cash out all their leave,’ we would actually be preventing many employees from having a system which they want and which allows them to balance their work and life responsibilities. I have to say that this is an issue I feel quite strongly about. I am very interested and I do take that obligation under the act very seriously, but I think you have to really look at it in more depth than just take a blanket view on it.

Senator WONG—An example of this was the AWA at Michel’s Patisserie, was it—the one which cashed out sick leave and annual leave entitlements?

Mr Hamberger—I am not aware of that one in particular.

Senator WONG—It was raised in the parliament, Mr Hamberger.

Mr Hamberger—I am not aware of it in particular, to be honest.

Senator WONG—Going back to Senator Carr’s question regarding the obligation under the act—which we understood applied to you—to take into account work and family responsibilities, isn’t the case that there have been certified agreements which the commission refused to certify on the basis that they did not conform with public interest because they minimised or cashed out particular leave entitlements? Why does that not apply to AWAs?

Mr Hamberger—We do not have any responsibility to take account of the public interest.

Senator CARR—How do people know about these particular AWAs if you are saying it is a matter on which you have had no representations? These AWAs are private, aren’t they?

Mr Hamberger—Yes.

Senator CARR—Did you not say that you have had no representations on the issue of public interest?



Mr Hamberger—I may not have been clear enough. In considering whether to approve an Australian workplace agreement, I do not have the power to take into account public interest. Rightly or wrongly, the legislation does not allow me to take account of public interest.

Senator WONG—I would like to go back to the Specified Partner Program. In a question on notice, I asked you to lodge various declarations in relation to these partners. The reference is W224_03.

Mr Hamberger—I am sorry, I do not have a copy of the declaration with me. I have a page that says that the copies are attached but, I am sorry, I do not have the declaration.

Senator WONG—I received the answer only yesterday.

Senator CARR—Has this stuff come in late?

Senator WONG—Yes.

Mr Hamberger—The reply was not late.

Senator WONG—Do you want to wait to get it, Mr Hamberger, before I ask you these questions? There are only six or seven pages. Are we ready?

Mr Hamberger—Yes, thank you.

Senator WONG—I will clarify precisely what these declarations are. Are these statutory declarations or declarations on which your office simply requires a signature?

Mr Rushton—They declarations on which our offices requires a signature.

Senator WONG—So the witness need not have any particular status, such as JP, legal practitioner or anything like that?

Mr Rushton—That is correct.

Senator WONG—Do you have any restriction on who can witness these declarations?

Mr Rushton—No, we do not.

Senator WONG—Is it true that these declarations are the fundamental commitments that you rely on for the purpose of giving people access to this program?

Mr Rushton—They are certainly an important part of it.

Senator WONG—So these three commitments that people make are all you require of them before you give them access to this streamlined process?

Mr Rushton—We might not let them join it if we had other concerns, but they certainly need to comply with these three things.

Senator WONG—What do you mean by that? Do you have some written criteria against which you assess these people, or is this it?

Mr Hamberger—To become a partner, generally, you must meet the published, specific, written criteria. You cannot become a specified partner unless you meet those criteria and the include a proven track record in providing advice and assistance. Obviously we require a certain level of expertise even before you get to this stage.

Senator WONG—The only commitments you require are, firstly, that they lodge the AWAs via the e-lodge system—that is, presumably, by email or the Internet?

Mr Hamberger—Yes, the Internet.

Senator WONG—Secondly, you require that they lodge only AWAs which, using the OEA’s no disadvantage test calculator, meet the no disadvantage test?



Mr Hamberger—Yes.

Senator WONG—So you provide them with this?

Mr Hamberger—Yes.

Senator WONG—And prior to lodgment, that they identify the employers for whom they intend to lodge under the SPP?

Mr Hamberger—Yes.

Senator WONG—That is the sum total of the commitments that you require from these people?

Mr Hamberger—That is the legal commitment they make—the undertaking.

Senator WONG—And for that they get, on your evidence, a streamlined process and certainly a prima facie assumption that the AWAs comply with the no disadvantage test?

Mr Hamberger—Yes, although we do check still.

Senator WONG—You do check?

Mr Hamberger—Yes.

Senator WONG—Can we just go through who these people are? I understood from your answer to Senator Carr that these are still the only people in the program. Is that correct?

Mr Hamberger—Yes.

Senator WONG—First, I have a Mr Heelan. Is he from Heelan and Co?

Mr Hamberger—Yes.

Mr McIlwain—Yes.

Senator WONG—Can I ask who the debt declarer is? Is it a Mr Dungan, who was declared before? Do you know who he is?

Mr McIlwain—Mr Dungan, at the time, was a deputy employment advocate.

Senator WONG—What does he do now? Is he working for Heelan and Co?

Mr McIlwain—He has now resigned.

Senator WONG—Does he work for Heelan and Co. now?

Mr McIlwain—No, he does not.

Senator WONG—Is it Mr Kingston who works for Heelan and Co. now?

Mr McIlwain—It is Mr Bruce Kingston, yes, who works for Heelan and Co.

Senator WONG—When did he first work for Heelan and Co? I think that was asked last time. I am sorry, I do not have the—

Mr McIlwain—It was. If you just bear with us, we will find our answer to it. We did not answer that specific question. Question W227_03 states: did Heelan and Co. become a specified partner before or after Mr Kingston left the OEA? Our answer was ‘after’.

Senator WONG—When did Mr Kingston leave the OEA?

Mr McIlwain—We will take that on notice and give you the precise date of his separation.

Senator WONG—If you could. Just going back to the SPPs, I think you indicated before that Haycroft Industrial Management Pty Ltd was a—

Mr Hamberger—A sort of employee relations consultancy.



Senator WONG—And who is Jean Sysak?

Mr Hamberger—I do not know.

Senator WONG—You do not know?

Mr Hamberger—No.

Senator WONG—Is she not an employee of yours or an officer of the OEA?

Mr Hamberger—No.

Mr McIlwain—No, she is not an officer of the OEA.

Senator WONG—The Civil Contractors Federation—we think we know who they are; they are an employer association. Is L. Atkinson employed by you?

Mr McIlwain—No, I do not believe that is an OEA officer.

Senator WONG—And then we have Chris Platt from Agribusiness Employers Federation, another employer organisation, and Mr Michael Foley.

Mr Hamberger—He is a colleague of Chris Platt’s.

Senator WONG—In the Agribusiness Employers Federation?

Mr Hamberger—I believe so.

Senator WONG—So the declaration can be made in front of somebody from the same organisation that is making the commitment, and that is sufficient for you?

Mr Rushton—Yes. As I said before, there is no restriction on who can witness the signature.

Senator WONG—I now refer to Livingstones Australia, is N. Taylor someone from the office?

Mr McIlwain—No, not from the OEA.

Senator WONG—Is N. Taylor from Livingstones Australia?

Mr McIlwain—I simply do not know.

Senator WONG—Would you not have that information?

Mr McIlwain—No. If we had that information, it would only be incidental.

Senator WONG—What about the HIA declaration? Do you know a Mr Scott Lambert?

Mr McIlwain—No. Again, he is not an officer of the OEA.

Senator WONG—We know Mr Kingston, who did the declaration for Industrial Mediation Services. We are not sure whether he was at Heelan and Co. or your office at that stage; is that right?

Mr McIlwain—We will provide you with the precise date of Mr Kingston’s separation.

Senator WONG—Your processes are simply that these people have to sign a declaration before a witness and you make no effort to ensure that that witness is someone who can take an affirmation or an oath or any of the other usual forms of legal probity applied to statutory declarations?

Mr Rushton—It is not a statutory declaration, Senator, is the answer.

Senator WONG—Under the scheme that you are part of, in the Workplace Relations Act, there are a plethora of declarations required from various parties, aren’t there? And the point



of ensuring that they are statutory declarations is to ensure that there is some probity in the process, to make sure that people are actually telling the truth and that if they make a commitment you can actually rely on it. Is that not the case?

Mr Rushton—We do seek to rely on those declarations. As I said to Senator Carr before, it is the provision of information to a Commonwealth officer and if they have provided false information that may well be a breach of the Crimes Act.

Senator WONG—Have you told them that?

Mr Hamberger—In the declaration they say, ‘In making this declaration I understand that giving false or misleading information is a serious offence.’

Senator WONG—But you do say to them, ‘This is a Crimes Act issue and what you are actually doing is not just signing in front of your mate who you work with but you are providing it to a Commonwealth officer’?

Mr Rushton—Those words are a fairly standard form which conveys that message that it is a serious matter and it is potentially a criminal matter.

Senator WONG—Who made the decision that these sorts of declarations do not require statutory declarations and that you would make no effort to ensure that they are declared before some person of status or some neutral third party?

Mr Rushton—I guess the decision was ultimately made by the Employment Advocate, on legal advice.

Mr Hamberger—We looked at statutory declarations. We looked at what kind of declaration was appropriate. My legal advice at the time was that this kind of declaration, with those words, would invoke the authority of the Crimes Act. It was based on quite an extensive analysis of the relevant law on declarations.

Senator WONG—I am just a little confused, Mr Hamberger. Under the Workplace Relations Act there are many statutory declarations which have to be prepared if you want to lodge AWAs or CAs; there are commitments which have to be made. Why is it that the specified partners are allowed to sign a document in front of a work colleague which is supposed to bind their organisation? How can you possibly rely on that?

Mr Rushton—Firstly, I am not too sure there are a plethora of statutory declarations required under act. But, regardless of that, this is an additional requirement that is not statutory based. We are requiring this as something additional because of the Specified Partners Program. We do not have the statutory imprimatur under the act to require a declaration; it is something additional we are doing.

Mr Hamberger—Just on this issue, I thought, okay, we will get them to do a statutory declaration, and my advice was that that was not technically the right way to do it. We did not just do it without thinking. My legal advice was that this was the most effective way of ensuring that, if there were a genuine problem and we needed to enforce the declaration, this would do it; that this was the best way of doing it rather than having a statutory declaration. I know the Industrial Relations Commission uses statutory declarations. It was explained to me—I cannot remember all the details—that that relates to the rules of the commission and there are particular provisions there that are made under the act for which statutory declarations are the most appropriate thing, but that this was the most appropriate form of declaration for the purpose we are seeking to use it and it was an enforceable declaration—in other words, someone could actually be prosecuted under the Crimes Act for breaching it.



Senator WONG—But the extent of your advice as to prosecution is the sentence at the end of the declaration?

Mr Hamberger—I am sorry?

Senator WONG—The extent of your indication to these specified partners as to their failure to comply is that last sentence in the declaration?

Mr Hamberger—That is the formal; I am sure there would have been discussions with them before they entered into this. They would know that this was a serious matter and this was a legally enforceable undertaking.

Senator WONG—So you have correspondence which confirms that?

Mr Hamberger—I do not think there was necessarily written correspondence.

Senator WONG—Notes of conversations that confirm this advice being given?

Mr Hamberger—No, but my advice is this does the trick.

Senator WONG—I am not asking about that.

Mr Hamberger—I do not have notes of the conversation.

Senator WONG—You made the assertion, Mr Hamberger, that advice was given by your office as to the potential ramifications for SPPs making declarations that were false. I am asking: if that is the case, did you actually write to them indicating this, or are there notes of conversation confirming that advice?

Mr Hamberger—I do not know.

Senator WONG—So it may not have occurred?

Mr Hamberger—I have certainly had discussions with a number of these people. I did not necessarily keep notes of the precise words and the precise dates, but I have personally discussed this issue with them.

Senator CARR—Was the advice verbal?

Mr Hamberger—It would probably have been verbal. I do not think there are any written notes beyond what is here.

Mr Rushton—Our view is that the words at the end of the declaration are sufficient.

Senator CARR—The advice to you is that they are sufficient. Where does that come from, the Government Solicitor’s Office?

Mr Rushton—It is internal legal advice.

Senator CARR—Your own legal advice?

Mr Rushton—Yes.

Senator CARR—Is that in written form?

Mr Rushton—Yes.

Mr Hamberger—Yes, it would have been.

Senator CARR—Can we have a copy?

Mr Rushton—We do not normally provide legal advice.

Senator CARR—No, but it would be correspondence between the offices.

Mr Rushton—It is legal advice.



Senator CARR—Are you claiming legal privilege?

Mr Rushton—Indeed, Senator.

Senator CARR—This process of not seeking statutory declarations, which certainly in my experience is the practice in the rest of the act—in fact, if you were to apply that same process, it would be more cumbersome, wouldn’t it?

Mr Hamberger—It is not that it would be more cumbersome. As I recollect, the advice was that it would be less legally effective than this.

Senator CARR—Less legally effective?

Mr Hamberger—Yes. In fact, it would not be legally effective. My original thing was that we would get them to do a stat dec—similar sort of background to you, Senator.

Senator CARR—But a stat dec requires a JP or other persons authorised to take oaths. It would slow down the whole process.

Mr Hamberger—That was not the issue.

Senator CARR—It was not a consideration?

Mr Hamberger—No. That would have been minor. That was not an issue. It was not a matter of saying, ‘Oh well, we’d better not do stat decs because it will slow it down.’ The advice was that, for reasons that I cannot recall in detail, there would be some doubt about the legal effectiveness of a statutory declaration, whereas this would be more effective.

Senator CARR—Mr Hamberger, I am not a lawyer; Senator Wong is. What I can say to you, though, is that the proposition you have put to us today is that you were given some advice some time in the past, you cannot verify that that advice was given, you have communicated verbally with the partners of this special program, and you are now telling us that you think it would be less legally enforceable to have a statutory declaration than a vague statement signed by a couple of mates coming together on the job.

Mr Rushton—I do not think it is a vague statement. I do not think you have characterised it correctly, Senator.

Senator CARR—It is hardly an onerous statement, is it?

Mr Rushton—Certainly our advice—and our belief—is that it is an effective method to ensure that both comply with what they have said in that declaration.

Mr Hamberger—It is based on looking at the case law in relation to the relevant provisions of the Crimes Act. This was the most effective way of doing it. We were concerned to make sure that this declaration had proper legal standing. I am not a lawyer, either. My original view was, ‘Oh well, you get a statutory declaration.’

Senator CARR—You would think that would be a commonsense approach, wouldn’t you?

Mr Hamberger—Yes, sure—commonsense—a bush lawyer; get a stat dec—

Senator CARR—I am not a bush lawyer but commonsense would say that. Senator Alston is here; he is a great bush lawyer!

Mr Hamberger—I have exceedingly good lawyers who work for me, who have a much better understanding of some of this.

Senator CARR—He would tell you, no doubt, that a statutory declaration is of lesser weight than an uncertified statement.

Mr Hamberger—However, the legal advice was that this in fact was more effective.



Senator WONG—You keep saying that, but there is no indication that I can discern of any process of actually advising these people about that fact.

Mr Rushton—As I said, the words on the declaration itself are—

Senator WONG—Other than that. We are talking about compliance. That is the case, isn’t it? Compliance is in the mind of the complier, mainly, isn’t it? So the whole point is to make sure that these people understand precisely what might happen if they do not comply with these and give some weight to the commitments they are making. What you have is a set of declarations that their colleague in their office can sign. You say your legal advice is that that is better because of the Crimes Act, but you do not have any indication in correspondence or written notes, that you are prepared to provide to this committee, that you have actually told them that.

Mr Hamberger—Our advice is that this form of declaration and these words would do the trick.

Senator WONG—Do the trick?

Mr Hamberger—In other words, it would make it legally enforceable; that if they were to breach it they could be prosecuted.

Senator CARR—You run an extraordinary outfit, Mr Hamberger—quite an extraordinary outfit.

Mr Hamberger—No. Instead of taking the immediate ‘commonsense’ view, we actually sought legal advice on the question.

Senator CARR—That is very wise, because lawyers can always get around commonsense, can’t they, Senator Alston?

Senator Alston—It depends. Bush legal advice comes very cheaply.

Senator CARR—Is that right? From what we have been looking at with regard to the royal commission, it seems it also comes extremely expensively, and I will come to that in a moment. In applying this no disadvantage test, are there any restrictions on the removal of limits of hours of work contained in awards or certified agreements?

Mr McIlwain—Not per se; in an AWA it is possible to vary the span of hours.

Senator CARR—That varying could, in fact, remove all limits?

Mr McIlwain—In theory, yes.

Senator CARR—Of course, there is one test, and that is that you would want to have a look at how much money was involved. Would that be right?

Mr McIlwain—Amongst other things, yes, because the test is a global test.

Senator CARR—We have established that it does not include leave or various other things and it does not appear to include hours of work, so there would no limit on the number or the duration of shifts that a worker could be directed to work?

Mr McIlwain—Again in theory, were the remuneration to be sufficient, that in itself would not be, per se, constrained.

Mr Hamberger—The employer cannot contract out of his obligations under health and safety laws by dint of an AWA. For example, if you put in an arrangement whereby somebody could be called in and works six 12-hour shifts a week, I would pretty safely say that they would be in trouble under health and safety law—I must say that I have never seen an AWA like that. You could not actually effectively do it. We have, on a number of occasions, put



restrictions on the maximum number of hours, so maybe it is a relevant factor. For the purposes of undertakings, we may have sought to restrict the maximum number of hours. But certainly an employer who entered into an arrangement that raised issues of health and safety would not be able to do that.

Senator CARR—If we had a permanent employee on an AWA that had no regulation of working hours, how do you think they would balance their work and family commitments?

Mr Hamberger—It is very hard to discuss that in the abstract.

Senator CARR—In the abstract?

Mr Hamberger—Just a general proposition like that. Surely it is not whether there are limits on a bit of paper; it is what actually happens in practice.

Senator CARR—So, for instance, it is possible under an AWA for a worker to have no limit on the duration of shifts that they are directed to work?

Mr Hamberger—I will give you an example. There would be some industries where an AWA might say, ‘You work the hours you need to get the job done.’ That would be the exception, not the rule. That does not necessarily mean people are working 24 hours a day, seven days a week—it clearly does not mean that. It may well be a very good arrangement from an employee’s point of view.

Senator CARR—It is not a matter of concern to you how much time is available to pick up the kids from school or if the kids are crook?

Mr Hamberger—Of course it is; I am actually very concerned about this.

Senator CARR—Do they come into your calculations?

Mr Hamberger—Yes, in terms of the way you perform a function. I stress again that you have to be careful in not taking—with all due respect—a paternalistic approach to this issue.

Senator CARR—A paternalistic approach?

Mr Hamberger—Sometimes what may seem at first blush to be something that will not help people balance their work and life actually may do that. Remember that this is about devolving responsibility to the employer and employees to design arrangements that suit their needs. As I said, the evidence is that overall that has worked well and in fact employees are finding it, on average, beneficial to balancing their work and life. I can certainly think of some cases—going back to the issue of leave—where in fact you might think that cashing out leave would be a no-no from a work and family point of view, whereas when you talk to the employees you actually find that precisely the opposite is the case. When you look into it in more depth the situation is more complex.

Senator WONG—How often does your office do that?

Mr Hamberger—We quite regularly talk to employees.

Senator WONG—Is every AWA that comes to your office for consideration which cashes out leave the subject of discussion with the employee to determine if it is in fact good for the employee?

Mr Hamberger—No, we do not.

Senator WONG—Even if I accept your argument that there may be some people who are happy to work without annual leave or sick leave, and for some miraculous reason that does not impact upon their ability to be with their family, equally there may be others where it



might. You would not know that because you do not actually investigate that, do you, Mr Hamberger?

Mr McIlwain—We do send every employee for whom an AWA is filed a letter, which we call the genuine consent letter, firstly giving them some basic information about the process and reminding them that they must have been given an information statement for employees which is prepared by the OEA. We then invite them to telephone our free 1800 number to talk to us, if they have any questions or concerns. To use your example, if an employee had entered into an AWA that, because of the hours of work, impinged dramatically upon their capacity to perform their duties as a parent, the opportunity—indeed the express invitation— exists for them to telephone us.

Senator WONG—But you do not say, ‘There is an obligation under the act to consider the issue of work and family. Under your award you would have this time. Have you considered that? Is this good for your work and family responsibilities balancing process?’ You do not actually go through that level of detail. You send a general letter saying, ‘If you have any problems, ring us.’ Is that right?

Mr McIlwain—That is correct. To take up a point that the advocate made, it is a question of balance between giving people the opportunity to self identify issues of concern. The opportunity is absolutely transparent and a simple one for them to avail themselves of. It is a question of balance between giving that opportunity and not making incorrect assumptions about what best suits an individual. I think to go down that path is risky. The adage is, assumption is the mother of all. I think that we take that to heart. We do not see it as our role to tell people what best suits them, but they have the opportunity to raise with us any concerns they personally have.

Mr Hamberger—Can I just put a bit of context on this particular issue? Nearly 30 per cent of employees in Australia do not have access to any annual or sick leave, or any other bereavement leave. This is not something that is uncommon; it actually involves about a third of workers. They are usually called casuals. This is not some sort of strange thing that might happen under AWAs. You may or may not be aware of an issue I have identified as something the OEA will be doing more work on. However, our research shows that, through the use of AWAs, in the industries where casualisation is extremely high, in other words, where a large proportion of employees do not get annual leave or sick leave, we have seen a substantial reduction in the level of casualisation amongst those people on AWAs. So it is quite likely to be the case that, as a result of entering into an AWA, employees are more likely to be getting access to annual leave or sick leave than they would be by not entering into an AWA.

In hospitality, 50 per cent of employees under awards have no access to annual leave, sick leave or bereavement leave. In practice, they do not have it because they are working as casuals. In many awards, casuals can work up to 40 hours a week. Often there is no restriction on the number of hours casuals can work. So we are not talking about this idea that what is happening with AWAs is that people are getting rid of all their annual leave and sick leave. Some cash out their annual leave and sick leave. Some cash it all out, undoubtedly. But you have to understand that this is not something that is odd or unusual. Twenty-eight per cent, or whatever the figure is but getting on for 30 per cent of employees under the mainstream system, do not have any entitlement to annual leave, sick leave, bereavement leave or all these other types of leave.

What we are seeing out of AWAs, certainly in the two industries of hospital and retail where casualisation is most dominant, is that employees are much less likely to be casuals, which generally would mean they are likely to have access to annual leave or sick leave in a



way that they probably did not beforehand. So I do not think we should be characterising this as saying that overall we are seeing people moving to get rid of these leave provisions. We do sometimes see that, but we also see it going the other way, possibly more often.

Senator WONG—A few questions are opened up by that. First, in relation to this assertion about casuals, how many of the AWAs which cash out sick leave or annual leave involved people who were previously casual?

Mr Hamberger—I cannot give you that figure.

Senator WONG—Is that something you have considered or investigated?

Mr Hamberger—We could have a look at that. We do not have that data so it would be a significant research project to have a look at that issue.

Senator WONG—But the reality would be, as you quite rightly pointed out, that casuals do not generally have those sorts of entitlements. So if you have an AWA that is cashing them out, it is more likely, is it not, to be a person who previously had those entitlements?

Mr Hamberger—It depends on what you mean by ‘cashing out’; not necessarily.

Senator WONG—Just to summarise, it is quite possible, from the way you approach these things, for an AWA to be lodged and approved which cashes out any or all sick leave, annual leave and other forms of leave entitlements?

Mr Hamberger—All other things being equal, yes.

Senator WONG—Provided the money was sufficient?

Mr Hamberger—Yes, and whatever other offsetting benefits there were, in the same way that a lot of people work as casuals. In a sense, that is not terribly different. Nearly 30 per cent of the workforce are in that situation where they get a financial loading in exchange for not having access to those benefits, and indeed for other factors as well. I do not see this as a particularly odd or unusual scenario.

Senator WONG—No, I know you do not, Mr Hamberger. Mr McIlwain, the suggestion that your office makes in this general consent letter—was that the term used?

Mr McIlwain—Genuine consent.

Senator WONG—In the genuine consent letter. How many employees avail themselves of that suggestion to call your 1800 number?

Mr McIlwain—I do not have the statistics with me. We can provide you with quite a detailed statistical breakdown of the calls that come in every day. As Mr Hamberger said, it is around 200 calls a day.

Mr Hamberger—Two-thirds of whom will be employees. They may not all be in response to the genuine consent letter. They may ring us wanting some information, to seek some assurance or to express their concerns. They may or may not say it is in response to that genuine consent letter. They might not mention it.

Senator WONG—What do you do with people who may have literacy problems?

Mr Hamberger—We would use the telephone interpreting service.

Mr McIlwain—Yes, we use TIS. Are you talking about our people of a non-English speaking background?



Senator WONG—Either non-English speaking background or who might have literacy problems. There are a lot of people in Australia who do have literacy problems. I am sure you are aware of that.

Mr McIlwain—Certainly, for people from a non-English speaking background, we would use TIS. Off the top of my head, I am not sure what happens for native English speakers with a literacy problem. However, we have provided the information statement as an audiocassette.

Mr Hamberger—One of the key parts of the process is that, in addition to this genuine consent notice, employees are provided with a copy of an information statement that goes into a bit more detail about their rights, what an AWA is and what the effect of it will be and so on, and their rights to seek assistance from other people, where they can contact community partners, for example, and so on. We make that available in a range of community languages—I think up to 10 or maybe even more languages—particularly in manufacturing areas or areas where there is a high proportion of workers from different backgrounds who may not have very good English skills. That information is provided in a range of languages. If people ring up, we do use the telephone interpreter service so that we can speak to people in different languages. We have also provided that employee information statement, as Mr McIlwain suggested, in audio form and, in fact, I think we have a braille version as well.

Mr McIlwain—We do have a braille version as well.

Senator WONG—The TIS will only be activated if someone actually rings the 1800 number?

Mr Hamberger—I think there is something attached to the genuine consent notice which says that, in a large number—

Mr Burnett—A statement also goes out as an insert in the genuine consent letter. I believe that is in 18 community languages. It explains the provision of the interpreter service to them and the number that is to be called. Obviously we do not do the entire text of the letter in community languages as it would be quite cumbersome, but we provide that saying, ‘If you have any questions about this or you do not understand what you have received, please call this number and it will be explained in a community language.’

Senator WONG—That is in various languages?

Mr Burnett—That is in 18 languages, if I am not mistaken.

Senator CARR—Mr Hamberger, your annual report states that you seek voluntary compliance as a first resort when dealing with breaches of the Workplace Relations Act. Is that the way you would characterise your work? In the first instance when there are breaches of the act you seek voluntary compliance?

Mr McIlwain—In most cases that would be the approach initially sought. However, that arrangement does not preclude the immediate adoption of higher level responses—if I can describe them as that—if the circumstances of the case warrant that. So if there were prima facie a serious and blatant breach of the legislation, or that part of the legislation where the Employment Advocate has an interest, we could immediately move to legal remedies. As is the case with matters falling under award jurisdictions, it is in our experience more effective to begin initially by seeking a voluntary compliance outcome.

Senator CARR—I see.

Mr Hamberger—We normally do that in relation to other aspects, not just AWA matters but freedom of association and so on. We would normally seek voluntary compliance.

Senator CARR—Does that approach apply to the CFMEU, for instance?



Mr Hamberger—Yes, we have applied that. I cannot absolutely guarantee that we applied it in every single case—Mr Rushton could tell you—but certainly it would be the normal practice. Even in the matters where we have litigated against the CFMEU, we would normally have sought voluntary compliance. It maybe actually to the point of getting into court but we certainly had undertakings given.

Senator CARR—It does not always apply to the CFMEU?

Mr Hamberger—I would say that our policy now would be that, except in exceptional circumstances, we would do it.

Mr Rushton—I think the policy, as Mr McIlwain outlined, applies generally. There is no exclusion or inclusion for the CFMEU.

Mr Hamberger—There is no special rule for particular unions.Senator CARR—There is no special rule for the CFMEU?

Mr Hamberger—There is no special rule for different unions, or for unions at all.

Senator CARR—For any other union?

Mr Hamberger—There is no special arrangement by union, or indeed by the fact that they are in a union.

Senator CARR—In the case of Carson and Lyten, this is the one where you were obliged to pay that $70,000, was that one where you sought to have compliance by voluntary agreement?

Mr Rushton—I do not think it was.

Senator CARR—Why is that?

Mr Rushton—I think because of the nature of the conduct.

Senator WONG—I am sorry, I did not hear that.

Mr Rushton—The nature of the conduct.

Senator WONG—The nature of the conduct?

Mr Rushton—Yes.

Senator CARR—What conduct was that that you are referring to?

Mr Rushton—The conduct of requiring a closed shop on the site.

Senator CARR—I see. But this is a case which you comprehensively lost through various appeals.

Mr Rushton—I would argue with the characterisation of ‘comprehensively’. We were unsuccessful before the judge of first instance and unsuccessful on the appeal by a 2:1 majority.

Senator CARR—That is right. Mr Justice Marshall actually found there was no relevant problem on the site until the persons that you had indemnified had created one.

Mr Rushton—I think he said some words to that effect.

Senator CARR—Through your actions a problem was actually manufactured.

Mr Rushton—I do not accept that was the case.

Senator CARR—You do not? Justice Marshall clearly did.

Mr Rushton—That was his finding.



Senator CARR—That is right. He found, in fact, that your witness was a liar and he said his evidence was to be treated with the utmost caution and that it was riddled with inconsistencies. Further, the other witness you relied upon, Carson, gave unconvincing evidence and had impugned his credibility. That is two out of two.

Mr Rushton—You are obviously reading from what Justice Marshall said.

Senator CARR—That is right. I am relying upon the evidence before me. Furthermore, you were obliged to provide $70,000 to the CFMEU.

Mr Rushton—That is in relation to Mr Carson and Mr Lyten, as said on the last occasion.

Senator CARR—That is right, but you did that as a result of the legal indemnity that you had issued to these two people, these two people that the judge actually found were liars.

Mr Rushton—Just to clarify that, the indemnity was issued by the minister.

Senator CARR—Sorry, the minister. You have had a chance since we raised this last time to have a look at your files. When was that indemnity issued?

Mr Rushton—I think we did answer those questions on notice.

Senator CARR—Do you have those?

Mr Rushton—I think the date was 11 December.

Senator CARR—The indemnity was issued on 11 December.

Mr Rushton—It is the answer to question on notice No. 235_03.

CHAIR—It being 11 o’clock, the proceedings are suspended until 11.15.

Proceedings suspended from 10.58 a.m. to 11.15 a.m. CHAIR—We are continuing consideration of the estimates relating to the Office of the

Employment Advocate.

Senator CARR—Mr Rushton, I asked a question before about the compliance processes. You indicated that, in the Abbey case, you did not take the normal process of seeking to resolve it through conciliation. You said that the strength of the evidence warranted your taking legal action.

Mr Rushton—I think I said the nature of the conduct.

Senator CARR—It was demonstrated that the conduct did not happen. So it was not the conduct; it was what you believed was happening.

Mr Rushton—The judge did not accept that the conduct was occurring.

Senator CARR—Did not accept that there was the conduct?

Mr Rushton—Did not accept that there was a breach of the Workplace Relations Act, to be more precise.

Senator CARR—He said there was no problem until you manufactured one, to be even more precise.

Mr Rushton—It may be something that is contained in his judgment.

Mr Hamberger—I do not think he said anything of that nature. It was not a comment about the OEA doing it; it was about the conduct of the two witnesses. He did not make any findings that there was not a closed shop on the site or anything like that.

Senator CARR—The events began in February 1999. In December 2000, the minister signed off on the indemnity. Is that right?



Mr Rushton—That is right.

Senator CARR—It was on your recommendation that he signed off on that indemnity, wasn’t it?

Mr Rushton—It was a recommendation by the Employment Advocate.

Senator CARR—It says here that the recommendation was signed for the Employment Advocate by the senior legal manager. Is that you?

Mr Rushton—Yes. I was signing on behalf of the Employment Advocate.

Senator CARR—So it was your recommendation?

Mr Rushton—I had discussed it with the Employment Advocate. It was agreed with the Employment Advocate.

Senator CARR—That is a different question: did the Employment Advocate agree with you? The answer is yes. But I want to know whether it was your recommendation.

Mr Rushton—The recommendation to the minister was for the Employment Advocate.

Senator CARR—Yes, signed by you.

Mr Rushton—Yes, signed by me for the Employment Advocate.

Senator CARR—Why did you recommend that?

Mr Rushton—I think we would be getting into the issue of the recommendation and the indemnity.

Senator CARR—It cost the public a lot of money, didn’t it?

Mr Rushton—I have answered in the questions on notice that, as we were providing advice to the minister, it is not appropriate to provide that. To go into the detail of that would be tantamount to providing those documents. With respect, I would not go into the reasons for the recommendation.

Senator CARR—So you will not explain to us why you made this recommendation?

Mr Rushton—No.

Senator CARR—The minister was obviously happy to sign the indemnity. He must have reasons for signing the indemnity. That has nothing to do with your advice, clearly.

Mr Rushton—The minister signed the indemnity.

Senator CARR—Why?

Mr Rushton—That is a matter for the minister. I cannot answer that.

Senator WONG—Does your office have a copy of the indemnity?

Mr Rushton—Yes.

Senator WONG—Will you provide a copy of the indemnity?

Mr Rushton—As I have just said, we have answered that question on notice.

Senator WONG—This is W237_03. Is that right?

Mr Rushton—Yes.

Senator WONG—So you are refusing to provide the committee with a copy, even though you possess a copy of that indemnity?

Mr Rushton—Yes, that is so.



Senator WONG—On what basis?

Mr Rushton—On the basis that the indemnity is given by the minister. It is a matter for the minister to provide that.

Senator WONG—Have you asked the minister whether he will do so?

Mr Rushton—Not specifically.

Senator WONG—So you have not asked Minister Abbott for permission to provide the indemnity, of which you have a copy?

Mr Rushton—No.

Senator CARR—How do you know that the minister will not provide a copy?

Mr Rushton—That is obviously a matter for the minister.

Senator CARR—Hang on. You have given an answer to this committee that you will not provide it. You have not asked the minister, but you are saying that, as a matter of policy, you will not provide it?

Mr Rushton—Yes.

Senator CARR—Is that the basis of your action?

Mr Rushton—The documents are advice provided to the minister and indemnity given by the minister.

Senator CARR—The indemnity is not advice. The indemnity is a legal agreement between the government of Australia and two people that the court found to be liars.

Senator WONG—And paid quite a substantial amount of taxpayers’ money.

Senator CARR—It has nothing to do with legal advice.

Mr Rushton—It is an indemnity given by the minister. On this officer’s view, it is a matter for the minister to provide that.

Senator CARR—And you have not asked the minister to provide that document?

Mr Rushton—I do not consider that to be my role.

Senator CARR—We will ask the Office of the Employment Advocate to ask the minister to provide the document.

Senator WONG—Not only that; we will also ask for permission for you to provide your copy of the document.

Mr Rushton—We can do that.

Senator CARR—If he will not, can you explain to us the nature of the reasons for him refusing? If you say it is legal advice, can you demonstrate to us on what basis you make that claim?

Mr Rushton—I am not saying it is legal advice; I am saying that the documents in relation to the indemnity are advice to the minister.

Senator CARR—No, that is not what you were asked. You have been asked for a copy of the agreement between two people the court found to be liars and the Commonwealth of Australia. As you have explained to us, the nature of that agreement was that the Employment Advocate conduct their defence and to instruct the Australian government to act for them and the Employment Advocate jointly to meet all reasonable costs. That was the nature of the agreement, wasn’t it?



Mr Rushton—That was the nature of the agreement.

Senator CARR—Or is there something else in the agreement that you have not indicated to us?

Mr Rushton—That is the nature of the agreement.

Senator CARR—Where does the legal advice fit into that?

Mr Rushton—I have not said that that was legal advice. It was an indemnity given by the minister. As such, it is not appropriate for this office to provide that document.

Senator CARR—My question was to you and went to the issue of providing the agreement and all documents relating to this agreement. You may well argue that documents relating to the agreement are subject to legal advice. I can understand your point of view there. Please provide the agreement. You have not answered that question.

Mr Rushton—I have answered that question and have taken it on notice.

Senator CARR—No, you have not. What you have said to us is that it is a matter for the minister.

Mr Rushton—Yes.

Senator CARR—You have not asked the minister.

Mr Hamberger—We said we will ask the minister.

Senator CARR—You have? Thank you. The problem is that we keep having to return to it at every estimates committee hearing. As you know, I have been pursuing this matter since 1999. For the first two years, you told me you could not answer questions because it was the subject of various legal proceedings—you lost one case, you went to an appeal and so forth— and now we discover, at the end of it all, that you actually had a legal indemnity. That was only discovered because we had a copy of the cheque. It seems to me that there is an extraordinary set of events here that do require explanation. Have you provided any other legal indemnities to persons?

Mr Rushton—No.

Senator CARR—Are you considering any other legal indemnities?

Mr Rushton—Not as far as I am aware.

Senator CARR—So you would agree that this is an extraordinary circumstance?

Mr Rushton—I would not use the word ‘extraordinary’.

Senator CARR—That it is unique?

Mr Hamberger—Unusual.

Senator CARR—Unusual?

Mr Hamberger—Yes.

Senator CARR—It is the only occasion, is it, that this event has occurred?

Mr Rushton—It was an unusual circumstance.

Senator CARR—Not just unusual; it is the only occasion when this has occurred.

Mr Rushton—Indeed, it is the only occasion when there have been cost orders sought against witnesses in any matters where the OEA has been involved.



Senator CARR—Costs of $70,000. But we have discovered that that is not the complete cost—that there are additional matters. Is it probably closer to $100,000 all up? That is a pretty expensive piece of advice, Mr Rushton.

Mr Rushton—I am not sure what figures you are referring to.

Senator CARR—What are all the costs associated with this particular exercise?

Mr Rushton—Again, I think we provided those on notice on the last occasion. All the legal costs—

Senator CARR—You provided an answer on notice with regard to the particular case— presumably the final case—but is it not the case that a number of cases arose from this matter? I would like to know the total cost associated with the events that commenced in February 1999.

Mr Rushton—That is provided at W233_03.

Senator CARR—Just remind me: what is the total cost?

Mr Rushton—The total cost is $225,940.92.

Senator CARR—What number did you say that was?

Mr Rushton—W233_03.

Senator CARR—But that is just the cost before the bench. There were other costs as well, were there not—solicitors’ costs?

Mr Rushton—That is the cost.

Senator CARR—That is the total cost?

Mr Rushton—Yes.

Senator CARR—Are solicitors’ costs included there?

Mr Rushton—Solicitors’ and barristers’ costs, yes.

Senator CARR—Legal advice?

Mr Rushton—That is the cost.

Senator CARR—Out-of-pocket expenses? They are all there?

Mr Rushton—Yes.

Senator CARR—Would you agree that, in total, it was a pretty expensive operation?

Mr Rushton—Yes.

Senator CARR—What is your annual budget?

Mr Rushton—The OEA’s annual budget?

Mr Hamberger—It is about $15.5 million.

Mr Rushton—This was over a three-year period.

Senator CARR—It is a significant sum of money.

Senator WONG—Mr Rushton, can you remind me again when the indemnity was in fact issued?

Mr Rushton—On 11 December 2000.

Senator WONG—Was there only ever one indemnity? Were there any other indemnities provided?



Mr Rushton—There was indemnity for Mr Lyten and then Mr Carson.

Senator WONG—I appreciate that.

Mr Rushton—That was the only one.

Senator WONG—There was only one indemnity in respect of each of them?

Mr Rushton—Yes.

Senator WONG—Just to remind me of the timetable, had the proceedings at first instance commenced when the indemnity was provided?

Mr Rushton—Yes.

Senator WONG—Had they concluded?

Mr Rushton—Yes, they had.

Senator WONG—They had concluded?

Mr Rushton—At first instance, yes.

Senator WONG—It is correct, is it not, that the comments regarding the concerns as to the credibility of Mr Lyten and Mr Carson were raised at first instance?

Mr Rushton—Yes, they were commented on by Justice Marshall.

Senator WONG—Was that in fact the judgment in which there were some less than flattering comments about their credibility as witnesses?

Mr Rushton—Yes, that is so.

Senator WONG—Was that fact considered in terms of you preparing your advice to the minister as to whether an indemnity should be provided to these persons?

Mr Rushton—Yes, it was.

Senator WONG—So your advice did go to the issue that, at first instance, there had been significant adverse findings as to credibility?

Mr Rushton—We are getting into the advice, Senator. It certainly was considered in the advice.

Senator CARR—There were serious doubts about their evidence and you still provided them with an indemnity?

Mr Rushton—The minister provided them with an indemnity.

Senator CARR—It is very good blaming him, but you recommended it. You prosecuted this case with extraordinary vigour. You sent officers down to that site. You know the full circumstances here. I do not need to remind you about the struggles on the floor and all that sort of stuff—people seeking medical attention. This was quite a big coup for you, was it not? You were going to demonstrate that the CFMEU had a closed shop—and you failed. And there was no expense spared in doing it.

Mr Rushton—I do not know if you are calling for a response or whether that is a question, but I want to place on the record again that the struggle on the floor is a complete mischaracterisation of what occurred.

Senator CARR—A mischaracterisation? Medical attention was not sought for the manager?

Mr Rushton—That is in fact wrong.



Senator WONG—I would like you to confirm what amounts were paid out specifically under the indemnity, as opposed to the total costs you provided. Was it around $70,000 to the CFMEU?

Mr Rushton—Yes. As I said last time, there was $70,000 to the CFMEU and $26,000 to the solicitors for the delegate, Mr Williamson.

Senator WONG—Who was he?

Mr Rushton—The delegate. The proceedings were brought against the CFMEU and the delegate.

Senator WONG—And some $1,256 for the legal costs of Messrs Lyten and Carson?

Mr Rushton—Yes. The costs of representing Mr Lyten and Mr Carson were set out in W243_03, where the AGS have provided an estimate of the breakdown of their costs for running the cost application. They attribute $1,256 for that representation.

Senator CARR—That $8,000 can be found within the total figure of $225,000, can it?

Mr Rushton—Yes, it can. Then there are the additional costs that the answer refers to, which are the negotiations involved in the costs that the solicitors for the CFMEU and Mr Williamson provided to the OEA and the AGS, and there was some negotiation about that. The AGS’s costs in that negotiation process were $1,289.30.

