ABC Radio National Breakfast with Fran Kelly
KELLY:
Ninety nine cents an hour – that was the pay rate for two people with intellectual disability who were employed by Australian Disability Enterprises or ADEs. Back in 2012 a court found that the pay rate breached the disability discrimination act and up to 10,000 workers were affected. The court ruled that the tool used to calculate the wage rate was flawed. In response the Federal Government is legislating to address this issue. But in that legislation, while it’s offering to restore the back pay, it’s actually only offering to restore people half the monies they’re owed. There is a class action currently underway to try and restore 100 per cent of the wages and in a moment we’ll hear from the lawyer leading that case. But first, Mitch Fifield, the Assistant Minister for Social Services joins us. Senator Fifield welcome back to Breakfast.
FIFIELD:
Good morning Fran.
KELLY:
Minister, this bill will see workers only receive some of the money they’re owed. In 2012 the wage rates were found to be in breach of the discrimination act. Why not give people all their money back?
FIFIELD:
Fran, a few matters of fact. You’re right in December 2012 there was a Federal Court decision in relation to two individuals, Mr Nojin and Mr Prior. That court decision found that there had been indirect discrimination against those two individuals through how the Business Services Wage Assessment Tool was applied. Now that decision only related to those two individuals, and there was no compensation awarded as a result of that. So at the moment we have a situation where the courts have not established either discrimination across the board, or an entitlement to payment across the board. And there is a representative action afoot at the moment and that may well not find discrimination across the board. What we’ve done as a government is seek to legislate a payment scheme to provide a more certain environment for Australian Disability Enterprises, and also for the people in those enterprises who have previously been assessed under the Business Services Wage Assessment Tool.
KELLY:
So you’re proposing a payment scheme where people will be assessed individually? Is that right? There’s no across the board set payment?
FIFIELD:
That’s right. We have a formula and the formula is half of the difference between the amount that would have been paid had only the productivity element of the Wage Assessment Tool been applied and the amount that they were paid. So the Wage Assessment Tool has two elements. A productivity component, and a competency component. And the Federal Court found in relation to those two individuals that the competency component was incorrectly applied.
KELLY:
So why are you only offering half of the amount then?
FIFIELD:
As I say, there has been no determination by courts that there is money payable. But we’ve come up with a formula and there are some important additional elements in relation to that formula. That includes that individuals will only be required to accept that amount plus they will also receive an amount that will cover any tax liability that may have been incurred. That also, they will have access to lump sum in arrears tax offset treatments. And also importantly, that payment won’t be treated as income under social security law.
KELLY:
Okay so let’s see if I’ve got this right. Under the law that you hope will go through next week, people who access the payment and accept the payment will get all of those things you just outlined there. Potentially, they could take another path, they could go to the courts and try and put the case for 100 per cent of the money they’re owed. Or what they claim is 100 per cent of the money and have that assessed in the courts. But they can’t do both, they can’t accept your payment, and then still test it in the court to see if there’s a shortfall?
FIFIELD:
That’s right, we’re offering an additional choice. At the moment the only avenue that people have is the representative action. What we’re saying is that we would like people with disability who have been assessed under the BSWAT tool, who feel that they may have had an economic loss, that they should have an additional option. They can obviously accept their legal rights and pursue that through the courts, or they can pursue our streamlined process and get certainty and an amount of money sooner.
KELLY:
Streamlined, but just a little bit cheap isn’t it? I mean, you acknowledge that it is only half the productivity component. So even though it’s got all those other elements you acknowledge that they, on the face of it, could go through the courts and perhaps achieve more.
FIFIELD:
Fran, we don’t know what the outcome of the court could be. It could be less, there could be a determination that there isn’t discrimination, we just don’t know what the outcome of the courts will be. So what we’re doing is we’re offering certainty. We’re offering a guaranteed amount of money, a streamlined process, we’ve got a formula for that. You’ve mentioned that it’s 50 per cent of the productivity only assessment. But you’ve got to add to that the fact that individuals will have additional money to cover any tax liability. That they will have access, as I said, to the lump sum in arrears tax offset treatment. And they will also not have the payment counted as income under social security law. So the actual money that people get could be significantly above 50 per cent. And typically, settlements in court cases are usually only a fraction of what is actually sought.
KELLY:
You’re listening to RN Breakfast, our guest is Senator Mitch Fifield, the Assistant Minister for Social Services. The legal case running, suing the Government for 100 per cent of the wages to be paid back, if that’s successful and the Government does have to pay that money, and I know we’re in the hypothetical realm here but we will be hearing from the lawyer Josh Bornstein in a minute. Will that affect the funding for ADE’s? For these employment agencies?
FIFIELD:
No, we have separate provision for any settlement that there would be. We have separate provision for funding of the Business Services Wage Assessment Tool Payment Scheme. So whatever happens, that is not going to affect the $220 million a year that the Government gives to Australian Disability Enterprises. But Fran I should also mention that we have announced $173 million, which will be used to help develop a new wage assessment tool. And also to assist Disability Enterprises with the transition to that new wage assessment tool. So we’ve got an arrangement to deal with the future, in terms of the $173 million to develop a new tool and assist ADE’s with the transition costs. But we’ve also got in prospect, if legislation passes the Senate, a payment scheme to assist with the past.
KELLY:
Because there is some suggestion that ADE’s are telling the families of the people who are trying to get their money back, that some of them will be sacked unless the bill is passed and they drop their legal action.
FIFIELD:
Look there’s a lot of concern in Disability Enterprises about the uncertain environment that they are in. What we hope is that the BSWAT Payment Scheme will help to create a more certain environment for Disability Enterprises, for supported employees and for their families. And Fran I should’ve mentioned before that with our Payment Scheme, people can only take part in our Payment Scheme if they furnish a certificate indicating that they have received independent legal advice, and also independent financial advice to make sure that they’re in a good position to determine what is in their best interests. And also, we will pay for that independent legal advice and that independent financial advice.
KELLY:
And just finally Minister as it currently stands the old tool is still in place. Does this mean some people a still being paid at 99 cents an hour?
FIFIELD:
Well there have not been any fresh assessments under the BSWAT tool for quite some time. And you mentioned the individual dollar amount. It’s really important I think that we don’t just separate out that individual dollar amount because people in Disability Enterprises really get a package. They get the hourly rate, they get the Disability Support Pension, they get the health benefits card and also the disability support workers that the Commonwealth pays for. And, of course, they get the dignity of work and they get the social life that comes with work, something that we all take for granted. So you’ve really got to look at the package that individuals get, rather than isolating out any single element.
KELLY:
I think that’s right. There’s no way you’d like these development enterprises to be shut down because that shuts down a whole avenue of work and opportunity for people. Mitch Fifield, thank you very much for joining us.
FIFIELD:
Thanks Fran.
KELLY:
Senator Mitch Fifield is the Assistant Minister for Social Services and the Bill that he’s prepared is likely to be considered in the Senate next week.