[2019] FWCFB 8179 [Note: a correction has been issued to this document; the changes arising have been incorporated in this version at Attachment A at Schedule D.4.1(b)]
FAIR WORK COMMISSION

DECISION


Fair Work Act 2009

s.156 - 4 yearly review of modern awards

4 yearly review of modern awards—Supported Employment Services Award 2010
(AM2014/286)

Social, community, home care and disability services

VICE PRESIDENT HATCHER
DEPUTY PRESIDENT BOOTH
COMMISSIONER CAMBRIDGE

SYDNEY, 3 DECEMBER 2019

4 yearly review of modern awards – Supported Employment Services Award 2010.

Introduction and background

[1] On 29 May 2017, this Full Bench was constituted to hear and determine a number of applications to vary the Supported Employment Services Award 2010 (SES Award) as part of the 4 yearly review of modern awards then being conducted pursuant to s 156 of the Fair Work Act 2009 (FW Act). The main issue raised by those applications is the means by which minimum wage rates for disabled employees covered by the SES Award should be determined, and this decision is primarily concerned with determining that issue. The applications also raised some ancillary issues which are described later and dealt with in this decision.

The legislative framework

[2] Section 156 was repealed by the Fair Work Amendment (Repeal of 4 Yearly Reviews and Other Measures) Act 2018 effective retrospectively from 1 January 2018, but clause 26 of Schedule 1 to the FW Act (which was added by the amending Act) requires the Commission to continue to apply s 156 to the current review of the SES Award as if had not been repealed. The former s 156(2) of the FW Act provided:

What has to be done in a 4 yearly review?

(2)  In a 4 yearly review of modern awards, the FWC:

(a)  must review all modern awards; and

(b)  may make:

(i)  one or more determinations varying modern awards; and

(ii)  one or more modern awards; and

(iii)  one or more determinations revoking modern awards; and

(c)  must not review, or make a determination to vary, a default fund term of a modern award.

[3] However, the conduct of the 4 yearly review is subject to s 138, which provides:

138 Achieving the modern awards objective

A modern award may include terms that it is permitted to include, and must include terms that it is required to include, only to the extent necessary to achieve the modern awards objective and (to the extent applicable) the minimum wages objective.

[4] The modern awards objective to which s 138 refers is set out in s 134(1) as follows:

What is the modern awards objective?

(1) The FWC must ensure that modern awards, together with the National Employment Standards, provide a fair and relevant minimum safety net of terms and conditions, taking into account:

(a) relative living standards and the needs of the low paid; and

(b) the need to encourage collective bargaining; and

(c) the need to promote social inclusion through increased workforce participation; and

(d) the need to promote flexible modern work practices and the efficient and productive performance of work; and

(i) employees working overtime; or

(ii) employees working unsocial, irregular or unpredictable hours; or

(iii) employees working on weekends or public holidays; or

(iv) employees working shifts; and

(e) the principle of equal remuneration for work of equal or comparable value; and

(f) the likely impact of any exercise of modern award powers on business, including on productivity, employment costs and the regulatory burden; and

(g) the need to ensure a simple, easy to understand, stable and sustainable modern award system for Australia that avoids unnecessary overlap of modern awards; and

(h) the likely impact of any exercise of modern award powers on employment growth, inflation and the sustainability, performance and competitiveness of the national economy.

This is the modern awards objective.

[5] Section 134(2)(a) provides that the modern awards objective applies to the performance or exercise of the Commission’s function or powers under Pt 2-3 of the FW Act.

[6] The minimum wages objective is set out in s 284(1) as follows:

What is the minimum wages objective?

(1)  The FWC must establish and maintain a safety net of fair minimum wages, taking into account:

(a)  the performance and competitiveness of the national economy, including productivity, business competitiveness and viability, inflation and employment growth; and

(b)  promoting social inclusion through increased workforce participation; and

(c)  relative living standards and the needs of the low paid; and

(d)  the principle of equal remuneration for work of equal or comparable value; and

(e)  providing a comprehensive range of fair minimum wages to junior employees, employees to whom training arrangements apply and employees with a disability.

[7] The general principles applicable to the conduct of the 4-yearly review established in Federal Court Full Court decisions and decisions of Full Benches of this Commission were summarised in Alpine Resorts Award 2010 as follows: 1

  section 156(2) provides that the Commission must review all modern awards and may, among other things, make determinations varying modern awards;

  “review” has its ordinary and natural meaning of “survey, inspect, re-examine or look back upon”; 2

  the discretion in s 156(2)(b)(i) to make determinations varying modern awards in a review is expressed in general, unqualified, terms, but the breadth of the discretion is constrained by other provisions of the FW Act relevant to the conduct of the review;

  in particular the modern awards objective in s 134 applies to the review;

  the modern awards objective is very broadly expressed,3 and is a composite expression which requires that modern awards, together with the NES, provide “a fair and relevant minimum safety net of terms and conditions”, taking into account the matters in ss 134(1)(a)–(h);4

  fairness in this context is to be assessed from the perspective of the employees and employers covered by the modern award in question; 5

  the obligation to take into account the s 134 considerations means that each of these matters, insofar as they are relevant, must be treated as a matter of significance in the decision-making process; 6

  no particular primacy is attached to any of the s 134 considerations and not all of the matters identified will necessarily be relevant in the context of a particular proposal to vary a modern award; 7

  it is not necessary to make a finding that the award fails to satisfy one or more of the s 134 considerations as a prerequisite to the variation of a modern award; 8 

  the s 134 considerations do not set a particular standard against which a modern award can be evaluated; many of them may be characterised as broad social objectives; 9

  in giving effect to the modern awards objective the Commission is performing an evaluative function taking into account the matters in s 134(1)(a)–(h) and assessing the qualities of the safety net by reference to the statutory criteria of fairness and relevance;

  what is necessary is for the Commission to review a particular modern award and, by reference to the s 134 considerations and any other consideration consistent with the purpose of the objective, come to an evaluative judgment about the objective and what terms should be included only to the extent necessary to achieve the objective of a fair and relevant minimum safety net; 10 

  the matters which may be taken into account are not confined to the s 134 considerations; 11

  section 138, in requiring that a modern award may include terms that it is permitted to include, and must include terms that it is required to include, only to the extent necessary to achieve the modern awards objective and (to the extent applicable) the minimum wages objective, emphasises the fact it is the minimum safety net and minimum wages objective to which the modern awards are directed;  12

  what is necessary to achieve the modern awards objective in a particular case is a value judgment, taking into account the s 134 considerations to the extent that they are relevant having regard to the context, including the circumstances pertaining to the particular modern award, the terms of any proposed variation and the submissions and evidence; 13

  where an interested party applies for a variation to a modern award as part of the 4 yearly review, the task is not to address a jurisdictional fact about the need for change, but to review the award and evaluate whether the posited terms with a variation meet the objective. 14

[8] In relation to the SES Award and the issues raised in the review of that award, section 153 of the FW Act has specific relevance and application. Section 153 provides:

153 Terms that are discriminatory

Discriminatory terms must not be included

(1)  A modern award must not include terms that discriminate against an employee because of, or for reasons including, the employee's race, colour, sex, sexual orientation, age, physical or mental disability, marital status, family or carer's responsibilities, pregnancy, religion, political opinion, national extraction or social origin.

Certain terms are not discriminatory

(2)  A term of a modern award does not discriminate against an employee:

(a)  if the reason for the discrimination is the inherent requirements of the particular position held by the employee; or

(b)  merely because it discriminates, in relation to employment of the employee as a member of the staff of an institution that is conducted in accordance with the doctrines, tenets, beliefs or teachings of a particular religion or creed:

(i)  in good faith; and

(ii)  to avoid injury to the religious susceptibilities of adherents of that religion or creed.

(3)  A term of a modern award does not discriminate against an employee merely because it provides for minimum wages for:

(a)  all junior employees, or a class of junior employees; or

(b)  all employees with a disability, or a class of employees with a disability; or

(c)  all employees to whom training arrangements apply, or a class of employees to whom training arrangements apply.

The SES Award

[9] Clause 4.1 of the SES Award provides that it covers employers throughout Australia who operate “supported employment services” and their employees working in the classifications listed in Schedule B of the award. The expression “supported employment services” is defined in clause 3.1 to mean “a service as defined in section 7 of the Disability Services Act 1986 (Cth)”. Section 7 of the Disability Services Act 1986 contains the following definition:

"supported employment services" means services to support the paid employment of persons with disabilities, being persons:

(a)  for whom competitive employment at or above the relevant award wage is unlikely; and

(b)  who, because of their disabilities, need substantial ongoing support to obtain or retain paid employment.

[10] Supported employment services were in past times referred to as “sheltered workshops” or “business services” but their contemporary appellation is “Australian Disability Enterprises” (ADEs), and that is how they will be referred to in this decision. ADEs employ non-disabled persons who are covered by the SES Award, but consistent with their purpose the large majority of employees of ADEs are disabled persons.

[11] Schedule B of the SES Award contains seven classifications. Broadly speaking, Grade 1 is an introductory classification, Grades 2, 3 and 4 are non-trades classifications, Grades 5 and 6 are trades classifications and Grade 7 is a supervisory/training classification. The classification descriptors are expressed in broad and generic terms, and the indicative tasks include functions in the areas of engineering, catering, cleaning, leather and canvas goods and sewing, microfilm, clerical support, gardening, laundries, specialist packing, printing/bookbinding, foam and plastic, cleaning, commercial biscuit and pastry making, horticulture and related activities and recycling.

[12] Clause 14 prescribes the minimum wages for the classifications set out in Schedule B. For relevant purposes, there are two aspects to the way in which clause 14 does this. First, clause 14.2 sets out the weekly rate and hourly rate for each classification. The current rates of pay are as follows:

[13] It should be noted that the rates of pay for Grades 1, 2, 3, 4, 5 and 6 are aligned with those for the classification levels C14, C13, C12, C11, C10 and C7 in the Manufacturing and Associated Industries and Occupations Award 2010 respectively.

[14] Clause 14.4 then provides for employees with a disability to be paid a percentage of the rates of pay prescribed by clause 14.2 as assessed under an approved wage assessment tool chosen by an ADE. At the time that the SES Award first took effect on 1 January 2010, clause 14.4 provided as follows:

14.4 Wage assessment—employees with a disability

(a) An employee with a disability will be paid such percentage of the rate of pay of the relevant grade in clause 14.2 as assessed under an approved wage assessment tool chosen by a supported employment service.

(b) For the purposes of this clause, an approved wage assessment tool means and is limited to:

(i) the Supported Wage System;

(ii) the Business Services Wage Assessment Tool;

(iii) the Civic Industries Supported Employees Wage Assessment Tool;

(iv) the Elouera Association Wage Assessment Tool;

(v) the FWS Wage Assessment Tool;*

(vi) the Greenacres Association Competency Based Wages System;

(vii) the Hunter Contracts Wage Assessment Tool;*

(viii) the Phoenix Wage Assessment Tool;*

(ix) the PHT Wage Assessment Tool;

(x) the Skillsmaster Wage Assessment Tool;

(xi) the Yumaro Wage Assessment Tool;

(xii) the Woorinyan Wage Assessment Tool;

(xiii) the RVIB Enterprises Wage Assessment Tool;

(xiv) the Koomarri Competency Based Wages System;

(xv) the Valmar Support Services Wage System;

(xvi) the Sunnyfield Association Wage Assessment Tool;

(xvii) the New Horizons Wage Assessment Tool;

(xviii) the Cumberland Industries Wage Assessment Tool;

(xix) the Endeavour Wage Assessment Tool;*

(xx) the Wangarang Industries Wage Assessment Tool;

(xxi) the Bedford Employee Wage Assessment Tool;

(xxii) the Blue Mountains Employment Services Wage Assessment Tool;*

(xxiii) the Ability Options Wage Assessment Tool;

(xxiv) the Blueline Laundry Inc Wage Assessment Tool;

(xxv) the Caloola Vocational Services Inc Wage Assessment Tool;

(xxvi) the GDP Industries Wage Assessment Tool;

(xxvii) the Kurri Contracting Service Wage Assessment Tool;

(xxviii) the Mai-Wel Group Wage Assessment Tool;

(xxix) the Merriwa Industries Limited Wage Assessment Tool; and

(xxx) the Waverley Helpmates Wage Assessment Tool.

* Wage Assessment Tools restricted to those specific organisations unless an employer was using that tool on or before 27 June 2005.

(c) The Supported Wage System is described in Attachment B to the Australian Industrial Relations Commission Full Bench decision of 3 April 2009 [[2009] AIRCFB 345].

(d) Wage assessment tools clauses 14.4(b)(i) to (xxii) are described in the Final Report dated 12 April 2006 prepared for the Department of Families, Housing, Community Services and Indigenous Affairs, entitled Analysis of Wage Assessment Tools used by Business Services.

(e) Wage assessment tools clauses 14.4(b)(xxiii) to (xxx) are described in the Final Report dated 18 October 2007 prepared for the Department of Families, Housing, Community Services and Indigenous Affairs, entitled Analysis of Wage Assessment Tools used by Business Services.

(f) No decrease—regression of disability

An employee with a disability will not have their rate of pay reduced as a result of a wage assessment made pursuant to clause 14.4(a). This clause does not cover the circumstance where the wage of an employee with a disability may need to be reduced due to the regression of the employee’s disability. However, a wage assessment that determines a lower percentage than an earlier wage assessment of the employee against the same duties is of no effect unless the reduction in percentage is solely due to the regression of the employee’s disability. Before the wage of an employee may be reduced the employer must exhaust all reasonable training options and options to allocate the employee new tasks to avoid the regression. Where regression of wages is provided for in the wage assessment tool against which the employee was assessed, regression may only occur in accordance with the method provided for in that tool.

(g) Review of assessment

For the purpose of clause 14.4(a):

(i) unless otherwise provided under the relevant wage assessment tool, the wage assessment of each employee with a disability will be reviewed within a period not exceeding three years’ service with the supported employment service since the last assessment, and the rate of pay adjusted accordingly; and

(ii) unless otherwise provided under the relevant wage assessment tool, a wage assessment may be reviewed at the initiative of either the employee with a disability or the supported employment service, once every six months and not more than four times every three years, and the rate of pay adjusted accordingly.

(h) Documentation of assessment

Any assessment made under clause 14.4(a) must be documented by the supported employment service and a copy provided to the employee with a disability, and, if requested, to the employee’s authorised representative.

[15] Clause 19 of the SES Award concerns superannuation. Clause 19.2 requires that, subject to clause 19.5, an employer must make such superannuation contributions to a superannuation fund for the benefit of an employee as will avoid the employer being required to pay the superannuation guarantee charge under superannuation legislation with respect to that employee. Clause 19.5 has at all relevant times provided:

19.5 Employees with disabilities

Where an employee with a disability is being paid less than $450 per month in accordance with clause 14.4, contributions for such employees will be either 3% of their ordinary time earnings or $6.00 per week whichever is the greater.

[16] The evidence before us demonstrated, and it was not in dispute that, with rare exceptions, disabled employees covered by the SES Award are paid a reduced minimum wage as a result of an assessment carried out with the use of a wage assessment tool pursuant to clause 14.4. Consequently, a significant proportion of such employees earn less than $450 per month and are therefore paid superannuation in accordance with clause 19.5.

[17] Arising from the review of modern awards required by item 6 of Schedule 5 to the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 which commenced in 2012, the SES Award was varied effective from 27 September 2012 to, among other things, delete clause 14.4(c) and add a new Schedule D to the award. 15 As can be seen above, clause 14.4(c) had referred to an attachment to a decision issued by the AIRC award modernisation Full Bench on 3 April 2009 which explained the operation of the Supported Wage System (SWS).16 As a result of the variation, this was now set out in Schedule D of the award itself. Schedule D in its original form provided as follows:

Schedule D—Supported Wage System

D.1 This schedule defines the conditions which will apply to employees who because of the effects of a disability are eligible for a supported wage under the terms of this award.

D.2 In this schedule:

approved assessor means a person accredited by the management unit established by the Commonwealth under the supported wage system to perform assessments of an individual’s productive capacity within the supported wage system

assessment instrument means the tool provided for under the supported wage system that records the assessment of the productive capacity of the person to be employed under the supported wage system disability support pension means the Commonwealth pension scheme to provide income security for persons with a disability as provided under the Social Security Act 1991, as amended from time to time, or any successor to that scheme

relevant minimum wage means the minimum wage prescribed in this award for the class of work for which an employee is engaged

supported wage system means the Commonwealth Government system to promote employment for people who cannot work at full award wages because of a disability, as documented in the Supported Wage System Handbook. The Handbook is available from the following website: www.jobaccess.gov.au

SWS wage assessment agreement means the document in the form required by the Department of Education, Employment and Workplace Relations that records the employee’s productive capacity and agreed wage rate

D.3 Eligibility criteria

D.3.1 Employees covered by this schedule will be those who are unable to perform the range of duties to the competence level required within the class of work for which the employee is engaged under this award, because of the effects of a disability on their productive capacity and who meet the impairment criteria for receipt of a disability support pension.

D.3.2 This schedule does not apply to any existing employee who has a claim against the employer which is subject to the provisions of workers compensation legislation or any provision of this award relating to the rehabilitation of employees who are injured in the course of their employment.

D.4 Supported wage rates

D.4.1 Employees to whom this schedule applies will be paid the applicable percentage of the relevant minimum wage according to the following schedule:

D.4.2 Provided that the minimum amount payable must be not less than $76 per week.

D.4.3 Where an employee’s assessed capacity is 10%, they must receive a high degree of assistance and support. 


D.5 Assessment of capacity

D.5.1 For the purpose of establishing the percentage of the relevant minimum wage, the productive capacity of the employee will be assessed in accordance with the Supported Wage System by an approved assessor, having consulted the employer and employee and, if the employee so desires, a union which the employee is eligible to join.

D.5.2 All assessments made under this schedule must be documented in an SWS wage assessment agreement, and retained by the employer as a time and wages record in accordance with the Act.

D.6 Lodgement of SWS wage assessment agreement

D.6.1 All SWS wage assessment agreements under the conditions of this schedule, including the appropriate percentage of the relevant minimum wage to be paid to the employee, must be lodged by the employer with Fair Work Australia.

D.6.2 All SWS wage assessment agreements must be agreed and signed by the employee and employer parties to the assessment. Where a union which has an interest in the award is not a party to the assessment, the assessment will be referred by Fair Work Australia to the union by certified mail and the agreement will take effect unless an objection is notified to Fair Work Australia within 10 working days.

D.7 Review of assessment

The assessment of the applicable percentage should be subject to annual or more frequent review on the basis of a reasonable request for such a review. The process of review must be in accordance with the procedures for assessing capacity under the supported wage system.

D.8 Other terms and conditions of employment

Where an assessment has been made, the applicable percentage will apply to the relevant minimum wage only. Employees covered by the provisions of this schedule will be entitled to the same terms and conditions of employment as other workers covered by this award on a pro rata basis.

D.9 Workplace adjustment

An employer wishing to employ a person under the provisions of this schedule must take reasonable steps to make changes in the workplace to enhance the employee’s capacity to do the job. Changes may involve re-design of job duties, working time arrangements and work organisation in consultation with other workers in the area.

D.10 Trial period

D.10.1 In order for an adequate assessment of the employee’s capacity to be made, an employer may employ a person under the provisions of this schedule for a trial period not exceeding 12 weeks, except that in some cases additional work adjustment time (not exceeding four weeks) may be needed.

D.10.2 During that trial period the assessment of capacity will be undertaken and the percentage of the relevant minimum wage for a continuing employment relationship will be determined.

D.10.3 The minimum amount payable to the employee during the trial period must be no less than $76 per week.

D.10.4 Work trials should include induction or training as appropriate to the job being trialled.

D.10.5 Where the employer and employee wish to establish a continuing employment relationship following the completion of the trial period, a further contract of employment will be entered into based on the outcome of assessment under clause D.5.

Initial proceedings and their origin

[18] The catalyst for the proceedings before us was the decision of the Federal Court Full Court in Nojin v Commonwealth of Australia (Nojin), 17 issued on 12 December 2012. We discuss this decision in greater detail below but, in summary, the Full Court determined (by majority) that the respondent ADE had discriminated against the applicants, who were intellectually disabled persons, in breach of s 15 of the Disability Discrimination Act 1992 by imposing on them a requirement or condition that in order to secure a higher wage the applicants undergo a wage assessment using the Business Services Wage Assessment Tool (BSWAT). The BSWAT was at the time an approved wage assessment tool under clause 14.4(b)(ii) of the SES Award.

[19] On 16 December 2013, the Health Services Union (HSU) and the United Workers’ Union (UWU) 18 made a joint application under s 160 of the FW Act for the reference to the BSWAT in clause 14.4(b) of the SES Award to be removed. This application was subsequently amended to seek the removal of all wage assessment tools which contained a competency component. The application was referred to a Full Bench for determination, and the Full Bench then referred the application for conciliation before one of its members, Deputy President Booth. Participants in the conciliation process which followed included the HSU, the UWU, the Australian Council of Trade Unions (ACTU), National Disability Services (NDS), Australian Business Industrial and the NSW Business Chamber (ABI), a number of disability advocacy representatives including the AED Legal Centre (AEDLC), managers from individual ADEs and representatives of parents and carers including Our Voice Australia (Our Voice). The Commonwealth Department of Social Services (DSS) also attended the conciliation conferences as an observer.

[20] During this conciliation process, an interim agreement was reached between all the participating parties that, in light of the Full Court’s decision in Nojin, the BSWAT should be removed from the list of approved wage assessment tools in clause 14.4(b) of the SES Award. A consent order varying the SES Award was made by Deputy President Booth on 5 June 2015 to give effect to this agreed position. 19

[21] On 15 October 2015, Deputy President Booth issued a Statement (October 2015 statement) 20 which gave a progress report as to the continuing conciliation process. It reported that the participating parties had agreed that their shared objectives in connection with the Award were as follows:

“a) A fair, equitable and non-discriminatory wage outcome to contribute to a living income for employees in supported employment;

b) Continued opportunity for employment in supported employment settings to build and maintain the self-esteem and sense of purpose of employees;

c) Sustainable employment opportunities in viable ADEs; and

d) To provide security and confidence to employees, parents and carers for the future.”