Senator WONG—Just to clarify: the figure of around $8,100 is the total cost to the taxpayer of representation by the AGS in the costs application? Is that correct?

Mr Rushton—Yes.

Senator WONG—Of which $1,256 was attributable to the representation of Messrs Lyten and Carson?


Senator WONG—And $1,289.30 was attributable to the negotiation associated with the indemnity?


Senator WONG—So you are looking at over $1,500 of the $8,000 or so? Is the $1,289.30 part of the $8,000?

Mr Rushton—No, it is not.

Senator WONG—So that is additional?

Mr Rushton—In the answer to question w233, you will see the figure for the costs hearing is $9,403.05, which is the addition of the two—the $8,113.75 plus the $1,289.

Senator WONG—Are there any other costs that the government has paid out under the indemnity which have not been disclosed in these two answers?

Mr Rushton—No.

Senator WONG—So that is the total?

Mr Rushton—As far as I am aware.

Senator CARR—In answer w233, you indicated that you revised the cost of the hearings for the full court, which you said was $47,500. You revised it from the question on notice that I asked on 20 February. What is the nature of the revision?



Mr Rushton—They are increased costs. I think the figure given there was around $40,000. After doing a full and detailed review of the matter to answer these questions, the correct figure is the figure that we have given you now, which is in fact slightly more. I apologise for the earlier answer.

Senator CARR—Do you think you will be more careful in future with issuing indemnities?

Mr Rushton—We will certainly be very careful in relation to indemnities.

Senator WONG—You have indicated that you did consider the adverse findings as to credibility when formulating your advice on whether the indemnity should be issued. Did you also consider the nondeclaration of taxable income by Mr Lyten in formulating your advice?

Mr Rushton—I do not think there were any findings in relation to that in Justice Marshall’s decision.

Senator WONG—I understood it was the case that the tax returns put before the court did not declare any wages incomes.

Mr Rushton—There certainly were not any findings in relation to tax issues.

Senator WONG—But you were aware there were some issues raised in the proceedings regarding Mr Lyten’s tax returns?

Mr Rushton—I think there were issues raised in relation to whether he was a subcontractor or an employee.

Senator WONG—Was that a matter to which you turned your mind when formulating your advice to the minister?

Mr Rushton—Not specifically.

Senator WONG—The Commonwealth has model litigant guidelines, doesn’t it?

Mr Rushton—It does.

Senator WONG—So, presumably, you are familiar with them.

Mr Rushton—Yes, but I do not have them here.

Senator WONG—And they require agencies to act honestly and fairly in handling claims and litigation?

Mr Rushton—Sure.

Senator WONG—And the OEA is bound by those guidelines?

Mr Rushton—They are Commonwealth guidelines.

Senator WONG—Do you think, in relation to this case, you have adhered to those guidelines?

Mr Rushton—I believe so.

Senator CARR—You believe you have?

Mr Rushton—Yes.

Senator CARR—I can just imagine how you apply the no-disadvantage test!

Mr Hamberger—There were no findings at all that the Commonwealth or the OEA had acted any way other than honestly. There obviously were findings about the two witnesses. Obviously we appealed that judgment—we did not agree with it—and we lost the appeal, not on those issues but on a reading of the act and some of the factual issues about whether one of



the persons was an employee or a contractor. But there were no findings that the Employment Advocate had done anything dishonest or improper at all.

Senator WONG—Then, presumably, there is no reason for you not to release the indemnity.

Mr Hamberger—That is not our concern. Our concern was that it was the minister’s indemnity, not ours, and it is not for us to release it.

Senator WONG—But if there is no impropriety, why would you be concerned about releasing it?

Mr Hamberger—There is no finding that the OEA did anything improper at all. That is not the issue about why we do not think it is appropriate for us to give you the indemnity.

Senator WONG—Mr Rushton, you would agree that, even if there were no findings regarding the issue of Mr Lyten’s taxation status, it was an issue raised in evidence at first instance?

Mr Rushton—There was some evidence in relation to that.

Mr Hamberger—The finding of the full bench hearing, as I understand it, was that the person concerned was not an employee.

Senator WONG—Correct; that is my point.

Mr Rushton—That was the finding by Justice Marshall as well as the full bench.

Mr Hamberger—The fact that he did not have wage income may not necessarily be improper.

Senator WONG—It is not improper, but it has significant implications for whether or not there has been a breach, doesn’t it?

Mr Hamberger—Whether he was an employee or not certainly did.

Senator WONG—Correct.

Senator CARR—Whether or not he was paying tax might be an issue as well.

Mr Hamberger—There were not any findings that he was not paying the correct tax.

Mr Rushton—There certainly were not any findings that he was not paying any tax.

Senator WONG—I appreciate that. You have agreed it was not evidence, but it was certainly a live issue between the parties. Presumably, given the fact that his status as an employee or contractor was going to have some implications for the merits of the case on appeal, it was a matter to which you turned your mind when providing advice to the minister on whether he should issue this open-ended indemnity.

Mr Rushton—It was one of the many factors in the case.

Senator WONG—So you did consider it.

Mr Rushton—It would have been one of the many factors in the case. All matters in the case were obviously going through my mind and the minds of those involved in the case at the time.

Senator WONG—Was that the matter that was communicated to the minister at the time? Was the fact that there was this live issue, which might have significant implications for the merits of the case on appeal, communicated to the minister?

Mr Rushton—I do not think it was specifically.



Senator WONG—It was not?

Mr Rushton—I do not think it was specifically.

Senator WONG—Was the indemnity open-ended in monetary terms?

Mr Rushton—It related to that particular case and costs—any orders against those persons and the costs of the proceedings.

Senator WONG—So there was no monetary limit on it at all?

Mr Rushton—There was not a monetary limit, no.

Senator WONG—So it was a blank cheque, effectively?

Mr Rushton—In relation to the particular matter.

Mr Hamberger—But it was being handled by the Australian Government Solicitor. We did not say, ‘You go and get your own lawyers, and you can spend whatever you like.’

Senator WONG—But they still charge you, don’t they?

Mr Hamberger—Yes, they do charge us.

Senator WONG—The taxpayer still has to pay them.

Mr Hamberger—There was not a monetary limit, but we did go on the assumption that they would act responsibly in the way they conducted the case.

Senator CARR—Can you confirm that your office has appointed all members of the interim Building Industry Task Force pursuant to 83BG of the Workplace Relations Act?

Mr Rushton—I am not sure whether all of them have been appointed. Certainly a number have been appointed.

Senator CARR—Can you tell me who?

Mr Rushton—Not off the top of my head. I would have to take that on notice.

Senator CARR—But most of them have?

Mr Rushton—Yes. As I think was said on the last occasion, five were seconded across from the OEA who were already authorised officers. A number of others have been appointed. I do not know the total number of officers.

Senator CARR—Can you give me the details of those persons?

Mr Rushton—I will take it on notice.

Mr Hamberger—Do you want names?

Senator CARR—If it is possible, yes.

Mr Rushton—I will take that on notice.

Senator CARR—I would also like to know whether any of those persons who have been appointed under these provisions are presently subject to any direction from your office pursuant to 83BG(2).

Mr Rushton—There is one direction. It relates to an earlier direction that was given to persons appointed authorised officers under the department, and that related to their dealing with AWA breach matters. In fact, the direction to members of the task force is that they do not need to follow that particular direction, because they are not dealing with AWA breach matters. That is just to clarify the issue.

Senator CARR—So you are saying there are no applicable directions?



Mr Rushton—No.

Senator CARR—How many persons who have been employed by your office have been seconded to the task force?

Mr Rushton—We did answer that last time. The number is still five, as I think we answered on the last occasion. One officer who was seconded on the last occasion returned to the OEA, but another officer from the OEA has been seconded.

Senator CARR—So there has been a change in the tune?

Mr Rushton—There has been a change in personnel, but the numbers are the same.

Senator CARR—How many persons who might well have been seconded are now employed permanently with the task force?

Mr Rushton—I do not think anyone is employed permanently with the task force. As you know, it is an interim body that is going to the middle of this year. As I understand it, the terms of the secondment are to go for the period of the interim task force, whereupon they will return to the OEA. I do not think any of them are permanently employed with the task force.

Senator CARR—Can you confirm that the head of the task force has been appointed as a delegate of the Employment Advocate under section 83BE(1)?

Mr Rushton—Yes, I can. He has been appointed a delegate in relation to a number of matters. There are in fact three delegations.

Senator CARR—Three?

Mr Rushton—Yes.

Senator CARR—I thought you said there was only the one.

Mr Rushton—I was talking about directions to authorised officers; these are delegations of the Employment Advocate’s functions.

Senator CARR—So he has no directions—there are no directions for the head of the task force?

Mr Rushton—There are directions that go with those delegations to the head of the task force. I can provide you with copies of those.

Senator CARR—Would you please do that?

Mr Rushton—Yes. Just briefly, they relate to the taking of action in relation to freedom of association, investigating freedom of association breaches and investigating breaches of part 60 of the act, which relates to AWAs. The delegations make it clear that it is only in relation to the building industry, and the directions make it clear not to exercise that function in relation to matters involving AWA filing, approval or breach issues.

Senator CARR—Or breaches?

Mr Rushton—Yes, breaches of AWAs.

Senator CARR—So you are not interested in AWA compliance in the building industry?

Mr Rushton—We would continue to do that.

Senator CARR—You would do that?

Mr Rushton—The OEA will continue to carry out that function.



Senator CARR—Do you have any other role in the building industry, apart from investigating breaches of AWAs?

Mr Hamberger—Filing, assessment and approval of AWAs.

Senator CARR—And the no disadvantage test.

Mr Hamberger—Yes.

Senator CARR—So you have no other role?

Mr Hamberger—Basically, the other matters are handled by the task force.

Mr Rushton—The effect of the delegation is not to exclude us from operating if we wished to, but obviously the task force is the logical place to deal with the building industry.

Senator CARR—So there is no duplication? Is that what you are telling me? Is that the point?

Mr Rushton—Exactly.

Mr Hamberger—That is right. Theoretically, we could go off and investigate an FOA matter in the building industry but we would, in fact, refer it to the task force.

Senator CARR—So you have had no involvement with the code of practice with regard to the building industry?

Mr Rushton—The Office of the Employment Advocate had a role in relation to the code of practice until late last year when the task force took over that function.

Senator CARR—So you have no ongoing role there?

Mr Rushton—That is correct. I think it was in October.

Senator CARR—Have you had any involvement or contact with Australia Post or the MBA with regard to the construction of the postal facility at Tullamarine Airport?

Mr Rushton—No.

Senator CARR—No involvement in the letting of contracts?

Mr Rushton—No. I will just confirm that the date was 11 November 2002 in relation to the code of practice.

Senator CARR—So what you are saying is that you have ceased all operation in the building industry with regard to right of entry and all those sorts of issues?

Mr Hamberger—In relation to the construction industry.

Senator CARR—Are you happy about that, Mr Hamberger?

Mr Hamberger—I do not see that my personal opinion about whether I am happy or not is—

Senator CARR—Clearly, it has been a major area of defeat for you. You have done so well in the building industry, I would have thought you would be glad to be out of it! Why was the task force established, since you have had coverage of all these areas?

Mr Hamberger—That is clearly a matter for the government. The government decided to set up the task force.

Senator CARR—Were you involved in the establishment of the task force, other than supplying five officers?

Mr Hamberger—In an administrative way? No, we were not.



Senator CARR—You were not asked about it?

Mr Hamberger—Not that I recall. We do not divulge policy advice, but basically we were not.

Senator CARR—I am not asking about policy advice.

Mr Hamberger—It was the government’s decision. If you remember, there was a recommendation—

Senator CARR—There was a recommendation from the MBA. The MBA made a public declaration that they needed a task force because you were not doing your job—and, lo and behold, we have a task force established. Were you consulted about that?

Mr Hamberger—I do not believe we were, no.

Senator CARR—It must be a disappointment to you, though.

Mr Hamberger—We could discuss this for a long while. There was a recommendation from the royal commission—

Senator CARR—Yes, I know that you got some expert advice.

Mr Hamberger—There was a recommendation from the royal commission to set up an interim task force.

Senator CARR—It was actually a recommendation from the Master Builders Association.

Mr Hamberger—If you say so. I do not know about that.

Senator CARR—In fact, I was at an MBA dinner when the minister actually thanked them very much for their recommendation.

Mr Hamberger—I was not aware of that.

Senator SHERRY—Did the CFMEU know about this?

Senator CARR—They were there too, and they were all shocked to hear that the MBA had actually come up with this idea. Did you have a discussion with the MBA about why they were not happy with your work?

Mr Hamberger—No.

Senator CARR—It is a big vote of no confidence in you, is it not, Mr Hamberger?

Mr Hamberger—I do not take it that way at all.

Senator WONG—On another topic, which you will be pleased about, Mr Hamberger: I think it says in your annual report that you have 20 OEA ambassadors. Is that still the case?

Mr Hamberger—There would be more now.

Mr McIlwain—There would be more now. It is probably getting up to around 40.

Senator WONG—Are they all on your web site? The numbers did not quite match.

Mr McIlwain—There may not be an exhaustive list of ambassadors on the web site.

Senator WONG—Could you provide on notice a list of all your OEA ambassadors?

Mr McIlwain—Yes.

Senator WONG—How do you select these ambassadors?

Mr McIlwain—They are selected on the basis of having made AWAs successfully with their employees, having made innovative AWAs, having made AWAs that are pacesetters in



their particular industry in terms of, again, innovation. We look for different sorts of innovation. For example, we may select or invite an employer to become an ambassador because that employer has particular work and family provisions in their AWA that are interesting or innovative. At the moment we are looking for an ambassador who is using AWAs to offer employment to young people in an innovative way.

Senator WONG—Who selects them?

Mr McIlwain—The invitation to an employer would be customarily approved by me, but the actual decision on whether an employer is accepted as an ambassador is made collectively in the office with consultation between my division and the national communications team of the office. We might consult the Employment Advocate to get his views.

Senator WONG—Is the selection criteria for these ambassadors, which you rattled off before, written somewhere?

Mr Hamberger—They have not been published.

Mr McIlwain—They are not published in the way, for example, that the criteria for membership of the industry partner program are published on the web site. But they are the criteria that I have just elaborated.

Senator WONG—Are they documented somewhere in your organisation?

Mr McIlwain—We would have some internal material on them.

Senator WONG—Could you provide that?

Mr McIlwain—Yes, we will provide what we can.

Senator WONG—Is this what is given to staff for the purposes of them putting to you, ‘We reckon this bloke down the road has a great AWA and he should become an ambassador’?

Mr McIlwain—There is an ambassador policy. We can provide that to you. Staff would have regard to that. Since its inception, I have personally spoken to all of the client service network staff about the scheme on several occasions. People within the organisation have a very good understanding of what we are looking for in ambassadors. We can provide a copy of the ambassador policy.

Senator WONG—Is there any consultation with the minister’s office on this issue?

Mr McIlwain—No.

Senator WONG—Are employees at the relevant workplace consulted when you are considering their employer as a potential ambassador?

Mr McIlwain—No.

Mr Hamberger—They may have been spoken to. I do not think it is an absolute rule.

Mr McIlwain—Sure. To be more precise, they are not necessarily consulted in the context of that invitation. We may have spoken to the employees about specific agreements on many occasions. For example, an Adelaide based ambassador, Crafty Kids—a business that produces craft kits for children and schools—has been the subject of longstanding research by the OEA into work and family balance in agreement making in AWAs going back some years, and staff there have been consulted on many occasions.

Senator WONG—But the more forthright answer that you gave earlier is that the staff are not spoken to as a matter of course when you are considering their employer as a potential ambassador.



Mr McIlwain—That is correct; they are not. But they may have been spoken to over the years.

Senator WONG—I accept that, but in your normal processes you do not check before you make these people ambassadors that the staff actually think that these AWAs are innovative and positive.

Mr McIlwain—We would certainly not invite an employer to become an OEA ambassador if we had any concerns about the content of the AWA or the way it has operated. We are looking for best practice, so we certainly select AWAs from the field of best practice in a particular area. For example, for work and family we are looking for the best AWAs providing work and family provisions. For training, for young people or trainees, again we are looking for best practice AWAs in that area.

Senator WONG—I understand that, but your assessment of what is best practice is done as a matter of course without reference to the employees concerned.

Mr Hamberger—The policy does not say, ‘You must.’ It could; I hear what you are saying. You could—and maybe we should—say, ‘Before you recommend someone to be an ambassador, you must speak to the employees.’ That is not an unreasonable proposition. But, from my knowledge, probably in most cases—if not in all—there would have been discussions with the employees.

Senator WONG—That is not what Mr McIlwain said a few minutes ago.

Mr Hamberger—This is based on my experience. I certainly know a number of the ambassadors and have visited them. I have certainly spoken to a lot of the employees and I know that our regional office people have. I am not saying that in every single case the employees have been spoken to. It is not standard policy that they must be.

Senator WONG—And the visits to which you refer may well have been after these firms have been employed as ambassadors in any event.

Mr Hamberger—I take your point, but I am actually not referring to that. I am talking about visits that would have happened before they became ambassadors. I have certainly discussed things with employees and I know that our regional office has. I do not want to give the impression that we base it purely on what employers are telling us and do not have any discussions with employees. The point you raise is an interesting one, though. Maybe we should make it more a matter of course.

Senator WONG—I am pleased that you have considered the issue.

Mr Hamberger—It is a good point. As I said, I think it actually happens often, but to be honest I would be quite happy to take that on board. It certainly makes sense.

Mr McIlwain—In the material we produce on ambassadors, one of our goals is to incorporate interviews, or material from interviews, with employees. In recommending to me that somebody be invited to be an ambassador, our staff are aware of that. They are looking for workplaces where, whether through thinking specifically of that employer as a possible ambassador or through their experience over the months or years, they know the views of the employees about the AWAs. But again, as Mr Hamberger and I have said, it is not a formal requirement in making a recommendation to me to issue an invitation that staff be consulted at that point.

Senator WONG—So is it possible that there are ambassadors who have been appointed without the office having had any direct discussion with the employees?

Mr McIlwain—It is possible but unlikely.



Senator WONG—Do these ambassadors receive any monetary benefit from the OEA?

Mr McIlwain—No.

Senator WONG—Do they receive any other benefit in terms of more streamlined procedures?

Mr McIlwain—No.

Senator WONG—What benefit do they receive?

Mr McIlwain—They receive the kudos of being identified by the OEA as having AWAs that are best practice for one reason or another.

Senator WONG—Have any firms or employers which have been invited to be ambassadors then subsequently been uninvited or dismissed, or whatever the term might be?

Mr McIlwain—To the best of my knowledge, nobody has lost that status after having been appointed an OEA ambassador.

Senator WONG—Has any firm resigned from that?

Mr McIlwain—Again, to the best of my knowledge, no.

Senator WONG—Presumably one’s ambassador status will continue beyond the life of a particular AWA.

Mr McIlwain—It could. However, we would not see value in having as an ambassador an organisation or an employer that did not have live AWAs in place. That is the purpose of this initiative.

Senator WONG—I appreciate that. I am asking whether, if they get it once because they have had this particularly innovative AWA, you then check that the next one would similarly entitle them to ambassador status, or once you are in are you in permanently; or is this not something that you have turned your mind to?

Mr McIlwain—It is not something we have actively turned our mind to at this stage, the program having been so recently developed. However, our OEA industry partnership program has an evaluation and a review mechanism in it. That would be, I suggest, an appropriate way to also deal with this issue in the OEA AWA ambassador program.

Senator WONG—There you go; there is another idea, Mr Hamberger.

Mr Hamberger—Yes, I wrote that down. That is another good suggestion.

Senator WONG—Do you have any involvement in funding working women’s centres?

Mr McIlwain—We do.

Senator WONG—Is it you as well as DEWR or in addition to?

Mr Hamberger—Yes.

Senator WONG—Has there been or is there currently a review of the funding to be allocated to working women’s centres?

Mr Hamberger—Not from the OEA. I will check, but my recollection is that we have just signed new contracts with all the working women’s centres—for the next, I think, two years. I will check that and, if I am wrong, I will correct it. But I am pretty sure that we have just entered into new contracts. I cannot speak for the department; I do not know about that. But, speaking for the OEA, we have just entered into new contracts with the working women’s centres.



Senator WONG—Do you expect the funding for these centres to continue from the OEA’s end?

Mr Hamberger—At the very least for the duration of those contracts. I think they are two-year contracts.

Senator WONG—Do these working women’s centres provide you with reports to identify where employees might be facing difficulties in either particular sectors or with particular employers?

Mr Hamberger—They do have to provide regular reports, I think on a quarterly basis, about what activities they have been undertaking pursuant to the contracts. But there is also pretty regular discussion at an informal level between the working women’s centres and the community legal centres we fund and our regional offices. I think there is quite often some useful interchange on those kinds of issues. It is not a formal requirement that they do it, and it is not necessarily part of a formal report, but there is quite a lot of discussion about those kinds of issues.

Senator WONG—So there is nothing in the formal reporting requirements under the contract for funding that goes to the issue of where that particular centre, working women’s or community legal centre, has identified there being problems in a particular industry or with a particular employer?

Mr Hamberger—No. They do have to indicate what kinds of matters they have been dealing with. I suppose implicitly, if they have been dealing with lots of unfair dismissals in the clothing industry, let us say, you might say that is a bit of a sign that there is a problem there. But it is not an explicit requirement in their reporting.

Senator WONG—Do you do an analysis of those issues in relation to their reports?

Mr Hamberger—We do have a look at those reports, yes.

Senator WONG—You look at those reports, but do you do the sort of analysis where you say, ‘Look, there obviously is a significant problem in the clothing industry’? I think you used that industry hypothetically. Does the office do that?

Mr Hamberger—Not on a systematic basis, no.

Mr McIlwain—No. There is no formal aggregated analysis of the data coming out of those reports. However, as Mr Hamberger said, there is frequent contact between the relevant regional manager and the contact person in the community partner organisations. In fact, we run training for the partner organisations. We attend lunches and morning and afternoon teas with their staff to talk to them directly and hear, amongst other things, what issues might be raised by callers seeking their services.

Senator WONG—Are these reports produced quarterly or annually?

Mr McIlwain—Quarterly.

Senator WONG—Are you able to provide us with reports for the current and previous financial years from the working women’s centres and other community partners?

Mr Hamberger—We could; I do not think it would be a problem. But perhaps as a matter of courtesy—I do not think they would mind—we should check with the people who have produced the reports.

Senator WONG—I do not have any objection to your doing that.

Mr Hamberger—Subject to that, we can do that.



[12.10 p.m.]

CHAIR—We move now to output 2.1—Workplace relations policy and analysis.

Senator WONG—Dr Boxall, I think I asked you on the last occasion where the legislation was that requires unions to hold secret ballots prior to affiliation with a political party, and I think Mr Smythe said that the drafting had commenced. Where are we at on that?

Mr Smythe—Drafting is continuing on that bill. The government has not yet introduced that bill, as you would be aware.

Senator WONG—I am aware of that. So drafting is not finalised yet?

Mr Smythe—I am not sure how much I can reveal about the drafting process, other than to say that instructions are with the Office of Parliamentary Counsel and drafting is proceeding.

Senator WONG—I just asked whether the drafting had been finalised; that is all. Is that a problem? I am not asking what the advice of the minister is.

Mr Smythe—The iterative process of preparing a bill for introduction is such that it is possible that aspects of the policy that underpins the bill could change up to the point of introduction. So it is not really possible to definitively say that drafting is finalised until such time as there is a bill ready for introduction.

Senator WONG—But there is a bill that is finalised subject to the government’s policy imprimatur?

Mr Smythe—The status of bills is confidential until such time as they are introduced into the parliament.

Senator WONG—The status of the bill is confidential?

Mr Smythe—Yes.

Senator WONG—So we are not entitled to know even whether or not you have drafted it? Is that what you are now telling me?

Mr Smythe—We do not draft it; the Office of Parliamentary Counsel drafts it. That process is subject to confidentiality up until such time as the government—

Senator WONG—What sort of confidentiality is that?

Mr Smythe—It is the operative rules of the Office of Parliamentary Counsel. What they do with bills is that they—

Senator WONG—It is their confidentiality, isn’t it?

Mr Smythe—That is right.

Senator WONG—Do you have a draft bill?

Mr Smythe—Do I have a draft bill?

Senator WONG—Yes. Does the department have a draft bill?

Mr Smythe—Yes.

Senator WONG—But it has not yet been introduced?

Mr Smythe—Correct.

Senator WONG—Has the explanatory memorandum been drafted?

Mr Smythe—No.



Senator WONG—Has the department conducted any research or analysis as to whether union members are concerned about this issue?

Mr Smythe—Not that I am aware of.

Senator WONG—Dr Boxall, can you assist us?

Dr Boxall—Mr Smythe has answered the question.

Senator WONG—He has said that he is not aware of any. I wonder whether you would be aware of anything that your department has done on this issue.

Dr Boxall—No, I am not aware of anything.

Senator WONG—Has the department done any work quantifying the level of donations made to political parties by registered associations?


Senator WONG—What about in relation to other registered organisations—that is, employer organisations? Has there been any work done on quantifying their political donations?


Senator WONG—Are political donations from either employer or employee registered organisations accounted for under the Workplace Relations Act?

Mr Smythe—I will have to take that question on notice.

Senator KIRK—I have some questions in relation to the Workplace Relations Amendment (Termination of Employment) Bill. Has the department conducted any analysis of how the proposed remedies for unfair dismissal claimants differ under this bill as compared with what is available under state law?

Mr Smythe—Some work has been done. There has been some comparative work done as a matter of internal working of the department.

Senator KIRK—Which areas have you compared?

Mr Smythe—I will have to take that question on notice.

Senator KIRK—Has there been any written analysis done of the comparison between the two types of laws?

Mr Smythe—There may be internal working documents. I am not aware of published material.

Senator KIRK—Would those internal working documents be available to the committee?

Mr Smythe—I will take that question on notice.

Senator KIRK—Will you take the question on notice or will you provide—

Mr Smythe—I will take on notice the question of whether they would be available.

Senator KIRK—Assuming there has been some analysis done of the differences between the two laws, I would like to know such things as what the differences are in the compensation that can be awarded, the qualifying periods in which action can be taken and the redundancy payments and the like. Can someone perhaps outline for me the major differences between the two?

Mr Smythe—I could take that question on notice. But I think you prefaced your question with my view, and I do not think it would be appropriate for me to give you my view.



Senator KIRK—I am asking for the department’s view, the department’s analysis.

Dr Boxall—It is not appropriate for us to give the department’s view. We can answer factual questions.

Senator KIRK—It is a factual question. I am asking: in so far as you have done your analysis, what are the legal differences between the bill as proposed and, as they exist, the state unfair dismissal laws?

Mr Smythe—I think I can probably provide that information.

Senator KIRK—I believe that in the last estimates I raised some questions about consultation with the states over this bill. As I recall, there was very little, if any, consultation with the states. I wonder which, if any, other bodies were consulted in relation to the introduction of this bill.

Mr Smythe—I am advised that there was consultation with the ACTU and the employer body, the Australian Chamber of Commerce and Industry.

Senator KIRK—How did that consultation come about? What sort of consultation was that? Were there just meetings or were submissions called for?

Mr Smythe—There is a committee of the National Labour Consultative Council—I am afraid I cannot remember the new name it has—called the committee on industrial legislation, and consultations occurred under the auspices of that committee.

Senator KIRK—Who is on that committee? Who makes up that committee?

Mr Smythe—The committee on industrial legislation comprises the minister and representatives of the ACTU and the ACCI.

Senator KIRK—Are there representatives from each of the states on that as well?

Mr Smythe—No, there are no state government representatives on that committee.

Senator KIRK—Only industry people?


Senator KIRK—Now that the legislation has been introduced into the parliament, what progress has the department made on doing some costings as to how much it will cost to introduce this legislation?

Mr Smythe—I do not think I can add to what I answered last time. It is subject to the budget, and there has been no further analysis that I am aware of.

Senator KIRK—So there has been no preliminary work done at all as to the effect on resources at the federal level?

Mr Smythe—I think I indicated last time that there had been some preliminary informal calculations done within the department; the situation has not changed.

Senator KIRK—It has not progressed any further since November?

Mr Smythe—No.

Senator KIRK—So in the last three months there has been no further progress?

Mr Smythe—That is correct.

Senator KIRK—Are you saying to me that it will not be until the budget process that these matters will be costed?




Senator KIRK—So I am best off asking these questions after the May budget.

Mr Smythe—Yes.

Senator WONG—With respect to the emergency services volunteers amendment, I understand that the minister announced an amendment to the act last week. Has a bill been drafted in respect of that issue?

Mr Smythe—The bill has not been drafted yet, but instructions have been issued.

Senator WONG—Are you aware of a private member’s bill that Simon Crean introduced on this issue?

Mr Smythe—I am vaguely aware of that bill.

Senator WONG—Did the drafting instructions request a bill that substantially differs from that private member’s bill?

Mr Smythe—I do not think it would be appropriate for me to canvass what is in the drafting instructions for the bill. All I can say is that the bill will reflect the announcement that the minister made.

Senator WONG—Will the allowable matters be expanded to include paid leave for volunteers?

Mr Smythe—As I said, I cannot expand on what the minister has announced in respect of a bill that has not been introduced.

Senator WONG—Has there been consideration of an amendment to the dismissal provisions?

Mr Smythe—I cannot answer that question for the same reason that I have just stated.

Senator WONG—Is it correct that we have not yet ratified ILO convention 182 on the elimination of the worst forms of child labour?

Mr Hoy—That is correct.

Senator WONG—I understand that most other OECD countries have ratified it.

Mr Hoy—Yes.

Senator WONG—Wasn’t it one of the matters referred to in the Singapore declaration?

Mr Hoy—I believe it was.

Senator WONG—So why have we not done it?

Mr Hoy—The government is committed to ratifying it; but under the treaty making arrangements in Australia all governments—state, territory and federal—need to comply in terms of law and practice. Following a Workplace Relations Ministers Council meeting in November, the minister announced that the Commonwealth was committed to having it ratified as soon as possible and got agreement of all ministers there to aim for Easter 2003 to achieve that.

Senator WONG—Has there been discussion with the states yet about ratifying it?

Mr Hoy—Yes, there has been.

Senator WONG—When did that happen?

Mr Hoy—It has been happening over a period of time. But the situation is that there are still some laws at the Commonwealth and state levels which currently prevent Australia from ratifying that treaty.



Senator WONG—Which laws at a Commonwealth level would those be?

Mr Hoy—Mainly relating to Customs—dealing with pornography, the age at which children could participate in pornographic films and the like. Some states have it as 16; the convention requires it to be 18. So there needs to be a change in the law.

Senator WONG—When did the government first announce that it would ratify this convention?

Mr Hoy—I am not sure about that. Last November Minister Abbott announced, on behalf of the government, that the government was committed to ratifying it as soon as possible.

Senator WONG—When was the Singapore declaration?

Mr Hoy—That was 1996.

Senator WONG—In 1996 we announced, for the purposes at least of international trade, that we would comply with that convention?

Mr Hoy—Yes; but, as I explained, it is a matter for the federal and state governments.

Senator WONG—I appreciate that, but the first announcement you can advise me of is 2002.

Mr Hoy—That is the one that I am directly familiar with. There may have been others. I will just check that. I am advised that this convention was not adopted until 1999.

Senator WONG—So did the declaration just refer to child labour generally, without referring to that particular convention?

Mr Hoy—I am not sure of that. I would need to check that.

Senator WONG—So in 1999—

Mr Hoy—In 1999 this convention was introduced.

Senator WONG—To your knowledge, between 1999 and November 2002, has there been any work done by the government to proceed to ratification in terms of—

Mr Hoy—Yes, work has been done at bilateral levels with the states and there have also been discussions regularly at Workplace Relations Ministers Council meetings.

Senator WONG—But how far away are we from ratifying it?

Mr Hoy—As I said, there is a commitment on the part of all states and the federal government to achieve it by Easter this year.

Senator WONG—Since the release of the Breaking the gridlock papers, has the department done any further work on the introduction of a unified workplace relations system?

Mr Smythe—I am sorry. What do you mean by ‘further work’? Have we done any internal—

Senator WONG—The thrust of the papers, as I understand it, is a discussion of moving towards a unified workplace relations system—in other words, a more centralised workplace relations system. I suppose you would say that the bill I was referring to earlier, the termination of employment bill, is perhaps a step in that direction. Has any further work been done or have there been discussions or proposals?

Mr Smythe—There is no other published material, if that is what you are asking. In terms of the notion, in a wide and disparate policy group, there is always a raft of policy ideas that



are being considered in some way or another. But as they are internal workings of the department, I am not sure whether it is appropriate to canvass those in a forum such as this.

Senator WONG—So, as far as you are aware, there are no proposals to introduce anything further along those lines?

Mr Smythe—I do not think it would be appropriate for me to canvass what possible proposals there might be floating around.

Senator WONG—Has there been any consideration of or research into how such a unified workplace relations system would be introduced? I am thinking along the lines of whether there has been consideration of the head or heads of power that the Commonwealth would be relying on in order to introduce such laws.

Mr Smythe—I think it is reasonable to say that, in terms of general consideration of a unified system, some thought has been given to the constitutional bases upon which such a system would be based, yes.

Senator WONG—What have been your conclusions on that?

Mr Smythe—I do not think it would be appropriate to disclose those.

Senator WONG—Have you conducted any research into the use of international conventions as the basis for such a unitary system?

Mr Smythe—I am not aware of any research having been conducted along those lines.

Senator WONG—Is there no research at all into the use of the external affairs power to introduce it?

Mr Smythe—The external affairs power was used by the Labor government to underpin various parts of the Workplace Relations Act. So there is already, within the department’s knowledge, existing research and constitutional advice on the extent of that power.

Senator WONG—So you would not need to do any further research?

Mr Smythe—No, I did not say that.

Senator WONG—I have a question about the announcement regarding a proposed amendment to the act: before allowing minimum award wages to rise in future, the AIRC would be required to assess whether low-paid workers would lose their jobs. Has that legislation been drafted?

Mr Smythe—I am sorry, I did not hear the first part of your question.

Senator WONG—The minister has made an announcement, which has been reported, that amendments will be introduced to require the AIRC—before minimum award wages are allowed to rise in the future—to assess whether low-paid workers would lose their jobs. Are you aware of that?

Mr Smythe—Not in those terms, no; I am not aware of such a report.

Senator WONG—It is reported in today’s Financial Review that Minister Abbott’s spokeswoman said that the proposed laws were ‘aimed at stopping low-income earners from being priced out of the labour market’. Are you familiar with that article?

Mr Smythe—I am not familiar with that article.

Senator WONG—Can anyone else help me?

Mr Hoy—No.

Senator WONG—Do you know anything about this announcement?



Mr Hoy—I saw a reference in the newspaper, but I am not aware of an announcement by the minister.

Senator WONG—Has the department been asked to do any labour market analysis as to the effect of minimum wage increases on employment levels?

Mr Hoy—I am advised that some internal work has been done which is associated with the current wage case.

Senator WONG—So presumably that has been done in forming your submission on that?

Mr Hoy—Yes.

Senator WONG—Has that been included in your submission?

Mr Hoy—The submission has not been lodged yet.

Senator WONG—On the issue of this announcement, has the department drafted any amendments to the act to alter the way in which the AIRC considers the living wage case?

Mr Smythe—I do not believe that it is appropriate to canvass possible bills that have not been introduced or the content thereof.

Senator WONG—I am not asking what the advice is. I am asking whether or not you have issued instructions to parliamentary counsel to draft a bill to alter the way in which the AIRC considers the living wage case.

Mr Smythe—Yes.

Senator WONG—You have?

Mr Smythe—Yes.

Senator WONG—When did that occur?

Mr Smythe—I will have to take that on notice. I do not recall the precise date.

Senator WONG—Is there not someone here amongst these many people who could assist us with that?

Mr Smythe—No, there is not.

Senator WONG—Perhaps you could take that on notice.

Mr Smythe—Certainly.

Senator WONG—Do you have any indication as to the time frame for completion of that legislation?

Mr Smythe—No.

Senator WONG—So the status is that you have issued instructions to parliamentary counsel, and you will tell me when at a later stage; and you are not able to indicate when the bill is likely to be finalised. Is that right?

Mr Smythe—That is correct.

Senator WONG—But you can confirm that, in part, it is to do with alterations to the way in which the commission will consider living wage cases?

Mr Smythe—It will affect the way in which the commission is to perform its functions in considering wage cases.

Senator WONG—Will it apply to this year’s living wage case?



Mr Smythe—I cannot answer that question. It would require me to speculate on a bill that the government has not yet introduced.

Senator WONG—Did you issue the drafting instructions?

Mr Smythe—I have.

Senator WONG—Do they—

Mr Smythe—I cannot tell you what is in the drafting instructions.

Senator WONG—When is the living wage case to be heard this year? Has it in fact started?

Mr Cole—The living wage case is to be heard commencing on 31 March and for the rest of that week. There is a process in train, as there usually is, for the respective parties to prepare their written submissions and any exhibit material. The ACTU has recently provided its material, and the employer parties and the government will be doing likewise in the next two to three weeks.

Senator WONG—Surely there is no suggestion, is there, that these amendments might apply to this case, which is so close?

Mr Hoy—We cannot add any more than what we have already said.

Senator WONG—So workers in this country might anticipate there being a bill that alters the way in which their minimum wage will be assessed prior to 31 March. Is that right?

Dr Boxall—Not necessarily so. The government determines the priority of legislation. The government makes a decision about when they introduce which legislation, and parliament decides when they are going to pass it. We cannot tell you whether the legislation will be introduced before or after the case, and we certainly cannot tell you whether it would be passed before or after the case. We simply cannot add anything in answer to your question.

Senator SHERRY—It is the operative date that is critical. Mr Smythe, can you tell us the proposed operative date?

Mr Smythe—No.

Senator SHERRY—Why not?

Mr Smythe—Because it would require me to disclose the contents of a possible bill that the government has not yet introduced.

Senator WONG—When is the Commonwealth’s submission on the living wage case likely to be finalised?

Mr Hoy—On 26 February.

Senator WONG—So presumably it is reasonably well advanced.

Mr Hoy—I hope so.

Senator SHERRY—‘No’ is easy to write.

Senator WONG—Is it the Commonwealth’s position to support the ACTU claim?

Mr Hoy—The Commonwealth’s position will be clear when the submission is lodged.

Senator WONG—At least that was a predictable answer, Mr Hoy. Are you proposing to brief counsel for this?

Mr Hoy—At this stage, no, but again that is a matter for the minister.

Senator WONG—How many persons are working within the department on this case?



Mr Hoy—As I answered last time and also on notice, there are people across my group and other parts of the department. I could not give you a precise estimate of it.

Senator WONG—Are you able to cost it?

Mr Hoy—No.

Senator WONG—You are not able to cost—

Mr Hoy—No, I cannot give you a costing of resources going into this particular case.

Senator WONG—You are not able to tell Australian taxpayers how much they are paying for the Commonwealth submission on a case such as the living wage case? I accept that you cannot do it now, but one would have thought that was something you could work out.

Mr Hoy—The problem is that we do not actually cost an individual’s time in participating in various things. We use resources flexibly across particular matters—not in this case, but in a range of matters. The only thing we are able to tell you is the costs of external legal providers that we have to present particular cases.

Senator WONG—Are you able to provide an estimate of what the costs of the Commonwealth’s involvement in the living wage case will be?

Mr Hoy—No, I cannot.

Senator WONG—You cannot even provide an estimate?

Mr Hoy—No.

Senator WONG—You do not have the ability internally in your department to provide any estimate of the cost of your participation in the living wage case?

Mr Hoy—That is correct.

Senator WONG—I find that extraordinary. How many people are working on it?

Mr Hoy—I do not think I could give you that estimate either because—

Senator WONG—Could you take on notice how many persons in the department, directly or indirectly, are working on the living wage case? It is not an unreasonable question.

Mr Hoy—I will take it on notice.

Senator WONG—Thank you.

Proceedings suspended from 12.37 p.m. to 1.41 p.m. CHAIR—We are considering output 2.1—workplace relations policy and analysis.

Senator WONG—I want to go back to the issue we were discussing before lunch regarding the flagged amendments to the act to alter the way in which the commission considers minimum wage increases—the living wage cases. I think you said that the department, in the context of the living wage case, had done some analysis of employment effects of minimum wage increases; is that right?

Mr Hoy—What I said was that, as part of the Commonwealth submission, we are doing some work on that, yes.

Senator WONG—Are you able to provide the results of that work?

Mr Hoy—As I said earlier, whatever we use in that will be in the Commonwealth submission, which will become public on 26 February.

Senator WONG—Is a report being prepared?



Mr Hoy—No.

Senator WONG—A statistical analysis?

Mr Hoy—What I said was that internal work is being done as part of drafting the Commonwealth submission.

Senator WONG—Has there been an analysis of the employment effects of a minimum wage increase?

Mr Hoy—Yes.

Senator WONG—What form does that take?

Mr Hoy—I cannot tell you any more on that until the submission is out.

Senator WONG—I am not asking about what is in it; I am asking: what form does it take? Is it a statistical analysis, is it only for the submission or does it have broader relevance?

Mr Hoy—It is just a statistical analysis. It does not take any particular form and it is part of drawing up the Commonwealth submission.

Senator WONG—Is the only purpose of that statistical analysis the preparation of the Commonwealth submission to this current living wage case?

Mr Hoy—Yes.

Senator WONG—So it has had no other use, for example, in relation to the proposed bill?

Mr Hoy—I cannot comment on that.

Senator WONG—Why not?

Mr Hoy—Because, as Mr Smythe said, the issue about the bill and what is in the bill is still a matter for government.

Senator WONG—I am not asking about what is in the bill; I am asking whether the statistical analysis was also done—

Mr Hoy—No, I cannot tell you that.

Senator WONG—You cannot tell me that?

Mr Hoy—No.

Senator WONG—On what basis?

Mr Hoy—On the basis that the government is still considering what might be in that particular bill.

Senator WONG—I understand that, Mr Hoy. I am not asking you about what is in the bill; I am asking you about work that the department has done. You have indicated that you have done a statistical analysis of projected effects of a minimum wage increase on employment. I am asking: has any other work been done in relation to the proposal that we were discussing before?

Mr Hoy—No.

Senator WONG—No, there has not?

Mr Hoy—No.

Senator WONG—I had some questions regarding the full bench decision handed down last month in the SDAEA roping-in award case.

Mr Cole—I might be able to help you with that.



Senator WONG—Thank you. Could you clarify something for me? I have read the decision; forgive me if I do not quite understand it. Is it the case that the Commonwealth submission in that case was in part that schedule 1A was an appropriate safety net in respect of those employees?

Mr Cole—The Commonwealth submission was that in the particular circumstances of that case it was not appropriate for the commission to make a new federal award. That would have left the situation that the employees concerned would have continued to be covered by what we call the schedule 1A arrangements.

Senator WONG—I understand that. In its decision on the Commonwealth submission, the commission stated:

It submitted that the application of the safety net provided for in Part XV of the Act, particularly in Schedule 1A, to the employees covered by the application distinguishes the application from other roping-in applications the Commission has dealt with in the past. The Commission should not replace one safety net with another ...

Mr Cole—That was in the context of an overriding submission that, based on its concerns about what would be the likely job loss that would flow from the making of the proposed award, the Commonwealth’s position was that in the public interest the proposed award should not be made. There was a subsidiary submission in support of that primary position that parties should not be deprived of the benefit of the schedule 1A safety net as it is a statutory arrangement and one way you could be deprived of the benefit of that safety net would be if, for example, as an employee you lost your job as a consequence of a federal award being made. That was the connection between the two main submissions.

Senator WONG—Perhaps we can discuss first the primary submission that you outlined, Mr Cole, that the making of this award would lead to employment losses.

Mr Cole—Yes.

Senator WONG—Did the department conduct an analysis of that particular sector to demonstrate that that would in fact be the case?

Mr Cole—We did arrange for consultants to undertake a survey of the impact that businesses saw the making of the proposed award would have on the employment and other dimensions of their business. That survey was directed to the overwhelming majority of the businesses affected who were not represented in the proceedings. There are some 18,000 businesses affected. The vast majority of those businesses were not represented by any organisation or any other representative, and the Commonwealth survey went to what might be the employment impact in that particular area of coverage.

Senator WONG—Can I just clarify that, Mr Cole? The research that you conducted was a survey of some of the employers who were proposed to be the subject of the award in question?

Mr Cole—Yes, Senator.

Senator WONG—These employers opposed the roping-in application?

Mr Cole—I have explained, Senator, that the survey was a survey of employers who were not represented in the proceedings.

Senator WONG—But they certainly did not rock up and consent?

Mr Cole—They were not there. People could make their own inferences as to what their position was.



Senator WONG—So you restricted your survey to people who would have been subject to the order if it had been made?

Mr Cole—It was relevant to target the survey to the businesses which the union was seeking to rope into the award.

Senator WONG—Was this evidence presented to the full bench?

Mr Cole—Yes, the statistical results of the survey were presented to the full bench?

Senator WONG—They were presented to the bench?

Mr Cole—They were presented to the bench, yes.

Senator WONG—Other than this statistical analysis, was there any other evidence in relation to prospective employment loss as a result of the award being made?

Mr Cole—There was some other survey material. For example, one of the employer organisations affected, the Australian Retailers Association, had conducted a survey of its own members and presented some material to the commission which included, from memory, some indication of the likely employment impact on its members.

Senator WONG—In regard to this statistical analysis in which you asked employers what they thought they would do if they had to be under the award, was that prepared before or after the case commenced?

Mr Cole—This case has, in various stages, been in progress for about four years. The initial proceedings went to whether it was sufficient that the log of claims might have been served through the ordinary mail instead of by registered mail, and subsequent proceedings dealt with the formal finding of an industrial dispute. In 2002, ultimately, the matter reached the stage where parties had put in submissions on the merits or otherwise of making an award, including material in support of those positions. The survey I am talking about was prepared in anticipation of those proceedings but in the knowledge that that stage was a stage that was yet to be heard by the commission.

Senator WONG—When was the survey prepared?

Mr Cole—The survey was conducted in early 2002. The report is dated 4 April 2002. From memory, it was supplied to the members of the full bench and to the other principal parties in the case, including the union, at about that time.

Senator WONG—Was that in April 2002?

Mr Cole—Yes.

Senator WONG—From how many employers did you receive a response?

Mr Cole—There were responses from 302 employers.

Senator WONG—The log of claims was on some 35,000 employers and a dispute finding of about 24½ thousand? Is that right?

Mr Cole—Ultimately, the case affected about 18,000 businesses.

Senator WONG—Out of 18,000 businesses, how many of them were, in fact, represented?

Mr Cole—I do not have a precise figure to quote on that but, at most, a couple of thousand businesses would have been represented.

Senator WONG—Did the sample group that you surveyed comprise the remaining 16,000?



Mr Cole—I think it might have been nearer 14,000 to 15,000. The other figure would represent the balance.

Senator WONG—So you surveyed about 15,000?

Mr Cole—Ultimately, that would have been about the proportion to be targeted. If you are asking, as I think you might be, what the total number of businesses was from which the sample for the survey was drawn, I think that total was between 14,000 and 15,000, subject to checking.

Senator WONG—That was the total pool from which you drew a random sample?

Mr Cole—The consultants would have drawn a random sample.

Senator WONG—Who were the consultants?

Mr Cole—A Melbourne company by the name of Market Solutions.

Senator WONG—How much did that consultancy cost?

Mr Cole—The consultancy cost in total, excluding GST, was $58,153.01.

Senator WONG—Can you tell me who the principals of Market Solutions are?

Mr Cole—I am not sure I can provide you with the names of the principals of the firm. I would be able to provide the name of the chief contact, who from memory was a Ms Wallace. That is subject to correction.

Senator WONG—Perhaps you could take that on notice.

Mr Cole—Yes.

Senator WONG—Of the approximately 15,000, who were the group from which the sample was taken, how many were actually surveyed?

Mr Cole—Questionnaires were distributed to 2,500 businesses.

Senator WONG—Was there some methodology in the selection of the 2,500 out of the 15,000?

Mr Cole—It was, as I understand it, simply a random sample.

Senator WONG—A random sample?

Mr Cole—Yes.

Senator WONG—Out of 2,500 you got 302 responses?

Mr Cole—There were 302 completed questionnaires. I might explain that it was a very complex survey. It literally had to remind businesses what were the key differences between the arrangements that were the minimum requirements under schedule 1A, which we have referred to previously, and what would be the minimum requirements under the proposed roping-in award. What was crucial to that was the difference in rates of pay, as the award provided in various respects for penalty rates of pay on different days of the week and at different hours of the day.

Businesses had to be advised what their obligations would be in certain critical respects under the proposed award. They were then asked very extensive questions about what they considered would be the impact of the making of award on the different categories of their employees. For example, if we look at Sundays—and similar questions were asked in respect of Saturday, and Monday to Friday—having been advised what the proposed award would mean in terms of the hourly rates of pay applicable to the employees working on the Sunday, they were asked what they thought the impact would be on adult permanent employment,



adult part-time employment, adult casual employment and junior employment, and in each case whether the number of employees would increase, decrease or stay the same, or they did not know or did not have employees in that category. There were related questions on what the impact might be on the number of hours that the proprietor and other unpaid helpers would have to spend working in the business. Indeed, there were even more wide-ranging questions than that.

I am trying to give you a sense that it was a fairly complex survey. In total, some 302 businesses fully completed that survey. The consultants were able to establish that there were some 471 businesses that qualified; that is, they were within the target population but for whatever reason did not see fit or did not have the time or opportunity to actually submit a fully completed survey. So 302 completed the survey and 471, it transpires, were within the target population but did not complete the survey. Then there was a very large number, as it turned out, of sole proprietors: 579 of the businesses who received the questionnaire were sole proprietors. There was no way of knowing in advance, of course, whether a business was or was not a sole proprietor. By definition, sole proprietors have no employees and the question of any impact on employment in those businesses would not be relevant. Then there were small numbers of businesses who, it transpired, were members of employer associations but for whom we did not have prior information to identify that. There was also a group left at the end of the day of about 750-odd for whom the consultants were not able to establish anything about the status of these businesses. These were presumably businesses that simply failed to respond in any way at all to the survey.

Senator WONG—Thank you for that very detailed answer. To summarise what I understand to be the numbers, you actually only had 302 completed questionnaires on which you could rely for the purposes of your submission as to employment effects. Am I right?

Mr Cole—Yes, but the consultants did establish enough information in respect of the second group I mentioned—people who qualified in the sense that it was positively confirmed that they were within the intended target population—for them to advise as to whether the employment profile of those businesses was similar or otherwise to the employment profile of the 302 who did complete the survey. By employment profile, I am talking about the proportion of employees in the different categories or types of employment. Sufficient information was gained from those businesses for the consultants to be able to report that on balance, while there were some ons and offs so to speak, on average the employment profile could be taken as similar. So, whilst we had completed questionnaires from 302, we knew as a consequence of what I have just been describing that their experience was also likely to be replicated by up to another 470 businesses.

Senator WONG—I want to come to that proposition in a moment. With the 302 I understand you were looking at intention only. Is that right?

Mr Cole—Yes.

Senator WONG—Because nothing had happened at that stage.

Mr Cole—That is correct. The survey was a survey of what the businesses considered would be the impact if an award were made.

Senator WONG—Did most of the 302 indicate that they considered that they may shed jobs as a result of the award?

Mr Cole—I will provide you with a summarised statistic. The report estimates that, from the businesses that were able to quantify the impact in respect of each type of employment that they had, there would be a job loss of 2,505 employees.



Senator WONG—How many of the 302 indicated that?

Mr Cole—There is a very detailed table here that takes different days of the week, weekends and different categories. It provides a breakdown in respect of where, and what number or proportion of those businesses anticipated a change in employment on those particular days.

Senator WONG—Isn’t it the case that the commission did not accept that the evidence you obtained supported the proposition you made—by ‘you’ I mean the Commonwealth, Mr Cole—in relation to the employment effects of the application?

Mr Cole—The commission, broadly speaking, was not satisfied in the light of some other evidence that was produced by the union that the overall response rate to the survey was sufficient to reliably quantify the number of jobs that would be lost. The commission certainly did accept that there would be job loss from the making of the award. You have probably come across that reference in the decision yourself.

Senator WONG—Yes, but the commission also commented on the effective self-selection of the respondents to the survey.

Mr Cole—You are correct. The commission had some other issues. Nevertheless, the commission did accept that there would be job loss and determined it should take a cautious approach. As you would be aware, the award that is to be made will differ in significant respects from the existing award. It appears that that would be not least as a consequence of the commission being satisfied as to the likely job loss and being determined to adopt a cautious approach.

Senator WONG—I believe the commission makes the point that the survey, even if you could rely on it, is only really in reference to the proposed award, not what it might make in terms of gross employment outcome.

Mr Cole—Yes, but nevertheless it is significant that the commission has determined not to make the proposed award. It is making a different—

Senator WONG—I do not know about you, Mr Cole, but in my experience it is pretty unusual for an application to be granted in toto, but it is probably not a matter we want to explore here.

Mr Cole—We are talking here with respect to a roping-in award. The nature of a roping-in award is that businesses which have not been initially logged or made party to an award are quite typically then made party to that award. What the commission is determined to do here is to not make the 18,000 businesses subject to the terms of the existing award in certain critical respects.

Senator WONG—I will just go back to the timing of this survey. When did the Commonwealth first indicate its opposition to the award being granted in the terms sought?

Mr Cole—May I just remind you of what I said. The matter has had an extensive and somewhat chequered history. The matter was the subject of initial written submissions in September 2001. In September 2001, the Commonwealth had not arranged at that time for the survey to be conducted.

Senator WONG—But at that time, if I could just clarify, had the Commonwealth already indicated its opposition to the award?

Mr Cole—The Commonwealth written submissions at that time more made the point that the union, in the Commonwealth’s view, had not made out a case in its written submissions— because it had already prepared written submissions and the Commonwealth written



submissions were prepared in response to those written submissions. We expressed concern as to the likely employment impact. That concern at that point was based on other theoretical and empirical material.

Senator WONG—What empirical material was that?

Mr Cole—Material such as has been tendered by various parties in national wage cases, material drawn from the academic literature on the employment impact of minimum wage increases.

Senator WONG—So this is a particular view the department has as to a general view that there is a negative employment impact of minimum wage increases; is that what you mean?

Mr Cole—To the department’s understanding, and it has been reflected in the Commonwealth’s submissions in a series of national wage cases, that is the orthodox and predominantly accepted opinion of experts. That is not to say that there is unanimity among the academics on that point but the majority of empirical studies—and this is all summarised in, for example, last year’s Commonwealth submission to the wage case—attest that there will be a negative impact on jobs flowing from minimum wage increases. So in 2001, we were expressing concerns predicated on an understanding as to the significant differences between the proposed award and what might otherwise have been the conditions applying in a number of these businesses, based on that sort of theoretical and empirical information. Then we took that a stage further, because the case did not proceed. There was a federal election and, on the return of the government, the matter was resumed and the survey was conducted.

Senator WONG—So you had this view and then you spent just over $58,000 in order to try and obtain evidence in respect of this industry?

Mr Boxall—The department does not have views. The government’s views are outlined in their submission and the department draws on various evidence in advising the government on the submission.

Senator WONG—So the department communicated a particular view based on the predominance of experts that you referred to, Mr Cole, and then arranged to spend a substantial sum of money getting a survey, to which you got 300 respondents, as the evidence for this case.

Mr Boxall—The department provides advice to the government, which goes into the submission, and it is the government’s submission. The department pulls together analysis and various advice that goes in the submission.

Senator WONG—I am not asking about the advice.

Mr Boxall—What were you asking about?

Senator WONG—I am simply clarifying that you put this view before doing this survey, based on your previous experience and previous evidence that you had collated.

Mr Boxall—The department did not put a view at all, the Commonwealth—

Senator WONG—The submission from the Commonwealth was—

Mr Boxall—That is the government’s submission; it is not a departmental submission.

Senator WONG—I can still ask about it, Mr Boxall.

Mr Boxall—You can, but we cannot answer what the department’s view is. It is the government’s submission.

Senator Alston—You and advice are essentially the same.



Senator WONG—Mr Cole, in regard to the government position that was put in the submission prior to the survey being completed, I think you stated that that position was on the basis of a previous consideration of that issue in the context of national wage case matters?

Mr Cole—Yes. It was obviously not specifically with respect to the retail sector because the nature of those empirical studies and other theoretical studies were generally more wide ranging and not specifically targeted to retail, but it was sufficient to cause the government to be concerned about the likely job losses issue and for a survey to be undertaken.

Senator WONG—The survey was then undertaken with 302 completed questionnaires?

Mr Cole—That is right. Sufficient information was gained from about 471 other businesses for it to be established that the profile of the 302 was similar, on average, to the profile of at least another 470.

Senator WONG—So that is some 700-odd businesses?

Mr Cole—Yes, that is so. Parties will take different positions, I suggest, as to ultimately what they consider to be an appropriate response rate. In the absence of other information, particularly in the absence of much alternative information except some from the employer organisations in respect of their own members who were only a small minority of the total, we took the view that this information was relevant to the commission’s consideration. Indeed, we believe that the commission has taken it into account. Whilst not being prepared to accept a precise quantification of the job loss, the commission clearly determined it should adopt a cautious approach because it was satisfied there would be job loss.

Senator WONG—Equally, it was not entirely accepting of the survey as evidence for the proposition on which you were relying?

Mr Cole—That is correct. Parties will differ as to what they consider to be an appropriate response rate. Looking at the literature on that, there is a range of ways in which response rates may be calculated and parties will genuinely differ as to what is an acceptable response rate for a particular purpose. Ultimately, the Commonwealth was not especially asking the commission to accept that there would be 2,505 fewer jobs—if that was the figure I mentioned. The Commonwealth was seeking to impress upon the commission that there would be an impact and it would be negative. Those propositions were accepted by the commission.

Senator WONG—Can I turn now to the second proposition that you discussed regarding the Commonwealth submission—that is, that schedule 1A was an appropriate safety net.

Mr Cole—The Commonwealth submission pointed out it was a statutory safety net, and we made the argument that parties should not be denied the right of a statutory safety net by an award being made. As we saw it, parties would lose the benefit of such a safety net if employees lost their jobs or, for that matter, if businesses whose viability was predicated on the statutory safety net were not viable under the award. So if there are people losing jobs and businesses going out of business, and people would have retained jobs under the statutory safety net and businesses would have stayed in business under the statutory safety net, it seemed to us that there was an argument that that would be an untoward result—they would effectively be denied the benefit of a statutory arrangement.

Senator WONG—You would agree, wouldn’t you, Mr Cole, that the commission did not accept the proposition that this was an appropriate safety net, such that an award should not be made over and above the statutory provisions? That is self-evident, isn’t it?



Mr Cole—The commission determined to make an award. For the reasons given, the commission looked at various parts of the act and determined that the direction of the guidance was probably in favour of making an award. However, the commission did acknowledge that it was also required by the act to have regard to employment issues. It had to make a balanced judgment and its judgment came down in favour of the making of an award, but, as I have indicated, an award that will differ in significant respects from the award that the union was seeking.

Senator WONG—Does this decision not have implications for reliance on schedule 1A as a nationwide safety net in any unitary system?

Mr Cole—I think that is seeking an opinion on a policy issue, and that is not my role.

Senator WONG—In paragraph 62 of the decision, the commission paraphrases the Commonwealth’s contentions and expresses reservations about the suggestion made by the Commonwealth that—and I quote: ... schedule 1A employees enjoy an advantage flowing from greater flexibility offered to employers and employees.

Could you please clarify the basis of that submission?

Mr Cole—There was material indicating that a not insignificant proportion of retail employees do enjoy benefits above the schedule 1A minimum entitlements. We were referring to that and to the fact that the schedule 1A arrangement clearly is a safety net that does facilitate an enterprise focus on wages and employment issues. Parties subject to the safety net are able to make formalised agreements under the act. They also have the opportunity of making essentially local arrangements, just in the individual business, on a whole variety of matters, subject only to meeting the minimum requirements. It is a differently focused arrangement compared to an award.

Senator WONG—Yes, I understand that. So your contention that they enjoy an advantage, despite the fact that they have inferior conditions, in terms of the award, is predicated on an assumption about what might or might not be agreed between an employer and employee at the workplace. Is that right?

Mr Cole—Yes, that reflects the broad government perspective on the matter.

Senator WONG—Is the submission referring only to those employees who have those arrangements over and above the statutory entitlement? I fail to see how one could make that submission about people who do not have additional arrangements over and above schedule 1A, but perhaps I am missing something.

Mr Cole—Arguably, on matters such as hours of duty, under a less regulated arrangement there is more scope for parties and the business to come to some mutual accommodation as to what the working hours arrangements are going to be. That would be an example. As I have said, it is a differently focused arrangement. The government’s view is that it does create scope for the sorts of flexibilities that will generally be in the mutual interest of the parties and the business. In that way, it does allow for a strong focus on the enterprise, whilst at the same time there is nothing to preclude those very same parties from availing themselves of formalised agreement arrangements under the ordinary system.

Senator WONG—How many persons worked on this case?

Mr Cole—What I can say is that yours truly have been working fairly consistently on this case, and others, for some time. For the same reason as we have explained in respect of other cases, I am not in a position to be able to aggregate in any meaningful manner the



contribution of various people at various times, simply because our system is not to charge out, so to speak, the time of people who make contributions to a variety of cases.

Senator WONG—Are you able to provide me with an estimate of the number of people who have worked on this case, for example, in the current financial year?

Mr Cole—No, I am not able to take the answer beyond what I have given for the same reasons that have been explained previously in respect of other cases.

Senator WONG—I believe Mr Hoy took it on notice to have a look at it.

Mr Cole—If his consideration of that matter should lead to producing an ability to take any other view I would certainly be open to do that.

Senator WONG—I ask you to take on notice how many departmental personnel have been involved in preparing the Commonwealth’s case in relation to the SDAEA roping-in application in this last financial year. I have not asked for staff hours because I understand your contention is that you do not charge out, therefore you cannot analyse that. I would have thought that you could at least do a head count.

Mr Cole—I will take that question on notice.

Senator WONG—Did you brief outside counsel for it? I think you did.

Mr Cole—Which part of the four years are we talking about? If we are talking about the proceedings in the last 12 months or so, there was one issue that arose. I am not quite sure if it is strictly within the 12 months, but it was certainly connected with this final stage of the case, and that was whether the commission should accede to a request by the union to subpoena identifiable individual company data from the survey. The Commonwealth was opposed to that being done and counsel was engaged for a day or so to assist in the preparation and presentation of an argument to the commission as to why that material should not be subpoenaed. The commission agreed that it should not be subpoenaed.

Senator WONG—Right.

Mr Cole—Apart from that, the representation on behalf of the Commonwealth in respect of the making or otherwise of the proposed award during the course of 2002 has been handled by the advocacy area of the department, principally myself.

Senator WONG—Are you E.R. Cole, Mr Cole?

Mr Cole—That is correct.

Senator WONG—Can I ask about the federal redundancy case? Has the Commonwealth determined its approach in this matter?

Mr Hoy—The Commonwealth is opposed to the ACTU claim.

Senator WONG—Has the Commonwealth’s submission been provided?

Mr Hoy—An outline of contentions has been put in. I do not think the final submission has gone in yet.

Senator WONG—When is that due?

Mr Hoy—I am not sure about that but I am advised that the commission is still conciliating on the claim.

Senator WONG—In terms of the Commonwealth’s public position in its outline of contentions, is it proposing any alteration at all to the current TCR provisions, or is it simply opposing the ACTU’s claim in toto?



Mr Hoy—I think it is just opposing the claim in total. I think the Commonwealth did support some elements of the claim that was agreed between the parties.

Senator WONG—Has the department conducted any analysis of the average amount of redundancy payments made to workers and compared that with the minimum TCR provisions?

Mr Hoy—Not that we are aware of.

Senator WONG—Has the department conducted any analysis of any difference between redundancy available in various state jurisdictions and the federal jurisdiction?

Mr Hoy—Yes.

Senator WONG—When was that conducted?

Mr Hoy—It is an ongoing thing in that we know what is going on in the various systems.

Senator WONG—Does that demonstrate there is a significant difference between the federal and state systems?

Mr Hoy—There are some differences between the federal and state systems.

Senator WONG—Is it the case that there tends to be more generous entitlements at the state level?

Mr Hoy—Yes.

Senator WONG—Have you quantified the range of that?

Mr Hoy—I am not sure what you mean.

Senator WONG—How much better are the states doing on this issue?

Mr Hoy—In terms of some of the provisions, the states are in advance of the federal TCR standard.

Senator WONG—In what areas would that be, Mr Hoy?

Mr Hoy—I could give you the details. I will need to give you that information on notice. In terms of your question, they are not necessarily better, they are just different.

Senator WONG—But they are in advance in certain areas?

Mr Hoy—Yes.

Senator WONG—Thank you. Have you done any analysis of the number and classes of employees who have no award based redundancy pay entitlements?

Mr Hoy—I would need to take that on notice. I am not sure.

Senator WONG—If you could do that, and if it is able to be released, I would like to know the details of that.

Mr Hoy—I will take that on notice.

Senator WONG—Does the Commonwealth’s position in opposition to the ACTU’s claim distinguish between different situations which may lead to redundancy arising—for example, transmission of business, alternative employment and those sorts of things?

Mr Hoy—At the moment, as I said, the Commonwealth position is that the current safety net standard is appropriate and, until the Commonwealth’s full submission is developed, I cannot take it any further than that.



Senator WONG—Has there been consideration of what any change to the TCR provisions might mean for existing Commonwealth schemes, such as GEERS?

Mr Hoy—No.

Senator WONG—Or EESS?

Mr Hoy—No.

Senator WONG—Is the Commonwealth proposing to brief external counsel for the purposes of this case?

Mr Hoy—No.

Senator WONG—Which persons in your department are currently handling this matter? Is it in your unit, Mr Hoy?

Mr Hoy—It is in my group.

Senator WONG—Again, and I presume you will want to take this on notice, I am requesting some—

Mr Hoy—The same answer, Senator.

Senator WONG—I appreciate that, Mr Hoy. I am trying to truncate the discussion.

Mr Hoy—I was trying to truncate your question.

Senator WONG—I am asking for the number of people in the department who are currently working on the redundancy case.

Mr Hoy—I will take that on notice.

Senator SHERRY—Mr Cole, there is one issue that relates to the previous exchange between yourself and Senator Wong. There was some discussion and a response from yourself about increases in minimum wages and the impact on employment. You referred to some academic study in this area without going into detail. Are you aware of any study, if there is any, regarding the impact of the increase in the superannuation guarantee on employment levels?

Mr Cole—That is not a matter I am personally aware of, so I cannot assist you in that regard. I am not saying there is or is not; I am just not personally aware of it.

Senator SHERRY—I asked that question because the argument would be somewhat similar, I think, if it were advanced—that an increase in minimum wages or an increase in the superannuation guarantee, which is a labour on-cost, could lead to unemployment.

Mr Cole—It is not for me to comment on any inferences you think may be able to be drawn.

Senator SHERRY—I just want to know whether you are aware of any research in this area. The extension of that would have been whether or not it had been used, as far as you were aware, for reference in submissions to cases which have been prepared so far. But if you are not aware of any research, obviously you have not referred to that issue in submissions prepared so far.

Mr Cole—No. I am aware, of course, that the act requires the commission to take into account the introduction of the stepped increases in the superannuation guarantee in determining other cases—an obligation that the Commonwealth has certainly reminded the commission about in a number of safety net review cases. Apart from being aware of that, I



personally am not aware, one way or the other, of whether there is research available of the nature you allude to.

Senator SHERRY—In reminding the commission of the need to examine the issue of the increase in the superannuation guarantee over the past eight years, has it been for the past four years that you have been involved in the presentation and preparation of cases?

Mr Cole—At least four years—in fact, longer than that.

Senator SHERRY—And there has been no documentation, or research analysis papers, presented on the aspect of the increase in unemployment which may or may not result as a consequence of a superannuation guarantee increase?

Mr Cole—There is none that I specifically recall. A vast amount of material is presented in safety net review cases. They are literally massive cases in terms of the material produced by the unions and employers and, for that matter, the Commonwealth submission has normally been noted as a fairly extensive one. I cannot specifically recall material of that nature. There may have been some in that vast volume of material.

Senator SHERRY—By other parties?

Mr Cole—By other parties.

Senator SHERRY—Thank you.

Senator WONG—Has the Commonwealth’s approach in relation to the Victorian child care pay equity case been determined?

Mr Cole—No, it has not. There have been some delays in the progressing of that case. I recall that you asked me some questions on that at the previous estimates. I think my answer forecast that a Commonwealth position would probably have been determined by now, and that would have been in the light of having the benefit of the material from the unions. However, as the unions have not yet completed the production of their material witness statements and exhibits, the Commonwealth has not as yet determined its position on the case.

Senator WONG—Are you able to estimate when the submission is likely to be finalised?

Mr Cole—There was to have been a further conference of the parties in front of the commission on 12 February—today. That has been deferred because the union was not able to be represented until next week, 19 February, and it may be there is some development on the 19th that gives greater assurance to what the future progressing of that case will be.

Senator WONG—Has the department investigated the characteristics of the labour market in the child-care industry—for example, the composition of the work force by age, sex, qualifications et cetera?

Mr Hoy—No.

Senator WONG—There has been no such investigation?

Mr Hoy—No.

Senator WONG—I have nothing further on that.

CHAIR—As there is nothing more on 2.1, we move to 2.2—Workplace relations implementation.

[2.41 p.m.]

Senator WONG—I think Senator Sherry had some questions on GEERS. Does that come under 2.2?



CHAIR—Yes.

Senator SHERRY—Since we last met in November last year, have there been any changes to the administrative structure of the oversighting of the schemes within the department?

Mr Lloyd—A change is planned and is about to take place. It has been made in response to the department’s consideration of an ANAO report on the schemes.

Senator SHERRY—Could you outline the planned change?

Mr Lloyd—The report provided quite a valuable contribution to the department’s continuing improvement process in administering two schemes, EESS and GEERS. The report drew attention to a number of areas where the department could enhance the efficiency of its administration. The department accepts the report’s recommendations and is proceeding to implement them. In response to the issues identified in the report, the department has engaged a consultant to undertake a review of the scheme. As a result of that review, the department has revised the business model of the schemes.

Senator SHERRY—Has that been completed and reported on?

Mr Lloyd—That has been completed.

Senator SHERRY—Just before you go on, this is new information to me. What is the name of the consultant or the firm?

Mr Lloyd—The firm that was engaged was Resolution Consulting Services.

Senator SHERRY—What was the cost of the consultancy?

Mr Lloyd—I do not have that figure at my disposal. We can take that on notice.

Senator SHERRY—What was the process of engaging the consultancy?

Mr Lloyd—It was a regular tender process of selecting and issuing a tender specification and choosing the best firm.

Senator SHERRY—Thanks, Mr Lloyd.

Mr Lloyd—I will continue with your initial question about the structure. We received the consultant’s report. As a result of that review I was saying that the department revised the business model for the schemes to streamline the procedures and processes. We are designing a new IT system to support the revised business model. We have established a new project branch to implement those changes, so that new project branch is, if you like, the change I was speaking about to the way we administer the schemes.

Senator SHERRY—What about staff involved? Have you identified any changes? Have there been additional staff required or reductions in staff required?

Mr Lloyd—Yes, there is a branch being created. We are in the process, in a day or so, of finalising an appointment of a person to head that branch. There will be a small number of staff supporting that branch head.

Senator SHERRY—What will be the number of staff?

Mr Maynard—That branch will have in the order of 20 additional staff for the period of the transition to the new system and the new business model.

Senator SHERRY—What is the current staffing?

Mr Maynard—The current staffing is in the order of 55.



Senator SHERRY—So the additional 20 staff are for the transition period. For how long will that be?

Mr Maynard—It will be for this calendar year.

Senator SHERRY—Is it envisaged that those additional staff would be phased out and the number would go back to the 55?

Mr Maynard—It is hoped and expected that the efficiencies coming from the new business model and from the new system will allow it to be decreased.

Senator SHERRY—Is that the 20 additional, or the 55 down?

Mr Maynard—We have yet to go through the process with the Department of Finance and Administration, so we will have discussions with them to determine relative efficiencies.

Senator SHERRY—What is the approximate additional cost identified with those 20 staff?

Mr Maynard—It is in the order of $500,000.

Senator SHERRY—Is that in the additional estimates?

Mr Maynard—No. The decision to take this approach was made after the additional estimates process.

Senator SHERRY—That would explain why I could not see any specific reference to it. Are there any other additional expenditures in addition to staffing, such as technology, office—

Mr Maynard—All of the costs associated with this particular implementation will come from within our existing resources. It is expected that the costs of a new IT system will be borne within that.

Senator SHERRY—What is the likely cost of a new IT system?

Mr Maynard—It is somewhere in the order of $1 million.

Senator SHERRY—With the new branch being established, will there be new and additional reporting requirements by the branch?

Mr Lloyd—There are just regular reporting requirements, nothing new or special. The branches are accountable and a plan of action would be worked out and they would be required to work to that. There is nothing special or different from the normal processes to be accountable.

Senator SHERRY—Thank you. Has there been any public announcement at all of this creation of a new branch, at least in some of the detail that we have just—

Mr Lloyd—Staff have been informed in the department. I am not aware of any actual public media announcement, but staff have certainly been advised about it.

Senator SHERRY—Are the additional staff coming from within the department, within the Public Service, or both?

Mr Lloyd—I would imagine from both. Some will come from within the department and some may be from outside.

Senator SHERRY—When you say outside, do you mean outside the department or outside the Public Service?

Mr Lloyd—It could be both.



Mr Maynard—There would be additional staff to assist with the IT development and we would seek to get the most skilled to be able to do those processes.

Senator SHERRY—They may or may not be outside consultants?

Mr Maynard—We use some contract staff to assist us with our IT development. It is envisaged that there would be some contract staff for this project.

Senator SHERRY—Have those contracts been advertised yet? What stage is the main contract at?

Mr Maynard—We have a range of contract staff who have been working on the IT system that the branch currently uses. They would be moved on to the new project. We would seek to support that with departmental staff who have a thorough understanding and knowledge of the business.

Senator SHERRY—Regarding the actual review in respect of appeals against decisions, my understanding is that there has been an increasing number of appeals. Do we have any data on that issue?

Mr Maynard—Yes. Over the life of the programs we have had 419 appeals to 31 December last year. The number of appeals has increased over the life of the program, as the number of claims that we have received has also increased.

Senator SHERRY—Has the proportion of appeals increased more than the proportion of the increase in applications?

Mr Maynard—I cannot see a significant increase in the rate at which the appeals are coming in. I would have to look at the trend lines to be able to give you a definitive answer on that.

Senator SHERRY—Have you provided, since the creation of the scheme, the data on the number of applications—either half-yearly or yearly—and the number of appeals—either half-yearly or yearly—to the committee? If you have not, could you take that on notice?

Mr Maynard—Certainly. On that point, as I said, there have been 419 appeals from the beginning of 2000 through to the end of December 2002. During the same period the number of claims was 27,000. Those are the two figures that might assist you there.

Senator SHERRY—The appeal is to whom?

Mr Maynard—The appeal process is an internal one. It was reviewed by an independent officer—independent of the original application—and considered by a senior officer in the department.

Senator SHERRY—Is that independent officer within the working group?

Mr Maynard—When the scheme was first established, they were within the working group. As a result of the ANAO audit, we have created a separate quality assurance team that is independent of the case management teams.

Senator SHERRY—That quality assurance group, which is to hear future appeals—

Mr Maynard—It has been hearing appeals for some four or five months.

Senator SHERRY—That is still located within what will be the branch?

Mr Maynard—It is still within the branch, yes, but independent of the case management teams.



Senator SHERRY—You referred to the criticism or suggestions made by the National Audit Office—

Mr Maynard—I referred to the fact that they had identified a potential improvement. We have taken that advice.

Senator SHERRY—I think I was being reasonable in my wording of ‘suggestions’ or ‘criticism’; I could have just said ‘criticism’. How is the issue of lack of consistency across appeals being addressed?

Mr Maynard—Through the creation of the quality assurance team, we can ensure that all appeals are dealt with in the same way. Having said that, prior to this all of the appeals were being dealt with by a total of five delegates who had day-to-day communication and consultation on particular cases before them. Consequently, the concerns of the ANAO about the potential for differences in decision making were mitigated in that way.

Senator SHERRY—Will the quality assurance team that you refer to be in open hearings?

Mr Maynard—No. It is not conducted via open hearing, it is conducted by a review of each of the circumstances of the claims. The information is known and is provided as part of the appeal, research into the circumstances is done independently of the case management team and the rules are applied accordingly.

Senator SHERRY—If a person lodges an appeal, is it generally in writing?

Mr Maynard—Yes. We require that an appeal be in writing; we do not act upon a verbal request for an appeal because we seek to gain whatever information from the individual that they wish to have explored. Consequently, we like to have it in writing.

Senator SHERRY—Is the individual entitled to make a submission to the particular member of the team hearing the appeal?

Mr Maynard—Yes. We ask them to provide us with as much information as possible to support their case.

Senator SHERRY—It is not an open hearing, so is there a transcript?

Mr Maynard—The process is one of assessing all of the facts. We do not call the appellant in and interview them; it is not that form of appeal, it is a paper based appeal process.

Senator SHERRY—Are they entitled to a representative, either directly or in written form, to make a submission on their behalf?

Mr Maynard—We take advice from them and from whomever they wish to have support them in this process. Whether it is the insolvency practitioner, other work colleagues or whomever, all of these facts are taken into account. In the event that they are dissatisfied with the way in which the process has been handled, they have recourse to the Ombudsman and that advice is provided to them when we provide them with their original assessment.

Senator SHERRY—Have there been any further appeals to the Ombudsman?

Mr Maynard—Over the life of the program, we have had 25 issues raised by the Ombudsman. We are unaware, of course, of whether or not they have more inquiries that are not required to be passed to the department.

Senator SHERRY—Obviously, there would be a file kept by the particular member of the team carrying out the appeal. Is that file available to the claimant?



Mr Maynard—All of the information in relation to the claimant’s assessment of their claim for assistance payments is accessible to them through FOI. We have files that are based on—

Senator SHERRY—Why through FOI?

Mr Maynard—If they choose to take the FOI route, of course, the information is available through the FOI route. We have clerical files that are based on the case in question and the employing entity and, therefore, there is a lot of information on those files, which relate to any and all of the employees in that particular case. Consequently, there is a lot of information on the files which any one individual would not have access to because of the Privacy Act.

Senator SHERRY—Is the file available to the public if they wanted to scrutinise a particular case?

Mr Maynard—No. We have not had such an inquiry.

Senator SHERRY—If they are not available, it is not surprising. I assume that also applies to other persons outside the department?

Mr Maynard—No. We are obliged under the Privacy Act to maintain the appropriate security for all of these things, and we would not seek to provide it to anybody without the written approval of any of the claimants.

Senator SHERRY—Will the process of appeal we have just been discussing be different in any way, apart from the separate quality assurance teams?

Mr Maynard—No, we have not at this point considered doing the process any differently.

Senator SHERRY—Will the persons in the quality assurance team hearing the appeal be doing other work within that to be created division?

Mr Maynard—The quality assurance team is being charged with a range of functions which include dealing with the appeals, dealing with the Ombudsman’s complaints and also looking at general quality control processes across the full process that the branch uses and thereby identifying areas for improvement on an ongoing basis.

Senator SHERRY—Would they be involved in the assessment of initial applications?

Mr Maynard—No, they would be independent of that process.

Senator SHERRY—Dr Boxall, do you think the process that has been outlined is sufficiently independent as an appeals process?

Dr Boxall—The department believes that the process works well and is independent and that the establishment of the quality assurance team will enhance that.

Senator SHERRY—I want to turn to some company arrangement issues. When a company goes into administration is there scope for GEERS to make or guarantee payments, thus allowing redundancies to be made early in the process?

Mr Maynard—The rules of the scheme are such that we do not guarantee payments. We assess each of the claimants on their circumstances according to the operational arrangements which are publicly available on the Australian WorkPlace web site. GEERS certainly provides a mechanism by which companies that have insufficient funds to provide the entitlements that they owe to their employees have access to the safety net payments, but only on the grounds that it be repaid in accordance with the repayment priorities set out in the Corporations Act.

Senator SHERRY—If an employee is made redundant but there is no winding up or liquidation, does GEERS still make the payment?



Mr Maynard—In the event that the company goes into administration, we would advance the funds only under certain conditions. These conditions would include that the repayment of the advance would be consistent with the repayments as if it were under liquidation and under section 556 of the Corporations Act or, in the event that the company were handed back to the company directors, that the company directors would repay in full the advance made by GEERS within 28 days of them retaining the company from the administrator.

Senator SHERRY—That leads to the next issue of the involvement of the department with the insolvency practitioner. The insolvency practitioner may or may not be able to save some or all of the jobs in an insolvency. Is the department involved in the interaction with the practitioner in these circumstances?

Mr Maynard—I am not sure that I understand what you mean.

Senator SHERRY—Does the department endeavour to find out what is likely to occur from the insolvency practitioner administrator—whether it is likely that the entire company may be liquidated and some or all of the jobs lost or whether there is likely to be some scheme or arrangement for a period of time et cetera?

Mr Maynard—When either a claimant or an insolvency practitioner brings a new case to our attention, we seek to obtain as much information as possible from the insolvency practitioner as to the likelihood of a company going into liquidation or whether a deed of company arrangement would be proposed. We provide them with as much information as we can to ensure they fully understand how the scheme operates and we provide them with assistance so they can provide clear information to the employees as to how the scheme operates and what processes are to be followed. We do not, however, intervene in their role as an insolvency practitioner.

Senator SHERRY—I understand that, but it is a case of receiving information that you may find useful in the administration of the scheme.

Mr Maynard—We actively seek the information from the insolvency practitioner so that they can ensure that we have enough information to assist them and they have enough information to assist us.

Senator SHERRY—What is the degree of response from insolvency practitioners to requests from the department? Are some cooperative and some not cooperative?

Mr Maynard—There is a range. Particularly those who have used the scheme a number of times become very familiar with it and come to us effectively with templates filled in ready to go. Others are more wary and have less interest or ability to be able to interact with us in a prompt way.

Senator SHERRY—Why are some more wary?

Mr Maynard—It is unclear to me why some might have a difficulty and why they would find the use of a scheme such as this difficult. In some circumstances, individual insolvency practitioners would find this to be additional work. You will appreciate that, when we are talking about very small insolvent companies with no assets, this is an additional cost burden on the insolvency practitioner to work through the company records to determine employee entitlements. In those circumstances, we would move to an independent accountant and pay them to perform that function so that we could get the verified information promptly to be able to pay the assistance payments.

Senator SHERRY—Are you saying the department pays for an accountant to carry out that assessment?



Mr Maynard—In a very small number of cases.

Senator SHERRY—In that case, obviously the department is carrying a cost that it otherwise would not be expected to carry?

Mr Maynard—That is part of the cost of running the scheme.

Senator SHERRY—When you are seeking the information on outstanding entitlements in those circumstances, is any information sought or provided that relates to outstanding superannuation contributions?

Mr Maynard—In a very limited number of cases the insolvency practitioner will provide us with that advice. I believe you would be aware from previous discussions in this forum that, where employee contributions have been withheld by the employer and not passed on, that is considered under the scheme to account for wages and, therefore, would be covered, but employer contributions are not covered by the scheme.

Senator SHERRY—And that, in the main, would be superannuation guarantee contributions, wouldn’t it?

Mr Maynard—Correct.

Senator SHERRY—Just so that I am clear—I know I have asked this before and I do not think it has changed—the scheme does not include superannuation guarantee contributions that are not paid to the particular fund?

Mr Maynard—That is correct.