[22] While the conciliation process was underway, the 4 yearly review of the SES Award commenced. Deputy President Booth conducted a number of conferences in relation to the review in the period from 22 August 2016 to 29 May 2017. The same parties who were involved in the earlier conciliation process also participated in the award review process. On 5 May 2017 the HSU and the UWU discontinued their s 160 application on the basis that they would pursue their outstanding claims in the award review.

[23] One of the matters considered in the award review conference process conducted by Deputy President Booth was the potential modification of the SWS. With the support of the DSS, field work was conducted in furtherance of this issue. Ultimately it was agreed that variations to the provisions governing the operation of the SWS in ADEs contained in Schedule D to the Award as well as to the Supported Wage System Handbook under the Supported Employment Services Award (2010) (SWS Handbook), a publication of the Australian Government, should be made.

[24] On 29 May 2017 the current Full Bench was constituted to hear and determine outstanding substantive matters in respect of the 4 yearly review of the SES Award. Directions were issued in that connection on 10 July 2017 which, among other things, required any party which proposed any variation to the SES Award to file a draft determination to give effect to their proposal by 31 July 2017. In response to that direction, draft determinations were filed by the AEDLC, ABI, the UWU, NDS, Our Voice and the HSU. The details of the variations sought by each party are described later in this decision.

[25] In a decision issued on 10 October 2017 (October 2017 decision21 we determined to vary Schedule D of the SES Award in the terms agreed by the parties which participated in the conference process conducted by Deputy President Booth. Our decision relevantly stated:

“[5] The SWS is managed by the DSS. The DSS publishes the SWS Handbook and the SWS Assessment Guidelines. The DSS funds and oversees the assessment process in line with the SWS Handbook and the SWS Assessment Guidelines. During the conciliation the DSS assisted the parties’ discussions by supporting fieldwork in relation to a range of possible modifications to the SWS to apply when the SWS is used to assess the wages of people with disability in an ADE pursuant to the Award.

[6] During the period that the conciliation conferences for the application were being conducted, the 4 Yearly Review of Modern Awards (the Award Review) of the Award commenced. On 22 August 2016 Deputy President Booth conducted the first conciliation conference in the Award Review. She conducted conciliation conferences concerning the Award Review between 22 August 2016 and 29 May 2017.

[7] The Award Review was publicised via the Commission website so that any other interested parties could join the conciliation conferences if they so wished. The subject matter of the application was also addressed at these conciliation conferences. No one other than the parties to the application conciliation conferences attended the Award Review conciliation conferences. On 5 May 2017 the HSU and the UWU discontinued the application. They indicated their intention to pursue the balance of their claims in the Award Review. Conciliation conferences continued pursuant to the Award Review. The DSS continued to assist the parties’ discussions by supporting field work to consider modifications to the SWS.

[8] Following the field work and subsequent discussions during conciliation conferences, the parties agreed to a further variation to the Award. The agreed variation amends Schedule D to the Award. Schedule D sets out the parameters for the implementation of the SWS in an ADE. The parties have agreed to a number of modifications to those parameters. The DSS consulted with the parties during the conciliation conferences about complementary amendments to the SWS Handbook and Guidelines.

[9] We are satisfied that this variation to the Award is appropriate and consistent with the modern awards objective in s.134(1). The variation will take effect on 17 October 2017. A determination will issue with this decision reflecting this variation to the Award.”

[26] The main changes to Schedule D were contained in new clauses D.4 and D.5 as follows:

D.4 Supported wage rates

D.4.1 Employees to whom this schedule applies will be paid the applicable percentage of the relevant minimum hourly rate of pay. The applicable percentage will be the higher of:

(a) the assessed productive capacity of the employee determined in accordance with clause D.5 rounded to the nearest whole percentage; and

(b) 12.5%, if the assessed productive capacity of the employee determined in accordance with clause D.5 is less than 12.5%.

D.4.2 For the avoidance of doubt, there is no minimum amount payable to an employee per week.

D.5 Assessment of capacity

D.5.1 For the purpose of establishing the percentage of the relevant minimum wage, the productive capacity of the employee will be assessed in accordance with the Supported Wage System by an approved assessor, having consulted the employer and employee and, if the employee so desires, a union which the employee is eligible to join.

D.5.2 All assessments made under this schedule must be documented in an SWS wage assessment agreement, and retained by the employer as a time and wages record in accordance with the Act.

D.5.3 The approved assessor will assess the productive capacity of the employee having regard to:

(a) where an employer has collected workplace data with respect to an employee:

(i) the workplace data—50% weighting; and

(ii) the data collected by the approved assessor in accordance with the Supported Wage System—50% weighting;

(b) otherwise—the data collected by the approved assessor in accordance with the Supported Wage System.

D.5.4 Where, in undertaking an assessment in accordance with clause D.5.3(a), there is a disparity of greater than 20% between the overall productivity percentage calculated from the workplace data and the overall productivity percentage calculated from the data collected by the approved assessor, the employee, employer and approved assessor may agree to collect additional data. The additional data should be collected as soon as practicable and added to the existing data with respect to the employee for the purpose of undertaking the assessment in clause D.5.3(a).

D.5.5 If, in undertaking an assessment in accordance with clause D.5.3(a), including in circumstances where additional data is collected in accordance with clause D.5.4:

(a) the disparity between the overall productivity percentage calculated from the workplace data and the overall productivity percentage calculated from the data collected by the approved assessor is 20% or less, then the productive capacity of the employee will be determined in accordance with clause D.5.3(a); or

(b) the disparity between the overall productivity percentage calculated from the workplace data and the overall productivity percentage calculated from the data collected by the approved assessor is greater than 20%, then the productive capacity of the employee will be assessed in accordance with clause D.5.3(b).

D.5.6 In addition to an employee’s general right to access clause 9—Dispute resolution, an employee or an employer may:

(a) raise a dispute in accordance with the dispute processes outlined in the Supported Wage System Handbook; and

(b) after exhausting the process provided in clause D.5.6(a), raise a dispute in relation to the assessment of the employee's assessed productive capacity in accordance with clause 9. In those circumstances, the Commission may, in exercising its powers under clause 9.6, make a determination as to the employee's productive capacity, having regard to the reasonableness of the workplace data and the data collected by the approved assessor and fairness between the parties in all of the circumstances.

[27] It may be noted that the minimum amount of 12.5% of the minimum hourly rate of pay provided for in the new clause D.4.1(b) equates, in relation to Grade 2 of the SES Award, to an hourly rate of approximately $2.50. The modified Schedule D also varied:

  clause D.7 to provide for an enhanced process for the review of SWS assessments; and

  clause D.10 to extend the trial period for the conduct of an assessment, with the employee to be paid the at least 12.5% of the relevant minimum hourly rate during the trial period.

The claims

[28] We have earlier referred to the draft determinations embodying the claims for variation of the SES Award that were lodged by parties pursuant to the Commission’s directions. A number of these claims were amended as the proceedings progressed. It is only necessary for present purposes to describe the claims in the form in which they were ultimately advanced by each party.

[29] The AEDLC proceeded at the hearing upon an amended draft determination lodged on 22 December 2017. The fundamental feature of its application was the amendment of clause 14.4 so that the SWS becomes the only wage assessment tool permitted to be used. The actual variations to clause 14 which it sought were as follows: 22

[1] By deleting clause 14.4(a) and in lieu thereof inserting what follows:

An employee with a disability may from time to time be required by an employer to undergo assessment under and in accordance with the Supported Wage System referred to in Schedule D.

[2] By deleting clauses 14.4(b)-(e) and lieu thereof inserting a clause, numbered as clause 14.4(b), as follows:

If an employee with a disability is assessed under clause 14.4(a), the employer may, subject to clause 14.4(c), pay the employee the applicable percentage, as determined by that assessment, of the minimum hourly rate of pay prescribed by clause 14.2 for the grade that applies to the employee's work.

[3] By deleting 14.4(f) and in lieu thereof inserting a clause, numbered as clause 14.4(c), as follows:

If the most recent Supported Wage System assessment undertaken under clause 14.4(a) discloses a reduction in the employee's productivity when compared with the immediately prior assessment for the same work and the reduction in productivity is solely due to a regression in the employee's disability, the employer must not reduce the employee's wage unless:

(i) the employer has first exhausted all reasonable training options and options to allocate the employee work that would avoid the reduction in the employee's rate of pay; and

(ii) any reduction occurs in accordance with any method prescribed by the Supported Wages System in Appendix D1 of Schedule D.

[4] By deleting clause 14.4(g).

[5] By deleting clause 14.4(h) and inserting a clause in the same terms but numbered as clause 14.4(d).

[6] By deleting clause 14.6.

[30] ABI advanced a claim for a new “Work Value Classification Structure” to be added to the SES Award as Schedule I, which would operate as an alternative to ADEs that chose not to utilise an approved wage assessment tool. ABI’s proposal went through a number of iterations, the final one of which was contained in a further amended draft variation determination filed on 24 January 2018. 23 The main feature of this proposal is a five level classification structure under which disabled employees would be paid specified percentages of the minimum rate specified in clause 14.2 for a Grade 2 employee. The percentages are 12.5% for the lowest Training and assessment level classification, 15-30% for Level A, 30-45% for Level B, 45-60% for Level C, and 70-100% for Level D. Each classification is assigned classification descriptors which refer to a combination of the work performed by the employee but also the personal characteristics of the particular disabled employee, so that Level A for example refers to the employee being “directly supervised”, “continually requires a high level of Work Support [and] … Personal Support”, “is incapable of organising their own work”, “does not work to any pre-set pace”, “has some difficulty staying on task or remaining at their work station”, “requires the quality of their work to be constantly checked” and “performs very basic tasks”. The expressions “Personal Support” and “Work Support” are defined, so that the former is the “care and support of an employee with a disability in the workplace provided by a trainer and/or supervisor”, which may include “encouragement; mentoring; counselling; and/or behavioural intervention” and the latter is the “support of an employee with a disability in the workplace provided by a trainer and or supervisor” which may include “the design of work tasks (including the disaggregation of work tasks to sub-tasks) tailored to the employee to allow them to perform a productive task” as well as “coaching and/or training” in base work skills, work task, the use of machinery, communicating with others in the workplace or commuting to and from work. The percentage of the Grade 2 wage to be paid to employees within the proposed Levels A, B, C and D is determined by the employee’s “output” as a percentage of the output of a non-disabled employee person carrying out the employee’s task, with there being four wage points in each Level based upon whether the employee’s output is 25% or under, over 25% but under 50%, over 50% but under 75%, or 75% and over. ABI’s proposal also contains a mechanism for the review of an employee’s classification.

[31] Our Voice sought the inclusion in the SES Award of a new provision entitled “Rights at Work for Supported Employees” which was ultimately advanced in the following terms:

Rights at Work for Supported Employees

(a) When dealing with employment matters affecting supported employees the employer shall take all reasonable steps to provide such employees with the information they require to exercise their employment rights.

(b) Such reasonable steps will include but are not limited to the following.

  Providing information to supported employees of their right to be a member of the union and be represented in the workplace by a union representative.

  Providing information in relation to seeking information and or assistance from the Fair Work Ombudsman.

  Providing information to a supported employee about their right to have their nominee, guardian, carer, parent/family member, advocate or union assist them in making decisions about employment matters.

(c) In addition to those matters listed in sub-clause (b) the employer shall take reasonable steps to provide the opportunity to the supported employee to have their nominee, guardian, carer, and/or parent/family member to be involved and or consulted in employment matters that may be prejudicial to the supported employee’s interests.

(d) Such matters shall include but not be limited to:

  significant workplace change;

  grievances, including disputes under clause 28;

  redundancies;

  disciplinary matter;

  performance appraisals;

  wage assessments; and

  enterprise bargaining.

[32] The UWU’s claim was for the superannuation contribution amount payable to disabled employees who earn less than $450 per month pursuant to clause 19.5 to be increased. It accordingly proposed that clause 19.5 be replaced with the following new provision:

19.5 Where an employee with a disability is being paid less than $450 per month in accordance with clause 14.4, contributions for such employees will be either 9.5% of their ordinary time earnings or $15.00 per week whichever is the greater.

The hearing process and expression of preliminary views

[33] Pursuant to the directions issued on 10 July 2017, interested parties filed evidence and submissions concerning the proposals for variations to the SES Award in the latter half of 2017. The matter was listed for hearing before us on 5-9 February and 12-16 February 2018.

[34] As part of the hearing process and after receiving opening submissions on 5 February 2018, we conducted the following inspections of ADEs:

6 February 2018

  Endeavour Foundation

59-65 Kurrajong Road Mt Druitt NSW

  Disability Services Australia,

247 King St Mascot NSW

7 February 2018

  Greenacres Disability Services

2/4 Ralph Black Drive North Wollongong

  Greenacres “Brewing up a Storm” Cafe

93-99 Burelli St Wollongong

  Flagstaff Group

254 Nolan St Unanderra 

[35] We heard evidence from witnesses who were required to attend for cross-examination on 8-9 February and 12-14 February 2018, and received closing submissions on 15 and 16 February 2018.

[36] Having given consideration to the evidence and submissions, we issued a statement on 16 April 2018 (April 2018 Statement24 in which we expressed provisional views concerning the issues raised by the claims advanced by AEDLC and ABI. The relevant parts of the April 2018 Statement were as follows (footnotes omitted):

[14] During the hearing we conducted inspections of a number of ADEs in Sydney and Wollongong, received witness statements and heard evidence from a large number of witnesses, including expert witnesses, and were assisted by extensive written and oral submissions from the parties. We will in due course, subject to what we state below, issue a full decision stating our findings as to the evidence and our final conclusions as to the matter. However because we do not propose to grant any of the claims relating to wages and wage assessment in the form proposed by the respective claimant organisations but rather consider it likely that it will be necessary to vary the Award in terms not proposed by any party, we consider that the proper course is to state a number of provisional conclusions we have reached and to give the parties an opportunity to consider them, confer and, if necessary, advance further submissions concerning them.

[15] The provisional conclusions we have reached are as follows:

(1) Supported employment covered by the Award has a valuable and socially significant role in providing employment to primarily intellectually disabled persons for whom, at current or foreseeable levels of government support, the achievement and maintenance of open employment would not be viable. ADEs are able to employ disabled persons by adjusting their daily job tasks to suit their abilities, in circumstances where an equivalent open employment job role may not be able to be completed by a single ADE employee. 

(2) The determination of wages for supported employees by the use of the wage assessment tools currently prescribed in clause 14.4 of the Award does not meet the modern awards objective because:

  they produce different wage outcomes for persons performing equivalent tasks at equivalent levels of competency;

  in substance they permit employers to establish their own classification structure and pay rates rather than apply pay rates properly derived from the Award; and

  may in some cases contravene the Disability Discrimination Act 1992 for reasons similar to those found in the Nojin decision in relation to the BSWAT assessment tool.

(3) The SWS does not, by itself and in its current form, represent an appropriate method of determining the wage rates for supported employees in ADEs because it:

  does not take into account the proper range of work value considerations used to assess award wage rates, namely the nature of the work, the level of skill and responsibility involved in doing the work and the conditions under which the work is done (which, in the context of supported employment, would include the complexity of the task(s) performed, the range of tasks performed, and the level of support required in order for the task(s) to be performed);

  may not adequately measure non-productive time at work on the part of supported employees; and

  does not provide a sufficiently objective and relevant means of identifying the performance benchmark by which any SWS assessment is conducted.

We emphasise that we express no conclusion about the operation of the SWS in the context of open employment.

(4) The modified SWS to be introduced into the Award effective from 1 July 2018, by consent and in the context of the current arrangements which allow an employer to choose from a range of wage assessment tools, does not adequately address the second problem identified above, and does not address at all the first and third problems.

(5) The existing classification structure in Schedule B of the Award, in relation to which the wage assessment tools are intended to operate, is also inadequate and unlikely to meet the modern awards objective. This is principally because it has not been structured with the specific circumstances of supported employment in mind, has not been drafted in a way which clearly identifies the work tasks and skills required of a fully competent employee at each grade, and may on one view be read as entitling supported employees in ADEs who perform only disaggregated parts of a single job to the full classification rate.

(6) The classification structure proposed by ABI/NSWBC, although we accept it was advanced in a somewhat embryotic form, is not appropriate for adoption or further development because it requires the formation of excessively subjective judgments on the part of the employer in classifying employees and focusses upon the individual characteristics of the employee to be classified rather than the nature and value of the work to be performed and the degree of support required to be provided by the employer.

(7) We consider that the use of all the existing wage assessment tools should be phased out over a period of time. They should be replaced by a redesigned classification structure for Grades 1-3 of the Award which sets the full award wage rates together with a single prescribed method for the adjustment of the award wage rates for supported employees. This new wage assessment mechanism should meet the objectives of fairness, equality, objectivity, independence and sustainability, and be non-discriminatory.

(8) The new classification structure should, at each grade, generally describe the range of tasks which a fully competent employee would have the capacity to perform to the reasonable output and quality standard required by the employer in a given industry or occupational area of work. At Grade 2, this would involve a simple and repetitive range of tasks performed under a normal industry-standard level of supervision, and Grade 3 would involve a range of somewhat more complex tasks.

(9) The new wage assessment mechanism would be a hybrid model involving two elements:

(a) An assessment of the “size” of the job actually assigned to the supported employee compared to a job which would attract the full Award rate of pay at Grade 1, 2 or 3. This would involve a work value assessment with particular focus on the range of tasks required to be performed compared to the relevant Award classification, the complexity of those tasks and the skills required to perform them, and the degree of support necessary to allow the employee to perform those tasks. This might involve, for example, an actual job assigned to a supported employee being “sized” in increments of 20%, 40%, 60%, 80% and 100% of a job to which an Award classification in Grades 1-3 would apply.

(b) Once the job was properly “sized”, a modified SWS-type assessment would be carried out to determine the output of the supported employee in discharging that job compared to the output of a person without that employee’s disability performing the same job. This assessment would have to take into account any non-productive periods on the part of the supported employee and provide for an objective and consistent method of benchmark-setting.

The result would be, for example, that if the job was “sized” at 60% of a full Award classification job, and if the supported employee could perform that job at an output level of 50% compared to another person who can perform to the employer’s reasonable expectation of output, the wage rate would be 30% of the Award classification minimum rate of pay. A minimum of 12.5% of the full award hourly rate would continue to apply.

(10) The interested industry parties and the Commonwealth will be given an opportunity to participate in a conferral process conducted by a member of this Full Bench in order to design a new classification structure and wage assessment mechanism consistent with the above conclusions. This conferral process will include consideration of:

  the length of the phase-out period for the existing wage assessment tools;

  the establishment of objective criteria for the “sizing” of jobs performed by supported employees;

  how the SWS might be modified, or an analogous mechanism established, for the measurement of the output of a supported employee in a particular job; and

  transitional arrangements concerning existing wage rates and transitional time periods for ADEs with a demonstrated economic incapacity to pay.

(11) We consider it highly desirable that both elements of the new wage assessment mechanism be supported by the provision by the Commonwealth of trained and independent assessors. We therefore consider that the close involvement of the Commonwealth in the design of the detail of the new wage assessment mechanism would be in the public interest.

(12) The new wage assessment mechanism should be trialled early in the phase-out period to determine its wage cost impact and to identify any other difficulties before the Commission approves its inclusion in the Award.

(13) If a broad consensus about the design of the new wage assessment mechanism cannot be reached within a reasonable timeframe, then this will be determined by us.

[16] A report-back hearing concerning the above provisional conclusions will be listed after the parties have had a reasonable opportunity to consider the contents of this Statement. We will state our conclusions concerning the UWU’s claim for increased superannuation contributions and Our Voice Australia’s claim for a “Rights at Work for Supported Employees” clause in our final decision.

[37] As paragraph [15](10) of the April 2018 Statement disclosed, it was our preference that there would be a consensus among the interested parties in favour of participation in a conferral process to design a new classification structure consistent with the principle we identified. However, no such consensus emerged. At a report back hearing conducted on 29 May 2019, the following parties indicated a non-preparedness to engage in a constructive conferral process:

  the AEDLC requested that “Option 2” be taken (that is, final determination of the outstanding matters by the Full Bench);

  the UWU submitted that there was not “any realistic capacity” for the interested parties to reach agreement, and that the most appropriate course would be to deal with the outstanding matters by way of “Option 2”; and

  the HSU submitted that it had “significant concerns” about a number of matters raised in the April 2018 Statement and was not prepared to participate in a conferral process beyond a strictly limited period of time (being four dates in June 2018 which were indicated by us as being available for the envisaged conferral process).

[38] Accordingly, we did not proceed with the envisaged conferral process.

[39] On 5 July 2018 correspondence (dated 4 July 2018) was received from Mr Paul McBride, Group Manager, Disability, Employment and Carers in the DSS. Omitting formal parts, the correspondence stated:

Concerning matter AM2014/286 Supported Employment Services Award 2010

I refer to the 16 April 2018 Statement, published by the Fair Work Commission (the Commission), which states that interested industrial parties and the Commonwealth will be given an opportunity to participate in a conferral process conducted by a member of the Full Bench. I understand that this conferral process will facilitate the design of a new classification structure and wage assessment mechanism, consistent with the conclusions of the Full Bench. Further to the directions hearing of 29 May 2018 and the submissions made by the parties at that time, I am pleased to advise that the Minister for Social Services, the Hon Dan Tehan MP has announced the Australian Government will provide up to $0.95 million to support any agreed trial and analysis activities in the Commission to inform a new wage assessment approach under the Supported Employment Services Award 2010. The Department of Social Services, on behalf of the Commonwealth, will continue to participate in the proceedings, as invited to do so by the parties that are covered by the Award and by the Commission. I note the Commission considers it highly desirable that both elements of the proposed new wage assessment mechanism be supported by the provision of trained and independent assessors by the Commonwealth. Implementation matters, which may have an impact on the expenditure of public funds, would need to be considered by Government at an appropriate time once the features of the proposed wage assessment mechanism are known.”

[40] On 11 September 2018 we issued a further statement (September 2018 Statement25 in which we reviewed the events since the April 2018 Statement, confirmed that given the attitude taken by the AEDLC, the UWU and the HSU it was unlikely that the conferral process envisaged in the April 2018 Statement would achieve any consensus, and accordingly stated that it would be necessary to determine to finality the outstanding matters before us. To that end the September 2018 Statement made directions as follows:

“[6] We direct that written submissions in response to the 16 April 2018 Statement are to be filed in the Commission on or before 19 October 2018. Such submissions may include:

(1) any submissions which any party wishes to make concerning the merit of the provisional views expressed in the Statement; and

(2) any proposal which any party wishes to advance concerning the design and implementation of the new wage assessment mechanism outlined in the Statement, should the Full Bench ultimately determine to proceed with the provisional views expressed therein.