Senator SHERRY—I want to ask about a specific case in the matter of a company known as National Forge, which I understand was an automotive components and power station blade producer. Do you have any information?

Mr Maynard—And titanium golf clubs, I believe.

Senator SHERRY—Titanium golf clubs—that was not in the brief. You are obviously familiar with the details.

Mr Maynard—I do know some information about National Forge.

Senator SHERRY—If you know about the titanium golf clubs, you are the man. Regarding the particular circumstances of National Forge, what can you outline of the events in this case?

Mr Maynard—My understanding is that the company is an automotive manufacturer in Victoria. It had 350 employees or thereabouts. The company went into administration in October. There was the search—as insolvency practitioners do—for means of saving the company. In this particular case it was to sell the company to another.

Senator SHERRY—To sell the company as a whole?

Mr Maynard—To sell the company as a going concern. In this particular case—forgive me, Senator, I am operating from memory and I hope I do not get any of this wrong—the purchaser looked to purchase part of the business and the remainder of the business was therefore liquidated. That resulted in the transfer of a number of employees whose entitlements transferred to the purchaser. The remaining employees of the element of the business that was not purchased were made redundant and GEERS assistance was claimed and paid.

Senator SHERRY—In these circumstances where there is an administration for a period of time, at least part of the company is on sold. Does that mean a delay for that part of the



company that is ultimately not sold—it is effectively liquidated and the employees lose their jobs?

Mr Maynard—The department will process claims from the insolvency practitioner as quickly as they can provide them and provide the verified information. The delay in that process is an issue subject to the insolvency practitioner’s processes that are outside of the department’s control.

Senator SHERRY—In the case of National Forge, if part of the company is sold as an ongoing concern and there is minimal or no redundancies from that section, the employees in the other section or sections of the firm that were not likely to be sold, and in fact were not on sold—they were liquidated and people lost their jobs—would they have to wait until that point in time was determined by the liquidator?

Mr Maynard—If we take a theoretical circumstance, the insolvency practitioner does not have the verified employee entitlement data until such time as the employees are terminated. Consequently, their continued employment in a company would presumably come with the continued payment of wages and the like when under the control of an administrator. Therefore, yes, the timing of assistance payments is dependent upon their having been made redundant, and the verified information supplied by the insolvency practitioner.

Senator SHERRY—I asked you about the issue of outstanding superannuation guarantee contributions. Has there been an assessment done of the cost of including that within GEERS?

Mr Maynard—Not to my knowledge, Senator.

Senator SHERRY—To anyone else’s knowledge at the table?

Mr Lloyd—No, Senator.

Senator SHERRY—If an employee resigns because he or she has concerns about the ongoing viability of the enterprise—and we have discussed a circumstance—and before his or her accrued entitlements are paid the enterprise goes under, would GEERS assist under those circumstances?

Mr Maynard—There are arrangements within the operational arrangements of GEERS to provide for the payment where the resignation can be shown to have been due to constructive dismissal. Obviously, that is an issue that has to be worked through with the insolvency practitioner to understand the circumstances of each and every one of those cases.

Senator SHERRY—In a case of constructive dismissal, if there is verifying material from the insolvency practitioner that the person had in fact resigned because they believed that their job would disappear—

Mr Maynard—Where they can show that the employer has withheld wages and therefore withheld their labour, that would be more the style of constructive dismissal.

Senator SHERRY—On the issue of constructive dismissal, is this an area of appeal?

Mr Maynard—Any of the reasons for the decision under GEERS is an area for appeal.

Senator SHERRY—I understand that. I am sorry; I did not make that clear. Perhaps if I ask it in this way: do you have a categorisation of the types of appeal? Are you able to categorise them into groups of issues about which people are appealing?

Mr Maynard—We have some basic data on the types of appeals, yes.

Senator SHERRY—Can you provide that to the committee on notice?

Mr Maynard—I would have to take it on notice.



Senator SHERRY—Can you provide me with documentation of the circumstances where an employee has resigned and is still eligible for GEERS? Is there a document that you can provide to us or point me to?

Mr Maynard—Certainly within the operational arrangements there are clauses that refer to constructive dismissal. I would be happy to provide you with the relevant clauses if that would be of assistance to you.

Senator SHERRY—Yes, it would. But has there been any change in this area—where an employee has resigned—since GEERS commenced?

Mr Maynard—No, not that I am aware of.

Senator SHERRY—What is the latest information on the amounts that have been paid to employees under GEERS? Do you have an update on what was provided last November?

Mr Maynard—Certainly. As at the end of the last quarter, we have advanced $70.5 million under GEERS.

Senator SHERRY—Do you have a figure on the difference between the amount advanced and the total legal entitlements of the employees?

Mr Maynard—The additional amount over and above that provided for by GEERS is $21 million.

Senator SHERRY—What sorts of entitlements would be included in that $21 million?

Mr Maynard—The two caps that apply to GEERS would be the maximum income cap, which would be applied across all of the categories provided by GEERS, and the cap of the eight-week redundancy entitlements, which would be an area that would lead to additional unmet—

Senator SHERRY—Do you have a breakdown of those two categories?

Mr Maynard—Unfortunately I do not have that here but I am happy to provide that to you.

Senator SHERRY—Of course it does not include outstanding superannuation guarantee contributions?

Mr Maynard—No.

Senator SHERRY—What percentage of employees have received 100 per cent of their entitlements?

Mr Maynard—Under GEERS, 77 per cent of all of the GEERS recipients have received 100 per cent of their outstanding legal entitlements.

Senator SHERRY—In the current financial year, what percentage of claims have been processed within 16 weeks?

Mr Maynard—In the current financial year, we have processed 64 per cent of all claims within 16 weeks.

Senator SHERRY—Of those that were not processed within 16 weeks—presumably 36 per cent—can you give me some idea as to the range of process times involved?

Mr Maynard—The other statistic that I brought, thinking you might ask the question, was that the department’s 80 per cent target is achieved within 22 weeks.

Senator SHERRY—That means that there would still be some that would be outstanding over 22 weeks. What are the circumstances in which that would occur?



Mr Maynard—The circumstances in those cases are many and varied, including whether the insolvency practitioner has been able to provide us with verified data. We have circumstances where the company records are so poor that a special arm of accounting is used, called forensic accounting, which has to try to piece together the records of the company to verify that particular creditors, including employees, are owed their amounts of moneys. In other circumstances, we have claimants who have submitted a form but have not completed all of the relevant information and, in some circumstances, cannot then be contacted, so we have to track them down to find out the additional information. There are many and varied particular reasons.

Senator SHERRY—At the present time, what is the longest outstanding case claim?

Mr Maynard—Unfortunately I do not have that information with me.

Senator SHERRY—Can you take it on notice?

Mr Maynard—Yes.

Senator SHERRY—How much is being paid to employees under EESS?

Mr Maynard—The total payment under EESS has been $22.6 million.

Senator SHERRY—What is the difference between the $22.6 million and the total legal entitlements of those employees?

Mr Maynard—I am sorry; I do need to correct myself there. The Commonwealth contribution under EESS has been $22.6 million. EESS was devised to be a 50 per cent contribution by the Commonwealth and 50 per cent contribution by the states; consequently, there is an additional $232,000 contributed by the states.

Senator SHERRY—What is the difference between these amounts and the total legal entitlements?

Mr Maynard—The difference is $55.4 million.

Senator SHERRY—From what date is that information?

Mr Maynard—As at 31 December 2002.

Senator SHERRY—I did raise this issue at the last hearing: I would like to touch on employees who do not have pre-existing redundancy entitlements. There are those circumstances, are there not?

Mr Maynard—There are circumstances such as that, yes.

Senator SHERRY—And that is because federal award minimum standards do not extend to all jurisdictions in Australia? I raise the issue of Tasmania.

Mr Maynard—Correct.

Senator SHERRY—Since I last asked about the matter of Tasmania, where there is no standard redundancy provision in state awards, has there been any reconsideration of this issue within the definitions of the coverage of the GEERS scheme?

Mr Maynard—The matters you raised at this forum in November have been referred to the minister for his consideration. There is no decision to change the operational arrangements at this stage.

Senator SHERRY—As a consequence, at the present time we have a situation where I think approximately 40 per cent of workers covered by an award—there are obviously some who are not covered by any award, state or federal—in the Tasmanian jurisdiction are covered



by state award and 60 per cent by federal award. We have a situation in other states where there is coverage, with variations as I understand it, but we have one group—the 40 per cent of state award employees in Tasmania—who are not covered. There are no other groups, as I understand it, in other jurisdictions around the country.

Mr Maynard—I have no data to confirm or deny that, Senator.

Senator SHERRY—Dr Boxall, with respect to the problem of the 40 per cent of Tasmanian workers covered by state awards not being covered by the scheme—certainly on the information I am given they are the only significant group not to be covered by the scheme—this would seem to be a lack of equity for a particular group of workers in not being covered by the scheme, Dr Boxall.

Dr Boxall—I cannot offer an opinion on that. The state of play is exactly as Mr Maynard outlined. You raised this issue last November, I think, and the minister is aware of the issue you raised. The government has not made a decision on that since November.

Senator SHERRY—Has the department provided any advice—I am not asking about the detail of the advice—to the minister on this matter?

Mr Maynard—The department has provided a brief in relation to the Watts case.

Senator SHERRY—Are there any other cases in the Tasmanian jurisdiction?

Mr Maynard—Not that I am aware of, Senator.

Senator SHERRY—So there has not been any change to this point in time. Is the department aware of the Termination of Employment Convention, article 12?

Mr Maynard—Yes, we are.

Senator SHERRY—Australia is a signatory to that convention, as I understand it.

Mr Maynard—We are seeking advice. I hope to get it to you very shortly.

Senator SHERRY—As you are not aware at the table whether Australia is a signatory, can I assume that there has been no examination of this article in the context of the group of workers in Tasmania who are not covered by the GEERS scheme?

Mr Rowling—That is my understanding.

Senator SHERRY—Then I would obviously need to ask you to take this on notice. Can you examine article 12, Termination of Employment Convention—to which I think Australia is a signatory—because it is my contention that the exclusion by the definition of GEERS of the 40 per cent of the state award employees in Tasmania is contrary to this convention? Therefore, the scheme is in breach of a convention by not covering this particular group of workers. Would you take that on notice?

Mr Rowling—Yes, I will.

Senator SHERRY—It might be of assistance to the minister.

Dr Boxall—The people who deal with the ILO are actually in output group 2.1, and they have left.

Senator SHERRY—I understand that. But it is my contention that the particular outcome for the GEERS scheme, which we are discussing here, in respect of this group of Tasmanian workers is in contravention of this article. Obviously you are not aware—or it is my assertion—that it is a contravention of this article to which Australia is a signatory. You are obviously not aware and therefore it has not been drawn to the minister’s attention until now.



Dr Boxall—As Mr Rowling said, we will take it on notice.

Senator SHERRY—That is fine. In relation to fraudulent activities surrounding claims, can you give me an indication of recent fraudulent claims that have been referred to either ASIC or the ATO?

Mr Maynard—As noted in November, the answer is that it would be inappropriate to name names in relation to that.

Senator SHERRY—I was not asking for names on this occasion.

Mr Maynard—I think that the circumstances in relation to particular cases might also allow people to identify individual cases. Consequently, I think that would be something I would be unable to do.

Senator SHERRY—Not even general observations about the types of fraudulent claims?

Mr Maynard—There are a small number of individual actions under way against individuals. In terms of organisational fraud, they are matters that we seek the insolvency practitioner to refer to ASIC and, obviously, we encourage them to do just that.

Senator SHERRY—Has the department itself referred any?

Mr Maynard—We have been in contact with ASIC when we have concerns about inappropriate activity.

Senator SHERRY—Do you contact the state or federal police authorities where appropriate?

Mr Maynard—Where appropriate, we would involve the police and that would be in relation to an activity that would be consistent with an individual’s fraudulent activity.

Senator SHERRY—And the ATO?

Mr Maynard—The ATO would be advised of activity where it related to activities that were within their responsibility.

Senator SHERRY—There were some recommendations in the Audit Office report on this area. What has been the change, if any, to those recommendations?

Mr Maynard—To which particular recommendations are you referring?

Senator SHERRY—They are detailed in report No. 20 on page 42. I do not have the document in front of me, unfortunately.

Mr Maynard—Was there a specific issue?

Senator SHERRY—I understood it related to issues of reporting unlawful activities. Do you want to take it on notice?

Mr Maynard—No, I just need to re-read the particular paragraph.

Senator SHERRY—I do not have a copy of it and I would be happy for you to take it on notice if you want to respond in that way.

Mr Maynard—Okay, in order to keep things moving, I will take that on notice.

Senator SHERRY—What is the full amount provided by the Commonwealth to the Ansett administrators under SEESA, the third employee protection scheme?

Mr Maynard—To date, we have advanced $333 million to the Ansett administrators under SEESA.

Senator SHERRY—When you say ‘to date’, do you mean today?



Mr Maynard—That is the current figure, which has been the current figure now for a month.

Senator SHERRY—Is that as at the end of January or December?

Mr Maynard—As at the end of January the figure is $333 million.

Senator SHERRY—What is the estimated outstanding liability under SEESA as at the end of January?

Mr Maynard—Do you mean the likely additional call on SEESA?

Senator SHERRY—Yes.

Mr Maynard—It is in the order of $15 million.

Senator SHERRY—Has the Commonwealth received any repayments from the Ansett administrators to date? If so, how much?

Mr Maynard—No, Senator, we have received nothing.

Senator SHERRY—Does the Commonwealth expect to be repaid by the end of this financial year, either in part or in full?

Mr Maynard—We would hope that the Ansett administrators would be in a position to make a distribution to all creditors. However that is contingent upon legal action which is under way, the most significant of which would be the Ansett ground staff superannuation fund action.

Senator SHERRY—They have appealed the decision. I believe they lost, didn’t they?

Mr Maynard—Have you heard that they have appealed?

Senator SHERRY—No, I heard that they lost.

Mr Maynard—I was hoping that there was a little more information.

Senator SHERRY—I have heard statements that they intend to appeal but I am not sure that they have actually lodged the appeal.

Mr Maynard—The court has handed down its orders as of Friday of last week. They have a 21-day appeal period within which to make appeals. I too have not heard whether there is an appeal to date.

Senator SHERRY—You mentioned that is the most significant factor in the delay. Have there been other factors?

Mr Maynard—Before the Ansett administrators can make a distribution they have to resolve the proof of debt of all the creditors in the order that they stand. There may be other factors, as outlined in their report to creditors in September of last year. There are a number of relatively minor court cases that they have underway, all of which are listed in that report.

Senator SHERRY—Is the issue of the need to sell the assets still an impediment?

Mr Maynard—My understanding, based on a report to creditors from September of last year, is that they still have quite a number of assets that are yet to sell.

Senator SHERRY—Would that include aeroplane sales?

Mr Maynard—Yes, it would.

Senator SHERRY—I must say that I did look down at all those planes lined up at Melbourne airport on my way through. I am not sure whether they have been sold or not but



they are still sitting there. There is really no indication of a schedule of payments from the receiver or the administrators at this point in time.

Mr Maynard—Unfortunately not, Senator. The September report to creditors had a proposed schedule of payment subject to the outcome of the Ansett ground staff superannuation case. That was not resolved in time for their proposed first distribution in December. It has still not been resolved and consequently they have not provided a publicly announced revised schedule.

Senator SHERRY—Has there been an indication from the administrators as to when a schedule of payments will be released?

Mr Maynard—They have been on the public record stating that they would seek to make a distribution, if I recall correctly, something in the order of one month after the appeal process is completed on the assumption that there is no appeal. Again, that is my recollection—

Senator SHERRY—That is the superannuation fund appeal.

Mr Maynard—Yes.

Senator SHERRY—Are you aware whether the Australian Prudential Regulatory Authority has given any advice and/or direction to the trustees of the superannuation fund about whether they should—

Mr Maynard—I am unaware of any of those matters.

Senator SHERRY—We have APRA appearing before us on Friday, I will ask them. What have been the administrative costs in the department of the SEESA scheme to date?

Mr Maynard—There are administrative costs for both this department and for the Department of Transport and Regional Services. The combined costs to date are in the order of $2 million.

Senator SHERRY—Would you have a breakdown between the two departments?

Mr Maynard—Our costs are in the order of $1.2 or $1.3 million. As I understand it, DOTARS’s costs are in the order of $0.8 million. However, that again is based on the amounts that they have invoiced us. They invoice us quarterly in arrears and they are due to provide us with an additional invoice shortly in which we will obviously see that increase.

Senator SHERRY—I meant to ask you this at the beginning. You are the deputy director?

Mr Maynard—I am the Assistant Secretary, Employee Entitlements.

Senator SHERRY—Who is the secretary?

Mr Lloyd—Mr Rowling is the group manager. The group has within it the Employee Entitlements Branch.

Senator SHERRY—The government listed a contingent liability of $104 million relating to the SEESA scheme in the 2002-03 Mid-Year Economic and Fiscal Outlook. For what specific future events was this listed as a contingent liability?

Dr Boxall—I know that you asked a question on notice—question No. 999—and the minister has answered your question on notice, with respect.

Senator SHERRY—When was that sent?

Dr Boxall—My understanding is that it was delivered this morning.



Senator SHERRY—That is why I have not yet read it; I have been here. Could you give me the answer, please?

Dr Boxall—Yes.

Senator SHERRY—I would like to read it before we get to the questions.

CHAIR—Is it the wish of the committee that the document be tabled? There being no objection, it is so ordered.

Senator SHERRY—Paragraph 1(a) of the answer refers to ‘the possible outcome of future events in what is a complex corporate insolvency’. I would certainly agree that it is complex. In 1(b) the answer goes on to talk about: a potential tax liability associated with the administration of the scheme, the size of which is dependent on outstanding court action and/or other related outcomes or advice.

Is this the court action surrounding the ground staff superannuation fund?

Mr Maynard—That is correct.

Senator SHERRY—I suspect I know this, but in what way is the tax liability changed, depending on the outcome of the case?

Mr Maynard—In the event that the Ansett administrators were to repay zero, then the loan would be retained for a longer period of time and consequently contingent liabilities would potentially increase.

Senator SHERRY—I am not sure whether the answer to the next question I was going to ask about the amount of contingent revenue relating to SEESA, referred to in the Mid-Year Economic Financial Fiscal Outlook, is included in this.

Mr Maynard—The contingent revenue would include the potential recovery of funds from the advance to the Ansett administrators.

Senator SHERRY—That amount would be?

Mr Maynard—It is dependent upon court action.

Senator SHERRY—Why was SEESA not listed as a contingent liability in the 2002-03 budget papers?

Dr Boxall—I think that is covered in answer 1(a) by the minister to your question on notice.

Senator SHERRY—Was the department aware of action by the ground staff superannuation trustee or the likelihood of action when the 2002-03 budget papers were prepared or did it wait until the formal lodgment of their claim in the court?

Mr Maynard—My recollection fails me here but I believe that it is the latter rather than having been aware of it prior to that point.

Senator SHERRY—So even if you were aware, you would not make an assumption on being aware of a likelihood of a case, you would wait until the actual application is lodged for the hearing of a case?

Mr Maynard—I think that would be a more appropriate mechanism, but I would have to take advice.

Dr Boxall—Maybe I can help on this. On page 180 of the annual report there is a contingent liability or loss of $108.804 million, and the bulk of that is the $104 million to which you refer. The point here is that the department made a judgment on this towards the



end of the financial year and listed it in the annual report and, of course, the next available opportunity to have that picked up in the government accounts was the Mid-Year Economic and Fiscal Outlook. The Audit Office has signed off on this recognition, so it was recorded in the accounts for public release as soon as a judgment was made that it was appropriate to do so.

Senator SHERRY—Thank you. You mentioned that this answer to my question on notice was sent to my office this morning. Have any other answers to questions been sent through this morning?

Dr Boxall—Not that I know of.

Mr Lloyd—We have been advised that the cost of the consultancy by Resolution Consulting was $36,000 including GST.

Senator BUCKLAND—What is the basis of the Commonwealth’s policy not to pursue claims of unpaid entitlements under federal awards or agreements where the claim does not exceed $10,000? I particularly ask this given that the Commonwealth accepts that the majority of claims are under that $10,000 threshold.

Mr Jasprizza—If the claims are under $10,000 and the claimant believes that they may not have been paid their full entitlements, we would seek to recover them through voluntary compliance with the employer. Probably in more than 90 per cent of instances, that will be the case. In those circumstances where our aim is to achieve voluntary compliance and that is not achieved, we then decide whether we ought to prosecute or whether the applicant should make a claim through the small claims court. That course of action would be pursued for small amounts, generally speaking, where the applicant wishes to take up that option.

Senator BUCKLAND—What if you cannot recoup it? Is it left to the individual?

Mr Jasprizza—This occurs in a minority of cases. Where small amounts of money are involved, and after we have determined to achieve voluntary compliance or not, we have to make a judgment about whether to allocate resources to follow up those cases. In some instances, we make a judgment that it is not practical to pursue those particular cases. But, as I say, they are in a minority of circumstances.

Senator BUCKLAND—What does the department determine is a small claim that does not warrant pursuing?

Mr Jasprizza—Ten thousand dollars, in some circumstances, is used as a threshold for small claims cases. Clearly, there may be other circumstances where we would take prosecution action where they may be below that amount.

Senator BUCKLAND—It might be a small amount, but it is a lot of money to the claimants, I am sure.

Mr Jasprizza—As I have said, the vast majority of claims—in fact, more than 90 per cent—that are made upon us are resolved through voluntary compliance. So we are talking about a relatively small number.

Senator BUCKLAND—In regard to the other 10 per cent, what do you use to determine not pursue a matter? Is it $1,000 or $500?

Mr Jasprizza—No. In those circumstances, one of the alternatives that I have mentioned is for that applicant to pursue their claim through the small claims court. We provide them with information about how to do that. Many of those claims are, in fact, pursued through the small claims court.



Senator BUCKLAND—Will this policy not to pursue such matters through the courts continue indefinitely?

Mr Jasprizza—We go to prosecution action on a very small number of claims. The policy has been unchanged for quite some time, and we will continue to apply that current policy in the future. Where a number of circumstances are taken into account and where we have exhausted the opportunity for the employer to make voluntary compliance, the opportunity is there for the employee to pursue their case through the small claims court.

Senator BUCKLAND—How does the policy square with the zero tolerance of unlawful practices referred to by the minister when the IBTF was set up?

Mr Jasprizza—All I can say is that our investigations are aimed primarily at achieving a result through voluntary compliance. In some cases that may not be achieved. We make a judgment about prosecution or the applicant being given the opportunity to follow up through the small claims court.

Senator BUCKLAND—Does the department have any record of the number of cases involving claims of less than $10,000 that have been pursued by individuals without Commonwealth assistance, which have resulted in court orders for the payment of the money by employers?

Mr Jasprizza—I have some information here about the number of cases that have been followed up over the last couple of years through the small claims court. I would not have the information about the results of those particular circumstances. For example, in 2000-01 we gave 265 claimants relevant information to help them recover their entitlements through the small claims court. In 1999-2000 it was 255. I could take it on notice, if you wish, for the period from 2001-02. From 1 July 2001 to 31 March 2002 there were 215 cases.

Senator BUCKLAND—In a media release on 19 December last year the minister announced: Reports of breaches of Commission orders to stop or prevent industrial action will be investigated and Commonwealth inspectors will bring civil proceedings in appropriate cases.

Does this mean that even greater priority will be given to allegations of union breaches at the same time as breaches of awards and agreements by employers will be ignored by the department?

Mr Jasprizza—No.

Senator BUCKLAND—Does the department accept the assessment of counsel assisting, who said: Government agencies’ approach to recovery of entitlements is generally reactive to problems and largely complaint driven and to leave complaints to be handled by unions or other mechanisms.

Mr Jasprizza—No, that is not correct. We also have what we call targeted compliance campaigns. We also work with employer associations to ensure that employers understand their obligations under the Workplace Relations Act, agreements and awards.

Senator BUCKLAND—How is that done?

Mr Jasprizza—It would consist of a process of perhaps some seminars in some cases for employers. We would then do some random checks on employers’ time and wage records to verify whether or not they were complying with the appropriate award or certified agreement.

Senator BUCKLAND—Where have the seminars been held to date?



Mr Jasprizza—I might take that on notice because I do not have a record of the location of every single seminar that has been conducted.

Senator BUCKLAND—It would be fine if you could take that on notice.

Proceedings suspended from 3.59 p.m. to 4.19 p.m. Dr Boxall—I was advised during the tea break that another answer to a question on notice,

No. 1038, was delivered to Senator Sherry’s office this morning.

Senator BUCKLAND—We have just been advised that you will provide on notice information regarding seminars that have been held and where they have been held. You also made reference to random checks being carried out. Can you tell us how that is done, how often and where?

Mr Jasprizza—I can give you some examples of some of those if you wish. Basically, as you know, we get a range of claims from employees. When we find that there are a larger proportion of claims in a particular industry in a particular state, we make a decision about whether we undertake a targeted compliance campaign in that particular industry.

Senator BUCKLAND—How many investigations would have been undertaken in the last 12 months?

Mr Jasprizza—In the year 2002-03, we have planned to undertake targeted compliance work in the ACT fast food industry—I can read these out or I can provide the information.

Senator CARR—If you have a table, maybe you could table it.

Mr Jasprizza—No. I can tell you that in New South Wales and the ACT we undertook seven campaigns. In Victoria there have been two campaigns to date in this financial year. In the Northern Territory there was one campaign. We contract out our services to some of the other state governments. I do not have with me the information about the targeted compliance work they have undertaken.

Senator CARR—To follow up some of those points that you have made, you say that there were seven campaigns on compliance in New South Wales and the Australian Capital Territory and you were about to tell us the industries. Can you do that now?

Mr Jasprizza—I have a mix of information here and it is probably better if you want me to—

Senator CARR—You do not have a table you can just hand over?

Mr Jasprizza—No, Senator, because it has other information on that table as well. I would probably need to clarify some of that information—

Senator CARR—By the time I have finished I am sure you would wish you had handed it over. What are the industries in which you had targeted campaigns in New South Wales?

Mr Jasprizza—I will take that on notice.

Senator CARR—Can you tell me whether you have retail?

Mr Jasprizza—I think it would be better if I took that on notice to make sure I give you accurate information.

Senator CARR—Are you saying you did not do one in retail?

Dr Boxall—We have undertaken to take that on notice, Senator Carr.

Senator CARR—Did you do one in building?

Dr Boxall—If we answer those sorts of questions it is by a process of elimination—



Senator CARR—That is right, Mr Boxall. That is why I was looking for a bit of assistance here. Your officer has a table. He does not want to hand it over.

Dr Boxall—We are prepared to give assistance and we have offered to take it on notice.

Senator CARR—He started to read out a list, Dr Boxall, and I am just trying to encourage him to continue reading out that list.

Dr Boxall—I have just said that the department will take that on notice.

Senator CARR—How many officers do you have involved in the compliance units?

Mr Jasprizza—We have 225 inspectors including those in the contracted states. The number of inspectors that we have in the Office of Workplace Services is 87.

Senator CARR—And how many contractors are there? Are the rest contractors?

Mr Jasprizza—The contracted states provide services on our behalf and they have 138.

Senator CARR—I want to be clear about this. There are 87 members of the Public Service and 134 contractors.

Mr Jasprizza—There are 138 state public servants.

Senator CARR—State public servants.

Mr Jasprizza—Yes. We have a presence in New South Wales, Victoria and the Northern Territory. We contract out the compliance services to state governments in the other states.

Senator CARR—Why do you not have officers in the other states?

Dr Boxall—Because it is contracted out.

Senator CARR—That is quite apparent; we have got that straight. I would like to know why you choose to contract out in those states and not in the others?

Mr Jasprizza—That was a decision that was taken some years ago as a result of deliberations at the Workplace Relations Ministers Council to provide a one-stop shop to employees who wish to seek assistance on those matters.

Senator CARR—So this is of benefit to workers, is it? Is that the point of it?

Mr Jasprizza—Yes.

Senator CARR—Did one of your officers, Ms Lesley Riggs, make a statutory declaration before the Industrial Relations Commission to the effect that you do not investigate claims of less than $10,000?

Dr Boxall—We have just answered that question.

Senator CARR—I was not here. Did she or did she not?

Mr Jasprizza—I do not recall precisely what was in that affidavit. I do not have it before me.

Senator CARR—Could you take that on notice, if you cannot recall seeing the affidavit?

Mr Jasprizza—Yes.

Senator CARR—It is quite easily verifiable. Do you have a policy of not seeking the return of moneys where the claim is less than $10,000?

Mr Jasprizza—No, that is not the policy.

Senator CARR—You have no policy to that effect?



Mr Jasprizza—If an employee lodges a claim with us and it is for less than $10,000, we will investigate the claim, generally speaking, if it is straightforward. There is no limit.

Senator CARR—When was the last time you prosecuted a case for less than $10,000?

Mr Jasprizza—I would have to take that on notice.

Senator CARR—How much moneys did you recover last year?

Mr Jasprizza—In the last financial year—this is including the contracted states—we recovered $5,393,981.

Senator CARR—Were any of those cases involving claims for less than $10,000?

Mr Jasprizza—Yes.

Senator CARR—How many?

Mr Jasprizza—I could not say off the top of my head, but I would say an extremely large number of those claims.

Senator CARR—Would you be able to tell me the range of the moneys in that $5 million?

Mr Jasprizza—No, but I would expect that the vast majority of claims would have been for less than $10,000.

Senator CARR—In Victoria, you said you had two campaigns. Is that right? How many officers do you have in Victoria?

Mr Jasprizza—In Victoria we have 63 inspectors. In terms of the overall staff number in Victoria, we have 86.

Senator CARR—Are 86 concerned with compliance?

Mr Jasprizza—No, 63 inspectors are concerned with compliance.

Senator CARR—How much was recovered from Victoria last year?

Mr Jasprizza—Victoria recovered $2,849,594.

Senator CARR—Were there claims for less than $10,000?

Mr Jasprizza—Yes.

Senator CARR—What industries were those claims drawn from?

Mr Jasprizza—They would be from a spectrum of industries.

Senator CARR—How broad a spectrum?

Mr Jasprizza—I do not have the details of all the industries but, basically, there would be a whole range of industries.

Senator CARR—How many individual claims were there?

Mr Jasprizza—I have the number of cases that were finalised—that is, 3,635. That was for the financial year.

Senator CARR—Are you able to indicate to me in which industry the predominance of those claims was?

Mr Jasprizza—No, not off the top of my head.

Senator CARR—Can you take that on notice?

Mr Jasprizza—Yes.



Senator CARR—Can you give me a breakdown of the percentages from each of the major industries?

Mr Jasprizza—Just to qualify that, I can get you information on the awards or certified agreements where there has been a predominance. We do not categorise the information—our report is arranged by industry—but it will give you an indication.

Senator CARR—I do not mind how you do it. I would just like to know where the department’s activities are focused, where those two campaigns were launched and in what industries the two campaigns were run in Victoria.

Mr Jasprizza—We have taken that one on notice.

Senator CARR—I thought it was the New South Wales question that you took on notice.

Mr Jasprizza—We have taken the general question on notice.

Senator CARR—Can you tell me where the one claim in the Northern Territory was or do you need to take that on notice?

Mr Jasprizza—We will take that on notice.

Senator CARR—How much money was recovered in the Northern Territory?

Mr Jasprizza—For the Northern Territory last financial year it was $169,907.

Senator CARR—And you will be able to give me the same breakdown on the predominance of awards?

Mr Jasprizza—Yes.

Senator CARR—I am sure Senator Buckland has drawn your attention to the particular case of the Lake Cargelligo slave labour claims. Do you recall the incident whereby a water tower collapsed and two workers were killed and the revelations that a contractor involved had grossly underpaid workers compensation premiums and had been exploiting migrant labour?

Mr Jasprizza—In a general sense, yes.

Senator CARR—This is a case where a South African worker was receiving $100 for three months work. When he made a complaint, despite being injured, he was put on a plane back to South Africa. Did you investigate that case?

Mr Jasprizza—No. My understanding is that comes under state jurisdiction and that the state government is investigating that matter.

Senator CARR—What about the immigration issues? Did you come across any? You are not aware of any investigation?

Mr Jasprizza—I am not aware of any.

Senator CARR—I presume that is a matter we will have to take up with Immigration.

Mr Jasprizza—Yes.

Senator CARR—So you have undertaken no investigation whatsoever of that matter?

Mr Jasprizza—As I have indicated, our investigation suggested it is a state matter, and the state is investigating that.

Senator CARR—Do you come across many cases involving persons who are working illegally—that is, in breach of visa conditions?



Mr Jasprizza—I cannot say for sure how many there are or whether we find that on a regular basis.

Senator CARR—So in your surveys and campaigns you do not come across people working here illegally?

Mr Jasprizza—I cannot say that we never come across it; I just do not have that information before me.

Senator CARR—You have not got it here with you?

Mr Jasprizza—No.

Senator CARR—For a start, could you indicate to me the number of complaints you have received about workers who are being employed in breach of their visas?

Mr Jasprizza—That would be an Immigration matter.

Senator CARR—Yes, I know it is an Immigration matter but presumably you would receive the complaints in the first instance.

Mr Jasprizza—Not necessarily. People make complaints to us if they believe they have been underpaid and we would proceed with an investigation on that basis.

Senator CARR—Fair enough. How many cases have you had of persons who have come here on a visa of one description or another making complaints about the underpayment of wages?

Mr Jasprizza—I do not have that information. I am not too sure we would even record that information.

Senator CARR—So you do not regard it as a serious problem?

Mr Jasprizza—We do not record that information.

Senator CARR—Presumably, if you do not record it, you do not regard it as a serious problem?

Dr Boxall—He did not say that, Senator. That is not the department’s position.

Senator CARR—What is the department’s position, Dr Boxall?

Dr Boxall—The department’s position is that violation of visas is a matter for the Department of Immigration and Multicultural and Indigenous Affairs.

Senator CARR—You do not record that?

Dr Boxall—The department’s position is that complaints and issues about working on visas are primarily a matter for the department of immigration. As Mr Jasprizza said, the department responds to complaints of underpayment, and he has outlined how we deal with that.

Senator CARR—But you do not have any record at all of persons who are being underpaid but happen to be here on a visa? You have no crosschecks with the department of immigration?

Mr Jasprizza—If we become aware of cases where we suspect that illegal immigrants are involved, we refer them to the department of immigration.

Senator CARR—I am sure you would, but I would like to know what the level of liaison between the department of employment and the department of immigration is when it comes to the issue of the underpayment of persons working here whilst on visas?



Mr Jasprizza—I cannot tell you precisely on how many occasions that liaison may have occurred because I do not have that information with me.

Senator CARR—Do you want to take that on notice? Is there an interdepartmental committee of any description? Is there any contact with the department of immigration on the issue of people working here whilst on visas?

Dr Boxall—There is, but it is mainly in the outcome 1 area, which is the employment area, where there are issues to do with the issuing of visas.

Senator CARR—Sure. But the question of the underpayment of those workers is not a matter that comes under this portfolio at this particular—

Dr Boxall—Mr Jasprizza just outlined that if somebody complains that they have been underpaid, the department investigates that. If somebody makes a complaint about the employment of illegal workers then that is an area for Immigration.

Senator CARR—Are you telling me that you do not keep any records on that at all? I would like to know whether there is any cooperation between the department of immigration and the department of employment on this matter.

Dr Boxall—Mr Jasprizza outlined that. Where we become aware of that, we alert the department of immigration.

Senator CARR—That is the best you can tell me?

Dr Boxall—No, that is a fact; it is not a matter of being the best. That is what the department does. If the department receives information on the underpayment of workers, people working illegally or in obvious violation of some visa requirement, it is referred to Immigration to investigate.

Senator CARR—How many times have cases been referred in the past year?


Senator CARR—Thank you.

Senator WONG—I have some questions in relation to drive-offs. That is a matter, I think, that has had some media coverage. Has the department received any referrals concerning pay deductions for petrol station console operators for these so-called drive-offs?

Mr Jasprizza—Yes. We have investigated the matter that was raised in the media last week. My latest information is that the employer has agreed to reimburse the employees. As a result of that matter we are also undertaking an audit of other service stations.

Senator WONG—Had such an audit been undertaken prior to the matter being raised in the media?

Mr Jasprizza—I cannot answer that question, but I will take it on notice.

Senator WONG—Perhaps I could clarify. I would like to know whether, prior to February this year, you had collected any records or had done any investigation into the practice of employees having their wages deducted in these circumstances.

Mr Jasprizza—If someone had lodged a claim with us, we would have investigated that claim.

Senator WONG—I am sure you would have, but there have been suggestions that this is not just a one-off. Has the department investigated whether this is a broader practice?




Senator WONG—What will the investigation to which you are referring—which commenced subsequent to the matter being raised in the media—involve?

Mr Jasprizza—That will involve checking the wage records of individual service station proprietors and checking to see that the appropriate wages have been paid.

Senator WONG—Who is conducting that? Is it the department?

Mr Jasprizza—Our inspectors. Yes, the department is conducting that.

Senator WONG—Is that nation wide or only in Victoria?

Mr Jasprizza—No, that will be in Melbourne.

Senator WONG—Only in Victoria?

Mr Jasprizza—Yes.

Senator WONG—So you are not proposing to do this anywhere else other than in Victoria?

Mr Jasprizza—Not at this stage.

Senator WONG—In fact, as I understand it, only in Melbourne.

Mr Jasprizza—That is correct.

Senator WONG—How many people have been allocated to this activity?

Mr Jasprizza—I cannot say precisely how many have been allocated at this stage, but I can take that on notice.

Senator WONG—Are you able to advise how many service stations you are proposing to audit in the manner you have outlined?

Mr Jasprizza—I can do that, too.

Senator WONG—You cannot do that today?


Senator WONG—Is the department aware of any similar practices in different industries—for example, the pay of employees in the retail sector being docked if there is theft of product?

Mr Jasprizza—I am not personally aware of individual cases.

Senator WONG—No individual cases whatsoever of that occurring?

Mr Jasprizza—I cannot say that does not occur; it is just that I am not aware of any cases. None have been brought to my attention.

Senator WONG—Whose attention would they be brought to? Would it be yours or someone else’s in the department?

Mr Jasprizza—Our state offices, where our inspectors are located, could have some information on that.

Senator WONG—Has the department investigated whether or not this is a reasonably widespread practice?

Mr Jasprizza—As I may have mentioned earlier, if we find that we get a disproportionately large number of claims from a particular industry for a particular issue then we consider our targeted compliance campaign.



Senator WONG—Has a compliance campaign been run in relation to these unauthorised deductions from wages in any particular industry sector?

Mr Jasprizza—I have taken on notice information that we will provide about the targeted campaigns that we have conducted.

Senator WONG—Generally, are there award provisions which prevent such unauthorised deductions?

Mr Jasprizza—It depends on the circumstances. Generally speaking, in a matter such as this, if deductions that are not covered in the award are being made from an employee’s salary, they need the agreement of the employee. I am only generalising here. It depends on the circumstances and the particular deductions that are being made.

Senator WONG—Were there awards that previously had such provisions and which have had them removed through the award simplification process?

Mr Jasprizza—I am not aware of any. I would have to take that on notice because I am not familiar with all the provisions of all awards.

Senator CARR—How much money was collected from the building industry in the last three years? I refer to Commonwealth action. Do you have that figure?

Mr Jasprizza—No, I do not have that figure with me.

Senator CARR—It has been put to me that the department told the commission relatively recently that between 1998 and 2001 the department had 78 cases of 46 alleged breaches concerning underpayments amounting to $74,000. Does that sound right to you?

Mr Jasprizza—Yes. My recollection was that we did provide some information or that some information was provided along those lines. The number of complaints that we got previously from the building industry represented a very small number of our total claims.

Senator CARR—So you will be able to tell me whether or not you have run a campaign in the building industry?

Mr Jasprizza—Yes. I have taken on notice providing you with information about the targeted compliance campaigns.

Senator CARR—Do you have any reason why you think there will be such a small number of claims in the building industry, given that the press and the CFMEU seem to indicate that there are very substantial levels of underpayment and enforcement?

Mr Jasprizza—No, although I suspect many of the building industry organisations, at least the relatively large ones, are covered by certified agreements. We tend to find that compliance by organisations covered by certified agreements is higher than with awards.

Senator CARR—I will look forward to your answer and we will perhaps revisit this at the next round.

Senator GEORGE CAMPBELL—The minister recently took a proposal to cabinet containing a strategy to push more Commonwealth public servants on to AWAs and non-union agreements. Is that correct?

Dr Boxall—Are you referring to a report in the Canberra Times before Christmas?

Senator GEORGE CAMPBELL—Yes.

Dr Boxall—No, that cannot be correct.



Senator GEORGE CAMPBELL—There has not been any submission taken to cabinet on this issue?

Dr Boxall—Not that I know of.

Senator GEORGE CAMPBELL—So as a consequence there has been no decision made by cabinet in relation to this matter.

Dr Boxall—Not that I am aware of.

Senator CARR—I would like to ask some questions concerning the interim building task force. Are the officers here from the building task force?

Dr Boxall—There are officers at the table, so we are ready to answer the questions under 2.2.

Senator CARR—So you do not have officers from the task force?

Dr Boxall—I did not say that. I am saying that there are officers at the table and we will answer the questions as they come.

Senator CARR—I will ask you again: do you have officers here who are employed as part of the interim building task force?

Dr Boxall—We have officers in the building employed by the interim building task force. We have officers at the table ready to answer your questions or any other questions. You ask the questions and we will answer them.

CHAIR—Senator Carr, it is up to Dr Boxall how he refers the questions to his staff.

Senator CARR—That is fine. Has the department had any contact with Australia Post, the MBAV or Hansen Yuncken Pty Ltd in relation to the proposed Australia Post facility at Tullamarine?

Mr Lloyd—We have had contact with Australia Post and the MBAV.

Senator CARR—What is the nature of the contact?

Mr Lloyd—Australia Post raised a concern about certain arrangements with the preferred tenderer for the building and sought our advice about that. The MBAV made an inquiry about the application of the national code and guidelines for the project.