[7] A party may address the second matter in its written submissions without prejudice to any submissions it wishes to make concerning the first matter.”

[41] After having received written submissions in accordance with the above directions, we conducted a further hearing on 5 and 6 November 2018 at which we received further oral submissions. We then reserved our decision.

Last minute intervention by the Department of Social Services

[42] On 9 September 2019, at a time when the publication of our decision in this matter was imminent, we received correspondence (addressed to the presiding member of the Full Bench) from Mr Michael Lye, the Deputy Secretary, Disability and Carers of the DSS. Omitting formal parts, the correspondence stated:

“I refer to the statement of 11 September 2018, published by the Fair Work Commission (the Commission), which states the Full Bench considers it is necessary to proceed to determine to finality the matters before it.

I am writing to advise you of recent developments that may be relevant to the Commission during its deliberations.

A new pricing structure for employment support is scheduled to be announced by the National Disability Insurance Agency (NDIA) in October 2019. Indicative modelling by the Department of Social Services (the Department) has shown the majority of Australian Disability Enterprises (ADE) are likely to be better off financially once this new pricing has been implemented. This may help to alleviate current pressures that prevent some ADEs from adopting a higher-paying wage tool, such as the Supported Wage System.

The Australian Government is committed to playing an ongoing role in supporting ADEs to continue to provide employment opportunities for people with disability, subject to the details of the Commission's decision. To this end, in the 2018-19 Budget, the Government announced the Australian Disability Enterprise (ADEs) Additional Support measure. The Government will provide $67 million over the forward years from 2018-19 to support ADEs to transition to a new wage assessment model following a decision by the Commission on its review of the SES Award.

On the basis that future National Disability Insurance Scheme (NDIS) pricing, alone or in conjunction with Australian Government funding, may enable ADEs to adopt the Supported Wage System tool, the Department is considering consultation with parties to the proceedings.

In this context, I would be grateful for your advice whether such a consultation could occur prior to a determination by the Commission.”

[43] We regarded this correspondence as a potentially significant development because, as is discussed later in this decision, the likely cost to ADEs of implementing the SWS as the sole wage assessment tool is an important consideration in the outcome we have determined. Consequently, the presiding member sent the following correspondence to the DSS in reply on behalf of the Full Bench on 25 September 2019 (formal parts omitted):

“I refer to your correspondence dated 9 September 2019 concerning the above matter, in which you provided information concerning forthcoming funding changes which may affect Australian Disability Enterprises (ADEs), and sought advice as to whether the Department of Social Services should consult with the parties to the proceedings concerning this prior to the Commission issuing its decision. As you are aware, this matter is being heard by a Full Bench of the Commission consisting of myself, Deputy President Booth and Commissioner Cambridge. I have consulted with my Full Bench colleagues about your correspondence, and this letter constitutes our joint response.

The proceedings concerning the minimum wage structure for disabled employees in ADEs in the Supported Employment Services Award 2010 (Award) has been ongoing for some time. The Full Bench has received extensive evidence and submissions from interested parties which has, among other things, addressed the level of wages payable to disabled employees in the context of the current financial and commercial position of ADEs. That position is critically affected by the degree of government funding which ADEs receive both directly and indirectly, and the proceedings before the Full Bench have been conducted within the framework of what was currently known and predicted concerning such government funding.

The Full Bench had, immediately before the receipt of your correspondence, reached a position whereby it intended to issue its decision in the matter within a 2-3 week timeframe. The decision which the Full Bench intended to issue had regard to the existing financial and commercial position of ADEs as earlier described and would involve significant modifications to the minimum wages structures in the Award.

It appears to us that your correspondence of 9 September 2019 is indicative of funding changes that may fundamentally alter the framework in which the proceedings have been conducted to date. We consider that it is likely to be necessary for the decision we make to take into account these changes, and that may render it necessary in turn for interested parties to be given an opportunity to make further submissions in relation to the variations, if any, to be made to the minimum wages structure in the Award in light of these changes.

It is of course a matter for the Department whether, when and to what extent it engages in consultation with interested parties in the ADE sector about the foreshadowed funding changes. However, in terms of the proceedings concerning the Award before the Full Bench, we consider that the appropriate course is for the Department to lodge with the Commission a publicly´┐Żavailable submission concerning the funding changes and their potential consequences for the outcome of the Award proceedings. If this is done in a reasonably timely way, the Full Bench would then consider postponing the publication of its decision and instead inviting interested parties to provide advice as to how they wish to proceed in light of the Department’s submission.”

[44] Upon receipt of this correspondence, the DSS indicated that it would file a further submission in response to our invitation to do so. In anticipation of the receipt of this further submission, we re-listed the matter for a further hearing on 23 October 2019 to allow the parties to be heard as to what procedural course should be taken in light of the DSS’s submissions.

[45] The DSS’s submission was eventually filed on 22 October 2019. After describing by way of background the existing funding model for ADEs and disabled persons using ADEs, the submission identified two changes to the funding. The first was a revised pricing structure for the National Disability Insurance Scheme (NDIS) which introduced an “hours based per participant model” that would:

  reflect the actual hours of support provided to the participant per week, which may include non-face-to-face work time if appropriate;

  vary depending on the expected level of workplace supports a participant needs;

  align NDIS funded employment support prices with NDIS funded community participation support price.

[46] The DSS said that “the hourly rates for supported employment are generally higher under the revised pricing model compared to prior case based funding.”

[47] The second was an announcement made in the 2019-20 Budget that the Commonwealth Government would provide $67 million over five years from 2018-19 to support ADEs transitioning to a new wage assessment model “following a review of the SES Award by the Commission”. The purpose of this funding was described as follows:

“This funding will be used to support ADEs to transition to the wage assessment tool determined by the Commission and is separate to funding provided through the NDIS. The transitional funding provided by the Department is intended to assist ADEs in meeting costs associated with transitioning to a different model of wage assessment. Details of the new support package are currently under development and subject to Government consideration and approval. The Department intends to consult in detail over coming months with the sector and other key stakeholders to inform its development. It is not intended that ongoing funding be made available for wage subsidies.”

[48] Having regard to these funding changes, the DSS submitted:

“48. While the increase in the funding of supports is not provided to subsidise the cost of employee wages, the increase in funding available for employment supports may be relevant to an ADE's capacity to fund the wages of supported employees because:

(a) an increase in funding may lead to an enhanced service offering and greater level of support for a supported employee, thereby resulting in higher productivity/output;

(b) the increase in funding for supports may mean that ADEs may have the ability to direct more of their revenue (which, anecdotally, is currently directed by some ADEs at meeting some of the costs of providing supports and maintaining the work environment which are not met through existing funding) to employee wages.

49. For ADEs which currently use wage assessment tools other than the MSWS, the increase in funding may make it viable to transition to use the MSWS for all their supported employees.

50. In those circumstances, it may be appropriate for the Commission to seek further submissions from ADEs (and others) in relation to potential changes to wage assessment arrangements and, in particular, the use of the MSWS as the single wage assessment tool.”

[49] The DSS also made, for the very first time in the proceedings, a submission concerning the coverage of the SES Award:

“51. The SES Award is currently expressed to cover employers throughout Australia who operate supported employment services and their employees working in the classifications specified in the Award.

52. The coverage of the Award is critical to ensuring that ADEs providing supported employment are covered by the Award and that other employers in open employment are not.

53. ‘Supported employment services’ is defined in the Award as meaning a ‘service’ as defined in section 7 of the Disability Services Act 1986 (Cth).

54. The Disability Services Act provides a legislative and funding framework for a range of disability services including employment services. Section 7 of the DS Act defines supported employment services as:

services to support the paid employment of persons with disabilities, being persons:

(a) for whom competitive employment at or above the relevant award wage is unlikely; and

(b) who, because of their disabilities, need substantial ongoing support to obtain or retain paid employment.

55. Following the transition to the NDIS, there is a question as to whether an ADE will continue to be a ‘supported employment service’ for the purpose of the DS Act where their funding is derived from the NDIS and not pursuant to the DS Act.

56. The Commission and the parties may wish to consider whether the definition of ‘supported employment services’ under the SES Award is, and will remain into the future, appropriate given that:

  the funding model for supported employment has shifted away from funding under the DS Act; and

  the revised pricing model for employment support under the NDIS is not limited to a participant’s employer as not all employers of NDIS participants are NDIS providers.”

[50] At the hearing on 23 October 2019, the DSS submitted that it wished to engage with the ADE sector about the implementation of the new NDIS pricing structure and the impact this would have on ADEs. It described the outcome of this process as an “important piece of information” for the Commission to have in its decision-making process, and consequently it should happen before the Commission issued its decision. The DSS said that the new pricing mechanism would come into effect on 1 January 2020, and that the engagement process it foreshadowed would take approximately 12 weeks. The AEDLC supported this proposed approach (notwithstanding that it had previously sent corresponding to the Commission urging the early publication of our decision in this matter), as did the HSU. It was strongly opposed by ABI, NDS, Greenacres Disability Services (Greenacres), The Endeavour Foundation (Endeavour) and Our Voice, which urged us to proceed to issue our decision as soon as practicable. In expressing their opposition to any further delay in the proceedings, NDS and Greenacres both contended that the new NDIS pricing structure would reduce rather than increase their funding.

[51] Immediately after the completion of the hearing on 23 October 2019, we issued directions inviting interested parties to file written submissions in response to the DSS’s submission of 22 October 2019, with the DSS then having the opportunity to file a reply submission if it wished to. Submissions were filed by ABI, NDS, Greenacres, The Flagstaff Group Ltd (Flagstaff), Practical Workplace Relations and the AEDLC. All parties except the AEDLC opposed any further deferral of the publication of the Commission’s decision, and NDS, Greenacres and Flagstaff in particular filed detailed submissions explaining that the new NDIS pricing structure would cause significant reductions rather than increases to their funding revenue. The AEDLC submitted that, notwithstanding its concern about the time the proceedings had taken, the late timing of the DSS’s intervention and its reservation as to various aspects of the DSS’s submissions, it supported the DSS’s proposal that there should be a 12 week consultation period, to be followed by a report back before the Commission 15 January 2020.

[52] The DSS filed a submission in reply on 13 November 2019 which affirmed the need for further consultation with ADEs concerning the new NDIS funding model, but stated:

“The Department has not suggested, and does not suggest, that the Commission's decision with respect to the terms of the SES Award should be delayed pending this consultation process. While the further information about the pricing framework expected to be published by the NDIA and the outcomes of the Department's consultation with ADEs could be relevant to the Commission's considerations on the terms of the SES Award, the question of whether it is appropriate to defer any decision pending these processes is ultimately a matter for the Commission.”

[53] The above submission is difficult to reconcile with the submission made by the DSS at the hearing on 23 October 2019. Notwithstanding this, the current position is that the DSS does not seek any deferral of the publication of our decision. It is also clear that the Department’s proposition that the new NDIS funding model would enhance the revenues of ADEs and thereby potentially allow the introduction of the SWS as the sole wage assessment tool is strongly contested by ADEs. It might be noted at this point that it appears to be implicit in the DSS’s position that current funding levels might not be sufficient to sustain the industry-wide implementation of the SWS.

[54] That being the position, the DSS’s last-minute intervention has not caused us to delay further issuing our decision.

The parties’ positions

AED Legal Centre

[55] The AEDLC submitted that its proposed variation to clause 14 of the SES Award should be made because:

  clauses 14.4(a) and (b) do not satisfy the modern awards objective or the minimum wage objective, and are contrary to s 153(1) of the FW Act because they are discriminatory;

  clause 14.4(a) confers an unfettered right on the employer to choose from 29 methods of valuing the work of a disabled employee, with the result that valuations are likely to differ from one employee to another for the same class of work, regardless of the effects of their disabilities;

  as an example of this, a comparison of the Greenacres tool and the Skillsmaster tool showed that they resulted in different wages outcomes for persons performing similar work;

  it would be permissible under clause 14.4 for an employer to select a different tool for different employees within the same enterprise, resulting in inconsistent wage outcomes within a single workplace;

  clauses 14.4(a) and (b) result in multiple work valuations for disabled employees, while for non-disabled employees there is one constant standard;

  clause 14.4(a) singles out employees with a disability for an inferior wage for performance of the same class of work as other employees to whom clause 14.2 applies.

  unlike non-disabled workers, employees with a disability cannot ascertain what rate of pay they are entitled to as the SES Award only specifies a percentage of the relevant grade;

  some tools such as the Greenacres tool contain their own sub-classification system that re-classifies the SES Award classifications and arbitrarily allocates a percentage of the SES Award rate to each sub-classification;

  clauses 14.4(a) and (b) do not establish a guaranteed safety net of minimum wages as they offer 29 methods of determining a wage by means of 29 self-contained processes; and

  the fact that 29 ways of valuing the same work exists results in unnecessary complexity and technicality which is inconsistent with s 134(1)(g) of the FW Act.

[56] The AEDLC submitted that the SWS is an appropriate wage-setting methodology because it is adapted for the determination of minimum wages for employees with a disability covered by the SES Award, achieves the objects of the FW Act, is a simple, transparent and non-discriminatory method for setting a rate of pay for disabled workers, is independently conducted by accredited workplace assessors, and is capable of being disputed under the SES Award. The AEDLC proposal would ensure that the SES Award contains terms that set fair and relevant minimum wages for disabled employees, having specific regard to the matters stated in ss 134(1)(a),(c),(d) and (g), and was also consistent with the minimum wages objective, in that it would establish the means by which fair minimum wages are set having regard to ss 284(1)(b),(c) and (e).

[57] It was also pointed out by the AEDLC that the following wage assessment tools in clause 14.4(b) of the SES Award are no longer in use and are redundant:

  Hunter Contracts Wage Assessment Tool;

  Phoenix Wage Assessment Tool;

  PHT Wage Assessment Tool;

  RVIB Wage Assessment Tool;

  Cumberland Industries Wage Assessment Tool;

  Wangarang Industries Wage Assessment Tool; and

  Ability Options Wage Assessment Tool.

[58] In relation to the existing wage assessment tools generally, the AEDLC submitted that there appeared to have been no re-consideration as to whether they constituted an appropriate wage-setting mechanism in the award modernisation process which led to the making of the SES Award.

[59] In response to provisional views expressed in the April 2018 Statement, the AEDLC submitted that:

  the factual premise in paragraph 15(1) that ADE employers are the only employers of disabled workers who adjust daily job tasks to suit the abilities of these workers was incorrect, since this was also done in open employment;

  it supported the conclusion in paragraph 15(2) that the determination of wages by the multiplicity of wage assessment tools in clause 14.4 fails to meet the modern awards objective, and it also supported the conclusion in paragraph 15(7) that there should be single method for the determination of wages;

  it did not support the re-classification of grades and the proposed hybrid model of the tool, which was based on acceptance of a false simple/complex dichotomy with respect to the range of work performed by ADE employees;

  the FW Act does not require that minimum rates of pay should be fixed by reference to a notionally fully competent employee who performs a notional single job composed of unspecified tasks;

  in awards such as the Fast Food Industry Award 2010, the Gardening and Landscaping Services Award 2010, the Nursery Award 2010 and the Dry Cleaning and Laundry Award 2010, the employer has discretion to determine or direct employees to perform other duties within the limits of their competence, skill and training, yet their rate of pay is fixed by their classification level and not the aggregation or disaggregation of the tasks the employee is directed/required to perform;

  provided that the work performed by an individual is work within a category of work of a particular nature, no change to the valuation of that work is implied from differences in the way in which work of that kind is performed from one employee to another or as between employers;

  no part of the work value concept calls for an assessment of the job size of an individual employee’s assigned work within a single classification;

  job size is only relevant in considering whether a new classification is justified within the classification structure or whether a worker can progress from one classification to another;

  job size is a unique way of viewing competency in the award system, as competency has generally been conceived in terms of skill level, and this concept would have discriminatory effects contrary to s 153(1);

  the proposed wage assessment tool does not promote the lifting of the minimum wage floor for ADE employees, but would rather diminish it;

  the SWS already discounts the full award wage and the proposed wage tool would entitle ADE employers to further discount wages by reference to competency and output criteria;

  adverse findings concerning the SWS would undermine the SWS more broadly including in relation to its use in open employment;

  there was no consensus in favour of the proposed wage assessment tool, and no conferral process had taken place concerning replacement of the SWS;

  there was no indication that the Commonwealth had shifted its support away from the SWS to the proposed wage tool;

  the proposed wage assessment tool threatens minimum wage uncertainty for supported employees for an extended period, as the Full Bench has no way of knowing how major elements of the approach (i.e. assessment of job size and individuals) will be delivered, by whom, how they will be paid for, how long it will take to determine or whether they can work appropriately and fairly in the multiplicity of work environments of employers;

  the job size element of the tool is conceived of a set of pre-determined, fixed and apparently arbitrary proportions of the full award wage, expressed as a range, and would serve as a proxy for the value of an individual’s work with the effect of reducing the quantum of minimum wages that would otherwise be payable for labour output;

  an employee would need to demonstrate greater work capacity in order to qualify for a higher wage based on the job size element of the proposed tool;

  the proposed tool may be indirectly discriminatory in a similar manner to what was found in Nojin with the BSWAT, in that a disabled employee with work impairments will be unable to comply with a condition that implicitly views what he cannot do as a basis for discounting his or her wages from the full minimum wage;

  this indirect discrimination arises from the fact that the job size element of the tool forges a direct link between the disability and the quantum of the minimum wage; and

  the proposed wage tool is not reasonable in that it views the adjustments that ADE employers make (and are obliged to make by law) for individual employees through a value lens and impose a wage penalty for them.

Health Services Union

[60] The HSU supported the variations proposed and submissions of the AEDLC and opposed ABI’s proposed new work value classification structure. Its position was that the SWS should be the only wage assessment tool permitted to be used under the SES Award. In response to the April 2018 Statement, the HSU submitted that the provisional view concerning the SWS was not supported by the evidence and might have implications for the use of the SWS outside the context of ADE employment. In relation to the proposal contained in the April 2018 Statement for a redesigned classification structure and a new hybrid model of wage assessment, the HSU submitted that it was problematic in that it involved a double discounting of wages for supported employees which would lead to very low and exploitative wages and therefore could not meet the objectives of a fair and non-discriminatory wage assessment.

People with Disability Australia

[61] People with Disability Australia (PWDA) is a non-government organisation, the membership of which is comprised of people with disability and other organisations primarily constituted by people with disability. PWDA supported the position of the AEDLC that all wage assessment tools other than the SWS should be removed from the SES Award. It submitted that the SWS was an appropriate wage assessment tool for ADEs as it was a simple, transparent and non-discriminatory method of setting a rate of pay for workers with disability and was consistent with wage fixation in modern awards. PWDA did not support a competency-based wage assessment process. PWDA also agreed with the HSU and the UWU submissions and opposed all other submissions.

Australian Council of Trade Unions

[62] The Australian Council of Trade Unions (ACTU) supported the position of the AEDLC, the UWU and the HSU. It submitted that the use of competency-based wage assessment tools, which involved assessments that scored employees on general skills and competencies not related to their work leading to a lower wages assessment than one based only on a productivity/output assessment, were discriminatory in the sense determined in Nojin. For that reason, all wage assessment tools other than the SWS should be removed from clause 14.4(b) of the SES Award, as they required competency-based assessments that may unlawfully discriminate against employees with a disability. The SWS is the only tool that is entirely task-based, independently developed and externally assessed.

[63] In response to the April 2018 Statement, the ACTU submitted that the Commission should retain the SWS as the only appropriate wage assessment tool in the SES Award, and that the SWS was more capable of meeting the Commission’s stated objectives than the Commission’s proposed hybrid tool. It contended that the proposed tool would not meet the Commission’s stated objective for a wage assessment tool to be objective and fair, and that the idea of “sizing” a job would result in inconsistent and discriminatory behaviour towards workers with an intellectual disability, as well as leading to lower wages through double discounting. If there was to be any reduction and variance in pay, it should be less than the existing differential between pay rates for classifications in the SES Award, which would be a maximum reduction of less than 3.8%.

[64] The ACTU contended that under the SWS, a worker’s wages are reduced in accordance with their productivity so that the employer receives the same output per dollar from any worker whose output is affected by their disability. The ACTU did not agree that the same could be said of the job “sizing” concept, according to which the rate of pay and number of tasks are irrelevant to output. It also contended that the criticisms of the SWS were unfounded and based on incorrect provisional findings of fact. Trials of the SWS suggested that the transitioning of disabled employees to SWS would result in modest wage rises and the fact that many ADEs are currently using the SWS and are able to function effectively suggested that arguments that the SWS is financially unsustainable should be treated sceptically in the absence of any financial evidence. The ACTU said that the SWS embodied an objective approach based on an assessment of a worker’s output without consideration of any general competency factors. By contrast, the ACTU contended, the Commission’s proposed tool would appear to introduce an unnecessary competency component and would result in workers’ wages being further discounted below their productivity. Rather than implementing job “sizing”, the Commission should outline the three lowest existing award classifications in greater detail to ensure that an assessor could not take a subjective interpretative approach.

[65] The ACTU submitted that, were the Commission to make any significant changes, natural justice would demand that a concrete proposal was put to the parties and the parties be given the opportunity to adduce evidence and make submissions in respect of it before any determination is made, and the Commission ought instead consider whether a broader inquiry into the role of the SWS in the award system was justified. In the absence of such an inquiry, a finding that the SWS does not take proper account of work value considerations to assess award wage rates could not be made. The SWS was the only tool that preserved the classification and work value relativities in the SES Award and applies a pro rata rate of pay to an employee based on the employee's productivity/output.

United Workers’ Union

[66] In support of its claim for higher superannuation contributions for employees earning less than $450 per month, the UWU referred to the following data concerning the sector:

  ADEs provide supported employment opportunities for a workforce of around 20,000 employees;

  the average hourly rate for workers with disabilities in supported employment was $3.65 in 2012 and the average hours worked per week were 24; and

  2016-2017 financial year data from the DSS demonstrated that the average hourly rate for supported employees was $5.60 with the DSS funding the support costs of 13,832 workers and, in locations where the NDIS was operating, a further 5,539 supported employment workers were funded by the NDIS.