Senator CARR—When did this contact occur?

Mr Lloyd—I do not have precise dates but they have been in very recent times, in the last month.

Senator CARR—The contact was between whom in the department?

Mr Lloyd—Australia Post made contact with officers within my outcome. I do not have the precise names but one was Ms Carapellucci, assistant secretary of the department. The MBAV made contact with me.

Senator CARR—Directly?

Mr Lloyd—Yes.

Senator CARR—Was this in the last few weeks?

Mr Lloyd—Yes. I think it was during January.

Senator CARR—Could you give me the dates?

Mr Lloyd—I could take it on notice.



Senator CARR—I appreciate that. Were they concerned about the letting of contracts for that project?

Mr Lloyd—The concern was with the application of the national code and guidelines for the project.

Senator CARR—When you say that they were concerned about them, what particular aspects of the code concerned them?

Mr Lloyd—I do not know the precise nature. They raised with us a concern that the preferred tenderer may not comply with the national code and guidelines.

Senator CARR—Who is the preferred tenderer?

Mr Lloyd—I believe it was Hansen Yuncken.

Senator CARR—Did Hansen Yuncken contact you about these guidelines?

Mr Lloyd—No, Senator.

Senator CARR—What particular aspects of the guidelines did the master builders indicate to you they were concerned about?

Mr Lloyd—The master builders just sought a clarification as to the department’s position on the application of the national code and guidelines for the project.

Senator CARR—What aspects of the department’s views concerning the operations of the code were they concerned about?

Mr Lloyd—The MBAV sought my advice about applying the government’s code and guidelines to the project.

Senator CARR—But the code is quite large. Are you saying all of it, or are you saying that they would not get any government money unless they applied the guidelines rigorously?

Mr Lloyd—The nature of the request was that they sought my advice as to whether the national code and guidelines would apply to the project, and I confirmed that that was the case.

Senator CARR—Was a condition of the spending of Commonwealth money that those guidelines apply?

Mr Lloyd—The government’s national code and guidelines apply to all Commonwealth building projects that are Commonwealth funded.

Senator CARR—What does that imply? Is it a condition of funding that those guidelines apply?

Mr Lloyd—It is a requirement of tender that the national code and those guidelines apply.

Senator CARR—Has the department issued any written instructions, advice or communication to Australia Post in relation to the letting of the contracts?

Ms Bennett—The code and guidelines have been agreed to. Agencies that construct major projects from Commonwealth funding are informed—and on a regular basis—that the code and those guidelines apply. It is up to the agency to ensure that the tender conditions are abided by. We are there to provide assistance and advice to agencies in interpreting and applying those guidelines and code.

Senator CARR—Are you saying that only generic advice was presented to Australia Post?

Dr Boxall—No. Ms Bennett is saying that the department’s position is that the code and guidelines are set by the government and they are advised to agencies, one of which is



Australia Post. So Australia Post knows what the code and guidelines are, and they proceeded accordingly. According to the officers, along the way they sought some advice.

Senator CARR—So they have sought an interpretation by telephone. Is that how it happened?

Ms Bennett—As Mr Lloyd said, after receiving the tender, they approached us in making a preliminary view about aspects of that tender, seeking our advice in relation to its compliance with the code and guidelines.

Senator CARR—Have you issued any written instructions and/or advice or any other communication to Australia Post since that contact?

Ms Bennett—We have confirmed in writing our view on how that tender did or did not meet aspects of the code and guidelines.

Senator CARR—When was that written advice tendered?

Ms Carapellucci—That advice was provided by email to Australia Post in the days before Christmas; it was around 23 or 24 December.

Ms Bennett—Senator, in relation to your question, the Master Builders Association of Victoria contacted Mr Lloyd on 15 January.

Senator CARR—You have indicated to me the substance of those instructions to Australia Post. Can you provide me with a copy of them?

Ms Bennett—We are not going to provide confidential information relating to a tender that we provided to Australia Post.

Senator CARR—Let us just go through this. This is the preferred tender; it has nothing to do with price.

Dr Boxall—That is an issue for Australia Post.

Ms Bennett—That is for Australia Post. That is a tender arrangement. We are not part of that process.

Senator CARR—So, if I want this information, I have to go to Australia Post.

Dr Boxall—The issue is that agencies, including Australia Post, if it is their project, are responsible for working out the tender. They work through the tender to make sure that it complies with the code and guidelines. The nature of the tender is not up to us. We just respond, if we are asked, by checking on whether something may or may not conform with the code and guidelines.

Senator CARR—So it had nothing to do with the price?

Dr Boxall—We do not know that, and we are not the right agency to ask.

Senator CARR—I take it that the preferred tenderer was already established at the time Australia Post contacted the department.

Dr Boxall—We do not know that either, because agencies come to us at varying stages. It depends on when they decide that they will seek assistance, if indeed they want to seek assistance.

Senator CARR—But I understood Mr Lloyd to indicate that it was the preferred tenderer; it was Hansen Yuncken. Is that true?

Mr Lloyd—It was reported in the press that that was the preferred tenderer.



Senator CARR—Yes, it was, and you indicated that here today. When did you discover that they were the preferred tenderer?

Mr Lloyd—I cannot give you an exact date or time.

Senator CARR—Was it before the master builders contacted you on 15 January?

Mr Lloyd—I cannot recall.

Senator CARR—Was it before 23 December, when Australia Post contacted the department?

Mr Lloyd—No.

Senator CARR—So some time between the 23rd and the 15th you discovered that this was the preferred tenderer?

Ms Bennett—As Ms Carapellucci indicated, the first approach to us from Australia Post about the code and guidelines was on about 23 or 24 December. That was our first contact with them about this project.

Senator CARR—Ms Bennett, did you speak to Australia Post?

Ms Bennett—I did speak to them on Christmas Eve as the last officer on shift, yes.

Senator CARR—Did they tell you that that was the preferred tenderer?

Ms Bennett—No, I do not recall that they did. We discussed some interpretations of the code.

Senator CARR—When did you discover that the preferred tenderer was Yuncken?

Ms Bennett—I do not recall.

Senator CARR—Have you issued any correspondence to the Master Builders Association about compliance by members of the MBAV with the national code of practice?

Mr Lloyd—No.

Senator CARR—None at all?

Mr Lloyd—No.

Senator CARR—You have issued no implementation guidelines or advice on the implementation of guidelines?

Ms Bennett—The code and guidelines are available on the department’s web site, so we do not need to issue them.

Senator CARR—So communication on these matters with the master builders has all been verbal?

Mr Lloyd—Yes.

Senator CARR—Are you in a position to veto funds for projects solely on the basis that the contracts are let to subcontractors with agreements that do not strictly comply with the guidelines for that particular project?

Ms Bennett—It is not a role of veto. This is a decision by the government that the code and guidelines apply to these projects as part of the tender requirements to construct a Commonwealth funded project. The department’s role is not one of the right of veto; they do it because it is a tender requirement. We are there to advise them and to ensure and provide assistance in the application of the code and the guidelines.



Senator CARR—Would it be fair to say, though, that your recommendations may well stop moneys being paid to a contractor?

Ms Bennett—We provide advice to agencies and they make a decision on the basis of the advice that we provide.

Senator CARR—Can you advise whether or not a contractor is in breach of the code?

Dr Boxall—If asked by an agency, we give an opinion about whether or not the proposed contract is in compliance with the code.

Senator CARR—Is it reasonable to assume that the basis of your advice may well determine the outcome as to whether or not that company is in breach of the code?

Ms Bennett—It is a tender requirement, and the agency that is purchasing under those purchase arrangements needs to ensure that whoever is tendering is meeting the requirements of the tender.

Senator CARR—In circumstances where a preferred tenderer has been identified, you have the capacity to advise the agency that they are in breach of the code?

Ms Bennett—I think agencies would be looking to make sure that they meet the tender requirements.

Dr Boxall—Agencies have an obligation to abide by the code. If agencies want to request our advice on whether they are in accord with the code, then we give that advice.

Senator CARR—I am surprised, though, that on 23 December Australia Post suddenly found it necessary to contact you regarding Yuncken. That was followed up on 15 January by the Master Builders Association.

Ms Bennett—You would need to talk to Australia Post about its time lines for those tender arrangements.

Senator CARR—That is good advice. I will have to take that through and see where that leads me. Was there any other contact with any ministerial office in this process?

Ms Bennett—No, not by the department.

Senator CARR—Was there any contact by the department and Mr Alan Wood?

Mr Lloyd—No. I do not know who he is.

Senator CARR—He seems to have written quite extensively—

Mr Lloyd—The gentleman who wrote the article in the Australian?

Senator CARR—He wrote a couple of articles in the Australian that seem to have chapter and verse on the department’s workings. I just wonder how he got them.

Mr Lloyd—No, no contact.

Senator CARR—You have not spoken to him?

Mr Lloyd—No.

Senator CARR—Are you aware of anyone in the department having communicated with Mr Wood?

Mr Lloyd—No, I am not aware of anybody.

Senator CARR—Not through the media office?

Ms Bennett—No.



Senator CARR—Has the department issued any written or oral instructions to the interim building task force in relation to compliance with the code?

Ms Bennett—Yes.

Senator CARR—In relation to this particular project?

Ms Bennett—No.

Senator CARR—Just in general?

Ms Bennett—Yes.

Senator CARR—What is the nature of that written advice? I take it that it is written.

Ms Bennett—The code and guidelines have a role for the department in ensuring that they are being complied with during the course of the project. We have advised the task force, as departmental officers, how that role should be conducted.

Senator CARR—Can you give me a copy of that advice?

Ms Bennett—It is internal correspondence.

Senator CARR—Then perhaps you can explain to me what the substance of that instruction is. Before you do, my colleagues are interested in knowing why you will not provide the document. You have said that it is because it is an internal document. What does that have to do with whether or not you provide information to a Senate estimates committee?

Dr Boxall—Because it is an internal working document.

Senator CARR—Do we have to get a return to order on it?

Dr Boxall—No. You can submit an FOI, I think.

Senator CARR—Dr Boxall, you have been in the Public Service for a fair while now. You know that we do not have to get FOIs; we have other processes.

Dr Boxall—You have asked whether you can have an internal document, and we have said no.

Senator CARR—On what grounds?

Dr Boxall—Because it is an internal working document.

Senator CARR—Ms Bennett, can you indicate the substance of those instructions to the building industry task force?

Ms Bennett—It explains that it is government policy that all construction projects funded by the Commonwealth are required to comply with the national code and guidelines. It explains what that role is and what that compliance means.

Senator CARR—Perhaps you can help me here. What does ‘compliance’ mean in those circumstances?

Ms Bennett—The guidelines set out the role of the department in monitoring the code. All we did was advise the interim building task force that they would be undertaking the role of the department as set out in the code and guidelines for Commonwealth funded projects.

Senator CARR—I think you will have to do a bit better than that. What role do you play in compliance?

Ms Bennett—It is in sections 5.5, 7.2 and 7.3 of the implementation guidelines. They say that the ‘Department of Workplace Relations and Small Business will have primary responsibility for investigating alleged breaches of industrial relations provisions of the code’.



They also say that the ‘results of any investigations will be reported to the code monitoring group’.

Senator CARR—What is the code monitoring group?

Ms Bennett—The code monitoring group is chaired by Mr Lloyd and is made up of a number of other agencies that are large purchasers of Commonwealth construction projects.

Mr Lloyd—Plus the Department of Finance and Administration.

Senator CARR—Through this means, do you have the capacity to stop payments on a contract?

Mr Lloyd—No.

Ms Bennett—But if they breach the tender and their contract with the Commonwealth— and the code is bedded into those contractual arrangements—the purchasing agency will deal with the breaches of the contract.

Senator CARR—Does one of those penalties involve suspension of payments?

Ms Bennett—It depends on the arrangements that have been set out in the contract by the individual purchasing agency.

Senator CARR—What is the role of the interim building task force in regard to compliance with the code?

Ms Carapellucci—The Commonwealth’s implementation guidelines for the national code set out the roles of various parties: the purchasing agency, the Department of Employment and Workplace Relations, the code monitoring group and the Office of the Employment Advocate. With the establishment of the interim building industry task force, the government decided that the code monitoring role previously undertaken by the Office of the Employment Advocate would be transferred to the interim task force.

Senator CARR—That was a decision made, you say, by government?

Ms Carapellucci—Yes.

Ms Bennett—No. The decision to transfer it to the interim task force was made by the department.

Senator CARR—When was that decision made?

Ms Bennett—With the establishment, it was announced that they would take over that role.

Senator CARR—When was that?

Ms Bennett—The interim task force was established on 1 October.

Senator CARR—So in October the department decided that your role, I take it, or the Office of the Employment Advocate’s role, would be undertaken now by the task force?

Ms Bennett—In relation to the code and in relation to—

Senator CARR—So has your role been taken over by the interim task force or not?

Ms Bennett—My role?

Senator CARR—The department’s role.

Dr Boxall—No. The decision was that the role of the Employment Advocate would be undertaken from now on by the interim building task force.

Senator CARR—What was the legal basis for that?



Dr Boxall—It is an administrative arrangement.

Senator CARR—Isn’t that why you have had to second officers of the task force from the advocate’s office? Isn’t that the reason for your doing that?

Ms Bennett—No; the monitoring of the code and the guidelines is done by the department. They are departmental officers.

Senator CARR—Who happen to also be officers of the Employment Advocate’s office? Is that the case?

Ms Bennett—They are employed as temporary employees with the interim task force at the moment. They are departmental officers working on the interim task force.

Senator CARR—Will they be made permanent members of the task force or will they always remain members of the department?

Ms Bennett—The task force has been temporarily established until 30 June this year.

Senator CARR—So for all intents and purposes it is an agency of the department?

Dr Boxall—The interim task force is part of the department.

Senator CARR—Is it a function of your department at law, Dr Boxall?

Dr Boxall—Indeed.

Senator CARR—The capacity to actually undertake inspections and other such work formerly done by the Office of the Employment Advocate has now been transferred to these officers of the task force?

Dr Boxall—That is correct.

Senator CARR—On what legal basis has that been done?

Ms Bennett—The administration of the code and guidelines is a departmental activity conducted by department staff. It is an administrative arrangement that had previously, through an MOU, been conducted by the Office of the Employment Advocate. On the establishment of the interim task force we ceased that arrangement and asked the interim task force, as temporary DEWR officers, to undertake tasks in relation to the monitoring of the Commonwealth code and guidelines.

Senator CARR—We were told this morning that, in fact, five officers of the OEA had been seconded to the interim task force and that they had picked up delegations from the Office of the Employment Advocate.

Ms Bennett—That is in relation to them undertaking OEA work.

Senator CARR—So the OEA work used to include enforcement of the code?

Ms Bennett—Yes, at our request. The OEA work that the interim task force is doing has been delegated to some staff by the Office of the Employment Advocate. They are different types of work.

Senator CARR—As I understand it, all members of the task force are authorised officers pursuant to section 83BG of the Workplace Relations Act. Is that true?

Ms Bennett—I do not know whether all officers are authorised officers.

Senator CARR—How many are?

Ms Bennett—Seventeen, Senator.

Senator CARR—How many are on the task force?



Ms Bennett—Twenty-five.

Senator CARR—Has Australia Post indicated to you that the certified agreement between the CFMEU and Yuncken is inconsistent with the code?

Ms Bennett—Yes, they have.

Senator CARR—Can we get a copy of that?

Ms Bennett—It was not in writing, Senator.

Senator CARR—Oh, I see, it was another verbal communication?

Ms Bennett—As we explained the process, that was their assessment in considering the tender documents provided by the preferred tenderer. They discussed that aspect with us.

Senator CARR—When did they discuss that with you?

Ms Bennett—On either 23 or 24 December.

Senator CARR—And that is when they told you that they were the preferred tenderer?

Ms Bennett—Yes. They contacted us by phone about these issues and we wrote back to them, as I indicated, confirming advice that had been provided on the phone in relation to the tender made by that preferred tenderer.

Senator CARR—So you undertook an analysis of the current terms of the certified agreement between the CFMEU and Yuncken?

Ms Bennett—Yes, on the basis of the details provided by Australia Post of their concerns on particular aspects.

Senator CARR—Did you have any third party conduct an analysis?

Ms Bennett—No; they were our people, who understand the code and guidelines.

Senator CARR—And certified agreements?

Ms Bennett—The information of concern to Australia Post was what we looked at—the advice they had provided to us.

Senator CARR—Can we have a copy of that analysis?

Ms Bennett—We have already explained that that is advice provided to Australia Post as commercial information they used in considering that tender and that we would not be providing that information.

Senator CARR—I am surprised that you say it is commercial information. With respect to the preferred tenderer, that decision had presumably been made. Does the department have details of construction projects that are to be federally funded, whole or in part, and whose schedule is to commence in 2003, and projects where the code or guidelines are said to apply?

Ms Bennett—Yes, we do, Senator.

Senator CARR—Can I have a copy of that?

Ms Bennett—We would have to approach the other agencies. Senator, this is often commercial information. Some agencies announce their construction projects. They may be part of budget decisions. We will have to talk to the agencies that have provided information to us.

Senator CARR—Ms Bennett, this is public money; this is a public process. To claim commercial-in-confidence on the basis of forward public works, it strikes me, is to stretch credibility beyond what you normally would.



Dr Boxall—Ms Bennett did not say that, Senator Carr.

Senator Alston—There is no need to abuse, just because you do not like the question or the answer.

Senator CARR—I like the question, and you are right: I do not like the answer.

Dr Boxall—Ms Bennett said that we would need to consult with other agencies. We think that is perfectly reasonable before we give information that they provide to us.

Senator CARR—You will take that on notice?

Ms Bennett—We will take it on notice.

Senator CARR—Who does the task force report to on matters relating to the observance of the code or guidelines?

Ms Bennett—The task force reports to the code monitoring group.

Senator CARR—Will the task force be on the code monitoring group now?

Ms Bennett—Yes, they are.

Senator CARR—So they report to themselves?

Dr Boxall—No; they report to the code monitoring group chaired by Mr Lloyd.

Senator CARR—Has the task force been requested to examine the industrial credentials of those tendering for the Australia Post Tullamarine project?

Ms Bennett—No, Senator, that is not the role of the department in monitoring the code and guidelines.

Senator CARR—Was the task force asked to examine the terms of the certified agreement?

Ms Bennett—No.

Senator CARR—Has the task force been asked to examine Yuncken in particular?

Ms Bennett—No.

Senator CARR—There was a report in the Australian of 11 February that the task force would be checking for under-the-counter deals in respect of the project. Is that correct?

Ms Bennett—Senator, until Australia Post makes a decision about who they will award that contract to, until the contract is finalised and that ensures the appropriate components that require compliance to the code and guidelines, and until the project becomes constructed, there is nothing to monitor. At the point where the project has passed the requirements and it commences being an actual site, then there would be a role for the task force in monitoring compliance with the contractual arrangements that are set out in the code and guidelines.

Senator CARR—So you have this monitoring group in the department, you have a condition of the contract that there be compliance with the code and you have no means of checking whether or not those events have occurred—that there is compliance prior to the signing of the contracts. Is that what you are saying to me?

Ms Carapellucci—As we have explained, agencies will approach the department for advice to ensure that contracts they enter into comply with the code, and we will provide advice to agencies on request.

Ms Bennett—Once the project commences, a requirement of the contractual arrangements is for access by the interim task force onto the sites to ensure that it is being adhered to.



Senator CARR—Do you have the capacity to undertake investigations of under-the-counter deals? Is that what you are saying?

Ms Carapellucci—We cannot comment on the terminology used in the newspaper article.

Senator CARR—Do you have any capacity to establish whether or not the compliance arrangements are actually being met?

Dr Boxall—No, that is not what we said. We just explained that once the contract is entered into, the interim task force would be able to monitor the code to make sure that it is adhered to.

Senator CARR—Do you have any statutory authority to investigate Yuncken?

Ms Bennett—It is a contract requirement. If they want to build a Commonwealth project, it is a requirement of the tender and the contract.

Senator CARR—When you examined the certified agreement, were any further investigations made?

Ms Bennett—We provided advice to Australia Post on the issues that they raised with us.

Senator CARR—Without reference to the task force?

Ms Bennett—There was no conversation with the task force.

Senator CARR—Is it possible for a certified agreement—an agreement which is actually subject to law through the Australian Industrial Relations Commission, that is presumably checked by them and is compliant with the law—to be contrary to the code?

Ms Carapellucci—Yes.

Senator CARR—How is that?

Ms Carapellucci—It depends on the elements and the requirements in the code. If they had elements that are contrary to the requirements in the code, then it is in conflict with the code.

Senator CARR—Can you explain what elements might be in conflict with the certified agreement—that is, an agreement that has actually been through the Industrial Relations Commission?

Ms Bennett—Some examples could be freedom of association, refusing or not making available employee and subcontractor records, bedding in conditions and arrangements which displace individual contractors’ agreements. They are a few examples.

Senator CARR—What sorts of matters would be covered by that last item to which you referred?

Ms Bennett—It is a breach of the code that says for a subcontractor to work on a site, they must displace their own enterprise arrangements and adopt the arrangements that might be used at that site.

Senator CARR—What were the breaches of the code that you identified?

Ms Bennett—In relation to the request from Australia Post?

Senator CARR—Yes.

Ms Bennett—As we said earlier, that information is provided to Australia Post for them to make decisions about tendering and contract arrangements, and it is confidential.

Senator CARR—Did the issue of freedom of association come up?



Ms Bennett—I am not going to discuss it.

Senator CARR—When did you discuss this with the minister?

Ms Bennett—We regularly provide advice to the minister about the code and guidelines. We have briefed the minister on these issues.

Senator CARR—Presumably you briefed him fairly recently if all this has occurred since January?

Ms Bennett—Yes.

Senator CARR—It strikes me as strange that it has all blown up so quickly. Was that a deliberative policy on behalf of the department?

Dr Boxall—Is that a question?

Senator CARR—Yes.

Dr Boxall—Could you please repeat it?

Senator CARR—Have you sought to make this particular project an issue in regard to the code?

Dr Boxall—Of course not. The department implements government policy and advises the minister accordingly.

Senator CARR—Has the minister chosen to make this an issue?

Dr Boxall—You would need to ask the minister, but it is not as though this is the first time a code issue has come up.

Senator CARR—In Victoria.

Dr Boxall—For example, as you well know from previous Senate estimates hearings, there is the Darwin to Alice Springs railway line, which is done in accordance with the code of conduct, where there has been an agent of the OEA who previously had the responsibility to monitor it. As far as I know there have been no problems.

Senator CARR—Can you explain to me what the difference is between the Victorian building industry agreement and the national code?

Ms Carapellucci—The national code prevents parties being directly or indirectly coerced or pressured to make over-award payments, and over-award payments are defined to include unregistered agreements.

Ms Bennett—Our analysis is that the Victorian building industry agreement is incompatible with various elements of the national code and guidelines. The incompatibility includes: an industry-wide set of conditions and arrangements which displace individual contract agreements; an explicit affirmation of a wide-ranging role for the union in the control of the site; a matrix of site rates that apply throughout Victoria; induction procedures conducted by union delegates that emphasise the rights, obligations and benefits of union membership; a preferential role for unions in dispute resolution of redundancy and superannuation agreements; employee and subcontractor records made available for examination by union representatives; and arrangements for redundancy, superannuation, long service leave and workers compensation top-up payment by employers.

Senator CARR—So it is all about the role of the union.

Ms Bennett—You asked what the differences were, Senator.

Senator CARR—But every one of those is to do with the role of the union.



Ms Bennett—Senator, you asked me what was incompatible—

Senator CARR—I thought it would be a reasonable question to ask.

Ms Bennett—between two publicly available documents.

Senator CARR—Thank you. Do you expect delays in the project now being commenced?

Dr Boxall—You will need to ask Australia Post that. They are in charge of time lines and negotiation with the contractor.

Senator CARR—In regard to the establishment of the task force itself, the proposal to establish the task force was first made by the Master Builders Association. Is that true?

Dr Boxall—The proposal was made in the interim report from the royal commission.

Senator CARR—The Master Builders Association actually proposed this matter early last year. Is that the case?

Dr Boxall—I do not know.

Senator CARR—I put it to you, Dr Boxall: did the department prepare a speech for the minister for the MBA annual dinner in Canberra late last year?

Ms Bennett—We provide speaking notes for the minister for a range of functions. I cannot recall specifically, Senator.

Senator CARR—You cannot recall that one specifically? I was present at the dinner—

Ms Bennett—I think we did.

Senator CARR—and the minister actually acknowledged and congratulated the MBA for their initiative in proposing the establishment of the task force. Is that true?

Ms Bennett—I do not recall what the minister said at that function.

Senator CARR—You were there, I presume?

Ms Bennett—Yes, I was there, Senator, but I certainly do not recall that any speaking notes that we provided included that. The royal commissioner heard—it is on the public record—many, many days of evidence and received many, many submissions. I cannot recall exactly what the master builders’ submission to the royal commission was and whether it included the establishment of an interim task force.

Senator CARR—I put it to you—and newspaper reports would confirm this—that the MBA were the initiators of this proposal and, furthermore, that the minister, at the MBA dinner at the museum last year, acknowledged and thanked the MBA for their initiative.

Ms Bennett—The establishment of the interim task force was a direct response to the royal commissioner’s first report. It was explicitly set out in his first report why he felt the interim task force should be established.

Senator CARR—You have told us there are 25 members of the task force.

Ms Bennett—Twenty-five members of staff.

Senator CARR—Can I get the background of each of those 25?

Ms Bennett—You asked that question last time we were at estimates, and we explained the type of work that they do. We gave you the broad answer at the last estimates that they come from a range of backgrounds: workplace relations, legal, analytical and some forms of policing. But the specific person by person information would not be appropriate given the work that they are being asked to conduct at the moment.



Senator CARR—What is the background of the chairman of the task force, Mr Nigel Hadgkiss?

Mr Lloyd—Mr Hadgkiss is a former police officer; he has had a distinguished career in various police services. His job before going to the task force was as a director at the National Crime Authority.

Senator CARR—He was involved in the royal commission into police corruption in New South Wales, wasn’t he?

Mr Lloyd—I am not aware of that.

Senator CARR—I understand that he has a distinguished record in law enforcement, particularly when it comes to police corruption and other matters. What were his industrial relations qualifications?

Mr Lloyd—There were no industrial relations qualifications specified as such. He was selected on the criteria for the position.

Senator CARR—Did he wish not to be here today, or did you make a decision, Dr Boxall, that he should not be here today?

Dr Boxall—No, I did not make a decision that he should not be here.

Senator CARR—Was it his desire to come to the estimates hearing?

Dr Boxall—He is here.

Senator CARR—Why isn’t he at the table? I could ask these questions directly.

Dr Boxall—Because you have not asked any questions that we cannot answer.

Senator CARR—I see. Perhaps I could ask: how does he intend to carry out his work?

Dr Boxall—He will carry out his work under the charter, which I think is a public document. That is exactly what he will do.

Senator CARR—Will he be responding to calls from the public or on the basis of investigations undertaken?

Ms Bennett—The interim task force has a hotline which members of the public can call. That is one source whereby investigations or complaints are directed to the task force. In the course of investigating issues, other issues might emerge and that will be another source.

Senator CARR—Will they be undertaking undercover operations?

Ms Bennett—You asked this last time, Senator, and we said that they will not be conducting undercover operations.

Senator CARR—I am just wondering whether it has changed. I might have to ask the executive officer whether he will be undertaking those.

Dr Boxall—There is no change to the answer from last time.

Senator CARR—Will he be authorised to undertake undercover operations?

Dr Boxall—If he will not be undertaking them, he will not need authorisation.

Senator CARR—Will he be authorised or not?

Dr Boxall—That issue has not come up.

Senator CARR—It has now; I have just asked about it.



Dr Boxall—We said last time, and we just repeated that the answer is the same, that he will not be doing that.

Senator CARR—How many investigations does he have under way at the moment?

Ms Bennett—As at 6 February, there were 46 active investigations.

Senator CARR—What sorts of areas are being investigated? I do not want to know about the specific allegations—we will come to that.

Ms Bennett—Breaches of the Workplace Relations Act.

Senator CARR—Sorry, I did not realise that the good director was here in the audience. He is obviously a shrinking violet—or is he not allowed to come to the table?

CHAIR—Senator, do you have other questions?

Senator CARR—Yes.

Ms Bennett—The interim task force is to monitor conduct and enforce industrial, criminal and civil law in the industry.

Senator CARR—Is enforcement of the code of conduct part of this work?

Ms Bennett—Do you mean the national code and the Commonwealth implementation guidelines?

Senator CARR—Yes.

Ms Bennett—Yes, that is, as we explained earlier.

Senator CARR—Have you had any questions raised with you about its legality?

Ms Bennett—No.

Senator CARR—Will you be looking at right of entry?

Ms Bennett—Yes.

Senator CARR—That is good. I am getting closer here. What about strike pay?

Ms Bennett—Yes.

Senator CARR—Unpaid wages?

Ms Bennett—Yes.

Senator CARR—How many of the inquiries at the moment are to do with unpaid wages?

Ms Bennett—I do not have that information.

Senator CARR—Your director is right behind you. He can tell you.

Ms Bennett—If the interim task force receives an inquiry on its 1800 number about unpaid wages, they refer them to Mr Jasprizza’s area which deals with them accordingly.

Senator CARR—Here we go, yes, and we launch a blitz by the department within the building industry. So there are no current investigations at the moment. Is that right?

Ms Bennett—I explained what the procedures are.

Senator CARR—Are there any current investigations by the task force?

Ms Bennett—Not being conducted by the interim task force at the moment on those issues.



Senator WONG—Just to clarify: as I understand the procedure, they do not investigate unpaid wages at all; those calls are simply referred through to another area in the department. Is that not the procedure you have just outlined?

Ms Bennett—Yes.

Senator WONG—So it is not part of their brief to investigate unpaid employee entitlements?

Ms Bennett—No.

Senator CARR—How many investigations did you say are being run at the moment?

Ms Bennett—As at 6 February there were 46 active investigations.

Senator CARR—How many of them are in Victoria?

Ms Bennett—I can take that on notice.

Senator CARR—What states are they in? You cannot tell me how many are in Victoria, but presumably you can tell me what the spread of them is across the country.

Ms Bennett—There are cases under consideration in South Australia, Western Australia, New South Wales, Queensland and Victoria. I can confirm that 11 are in Victoria.

Senator CARR—Are you able to tell me the types of sites that are involved? Is commercial building the only area of interest you have?

Ms Bennett—No.

Senator CARR—What site types are involved?

Ms Bennett—I think we need to be circumspect with details. When there are only 11 in a particular state, you are providing information about investigations that are being conducted. We will take it on notice to make sure that we are not exposing any of the parties with the disclosure of that information.

Senator CARR—The task force will be interested in, for instance, examining the home building industry. Is that right?

Ms Bennett—If there are breaches of the Workplace Relations Act, yes.

Senator CARR—Have you identified any in the home building industry yet?

Ms Bennett—I have just been advised that some have been referred as issues for the task force to look at.

Senator CARR—But they are not currently subject to investigation?

Ms Bennett—Yes, they are.

Senator CARR—Are they part of the 46?

Ms Bennett—Yes.

Senator CARR—Are the 46 investigations all in capital cities? Are there any in rural areas?

Ms Bennett—Some are in non-metropolitan areas.

Senator CARR—Do you mean Geelong? What are you talking about?

Ms Bennett—I think it goes back to the point that if we start going into which regional areas and what are the names of the towns, it is not going to be difficult to identify where the site is for that investigation. As you would understand, proper processes—



Senator CARR—No, that is fine. But what you are saying to me is that it is not just the capital cities that you are interested in?

Ms Bennett—Yes.

Senator CARR—Are you just looking at registered organisations or are you looking at individuals?

Ms Bennett—It is anyone that has breached the Workplace Relations Act.

Senator CARR—Mr Hadgkiss, it would be much easier if you actually came to the table. That is the custom and practice in these procedures.

Ms Bennett—There is a spread of companies, unions, employer associations and individuals.

Senator CARR—I take it that the investigations are still at the collection of evidence stage?

Ms Bennett—We have said that there are active investigations.

Senator CARR—Have any prosecutions been launched?

Ms Bennett—Yes.

Senator CARR—Have any successful prosecutions been concluded?

Ms Bennett—There are still matters before the court.

Senator CARR—There was a report on page 35 of the Herald Sun on Sunday, 2 February. Obviously those matters were provided to the Herald Sun. I take it that they are public knowledge?

Ms Bennett—We do not discuss matters that are before the court.

Senator CARR—Can you confirm that the task force has launched legal action against an official of the CFMEU?

Ms Bennett—We do not discuss matters that are before the court, Senator.

Senator WONG—The senator is not asking about matters that are technically sub judice; he is simply asking about the parties. That is a matter of looking at the court list.

Senator Alston—If it is a matter that is on the public record, you can find out separately.

Senator WONG—What is the problem, Senator, with the department providing this? It is not a sub judice matter to ask who the parties are. We have not even asked for the names at this stage.

Senator Alston—If it is a matter of public record, I think that is right. I think the officials are anxious to avoid prematurely identifying individuals. They can take it on notice and, if it is not a problem, you will get your answer.

Senator CARR—Did the task force seek an emergency Industrial Relations Commission hearing in February?

Ms Bennett—Yes, Senator.

Senator CARR—Or was it in January?

Ms Bennett—It was in January.

Senator CARR—Was an attempt made to ban a union official from a Grocon site?



Dr Boxall—We cannot go into the details of that. We cannot answer questions that are not on the public record.

Senator CARR—They are on the public record: there is an article in the Herald Sun.

Dr Boxall—That could be an unofficial leak—

Senator Alston—That is not the public record. It could actually even be wrong.

Senator CARR—That is my point; we will get to that.

Senator Alston—So it is not a matter of public record.

Senator CARR—It is a matter of public record; there is an article in the Herald Sun, which has an extremely large circulation. I take that to be as public a record as you are going to get.

Senator Alston—You mean there is a story in the papers? That is not the public record.

Ms Bennett—There is a difference between being on the public record and a leak to the Herald Sun. They are not the same things.

Senator CARR—I am going to get to the point about who leaked it in a minute.

CHAIR—Order, Senator! The officer is answering; let her finish.

Dr Boxall—There has been no announcement that we are aware of on these issues.

Ms Bennett—It is not appropriate.

Senator CARR—Is this matter before the commission?

Ms Bennett—Yes.

Senator CARR—So there has been no hearing to date?

Ms Bennett—No.

Senator CARR—Given that the dispute between Grocon and the CFMEU has now been settled, will the task force be pursuing its claim?

Ms Bennett—You are asking for us to go to issues about investigations and matters for which it is not appropriate for us to disclose the information.

Senator CARR—The point I am putting to you is that Grocon have launched a series of legal actions against the CFMEU as part of an industrial dispute. The industrial dispute has now ended and the legal actions have been withdrawn. Will the task force’s ancillary action to Grocon’s cease?

Ms Bennett—We are not confirming or denying the issue that you are raising.

Senator CARR—Except that you are confirming that you do currently have an action involving the industrial relations task force.

Ms Bennett—We confirmed that we intervened on a matter; we are not confirming or denying anything in relation to any individual.

Senator CARR—And the matter is still currently before the commission?

Ms Bennett—Yes.

Senator CARR—When do you expect the commission to deal with the matter?

Ms Bennett—I do not know.

Senator CARR—You have no advice as to when the hearing will be?



Senator Alston—Again, if it is a matter of public record, you may be entitled to it. If it is not, then you are not entitled to any advance quotations.

Ms Bennett—We have no indication.

Senator CARR—As a result of these investigations so far, has the task force referred any matters to the Australian Federal Police?

Senator Alston—That would not normally be a matter for public disclosure. Quite often matters are brought to the attention of the police, and the last thing the police would want is for them to be on the public record.

Senator CARR—I am not asking you for who; I just want to know whether or not any matters have been referred to the Federal Police.

Senator Alston—Again, I do not think, in principle, there is any reason that any matter brought to the attention of the police should be publicly acknowledged.

Ms Bennett—The charter said that, if appropriate, the task force will refer those matters.

Senator WONG—The task force is being funded by the public.

Senator Alston—So?

Senator WONG—The public is entitled to know what the task force is doing. We are not asking for names; we are simply asking whether, as part of their work, there have been referrals to the AFP. It is entirely appropriate.

Senator Alston—That is not a legitimate matter of public concern. All you should be concerned about is whether it is carrying out its charter obligations.

Senator CARR—We are trying to establish that.

Senator Alston—If they involve certain matters that are normally kept private, then that does not entitle you to know about it.

Senator WONG—It is a matter of public concern what the task force is doing.

Senator Alston—Yes, it is. But that does not mean that you are entitled to facts and information that would normally be kept private.

Senator WONG—I was not sure that that was the line in terms of what should be disclosed at Senate estimates.

CHAIR—It is a police matter, Senator.

Senator CARR—It is not a police matter.

Senator Alston—I think everyone is understandably cautious about disclosing matters that may go beyond what is—

Senator CARR—To this point, have there been any referrals to the Federal Police?

Ms Bennett—We have explained that, if it is appropriate, matters are referred, as is set out in the terms of—

Senator CARR—But you have yet to refer any?

Ms Bennett—I am not confirming or denying that.

Senator CARR—The Australian Taxation Office?

Ms Bennett—I am not confirming or denying.



Senator WONG—On what basis can information about whether or not a referral has been made to the tax office not be disclosed? We are not asking about whom.

Senator Alston—How does that add to the obligations to act properly? If they make private referrals, that does not suggest that they are or they are not carrying out their duties; that is simply a matter of public inquiry. I do not see that there is any obligation to disclose that. Matters brought to the attention of the tax office are not normally made public.

Senator WONG—We are not asking about whom.

Senator Alston—The fact of them is not normally made public.

Senator WONG—It is not unusual, is it, for these sorts of questions to be asked—are you doing this; are you referring these matters here? We had an answer from Ms Bennett in which she said, ‘If we get any employee wage queries to the task force, they are referred to elsewhere in the department.’ What is the difference with this?

Senator Alston—I think what you are concerned about is whether they are carrying out their duties. If part of their duties includes referring matters to the police, and the answer is yes, if we see a basis for doing that, we do it, that is as far as I would have thought you can go.

Senator WONG—Are you directing them not to answer, Minister?

Senator Alston—I am giving advice in the first instance, but I would have thought the officers are understandably reluctant to volunteer matters. If you want them to take it on notice, I do not have an objection to that. But I think that they should give a considered answer.

Senator CARR—Take it on notice. This is obviously going to become a regular part of the repertoire now. I would like to know the number of referrals that have been made to the AFP, the Taxation Office, ASIC or the ACCC.

Ms Bennett—We will take it on notice.

Senator CARR—Thank you very much. Has the task force received any referrals from the royal commission?

Ms Bennett—Information passed from the royal commissioner is under section 6P, of the Royal Commissions Act 1902. I understand that the royal commissioner has, under that aspect of the act, referred matters to the task force.

Senator CARR—What is the nature of those referrals?

Ms Bennett—These were investigations that the royal commissioner felt were appropriate to be handled by the task force.

Senator CARR—And you cannot tell me what the referrals are?

Ms Bennett—No.

Senator CARR—Can you tell me how many of the referrals involve investigations of employers?

Ms Bennett—No.

Senator CARR—Of the 46 current investigations, how many involve investigations of employers?

Ms Bennett—I would prefer to take that on notice.

Senator CARR—You have the list in front of you; surely you can identify the employers.



Ms Bennett—No, it does not have the identification of those issues.

Senator CARR—Could you take on notice: are there any employer organisations?

Ms Bennett—I will take it on notice.

Senator CARR—Have any of the matters referred by the royal commission under section 6P constitute part of the 47 investigations?

Ms Bennett—No.

Senator CARR—You have 25 officers involved in the task force. Do they have a heavy workload?

Ms Bennett—I am sure they do.

Senator CARR—I take it from the government’s statements that there is an extraordinary level of lawlessness in the building industry. Have they found that it is too much for them to handle?

Senator Alston—Those are not serious questions at estimates committees. You can have that as a political debate—

CHAIR—No. It is speculation, Senator.

Senator CARR—I am just wondering what they do. Are they able to cope with the level of lawlessness?

Senator Alston—You are entitled to ask whether they are doing their job, but you are not entitled to ask whether—

Senator CARR—I am asking whether they are doing their job.

Ms Bennett—Are they doing their job?

Senator CARR—Yes.

Ms Bennett—Yes, they are monitoring and conducting investigations and enforcing industrial, criminal and civil law in the building and construction industry.

Senator CARR—Criminal laws—are they not matters for the police?

Ms Bennett—Yes.

Senator CARR—What role does the task force have in the enforcement of criminal law?

Ms Bennett—It enforces industrial and it would refer criminal matters to the appropriate jurisdiction.

Senator CARR—But it does not actually enforce criminal law, does it? The officers are not—

Ms Bennett—Police officers—

Senator CARR—Mr Hadgkiss is still a member of the AFP, I presume, is he?

Ms Bennett—No, he is a temporary employee with the department.

Senator CARR—But he is not authorised to enforce criminal law, is he?

Ms Bennett—No, he is not.

Senator CARR—Are any officers authorised to enforce criminal law?

Ms Bennett—No.

Senator CARR—Are there any officers here on secondment from the AFP?



Ms Bennett—I do not know, but there are certainly no seconded officers with powers that they are able to exercise in the task force.

Senator CARR—None of them have a warrant card, do they?

Ms Bennett—No.

Senator CARR—Any members of the NCA seconded?

Ms Bennett—Mr Hadgkiss.

Senator CARR—Apart from Mr Hadgkiss?

Ms Bennett—No.

Senator CARR—No other security organisations?

Ms Bennett—No.

CHAIR—There being no further questions on 2.2, we will move to the agencies.

Senator CARR—I look forward to Mr Hadgkiss joining us in the flesh.

[5.58 p.m.]

Equal Opportunity for Women in the Workplace Agency Senator WONG—Ms Biggs, can you tell me what additional work has been done by your

agency on the issue of paid maternity leave?