[67] The UWU submitted that the current superannuation entitlement in clause 19.5 has not been indexed or varied since at least 1993 resulting in the obsolescence of the benefit. Rising costs, fees and default insurance premiums had absorbed superannuation contributions, with the result that employees to whom clause 19.5 applied would not accumulate any appreciable retirement benefit. The NDIS will not apply to people aged 65 and over, and its interaction with workers with a disability covered by clause 19.5 is unclear. Accordingly it was appropriate, the UWU submitted, for relevant employees to be provided with greater security in retirement by increasing the percentage under clause 19.5 to 9.5 per cent, as well as to index this figure to ensure there is an increase in retirement savings for supported employees and to maintain parity with the current mandated percentage.

[68] The UWU also said that it had been working with AustralianSuper concerning the development of a new insurance product with a no-insurance option that would be able to be used under clause 19.5 and would significantly increase the superannuation balance of persons covered by the clause if it were used as the default superannuation fund. The UWU foreshadowed that its draft determination may need to be amended in order for the AustralianSuper product to be named in clause 19.5.

[69] Lastly, the UWU submitted that transitional arrangements could be made in relation to the implementation of the proposed variation, but that considerations regarding employers’ capacity to pay should be assessed in the context that this particular labour cost has remained unchanged for 20 years, while the general obligation of employers to make a much larger pro-rata contribution to employees earning above $450.00 per month has increased significantly since 1993.

[70] In relation to the other issues in the proceedings, the UWU supported the position of the HSU and the AEDLC.

Australian Business Industrial and NSW Business Chamber

[71] ABI submitted that all the existing wage assessment tools listed in clause 14.4(b) of the SES Award, including the SWS, were predicated on supported employees receiving less than the award rate. In that context, there were significant problems associated with a wage assessment system such as the SWS that is determined solely by reference to productivity and output rather than one which takes into account the competency and skills of supported employees. ABI contended that its proposed work value classification structure would address the disconnect between work and wages under the SWS by properly taking into account the nature of the work, the level of skill or responsibility involved and the conditions under which the work is done. Its work value classification structure would, it submitted, help ensure that ADEs, which play a critical role in the lives of supported employees, their families and carers, and the broader community, remain sustainable and can continue to employ significant numbers of disabled persons. ADEs were specifically set up to engineer roles that supported employees can perform based on their capacity, thereby providing such employees the means to secure and maintain employment which is not realistic in open employment.

[72] ABI rejected the proposition, advanced by the AEDLC and the HSU, that its proposed work value classification structure offended the principles espoused in Nojin and contravened s 153(1) of the FW Act on the basis that it involved an assessment of the skills and competencies relevant to the performance of work. ABI said that these were fundamental concepts applied to the vast majority of the workforce and were not connected with the specific criticisms of the BSWAT in Nojin. To seek to ignore the presence or acquisition of skills and competencies in the process of wage setting only served to devalue supported employees and their work.

[73] The SWS, ABI submitted, did not properly take individual capacity into account, and was therefore manifestly unsuitable as a compulsory mechanism for wage assessment. The consent modifications to the SWS had not addressed concerns about the viability of ADEs if it became the only wage assessment tool.

[74] In response to the April 2018 Statement, ABI supported the provisional conclusion concerning the need for a new wage assessment mechanism in the SES Award. It submitted that incorporating job “sizing” into the classification structure would ensure that work value considerations were taken into account when determining the pro-rata wage for an employee with disability. It would also properly incorporate wage assessment into the SES Award itself rather than simply incorporate by reference external documents which may not be in the public domain.

[75] ABI developed a proposed design concept for the job “sizing” component of the classification structure which it contended was consistent with the principles stated in the April 2018 Statement. It indicated its preparedness to engage in a further conferral process to develop its concept further.

Greenacres Disability Services

[76] Greenacres operates ADEs in Wollongong. It developed and uses the Greenacres Association Competency Based Wages System (Greenacres tool) to determine wage rates for its supported employees. It was opposed to the SWS becoming the sole wage assessment tool as proposed by the AEDLC, and submitted that the SWS would substantially increase wage outcomes for persons who have limited skills and reduces wage outcomes for higher-skilled supported employees carrying out more complex work. The SWS, it submitted, assessed wages by reference to productive output without taking skills into account. If it was the only wage assessment tool available, it would lead to significant job losses, if not closure of ADEs, resulting in adverse economic and social effects for employees with disability. Greenacres contended that the SWS was originally developed for open employment and was not appropriate for supported employment.

[77] Greenacres submitted that the skills and capability of supported employees should be a major construct of any wage determination method for supported employees, and it supported the work value classification structure proposed by ABI. It also supported the “Rights at Work for Supported Employees” clause proposed by Our Voice.

[78] In response to the April 2018 Statement, Greenacres expressed general support for the provisional conclusions expressed in the statement. In particular, Greenacres agreed that it was open to the Commission to find that the SWS is not an appropriate wage assessment mechanism on the basis of meaningful evidence, submissions and inspections. It supported the establishment of one national system of wage assessment with Commonwealth resourcing and implementation, and considered that ABI’s proposed classification structure was the simplest and most appropriate approach. Greenacres also supported a “job size” approach followed by a productive output assessment.

[79] Greenacres submitted that in respect of job “sizing”, the Full Bench should set clear parameters in the decision and subsequently facilitate conferences to finalise any adjustments to the wage assessment proposal, and that there should be a staged process of implementation over 24-36 months. It proposed a consistent approach on job sizing through a new assessment system to create simplified job statements for different types of work, with no more than 100 job statements across Grades 2 and 3 of the SES Award, with the flexibility for independent assessors and ADEs to create or amend the job statements. Such a job statement should have no more than 20 tasks, with each task given a weighting of 5% in the job size assessment process, with the job sizing result to be staged in 10% increments. Greenacres also proposed that the productivity output assessment be simplified to an average of three selected tasks, rather than the current method of using the three tasks that the supported employee spends most of their time on. Greenacres submitted that an SWS assessor should choose two tasks from the job statement. Greenacres supplied a detailed proposal for a new wage assessment system which it contended was consistent with the provisional conclusion stated in the April 2018 Statement.

National Disability Services

[80] NDS is a peak industry body for non-government disability services and has a membership of 1100 such organisations which includes ADEs. Its position is that wage assessment tools that only measure an employee’s disability relative to production output (such as the SWS) do not take into account the complexities of supported employment settings or the commercial and economic considerations associated with running a disability enterprise, and may result in unfair outcomes when an employee’s productive output rate might be reduced due to the performance of a more complex task. It supported ABI’s proposed work value classification structure, which it submitted would be a suitable mechanism as it would provide for the assessment of clearly observable, measurable and relevant elements of a supported employee’s work-related skills. The NDS submitted that the possession of skills remains the most important factor in determining an employee’s suitability for a job and underpins the Australian Core Skills Framework which, it noted, included a separate classification mechanism for employees who suffer intrinsic or core skills deficit due to intellectual disabilities.

[81] In relation to the AEDLC’s argument that non-SWS wage assessment tools in clause 14.4 of the SES Award are not protected by s 153(3)(b) of the FW Act, and were therefore discriminatory and needed to be removed, NDS contended that this was incorrect because:

  the words of s 153(3) do not require that all employees with a disability be paid the same minimum wage;

  s 153(3)(b) contemplates the payment of a minimum rate of pay for a “class of employees with a disability”, which is compatible with a wage assessment methodology which classifies employees into classes, having regard to a number of factors; and

  AEDLC’s reliance on the word “merely” in s 153 is ill-conceived as it is simply intended to mean that a term in a modern award which contains a provision to this effect will not be a discriminatory term merely by virtue of the inclusion of that particular provision.

[82] NDS further submitted that Nojin is not authority for the proposition that any and all wage assessment tools that have regard to competence and/or skills offend the Disability Discrimination Act. Rather, Nojin only stood for the proposition that the incorrect application of a flawed methodology by the disability enterprises for the two employees in question, coupled with a lack of a defence available to or relied upon by these organisations resulted in a finding that these individuals had their pro rata wages determined on an incorrect basis.

[83] NDS opposed the UWU’s claim for increased superannuation benefits.

[84] In response to the April 2018 Statement, NDS agreed that there should be a single wage assessment methodology for supported employment, conditional to the new assessment mechanism being fully tested as part of a trial program and being subject to a phase-in process (which it submitted should take 3 years). It also supported the concept of “job-sizing” which recognised job related skills, the complexity of work performed and the degree of supervision necessary to perform these tasks. NDS proposed that the output assessment referred to in the April 2018 Statement should take into account the time during which an employee engages directly with work activities compared to non-productive time, internal employer data, benchmarking of output and the resolution of inconsistencies identified in the SWS demonstration project. NDS proposed a design concept for the new wage assessment mechanism as well as definitions arising from this design.

[85] NDS also agreed with the involvement of the Commonwealth in the process, and submitted that the Commonwealth should advise the Commission on the time it will take for the wage assessment mechanism to be implemented across the supported employment sector and should look into the impact of any wage increases arising from the new methodology. It further contended that the Commonwealth should address issues of ADEs facing an economic incapacity to pay during and after the change, by developing policy responses, and should look into the ongoing provision of supported employment under the NDIS which is enabled through pricing and funding.

[86] NDS proposed that the Full Bench confirm its provisional views and also direct the parties to engage in a further and final series of conferences and/or submissions, which would provide the parties with an opportunity to confer on the details of the job sizing system, the output assessment and the proposals for its implementation.

Flagstaff Group Ltd

[87] Flagstaff operates a number of ADEs. They are operated as stand-alone business units, focusing on providing employment opportunities and skill development for people with disabilities. Flagstaff filed a submission in response to the April 2018 Statement. It expressed general support for the provisional conclusions, but submitted that the proposal for a modified SWS-type assessment to determine the output of the supported employee in discharging that job compared to the output of a person without that employee’s disability performing the same job would likely be problematic in some circumstances, such as where a specific task is created for the purpose of meeting that person’s ability. In that circumstance, basing productivity measurement on a person without disability may result in immediate disadvantage to the person being assessed. Flagstaff proposed that productivity be measured using an alternative formula rather than the traditional formulas of “number of items compared to…” or “as fast as compared to...”.

[88] With respect to the classification structure contained in the SES Award, Flagstaff submitted that descriptors for Grades 1, 2 and 3 are deficient insofar as they do not adequately identify the skills or level of supervision required in the role. Accordingly, the current wording should be significantly re-drafted, and a six stage sub-classification structure be embedded within those grades that identifies the job sizing formula. Each sub-classification would attract a corresponding percentage of the relevant grade’s full award rate to identify a base hourly rate (a=12.5%, b=20%, c=25% and so on). Flagstaff submitted that this approach would negate the need for the development of multiple individual job descriptions and would provide a consistent method for job sizing, a fair base rate of pay and a practical system by which a person with a disability could be employed on full award wages where they met the expectations of their Grade in their entirety.

Activ Foundation Inc

[89] Activ Foundation Inc (Activ) is the largest disability organisation in Western Australia and provides supported employment to over 1,000 persons at nine ADE sites. In response to the April 2018 Statement, Activ expressed support for a new wage assessment tool that would be a hybrid model. Activ currently uses the Greenacres Tool which it considers best represents the needs and skills of people with disability. Activ submitted that any new wage assessment tool should have a period of implementation of at least 24 months to understand, assess and plan for the implementation of the tool, and that the DSS should make available training resources and workshops prior to the 24-month implementation period. This was necessary in circumstances where the sector was experiencing financial difficulties associated with the introduction of the NDIS.

[90] Activ supported the hybrid approach and submitted that any future wage scheme should take into account:

  the range of tasks performed by the supported employee, relative to the full range of tasks expected of an employee with no disability and the degree of support necessary to allow the employee to perform those tasks;

  the productivity of the employee in the job, with regard to periods of non-productivity; and

  mainstream practices in assessing competency levels.

[91] Activ submitted that the following features are important for a new wage assessment tool:

  mandatory minimum hourly pro-rata wage rate;

  robust, reliable and valid productivity assessment;

  assessment applicable to any industry or job type that maps competencies to training needs and is transparent and easily understood by employees;

  an appeal mechanism; and

  a maximum review period between assessments.

Bedford Phoenix Incorporated

[92] Bedford Phoenix Incorporated consented to the removal of the Bedford Tool from the list of approved wage assessment tools in clause 14.4(b) of the SES Award.

Blueline Laundry

[93] Blueline Laundry (Blueline) is an ADE operating a commercial laundry in Tasmania with 81 supported employees and approximately 160 other employees. It stated that because supported employees’ income is supplemented by receiving a means-tested disability support pension from Centrelink, as well as other support, some employees only wanted to work restricted hours because increased wages would result in a minimal increase in income. Blueline opposed the SWS being the only wage assessment tool available to employers under the SES Award.

[94] Blueline submitted that its current wage assessment tool, the Blueline Laundry Inc Wage Assessment Tool, is consistent with the modern awards objective and allows the assessment of a supported employee’s productivity levels as a percentage of that achieved by an employee in a commercial laundry applying themselves to a variety of laundry tasks and at a standard performance rate which qualified workers would naturally achieve over the working day. It submitted that a determination to exclusively use the SWS would be detrimental to Blueline’s operations and its capacity to maintain the level of supported employees in employment, and it provided a report from Synergy Group Australia Pty Ltd estimating that the use of SWS would result in increased wages of $390,956. Blueline submitted it would have to seriously consider reducing its employment of supported employees in that circumstance.

Civic Disability Services

[95] Civic Disability Services (Civic) provides a range of services to disabled persons, including supported employment. Civic opposed the variation proposed by the AEDLC and submitted that the Commission could not be satisfied that the current SES Award is inconsistent with the modern awards objective or the minimum wages objective. In response to the April 2018 Statement, Civic submitted that it supported the provisional conclusions that the SWS does not represent an appropriate method for determining the wage rates for supported employees in ADEs, and that a new wage assessment tool should be developed. It further supported a hybrid model involving both a job “sizing” assessment (or work value assessment) and an output determination comparing the output of a person without the employee’s disability performing the same job, taking into account non-productive periods and providing for objective benchmarking. Civic submitted that such a tool would meet the relevant objectives of fairness, objectivity, independence and sustainability. In relation to the implementation of the new wage assessment tool, Civic submitted that the Full Bench should make a decision which confirms its provisional conclusions, sets out a proposal for a new wage assessment tool, and then provides an opportunity for parties to comment and confer on it. Civic also submitted that the Commonwealth should oversee and support any potential trial period.

Dare Disability Support

[96] Dare Disability Support provides services to disabled persons and operates an ADE in the Blue Mountains in New South Wales. It opposed any attempt to remove its current wage assessment tool, the Blue Mountains Employment Services Wage Assessment Tool (BMESWAT), from clause 14.4(b) of the SES Award. It submitted that this tool was focused on the individual and sought to identify skills, develop the individual and enable progression and improvement in both skills and remuneration. It submitted that the BMESWAT was skills–based, in keeping with mainstream awards, and is not based on a point assessment using a stopwatch as required by the SWS.

Disability Services Australia

[97] Disability Services Australia (DSA) operates ADEs in New South Wales. It supported the provisional views expressed in the April 2018 Statement, in particular the conclusions concerning job “sizing” and the modification of jobs undertaken by supported employees as compared to the jobs undertaken in mainstream employment. DSA provided a proposed outline of a potential job sizing method, together with a subsequent method of output measurement, which it contended was consistent with the principles outlined in the April 2018 Statement. The proposed method focuses on the work being performed, rather than the personal attributes of the employee. It utilises industry job descriptors so that a direct comparison can be drawn between the performance of the supported employee and a “full level” employee, enabling the supported employee to work towards acquiring the skills required for mainstream employment or obtaining a higher wage level.

[98] DSA submitted that there are three aspects which characterise the difference between the performance of a supported employee and a “full level” employee. The first is the proportion or percentage of the range/scope of tasks performed by the supported employee and the “full level” employee. The second is the proportion or percentage of the specific tasks performed within the range of tasks performed in their respective roles. This includes consideration of the complexity of the tasks performed within that range. The third aspect is the output or volume of work produced by the two types of employees.

Elouera Association

[99] The Elouera Association, which provides supported employment in regional New South Wales, opposed the removal of the Elouera Association Wage Assessment Tool from the SES Award. It submitted that this tool had been accepted by the AIRC as appropriate, and it used skills and competency as well as productivity to assess wage rates. It opposed being required to use the SWS, which it said operated as a barrier to skills growth because it produced higher wages outcomes for menial and simple repetitive tasks than for more skilled and complex duties which might be performed at a slower rate. The Association submitted that the SWS would only operate correctly if it assessed the whole of a job and not just the part that the individual can achieve.

Focus Link Consulting

[100] Focus Link Consulting is a consultancy business operated by a self-employed person who was formerly a supported employee. The business undertakes quality assurance audits against various standards including the National Standards for Disability Services in ADEs and disability employment services. It was submitted that the Commission should put aside the viability of ADEs when making a final decision, which should be addressed as a separate issue outside the proceedings, and should instead “consider [the] basic human rights of people with disabilities to access a fair and consistent wage mechanism regardless of which ADE in which they work”.

Illawarra Forum

[101] The Illawarra Forum is a group of 16 not-for-profit disability providers working together collegially and collaboratively to deliver better outcomes for people with disability in the Illawarra local community. It includes longstanding ADEs such as Greenacres, Flagstaff and The Disability Trust. The Illawarra Forum submitted that the Commission should ensure ADEs continue as a viable employment option for people with permanent and significant disability and that this would be determined by the way in which the Commission determined wages for persons with disability working in ADEs.

Koomarri

[102] Koomarri has been providing disability services and employing people with intellectual disabilities for over 60 years in the Australian Capital Territory and Southern New South Wales regions. Koomarri’s ADE employs 101 supported employees. The types of job tasks vary from basic single-range tasks to complex multi-range tasks. Koomarri sought the retention in the SES Award of wage assessment tools with a competency/skills-based element, including its own Koomarri Competency Based Wages System Tool which was established in 2001. Koomarri opposed the notion that the SWS should be the sole mandated option for wage assessment available to ADEs, and submitted that:

  the Commission should ensure that wages are assessed in a fair and equitable manner and that supported employees performing more complex tasks are not paid less;

  employment in a non-ADE or commercial environment includes the assessment of capacity to work based on skills and competence, which should not be different for supported employees;

  Koomarri aims to provide meaningful employment to individuals with disabilities, and to teach new and enhanced skills so that supported employees can achieve better outcomes;

  if the SWS became the only option to assess wages, higher wage outcomes could result in the cessation of the operation of the ADE and resulting job loss for disability support workers and supported employees; and

  the ADE currently operates in a financial model with a low-cost margin due to the NDIS price set market.

[103] Koomarri also supported the inclusion of ABI’s proposed work value classification structure in the SES Award.

Kurri Kurri Community Services

[104] Kurri Kurri Community Services (KKCS) operates an ADE which provides employment to local people with disability and employs 116 staff. It uses its own tool listed in the SES Award, the Kurri Contracting Service Wage Assessment Tool (KCSWAT), which was approved by the NSW Industrial Relations Commission in 2004. KKCS submitted that KCSWAT is designed to remunerate employees in a fair and equitable manner and to reward employees with disability who have medium to high support needs, and does not discriminate between supported and non-supported employees because the skills matrix and productivity measures it relies upon are related to the work performed by the employee. KKCS submits that no employees or any representative of an employee has challenged the validity of the KCSWAT or questioned its appropriateness for the work undertaken by KKCS employees. KKCS submitted that the SWS is an appropriate wage assessment tool for employees who have lower support needs but would not be appropriate for the majority of KKCS supported employees, who have medium to high support needs.

Mai-Wel Group

[105] The Mai-Wel Group (Mai-Wel) provides services to disabled persons in the Hunter region of New South Wales. It opposed the removal of the Mai-Wel Group Wage Assessment Tool from clause 14.4(b) of the SES Award. Mai-Wel submitted that the SWS is not a suitable tool for all ADEs because it does not work in team based production line work, lacked the flexibility in its assessment methodology to adequately adjust to the complexity of this type of work, and the rigidity of its assessment methodology relied on the same work to be completed to establish a standard. Mai-Wel submitted that if the SWS became the sole wage assessment tool it would have adverse effects for supported employees, their families and ADEs. The Mai-Wel Tool considered skills and tasks in completing wage assessments, in that skills and productivity were benchmarked according to the job a person without a disability would be required to do according to the SES Award classifications. The narrow focus of the SWS failed to recognise the broad range of skills and tasks that supported employees undertake. It submitted that the tasks at Mai-Wel are broad-ranging and that the Mai-Wel Tool provides an accurate assessment as it includes all tasks an employee undertakes. In contrast, the SWS assessment does not encompass the same broad range of tasks.

New Horizons

[106] New Horizons operates two ADEs and provides supported employment services covered by the SES Award. It opposed any variation to the SES Award which would remove the New Horizons Wage Assessment Tool and make the SWS the only wage assessment tool under clause 14.4(b) of the SES Award. New Horizons submitted that its tool was designed to provide an equitable method of reward for employees with disabilities who have medium to high support needs. Because New Horizons operated on limited budgets, any decision to make the SWS the only wage assessment tool would likely force its ADEs to close. Its estimate was that that the use of the SWS would increase supported employee wages by 63%, and the consequent closure of its ADEs would put 100 supported employees out of work and increase the social isolation of people with disability. It submitted that this outcome would cost the federal government more through the National Disability Insurance Agency (NDIA) than for those supported employees who would otherwise be attending the ADE. It submitted that, on average, its existing 100 supported employees cost the NDIA $11.01 per hour for work in the ADE. If those employees did not attend the ADE, they would need to be supervised through the NDIS via Community Supports charged at $44.72 per hour. This would equate to a yearly saving of $20,765 per year per NDIS participant, based on an average of two days a week for 7 hours per day for 44 weeks a year. This had the potential to increase the costs to NDIA by $2,076,536 per year (based on 100 supported employees if the ADEs ceased to exist).

Yumaro

[107] Yumaro, which operates a number of ADEs in southern coastal New South Wales, opposed the removal of the Yumaro Wage Assessment Tool from clause 14.4(b) of the SES Award and any requirement that the SWS be the only wage assessment tool. Yumaro submitted that its tool determined wage levels based on what employees can do from a wide range of tasks ranked at increasing levels of complexity, and encouraged training and skills development leading to higher wage outcomes. Yumaro said that as its wage assessment process was annual, it provided a fairer outcome than an SWS assessment mandated every three years. It submitted that the Yumaro tool’s competency-based assessment was in line with that used in the method of classification assessment used in almost every other award in Australia.

[108] Yumaro submitted that the SWS led to unfair wages outcomes, and illustrated this by the following example from its ADE:

  Some employees make cleaning cloths by overlocking the edges of cut recycled towels – this involves simple straight-line sewing with a large margin for error.

  Other employees with higher skills are involved in the more technically intensive work of setting up and embroidering garments.

  If the SWS was used to assess the employees involved in these two areas of work, a gross distortion of wages could occur.

  The employees only able to sew the simple overlocked cleaning cloths would be found to have almost 80-100% productivity because this task is very simple and cannot be performed much faster even if one’s skills increase.

  The employees who are able to work in the embroidery section, which is far more complex in nature, would be found to have very low productivity (10-50%).

  In this above example the employees doing the more complex task would achieve lower wage outcomes than the employees doing the simple straight sewing.

[109] Yumaro submitted that its wage rates were already high compared to industry averages, and it was concerned that if it was forced to use the SWS, wages would be unfairly distorted and this would make employment ventures unsustainable leading to less jobs and opportunities for people with a disability.

Australian Workers’ Union

[110] The Australian Workers’ Union (AWU) submitted that it had members and former members whose children worked as supported employees of ADEs. Through association with ADEs such as Flagstaff and Greenacres, the AWU submitted that it was aware of the valuable role ADEs had throughout Australia and understood the challenges people with disabilities encountered in the working environment and the impact any change to a wage determination might have on the livelihood of supported employees. The AWU contended that supported employees are able to work in a safe, inclusive and supportive environment and receive the DSP, resulting in their take home pay exceeding the national minimum wage. Further, the AWU contended that supported employment gave the families of supported employees valuable respite and support. In reconsidering the best method for determining wage outcomes for supported employees in disability enterprises, the AWU submitted that a skills-based assessment would be the best method. It contended that a productive output assessment would jeopardise the jobs of supported employees in disability enterprises and render them unsustainable. If the Commission determined that people with disabilities should be paid in accordance with their individual productive output, employers could use this determination in the future to validate a move away from a skills-based wage determination for workers without a disability.

Practical Workplace Relations

[111] Practical Workplace Relations (PWR) is an industrial relations consultancy. PWR submitted that the Skillsmaster Wage Assessment Tool should remain in the SES Award and disagreed with the proposition that any wage assessment tool with a competency and performance component was an unacceptable tool for that sole reason and therefore should be removed from the Award. PWR also submitted that the SWS was not intended to be used in supported employment, but was designed to apply only in open employment, where those with a disability being assessed would usually be higher functioning employees requiring limited supervision. PWR submitted that the SWS was not an appropriate tool to use in a work environment where the majority of the workforce consisted of disabled employees requiring medium- to high-level support and supervision, and the minority of the workforce consisted of able-bodied employees typically in management, supervisory, support or training roles.

[112] PWR submitted that the Skillsmaster system was one of a number of hybrid model wage assessment tools used in ADEs and was designed to remunerate employees with a disability in a fair and equitable manner. PWR noted that the Skillsmaster system was linked to the SES Award classification structure and was based on the acquisition and use of “task competencies” (skills) to a standard of performance required by an employer. Performance was linked to pre-determined assessment criteria contained in each “unit of competence”, including output or individual employee productivity. Each unit of competence contained a number of elements and “performance criteria” (knowledge required to complete each task). This enabled the employer to compare the employee’s skills against the documented units of competence within each job model, to assess the employee’s competence against the work required to be undertaken, and to identify skills deficiencies and training needs for the purpose of advancement through the classification structure.

[113] In response to the April 2018 Statement, PWR contended that the Skillsmaster tool was fair, equitable, reliable and non-discriminatory, and should remain in the SES Award. PWR submitted that the Skillsmaster tool was the only current wage assessment tool that referred specifically to, and incorporated, the SES Award classification structure and indicative tasks into the system to assess if the employee was competent at the task, as well as conducting a wage assessment to determine the ability and productivity of the employee whilst undertaking the task. PWR acknowledged that the classification structure in the SES Award did not adequately define the work undertaken by employees and supported the Commission’s view that the tasks should be clearly defined to establish the roles and duties of each job. PWR submitted that the Skillsmaster tool met this criterion.

Shellharbour City Council

[114] Shellharbour City Council supported the position of Greenacres and Flagstaff and requested that the Commission not make a decision that could lead to job losses for supported employees.

South Coast Labour Council

[115] The South Coast Labour Council, the peak union body of the South Coast of New South Wales, endorsed the AWU’s submissions and shared its concerns about the AEDLC’s proposal for wage assessment. The Council submitted that supported employees in regional labour markets face additional barriers and that changing the wage assessment method will not assist them in finding employment in the open market. It said that ADEs like Greenacres and Flagstaff were formed to offer employment opportunities to workers excluded from the labour market, and that an output-based wage assessment would defeat the purpose of assisting supported employees excluded from the labour market. The Council submitted the most equitable approach was to consider employment remuneration and social support payments as a “social wage”.

Wollongong City Council

[116] The Wollongong City Council expressed support for ADEs such as Greenacres, The Disability Trust and Flagstaff, and expressed concern about possible impacts on job security for employees of ADEs arising from a decision regarding the SES Award. It opposed moving from a skills-based wages system to a productivity-based wages mechanism.

Our Voice Australia

[117] Our Voice is advocacy organisation for families of persons with disability. It submitted that its proposed “Rights at Work for Supported Employees” clause would assist in resolving any conflicts of interest with the employer, ensure that employees have the appropriate level of assistance to be able to make a decision on a workplace issue, and also assist in streamlining the decision-making process. The inclusion in the proposed clause of a reference to a “nominee” was consistent with the practices adopted by Commonwealth agencies such as Centrelink, the NDIS and Medicare to recognise representatives of persons who are without legal capacity. In the case of Medicare, this required the completion of a form titled “Authorisation to act on an incapacitated person’s behalf for Medicare purposes”. Our Voice submitted that the appointment of a nominee for a person lacking the capacity to make decisions about complex workplace relations issues would enable consistency for its members in supported employment, and its proposed clause would require the “nominee” to be advised, informed and consulted before a decision could be made.

[118] Our Voice opposed the removal of the industrially approved suite of existing wage assessment tools containing a skills (competency) component and its compulsory replacement with the SWS. In response to the April 2018 Statement, Our Voice generally supported the provisional views expressed therein as being realistic, fair and providing what seemed to be a simpler system for employers to deliver the ultimate goal of providing job opportunities for disabled family members. It submitted that the SWS tool was designed for competitive open employment, not supported employment, and if it were accepted as the only wage assessment tool, it would threaten the existence of supported employment opportunities throughout Australia.

[119] Our Voice acknowledged the complexity of the existing system of wage assessment tools and the need for the system to be reviewed. It supported the implementation of ABI’s proposed work value classification system. It submitted that the proposed new system (not necessarily the espoused model) held some merit for further analysis and trials, and there would be a need for training, education, inductions and delivery. Our Voice requested a transition period that was realistic and would allow for sustainable implementation throughout the nation’s diverse range of supported employment sites. In relation to the assessment of the size of the job, Our Voice submitted that the system must be flexible in order to “size up” a task, as part of a job of final product. The productivity should then be measured to determine both a sale price and remuneration price for the employee. Our Voice further submitted that the issue of non-productive time in the workplace remained a great concern for its members, as the level of productivity varied depending on the disability and incidental issues in the workplace. It submitted that the provision and reinforcement of routines and requirements needed to be more consistent and regular in the workplace, with current mechanisms for workplace change and grievance for employees, their families, carers and advocates better explained in the SES Award.

Department of Social Services

[120] The DSS is the owner of the SWS, and it initially submitted in a letter dated 16 August 2017 that its preferred position was that the varied SWS (as modified) should be the only wage assessment tool in the SES Award. The DSS subsequently clarified in a letter dated 8 November 2017 that its indication of a preference in relation to other tools in the SES Award did not constitute a concluded government position and stated that the Australian Government would continue to follow the proceedings and ensure future policy settings allow for the ongoing viability of ADEs for employees, their families and businesses. In response to a number of questions which we raised with the DSS concerning this letter, the DSS said that:

  the purpose of the 8 November 2017 letter was to clarify that the DSS preference expressed in the letter dated 16 August 2017 did not constitute a concluded government position and to reassure supported employees that DSS’ policy development would seek to support “as far as reasonably possible” the ongoing viability of the sector.

  any decision to provide additional funding support for the extension of the SWS to the whole of the sector would be a matter for Government to consider in the context of the industrial landscape, including wage-setting arrangements;

  since the Australian Government’s submission to the Australia Fair Pay Commission in 2006 under the Workplace Relations Act 1996 that the SWS was not an appropriate wage assessment tool for the supported employment sector, ADEs have operated in a different context following Nojin, the removal of the BSWAT and the modifications to the SWS;

  it accepted that the Commission has the power to determine further modifications to the SWS if it considered it appropriate;

  the DSS only funded assessments of the SWS, and would continue to fund these in respect of the modified SWS;

  whether and to what extent assessments for a different wage mechanism would be funded was a decision for government to make taking into consideration factors including the degree of legal certainty of the application of a wage assessment tool; and

  the transfer of the equivalent quantum of Disability Maintenance Instrument (DMI) funding of an individual's NDIS plan to ADEs was only a transitional approach for the NDIS, and existing ADE employees in the same organisation will attract funding in their NDIS plans replicating historic DMI funding levels, but new ADE employees will have funding in their NDIS plan that will be the average DMI funding level of the relevant ADE outlet.

Evidence

[121] The evidence of those witnesses who gave evidence before the Commission, and those persons who made witness statements but were not required to attend for cross-examination, is summarised below.

AED Legal Centre

Paul Cain

[122] Paul Cain 26 was the Director of Research and Policy at Inclusion Australia (formerly known as the National Council on Intellectual Disability) and had worked in the disability sector for almost 30 years. He made three witness statements and gave evidence before us on 9 February 2018, but sadly passed away prior to the finalisation of the hearing process in November 2018.

[123] Mr Cain gave evidence that his role at Inclusion Australia required him to be across the national and international research on best practice in employment policy and to represent Inclusion Australia on that issue, but he explained that his evidence in the proceedings was his personal view and not necessarily that of Inclusion Australia. Mr Cain was an expert witness in the Nojin proceedings. In Mr Cain’s opinion, the SWS was an appropriate method for determining a pro-rata rate of pay for employees with a disability because it assessed the productivity of the employee, was underpinned by principles and safeguards to ensure that the wage assessment was independent, fair and equitable, and was based upon a comparison with the award rate of pay for the relevant classification. Mr Cain added that the SWS was the appropriate method because it:

  provided for a period of specialised training before assessment;

  focused on the performance of the employee in their actual job tasks;

  recognised that, for people with significant disability, jobs are customised or created;

  had been available to ADEs since being approved in a decision of the AIRC in 1994; and

  did not include an assessment of training, support or supervision in determining wages.

[124] Mr Cain said that many of the other SES Award wage assessment tools effectively re-classified the jobs of employees with disability below the award classifications, and did not provide an equity comparison between a worker with disability and a worker without disability based on indicative tasks in award classifications, and many of the wage assessments under the SES Award were conducted internally by employers. In his opinion, the SWS should be the exclusive pro rata wage determination method prescribed by the SES Award, as the design of wage assessment tools by ADE employers was too focused on discounting award rates of pay to control wage costs rather than a desire to provide fair award wages based on a direct comparison with the award classification and rate.

[125] In relation to ABI’s proposed classification structure, Mr Cain said that it prevented employees with a disability in ADEs from a fair comparative wage assessment, as it inserted a sub-classification system (for grade 2 of the Award) that was similar in design to many wage assessment tools currently listed in the SES Award. Mr Cain also stated that the proposal does not meet the comparison required by clause 14.4(a) of the SES Award. Mr Cain gave evidence relating to comparative research conducted by the Commonwealth showing that people without disability doing similar jobs in open employment as people with disability in ADEs were earning in excess of the award rate of pay. Mr Cain stated that ABI’s proposed classification structure limited the capacity of workers with a disability and treated them differently to employees without a disability.

[126] In response to a number of witness statements that were critical of the SWS, Mr Cain said:

  the statements inaccurately described the SWS assessment process;

  it was not correct that the SWS was only developed for persons with a mild disability and not for severe disability;

  it was not correct that the SWS assessed wages simply on the basis of how fast a person works;

  it was not correct that the SWS was developed only for open and not supported employment;

  it was not an accurate or complete description of the SWS to say that the speed at which the employee completes tasks is measured against a fully able employee in the workplace to establish a rate of pay is not an accurate or complete description of the SWS;

  volume of work is only considered in relation to a performance standard which includes quality and safety job task requirements; and

  only those employees with disability unable to work at the full award rate of pay may have their wages set by the SWS.

[127] In relation to whether the SWS took into account the difference between simple and complex jobs based on skill, Mr Cain stated that the distinction was not accurate as almost all employees with disability in ADEs performed work in the same award classification of Grade 2. He stated that the SES Award already graded jobs through the classification system, and the SWS was not a comparison of performance between employees with disability, but a comparison with an agreed performance benchmark of each job task under the relevant classification of work in the SES Award.

[128] Mr Cain said that the trial report for the modified SWS addressed concerns with its application to employees with a different number of job tasks, and stated that there was generally a correlation between how many duties and tasks the employee performed and their overall productivity. He contended that the rights of employees working in ADEs should not be inappropriately framed as about individuals without the capacity to be included in the open workforce, and referred to research showing that the only valid method of discovering the capacity of people with intellectual disability in open employment is placing the person in a job, providing instruction and ongoing support. He referred to the statistic that less than one per cent of disabled employees successfully moved out of ADEs into open employment, but said this was demonstrative of poor practice in ADEs rather than the capacity of the employees and that a move to best practice would lead to a 70 to 80 per cent success rate. Mr Cain said that “… in the 70s and 80s we learnt that going into a sheltered place is effectively terminal, you're staying there. You don't move through.”

Robert MacFarlane

[129] Robert MacFarlane’s 27 experience includes 22 years as an accredited SWS Assessor, 10 years as a Workplace Modifications Assessor, 7 years as an Ongoing Support Assessor, 34 years’ experience in the disability and employment industries, a range of generic and specialist qualifications, familiarity and involvement with Sheltered Workshop/Business Service/ADE workplaces, and a long standing interest and involvement in the historical development of wage assessment tools. Mr MacFarlane was asked by the AEDLC to read the ABI’s proposed work value classification structure and submissions, the witness statements of nine ADE representatives, and additional submissions from NDS, Greenacres and Our Voice. Mr MacFarlane concluded that the SWS can and has been effectively utilised in ADEs and that recent modifications have removed critiqued defects in the ADE environment. Further, the ADE work environment does not impede the relevance or efficacy of the SWS, and the proposed work value classification structure was both unnecessary for wage-setting purposes in ADEs and had the potential to create another BSWAT-like wage assessment tool. Mr MacFarlane said the SWS was a long-sanctioned affirmative action industrial relations measure that could deliver fair wage outcomes using a flexible, transparent and independent assessment methodology in all existing award job classifications and all workplaces.

[130] Mr MacFarlane said in cross-examination that he did not philosophically support a segregated employment service including ADEs but rather an integrated social enterprise model where the percentage of employees with a disability mirror that of society. When he was asked about the application of the SWS to employees undertaking complex tasks at a slower rate in comparison to very simple tasks at a faster rate, he said that in his experience people with more significant disabilities doing very basic tasks usually had very low productivity and those doing more complex tasks usually have higher productivity, but he agreed that an employee doing complex tasks might end up earning less than an employee doing simple tasks. He stated that this was a rare possibility and should not discredit the modified SWS.

Peggy Eagles

[131] Peggy Eagles 28 is the mother and carer of Danielle Harris, who has worked in supported employment at Wallara Industries since August 2009. Ms Harris has multiple disabilities including intellectual disability, cerebral palsy and uncontrolled epilepsy, and is wheelchair bound. Her wage was initially determined by the BSWAT under which she was paid $3.79 an hour. Wallara Industries replaced this tool with Skillsmaster Wage Assessment Tool, which determined her rate of pay as $0.91 an hour. Wallara Industries applies a minimum hourly rate of $2.50 an hour but intends to maintain Danielle on the $3.79 rate until her next assessment. Peggy Eagles complained about processes of the Skillsmaster tool and stated that it did not provide a clear indication of the process the assessor goes through to determine if an employee is competent in particular tasks and units, in addition to a lack of requirements that employees be informed of the assessable task units of their role and the lack of information in relation to training.

Kate Last

[132] Kate Last 29 is a person with disabilities who has been employed to work two to three days a week at Highpoint Industries since July 2004. Her duties have not changed during this time. Initially, her wages were determined using the BSWAT. Her 2008 assessment indicated a $4.2271 per hour pay rate and her 2012 assessment indicated $5.77 per hour. However, Highpoint agreed to pay her $10 per hour. When Highpoint began using the Skillsmaster tool her pay decreased to $8.47 per hour, and Highpoint no longer pays her the extra amount.

Kairsten Wilson

[133] Kairsten Wilson has been employed as Principal Lawyer at AEDLC since July 2008. Prior to this she was employed from 2002 in the same role at the Disability Employment Action Centre. She attached to her statement the reports referred to in clauses 14.4(d) and (e) of the SES Award and the Supported Wage System Handbook. She said that she asked James Kemp, Director, Payment Scheme and Supported Employment Policy of the DSS whether there had been any data collected from the ADEs in relation to wage tools referred to in clause 14.4.(b) of the SES Award and the wage determination each tool delivered. He had responded that there was no such data except in relation the usage of the BSWAT, which had been owned by the DSS when it was in use, and that the majority of ADEs which had previously used BSWAT had moved to the use of the Greenacres or Skillsmaster tools.

Leigh Svendsen

[134] Leigh Svendsen 30 is the Senior National Industrial Officer of the HSU. Part of her principal responsibility has been the conduct of the 4 yearly review of modern awards. Ms Svendsen has participated in the conciliation process before the Commission since December 2013, and was the union-nominated representative on a committee which oversaw the development, training and implementation of the major trial for the modified SWS. She gave evidence that several ADEs already utilise the SWS in its unmodified form before this time. She described the resistance to the adoption of the modified SWS amongst ADEs and said that no evidence had been provided to support the claim that the SWS would increase wages bills. She noted that the DSS had formerly taken the view that the modified SWS should be the only wage assessment tool in the SES Award but had changed its position to not having a preference for the SWS over any other tool in the SES Award.

ABI and NDS

Stephen Charles Burgess

[135] Stephen Burgess 31 is employed as the Group Manager - People, Culture and Support at Flagstaff, and gave evidence concerning the potential effect on Flagstaff’s operations should it be required to use the SWS. He described Flagstaff’s current operations and said that it had six ADE sites and employed 155 funded and eight unfunded supported employees in the Illawarra region and 82 funded and four unfunded supported employees in the Shoalhaven region. He said that Flagstaff’s commercial revenue streams were considered viable and sustainable, and currently allowed avoidance of reliance on automation in favour of employing people with a disability to undertake supported employment. Flagstaff used a wage assessment tool which provided remuneration commensurate to tasks, and additionally a yearly percentage increase was applied for all supported employees. This tool was essentially the same as the Greenacres tool but with higher wages percentages.

[136] Mr Burgess stated that there was scope for some increase in supported wages to be absorbed by the organisation but that Flagstaff’s viability in its business divisions would be jeopardised if close to minimum wages were mandated for supported employees undertaking individual tasks that would usually be undertaken by a single staff member. Mr Burgess agreed in cross-examination however that he had no evidence that confirmed that any one of Flagstaff’s employees would be operating at close to actual or actual minimum wages under the SWS.

[137] Mr Burgess stated that a decision to mandate the use of the SWS would require Flagstaff to completely review its business model, and would result in a transition to extensive automation, which would mean job losses. Such job losses would be particularly traumatic due to high unemployment in the region in which the organisation operated. In relation to the work value classification structure proposed by ABI, Mr Burgess stated that this would result in some wage increases for supported employees, but Flagstaff would be able to maintain its existing supported business model with minimal impact. However, Flagstaff’s position on the SWS was that it could not be practically applied in a supported environment because not only would it result in discriminatory wage outcomes, but it would artificially inflate wages to a point that was unsustainable for the commercial operations of the organisation. They came to this conclusion through Flagstaff’s own review and modelling, as well as feedback and data obtained by other organisations using and trialling the SWS.

[138] Mr Burgess agreed in cross-examination that he had no experience of the operation of ABI’s proposal or the SWS, that Flagstaff had no specific data that would enable the Commission to assess the wage impact of the application of either to Flagstaff employees, and that he was not a qualified SWS assessor and had no experience in using SWS. He stated that while the SWS was a part of the Flagstaff tool for any employee above 45 per cent, there were no roles that required anything higher than the parameters of the wage tool meaning it had not been used.

[139] In response to Mr Cain’s evidence, Mr Burgess said that subject to the appropriate supports being in place, many people with disability were suitable for appropriate roles in open employment, but that generally employers in open employment were not sufficiently resourced, qualified or experienced to provide this level of support. He also stated that job customisation occurs routinely at Flagstaff in order to create roles for people with a disability where a role is broken into separate isolated tasks that the supported employee is able to perform. Mr Burgess said that an assessment of skills after training is a legitimate and practical assessment and provides a fair measure of a person’s job skills, as is demonstrating the skills required to undertake the inherent requirement of a role or customised task in determining an employee’s classification.

FS1, FS2, FS3, FS4, FS5, 2FS11, 2FS12, 2FS13, 2FS14, 2FS15, 2FS16, 2FS17 and 2FS18

[140] Witness statements made by a number of disabled persons engaged in supported employment by Flagstaff were filed. 32 The persons who made the statements were pseudonymised for privacy reasons and were not required for cross-examination. Each person gave evidence in their statement concerning the personal and financial importance to them of supported employment with Flagstaff. For example, FS5 said that his employment made him feel useful, important, gave him a sense of normality and assisted his family. FS5 said he had been unsuccessful at securing a job in mainstream employment and, if he couldn’t work in supported employment, he would not have a job and would be bored and depressed. FS4 said that her work with Flagstaff helped her to feel important and safe and like she had a purpose, and the money she earned allowed her to be social on weekends and save for things that she wanted such as travel. Before she worked for Flagstaff, she was not very happy, did not have any friends and did not want to get out of bed much. FS4 said she had worked in mainstream employment before, but found it hard because she was not given the support or time she needed, but Flagstaff had given her the necessary support, skills and confidence. 2FS17 said that employment at Flagstaff played a big role in his life as it made him feel good and confident and enabled him to be with other people like him. He said that without supported employment he would have nothing to do, it would leave him alone and he would have no friends.