Ms Biggs—Since I last spoke here, we have not done anything with regard to that issue except to discuss it with clients who contact us for information. If clients contact us for information about paid maternity leave, we provide them with that information or with policies or with referrals to places they can go to.

Senator WONG—Can you give us some indication on the level of those sorts of inquiries?

Ms Biggs—Possibly one a week. Because we are not in a reporting period, we are not in constant regular contact with clients, but we expect it to definitely increase as of May. We expect that we will get a few inquiries then about paid maternity leave. We intend to do a survey on paid maternity leave at that time. We will ask all our clients—2,700 of them— whether they are paying maternity leave, and we will compare that with the results we got two years ago when we asked the same question.

Senator WONG—We had some evidence this morning from the Office of the Employment Advocate regarding agreements that may be entered into that cash out part or all of employees’ leave entitlements—that is, annual leave and sick leave entitlements. Does your office have any experience of those sorts of agreements?

Ms Biggs—No, we do not. I think I have heard of one company that has contacted us and asked us what we thought about that, but it is not a regular occurrence.

Senator WONG—What was your advice to this company?

Ms Biggs—We do not advise companies on issues like that. Our advice is with regard to equal employment opportunities and those sorts of issues. They would need to talk to the relevant agencies about that.

Senator WONG—I suppose the thrust of the question this morning was whether it would be possible for people to manage their family responsibilities under an agreement where you do not have any annual leave.

Ms Biggs—It would be very difficult, I would imagine.



Senator WONG—I would have thought so. From your perspective, do you think such agreement is consistent with the obligation under the act to consider work and family responsibilities.

Ms Biggs—Absolutely not. I would think that most leading edge companies that are trying to increase opportunities and advance women would not be going down that track, and that they would be encouraging women—or men, for that matter—who have family responsibilities to use their leave when they need it for sick children or sick relatives or any other family emergency.

Senator WONG—Would you agree that those sorts of agreements where you can cash out of some or all of your leave entitlements would disproportionately impact on women?

Ms Biggs—Possibly, as more women tend to take leave to look after their children. But they tend to take sick leave rather than annual leave to do that or, in some case, carers’ leave or personal leave if it is available in the company.

Senator WONG—Has your agency done much research on how family responsibilities might be divided within our community? Anecdotally, we would say that women tend to bear more of the domestic and family responsibilities. Has your organisation done any research into that fact?

Ms Biggs—We have not, but I know there is a lot of research out there. The time use survey was done a number of years ago, and it backed up the anecdotal evidence that women are still doing most of the housework and caring for children as well as paid work.

Senator WONG—From that, would you agree that an absence of family-friendly work arrangements might disproportionately impact upon women?

Ms Biggs—Absolutely.

Senator WONG—It might be a break upon a woman’s ability to progress within an organisation?

Ms Biggs—Absolutely.

Senator WONG—Have you been asked to provide any information on those sorts of issues to the government.

Ms Biggs—No, not to the government.

Senator WONG—Or to the department?

Ms Biggs—No.

Senator WONG—Have you been asked for advice in relation to the sorts of agreements I am describing?

Ms Biggs—Industrial agreements?

Senator WONG—Yes.

Ms Biggs—No, we have not.

Senator WONG—Have you been asked to give any advice about how particular workplace agreements might impact upon women?

Ms Biggs—That has not been our role in the past.

Senator WONG—Has your agency had any ministerial directions this current financial year?

Ms Biggs—With regard to?



Senator WONG—Any sort of activity.

Ms Biggs—Not that I can recall.

Senator WONG—What about in the previous financial year?

Ms Biggs—Possibly, but I would need to take that on notice. I cannot tell you absolutely.

Senator WONG—I understand that in your annual report there are some details of the consultation with the ILO working family delegation? Was your agency involved in that?

Ms Biggs—A while back now we had some contact with the ILO with regard to some work they were doing on women in leadership.

Senator WONG—You do not recall when that was?

Ms Biggs—About 12 months ago, I think. There is currently some information that has been required for the ILO, but I do not think it is in the area of work and family.

Senator WONG—You think there was a consultation with an ILO working family delegation about 12 months ago?

Ms Biggs—Yes. Linda Worth from the ILO came to Australia.

Senator WONG—Were you involved in the discussion with Ms Worth?

Ms Biggs—Yes.

Senator WONG—Were there other agencies involved in that discussion?

Ms Biggs—I think we hosted a lunch, where we invited a number of agencies and the private sector to come along and talk to her and listen to her.

Senator WONG—May I ask which agencies? Just off the top of your head, if you can recall.

Ms Biggs—Probably HREOC, possibly some state government agencies and probably DEWR. We have an information sharing group that meets three or four times a year. There are a number of agencies who attend those meetings. I seem to recall that they are the people who attended that meeting with Linda Worth.

ACTING CHAIR—There being no further questions, we will move to the National Occupational Health and Safety Commission.

[6.07 p.m.]

National Occuational Health and Safety Commission Senator WONG—Mr Stewart-Crompton, I want to ask some questions about workplace

deaths and the database or information that is currently retained by your agency.

Mr Stewart-Crompton—We hold information about a variety of data sets about workplace fatalities. The most reliable information we have is that which is based on compensated traumatic fatalities—that is, fatalities for which workers compensation is paid. That is not a complete data set, because there are a number of workers who are not employees, or there may be circumstances where workers are employees but the workers compensation scheme does not extend to cover the circumstances of what would generally be perceived to be a work related fatality, such as commuting to and from work.

As the committee is no doubt aware, across Australia there is some variation in whether journey claims are accepted as workers compensation. For those areas where we do not have information about fatalities from the workers compensation schemes, we have good information about fatalities that are caused by mesothelioma. Australia has probably one of



the best registers of fatalities from that cause in the world, and that is maintained by the National Occupational Health and Safety Commission.

The commission has decided, as part of its national action plan on data, to try to improve the sources of data for other fatalities—indeed, all injuries—by looking at other sources of data, such as hospital discharge data. We have been supporting for some years the relatively new National Coronial Information System, which is starting to provide more reliable and speedier information about work related fatalities.

I think it would be fair to say, however, that there is no complete source of information in Australia about all work related fatalities. The area where we have the greatest difficulty is for long latency diseases, where workers have been exposed to hazardous substances and, many years later, contract some form of cancer, for example.

Senator WONG—There have been some calls, which I am sure you are aware of, from the union movement in Victoria about a national coronial database.

Mr Stewart-Crompton—Yes, and in my last answer I referred briefly to the support that the National Occupational Health and Safety Commission has been giving to the National Coronial Information System. It has been operating for only a few years, and we are not the only Commonwealth agency that is supporting it. I believe the Attorney-General’s portfolio and the Health portfolio also provide funds to support it. Recently, the Commonwealth agencies agreed to continue their financial support for the system. There was a launch in about November or December of the next phase of the system. We are starting to see delivered from the National Coronial Information System a wider source of information, but there are still issues to do with coding and some of the coronial practices across Australia that have to be rationalised before we can say it is a completely reliable source of data.

Senator WONG—So it is not necessarily standardised yet?

Mr Stewart-Crompton—No.

Senator WONG—What does this information system in its current form tell us? What can we track with it?

Mr Stewart-Crompton—Through the coronial investigations of fatalities, they are able to identify those that are work related. From that database we may have the opportunity, subject to privacy considerations, to gather more information about the circumstances of fatalities. In some circumstances, coroners make recommendations for changes to work practices or the legal framework, which will also be of national interest and of particular interest to the jurisdiction concerned.

Senator WONG—In its current form, it does not enable a tracking of causative factors across the board? Is that right?

Mr Stewart-Crompton—We have only recently been able to derive information from it. From my discussions with the Victorian chief coroner, who has played a very important role in driving this forward, the coroners have some problems in resourcing to allow them to do all the necessary coding and other data preparation. With the continuation of funding and the stabilising of the system, I think all those involved—the coroners and those who are supporting it—are reasonably optimistic that, over the next two or three years, we will solve many of those difficulties.

Senator WONG—One would think that a database that permits that kind of tracking of causative factors would obviously be very useful in minimising future fatalities.



Mr Stewart-Crompton—Yes, although we would not say that all our eggs are in that basket and we will look for other sources of information, including information from hospitals, from medical practitioners and other sources.

Senator WONG—You mentioned mesothelioma. I have some questions about asbestos. Is that within your agency’s purview? What work does your agency do in relation to asbestos?

Mr Stewart-Crompton—Asbestos is both popularly understood to be and is technically a hazardous substance. It is covered by the hazardous substances framework of advisory regulatory material, which has been prepared at the national level and declared by the commission. The workplace relations minister’s counsel decided, on recommendation from the National Occupational Health and Safety Commission, that the use of all forms of asbestos should be prohibited subject to certain exceptions and including the existing use of asbestos. So all new uses of asbestos are to be prohibited from December 2003. The national commission has declared a prohibition, which will operate from December 2003. All jurisdictions are in the process of changing their laws to ensure that such a prohibition is in place, subject to very limited exceptions. We will also work with the Department of Employment and Workplace Relations and the Australian Customs Service to ensure there are border controls to make sure that asbestos cannot be imported or exported.

Senator WONG—What about asbestos in existing buildings?

Mr Stewart-Crompton—That is subject, typically, to laws in each state and territory relating to the handling of that material and exposure to that material. It has been subject to examination by the national commission, so there is guidance on the exposure limits for asbestos and guidance on exposure to it. This has been declared by the national commission and again used as a reference for producing a nationally consistent approach to the control of the use and exposure of asbestos.

Senator WONG—One of the things which has been put to us is that, within the next 15 years or so, the existing asbestos in buildings will become a more important issue. I am not quite sure why. You nodded, Mr Stewart-Crompton. Are you familiar with this issue?

Mr Stewart-Crompton—There are two issues that will certainly be continuing issues. The first is that the number of people who have been exposed to asbestos in the past and who will contract mesothelioma is expected to peak over the next few years. There is a continuing challenge for all regulators and employers and others who have control of those circumstances to ensure that, where asbestos is removed from buildings or other applications, it is done in a way that is safe and meets the best practice standards, which the commission attempts to guide.

Senator WONG—So you have an involvement in that process in terms of standard setting?

Mr Stewart-Crompton—Not at the operational level but the commission itself does try to ensure that, where there are exposure standards for asbestos—or, indeed, any other hazardous substance—the standards are maintained at the level of international best practice.

Senator WONG—The Commonwealth does not provide any operational funding, though?

Mr Stewart-Crompton—Most of the regulatory responsibility is on the states and territories, but the Commonwealth has control of premises where asbestos is found. There are some responsibilities within this portfolio at the operational level with Comcare, which I think will be the next agency to appear before this committee.



Senator WONG—Finally, has the commission investigated a system for national uniform occupational health and safety laws?

Mr Stewart-Crompton—For many years, the commission has had a goal to encourage national uniformity. It would be fair to say that we are still yet to see national uniform regulation in occupational health and safety emerge, but we have seen a very high degree of consistency emerge in those areas where the commission has established priority national standards. Those have flown through the national occupational health and safety laws of the various jurisdictions. There is a difference in the way those laws are expressed, but the fundamental principles in the standards are increasingly being brought into alignment with the national standards.

Senator WONG—But that is a cooperative arrangement. Have you investigated the possibility of Commonwealth legislation dealing with uniform laws?

Mr Stewart-Crompton—That is not something that the national commission has considered.

CHAIR—There being no further questions, we will move onto Comcare.

[6.22 p.m.]

Comcare Senator WONG—It probably comes as no surprise to you, but I would like to ask about

the National Gallery.

Mr Leahy—No, that is not entirely surprising.

Senator WONG—What happened at the National Gallery, from Comcare’s perspective, earlier this week?

Mr Leahy—We were notified last week by the National Gallery that they had had an incident where fibreglass fibres had been blown out of their airconditioning system at one of the air handling units. We commenced an investigation within an hour or so of being advised of that. We decided that we need not take any further action on the basis that the gallery had undertaken a lot of the work, including inspections. On Monday morning we were advised that there was evidence of further fibres in some of the galleries. Our investigator went to the gallery to ensure that the health and safety of employees in the gallery were appropriately looked after. We issued a prohibition notice, effectively prohibiting people from going into the affected areas. We have now initiated a series of testing procedures. We will allow the galleries to re-open once we are confident that there is no further risk to employees or the public.

Senator WONG—So there were two occasions on which Comcare had to attend the gallery?

Mr Leahy—We attend the gallery fairly frequently.

Senator WONG—So I gather.

Mr Leahy—On this issue, there were two notifications of incidents—and they are related.

Senator WONG—Yes, I understand that. They were in relation to the fibreglass fibres. Is that right?

Mr Leahy—Yes.

Senator WONG—Monday, 10 February was the second time you—

Mr Leahy—That is right.



Senator WONG—Can you remind me when the first was?

Mr Leahy—It was on Wednesday of last week.

Senator WONG—On Monday, 10 February, did you invoke sections of the Commonwealth occupational, health and safety legislation to secure the areas?

Mr Leahy—We put in place prohibition notices, which basically closed down the affected areas and closed down the airconditioning in those areas until we could, as I said, undertake a series of tests to ensure that there was no threat to staff and members of the public.

Senator WONG—What sections of the act are prohibition notices issued under?

Mr Leahy—Section 46.

Senator WONG—Does that relate to contamination?

Mr Leahy—Basically, it just enables us to issue a notice prohibiting activity, action— whatever we want to prohibit.

Senator WONG—What are the threshold issues that are required before you can exercise that?

Mr Leahy—It is a judgment call based on the experience and knowledge of the investigator.

Senator WONG—In the act, what do you have to be satisfied of before you can issue the notices?

Mr Leahy—The act says: Where, having conducted an investigation, an investigator forms the opinion that it is reasonably necessary to issue a prohibition notice to an employer in order to remove an immediate threat to the health or safety of any person, the investigator may issue such a notice, in writing, to the employer.

Senator WONG—Why was it not felt necessary for notices under section 46 to be issued on the Wednesday?

Mr Leahy—As I said, we were notified at two o’clock on the Wednesday. Our investigator was there at about three o’clock. By that time, a lot of action was already in place. The gallery had got the people who had installed the insulation to remove the torn insulation in the affected air handling unit, which was air handling unit No. 4. We made the judgment that they had removed the source of the fibres that were being blown out into the gallery. The gallery had undertaken all of the necessary cleaning of the affected areas. The affected galleries were being closed to the public. On Friday, the gallery initiated air testing, which occurred on Friday, Saturday and Sunday, and the air testing showed that there was no particular matter in the air that would cause concern. On the basis of all of that sort of information at that stage we did not think that it was necessary to put in place a prohibition notice. When the second incident occurred, because we obviously needed to undertake further investigations, we put the prohibition notices in place. We have already initiated testing of the fibres that have been found in the gallery.

Senator WONG—You say that you relied on air testing on Friday, Saturday and Sunday.

Mr Leahy—Yes.

Senator WONG—But I asked why prohibition notices were not issued on the Wednesday, which was prior to any of the testing you have described.

Mr Leahy—There were a range of steps that were in place and being planned that satisfied us that the gallery was meeting its duty under the occupational health and safety act, and that



is to take all reasonable steps to ensure the health and safety of employees. We made a judgment at that time that they were taking all those reasonable steps. On the Monday, when there was a further incident, we decided that we needed to undertake further investigations ourselves. One of the issues that we have not resolved—and this will be the subject of further tests that we hope to undertake tomorrow—is the cause of the second incident. There is a whole range of things that we still need to do to try to finalise the investigation.

Senator WONG—What time were you called in on the Monday?

Mr Leahy—On Monday, we got a phone call from an employee at the gallery at, I think, 9.12 a.m. Our investigator arrived at the gallery at about 10 a.m.

Senator WONG—When the investigator arrived was the airconditioning system shut off?

Mr Leahy—No.

Senator WONG—Is it the case that the airconditioning system was shut off at any time between Wednesday and 9.12 a.m. Monday?

Mr Leahy—The airconditioning had been shut off on a number of occasions between Wednesday and Monday.

Senator WONG—What that as part of a normal shut-off, or was there—

Mr Leahy—No. As I understand, it was part of cleaning up the airconditioning system as a result of the first incident.

Senator WONG—Is it the case that employees reported that they saw additional glass fibre contamination and that led to the airconditioning system being shut down between Wednesday and Monday?

Mr Leahy—My understanding is that the airconditioning system was shut down to allow for the cleaning of the airconditioning system to try to eradicate the source of the fibres and to carry out testing.

Senator WONG—Prior to Monday, was there any additional fibre material noticed after the clean-up on the Wednesday?

Mr Leahy—Not according to the tests that were carried out. The next notification that we received was on the Monday morning.

Senator WONG—Did Comcare participate in any of the tests that you have described?

Mr Leahy—Previously, no—we were advised of the arrangements that had been put in place. Now we are organising testing ourselves.

Senator WONG—So the testing that occurred between Wednesday and Monday morning, when it was determined that you were called again—and I want to ask you about that in a minute—was done entirely by gallery staff and under the direction of gallery management?

Mr Leahy—Yes, but we were aware of and supported the testing. They engaged people to undertake the testing. They did not do it themselves; they engaged experts. For example, to do the clean-up, they engaged the people who had installed the fibreglass and, for the air testing, they engaged a company that has done work in this area previously.

Senator WONG—Did Comcare have any involvement in that?

Mr Leahy—No.

Senator WONG—Was any of the testing protocols checked with Comcare?

Mr Leahy—No.



Senator WONG—Are you aware of what the protocols were?

Mr Leahy—They were fairly standard tests. We had no reason to query the appropriateness of the tests. In fact, the tests that we will be running will be similar tests.

Senator WONG—Before the tests were carried out, were you aware of the tests that these independent contractors would perform?

Mr Leahy—Yes. These people are experts in this field. They are people with previous experience.

Senator WONG—I think you said the contact on Monday morning was by an employee. Is that right?

Mr Leahy—That is correct.

Senator WONG—Not by management?

Mr Leahy—No, it was by an employee who wished to remain anonymous.

Senator WONG—I am going to respect the employee’s wish to remain anonymous—but is that common?

Mr Leahy—It has happened previously. The requirement for notification of dangerous occurrences is that we be advised within 24 hours of the incident. When we heard about it, our investigator immediately went over there. It may well have been that the gallery was going to notify us, but we were there prior to the notification.

Senator WONG—Do you know that, Mr Leahy?

Mr Leahy—No, I do not know that.

Senator WONG—So that is hypothetical?

Mr Leahy—I am surmising.

Senator WONG—Who attended from Comcare?

Mr Leahy—Our investigator, Maureen Trevanion.

Senator WONG—At the time Ms Trevanion attended, was management aware that Comcare had been notified by this anonymous employee?

Mr Leahy—Not that I am aware of.

Senator WONG—So that was something Ms Trevanion had to indicate to the gallery management?

Mr Leahy—Yes, that is correct.

Senator WONG—What was their response?

Ms Trevanion—They asked me how I knew that something had occurred again, and I just told them that it was through an anonymous caller from the gallery.

Senator WONG—May I ask with whom this discussion occurred?

Ms Trevanion—There was a group of people there. I think there was the OH&S adviser. I just cannot recall. There were three or four people there. There was a person from HR who actually took me into where that group was meeting. I am sorry but I cannot remember who the other ones were.

Senator WONG—Was Dr Kennedy there?

Ms Trevanion—No.



Senator WONG—Was the gallery somewhat concerned to see you there?

Ms Trevanion—No, they were not at all concerned to see me there; they just wondered how I knew.

Senator WONG—Did they at any stage indicate to you that they had been intending to call you?

Ms Trevanion—They did not mention that.

Senator WONG—Is it possible that between Wednesday and Monday there was glass fibre contamination continuing—not on a continuous basis, but that it occurred again between those two times?

Mr Leahy—The testing undertaken by Robson Laboratories on the air that was coming out of the airconditioning system on Friday, Saturday and Sunday showed that there was no particular matter coming out of the airconditioning system. The evidence would suggest that that was not the case. It is possible that there may have been some residue from the first contamination, but we do not know. That is part of what we will try to do through our investigation. We cannot conclusively give you a response on that at this stage.

Senator WONG—Just to clarify what we are talking about: are we talking about respirable fibres?

Mr Leahy—We are talking about fibres that, according to a preliminary report that we have, measure generally greater than 10 microns, which probably are not respirable. But there are some which are as low as five microns, which probably would be. There is some contest about this at the moment. We are still trying to clarify some of the issues about this at the moment.

Senator WONG—Do we know what the particular effects to the health of an employee or a visitor might be from breathing one of the five-micron particles?

Mr Leahy—For each substance that might be regarded as hazardous, the manufacturer is required to produce a material safety data sheet. We have obtained from the installer such a sheet for this product. There is some further work that we have to do on this sheet, but basically it says that there are some short-term health effects to do with skin itching and occasional rashes. The material safety data sheet says: There are no known long-term health effects. This product is rapidly bio-soluble in laboratory studies. Bio-soluble means that any fibres inhaled into the lungs dissolve in the bodily fluids and are quickly cleared from the lungs.

That is what the manufacturer is claiming about this particular fibre. We are doing further tests on that.

Senator WONG—I am glad to hear it.

Mr Leahy—We were particularly pleased to hear it too.

Senator WONG—Going back to the airconditioning system, is it the case that gallery airconditioning maintenance personnel shut off the airconditioning system prior to the Monday morning contact?

Mr Leahy—Prior to our arriving on Monday morning?

Senator WONG—Yes.

Mr Leahy—I think that is the case, yes.



Senator WONG—Is it the case that that occurred because there was some visual evidence of a second incident of fibre contamination?

Mr Leahy—The phone call that we got was that there was evidence that there was fibre on some of the art pieces—visible evidence.

Senator WONG—Was the airconditioning system subsequently switched on?

Mr Leahy—Yes, it was.

Senator WONG—Who ordered that that occur?

Mr Leahy—We are still trying to establish some of those facts. We really do need to work through some of those issues further before we can give you a conclusive answer. I do not want to be providing answers when we are not certain of our facts.

Senator WONG—When will that investigation be finalised?

Mr Leahy—Our objective at the moment is to try to ensure that the galleries are safe for staff and visitors. Once we have assured ourselves of that, we will move to try to sort out some of the causal and timing factors associated with the incidents. It could take some time.

Senator WONG—I appreciate that. Did gallery management request or direct that the airconditioning system be restored to full operation on the Monday morning?

Mr Leahy—That is the advice that we have, but it is not something that is conclusive. We still have to confirm that. We have not talked to people in sufficient detail about that. For example, I do not know that we have yet talked to gallery management. That is part of what we will keep doing.

Senator WONG—Presumably, Mr Leahy, you will do an investigation and you will produce a report.

Mr Leahy—Yes.

Senator WONG—Will that report be publicly available?

Mr Leahy—The standard procedure is that we would provide it to the gallery. It is then up to them to release it to their occupational health and safety committee. However, I understand that, in the Senate committee hearing yesterday, Dr Kennedy indicated that he would be happy to release the report publicly—or certainly release it to this committee.

Senator WONG—Without naming people—because I understand people seem to want to be anonymous in relation to this issue—has Comcare received complaints from gallery staff regarding management’s decision to return the airconditioning to full operation?

Mr Leahy—Not that I am aware of. We have not received a formal complaint, no.

Senator WONG—What about informal?

Mr Leahy—No, not a complaint.

Senator WONG—What about advice?

Mr Leahy—Yes, we have been provided with advice that that happened, but it is advice that we have to check.

Senator WONG—Was that issue—that is, the fact that the airconditioning was directed to be turned on again—relevant to the consideration of whether or not section 46 notices should be initiated?

Mr Leahy—No, it was the state of the gallery—the fact that there was fibre around that we had been advised had been cleaned up.



Senator WONG—But that state existed on Wednesday and you chose not to—

Mr Leahy—No, at that time, there had been a range of steps taken or being taken by the gallery to assure themselves that they were meeting their duty of care, and we were satisfied with that. When the second incident occurred, we decided that we needed to take steps ourselves to assure ourselves, as I explained before, that all reasonable steps had been taken. As I indicated, we have initiated a series of tests to assure ourselves. It will not be until we get the results of those tests that the galleries will be reopened or we will lift the prohibition notice.

Senator WONG—So management actions in directing that the airconditioning be recommenced was not a relevant factor in your decision to issue the section 46 notices?

Mr Leahy—That is a relevant factor for the investigation. The reason the prohibition notice is in place—and it is a prohibition notice in place not only the turning of the airconditioning but also people going into the gallery—is to ensure the health and safety of staff and members of the public. We are prohibiting people going into the gallery and we are prohibiting the airconditioning being turned on until we are certain that there is no risk to staff and members of the public.

Senator WONG—But that could be done with the cooperation of the employer, could it not—you do not need to issue a section 46 notice? In fact, that is what you did on Wednesday, wasn’t it—you worked with the employer to do it?

Mr Leahy—On this occasion, for an abundance of certainty, it was decided that a prohibition notice should be issued.

Senator WONG—Why did you feel it was necessary on the Monday but not on the Wednesday?

Mr Leahy—Because it was the second incident.

Senator WONG—Were there any concerns raised by gallery management when your investigator initiated the section 46 notices?

Mr Leahy—Not that I am aware of. The gallery is cooperating with us on this. Obviously, the gallery is interested to know when the galleries might be able to be reopened, but there has certainly been no pressure put on Comcare to get the galleries reopened.

CHAIR—Senator, are we nearly finished? If not, we will have to have a suspension.

Senator WONG—I will be finished by 7 p.m.

CHAIR—That was not the agreement. We were going to go until about 6.40 p.m. Otherwise I would have suspended the hearing at 6.30 p.m.

Senator WONG—The answers have gone on longer. That would be the end of Comcare, but if you want them to stay through the dinner break, I suppose that it is your prerogative, Chair.

Proceedings suspended from 6.47 p.m. to 7.46 p.m. CHAIR—We are resuming consideration of the estimates for Comcare. Questions, Senator

Wong?

Senator WONG—We were discussing the National Gallery incident. Mr Leady, you gave evidence earlier about the contractors who were contracted by the Gallery to test the airconditioning system. Was it Robson’s?

Mr Leahy—Yes, Robson’s were contracted by the Gallery to undertake the air testing.




Mr Leahy—The people who did the cleaning of the ducts were an organisation called Benmax, who I think were responsible for putting in place the insulation.

Senator WONG—Are you satisfied at this stage with the expertise and thoroughness of Robson’s work?

Mr Leahy—At that stage?

Senator WONG—At this stage now.

Mr Leahy—Yes, we were, and we have no reason to query the quality of their work, but because there has been another incident we have decided to do independent testing of our own.

Senator WONG—So you will not be using them for the testing?

Mr Leahy—No.

Senator WONG—You will be also using an external agency?

Mr Leahy—Yes.

Senator WONG—Who is that?

Mr Leahy—The people that we have used have actually been the ACT government analytical laboratory to undertake the samples of the fibres and we will be using a person called Paul Spry, I think, to undertake the air testing.

Senator WONG—Was it Benmax that was the other organisation?

Mr Leahy—Yes. They are the organisation who were responsible for putting the insulation into the airconditioning originally.

Senator WONG—And this is the insulation that appears to have produced the fibres?

Mr Leahy—Yes. A component of it appears to have broken away, and fibres of that broken away component have blown out through the airconditioning.

Senator WONG—Will Comcare carry out a full inspection of all the National Gallery’s airconditioning ducts to check for fibres?

Mr Leahy—As you probably know, we have had a series of investigations undertaken of the airconditioning over the last couple of years, and over the last 12 months or so we have had a comprehensive investigation being undertaken to review the outcome of those investigations and what the Gallery has done in terms of implementing the recommendations. We are awaiting that report; we hope to get a draft of that report in the next couple of weeks. But the investigator has determined that, as part of the follow-on from this investigation, we will get an airconditioning expert to basically examine not only the ducts in air handling unit 4 but other ducts in the Gallery as well.

Senator WONG—All other ducts?

Mr Leahy—Yes.

Senator WONG—When will that occur?

Mr Leahy—We are hoping to do it tomorrow morning.

Senator WONG—Has there been any report that Comcare is aware of, either to you or to the Gallery, about any injuries to staff or visitors associated with either the exposure or the clean-up efforts?



Mr Leahy—No, not at this stage—not that I am aware of.

Senator WONG—Is your organisation satisfied that the National Gallery staff were properly apprised of the dangers inherent in the situation?

Mr Leahy—I think there is probably still more information to be given out, but that can only happen once we have completed our investigation. As I understand it, there have been at least two all-staff emails from the Gallery advising all Gallery staff of what is going on. Obviously, because the investigation has not been completed, it cannot be comprehensive.

Senator WONG—Sure. Are you satisfied that appropriate personal safety equipment was issued to Gallery personnel who assisted with the decontamination, inspection of building areas and inspection, removal and conservation of artworks?

Mr Leahy—The advice that I have received is that that has been the case. In fact, when Robson’s undertook their initial investigation, they recommended personal protective equipment that was probably of a higher standard than was necessary.

Senator WONG—That advice has been from Gallery management or from Robson’s?

Ms Trevanion —Barry, which advice is that?

Mr Leahy—This is the advice that I received from you about the level of personal protective equipment.

Ms Trevanion—The advice was provided by Robson’s—is that what you mean?

Mr Leahy—Yes.


Mr Leahy—So it was provided by Robson’s to the gallery.

Senator WONG—In the course of your investigations will you be checking precisely what personal safety equipment was issued to people after the Wednesday incident and prior to the closure on Monday?

Mr Leahy—We will be reporting on that in the investigation, yes.

Senator WONG—Were vacuum cleaners used by Gallery staff from the time of the first incident onwards fitted with appropriate filters?

Mr Leahy—I will ask Ms Trevanion to answer that.

Ms Trevanion—I am sorry, I do not know that yet. I have not got to that stage of the investigation to ask that question.

Senator WONG—That would be something you will be investigating?

Ms Trevanion—Yes.

Senator WONG—I understand that there has been some suggestion of sabotage. Do you have any knowledge of that?

Mr Leahy—I have heard that that may have entered someone’s mind, but I am not aware of anything on that issue.

Senator WONG—Is there anything that Comcare is aware of that would suggest that that might be possible?

Mr Leahy—It is simply not an issue that we have followed up, nor will we, I do not think.

Senator WONG—But you are aware that it has entered someone’s mind?

Mr Leahy—Apparently, yes.



Senator WONG—Could you perhaps elaborate on that?

Mr Leahy—It is in the media.

Senator WONG—It is a suggestion of Dr Kennedy, isn’t it?

Mr Leahy—Oh, right.

Senator WONG—Turning to another issue, in relation to some correspondence you sent to Ms Annette Ellis MP in December 2002 regarding a constituent’s inquiry regarding his claim for workers compensation—are you aware of that?

Mr Leahy—Yes.

Senator WONG—You have in that letter indicated that he is entitled to a review.

Mr Leahy—That is correct.

Senator WONG—Who would conduct that review?

Mr Leahy—The process in our jurisdiction is that a Comcare officer makes a determination of liability—an initial determination. If the claimant is unhappy with the outcome of that determination, there is an independent review officer within Comcare—a number of them—who undertake reviews and they have had nothing to do with the case previously. Then, if the claimant is unhappy with that review outcome, they have got the option of going to the Administrative Appeals Tribunal.

Senator WONG—But the review that you are talking about is the first instance internal review. That is the review to which you refer in this correspondence?

Mr Leahy—Yes, that is right.

Senator WONG—Those independent review officers within Comcare are under your jurisdiction, are they not?

Mr Leahy—Yes.

Senator WONG—I just raise one issue: you appear to indicate in this correspondence that you are satisfied that decisions made regarding this person’s entitlements are correct.

Mr Leahy—Yes.

Senator WONG—Which would seem inconsistent with the notion that someone in your staff is then going to review that very fact.

Mr Leahy—No, I was satisfied with the initial liability determination. That does not preclude—and I can assure you this happens—the independent review officers taking alternative views. In fact, I could probably dig out statistics for you that show that there are a significant proportion of cases that go to them that are overturned. I have got no problems with that. I reviewed the initial determination decision, but an independent review officer may come up with further evidence. For example, in the case you are talking about, the individual has asked for additional time because of some misfortune that the individual suffered and we readily agreed to provide the person with additional time to allow that individual to provide additional evidence. The additional evidence that the individual provides may lead to a further position being taken.

Senator WONG—Can I now turn briefly to an issue of employers being provided with indemnities where they are going to employ somebody who has had a previous compensable injury. I understand in some state jurisdictions that is the case. Are you familiar with this?

Mr Leahy—I am sorry?



Senator WONG—Are you aware of a practice in some jurisdictions where indemnities are given to prospective employers of employees who have had a compensable injury in order to facilitate these injured workers in finding work?

Mr Leahy—That may happen in other jurisdictions. It is not a feature of our jurisdiction.

Senator WONG—There has been some suggestion, by way of constituent inquiries, that Comcare employers may not be in a position to accept employment of such persons. Are you familiar with this?

Mr Leahy—There are a very few circumstances where, because of the nature of the illness or injury that a person has suffered, it is inappropriate for them to go back to their original employer.

Senator WONG—As I understand it, a number of state jurisdictions have an arrangement where if you, as an employer, employ someone who has had a previously accepted compensable disability you are provided with an indemnity by the compensating authority. It is an incentive for employers to employ.

Mr Leahy—I understand.

Senator WONG—There is no such thing in the Comcare system?

Mr Leahy—No.

Senator WONG—So what happens if an employee under the state jurisdiction who would otherwise have the benefit of carrying with them this indemnity for the purposes of seeking future employment seeks employment with a Comcare employer?

Mr Leahy—To be frank, I do not think we have ever come across it. I am not sure how we would react.

Senator WONG—Is there anyone here who could perhaps assist us with this?

Mr Leahy—We would probably need to look at the sort of legal implications of doing that. Let me take it on notice and see if I can get an answer for you.

Senator WONG—I suppose I am not so much interested in legal advice as if there are any particular arrangements. Is there any comity, for example, between a state scheme and the federal scheme?

Mr Leahy—No. We are looking at a system ourselves where particularly difficult cases arise where we might try and move people between different organisations. In doing that we may arrive at a sort of informal agreement between organisations about, in effect, indemnity. It is between organisations within our jurisdiction. It is something we are developing at the moment, so there is a fair way to go.

Senator WONG—And there is no reciprocal arrangement for that kind of arrangement as between the Commonwealth and the state jurisdictions?

Mr Leahy—Not that I am aware of, no.

[8.01 p.m.]

CHAIR—As there are no further questions on any of the agencies, we will move to outcome 1, An effectively functioning labour market, and output 1.1, Labour market policy and analysis.

Senator WEBBER—I want to start with some general questions to follow up from the last time you appeared before the committee, when you were very lucky and got to deal with my colleague Senator Campbell rather than me. You will have to be patient with me now as I



learn my way through this process. I understand that last time you appeared before the committee there was some general discussion about the department having the assistance of a specialist modelling organisation that developed a model to project expenditure on labour market programs more effectively in the future. Can you tell me a bit more about that modelling, who is doing it and how it was developed?

Mr Correll—We engaged an external consultancy organisation called Econtech, who developed with the department an overall model which looked at modelling the flows of job seekers through the arrangements under the active participation model—the new service delivery arrangement for Job Network services—and then looked at calculating the overall financial estimates based on that, together with the actual estimates of job seekers through the various points in the active participation model.

Senator WEBBER—So to what level of detail is that modelling able to take you? Will it give you regional differences or is it more an overall picture?

Mr Correll—It is a model that is pitched at a national level, so it is geared to overall estimating the forward projections of expense based on predicted job seeker flows, you might say, through the model. It is not geared to being applied on a region-by-region basis.

Senator WEBBER—Can you tell me how that modelling will be evaluated and monitored and perhaps what the cost has been of using a specialist modelling organisation?

Mr Correll—In terms of how it will be monitored and evaluated, it effectively produces an estimated cost. As actual experience comes through, we will be able to compare both the actual job seeker flow levels with the flow levels that were estimated within the model. We will also then be able to compare the actual costs with the costs produced by the model and be able to progressively finetune it and finetune the various parameter settings that underpin the model.

Senator WEBBER—So the model will then be updated with actual data?

Mr Correll—Yes. It will not be a static thing; it will be refined over time as we are able to get better and better information on each of the parameters used.

Senator WEBBER—Is there an overall report or something about the basic information of the model now?

Mr Correll—The actual project—the task and the consultancy—was the construction of the model, so the product, the output, is effectively a model as such. There is not a separate report. The product from the consultancy was the model.

Senator WEBBER—You say it will be updated with real data. In developing the model, did you use data from previous years?

Mr Correll—Yes, the model was based on the best current estimates of job seeker flow data. In looking at the parameters within the model, that involves examining estimates of the likely numbers of job seekers through the various durations of unemployment gates. That is based on historical experience—historical data would have been used to support those estimates.

Senator WEBBER—So how useful do you think it will be, in terms of gearing other programs, to have only a national picture? There are obviously distinct regional, if not state-by-state, differences in the programs that you need to develop and the services you need to provide.

Mr Correll—Not specifically part of the model but separately, the department has also looked at developing overall estimates of job seeker flow levels at a regional level. Those



estimates have been included in the tender documentation that has been used for the current purchasing process for the next employment services contract. That has been publicly available information.

Senator WEBBER—Will there be any changes to the star rating system under employment services 3?

Mr Correll—We currently have established what is called a performance management working group with the industry body. We are in the process of reviewing the star rating system. The star rating system clearly needs to be reviewed and refined based on changes under the model. So, yes, the model will change and those changes are under development at present, jointly with industry.

Senator WEBBER—What reporting tools do you intend to use on any of this?

Mr Correll—I beg your pardon?

Senator WEBBER—What kind of reporting mechanisms do you intend to use?

Mr Correll—Associated with the star rating system?

Senator WEBBER—Yes.

Mr Correll—The broad intention would be that we would be continuing to look to publish a performance star rating at the end of each milestone period through the life of the contract. That would be supported by other ongoing performance information which would be provided to Job Network members.

Senator WEBBER—Star rating certainly has caused a fair bit of controversy with some of the providers in my part of the world, in Western Australia. Under the Australians Working Together initiatives that commenced on 1 July, training accounts were introduced for Indigenous and mature-age job seekers and also training credits associated with Work for the Dole. What information is available about how these training accounts have been used?

Mr Correll—We have been monitoring the usage of training accounts and training credits. We have information on the level of usage. That information shows that the usage of the training account and training credit is somewhat mixed across providers to date. We are currently in the process of communications with our providers to further raise their awareness levels of the use of the training account in particular. The training credits and access to those have a slightly more lagged impact, so our primary emphasis at the present stage is on ensuring a high level of awareness of the usage of the training account by Job Network members.

Senator WEBBER—Can you make that information available to the committee?

Mr Correll—What specific information are you looking for?

Senator WEBBER—Any information about how it is going at the moment would be good. I am specifically interested in how far that information can be broken down. Does it go into course type, length of courses or data about whether anyone has had improved employment outcomes?

Mr Correll—We could provide perhaps some summary information on the usage of the training account at the present stage. To provide those statistics, I would have to take that on notice.

Senator WEBBER—That is fine. Feel free to do that at any point. In doing all of that, have you undertaken any research on Job Network providers and job seekers’ attitudes to these accounts?



Mr Douglas—We have not done any specific research on attitudes to either training accounts or training credits. Our research has generally been of job seekers’ satisfaction or attitudes about generic services rather than particular products.

Senator WEBBER—Are you planning on doing any of that or, say, any formal evaluation of the use of these accounts?

Mr Douglas—That is obviously an issue that we will be taking into consideration in evaluating Australians Working Together, which was the overall package that announced these initiatives. As you will appreciate, it takes some considerable time before you have enough information to draw any effective conclusions, so I do not anticipate we will be doing any analysis or research of that at least for the remainder of this financial year anyway.

Senator WEBBER—That is fine. But it is not something that you have dismissed? You would consider doing it in the future, should the program continue?

Mr Douglas—Yes.

Mr Pratt—We have undertaken a phone survey of around 500 job seekers who have earned a training credit entitlement. This is not in the line of research as Mr Douglas has discussed; this is more to get early impressions about the training credits and intended usage. Essentially, the information we have boils down to that job seekers feel reasonably well informed about the training credits and the fact that they have an entitlement. The feedback is that they are considering using their training credits in the future. Many people of course, because it takes up to six months to earn a training credit, have not as yet decided to use that. Also, we are finding that quite a few of the job seekers who have earned an entitlement to the training credit have moved into intensive assistance and therefore have some time before they need to use their training credit.

Senator WEBBER—Thank you for that. Mr Correll, the last time this committee met you said: It is fair to say that there is potential for improvement in the contact between the training sector and the Job Network.

You went on to say that you felt that in this next Job Network contract there would be greater opportunity to enhance and foster those linkages. Are you now in a position to be more specific on how and who? Do you have faith that the linkages will actually improve?

Mr Correll—The driver for the continuing growth in those linkages under the active participation model will come through the introduction of the new Jobseeker Account, which will be further and additional to the training account and training credit arrangements. The department has been in contact with both public and private sector VET peak bodies with a view to bringing their awareness levels up on the developments, both with the training credits and training account and also the coming Jobseeker Account under the active participation model, to build those linkages. That work is under way. We should say that as each month goes by we are seeing a growth in the use of the training account. We are also seeing a growing awareness amongst training providers. We are seeing those linkages build as we move through and we would expect them to build even further with the introduction of the Jobseeker Account.

Senator WEBBER—I was just wondering if we could be a bit more concrete about how we think that is going to happen. As I understand it, most of the Job Network providers are looking at simply providing their own training and therefore expanding their repertoire. That is not necessarily going to be a linkage, is it?



Mr Correll—In some cases, Job Network providers may provide their own training, but in other cases, as occurs at the present stage, we would expect them to be purchasing training from both public and private training providers. So we would expect both of those things to be happening with Job Network members, many of whom are registered training organisations, I might add.