FS6, FS7, FS8, 2FS1, 2FS2, 2FS3, 2FS4, 2FS5, 2FS6, 2FS7, 2FS8, 2FS9 and 2FS10

[141] A number of witness statements made by parents/carers of disabled persons in supported employment with Flagstaff were also filed, and likewise were pseudonymised. 33 The makers of the statements were not cross-examined. In summary, they attested to:

  the beneficial effects of supported employment with Flagstaff for the employee’s emotional wellbeing, confidence, skills and sense of purpose;

  the degree of support provided by Flagstaff to the employee, including training and mentoring to improve work and life skills;

  the degree of respite, comfort and support for the parent/carer which supported employment provides; and

  the degree of concern about the employee’s personal future and their own circumstances should supported employment be rendered unviable.

[142] For example, FS6 is a mother and carer to a supported employee at Flagstaff, who supports her daughter in all aspects of her life including personal hygiene, daily house cleaning, washing, food shopping and preparation, socialising, financial affairs, legal requirements and documentation and medical needs and appointments. FS6 gave evidence that her daughter had been diagnosed with depression prior to her employment but, since working at Flagstaff, her overall wellbeing, sense of purpose and emotional health and confidence had significantly improved, and her daughter had developed social connections with colleagues and supervisors. FS6 held grave concerns about her daughter’s overall social and emotional wellbeing should the role at Flagstaff cease as her daughter was unable to work at the capacity required for mainstream employment. FS6 has been able to return to work since her daughter has been employed, and her family would be financially impacted if her daughter could not work.

[143] 2FS1 is the mother of a 26-year-old son who has Asperger’s and epilepsy and has been working at Flagstaff for six years. She acts as a carer to him in a range of ways. She believes employment at Flagstaff is very important to her son as it provides him a sense of “fitting in” and normality in his life and had given him a purpose and made him feel worthy. 2FS1 said that her son had demonstrated a sense of independence and responsibility and cared a lot about his job, and his self-esteem has significantly increased. It would have been almost impossible to find an employer in the open employment market who would employ him, and it would be devastating if he were no longer able to work at an ADE like Flagstaff. He would have nothing to do, would be bored, depressed and his self-esteem would plummet. 2FS1 also stated that her own wellbeing would be affected as she would be worried about him. The levels of rejection after participating in employment processes whilst previously trying to get a job in open employment have upset her son and resulted in behavioural issues.

[144] 2FS6 is the mother of a child who has worked at Flagstaff for six years. Her daughter has been diagnosed with Bipolar Disorder and is independent in many ways, including being able to work, transport herself, make her own appointments, undertake personal care, and cook and clean for herself. 2FS6 said that she and her family play a vital role in maintaining her daughter’s mental health and in providing her with a safe, supportive place to live. FS14 outlines the care she provides for her daughter, including regularly monitoring her daughter’s moods and behaviour to assess whether she is having suicidal thoughts, ensuring that her daughter’s medication is consistent and that her daughter schedules and attends her medical and psychiatric appointments. Her daughter is happy working at Flagstaff as it has given her a sense of purpose and belonging, and has provided her with a degree of financial independence. Additionally, her daughter has been making a tangible contribution to her family’s household. Working at Flagstaff has improved her daughter’s overall social and emotional wellbeing as her work not only provides her daughter with a respite from her anxiety and paranoia, but also allows her access to support from, and friendship with colleagues who understand her needs. Further, Flagstaff has provided study and other educational courses which has given 2FS6’s daughter opportunities to develop new skills. Her daughter’s employment with Flagstaff has had a positive impact on her relationship with her family. Previously on occasions when 2FS6’s daughter has re-entered the open workforce her daughter has become so stressed and anxious that she has required hospitalisation. With her daughter working full-time at Flagstaff, 2FS6 is able to focus on her own work commitments while having peace of mind that her daughter is safe, supported and happy. If her daughter was no longer able to work at a disability enterprise like Flagstaff, the increase in responsibilities and stress in looking after her would detrimentally affect the cohesion of the family unit.

Bradley Raymond Burridge

[145] Bradley Burridge 34 is employed as the Operations and Business Development Manager at Centacare, an ADE which provides supported employment services. Centacare previously used the BSWAT to determine the wages of its supported employees, but after the Nojin decision it switched to the SWS on the advice of the DSS. He gave evidence concerning the cost that implementation of the SWS tool has had for Centacare. He explained that the DSS initially provided a subsidy to Centacare to implement the SWS through a staggered arrangement involving a full subsidy in 2016 and then reducing each year to no subsidy in 2019. Mr Burridge acknowledged that the benefit of the SWS was its lack of administrative burden, but he said that moving to the SWS came at a large wages cost to the organisation. He submitted that a comparison of a core group of 50 supported employees from 2016 with their wages in 2015 demonstrated an 83 per cent increase in the cost of those wages. Although in 2016 this cost was absorbed by the subsidy from the DSS, once this subsidy tapers off Centacare will be in an ongoing position where it needs to self-fund this increase.

[146] Mr Burridge said that in his view the SWS was not an accurate measure of a supported employee’s capability because Centacare was required to assess the employee on a particular task. Centacare had chosen a very basic task so that all employees could complete it. This allowed faster workers to gain pay rises above inflation based on a basic skill rather than their overall performance. Where the minimum wage was increasing by about three per cent a year, Centacare’s wages were increasing by seven per cent. Mr Burridge also stated that the SWS also disadvantaged supported employees who had multiple skills and did not take into account advanced skills such as leadership and organisation. The tool is focused on task productivity not talent or skillset and ultimately discriminated against employees who contributed to an ADE in other ways. He also was concerned that the SWS prevented wages from going backwards even if an employee was assessed downwards using the tool. He provided the example of an employee who was previously assessed at 30 per cent but was beginning to slow down and was now working at 20 per cent. Under the SWS the employee’s wage had to remain at the previously assessed 30 per cent. Mr Burridge said that the SWS also increased some employees’ wages to such an extent that it had impacted on their DSP, and that these employees then cut their hours back to reverse this effect.

[147] Mr Burridge supports the ABI’s proposed work value classification structure, as it had a realistic classification structure and took into account all the elements of supported employment. He accepted in cross-examination that the proposed structure had not been applied in Centacare or costed, but his assessment was that it would result in lower wages than the under the SWS, and this would assist in competing with other ADEs which currently used different wage assessment tools by establishing a common wages platform.

Chris Christodoulou

[148] Chris Christodoulou 35 is employed as the CEO at Greenacres, an ADE which employs 240 supported employees and 23 permanent support staff. Mr Christodoulou has held this position since 2014. Mr Christodoulou stated that Greenacres trialled the modified SWS during the conciliation process overseen by Deputy President Booth and SWS assessors from Lead Employment Services. This assessment demonstrated that Greenacres would experience a 60 per cent increase in overall wage costs in a best-case scenario if the SWS was implemented, with the potential to be as high as 115 per cent. Wage increases of this size would lead to cancellation of much of Greenacres’ contract work leading to job losses. This would likely impact funding associated with high support need employees, meaning there would be a high probability of Greenacres having to close. Greenacres operated at a loss of over $400,000 in the 2016-2017 financial year and did not have the ability to subsidise the higher wage costs that would stem from the SWS tool, particularly with the NDIS funding model in place.

[149] Mr Christodoulou supported the inclusion of ABI’s proposed work value classification system in the SES Award. His view was that its classification method took the same approach as a standard skills-based structure, and that supported employees at each level were recognised in terms of the level of supervision and support they require, initiative, skills and the type of work they carry out. In comparison to the SWS, those who carry out more complex tasks under the proposed structure are remunerated more highly than those undertaking basic tasks, even if their output is slower relative to a supported employee on a lower level. He identified this as a more valid approach as the assessment was not based on the speed of a supported employee relative to a person without a disability, but rather took into consideration the individual’s skill and the value of the work they were carrying out.

[150] Mr Christodoulou agreed in cross-examination that Greenacres currently used the SWS to assess employees above the 55 per cent wage level, but said when a person got to 55 per cent they probably had the necessary skills to allow them to work in open employment, so that in those circumstances the results of the SWS would not be as perverse.

[151] Mr Christodoulou stated that Greenacres had the ability to subsidise the losses in its ADEs because part of their purpose was to keep people with disabilities in employment. Much of the work performed was of low value, and the payments the ADEs received did not cover all of the costs of performing this work. He said that many employees at Greenacres with very high support needs would be unable to access open employment without ongoing direct support and supervision. Greenacres provided employees with additional training and support not available in open employment that assisted them to complete their work and assisted with health and wellbeing during working hours. Commonwealth government funding offset the costs of trainers but did not fund supervisors or subsidise the wage costs of supported employees. Wages for supported employees were funded by commercial activity, which was determined by Greenacres’ ability to find work that supported employees were capable of doing.

[152] Mr Christodoulou was cross-examined by the UWU concerning superannuation entitlements under the Greenacres Enterprise Agreement. He stated that for employees earning less than $450 per month, Greenacres pays superannuation contributions of 9.5 per cent of their ordinary time earnings or $9.87 per week, whichever was the greater, and explained that Greenacres had made a conscious decision to improve superannuation for supported employees as under the SES Award rate many employees would not have any superannuation because their contributions would go entirely towards administration fees or insurance.

John Kenneth Harvey

[153] John Harvey 36 is the General Manager-Enterprises for Greenacres, which employs supported employees in packaging, assembly, gel pack and body bag manufacture, shrink wrapping and relabelling services, e-waste processing, scaffolding sorting and hospitality. In his statement he described how in each area of work, tasks which would usually be able to be performed by a single employee have to be broken into distinct steps which may then be allocated to individuals based on their capability. A task analysis is prepared for each job or group of jobs and is then assigned a skill level, and employees are selected for a job based on their assessed skill level. This amplifies quality control issues, requiring greater control through higher numbers of supervisors/trainers. The typical overall ratio is one support worker (supervisor or trainer) for every 8-9 supported employees. Supervisors and trainers must continually reinforce training for the job tasks and safe working practices, and engage in significant behaviour management to keep employees on task and deal with behavioural outbursts.

[154] Mr Harvey said that funding from the DSS and the NDIS made up approximately 61% of Greenacres’ revenue stream, with the remaining 39% from the sale of products and the provision of services. The total revenue was currently significantly below breakeven level, and the ADE operations were heavily subsidised by the Greenacres’ overall operations. Supported employee output restricted the capacity of Greenacres to accept significantly higher volume work, as the baseline output capacity was not reliable and capacity had to be estimated at the lower end of the range.

[155] Mr Harvey gave evidence that Greenacres’ modelling of ABI’s proposed work value classification structure showed an increased but manageable increase in supported labour costs due to supported employees at the lower end of the skills spectrum being classified slightly higher. He further stated that an independently assessed small group test of the modified SWS showed a 50% increase in wages (excluding on-costs), which would not be sustainable and result in the closure of the ADE operations.

Mark Wynen

[156] Mark Wynen 37 is the Operations Manager at Greenacres Industries. He has been employed at Greenacres in various roles since 1996, including various training roles. Mr Wynen said that he did not believe that a wage assessment system that did not take into consideration a range of factors, in particular skills, was reasonable or practicable. He also expressed a concern as to whether outside assessors, undertaking an assessment for a couple of hours, could pick up on the detailed understanding of each supported employee required to complete an assessment. In his view, removing the Greenacres tool without replacing it with something more holistic, would be inequitable. He also observed that many of Greenacres Industries’ supported employees are paid at a higher level through constant skill development, and that there would be no incentive to build skills if the primary way of receiving a wage increase was to do simple low value repetitive tasks.

[157] Mr Wynen also said that if Greenacres was forced to restructure in a way that caused significant job losses, this would have a negative impact on the lives of supported employees and their carers if they were unable to find alternative employment with the same level of support. Appended to Mr Wynen’s witness statement was a statement signed by Greenacres Industries’ trainers and supervisors. The statement outlined that the signatories had an understanding of the challenges involved in operating a financially sustainable supported employment enterprise and the implementation of the Greenacres Tool, and they had developed an awareness of alternative wage assessment tools. It also referred to Greenacres Industries’ emphasis on sourcing and securing contracts that may not be profitable but contribute to achieving the purpose of providing ongoing supported employment. The statement observed that productivity measuring was one of many considerations to which regard should be had when assessing competency and capability of workers, and noted the signatories’ opinion that using independent assessors to measure productivity led to an inaccurate assessment and did not involve a holistic approach to determining the capabilities of supported employees. The signatories indicated their preference for a wage determination system that was both practical and skill-development based and which recognised that for the vast majority of their supported employees, work in open employment would be unsustainable. The statement also outlined the role and service provided by Greenacres Industries and its relationship with its supported employees and their families, and asked that the Commission consider not only a practical and sustainable system of rewarding supported employees for the work they engage in, but also the impact that a financially unsustainable wage system would have on the lives of supported employees and their families.

G1, G2, G3, G4, G5 and G6

[158] Witness statements made by three parents/guardians of supported employees of Greenacres, and by three supported employees themselves, were filed. 38 Each witness was pseudonymised for privacy reasons, and none was required to attend the hearing for cross-examination. They described the value that they attached to supported employment at Greenacres and the concern they felt at the possibility that an alteration to the SES Award wage structure might render Greenacres ADE operations unviable and lead to the loss of supported employment. For example, G4 said that she had worked at Greenacres for over six years and suffered from major depression, alcohol dependence, personality disorder (avoidant), agoraphobia, social phobia, anxiety disorder, panic attacks, dependence disorder and self-harm. She struggles in most public spaces where there may be alcohol or large numbers of people. When she worked in open employment, she said she was treated like “an idiot”. It put enormous pressure on her, her marriage, her job and her friends. She said she works at Greenacres for her mental wellbeing (dignity, pride, support, friendships, a future, and a feeling that she is tolerated, safe from ridicule, and is respected by everyone). She uses the money she earns to support herself and has progressively gained pay rises. G4 said she now feels like she is able to talk to people she sees at work and has learned to make work friends and share some of her mental health issues with them. She feels that no one is concerned about her age (61), and believes that Greenacres has helped her save her life by assisting her to cope with her mental health issues, which have prevented suicide. She believes she would not be able to gain open employment because of her age and mental health issues. It would also be dangerous for her to look for work because of the rejection she would face. G4 believed if she was paid according to productivity only, the skills she uses would be undermined because people doing less complicated jobs could do more work and earn more. She asked: “please leave our wage structure as it is”.

Anne Lynette Constable

[159] Anne Constable 39 is the Chief Executive Officer of Asteria Services Incorporated, which operates Asteria Business Services (Asteria). Asteria provides employment services to support the paid employment of persons with disabilities in garden maintenance, packaging and labelling work for business enterprises, and car washes. Asteria employs 58 supported employees and six general staff members. Supported employees are assisted by disability support workers, who perform a number of functions including on the job training, mentoring, ensuring occupational health and safety standards are adhered to and basic counselling. All supported employees are also designated a case manager who monitors and review their goals and outcomes. Asteria’s funding comes via the NDIS, the DSS and sales via the work performed by its work groups/business units. Ms Constable stated that in the supported employment services industry the revenue from a job is compromised when supported employees can only undertake certain tasks in a “whole of job process”, meaning a line of supported employees is required to complete a job that could be completed by a single employee without a disability.

[160] In Ms Constable’s opinion, ABI’s proposed work value classification tool would not negatively impact upon Asteria as it largely mirrors the current tool they are using, and was the best option for the future of supported employment because it was a transparent and fair assessment tool that could be used across all of its business units. Ms Constable said that in her view many of the SES Award wage assessment tools were structured for a particular service and consequently did not suit other service needs and were difficult to understand and implement. Further, she believed that as the SWS tool was originally set up for open employment rather than supported employment, it was not suitable to measure the competencies of Asteria’s complex supported employees. However, Ms Constable agreed in cross-examination that Asteria did not use the SWS system and had no experience in utilising the SWS in its ADEs. She agreed that she was concerned that the SWS would impact their service delivery 40 but was not certain that it would happen.41

2AS1, 2AS2, 2AS3, 2AS4, 2AS5 and 2AS6

[161] Six witness statements made by supported employees of Asteria were filed. 42 The names of the witnesses were pseudonymised. They were not required for cross-examination. The statements described the benefits the supported employees derived from employment at Asteria and the concern they felt about losing their employment. As an example, 2AS1 has been a supported employee of Asteria for 15 years after suffering a brain injury as a child. AS1 described the important role his employment had in maintaining his lifetime happiness in ways such as preventing depression, preventing loneliness, preventing boredom, making his parents proud and the understanding shown of his needs and health. 2AS1 said he did not work at Asteria for the money but instead to feel he was part of the community. As another example, 2AS4 is 68 years old with a brain injury, and has been working at Asteria since 1996. 2AS4 believed that his employment was “everything” in his life, as his work made him feel really good and self-dependent. He said his carers were happy for him. 2AS4 believed he could not work in open employment because of his disability, and he would be devastated and depressed if he could not work at Asteria anymore because he would feel bored and useless.

Heath Alexander Dickens

[162] Heath Dickens 43 is the Business Service Operations Manager of DSA. He said that that DSA employs over 500 people across four ADE sites, and supported employees are engaged for an average of 26 hours per week. Following the Nojin decision, DSA transitioned from the BSWAT to the Greenacres tool, with a small number of employees assessed under the SWS. Mr Dickens stated that since transitioning to the new wage assessment tool, DSA’s wages have increased by $350,000 per annum. DSA had managed to meet the increased costs with efficiency measures but would be unable to sustain another substantial increase.

[163] Mr Dickens gave evidence that while DSA mostly matches employees with tasks that align with their productive capacity, this can be challenging. Most jobs that are easily broken down into simpler tasks are those with a smaller profit margin. DSA has had to keep jobs going that barely break even to ensure they can provide tasks for higher support individuals. If DSA were to sustain a large increase in wages costs, it would need to reduce lower margin jobs and seek more complex and higher profit work. DSA has an ageing workforce with an average age of 47, and Mr Dickens said that ageing employees have reduced productive output and need increased support. Because the funding of all existing supported employees will remain unchanged as they transition into the NDIS, their funding will stagnate as they age, only increasing in line with the CPI.

[164] Twelve employees at DSA are currently assessed under the SWS, all with wages above 75% of the minimum wage. The wage increases for those who moved across to the SWS were significant. Mr Dickens’ view was that the SWS was an unsustainable tool for DSA, did not adequately capture the differences between open and supported employment, and was therefore not able to appropriately assess a supported employee’s suitable wage level. Mr Dickens had experience in managing both open and supported employment services, and the differences he had observed between them included that tasks undertaken by supported employees are modified to a greater extent and that supported employees require significantly more support to assist them in managing their employment.

[165] Based on initial modelling, Mr Dickens believed that ABI’s proposed work value classification system could potentially raise costs of wages by 10-15%. In his opinion, the methodology used to assess wage rates under that structure more accurately assessed a supported employee’s productivity than the modified SWS. DSA trialled the modified SWS as part of the conciliation work and undertook modelling based on 10-15 representative employees, and Mr Dickens believed that the increase in wages under the modified SWS would be unsustainable for DSA without government intervention. Mr Dickens stated in cross-examination that the modelling was based on 10 to 15 representative employees in a total workforce of 500.

[166] Mr Dickens described a SWS assessment on a particular employee performing his primary task of running a flow-wrap machine undertaken by an external assessor on 19 October 2017. After the assessment was complete the team leader responsible for overseeing the assessment advised Mr Dickens that the employee’s assessment at 80% seemed excessively high and not an accurate reflection of the employee’s overall work performance and capabilities. The assessor responded that he had used a co-worker performing the same work as the benchmark when assessing this employee, and that in open employment, co-workers would usually be used to set benchmarks as they are employed on the full award rate. Mr Dickens submitted that this did not make sense to him, as the co-workers in supported employment were individuals who also had a disability. He consulted with the direct supervisor of the co-worker used as the benchmark who advised that the co-worker was also a supported employee with a disability, the co-worker did not perform the full range of tasks associated with running a flow-wrap machine and further the co-worker was unable to perform a number of tasks that would otherwise be expected of a full award rate employee employed to run the machine in question. Having supervised the supported employees in question, trialled the varying aspects of the task with supported employees, and directly trained the supported employee in the task, the direct supervisor formed the opinion that the co-worker was performing at 60-70% of the full range of tasks associated with driving the flow-wrap machine. 44 Mr Dickens therefore contended that the employee in question should have been assessed at 80% of 60-70%.

[167] Mr Dickens stated that in the context of open employment, the benchmark setting process is understandable as the majority of employees do not have a disability, are employed at or over the full award rate and are performing 100% of the duties for which they are employed. This however was not the case for individuals working in supported employment as all the employees have a disability, are not working at full capacity and ultimately not receiving full pay. Mr Dickens contended that this was a serious flaw in the implementation and use of the SWS, and the modifications to the SWS do not address the practice of setting benchmarks which makes the use of this system in supported employment fundamentally unsuitable.

[168] Mr Dickens gave evidence that in open employment, only a small percentage of the business’ means of production were accounted for by the single employee with a disability, and the employer was able to employ a person with a disability on a wage assessed under the SWS, even if it did not necessarily reflect the person’s productive capacity or value of their work, because that had the capacity to absorb the cost in their overall business. By comparison, in supported environments the means of production came solely from people with a disability, and jobs were modified to suit workers’ abilities. He said that it was fundamentally incorrect to state, as Mr Cain did, that jobs in open employment are modified or customised to the same extent as jobs in supported employment, and in fact jobs in open employment were very rarely modified or re-designed at all.

[169] Mr Dickens said that it was misleading to contend, as Mr Cain did, that there is no direct relevance between the level of support provided to a supported employee, and the employee’s work performance. To disregard a factor that enabled the employee to achieve a certain level of performance would lead to an inaccurate assessment of the person’s performance under usual circumstances. Under such circumstances, the challenge was ascertaining what part of the performance was produced solely by the employee, which would determine the appropriate wage level, and what part of the level of performance was due to the provided support. The methodology of the SWS to assess the performance of the supported employee in three 15-minute intervals was flawed because it disregarded the supported employee’s usual working circumstances and presumed that this was the way in which the employee usually worked. The majority of supported employees required constant supervision to perform their job. Further, the majority of supported employees performed tasks which were modified significantly such that it was unfeasible for an employer to employ a full award rate employee to perform the task. The false premise under which the SWS methodology applied did not recognise this, and assessed productivity using an employee on the full award rate as the benchmark.

DSA1, DSA2, DSA3, DSA4, DSA5, DSA6, 2DSA1, 2DSA2 and 2DSA3

[170] A number of witness statements made by supported employees of DSA or their parents or carers were filed. 45 These witness statements in general described the benefits and significance of supported employment with DSA and the likely consequences if such employment was no longer able to be provided. Each witness was given a pseudonym. None was required for cross-examination. Examples of their evidence are as follows:

  DSA4 has worked for DSA for 31 years. He said that “the money is good” and he is saving to go away on a holiday with his partner who he met at DSA. He feels good about himself working at DSA, and over the years he has learnt new jobs and skills, and he also likes socialising at DSA. DSA4 said that if he could not work at DSA any longer, he would be upset and would get bored if he had to stay at home all the time.

  DSA5 is a guardian for health and services for her nephew and assists in major decision-making that is beyond her nephew’s capacity. DSA5 said that due to her nephew’s disability, he needed to work at a workplace where staff had training and education to understand people with disabilities. Prior to working at DSA, her nephew had worked in a fast food chain, and had experienced harassment and was unhappy. Working at DSA had been a positive experience for DSA5’s nephew, and his role there gave him a sense of contribution and also routine and companionship. She said that her nephew had become more confident and grown and developed through his role at DSA, and this gives DSA5 a feeling of contentment.

  2DSA1 is a carer of a supported employee (EL) who is 33 with vision impairment, learning disability, Asperger’s Syndrome, personality disorder and depression. Other barriers to EL working in an open market include factitious disorder, gender dysphoria, anxiety and suicidal ideations. Employment with DSA is important to EL because it gives her purpose in life. Her employment has had a positive impact on her mental health, confidence and self-esteem. The main reasons for EL working in supported employment includes that it provides her with purpose, responsibility, the ability to live a normal life, inclusion in society and the ability to engage with peers. If EL was not able to work at a disability enterprise like DSA, it would change how support is provided to her and she would require more government funding to allow her access to other programs that would still not be able to fill the void. EL does not have family support in her life and the impact of supported employment being taken away will create further strain on 2DSA1 and other carers as well as the hospital system.

  2DSA3 has worked at DSA for 36 years. 2DSA3 believes employment at DSA has provided her with the ability to make lifelong friends, given her a reason to get up and work, provided a positive lifestyle and independence, made her feel good about herself and made her family happy. If she was not able to work at DSA she would have nowhere else to go. Her work is suited to her abilities and she feels supported. If she was not able to work at a disability enterprise she would have to stay at home and do nothing.

Dr Kenneth Baker AM

[171] Dr Kenneth Baker 46 is Chief Executive of NDS. He possesses a PhD in Sociology and is an advisor or member of numerous government disability employment and services advisory groups. Dr Baker said that, in his view, supported employment was valuable for people who want to work but who may not be suited to working in mainstream employment. He strongly disagreed with the view that supported employment was an outdated model and that the vast bulk of supported employees could and should work in mainstream settings. In his opinion, based on interactions with NDS member organisations and supported employees, supported employment was of social and economic benefit to employees, and it generated net budget savings as it cost significantly less than non-vocational day programs.

[172] Dr Baker states that NDS developed the BuyAbility Impact Tool to produce accurate data on the economic and social benefits of supported employment in Australia. The BuyAbility Impact Tool measured the net economic benefit of an ADE and the net economic return per dollar of government funding. In the 2015-16 financial year, the 80 BuyAbility participant members contributed a positive net economic benefit to society of $344,879,234 per annum from government support funding of $131,951,693 per annum, meaning an equivalent net economic benefit of $2.61 from each dollar of government funding.

[173] Dr Baker referred to an NDS funded KPMG Report on the impact of unfunded wage increases on the financial viability of ADEs. The KPMG Report considered the impact of wage cost increases from 20% to 100% on the viability of disability enterprises through data on 85 disability enterprises. The key finding was that a 40% increase in the wages of supported employees would see 85% of ADEs in deficit, with four in ten making losses above $250,000. An increase in wages beyond 40% would result in the employment of almost 11,000 employees at risk.

[174] Dr Baker said that should the SWS be the only wage setting mechanism that remained after the SES Award review was concluded, consideration of the impact of wage rises would become a key matter for the sector. There had been significant wage increases for NDS member organisations who had adopted SWS in its current form including six organisations which had experienced annual wage costs increase ranging from 18% to almost 85%. The financial viability of these organisations would be compromised once the federal government's decreasing annual subsidisation of these wage cost increases expired.

Rohan Braddy

[175] Rohan Braddy 47 is the Chief Executive Officer of Mambourin Enterprises Ltd (Mambourin), which has been providing supported employment since 1996. Since the inception of ADEs in 1996, Mambourin has paid its supported employees using the SWS, with the exception of a small number of new supported employees who were started on the BSWAT some years ago and subsequently re-assessed under SWS following the Nojin decision. Mr Braddy noted that at the time Mambourin opened its business services, the Commonwealth government stipulated that all new business services must pay supported employees using an approved wage assessment tool. Mr Braddy gave evidence that at the time the only approved wage tool available to them was the SWS.

[176] In respect of the employees who were transitioned from the BSWAT to the SWS, Mr Braddy stated that of the 14 employees, the wage rates of two went down slightly (between two and three per cent) and the other 12 went up substantially, approaching double what they were under the BSWAT.

[177] Mr Braddy gave evidence that the reason Mambourin’s ADEs had survived under the SWS was due to the substantial cross-subsidy from other parts of the business. Mr Braddy agreed in cross-examination that Mambourin had been growing significantly even though they had used the SWS. Mr Braddy said that in his view the implementation of the SWS in an ADE was highly problematic for a number of reasons, the most significant being that a supported employee is usually only assessed on one task, being a task that they can do well. This, submitted Mr Braddy, artificially inflated their annual wage over and above their full contribution to the business. He stated that his main objective was to create a level playing field between ADEs rather than the current position whereby Mambourin paid an average hourly rate of $8.93 and the national average rate was $5.37. Mr Braddy agreed that if everyone were paying $8.93 it might resolve the issue.

[178] In Mr Braddy’s opinion, a significant problem with the SWS was its lack of robustness and objectivity. In particular, Mr Braddy contended that the quality of a wage assessment outcome was highly dependent on the quality of the assessor and the relationship the assessor had with the ADE.

Paul Booker

[179] Paul Booker 48 is the General Manager of Karakan Ltd (Karakan). Karakan is a disability service providing disability and mental health supports to people across a range of locations throughout South East Queensland since 1972. Mr Booker outlined that Karakan adopted the SWS between 2014 and 2015 after phasing out the use of the BSWAT to conduct wage assessments for its supported employees. He said that following the adoption of the SWS, Karakan underwent a restructure of its business model in order to remain viable while still providing supported employment opportunities for its employees. Mr Booker submitted that Karakan had met the additional costs incurred in adopting the SWS in part via external funding through philanthropic grants, corporate funding and social procurement. Mr Booker stressed, however, that this funding was not guaranteed on an ongoing basis. Additionally, Mr Booker submitted that SWS supplementation funding from the Australian Government masked the immediate financial impact of adopting the SWS. The tapering of the supplementation would require Karakan to continue to invest its profits to meet the future shortfalls rather than investing in innovation, maintenance and growth.

[180] Mr Booker’s view was that the SWS in its current form did not adequately ensure fair, sustainable and equitable supported employment opportunities. However, he recognised that due to the wide range of disability enterprises throughout Australia, there was difficulty in establishing a “one size fits all” wage assessment tool.

Kerry Browne

[181] Kerry Browne 49 is the Chief Executive of Help Enterprises (Help). Help is a disability service provider which employs 305 people with varying degrees of disability to work in a number of social enterprises it operates in Queensland. She gave evidence that following Help’s adoption of the SWS to conduct wage assessments in December 2016, its supported employee wages bill had increased by over $355,000 per annum (25%). She said a complete restructure was required of its business model to remain viable. Ms Browne said that Help was “already under extreme pricing pressures” and that while the federal government’s supplementation funding was largely masking the immediate impact of adopting the SWS, Help would be unable to continue operating in its current form unless there is some guarantee of an ongoing wage subsidy.

[182] Ms Browne stated that Help would like to adopt the modifications to the SWS, once available. In her opinion, the SWS weekly minimum was causing significant problems, with wages over $10 per hour and above being financially unsustainable with respect to employees with low output and a lack of skills (which precluded placement in alternative employment options) and who require high support. She stated that Help will have to investigate the provision of non-vocational supports for employees through the NDIS, and expressed her disappointment that they are facing being priced out of employment supports.

Kristian Dauncey

[183] Kristian Dauncey 50 is the Chief Executive Officer of Knoxbrooke Incorporated (Knoxbrooke), a disability support provider in Victoria which employs 135 people with varying degrees of disability to work in a number of social enterprises it operates. Its flagship business, Yarra View Nursery, has a high proportion of employees with a disability. Mr Dauncey stated its “success has been the opportunity to provide people with disability with an interest in horticulture genuine employment in a commercial nursery business.”51

[184] Mr Dauncey gave evidence that following Knoxbrooke’s adoption of the SWS to conduct wage assessments in 2016, its supported employee wages bill had increased by $359,668 per annum. He said that Knoxbrooke has had to “completely overhaul” its business model to remain viable, involving significant (unfunded) investment in capital to support the establishment of new business lines. While Knoxbrooke had gained support from the Victorian government to obtain business contracts for the nursery, this support was not guaranteed on an ongoing basis. Mr Dauncey also gave evidence that while the federal government’s supplementation funding is largely masking the SWS’s immediate impact, unless there was some guarantee of an ongoing wage subsidy, Knoxbrooke was unlikely to be able to continue operating in its current form.

Florence Davidson

[185] Florence Davidson 52 is the Executive Officer of The Christie Centre (Christie) in Mildura Victoria. Sunraysia Supported Employment Services (SSES), a branch of Christie, is a disability service provider which operates several disability and social enterprises, employing 31 people with varying degrees of disabilities in North West Victoria. Ms Davidson stated that Christie firmly believes in meaningful employment and its benefits to health and well-being and was committed to the disability/social enterprise model as a key pillar of their organisation’s vision and mission. One of their businesses, Aroundagain, located next to Mildura Landfill, is expanding to include a builder’s yard and e-waste recycling to avoid the use of landfill. Another business, the Mildura Chocolate Company (MCC) produces premium chocolates with local produce.

[186] Ms Davidson stated that Aroundagain and MCC employ in excess of 23 staff, with a high proportion having a significant level of impairment requiring support to attain their employment goals. Ten volunteers assist at Aroundagain and seven at MCC. SSES’s success has been to provide opportunities to people living with a disability with skilled support, training and employment in a genuine commercial setting.

[187] Ms Davidson stated that since adopting the SWS, SSES’s supported employee wages bill had increased by approximately 18%. As a result, they have had to restructure their business model to ensure ongoing commercial viability, involving significant risk and unfunded investment in capital to increase productivity and to support the establishment of new business lines, as well as re-locating MCC to reduce operational costs. They had gained support from government departments through their social procurement projects, but there was no ongoing guarantee. The phasing out of federal government funding would require a significant increase to profitability to cover increased costs and, unless there was some guarantee of ongoing wage subsidy, they might not be able to continue operating their current business and service model.

[188] Ms Davidson submitted that the SWS weekly minimum wage was causing significant sustainability problems with employees who had low productive output rates requiring high levels of on-the-job support. As a consequence, SSES had difficulty in placing these employees in other employment and was greatly disappointed to see these employees being priced out of supported employment.

Joanne Jessop

[189] Joanne Jessop 53 is the Chief Executive Office of Multicap Limited (Multicap) in Queensland, an operator of an ADE and a number of social enterprises which provide employment opportunities for over 110 people with disabilities. One business, Monte Lupo Arts (MLA), provided high quality ceramic artwork to galleries across Australia and employed around 30 people, a high proportion of whom had a disability. Another business, Makeables, provided assisted workmanship services including assembly, packaging and finishing and employed more than 70 staff, a high proportion of whom required levels of support due to their disability.

[190] Ms Jessop gave evidence that in August 2013, Multicap adopted the SWS across MLA to conduct supported employee wage assessments after phasing out the BSWAT. She stated that the Makeables staff transitioned from another disability enterprise that was already using the SWS. Following the adoption of the SWS, MLA’s supported employee wages bill increased by 41%. The MLA business model was overhauled in order to remain viable. This involved significant risk and unfunded investment in capital to support the establishment and operation of new business lines. Ms Jessop stated that the early adoption of the SWS had made Multicap ineligible for federal government subsidies offered to organisations to assist in moving from BSWAT to SWS.

[191] Ms Jessop submitted that Multicap would like to adopt the modifications to the SWS as the SWS weekly minimum was causing significant problems. They had to “top-up” wages for 28 employees, many of whom required significant daily support and whose chosen hours meant they did not meet the minimum weekly pay mandated by the SWS. She submitted that these people want to remain employed at MLA or Makeables, but this increased their annual costs by around $40,000 and was unsustainable.

Rob William Kirkham

[192] Rob Kirkham 54 is the Chief Executive Officer of Access Industries for the Disabled (Access Industries), which provides paid supported employment services to support persons with disabilities. Access Industries has three divisions: packaging, timber products and a commercial laundry. Out of 424 employees, 240 are supported employees. He stated that jobs and tasks are allocated based on each individual supported employee's abilities. In his witness statement he described the different activities and the different ratios of support workers and supported employees, their operations and the impact of work on the lives of supported employees.

[193] Mr Kirkham stated the revenue stream and budgets for Access are reasonably close. Revenue was generated by a blend of supported and other employees who do not have a disability. He observed that the financial difference between the current wage assessment tool used by Access (the Greenacres tool) and ABI’s proposed work value classification structure was unclear, but in his view a skills and competency based structure would provide a fairer assessment for the employer to assess the supported employee's capability range. A productivity-only assessment on a task did not provide the employer with all the inputs required to complete a finished product. The proposed skills-based classification structure was a very acceptable approach to determine wages in most industrial awards. Access had moved from the BSWAT to the Greenacres tool but although the Greenacres-assessed wages were mostly lower than the BSWAT, Access did not reduce its supported employee wages as a result.

Tanya O’Shea

[194] Tanya O’Shea 55 is the Chief Executive of Impact Community Services (Impact), which manages the Material Recovery Facility in Bundaberg, Queensland. In her witness statement, Ms O’Shea explained that Impact’s recycling and collections centre is a DSS funded ADE employing 27 workers with disability. Employees’ pro rata wages are determined by the SWS. Ms O’Shea’s said that her concern with the SWS was that undertaking a productivity assessment did not consider all the factors necessary to make an informed decision when determining a supported employee’s pro rata wage. The SWS assumes workers were already competent, and under the SWS, employees were assessed by completing one task only. Ms O’Shea said that since the adoption of the SWS, Impact’s annual supported employee wages bill had increased by $108,160, or 41%. She added that IMPACT would like to be able to use modifications to the SWS when they became available to enhance its financial viability and help ensure its service is able to continue providing employment options for people with disability in Bundaberg.

Hugh Kenneth Packard

[195] Hugh Packard 56 is the Chief Executive Officer of Valmar Support Services Limited (Valmar), which provides paid supported employment services to persons with disabilities. Mr Packard has 10 years’ experience as a fully accredited SWS assessor. Valmar employs a total of 64 support workers and supported employees in timber products, recycling commercial cooking/kitchen work and grounds maintenance across four sites in New South Wales. He said that the ratio of support staff to supported employees was based on the needs of the supported employees and the need and complexity of the task. In his witness statement he described the different activities undertaken by the employees, how Valmar’s groups operated and the impact of work on the lives of supported employees. He observed that the level of productivity of each supported worker in the recycling, kitchen and sawmill work groups was dependent on, or determined by, the productivity of the rest of the work group.

[196] Mr Packard said that Valmar had not tested ABI’s proposed work value classification structure, but Valmar did internally test the SWS and were part of the formal trial of the modified SWS. He observed that the proposed classification structure would certainly be better than introducing either version of the SWS as neither acknowledged nor reasonably accommodated sub-level competence/skills in the assessment processes, despite a majority of supported employees having sub-award level competence. The proposed classification structure acknowledged this sub-award level competence as a genuine, industry wide reality and dealt with it similarly to award levels of competence or grading in all awards. Mr Packard further observed the SWS assumed competence for “100% of the time an employee is engaged in work and therefor assesses productivity in ‘artificial isolation’ from the actual production environment and in isolation from the applicable full suite of award competencies. Because of this it would ‘artificially’ increase wages for many employees well beyond the productive value they and do actually contribute to the business.” He said that the SWS was specifically developed for employees with disabilities working in open employment and was not designed for ADEs.

[197] Mr Packard referred to a trial funded by DSS that Valmar participated in of modifications to the SWS. He said that the evaluation report stated that the trial had not provided a clear case that the modified SWS can be consistently applied to provide an accurate assessment across a range of ADE contexts. During the trial’s data collection, it was identified that composition of a work group was central to productivity and output was significantly affected when the teams were reconfigured. He stated that the SWS was incapable of determining a fair wage in this situation.

[198] Mr Packard stated that in his experience as a long-term manager of an ADE he had noticed that many ADEs undertake a broad range of short-term contract work containing distinct steps. He observed that it is common for employees to work on several distinct jobs over the course of their workday or week. Supported employees might be assigned straightforward tasks that represented a small subset of a job, but these employees may perform these tasks at a highly productive rate. He stated that due to the simplistic nature of the tasks, there is not a realistic financial return at a rate covering an employee’s wage. Under the SWS, supported employees that are able to carry out more complex tasks are penalised if these tasks reduce their rate of productive output. He gave the example that an employee’s overall productive output rate might drop from 80% to 50%. Mr Packard stated that this demonstrates that productive output as the sole determinant does not take into account all relevant factors including job related skills and competencies. Mr Packard stated he was firmly of the opinion that the SWS should not be mandated as the only acceptable wage assessment mechanism for use in ADEs.

Sally Powell

[199] Sally Powell 57 was the Chief Executive of Bedford Group Ltd (Bedford) between August 2011 and December 2017, and commenced employment with Bedford in 2003. She has also worked with peak body disability providers both nationally and internationally. Ms Powell stated that Bedford is the second largest provider of supported employment for people with disability in Australia. It provided supported employment to about 1,800 people at a range of businesses in South Australia and at sites in Western Sydney and North Melbourne. She said she gave evidence in a personal capacity and not as a representative of Bedford.

[200] Ms Powell observed that people with disability, particularly intellectual disability, autism, or profound, complex disability have significant barriers to gaining and maintaining mainstream employment. She added that given the diversity and breadth of impairment of people with disability, and acknowledging the basic human right to work, the full range of employment options, including supported employment, was necessary to afford all people with disability the opportunity to gain and most importantly sustain employment.

[201] Ms Powell stated that public policy had a significant role to play in facilitating employment for people with disability. She recalled the impact of the closure of supported employment businesses in the United Kingdom flowing from a policy decision that was based on the belief that people with disability should be in mainstream employment, warning that the resulting unemployment and social isolation should not be repeated in the Australian context. Ms Powell stated that by 2013 no supported employment businesses existed in the UK ,  and that people with disabilities fell through the cracks with the vast majority of employees having left employment entirely.

[202] Ms Powell also gave evidence that the cost of running an ADE was considerably higher as it was not a mainstream employer, adding that an ADE was a disability service, educator and employer and as such required unique consideration. She said that supported employment plays a critically important role in Australian society and constitutes a targeted and fiscally responsible investment in public funds. Her opinion was that wages earned through supported employment can reduce public expenditure on DSPs and carer’s allowances. Her view was that supported employment significantly enhances the lives of people with disability, their families and carers in addition to wider society, and therefore needs not only to be protected but also encouraged.

Michael Smith

[203] Michael Smith 58 provided an expert witness statement on behalf of NDS. He stated that he had read the Harmonised Expert Witness Code of Conduct and agreed to be bound to it and his opinion was based on his specialised knowledge in disability services. He said that as a result of his 30 years of direct experience in disability services, he had specialised knowledge in the area including the management and operation of ADEs, unique cost implications and the importance of differentiating between production and productivity. His experience working in disability services included senior positions with Access Industries as Deputy CEO, and CEO from 1989 until retirement in 2014. Since retirement, he has undertaken some consultancy work with Access Industries until April 2017. Access Industries provides supported employment and training for approximately 250 people with disabilities in a wide range of work. Mr Smith stated that he had been contacted by NDS to provide an expert opinion on the differences between employment in the open labour market and the operational concept of supported employment in ADEs, the cost implications of these differences, and whether SWS in its present form was an appropriate method for determining these differences and why.

[204] Mr Smith stated that in his opinion ADEs were functionally, operationally and economically different from typical commercial businesses. He said that where a business employed persons with a disability, that would represent a very small part of the workforce, and would be supported by a specialist external agency funded by the Commonwealth government such that it did not constitute an additional cost for the employer. The employee would be undertaking tasks that would otherwise be carried out by a non-disabled person at the full award rate. In contrast a typical ADE essentially functioned as a social justice program. ADEs provided supported employment for people with disabilities who aspired to work but are independently assessed as unlikely to succeed in the open labour market. Mr Smith stated that for over a decade, referrals to ADEs had come from Centrelink on the basis of a job capacity assessment. The workforce of ADEs were predominantly made up of supported employees with lower productivity and higher support needs.

[205] There was a commercial imperative for ADEs to operate viably, and ADEs offered services to other commercial businesses on a contract or sub-contract basis. The ADE model was usually dependent on sourcing work that was suitable and sustainable for supported employment. ADE operations were largely focused on manual activity which, if carried out in commercial enterprise, would often be automated to reduce labour costs. Mr Smith said that during peak-production and labour demands from commercial customers, ADEs engaged non-disabled casual labour to meet customer demand and maintain the continuity of the contract to ensure ongoing commercial opportunities. The cost of non-disabled casuals performing work that may have been automated in a commercial entity was less economically efficient but necessary. A new or replacement contract often required a major injection of preliminary training which could have a short-term adverse impact on cost. Additionally, down-time had a major impact on production. Down-time occurs during the frequent change-over of customer jobs or due to inappropriate behaviour.