Senator WEBBER—At the last hearing my colleague Senator Campbell asked a series of questions about breaching and asked the department to make available a whole range of data on the number of breach notifications, the reasons for each breach request, the number that are recommended and the number that are upheld. At the time we were advised that the total number of participation reports was 274,026, of which 31.5 per cent led to a breach. The rest of the detail was to come on notice. Since then I am told we cannot get a more detailed response as it has been decided that this is a matter for the Minister for Family and Community Services. What I am wondering—this is a very long-winded way of saying it—is: does this mean that you do not collect that detailed data or that you just do not have the detailed data for the number of breaches made by individual Job Network providers?

Mr Pratt—No. The first point I would like to make—and it is an important distinction—is that Job Network members and community work coordinators do not breach people, they make participation reports to Centrelink, which then, because it has the delegation under the Social Security Act, makes decisions on whether or not someone should be breached. Given that Centrelink, which is part of the Family and Community Services portfolio, has that delegation under the Social Security Act, our position is that questions going to the release of information on breaching, which is made by Centrelink officers under the Social Security Act, should be directed to the Family and Community Services portfolio.

Senator WEBBER—That is fair enough. I am sure my colleagues will pursue that. So the only data that you collect is the actual participation report?

Mr Pratt—No, I am not saying that. What I am saying is that information about breaching needs to be sought from the Family and Community Services portfolio.

Senator WEBBER—That is fair enough. Are we able to get any information on the number of participation reports each Job Network site makes available to job seekers?

Mr Correll—I would have to reiterate Mr Pratt’s point in his response, in that the question of participation reports goes to part of the breaching process and the appropriate point of access is through the Family and Community Services portfolio.

Senator WEBBER—Are there any written reports that the committee can access about the proposed changes to the job seeker classification instrument?

Mr Correll—No. Basically, the job seeker classification instrument is an instrument that is progressively reviewed to refine the indicators that are used to predict the likelihood of long-term unemployment for an individual. Effectively, what the department does, using actual data, is periodically review and then update the job seeker classification instrument. That work was done earlier this year and updated and is being looked at again at the present stage for further revision for the introduction with the active participation model. As such, I am not sure that there is such a thing as a report coming out of those review processes. They are actually geared to evaluating and updating the validity of the data that is being used.

Senator WEBBER—So that is the main thrust. It is just that there has been a lot of talk about how it will be improved. I was wondering whether you could give us some idea of the types of changes that have been made to improve it?



Mr Correll—The focus of the job seeker classification instrument under the active participation model is to look particularly at those individuals at very high risk of long-term unemployment. The particular emphasis has been on looking at the refinement of those indicators in that area—those people who are at the most severe risk end. That has been the major emphasis of the review work. The emphasis has been to update the parameters driving that model to ensure that they are as valid a predictor of long-term unemployment as is possible.

Senator WEBBER—Can you give me any idea of the kinds of information that you are now seeking from these people?

Mr Douglas—The content of the JSCI, the questions that are asked and the data items that are included in it have not changed essentially since its introduction in 1998. What Mr Correll is referring to is that we continuously and periodically review on the basis of the selection parameters that are indicated by the point score for each question. This is on the basis of our experience by looking at the characteristics of the job seekers, the duration of unemployment.

Senator WEBBER—So there was never a problem with the kind of information you were seeking; it was how you used it?

Mr Douglas—That is correct. It is a matter of whether or not the points that each particular characteristic gets continue to be the right score relative to their disadvantage. So there is no report because there is no change other than the finetuning of the points score.

Senator WEBBER—That is fine. I accept that; it is not a problem. Is anyone from the department aware of the research undertaken by the University of New South Wales on the Work for the Dole program?

Mr Douglas—We are aware of a study that has been coordinated by Professor John Nevile, who sought and obtained funding from other sources—which just elude me for the moment— and who is looking at the experience of job seekers undertaking Work for the Dole. However, I am not aware that a final report has been produced.

Senator WEBBER—It is my understanding that some research findings have been produced and that one of the findings was that the name ‘Work for the Dole’ harmed the employment prospects of the unemployed. One of the recommendations was that the program should be renamed.

Mr Douglas—My recollection of that was that Professor Nevile shared at a particular forum some of his preliminary findings based on the interviews that his team had undertaken and that one of the observations they made from their interviews was that there was some concern expressed about the name. We have done our own research, which does not necessarily agree with that. In fact it shows some quite strong support for Work for the Dole, even among the people who are being required to undertake it.

Senator WEBBER—Is that general information available to the committee?

Mr Pratt—Yes, I can help you with that. Some research that we had undertaken a year or two ago by the Wallace Consulting Group gave us information on community and unemployed people’s attitudes to mutual obligation and Work for the Dole. The findings on community attitudes include: 91 per cent of the community support the concept of mutual obligation, 95 per cent have heard of Work for the Dole, and 89 per cent support the Work for the Dole program. The attitudes of unemployed people and Work for the Dole participants include: 63 per cent of mutual obligation and Work for the Dole participants are supportive of mutual obligation and 84 per cent are satisfied with their mutual obligation activity. When you look at the attitudes of the unemployed non-participants, 79 per cent of Work for the Dole



eligible non-participants support it and 74 per cent of Work for the Dole non-eligible unemployed support it. So you can see that there is broad community and individual support for the program.

Senator WEBBER—But the concept of mutual obligation and Work for the Dole were always linked. You did not look at mutual obligation separately?

Mr Pratt—We looked at both.

Senator WEBBER—But linked together?

Mr Pratt—We looked at mutual obligation as a concept and we looked at Work for the Dole.

Senator WEBBER—Right, separately. It is interesting that it seems your findings are a little bit different than what it is hinted this study will come up with, so it will be interesting to compare the two and why there might be a difference. I have a couple of quick questions on Drought Force. How many people have participated in Drought Force to date?

Mr Pratt—Drought Force was announced just before Christmas and kicked off midway through January. Already we have 17 activities in place. We have had 87 places developed and so far we have already filled 31 of those.

Senator WEBBER—Why was it not considered worth while to bring back the TASK program—the Training and Skills program?

Mr Pratt—Is that in the context of the drought?


Mr Pratt—It is difficult to answer that question. The government policy position on one of the ways in which the drought could be mitigated through using employment services and programs was through using the vehicle of the Work for the Dole program to provide work experience and access to training credits through Drought Force. Whether the government considered using other mechanisms is basically a policy question for the government.

Senator WEBBER—Has any consideration been given to comparing the impact of the two programs?

Mr Pratt—The TASK program was something which was run in the early to mid-nineties, from memory, and had a completely different focus. It was aimed at labour market adjustment rather than drought mitigation. I have to say that, from my perspective, we certainly have not considered comparing Work for the Dole with TASK.

Senator WEBBER—Have you had many requests for the reinstatement of the TASK program or an employment program that includes a training and wage subsidy package?

Mr Pratt—No.

Senator WEBBER—Fair enough. How much money has the department spent researching and developing the youth tool box for Job Network providers?

Mr Correll—I think that is one we would have to take on notice. We certainly have been involved in developing that product. It would not be a major amount of money, but we would have to take precise costs on notice.

Senator WEBBER—Perhaps you could just bring me up to date with the aims of the tool box and whether you have developed a brief for the contents of the tool box.

Mr Correll—Basically, what we are aiming to do with the youth tool box is similar to other tool boxes that have been developed for Indigenous job seekers and mature-age job



seekers, and that is to provide a key resource tool that will help providers to access information on programs, services and better practice ideas to promote the best possible services to those different groups of job seekers. So the youth tool box is being developed in that way. In each of these areas the department works closely with the industry to help facilitate the development of those products so that providers are able to draw on good information on programs and services available, help build those linkages with those sorts of programs and services and improve their own practices through access to better practice information.

Senator WEBBER—In developing that, has the department undertaken any research into young people’s feelings and experiences with the Job Network?

Mr Douglas—As I said before, the department has undertaken research into the attitudes of job seekers in general.

Senator WEBBER—I am talking specifically about young people because this is specifically targeting at them.

Mr Douglas—We have not done any specific research only looking at young people.

Senator WEBBER—Do you think that would be a relevant thing to do in continuing to develop that?

Mr Correll—As Mr Douglas has flagged, we have not undertaken a specific research project into young people and their views on Job Network. However, as part of the development of Job Network services for young people, we did run several youth forums. My recollection is that those forums were in Sydney. The information coming out of those forums has been used as feeders into the development of the youth tool box resource.

Ms Caldwell—It is also the case that we work closely with industry through the special interest group to garner the best practice models that may be arising from providers’ own experience with servicing youth clients, as well as working closely with other agencies.

Senator WEBBER—I think that is all my follow-up from what was raised the last time. I now have some quite specific questions about the employment services 3 contract. I do not know whether you will need to change.

Mr Correll—No, I think we are the same team.

Senator WEBBER—Good. You and I are going to spend a lot of time together tonight. Won’t that be fun.

Mr Douglas—Just before you move on to that, Senator, I would like to clarify an earlier answer I gave you. On pages 119 and 120 of Job Network evaluation. Stage three: effectiveness report, which is published on our Internet site, there is a section on young people’s experience with the Job Network.

Senator WEBBER—Terrific; thanks for that. I notice from this wonderfully informative agency additional estimates statement on page 11 that some $28 million has been transferred to cover implementation costs for Centrelink associated with arrangements for the third employment services contract. Could you outline for me what those moneys are specifically going to be spent on?

Mr Hade—Yes, certainly. Basically, the moneys will break up into three groups. First of all, there is an amount of $24.176 million, which is basically for the active participation model implementation within Centrelink. That will include a trial of a new disability assessment. Those moneys will also include IT costs to do with the development of systems within Centrelink. It picks up costs for call centre work that Centrelink will be doing for us as



part of the transition process. There will be training of Centrelink staff involved in that and also extra payments to cover the extra workload on Centrelink staff at the time. There is an amount of $2.4 million to cover the introduction of a new streamlined referral process and as well there is another amount of about $1.9 million to $2 million for some direct IT support to Centrelink. The way that this process is working is that Centrelink has provided us with costings of various elements of this and, as it moves into the various cost phases, it is providing us with detailed information on it and we are progressively paying those funds over to them.

Senator WEBBER—Can you explain to me the new streamlined referral process and how that is going to go?

Mr Correll—Yes, it is based on some trials that have been operating in, initially, nine Centrelink offices. It started with Job Network intensive assistance clients. It basically involves the Centrelink customer services officer obtaining any choice of Job Network member from the job seeker at the point of the initial interview with the job seeker and then making a direct referral and book-in appointment of that job seeker with their Job Network member right there and then with a view to having that job seeker start within 48 hours with their Job Network member. The experience with that trial was very successful and many job seekers were, in fact, starting on the same day.

As a result, under the active participation model those arrangements will now apply for all job seekers, not just those subject to Job Network intensive assistance. In addition, through some of the information technology systems developments that Mr Hade referred to and some of that costings information, Centrelink will be in a position to make direct bookings into the diaries of Job Network members at the interview time for the job seeker. So we are looking now at a much faster process of movement of the job seeker from their interview with Centrelink into their first contact with their Job Network member.

Senator WEBBER—Do those nine Centrelink offices that you have mentioned cover all of Australia, both metro and non-metro?

Mr Correll—Yes. They are in a range of locations. Since that trial, those streamlined arrangements have been extended to all Centrelink offices for Job Network intensive assistance job seekers. That means an overall pool of about 200,000 job seekers. With the introduction of the active participation model it will apply to all job seekers, which is an overall pool of about 900,000.

Senator WEBBER—This is a question from my home state of Western Australia: what about those job seekers who are remote to Centrelink or have other access issues—how will they be covered?

Mr Correll—Under the active participation model there is a new concept being introduced called locational disadvantage. Where a job seeker is locationally disadvantaged it enables the Job Network member to apply more flexible service delivery options. It also results in a funding supplement going into the Jobseeker Account for that particular job seeker. Through those mechanisms it will mean that the Job Network member will look at providing services to job seekers in ways that are sensible to their geographic locations. In some cases, that will mean that Job Network members will travel to the job seekers in communities rather than the job seeker coming to the site for an interview. It will depend on the circumstances involved, but the concept of locational disadvantage has been specifically designed to support a flexible model particularly for job seekers in, say, regional locations.



In the area of remote servicing, once the department has completed the current purchasing process we will be identifying those sites throughout Australia where there are difficulties either with the standard active participation model or the regionally more flexible model. This will particularly be in highly remote locations, and there we will be looking to tailor a service to meet the local circumstances and the local community needs. Then we will enter into a fee-for-service arrangement to meet those needs.

Senator WEBBER—Can you give me some kind of definition of the cut-off between locationally disadvantaged and remote. Locationally disadvantaged means something very different to me than it does to, say, Senator Carr, who comes from a much smaller, although more populous, state.

Mr Correll—The definition that we are using for locational disadvantage is basically outside a 90-minute reasonable travel time to their Job Network member location.

Senator WEBBER—That will be a huge task in Western Australia.

Mr Correll—It should be noted that that would apply to job seekers based on their circumstances. So if a job seeker is in a situation where there is limited transportation then that would apply. It is not an ‘as the crow flies’ situation.

Senator WEBBER—I understand that. You can hardly get anywhere in WA as the crow flies. Perhaps you could outline for me now how the implementation of ESC3 is progressing.

Mr Correll—At present we are in the middle of a purchasing process. That is proceeding on track. Our timetable is for the announcement of the outcomes of that purchasing process towards the end of March. We continue to be on track for that timetable. In terms of other aspects of implementation, we are working very closely with the industry. We have a joint working group with the industry in the management of transitional arrangements. There are significant transitional processes involved in moving to the new active participation model. We also have a working group with industry working closely on the information technology developments. There are major new computer systems under development. They are also running on track. There will be two releases: one in April to support the commencement of the transition process and then one at the beginning of July to support the introduction of the full market.

The other area that is under development closely with the industry at the present stage is the performance management arrangements that I referred to earlier in the revision to star ratings. Behind all of that there is also extensive work being put into preparations for communication of the changes and training for Job Network members, departmental staff and Centrelink staff.

Senator WEBBER—Can you advise us who the industry representatives are on these various working groups?

Mr Correll—That is one we would have to take on notice. The representatives are simply nominees from the National Employment Services Association, which has made the nominations.

Senator WEBBER—I am just interested to know who they are, that is all. Is it intended this time with the new contract that there will be a provider of last resort like there has been in the past?

Mr Correll—Yes, that goes to my earlier comment that, where there are any locations throughout Australia where the purchasing process for the model or the locational disadvantage element of the model does not provide adequate services, under those



arrangements we would be looking at negotiating with organisations in that location for the provision of services tailor-made to those locations. Given what we know, with the maturity of the Job Network to date and the range of proposals that have been submitted to us, it is likely that those circumstances would only emerge in remote locations of Australia.

Senator WEBBER—Do you have any idea who the provider of last resort will be?

Mr Correll—It would depend on—

Senator WEBBER—In the past it has been Employment National, but that is no longer possible.

Mr Correll—When we say a provider of last resort, in these circumstances, in a location where there was no effective tendered service under the model, we would effectively identify organisations that were available or were prepared to provide services and enter into a process of negotiating a service arrangement that suited that particular location.

Senator WEBBER—So there are no one or two providers in mind?

Mr Correll—No.

Mr Pratt—Senator, we have never used a provider of last resort provision under the Job Network.

Senator WEBBER—That is a different question. It is nice to know it is there. What if there is an area where there is no provider at all: do you have plans to make sure job seekers out there have access to services?

Mr Correll—If there was a circumstance like that, we would be looking at making contact with potential providers who might be prepared to provide services from those locations. Given the current coverage of Job Network, this is likely to be very much, as I said, in very remote locations, in which case the nature of the service needs to also be carefully looked at. In some cases this might be a remote Indigenous community where the nature of the service may not in fact sensibly be a traditional employment service operation as such.

Senator WEBBER—I agree; I can think of a few places where I am sure that situation will arise. Surely you should have some idea of the kinds of services you need to provide for those disadvantaged people. How do you determine, therefore, which provider you will contact to deliver those specialist services?

Mr Correll—It will very much depend on—

Senator WEBBER—Is it just who is geographically closest?

Mr Correll—Yes, potentially that will be a factor and it may well be that we would approach a range of organisations to determine who was in a position to provide those sorts of services on a fee-for-service type basis.

Senator WEBBER—So the whole process is quite open?

Mr Correll—Yes, it would be quite open. The other thing we would need to bear in mind is that any such service would need to be developed on a whole-of-government type basis, so we would also be mindful of what other types of service provision we are applying in those communities. As I say, in those circumstances it is quite often the case that the nature of the service needs to be absolutely customised to the circumstances of the particular community.

Senator WEBBER—Are all of the current providers members of NESA?

Mr Correll—Not all current providers are members of NESA, as I understand it.



Senator WEBBER—Going back to the discussion we were having before about the working groups that you have, you therefore have providers that do not have access to that process? You were saying all of the industry representatives were members of NESA?

Mr Correll—NESA nominates the industry representatives but also attempts to ensure that it is highly representative across the industry. We also ensure that any information that is provided to the working groups is also published on our web site so that any other Job Network members have access to that information and, for that matter, that potential new entrants into the Job Network through the purchasing process also have access to that information.

Senator WEBBER—As I understand it, the department provides sponsorship funding to NESA.


Senator WEBBER—The department provides funding to NESA—some kind of sponsorship or however you want to categorise it?

Mr Correll—Yes, that is correct.

Senator WEBBER—How much would that be each year? Or how much would the current allocation be?

Mr Correll—I think we can obtain that fairly quickly, with some support from behind me.

Senator WEBBER—Fair enough. While you are hunting for that, I was wondering whether it was the usual practice of the department for the purchaser of services—that is, you—to be funding the association of the providers.

Mr Correll—I think it is fair to say that the Job Network has been an emerging body—it is now not quite five years old. The industry as such is one that has been maturing and growing; so, too, has the industry body. We have attempted to support the growth of the industry and the growth of the industry body through the operation of an effective peak body for the employment services industry. The investment that is made there is one to support the growth and maturing of the industry.

Senator WEBBER—When do we determine that we get to a sufficient level of maturity that the department may look at discontinuing the funding or the sponsorship, or does this just go on ad infinitum?

Mr Correll—That is something we review on a year-by-year basis. We have an annual arrangement with the National Employment Services Association and we review that position on a year-by-year basis. I think it is fair to say that we see it as important to the industry—to the growth of the industry and the development of better practice across the industry—that there is a strong and healthy industry body.

Senator WEBBER—Are there any guidelines set down for managing any conflict of interest within either the department or NESA, considering they are your industry body but you fund them? How do you manage this?

Mr Correll—In terms of guidelines for conflict of interest situations, where there is any potential for such a position the department would not deal with individual Job Network member organisations but would deal directly with the CEO of the industry body in their own right. In that way we would not enter into any direct contact with a Job Network organisation that would place them in a conflict of interest position.



Mr Hade—Certainly now that we are into a purchasing process which will involve many potential providers, including NESA members, we do have a protocol of defining the contact with NESA, principally at the official level. As well as that, we have kept our probity adviser fully informed of all contacts with NESA to ensure that the potential for conflicts of interest does not arise.

Senator JACINTA COLLINS—Who is the probity adviser?

Mr Hade—BDW.

Senator JACINTA COLLINS—Sorry?

Mr Hade—Blake Dawson Waldron.

Senator JACINTA COLLINS—So it still is?

Mr Hade—Yes.

Senator WEBBER—Who else in the employment market does the department fund or sponsor in this way? Is this just a one-off, unique arrangement?

Mr Pratt—We also provide some funding to the Recruiting and Consulting Services Association, which is the peak body which represents recruitment agents around the country.

Senator WEBBER—How much money do you give them?

Mr Pratt—I will correct this if someone tells me I am wrong. It is in the order of $100,000 a year.

Senator WEBBER—Are we any closer to knowing how much we give NESA?

Mr Correll—We do not have that in the data we are holding here, so we will have to take the National Employment Services Association contract question on notice.

Senator WEBBER—That is fine.

Senator JACINTA COLLINS—Is there any other Commonwealth practice precedent to this?

Mr Pratt—I think the Commonwealth funds, for example, ACOSS. I think the Commonwealth funds quite a range of peak bodies in different sectors. I cannot think at the moment of one where a market has been created. I would be surprised if the Family and Community Services portfolio did not provide some support towards the peak body representing people with disabilities; they of course fund disability employment services in that portfolio. I cannot give you an example, but I would be surprised if that was not the case.

Senator WEBBER—Can you tell me whether the department is anticipating that there will be any fewer Job Network sites than there currently are in ESC2 with the new contract?

Mr Pratt—Before we go to that question, it has just been pointed out to me that we have actually in the past funded a peak body of this sort. We for many years funded the National Skillshare Association.

Senator WEBBER—Indeed. Some would argue that by funding NESA you have just in fact rolled that over, but that is not an argument for me.

Mr Pratt—A point of clarification: the National Skillshare Association actually became Jobs Australia, which we do not fund.

Senator WEBBER—Indeed.

Senator JACINTA COLLINS—Why is that?



Mr Pratt—It is a separate body. We fund the National Employment Services Association. Jobs Australia is a body which represents the interests of a select group of providers.

Senator JACINTA COLLINS—Do they receive some of the funding through NESA?

Mr Pratt—I do not believe so.

Senator JACINTA COLLINS—There is no reason, you feel, to fund the not-for-profit sector of the market?

Mr Pratt—I suggest that if we were to do that we might then have requests to fund other sectors of the market. As Mr Correll described, our interest is in driving the performance of the employment services market. To do that we support a peak body in that area.

Senator WEBBER—Correct me if I am wrong, but the current CEO of NESA was the CEO of the National Skillshare Association, wasn’t he?

Mr Pratt—No. The chair of the National Employment Services Association is the CEO of Jobs Australia and was formerly the CEO of the National Skillshare Association.

Senator WEBBER—Jobs Australia does not get any specific funding because it is a specific group but the recruitment people can get some specific sponsorship?

Mr Pratt—Yes. The RCSA is a body which covers a range of industries and types of providers. Jobs Australia is specific to the not-for-profit sector.

Senator WEBBER—Surely that association, although it covers a range, only covers a very narrow service delivery.

Mr Pratt—No. The Recruitment and Consulting Services Association—

Senator WEBBER—They do training as well, do they?

Mr Pratt—also has membership from charities and not-for-profit organisations. For example, Mission is a member of the Recruitment and Consulting Services Association.

Senator WEBBER—It must be a full-time job for all these people being a member of so many different organisations. Perhaps I can go back to my other question about whether you are anticipating that there will be any fewer Job Network sites with ESC3 as opposed to ESC2.

Mr Correll—When you look at the arrangements under the active participation model, you have got the introduction of the concept of job placement organisations as well as Job Network members. Overall we would expect that the number of sites would increase as a result of the fact that we are trying to encourage an increase in the number of jobs coming into the national jobs database through a greater number of job placement organisations coming into the system. So, overall, we would be expecting to see a growth.

Senator WEBBER—So we will not just have larger sites but a smaller number? We expect them to blossom throughout the nation?

Mr Correll—Yes. With the notion of licensing of job placement organisations we would be hoping to encourage as many organisations that can provide job opportunities into the national jobs database as we can secure.

Senator WEBBER—That is a mighty fine aim. Can you explain to me what process the department will be using in the current tender round where you have, say, two or more competing bids to conduct Job Network business in one particular location? I am specifically interested in those situations where an organisation, say, was not successful in the rollover



phase of the contracts and is competing against an organisation that was successful in another location but has no previous experience in the original one.

Mr Hade—In the tender process, all tenderers are regarded as starting from the same position. The assessment approach is set out in the request for tender document, which we released in late October. There are two basic criteria in it, one to do with the ability to deliver services, another one to do with the ability to demonstrate that you have been able to achieve and will achieve Job Network outcomes. In making the assessments we look at the bids, the proposals which tenderers have put forward, and we assess the relative merits of those tenders. If, for example, you have a new tenderer we would certainly be looking to see in that tenderer’s bid where it had, for example, delivered like services elsewhere or perhaps in the same region and for other relevant experience. Where you had an existing provider which had an ITT or which may be moving across into a new area, certainly the performance that it has achieved elsewhere is information for us. But at the same time we have to assess that, discount that perhaps, to make sure that that performance is relevant to the area in which it is seeking to work. At the end of the day, what we are seeking to do in a particular labour market region or employment area is to make sure that the proposals which are put forward by Job Network members are the best suited to meet the needs of the job seekers in that area.

Senator WEBBER—So a provider from Melbourne will be treated equally as an existing underperforming provider, say, in Perth?

Mr Hade—It would depend. As I said, there are many factors to be taken into account in this. With a provider from Melbourne we would be looking to see what that provider’s performance was in Melbourne. We would need to make judgments as to how that performance would translate into Perth. There may be similarities, there may be differences in that. Conceivably, you could have a low performing provider in Melbourne seeking to transfer to Perth and clearly it would not be a goer. On the other hand, you could have other situations where a high performer in, say, Melbourne or in other areas seeking to locate in Perth may be able to assure the assessors that there was a credible bid. Just to finish up on that, could I add that, to ensure this is as open and as fair as possible, the probity adviser does review all of our justification statements for the actions taken to ensure that they are consistent with the tendering principles which we have set out. So it is not just that we can; what we are seeking to do is to make sure that in every area the successful tenderers are those who can best provide the services.

Senator WEBBER—What are going to be the key indicators that will help you make the assessment if you decide to take a successful provider in Melbourne and let them to set up in Perth?

Mr Hade—As I said earlier, there are two basic criteria. Certainly we need tenderers to be able to show to us that they understand the active participation model and how to provide the services under that. As part of that we are then looking at the strategies which providers would be putting forward. Clearly, some providers may have better strategies developed. They may have a more sophisticated or less sophisticated view of the market. The second criterion is the one which has to do with the achievement of successful outcomes. We do take as a line, as an indicator, their performance in delivering services in ESC2, because there are similarities between the two services. So we would use ESC2 information as a starting point in making that comparison.

Senator WEBBER—I understand that. But how would a Victorian provider demonstrate an understanding to you of the WA labour market? What are the things you are looking for?



Mr Hade—As part of the tender documents we have released a fair amount of information on the characteristics of various job markets. The information that we have released gives a fairly good picture of the proportions of the various job seeker groups within job markets. As well as that, the tenders are being assessed by people who have a good knowledge of the local job market. The teams of assessors include people who work in our state offices, so they will have quite a good understanding of the particular needs of the local job market. Part of their brief is to ensure when they assess tenders that, if they are looking at a tender from elsewhere, be it another region of Western Australia or from another city, the tenderer has demonstrated an understanding of that local job market.

Senator WEBBER—What value do you give experience over knowledge? What kind of weighting is going to be given to local knowledge?

Mr Hade—The usefulness of local knowledge will come out in the strategies which the tenderer is putting forward to address the particular characteristics of that local job market. If the local job market, for example, has a high proportion of Indigenous job seekers, certainly there is an expectation that the tenderer would be addressing that in the tender. In looking at it, we place a very strong emphasis on an understanding of that local job market. It is certainly given considerable importance in the process of assessing the tenders.

Senator WEBBER—I guess we will have to see how it goes. It has been said to me that one of the key criteria in this current round is to actually reduce the overall number of providers. Can you give me a response to that claim?

Mr Correll—There is no such key criterion at all. What is involved in the purchasing process is the clearly defined two key criteria for selection which Mr Hade has outlined.

Senator WEBBER—What is the department’s total IT cost per annum?

Mr Correll—Is this a question in relation to outcome 1 or is this talking more on a total corporate basis?

Senator WEBBER—It is a mixture. We will get there.

Mr Correll—I think we would have to take that on notice. We are not in a position to comment on the complete corporate IT costs.

Senator WEBBER—Are you in a position to talk to me about the part of that total budget that is specifically costed against the Job Network? In other words, what are the internal costs for the department and those that can be specifically costed as part of supporting the employment services contracts?

Mr Correll—One of our key outputs relates to employment information referral and support services. That includes information technology costs but also includes some other elements within that particular output within the additional estimates statement. That is covered within output 1.2.1. I would emphasise that that includes both IT and some other costs under that output as well.

Senator WEBBER—Can you explain to me how much it costs the department to run the corporate interface under the existing employment services contract?

Mr Correll—I would have to take that one on notice.

Senator WEBBER—Fair enough. I do not suppose you would know then how many FTE staff, both departmental and contract, are undertaking duties to support the current corporate interface?



Mr Correll—The corporate interface is one component of what is the total IT support for the employment services operations. We would also have to take that on notice. We could certainly make an estimate.

Senator WEBBER—That would be good because, as I understand it, there are going to be some changes there. How is the EA3000 software development progressing? We are on track with that, are we?

Mr Correll—Very well. We are on track.

Senator WEBBER—How much money has been spent on that to date?

Mr Correll—The overall budget that we are operating to in our IT applications area this year is in the order of $17 million to $18 million. Not all of that would be directly associated with the EA3000 development, but a significant component of it would.

Senator WEBBER—Can you give me a rough ballpark percentage?

Mr Correll—Let me take that on notice and I will get back to you.

Senator WEBBER—In that case, I am hazarding a guess that you are going to have to take on notice how many staff are working on the development of EA3000 as well.

Mr Correll—Yes. I can currently say that we have around 33 development teams working on the IT applications. A substantial component of those teams would be focusing on the EA3000 application. In total, those teams have approximately 230 people attached to them.

Senator WEBBER—Thirty-three development teams is a significant number for an IT project, isn’t it?

Mr Correll—It is a big project.

Senator WEBBER—Indeed. Given the size of it—and you mentioned before that it is progressing quite well—how confident are you that EA3000 will be delivered on time and without major defects?

Mr Correll—We have rigorous governance project management structures in place and extensive risk management strategies and planning under way. This is not the first major complex IT project that we have developed and implemented and we are confident that we have an ability to manage the risks to deliver the application successfully on time.

Senator WEBBER—I am told that Mr Parsons was quoted as saying at the NESA conference in Brisbane in August last year that he was 120 per cent confident. Do you share his optimism? Is that still the case?

Mr Correll—Mr Parsons is our project manager for the project and I have full confidence in his views. As I said earlier, we are on track with the project.

Senator WEBBER—So what is the difference between this project and the last two contracts that the department had where the software does not seem to have been delivered on time or without defects? There have certainly been significant defect problems previously, haven’t there?

Mr Correll—I would not say that there have been significant defect problems. In relation to any major software development exercise, I am not aware of any software systems in a large-scale development that go in without the need for tuning and debugging after they have gone in. That will always happen in a major systems development project. It will happen again in this project where, after the application goes in, we will need to be looking at doing any finetuning refinements. That is an expectation that you would have in any large and



complex project. I think, to the contrary, we would suggest that there has been a fairly strong track record of delivering highly complex IT projects on time from the department into the network.

Senator WEBBER—So this is like qualified confidence: it is confidence with a proviso that there are going to be problems down the track?

Mr Correll—No, the message—and this is one we have been conveying to the industry— is that when you are dealing with highly complex IT projects, nowhere in the world do you get those projects implemented on day one without the need to be refining as you go along. That will always be the case, and that is the clear expectation. There will also always be a learning time for people who are using the system and there will be extensive training under way. Some of the training products for the new system will be going out to providers in the near future and there will be extensive training provided. Notwithstanding all of that training, it will take employment consultants working in the industry a little period of time to become familiar with the systems. I can say, however, that in the work that is being undertaken with the IT working group there is a very close relationship established with the industry and the providers. We are working very closely together to ensure that (a) the functionality that is delivered in the system is consistent with what the industry sees as its key needs and (b) that the training products also support those needs.

Senator WEBBER—This is all going to be taken care of on time?

Mr Correll—It will all be developed—

Senator WEBBER—It is a big project. I am impressed.

Mr Correll—Senator, exactly the same expectation that I would express to the industry I express to you: we should always expect that, in a major systems development, there will be some finetuning that is needed. But this is a project that is running on track, we are working very closely with the stakeholder group involved and we are very confident about its progress.

Senator WEBBER—So you would tell me that there is actually no truth to the rumours that I have heard that EA3000 developmental staff were told in December last year that either EA3000 was put back on track by January this year or they would be looking for new jobs?

Mr Correll—There is no truth to that rumour.

Senator WEBBER—No truth to that rumour whatsoever. I am pleased to hear it. Of course there would not be. Can I raise with you that there seems to be a serious level of disquiet within Job Network providers about the IT arrangements for ESC3. Have you got any general comments about that? Have you heard about that?

Mr Correll—I sat down personally for a day with the IT working group a matter of two and a half weeks ago and did not hear that disquiet. Indeed, the general reaction to the IT that has been demonstrated has been extremely favourable from the industry to new developments like the diary that we mentioned earlier and other facilities. It has been a very positive development. The industry will be using technology that they recognise is providing far improved levels of functionality. So I am certainly not aware of that.

Senator WEBBER—But the working group does not actually represent all of the providers, does it? Have you had any feedback from any of the others that are not NESA members about how they feel?

Senator JACINTA COLLINS—Did you get the proportions earlier that are not represented by NESA?

Senator WEBBER—No, I do not think so.



Mr Pratt—I doubt that information is available to us. That is information which NESA would have but not the department. We do not know who is a NESA member and who is not.

Senator WEBBER—That is fair enough.

Mr Pratt—I understand, anecdotally, that the vast majority of them are.

Senator WEBBER—But you are aware that not everyone is a member?

Mr Pratt—That is correct.

Mr Correll—In addition, as I mentioned, information on the IT development gets posted onto the web site. There is interactive dialogue for all members available. In addition to that, there is also a series of regional visits that occur where there are demonstrations of the IT developments. Indeed, the next round of those is scheduled to occur in early March. So there are extensive opportunities there for contact from all Job Network members or, for that matter, prospective Job Network members to contribute.

Senator WEBBER—Going back to what you were saying before about the feedback that you have had being all very positive, how can we explain an article that appeared in the Computerworld magazine in November last year? I have a copy of some of it here. It is an article that was titled ‘Job network members to comply by July 2003’. A Mr Parsons is quoted as talking about disgruntled Job Network members. Why would a senior person to do with this project describe Job Network members as disgruntled if you are saying everyone is happy? What has happened between November and now to make them all happy?

Mr Correll—I am aware of that article. I do not believe it was a particularly accurate article.

Senator WEBBER—What it refers to with Mr Parsons is wrong, is it?

Mr Correll—If not wrong, certainly taken out of any sensible context.

Senator WEBBER—In that same article, an IT manager from a Job Network member is quoted as saying: ... for 18 months the DEWR has been forcing its own products on the members, rejecting others and using what he feels are “dirty tricks” to justify department expenditure to upgrade its product to .Net with no B2B capability.

How does that fit in with your view about a lack of disquiet and disgruntlement?

Mr Correll—I think one has to potentially differentiate feedback from Job Network members who have been consulted extensively in the development of the IT and indeed have very strong involvement and ownership of the IT products under development.

Senator WEBBER—And they are the ones that are members of NESA?

Mr Correll—The concerns, I think, being expressed here may well relate to the corporate interface and the use of third-party software products where there has perhaps been some commercial interests involved in those third-party software vendors.

Senator WEBBER—Why is it that you are developing EA3000 with no significant B2B capability that would allow the use of third-party software?

Mr Correll—The development of EA3000 is supporting the use of third-party software, but supporting it in the connectivity between the employment functionality and the corporate systems—finance or human resource systems—utilised by Job Network members. It is not supporting the use of third-party software products in the specific employment functionality area for several reasons. The first of those is that where those third-party software products



are involved it becomes an extremely difficult and expensive process for Job Network members to adjust to policy or changes to Job Network services, which immediately ripples through into major costs in adjustments in those third-party software products when those changes occur. There are also concerns to ensure, in terms of data and data held within the employment systems, that they are all held securely. That is a key factor that we are keen to assure from a privacy point of view as well. For those reasons in particular, the strategy is to deliver to Job Network members all employment functionality but support a corporate interface capacity that will allow financial and HR systems—corporate related systems—to connect to that employment functionality.

Dr Boxall—Excuse me, Mr Chairman, I was wondering about a tea break.

CHAIR—Yes, at 9.30.

Senator WEBBER—We will come to the privacy issues a bit after the tea break. Given that you have alluded to the cost implications, can you provide us with some examples of what you are talking about with regard to the cost of changing the system? You have said it is costly. You must have something to base that on.

Mr Correll—I do not understand the question.

Senator WEBBER—You were referring before to the changes to IT and the interface with third-party software and saying that that was incredibly costly to providers and to the department. Can you give me something on which you base that, or is that just an assumption?

Mr Correll—I am not aware of the cost to a Job Network member of the development of a third-party employment functionality software application. But in moving, for example, to the active participation model, if the functionality was not being delivered within EA3000 there would need to be major change to third-party software products. It is impossible for me to estimate what the cost of those changes would be to individual Job Network members, but they would be very substantial.

Senator WEBBER—So we know they are great but we are not quite sure how great. Given that in ESC1 and 2 there was an interface or B2B capability, it would appear to be a significant change to not provide one for ESC3, wouldn’t it? Why the change?

Mr Correll—I mentioned that there is in fact the capacity for that interface but it is the point of the interface that has changed. Instead of being interfaced within the employment functionality, which creates those problems when changes are occurring, the interface connection is into the corporate system area. So there is a direct connection from the employment functionality into the corporate business systems for a Job Network member, ensuring the efficiency of operations. So the point of the interface is changing, not the absence of any interface.

Senator WEBBER—Chair, I am at a point where I have got a whole lot of questions on privacy. Do you want to break?

CHAIR—On which, I am sorry?

Senator WEBBER—On the privacy concerns that Mr Correll raised before. This is probably a better time to break and then do all of them in a block when we come back, if that suits you.

CHAIR—Okay.

Proceedings suspended from 9.25 p.m. to 9.40 p.m.



Senator WEBBER—I want to go back to the article in Computerworld magazine where Mr Parsons is quoted as saying: The third-party packaging doesn’t fit with the new policy settings, Privacy Act or have compatibility with the new employment market.

Can you explain to me why that was the case?

Mr Correll—As I was saying earlier, to provide the level of functionality for the active participation model third-party products would need to be very substantially redeveloped. In the same way that the department is very substantially redeveloping the existing IT systems supporting Job Network members, all third-party products would also have to be basically completely rewritten.

Senator WEBBER—How in particular would they not comply with the Privacy Act?

Mr Correll—It is not a question that they do not comply with the Privacy Act as much as it is a question of risk exposure. I can give an example of that. The department’s systems that are developed include audit browse logging facilities so that if there is any unauthorised browsing of the data through the systems it is monitored through an audit log. Indeed, that facility is used to manage privacy risks. Third-party software products do not in many cases have that type of facility and therefore it is a question of an increased risk exposure as a result of that.

Senator WEBBER—You said before that there was analysis that there needed to be substantial changes. How was that arrived at?

Mr Correll—Substantial changes to computer systems?


Mr Correll—It is basically because the actual nature of the active participation model changes business processes significantly under Job Network. It involves a single Job Network member providing a continuum of service. There are changes to fee regimes, considerable additional functionality involved, the introduction of a jobseeker account and the introduction of service guarantee arrangements. All of these ripple through to very substantial changes to the whole computer system functionality.

Senator WEBBER—How do you know that there needs to be substantial changes to third-party systems?

Mr Correll—The third-party systems that are built today are built to the current operation of the Job Network service. Given the significant changes that are involved, it logically cannot be so that those systems, if they are delivering the comparable employment services functionality, can possibly be able to operate under the new active participation model. Also, the nature of the technical platform that is being used under the active participation model changes. That in its own right also has implications on the systems that would be used through third-party vendors.

Senator WEBBER—I am pursuing this issue because it has been put to me that it is actually the case that it is the introduction of dot net applications that has caused the need for change.

Mr Correll—That is the technical platform side of it.

Senator WEBBER—So that is in fact true. That is what is causing the need for massive change?



Mr Correll—The technical platform is a key reason for change, but the functionality itself would be a key change requirement as well. There is no such thing as a jobseeker account at the present stage. Transactions need to be processed under the active participation model through the accessing of a jobseeker account. There is no such thing as an automated diary facility connected to Centrelink at the present stage. Transactions will be processed through that sort of an automated diary facility. There are a large range of differences in the way the systems actually function. That is why I say it is not just a technical platform; it is the nature of the functionality that changes as well.

Senator WEBBER—But you do process transactions under the current model, don’t you? So what is the difference?

Mr Correll—It is the nature of the transactions.

Senator WEBBER—So they are all going to change?

Mr Correll—There are many more of them and there are different ones.

Senator WEBBER—If there are just many more of them, couldn’t you just expand the existing ones rather than completely change everything?

Mr Correll—Basically, in developing the technology we are looking to deliver the most efficient and effective set of tools through to the Job Network members. What we are looking to use is the most effective, up-to-date technology to do that and to use a dot net type technical platform that supports that.

Senator WEBBER—So you have decided that the most efficient and effective way of doing that is to change everything?

Mr Correll—With the nature of the changes to the business, even if one kept exactly the same technical platform there would still need to be a massive change to the applications to cover the new functionality. So if the technical platform did not change at all, there would still be a massive and complex IT project here using the existing platform.

Senator WEBBER—Can you explain to me exactly why the technical platform has to change?

Mr Correll—As I said earlier, it is about providing the most effective means of communications. What this means is that Job Network members are able to access this using web based services through the dot net technology. That is not the infrastructure used at the present stage. It provides better infrastructure and a better service to Job Network members.

Senator WEBBER—So they could not use anything web based before but with dot net they can? How do you know this will be more efficient? Just because it is new does not necessarily make it more efficient, does it?

Mr Correll—It will provide better opportunities for the nature of the applications and the functionality that are being provided. Under the arrangements, Job Network members will be able to access information, access performance reporting data, that is not available to them at present. In all of the feedback we have received through our consultations, through working group meetings or broader forums with Job Network members, the feedback to the functionality and the tools that they will have available to them has been very positive. There has been recognition that the nature of the systems represents a significant step forward.

Senator WEBBER—Who prepared the business case in favour of the new technical platform?



Mr Correll—The technical platform was examined and considered within the department, looking at the overall business requirements and the various technical alternatives for going forward. We would need to draw in comment from a number of technical specialists to answer that in more depth.

Senator WEBBER—So to the best of your knowledge it was purely internal, within the department?

Mr Correll—Yes, but drawing on industry directions and industry practice. The department keeps closely abreast of future developments and future directions through areas like Gartner advice.

Senator WEBBER—So I have heard. How many other departments have adopted this same platform? Is DEWR on its own?

Mr Correll—No, I think not.

Senator WEBBER—It is just that you have a reputation as leading in terms of the use of new technology.

Mr Correll—Yes, I think that is true, but organisations like the Taxation Office are also using this form of technology.

Senator WEBBER—Returning to privacy issues, I would like to take you now to NESA’s response to the future IT infrastructure. It says on page 7 of that publication that following discussions with the Privacy Commissioner ‘it was understood that to date there have been no serious privacy breaches by a member of the Job Network.’ Given that—I accept that and I am sure that the Privacy Commissioner would correct us if he did not agree—how then would Mr Parsons assert that the third-party software does not comply with the Privacy Act?

Mr Correll—I would re-emphasise: this is all about management of risks and exposure to risks. The fact that third-party software products do not have the same sort of audit browse facilities within them means that there is a greater level of risk exposure. I would emphasise, too, that you recall when I answered this question initially I said there were several factors. Privacy and the risk exposure is one of those factors, but there are a number of other factors. There are factors associated with lead times and costs with the changes in policy that occur and there are also other issues. We have had an example where an individual jobseeker received 140 letters from a third-party software product. We therefore have concerns about the quality of some of those products.

Senator WEBBER—I heard you when you said that that was just one consideration. It is just that, when Mr Parsons specifically cites the Privacy Act when he is putting his case for change, it is interesting that the Privacy Commissioner does not seem to be concerned. The department is obviously more concerned about the Privacy Act than the Privacy Commissioner.

Mr Correll—The department has had discussions with the Privacy Commissioner and is well aware of privacy legislation. What we are looking at is managing the risks and the exposures in those areas. We believe there are clearly high risks and exposures to third-party products.

Senator WEBBER—Didn’t the department certify all the third-party products that have been used to date?

Mr Correll—Certify them in what way?

Senator WEBBER—For use by providers.



Mr Correll—I would need to check that that was the case. I am not aware that they are formally certified products.

Senator JACINTA COLLINS—Did you endorse those products?

Mr Correll—We certainly do not endorse any particular third-party vendor products as such.

Senator JACINTA COLLINS—Was any formal endorsement attached to them?

Senator WEBBER—Mr Correll, it is my understanding that, in order to access the corporate interface that it would seem we are no longer having, the third-party products had to be certified.

Mr Correll—I have just been advised by my colleague that the certification you are talking about represented a certification that the appropriate data was being dispatched and provided by that product. That does not mean a certification or in any way endorsement of a particular third-party product, which the department would not do.

Senator WEBBER—If you are happy therefore to certify them to access the interface, surely that would mean that you are happy they have addressed all of your concerns, or is this suddenly a new issue?

Mr Correll—No. That certification does not go to issues like consideration of whether that piece of software has got browse logging facilities.

Senator WEBBER—Even though it allows for the accessing and interchange of data?

Mr Correll—That is right. That is why we see it as a risk exposure that we want to close off.

Senator WEBBER—Correct me if I am wrong—as I have said before, I accept what you say that privacy is just one of a number of factors and you want to close off the risks—but is it not the case that in June last year Mr Wayne Gibbons, who of course has gone on to bigger and better things, addressed a NESA CEO forum and advised that privacy was no longer an issue, that he was satisfied with the way things were?

Mr Correll—I am not aware of precisely what Mr Gibbons said at that forum.

Senator WEBBER—There certainly seem to be people that have been happy to pass on to their providers that that was the feeling that they got.

Senator JACINTA COLLINS—Do you have the means to confirm or deny that that statement was made at that forum?

Mr Correll—I do not believe there was any record, to my knowledge, of that discussion at that forum. We could check.

Senator WEBBER—So accepting that, if Mr Gibbons did in fact tell the CEOs—I am reliably informed that he did—in June that privacy was no longer an issue, how was it that Mr Parsons could still use it as a justification as late as November last year? The messages coming from the department seem a bit confused.

Mr Correll—I would have to query whether those words were used in such a forum or whether they have been taken out of context. An internal audit of the use of third-party software products was commissioned by the department to act as a measure to try to ensure that the risks of the use of those third-party products were being minimised. That internal audit occurred in around a similar time last year, as I recall.

Senator WEBBER—So there is a report of that internal audit, is there?



Mr Correll—No. As I recall, feedback was provided to the participating Job Network members on the findings.

Senator WEBBER—Can we have a copy of that?

Mr Correll—I think there would be no difficulties in providing a summary of that.

Senator WEBBER—Thank you for that. It really concerns me that, if Mr Parsons and Mr Gibbons are telling Job Network members different things about the concerns but all of those statements go to the IT provision for ESC3, that does seem to make it reasonable for Job Network members to assume that there may be some kind of dirty tricks campaign, if they are getting conflicting messages.

Mr Correll—It simply has not been established that Mr Gibbons or Mr Parsons made those comments. I certainly do not accept that, and certainly there has been a consistent concern about managing the risk exposure in relation to third-party software products. I would again emphasise the point that, in making a judgment in this area, that represents one of multiple factors. There are other factors that are also very important in making that call. It is one; it is not the overriding consideration.

Senator WEBBER—I accept that. We will get to those other factors in due course.

Mr Correll—I would also like to formally reject that notion of any dirty tricks being involved in this. There are absolutely no dirty tricks involved in this. This is a consideration using sensible risk management principles and value for money considerations for the taxpayer’s dollar.

Senator JACINTA COLLINS—Let us wait until we remove the inconsistency that you have taken on notice to investigate before we reach judgments on that.

Senator WEBBER—Yes. That seems to be the judgment of some of the Job Network providers, rather than necessarily my personal one. Perhaps, then, you could get Mr Parsons to confirm that the quotes in the Computerworld magazines are accurate or not.

Mr Correll—I know from communications with Mr Parsons that the references in the Computerworld magazine represent an inaccurate reflection of discussions and also a description of the nature of the project.

Senator JACINTA COLLINS—It is easy to say that in a blanket sense. If you could give us an example of perhaps one of the allegations where you say the context is incorrect and misrepresents the situation, it would be more useful than just a blanket denial.

Senator WEBBER—And perhaps let us know whether he actually took up those concerns with the magazine.

Mr Correll—I would also be happy to table other articles that have appeared in relation to this project that in fact give a very different perspective.

Senator JACINTA COLLINS—That would be useful, too.

Senator WEBBER—Given that and given the fact that he feels like he has been misrepresented, there was actually another Computerworld article in June last year where Mr Parsons is quoted as saying: The current strategy for the next round of contracts, ESC3, will be no B2B interface and all job network members will be required to use EA3000.

He seems to spend an awful lot of time talking to Computerworld magazine for someone who is feeling misrepresented, doesn’t he?



Mr Correll—I think it is extremely unfair and inappropriate to be singling out an officer in this way.

Senator WEBBER—For some people, that is one of the main ways they have access to this kind of information. If that is their source, then I guess—

Dr Boxall—The department has made it clear that Mr Parsons said that those quotes that you referred to earlier were taken out of context and are not accurate. That is what Mr Correll said and that is what I am emphasising now.

Senator JACINTA COLLINS—Yes, but we have asked for an explanation of that blanket assertion. So if they were out of context, please explain the legitimate context. If they are inaccurate, please explain what the accurate situation is. We are waiting for that response.

Mr Correll—I repeat that the Computerworld article that you are referring to is not an accurate reflection of either the facts in relation to the project or indications from Mr Parsons.

Senator JACINTA COLLINS—Yes, and until we see some example of the details of which facts are purported to be inaccurate and which context is purported to be misrepresented, just a blanket assertion is not an adequate response.

Dr Boxall—It is not a blanket assertion. Mr Parsons has communicated to his superior officer, Mr Correll, that the facts as reported and referred to in the article by Senator Webber are inaccurate and taken out of context.

Senator JACINTA COLLINS—And we are waiting to see what the alternative context is purported to be.

Dr Boxall—He has told his superior officer that they are inaccurate and out of context and we do not accept them.

CHAIR—You have now heard the same answer twice, Senator, so perhaps we can move on.

Senator WEBBER—On that point, Dr Boxall, I would like to reassure you and the department that I am not, in fact, singling out Mr Parsons; it is just that he is the unlucky person who seems to be on the public record mostly commenting on those issues and, in fact, he has commented to that magazine more than once. So although I accept—and I wait for your response to Senator Collins’s question—

Senator JACINTA COLLINS—If anything, this process is giving a single departmental officer an opportunity to clear his record if he does believe that he has been misrepresented or quoted out of context and, at this stage, you are refusing to respond to that opportunity.

Dr Boxall—We have responded to that opportunity. The department has said that the facts were not accurate and taken out of context and that is the department’s position. We have responded to that.

Senator WEBBER—Are there any doubts about the accuracy of the quotes from the article in June last year in which, among other things, he said that there would be no B2B interface and that all Job Network members will be required to use EA3000? If you do accept that, why has the department adopted that approach?

Mr Correll—No. 1, all Job Network members are required to use EA3000. That is quite accurate. In relation to the B2B interface, the issue is, as I mentioned, that an interface will exist, but the interface will be through to the corporate business and HR systems not within the employment functionality area, for the reasons that I have outlined earlier.



Senator WEBBER—Can you perhaps then explain to me why Job Network members would have chosen over the course of ESC1 and 2 to use third-party products over those offered by the department?

Mr Correll—That is an individual decision made by Job Network members for their own particular reasons and business purposes. You would need to ask Job Network members themselves why they have made such business decisions.

Senator WEBBER—Can you give me a percentage of the Job Network members who have used or are using third-party products in preference to the department’s own?

Mr Correll—I do not have that precise information. I would have expected that it would have been less than half.

Senator WEBBER—Can you take that on notice and find out for me?

Mr Correll—Yes.

Senator WEBBER—It seems to me that, although you do not know the reasons why they have made the choice, this time they are not getting a choice. This time you are making it compulsory to use your product.

Mr Correll—Yes, and that issue has been discussed extensively with the industry and the industry is actively involved in developing that software product at present. I wonder whether these concerns are being raised by Job Network members or by third-party vendors who have commercial interests.

Senator WEBBER—Concerns are raised with me by a number of people, trust me. Can you tell me how much the department usually charges for the use of its software?

Mr Correll—The department’s software is developed and provided for use by Job Network members. It does not cost for the use of that software, although the communications associated with the transmission of data will have some costs. So the actual software is developed and provided to Job Network members. They do not pay for that as such; it is effectively built into the overall price of contracts.

Senator WEBBER—So you develop the software and it is essentially very low cost, if not free, yet Job Network members choose to pay for another product when they have a choice. Why do you think that would be the case? Does that indicate dissatisfaction with the development of your product?

Mr Correll—It represents a business decision made by a Job Network member in relation to their particular business circumstances.

Senator WEBBER—Has the department ever considered charging Job Network providers full cost recovery for using the software?

Mr Correll—From time to time the department would have looked at various different options for the way it handled its IT. It might have contemplated that at some stage, but the approach that has been adopted has been one where effectively the overall price of the development of software applications is built into the overall price of the operation of the employment services market.

Senator JACINTA COLLINS—What will be the difference in the communication costs?

Mr Correll—That is a very difficult question to answer. It will depend on the particular circumstances of an individual Job Network member. Under the Employment Services Contract 3 arrangements, particular decisions and choices can be made by Job Network members in relation to the bandwidth of the communication channel that they are using.



Based on those decisions, there are different cost considerations. But those decisions, again, are business decisions that an individual Job Network member would make.

Senator JACINTA COLLINS—No, between the old platform and the new, what will be the overall difference in terms of communication costs for providers?

Mr Pratt—That is nearly impossible to answer, because on both sides of the ledger, on the one hand, the use of the new technology will enable us to use screens which are less data rich, which means that there are savings in communications costs in that area. On the other hand, the active participation model is all about ensuring that job seekers and their Job Network members are working together very closely. So there will be more contacts and, therefore, more things input on the system. So it is virtually impossible to estimate the difference in communication costs. It could be greater or lower.

Senator JACINTA COLLINS—And what are the options that they are going to need to choose between in this aspect? I do not quite understand.

Mr Correll—It simply represents, in terms of the communication channels that Job Network members can use, that the bandwidths that they can use, depending on their business service, are different—bandwidths that enable potentially different speeds of transaction of data or transmission of data. It would depend on the volumes of business that they are transacting and calls that they will make about the speed of data transmission that is important to their business operation. But they are commercial decisions that each and every Job Network member will make.

Senator JACINTA COLLINS—Will those new arrangements allow some of the larger providers to consolidate their communications between the various sites? Is one of the advantages of the move that they will improve their speed, bandwidth et cetera?

Mr Correll—There is the potential, should a Job Network member choose, to have improved bandwidth and, therefore, transmission times, yes.

Senator JACINTA COLLINS—So particularly for some of the larger providers across many of the states, there are some significant advantages in relation to the new system?

Mr Correll—At present, different Job Network members use different communications solutions. There will be the option to use the existing type of solution, to continue to use the solution that some big providers are using at this stage, or to go to other approaches.

Senator JACINTA COLLINS—How significant is this speed problem now?

Mr Correll—In general, it is not a major problem. We monitor, basically, response times for the operation of the systems and attempt to operate in the context of a broad three-second response time. I do not have data immediately to hand but, generally, we are operating at a very high level of consistency in providing that type of response time.

Senator JACINTA COLLINS—Do you have any problems expressed by particular sections of providers in relation to speed issues?

Mr Correll—I am not aware of problems in that area in recent times. I would have to take that on notice to be confident about my response.

Senator WEBBER—You said earlier—someone said earlier; it has been a long day—that it is costing $17 million to $18 million to develop this new software. How are we going guarantee to taxpayers that we actually get value for money?

Mr Correll—The value for money is that this software is underpinning an operation of the new active participation model. The value for money would flow from the results from the



new active participation model. It should mean that job seekers are getting faster access to more job opportunities and, therefore, that people are matched more quickly to jobs in the labour market. It should mean a more effective functioning labour market, which should provide a substantial payback. It is worth noting as well that the Job Network is clearly performing better than its predecessor; in fact each year its performance levels are improving. Job Network intensive assistance operations this year are operating currently with outcomes 23 per cent higher than last year, and last year they were operating at 30 per cent higher than the year before. So the model is getting better and better.

Senator WEBBER—Can we put most of this down to the development of new technologies?

Mr Correll—New technology has been an important consideration in that. Also, in our overall application development work we use international benchmarking standards for the cost of the application development work. They are, I think, called the IFPUG standards.

Senator WEBBER—What was that?

Mr Correll—Let me check the precise terminology. It is the International Software Benchmarking Standards Group.

Senator WEBBER—It sounds painful!

Mr Correll—Basically, those benchmarking standards are the way we measure our productivity in the development application.

Senator JACINTA COLLINS—You will have to tell me what the real acronym is. Give me the initials.

Mr Correll—It is the International Software Benchmarking Standards Group. We use that as the basis for comparison of our performance in application development and we are performing well against that benchmark.

Mr Pratt—It is also worth noting that the cost of the new applications, which is a subset of that $17 million to $18 million that Mr Correll referred to, can be compared with the expenses of the employment services market over the next contract period, which is close to $3 billion. In relative terms it is quite a small investment.

Senator JACINTA COLLINS—If you get it right.

Mr Pratt—We are already on record that we are confident that we will get it right.

Senator WEBBER—Watch this space.

Senator JACINTA COLLINS—Have you heard of RMIT recently? Defence, too, I think, you will find.

Senator WEBBER—Would you accept that in all its various previous guises the department has created a marketplace for software for an employment services industry?

Mr Correll—Effectively, with the operation of a number of organisations in a commercial marketplace they have the capacity to purchase products and applications and software within that marketplace. They will continue to have the capacity to purchase and drive those applications and software. It is just that the nature of the connection interface will relate to corporate related systems rather than systems delivering employment functionality, for the reasons I have outlined.

Senator WEBBER—So do you think that the department uses its position in the market in a reasonable way? Given that you have created this market—you purchase the services, you



regulate it, you audit it, you now set out the IT standards and you are now going to operate as a supplier, all within the one market—do you think you operate reasonably? What structures do you have in place to make sure that you operate reasonably within the market?

Mr Correll—The structures that we have in place in relation to the operation of the market involve an ongoing working group with the key stakeholders within the market, an extensive process of consultation. Every quarter there are visits to all capital cities and regional centres, where there are forums with all Job Network members to work through their IT applications and any issues associated with their IT applications. There are extensive forums in things like annual conferences of NESA, the National Employment Services Association, which focus on IT development and providing forums and opportunities to contribute to IT development. We see ourselves in close partnership with the industry in the development of IT.

Senator WEBBER—It is an unusual situation that the department finds itself in, isn’t it? I cannot think of any other department that has a role in almost every segment of the market.

Mr Correll—It needs to be remembered that in the development of Job Network one of the key enablers was the underpinning information technology. Basically, without effectively a real-time flow of information between Centrelink, Job Network members and job seekers, you cannot have the sort of performance out of an employment service that we have seen delivered through this model.

Senator JACINTA COLLINS—How is the flow of information to job seekers going in terms of the performance of providers?

Mr Correll—It is vital, because information on job opportunities is accessed on a self-service basis through touch-screen kiosks. That information needs to be constantly updated.

Senator JACINTA COLLINS—I meant in terms of choice of provider. What information is now available to customers on the performance of individual providers when they choose their provider?

Mr Correll—The star rating information is available on the Internet and also on touch-screen units.

Senator JACINTA COLLINS—Is that marketed? Do customers know about this? I know what the star system is, but do your customers know about it?

Senator WEBBER—We are modifying the star system.

Senator JACINTA COLLINS—It has been modified a few times.

Mr Correll—One of the key findings of the streamlining of referral trials was a very significant increase in awareness and choice being exercised by job seekers of Job Network members. Under the streamlined referral process, job seekers first participate in an information seminar where they receive an information kit which includes a range of information on Job Network members. They attend that information seminar normally about two or three days before they participate in their interview. So they are provided with a kit of information on which to make their decisions. The streamlined referral trials were showing— this was for intensive assistance job seekers—50 per cent to 60 per cent of job seekers exercising a choice of Job Network member.

Senator JACINTA COLLINS—Yes, but I am trying to understand how that becomes an informed choice. If I am a customer or if I am a job seeker, how do I acquire the knowledge which tells me that this particular provider specialises in putting people into call centres, as opposed to this other provider who has good access to employment in some other area?



Mr Correll—All Job Network members are encouraged to provide information brochures in Centrelink offices and in the information kits that are available. In some cases, at the present stage Job Network members attend information seminars and give presentations on the nature of the services they provide. We are keen to attempt to ensure that job seekers have the best information available to them. It should also be remembered that every newly registering job seeker at Centrelink—about 50 per cent of them—are in fact reregistering. They have in fact had exposure to Job Network services in the past and, as a result of that, they have been experienced in Job Network services. That will influence the decision as well.

Senator WEBBER—I want to go back to the unique position the department finds itself in within the market. What reassurance can you give me that the department does not have the capacity or will not use its position and the resources of the taxpayer to drive out competitors within the market, seeing that you are involved in nearly every different segment of it?

Mr Correll—Could you repeat that question?

Senator WEBBER—We were having a discussion before about the role of the department in all of the different segments of the market. You purchase the services, you regulate it, you audit it, you set out the IT standards and protocols and then you operate as a supplier—in this case it would seem a sole supplier—within the market. What structures do you have in place or what assurances can you give us that the department has not and will not use its position in that market, and therefore the resources of the taxpayer, to drive out competitors—that it will remain a free and open market?

Mr Correll—I am not clear on the question. The department is not a competitor. It does not compete with anyone in the marketplace. The department is simply providing information technology infrastructure to enable a number of contracted service providers to receive and transmit communications rapidly to enable job seekers to receive information about it.

Senator WEBBER—But you are making the use of your piece of technology compulsory this time around. If we accept all of the reasons you give us for why that change has to happen, what protocols do you have in place to make sure you then do not restrict competition in other segments of the market that you operate in?

Dr Boxall—Such as?

Senator WEBBER—As I say, you purchase the services, you regulate it. You are involved in every segment of this employment market.

Dr Boxall—As Mr Correll explained, we purchase services from Job Network members to place people in jobs. Mr Correll has explained why we have adopted the IT system. The reason we are doing that has been explained. I do not quite see what the question is driving at.

Senator WEBBER—I am just trying to seek some reassurance that you are not going to use that position of dominance to then drive out—

Dr Boxall—To do what?

Senator WEBBER—You purchase services. Perhaps you will then decide that you want to restrict the number of people you purchase services from, as you are restricting the use of technology.

Dr Boxall—But every three years we put the Job Network out to tender. This is the third tender. It is a very competitive market. I do not see what the question is driving at. We are not competing with anybody. The department, on behalf of the government, purchases services. It is a very competitive process. It is a tender, which we have discussed earlier. We have



discussed the issue of the IT infrastructure underpinning the department’s purchase of services. Mr Correll has outlined why the department has mandated a certain—

Senator WEBBER—I accept that, Dr Boxall. What I am looking for is an assurance. In the current ESC, to stick with the IT example, there is software product competition. In ESC3 there will not be. How can we make sure that is not going to happen with other employment functions?

Dr Boxall—How else would it happen?

Senator JACINTA COLLINS—Let me give you a hypothetical example, Dr Boxall, which might prevent this going on for too long. It would be feasible, hypothetically, for the department to decide it wanted to standardise training of provider staff. I am not saying you are going to do that, but that is another element of the market that the government could reclaim.

Dr Boxall—The government sets the policy. The government has elected to have the active participation model. What Mr Correll has explained is that, in order to implement that, various considerations have been undertaken to have one form of IT infrastructure.

Senator JACINTA COLLINS—The question from Senator Webber is this: are there any other elements of the market where the department is contemplating taking a similar approach?

Dr Boxall—No, not that I know of. There is no reason why the department would do that unless it was crucial to the purchase of the services.

Senator JACINTA COLLINS—And that is the question. You have now decided that it is crucial in this case whereas it was not previously and you are saying, no, there are not other cases.

Dr Boxall—Mr Correll has explained why the department has elected to have the IT infrastructure. If you are asking, ‘Is the department contemplating mandating other things?’, as far as I know that is not the case.

Senator JACINTA COLLINS—Mr Correll, would you like to confirm that?

Mr Correll—That is the department’s position. I will give a specific example. The use of a facility like a diary is there to enable a job seeker to get into a service in two days. You cannot do it if you have multiple different computer systems.

Senator JACINTA COLLINS—I am not arguing against the decision. I might take a slightly different position from Senator Webber. Perhaps there are some other elements of the market that would not be harmed by a bit of regulation. I think Dr Shergold and I argued for quite some time before he finally admitted that it was not a free market; it was a managed one. I think it is a fairly accepted component of the discussion now. I am simply fleshing out Senator Webber’s question, and you have answered it in the negative.

Senator WEBBER—Perhaps I will move on to another issue. Can you explain the department’s thinking behind the introduction of smart cards?

Mr Correll—Yes. The area in which we are looking at using smart cards in the short term is to provide that option to providers where they wish to use that as an internal control. We are not intending at this stage to be in any way mandating the use of smart cards in the short to medium term. In the longer term we might be looking at the concept of smart cards. The reason for that simply goes to the issue of security in that it is a tool to support security in the access of computer systems.



Senator JACINTA COLLINS—What did I just say a moment ago?

Senator WEBBER—Indeed. Given the fact that they are meant to provide a higher level of security, what arrangements would be in place to stop people sharing their smart cards? That would breach that security protocol, would it not?

Mr Correll—There is no mandated requirement to use smart cards.

Senator WEBBER—Yet. But you can require it giving 180 days notice, as I understand it. Do you regard that as short, medium or long term?

Mr Correll—I presume you are referring there to the reference in the tender documentation to any use of smart cards having advance notice of 180 days before any such arrangement would come into play. I think that is the reference you are referring to.

Senator WEBBER—That is right.

Mr Correll—The issue there is that the smart card simply represents a tool for potentially improved security. The department, if it were to introduce such a tool, would be doing so in consultation with the industry. We are looking in the short term at having the option for providers who want to use that facility to be able to do it for their own internal control purposes.

Senator WEBBER—And how much would that cost?

Mr Correll—I do not have that information to hand. I would have to take that on notice.

Senator WEBBER—If you could, that would be good. The major benefit that you can see in their use would be security. If their use expands, either voluntarily or if it is mandated, is the department considering developing protocols about stopping people sharing them and handing them around, so that we maintain those security arrangements?

Mr Correll—If we move to the point of introducing smart cards on a widespread basis, then that might be the case, but at the present stage protocols apply. There are security arrangements in place in relation to the use of log-on IDs based around the current security system. So those protocols apply and are set out within the contract. If there was a widespread introduction of smart cards in the future, that would need to be covered by and supported with a protocol.

Mr Pratt—One of the benefits with the smart card technology, if we choose to use it, is that it actually makes life easier and more convenient for the Job Network member’s staff, who often share PCs. Rather than having to key in codes all the time to identify themselves to the system, they can do it quickly with the swipe of a card. So there is an efficiency element to this as well as a security element.

Senator WEBBER—Would you be able to tell whether people accessing the system are sharing IDs?

Mr Correll—There is a clear requirement that IDs are not shared and we expect—

Senator WEBBER—But can you tell whether they are?

Mr Correll—There are checks that can be undertaken through normal contract management and quality audit activities to observe contracted provider performance in that area, but in the final analysis we are expecting that the contracted provider is going to operate consistent with their contracted provisions and we would use our contract management regime to monitor any abuse of those provisions.

Senator WEBBER—So what are those checks?



Mr Correll—Contract management monitoring processes and other potential audit activities—if there is any suspicion of sharing of log-ons, for example.

Senator JACINTA COLLINS—Has it been identified as a problem to date?

Mr Correll—I am not aware of any substantial issues or problems in that area.

Senator WEBBER—Wouldn’t that same process then apply to smart cards?

Mr Pratt—There is always some risk. The point I was making before is that we are reducing the risk by making it easier for people to operate the machinery. Therefore, they have less incentive to do that.

Senator WEBBER—DEWR has been described by some as always being on the ‘bleeding edge’ of technology. There seems to be a constant level of technological change.

Mr Correll—Yes, that is happening I think within society.

Senator WEBBER—So is the use of smart cards another symptom of that?

Mr Correll—It is simply that we are constantly alert to opportunities for new technology to enable business and performance improvement. Technology is a key enabler and we are constantly alert to that. The changes that are being made under the active participation model are drawing extensively on better use of technology to deliver tangible, better services to job seekers. That is what it is about.

Mr Pratt—It is not a symptom; it is evidence that we are using innovative technology to reduce costs and improve services.

Senator WEBBER—In the past, when there has been significant IT change, that has been handled through contract variations and the department has actually assisted Job Network members in paying for many of those changes. Are you going to maintain that with the changes associated with ESC3 or are you going to leave them to cover the costs themselves?

Mr Correll—Under ESC3 it is not a price competitive tender. It is a fixed pricing structure. That fixed pricing structure factors in all costs associated with IT. That is part of the pricing structure.

Senator JACINTA COLLINS—So there is no other assistance apart from the pricing structure in relation to updating technology?

Mr Correll—Yes.

Senator WEBBER—And that will cover the costs of the change in IT?

Mr Correll—Yes.

Senator WEBBER—How much do you estimate, then, that it will cost Job Network members to upgrade their infrastructure to handle your new IT requirements?

Mr Correll—That will be different for every single Job Network member in terms of the circumstances they face and also the decisions they make regarding the infrastructure they want to run with.

Senator JACINTA COLLINS—Will we know those decisions in the tendering round?

Mr Correll—We have made clear the core IT requirements for Job Network members within the tender documentation. We have also made clear what the consideration is through the fees within the overall Job Network tender. Those fees were set following extensive consultation processes with the industry. The situation now is that if an organisation did not



consider those fees to be appropriate, you would expect that they would not tender for services.

Senator WEBBER—Therefore, the cost of adapting to fit your new IT kit could actively discourage some players from the market?

Mr Correll—That would be a decision for a prospective tenderer.

Senator WEBBER—But that is a possibility?

Mr Correll—If that were a judgment they formed.

Senator WEBBER—But you cannot rule that out?

Mr Correll—It is the same situation for anyone who makes a judgment to tender in any circumstances. You have to make a call.

Senator WEBBER—I understand that. My background in these dealings actually goes way back to the Skillshare days. Despite your dig about me dealing with third party providers, it is a little more community based than that, Mr Correll. I am aware of the supplementation that they used to get to adapt to all technology change, although it did not actually then dissuade people from being in the market. Now, with this change, there is the potential for that.

Mr Correll—No dig intended, Senator.

Senator JACINTA COLLINS—Through NESA, have you had any feedback about the extent to which some sectors of the market feel that the upgrade will compromise their viability?

Mr Correll—NESA, the industry body, developed an overall costing model for use by both its members and other existing Job Network members—and, for that matter, prospective tenderers as well. That model has been used as a basis for individual organisations to make their own decisions in relation to the financial implications of the active participation model. In the consultation processes that we undertook with the industry, which were very extensive, we received considerable feedback in that area and attempted to take that feedback into account in the final arrangements.

Senator JACINTA COLLINS—So you are satisfied that the final arrangements will not compromise such a significant proportion of the market as to raise concerns about the ongoing viability of the market?

Mr Correll—Very confident. There has been a good response to the tender.

Mr Pratt—By definition that is the case. Otherwise we would not have released the parameters that we released in the tender document.

Senator JACINTA COLLINS—What proportion would you regard as a reasonable amount of the market to suffer that fate?

Mr Pratt—Given that virtually every Job Network member tendered, plus additional providers, they must be making judgments—

Senator JACINTA COLLINS—It is insignificant, then, if you can say that to me. While we are on this, do you have an answer to that earlier question about their funding?

Mr Correll—I commented earlier that we did not have that information to hand and we would have to take that on notice.

Senator JACINTA COLLINS—I thought the officer went away to make a telephone call and we were likely to get it tonight. That is not the case?



Mr Correll—No. We have to get the data from the office in the morning.

Senator JACINTA COLLINS—Can we ask for sooner rather than later on notice on this particular one? It is a question that you would ordinarily expect the department to be able to answer at estimates rather than putting it on notice.

Mr Pratt—In the interests of being helpful, from memory it is in the order of about $150,000 per year and we may purchase or provide funding for certain other things like conducting surveys of members on performance enhancements and the like. But it is in that order. We will correct the figure on notice.

Senator JACINTA COLLINS—So $150,000 on everything, or would some of these other projects have grown that figure to $200,000?

Mr Pratt—Yes, in that order.

Senator JACINTA COLLINS—$150,000 to $200,000 would cover everything, do you think—ballpark?

Mr Pratt—I believe that it would be in that order—$150,000 to $250,000, say, in that band.

Senator JACINTA COLLINS—And can we have a description of what that funding is allocated for precisely?

Mr Pratt—We would have to take that on notice.

Senator WEBBER—You mentioned the new kiosks not so long ago. Is it true that the latest version of the AJS kiosks are now required to be wireless enabled, or have I been misinformed?

Mr Correll—They are wireless.

Senator WEBBER—They are?

Mr Correll—Yes.

Senator WEBBER—Does that increase the cost of each kiosk?

Mr Pratt—No, the kiosks are comparable in cost to the current ones. In relation to the Job Network members, the cost of leasing the kiosk from the supplier is provided to them to do so.

Senator WEBBER—And how much is that?

Mr Pratt—The cost ranges, depending on the size of the site and the number of kiosks they will have because there are economies in relation to connectivity and communications costs, but GST inclusive per kiosk for a small site with one kiosk, the kiosk fee for one year is $7,000; for two, it is $14,000; for up to four it is $28,000. For reference, I refer to page 52 of the yellow book of the Job Network requests for tender, the employment services contract 2003-2006 request for tender document.

Senator JACINTA COLLINS—When you say ‘up to four’ what is the cost of three kiosks?

Mr Pratt—$21,000.

Senator WEBBER—It uniformly goes up.

Mr Pratt—The kiosks are $7,000 each, but the connectivity and costs associated with telephones and communications—

Senator JACINTA COLLINS—Become more effective the more kiosks you have.




Senator WEBBER—Who is contracted for the development and roll-out of the kiosks?

Mr Correll—The roll-out of the kiosks is being handled by IBM. The kiosks themselves are manufactured by Neo, but IBM is contracted for their roll-out.

Senator WEBBER—Are Job Network members required to have kiosks?

Mr Correll—Yes.

Senator WEBBER—What is your preferred ratio of kiosks to job seekers?

Mr Pratt—Again, referring to page 52 of the aforementioned tender document, for an office which will have between 100 and 600 job seekers registered for assistance at any given point in time, that is one kiosk; up to 1,100 job seekers, two kiosks; up to 1,600, three; and over 1,600, four with a provision to on a case-by-case basis increase the number of kiosks depending on job seeker usage.

Senator WEBBER—What do you estimate are the likely costs for the day-to-day operation of a kiosk group for Job Network members?

Mr Pratt—I would have to take that on notice, making the point that the funding that we are providing to the Job Network members covers the costs of operating, leasing and maintaining the kiosks.

Mr Correll—That represents a service fee covering maintenance costs and consumable costs for the ongoing operation of the kiosks.

Senator WEBBER—Right. Seven thousand dollars seems a high price for a unit cost for a kiosk. There you go.

Mr Correll—This is not a unit cost for the kiosk as such. It represents the full servicing costs.

Senator WEBBER—Yes. Is anyone else using kiosks in the way that you are proposing that they are used—anyone else in the world? Is this a new and wonderful Australian initiative?

Mr Correll—Yes. The United Kingdom is using kiosks which were in fact imported from Australia. The same manufacturer is providing—

Senator JACINTA COLLINS—Who is making them?

Mr Correll—Neo, a Melbourne based company.

Senator JACINTA COLLINS—Where are they from?

Mr Correll—A Melbourne based company.

Senator WEBBER—So did they sign up to use them before we looked at them?

Mr Correll—No, the experience and the use of the kiosks in Australia, we understand, was a very significant factor in the contract secured by Neo in the United Kingdom.

Mr Pratt—For example, as further evidence of the department’s innovation in this area, the Smithsonian Institute in Washington DC in fact has the very first version of the touch-screen units that we introduced back in 1996.

Mr Correll—Referred to as a national treasure, as I recall.



Senator WEBBER—I am sure that there may be a bit of development and refinement from there to the Job Network providers. I hate to disappoint you all, but that about wraps me up for the night, unless Senator Collins has anything.

Senator JACINTA COLLINS—I just have a couple of areas. I will not be long. I am just curious from the additional PBS what it is that you are reclaiming from Centrelink precisely. How much more efficient are you becoming at clawing back costs?

Mr Correll—To what are you referring in the PBS?

Senator JACINTA COLLINS—We will go to page 13. Under outcome 1 and variations in administered appropriations, there are entries for revised employment program—savings, and transfer from administered for payments to Centrelink for the implementation costs of the third employment services contract.

Mr Hade—This was a question that Senator Webber asked at the start of the session. Basically, it is about $24 million to assist them for various elements of implementing the active participation model. There is about $2.4 million for the streamlined referral process development and then there is almost $2 million for some other IT support.

Senator JACINTA COLLINS—And then below that you have variations in the other direction, and there are entries for transfer from administered for payments to Centrelink for the implementation costs. They are the same, now that I look at it again. That is why I am asking.

Mr Pratt—One represents a transfer from the administered appropriation and the other represents a transfer into the departmental appropriation.

Senator JACINTA COLLINS—Explain that to me, please.

Mr Pratt—In simple terms, we have taken it out of one bucket and put it into the other bucket.

Senator JACINTA COLLINS—And why?

Mr Pratt—It is to cover the costs of implementing the active participation model in Centrelink.

Mr Correll—Centrelink is funded out of a different bucket.

Senator JACINTA COLLINS—I am just trying to work out that you take it from one bucket and bring it back in another bucket. What is it precisely that explains why you are doing it this way? Why the variation? Why was it not originally done this way?

Mr Correll—This represents a cost associated with implementation in setting up the new active participation model.

Senator JACINTA COLLINS—That had not been previously identified?

Mr Correll—That had not been, did you say?

Senator JACINTA COLLINS—That had not been previously identified; it is a variation.

Mr Correll—Yes.

Senator JACINTA COLLINS—So what is this cost that had not previously been identified that has now been identified and moved around in buckets out and back in again?

Mr Correll—It is the costs associated with the setting up of the changes in the systems, training of staff, et cetera, within Centrelink and the costs associated with the operation of call centre facilities for the calling in of job seekers and the development and the referral to Job



Network members. This is a key part of the transition to the new market. Those costs are associated with Centrelink and for that reason the money needs to be shifted into the Centrelink bucket to cover those costs.

Senator JACINTA COLLINS—Do they then come back again in the other bucket?

Mr Correll—Basically, the active participation model is a client-driven situation; that is, it is all based on job seeker flows. So the actual cost that emerges in ongoing years through the active participation model will be determined by the number of job seekers in the labour market.

Senator JACINTA COLLINS—Explain to me why this cost had not been identified in the PBS and why it is identified now.

Mr Pratt—In developing the costings for the active participation model, we needed to work through with Centrelink what the exact arrangements would be for it and the role that it would play in the active participation model. While the budget set out the broad parameters, some of the operational details still had to be worked out and it was agreed with government that we would, once that had been established, identify the funding requirement for Centrelink in additional estimates.

Senator JACINTA COLLINS—I understand that Senator Webber covered some of the other issues associated with how you were performing in relation to some of your benchmarks. I was looking at page 21, for instance, querying how you were going against some of these targets. Is that a correct understanding on my part? Have you taken that on notice?

Mr Correll—No. Your question was how we were going against the targets on page 21?

Senator JACINTA COLLINS—Yes.

Mr Pratt—Let me start.

Senator JACINTA COLLINS—Before you go on, can I say that I was very happy to see those targets indicated there. In comparison to some other PBSs, at least here we are getting a level of detail that seems to be disappearing from the system elsewhere.

Mr Pratt—At the top of page 21, there is a target of 40 per cent of the ANZ job advertisement series. We are marginally above that on average over the last six months. For job matching placements achieved there is a target of 325,000. To the end of December, we have achieved 245,000. For Jobsearch training and intensive assistance, I do not have—

Mr Correll—I can comment on those areas. Jobsearch training commencements are running at 87 per cent against target based on data as at the end of January. Intensive assistance commencements are tracking 97 per cent on target. NEIS commencements are 99 per cent; transition to work, 150 per cent.

Senator JACINTA COLLINS—One hundred and fifty per cent?

Mr Correll—That is correct.

Senator JACINTA COLLINS—What are you going to do about that?

Mr Correll—In fact there have been additional places allocated.


Senator JACINTA COLLINS—So how come they are not in this additional PBS?

Mr Pratt—They were agreed after the additional estimates. We are putting in place an extra 1,000 places.



Senator JACINTA COLLINS—Where is that money coming from?

Mr Pratt—Within the budget for employment services.

Senator JACINTA COLLINS—From elsewhere within the budget?

Mr Pratt—That is right.

Senator JACINTA COLLINS—Where is it being taken from?

Mr Pratt—From the Job Network services, I think. We are talking about a relatively small amount. It is in the order of about $1 million.

Senator JACINTA COLLINS—You can just find a million dollars? Where did you find it?

Mr Pratt—In a billion dollars it is relatively easy to find.

Senator JACINTA COLLINS—So you are not actually going to stop commencements in this program because you have hit your benchmark? You are going to continue and you have found the money elsewhere with this—

Mr Pratt—No decision has been taken on that. Given the success of the program so far, we will reserve our position on that later in the contract period, if necessary. But that is a decision that government will take at a later stage.

Senator JACINTA COLLINS—If you continue to trend at 150 per cent, and have the additional places that have been allocated, is that going to get you through the year?

Mr Pratt—Yes, we will probably come in fairly close. Against a target of 10,000 places at the moment we have achieved 7,000. With an extra 1,000 on top of that I think we will come in pretty close.

Senator JACINTA COLLINS—Sorry. Please continue.

Mr Correll—In other areas, in terms of the proportion of job seekers with positive employment outcomes, we are tracking at 100 per cent with job matching, 95 per cent of target with Jobsearch training, 117 per cent of target with intensive assistance, and 96 per cent with the New Enterprise Incentive Scheme. The transition to work program is a new program and we have yet to establish a clear benchmark there because we have had insufficient data coming through to allow our post-program monitoring results to be significant at this stage, so I cannot comment on that. In terms of the percentage of job seekers with positive outcomes three months following participation in employment services in areas of various disadvantage, across virtually all of the areas we are running either on, close to or slightly exceeding target.

Senator JACINTA COLLINS—Have you ever contemplated a target to deal with—I have forgotten the right word; we were talking about it a moment ago—the revolving door syndrome?


Senator JACINTA COLLINS—Do you have a target to attempt to deal with—what was the word; it is too late at night—churning? You mentioned earlier, for instance, that 50 per cent of job seekers have learnt from the experience of Job Network once already.

Mr Correll—Yes. When I said that, though, I was indicating that these are reregistrants— job seekers who are reregistering with Centrelink, which simply represents the fact that they have gone into employment. It often reflects casual, short-term employment situations. This is not the concept of churning that I think you are referring to.



Senator JACINTA COLLINS—I appreciate that, but it made me think of that issue when I was looking at these benchmarks. It made me ponder whether you have a benchmark which attempts to deal with the issue of churning.

Mr Correll—It is something we monitor periodically, but under the new active participation model that issue is really addressed by the service guarantee arrangements and the timing arrangements for participation in intensive support customised assistance. The concept of churning is really no longer applicable under the active participation model.

Senator JACINTA COLLINS—Humour me then by taking on notice an up-to-date position on where you think you are at on that issue.

Mr Correll—We will take that on notice.

CHAIR—That concludes consideration of additional estimates for the Employment and Workplace Relations portfolio. I thank the officers. The committee stands adjourned until nine o’clock tomorrow morning, when we will be considering the Education, Science and Training portfolio.

Committee adjourned at 10.59 p.m.

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