[206] Mr Smith stated that given disabled employees’ productivity is substantially lower than non-disabled workers, there was a “diseconomy of scale”. For example, a commercial business may have 15 non-disabled workers and an ADE may have 45 supported employees for a comparable level of production. The diseconomy of scale also has other cost implications including requirements for larger accommodation, additional equipment and higher supervision rates. The additional costs associated with this were a direct consequence of the unique nature of supported employment services as provided through an ADE.

[207] Mr Smith stated that, unlike commercial operations, fluctuations of work or the loss of contracts in ADEs do not result in redundancies or terminations. Employers are also limited in their capacity to send workers home during shortfall by duty of care considerations. He stated that ADEs typically intervene in situations of inappropriate behaviour to provide additional support to enable a worker to return to work rather than be terminated. He stated that while there is Commonwealth funding to assist in additional support costs, funding is not provided to offset the loss of production experienced whilst a worker is off task and receiving support.

[208] Mr Smith stated that in his opinion there was a major flaw in the current SWS methodology resulting in wage rates that were unaffordable and unsustainable based on production income. He stated that on this basis it cannot be considered a productivity-based wage; the methodology the SWS used was invalid because it implicitly equated productivity with output but ignored the costs associated with achieving that output. Steps 1 to 4 of the SWS Handbook described the methodology used to assess relative production output of a worker with disability compared to a worker who qualifies for the full award rate undertaking the same duties. Mr Smith said that aspects of this methodology were problematic when assessing teams where the output rate of the overall team is depressed by the slowest members. Further, it was difficult to establish a fair rate of pay for employees with widely fluctuating performance patterns, although no other assessment tool had been able to effectively overcome these problems.

[209] Mr Smith identified the major flaw in the SWS as being contained in Step 5 of the SWS Handbook. He stated that Step 5 erroneously equated relative production output with productivity and required that a worker be paid a wage rate directly equivalent to output, but this wage translation step assumed that the cost must be met from the production income. If a worker had reduced production capacity, this reduced capacity impacted directly on their ability to generate the production income to cover all these costs, not just the direct wage sub-component. Mr Smith stated that the Supported Wage System Handbook is silent on how and where the employer is expected to generate the funds to pay for these costs.

[210] He stated that if production income generated by workers does not meet all of the businesses’ operational costs, the enterprise will operate at a deficit and will close down. Mr Smith stated that while these are considerations in a commercial business the diseconomies of scale in an ADE exacerbate this. However, some of these costs can be offset against Commonwealth subsidies and the tax concessions applicable to not-for-profit organisations. 59

[211] Mr Smith stated it has been suggested that for a commercial business to remain viable, each production worker needed to generate approximately 2.5 times their base direct wage plus entitlements to cover the business costs of operation. If a person with a disability was employed to undertake the same job as a full award rate worker and was assessed as producing 40% output then, including direct wages, wage on-cost entitlements and other business costs, there was an immediate and significant shortfall.

[212] He stated that the failure to acknowledge and recognise the difference between “production output” and “productivity” was the most significant problem with the SWS methodology. It was containable in open employment but problematic in ADEs where supported employees generally had lower output levels and there were difficulties with cost absorption and diseconomies of scale. Unless the Commonwealth government made a firm and enduring commitment to underwrite the economic shortfall of the SWS methodology, ADEs would be financially non-viable and forced to close with the progressive loss of job opportunities for 20,000 people with disabilities.

Kevin Todeschini

[213] Kevin Todeschini 60 is the Services Manager of Start Fresh Services (Start Fresh). Start Fresh is an ADE that has paid full award wages to employees with disability since its inception in 2008. Mr Todeschini said that he did not know why pro-rata wage assessment was not introduced at that time, as the case-based funding level at which DSS funded most of the 20 supported employees (level 3) indicated they required significant on the job support.

[214] Mr Todeschini stated that while there were positive social and economic benefits for supported employees being paid full award wages, the payment of full award wages had significant impacts on the business’ viability. Examples he provided included the creation of disharmony in a team environment due to staff receiving the same rate of pay as less productive co-workers with a disability; the business being placed at a competitive disadvantage due to supported employees’ reduced rate of productive output; and the business’ inability to provide the maximum funded supported employment positions for many years, despite a reduction to 12 funded positions in 2013, because it is “still not financially sustainable to employ this many workers with disability at full award wages”. He said that, following a review of its business model, Start Fresh now only employed people with a level of disability that was likely to be funded at DMI level 1 on the basis that increased productive output reduced business cost, but this practice did not resolve all of the issues he had identified.

James Wood

[215] James Wood 61 is the Managing Director of Product Action Incorporated (PAI), a disability support provider in Adelaide which is primarily a packaging outlet for local industry. He said that PAI’s success had been to provide people with severe disabilities genuine employment in a commercial business. In 2015, PAI adopted the SWS after phasing out use of the BSWAT to conduct supported employee wage assessments. He stated that PAI’s supported wages bill has increased by almost 62% since adopting the SWS and they had had to change their business model in order to remain viable. They had gained support from the DSS, but ongoing support is not guaranteed. He said the SWS weekly minimum wage was also causing significant problems as it was financially unsustainable for employees who had low productive output and required high support and whose lack of skills prevents alternative employment options.

Civic Disability Services

Nicole Fitze

[216] Nicole Fitze 62 is General Manager of Human Resources of Civic and has worked there since 2000. Civic operates an ADE providing paid employment to people with intellectual disabilities and/or mental health conditions, who are in receipt of a DSP and who require additional support in the workplace. Civic uses the Civic Industries Supported Employees Wage Assessment Tool (CISEWA tool) to set wage rates for supported employees. It was developed in 2002 by a consultant and is a hybrid of the Greenacres and Skillsmaster tools. Part of Ms Fitze’s current role is to review Civic’s use of the CISEWA tool.

[217] Ms Fitze said that Civic received government funding for the ADE, but this was insufficient to cover the costs associated with supporting and assisting the supported employees. Civic is engaged by third party companies who require tasks to be performed and who are interested in diversifying their workforce. Civic employees are assisted by five employees without a disability who run machinery outside of supported employee capability and who supervise and assist supported employees. She said that the way Civic engages supported employees is different from employers in the general labour market. Civic employees typically have much higher support, behavioural requirements and limited skills. Civic also provided supported employees access to services not available in open employment.

[218] Ms Fitze was cross-examined about the application of the CISEWA Tool. She agreed that Civic received government funding in relation to behaviour management but that Civic also made a further deduction from wages for the behaviour of the individual based on a loss of performance time.

[219] Ms Fitze said that she has had exposure to the SWS and Skillsmaster. Her understanding of the SWS was that it claimed to determine a fair wage for supported employees through an assessment of productivity only and did not consider the impact of support requirements or the work environment. She stated that the SWS assessed a supported employee against an employee without a disability but that the full duties of a role, such as a receptionist, were not as simple as the tasks that were assessed in the SWS assessment. This was likely to create an inaccurate measure of actual performance and efficiency. She stated that the CISEWA Tool was a fair tool and a more reliable tool that the SWS. Ms Fitze agreed in cross-examination that the proper way in which the SWS is administered is to compare the actual duties performed by the worker with those actual duties performed by a benchmark person without that disability. She agreed that under the modified SWS, with the insertion of historical data that enabled the individual’s productivity to be captured over time, satisfied her concern about distortions arising from a point in time assessment.

[220] Ms Fitze considered that the AEDLC’s proposal to vary the SES Award was not in the interests of supported employees. The ADE was not a profit-making enterprise and ordinarily made a small loss or broke even. Forcing higher costs on the ADE by requiring it to use the SWS would result in substantial downsizing or closure.

Blueline Laundry Incorporated

Robert Fraser

[221] Robert Fraser 63 is employed as the Development and Sustainability Manager for Blueline. He was previously employed as Blueline’s Training Services Manager and General Manager. He has been involved with the Blueline Wage Assessment Tool (BWAT) since 1998. Mr Fraser stated that Blueline differs from other ADEs in that it operates a viable commercial business, unlike other ADEs who were dependent on government funding. In Mr Fraser’s opinion, the BWAT was simple, practical and based on the competencies required for employment in a commercial laundry. In cross-examination, he agreed that under the BWAT an employee would be assessed on more than one task even if the employee preferred to work one task and the employer did not require an employee to work on more than one task. Mr Fraser disagreed that the BWAT’s assessment of an employee’s motivation in determining wages was a subjective assessment.

[222] In Mr Fraser’s opinion, if the SWS were adopted as the sole wage assessment tool, this would adversely impact Blueline’s ability to employ its 81 supported employees. He said that the introduction of the SWS would compel Blueline to select employees with higher productivity levels. Mr Fraser provided the example of high support needs employees with a productivity as low as two per cent, and said it was unlikely that Blueline could viably support employees with such high support needs. Mr Fraser was cross-examined about an assessment from Synergy Group, a consulting firm, that there would be an increase in wages costs of $390,856 per year if SWS were used. He stated that he did not know the methodology used to make this assessment.

Peter Godfrey

[223] Peter Godfrey 64 is employed as Blueline’s External Facilitator. In 1994 he assisted Bayview Laundry, now Blueline, to develop its original wage assessment tool. He gave evidence concerning the BWAT’s application and methodology. He said that a new Blueline employee would undergo an initial BWAT assessment within a 13-week intake period to assess their capacity and set their wage levels. The BWAT was used to assess the productivity levels of a supported employee as a percentage of that achieved by an employee who is working at a standard performance rate using the correct methods and applying themselves to a variety of laundry tasks. Ongoing supported employees had their productivity and competency assessed annually based on a percentage relative to standard performance and against five core areas. Individual employees received a rating out of 10 on each competency by references to a series of questions. Scores were then discussed before preparing individual training plans. If an employee’s productivity or competency had regressed, their wages were not reduced. An employee could request a re-assessment if required and as appropriate.

[224] Mr Godfrey stated that annual BWAT assessments were checked for validity by reference to the average productivity, output and staffing levels of comparable commercial laundries. The assessment reflected both the average productivity of Blueline’s supported employees as well as the individual productivity of a particular supported employee.

Endeavour Foundation

Andrew Donne

[225] Andrew Donne 65 is the Chief Executive Officer of Endeavour Foundation (Endeavour) and is responsible for all operational and managerial functions across the organisation’s five core services in New South Wales, Queensland and Victoria. In his role, Mr Donne has overall responsibility for the management and operation of Endeavour’s ADE.

[226] Mr Donne said that, following a trial of the SWS conducted by the Department of Education in 2016, the results indicated there were a number of shortcomings in utilising the SWS tool at Endeavour. The SWS did not account for the social and behavioural challenges facing those supported employees with an intellectual disability which might impact on their production rate, nor did it account for the complexity of tasks. Further, he submitted that the SWS tool did not take into account any vocational skills required to complete the job and that individual tasks undertaken by employees were not typically remunerated as individual tasks in an open environment. Nor did the SWS adequately identify the periods of inactivity of the employee, whereas the Greenacres Tool which it currently used would identify any unproductive period and provide a discounted wage due to this in the short term while at the same time nonetheless providing the opportunity to improve the wages of the worker by focusing on areas of opportunity for improvement in the long term.

[227] Mr Donne stated that Endeavour would be unable to sustain an increase to the rates of pay that would follow if it was required to use the SWS tool. He considered that the Greenacres Tool was more appropriate for Endeavour as it had regard to the unique nature of supported employment and, in particular, employees with an intellectual disability.

[228] In response to the evidence of Kate Last, Mr Donne said that Endeavour had no record of her being offered $10 per hour, as she alleged. Ms Last was recently assessed in May 2017, which produced a rate of $7.29; however, Endeavour did not reduce her rate and she remained on an hourly rate of $8.67.

Scott Reed

[229] Scott Reed 66 is a Senior Business Services Manager at Endeavour and is responsible for the overall management and operations of Endeavour’s ADE. In his role, Mr Reed approves the assessment of employees using the Greenacres tool.

[230] There are currently 49 supported employees who work at Endeavour’s Maryborough ADE producing a range of timber products. Of those 49 supported employees, 46 have their wage rates assessed using the Greenacres Tool and three supported employees have their rates of pay assessed using the SWS.

[231] Mr Reed gave evidence that safety and quality control are critical challenges for supported employees during the production process, requiring constant encouragement and training via a number of established learning steps. He said that it could take several months for a supported employee to progress from one step to another and some employees may not have the capacity to progress through each stage.

[232] His view was that the current Greenacres Tool was a more appropriate tool to assess wages rates for supported employees, as it had regard to the employee’s productivity capacity in addition to his or her competencies. Mr Reed highlighted that the SWS tool is based on productive output and might result in a situation where an employee undertaking less challenging tasks might be paid at a higher hourly rate than one undertaking more complex work. The SWS’s focus on productive output alone would see unsustainable increases to the cost of wages. Moreover, solely measuring productivity does not include an assessment for quality nor does it account for any distractions which may arise.

The Mai-Wel Group

Anne Hodgson

[233] Anne Hodgson 67 worked at The Mai-Wel Group (Mai-Wel) for 20 years. She was the former Deputy CEO of Mai-Wel and continues to volunteer on a Board of Directors subcommittee and works as a consultant as required. She was responsible for developing The Mai-Wel Group Wage Assessment Tool (Mai-Wel tool) to be compliant with the established Disability Service Standards and supported the ongoing inclusion of the Mai-Wel tool in the SES Award. Ms Hodgson said that the Mai-Wel tool included both the assessment of an employee’s competency (skills) and assessment of their productivity in order to be fair, transparent and non-discriminatory. In response to AEDLC’s position, she said that direct observation and testing to assess competencies is fair, non-discriminatory and widely practiced in non-disability employment. The approximate four-month assessment process provided opportunities for supported employees to demonstrate their competencies and provided a clearer and more accurate assessment as the extremes of performance were removed. Assessment involved a range of staff to ensure a consistent and fair application of the assessment process. Carers of the supported employees were informed of the process (including the complaints process) and were satisfied with the results. Ms Hodgson stated that during her employment at Mai-Wel no wage assessment was challenged nor was any complaint received. She said that a productivity-only assessment did not consider issues such as the limitations placed on an individual working in a team and the impact on productivity when a job has been modified to suit the needs of individuals with disability.

Anthony Rohr

[234] Mr Rohr 68 is the General Manager, People, Culture, Quality, Safety of Mai-Wel. He stated that neither the original SWS nor the modified SWS were suitable tools in ADEs. In his view the assessment methodology of the SWS was simplistic and rigid and could not provide a valid and practical method of wage assessment in an ADE, although he accepted that he was not a qualified SWS assessor and was not responsible for the application of the Mai-Wel tool. He said that the SWS timing does not record individual productivity in production line work but was influenced by the level of teamwork achieved. He highlighted that due to the custom nature of the products manufactured at Mai-Wel, there were no practical means to establish a standard for type and size (of crates or pallets) that can be used in an SWS assessment. He suggested that the SWS methodology does not recognise the value and broad skills an employee contributes in certain tasks. He accepted in cross-examination that the SWS did consider supervision responsibilities at the end of the assessment and if there was a higher level of supervision than usual then the assessment score would be adjusted accordingly. However, he said that that speed had a significant bearing on the assessment outcome and in some circumstances, such as paper removal, the assessment only referred to speed. He also agreed in cross-examination that the two group leaders assessed in the modified SWS trial conducted at Mai Wel performed more tasks than the other employees and had higher productivity results, but said that this followed from the fact that a person whose disability does not affect them to the same extent as others will have higher productivity because they can do more parts of the job.

[235] Mr Rohr said that ABI’s proposed work value classification structure allowed a supported employee to be classified to a level based on their competencies/skills. In this sense it was similar to the Mai-Wel tool because it considers the overall job or jobs that are undertaken in the workplace. However, he accepted in cross-examination that proposed structure had not been used in Mai-Wel or applied, assessed or costed.

[236] Mr Rohr said that the important distinction between open and supported employment was the need and duration of employment support to cater for the level of disability and a person’s capacity. In open employment, if the person does not require it then employment support is not ongoing, or alternatively is provided intermittently. This is compared with a supported employee who would not be able to perform or maintain their job if it was not for the support provided by ADEs. The Mai-Wel tool considered supervision as part of the assessment and took into account the ability of the supported employee to undertake work with constant supervision through to their ability to working independently. The funding provided by the Commonwealth did not always cover the support required by supported employees. Both a low support and high support employee can have high levels of productivity and there was no fixed correlation between the assessed level of funding and the competency and productivity of a supported employee. The level of support which a supported employee is funded for has no bearing on the wage that they are paid.

[237] Mr Rohr contended that the SWS requires a performance standard to earn the full award wage to be set for the purpose of assessment, when in fact many modified jobs performed by supported employees having no reference point to the full award wage job and performance standard. As all the work in ADEs is performed by supported employees, it is difficult for the SWS to operate in the way it was designed for in open employment.

2MW1, 2MW2, 2MW3, 2MW4, 2MW5, 2MW6, 2MW7, 2MW8, 2MW9, 2MW10 and 2MW11

[238] Eleven statements made by supported employees of Mai-Wel or the parents or carers of supported employees of Mai-Wel were filed, and each was pseudonymised. 69 None was required for cross-examination. In summary they described the benefits and importance of supported employment for supported employees and their parents/carers, and a strong concern about the possible loss of such employment. For example:

  MW2 is the mother of an intellectually disabled daughter who cannot read or write. MW2 supports her financially and provides her housing. Her daughter is employed by Mai-Wel, and this is important to her as it fulfils her dream to work and provides her with a monetary incentive. Her self-esteem and independence have improved in supported employment as she is socially accepted. She has previously been unable to cope in open employment as it does not have the same level of support as that received at Mai-Wel. If her daughter could no longer had access to supported employment, this might result in MW2 having to deal with mental health issues resulting from boredom, and MW2 would no longer be able to have any time away from caring for her daughter.

  MW3 is an employee at Mai-Wel. She said loves working with her friends and giving her mother and father time to relax. Working gives her routine and independence and allows her to spend time with people. If she could not work at Mai-Wel, she would be at home doing nothing and her mother would have to be with her all of the time. She said “They need a break from each other”.

  MW4’s daughter who has an intellectual disability, cerebral palsy, dormant brain tumour, left-side hemiplegia, scoliosis and talipes. Her daughter has been employed by Mai-Wel for the last 20 years. MW4 said her daughter “needs things positioned on her right side, she has to be trained in the differences between paper, cardboard and plastic … if she is having a bad day she will just throw everything in… [she] needs very clear instructions, like the plain paper goes here, for shiny paper you say feel this type of paper it cannot go in”. MW4 provides her daughter with assistance showering, getting dressed, feeding her and packing her lunch and providing her transport. Her employment at Mai-Wel is important to the whole family. MW4 said it provides her daughter a reason to be motivated, have a sense of achievement and gives her a sense of purpose in paid employment. It is not feasible for her to sit at home every day.

Yumaro

Mark Brantingham

[239] Mark Brantingham 70 is the Chief Executive Officer CEO of Yumaro. He opposed the AEDLC application to removal the Yumaro Wage Tool (Yumaro tool) from the SES Award. He stated the Yumaro tool assessed the competency level of employees (in which productivity was also taken into account) and determined their wage level based on what they can do from a wide range of tasks ranked at increasing levels of complexity. He said that a competency-based tool encourages learning and skills development leading to higher wage outcomes and is in line with the classification of work used by almost every other award. He disagreed with Mr Cain’s evidence that an employee with disability should be able to expect that if they are doing one, some, or all of the specialist packaging job tasks within Grade 2 classification of the SES Award, that a SES Award wage assessment will be based on this classification and rate of pay. He said that the application of this proposition within ADEs would see a distortion in wage rates and the closure of many enterprises.

[240] In Mr Brantingham’s view, under the SWS employees doing the more complex task would achieve lower wage outcomes than the employees doing more simple tasks. This would unfairly distort wages and in the process make some of their best employment ventures unsustainable. However, he accepted in cross-examination that, from anecdotal evidence, the average wage under the SWS and the Yumaro tool were about the same. He also agreed that under the Yumaro Tool there was an alignment between the employee and the job classified in the Yumaro Enterprise Agreement and that if employees were able to do a job they were paid a pro rata amount of the award.

United Workers’ Union (UWU)

Martin Schultz

[241] Martin Schultz 71 is a Stakeholder Relations Managers at AustralianSuper, the largest superannuation fund in Australia, and has been employed by the organisation for 9.5 years. Mr Schultz is responsible for providing advice and information to stakeholders and members relating to superannuation, and AustralianSuper products specifically. In his evidence, Mr Schultz said that due to the low level of contributions provided for most employees in the supported employment sector, the combination of fees and insurance premiums have the potential to significantly impact superannuation balances. Using the minimum rate of superannuation contributions under the SES Award, Mr Schultz observes that employees with contributions of $6 per week are left with a negligible balance on retirement due to the default insurance premiums absorbing all contributions over the working life.

[242] Mr Schultz gave evidence that AustralianSuper had developed a new product principally intended to be used by employees in supported employment called “Super Only” which will provide for zero insurance as the default offer to members. Mr Schultz said that from November 2017, new members covered by the SES Award will be allocated the Super Only product as the default option which will not require any amendment to the Award. Members may continue to insure themselves for death, TDP and income protection should they choose to do so.

[243] In relation to retirement incomes under the SES Award, Mr Schultz stated that AustralianSuper was requested to model a number of different scenarios to identify the likely amounts of superannuation accumulated over a working life based on different levels of contributions. Mr Schultz states the current minimum rate of $6 per week was set in 1993 and since that time wages have increased 158%. Mr Schultz observed that, if the minimum contribution rate had been increased in line with movements in actual weekly ordinary time earnings, it would now be $15.49.

Our Voice Australia

[244] Our Voice Australia filed 55 statutory declarations made by disabled persons in supported employment, or by parents or carers of such persons. The maker of each statutory declaration has been pseudonymised. None were required to attend the hearing for the purpose of cross-examination. In summary, they gave evidence concerning the benefits and importance of supported employment to disabled persons and their parents/carers. By way of example:

  AT is a parent of a supported employee. He assists his daughter daily with routine tasks that she cannot complete herself so that her condition is not aggravated. His daughter works two days per week, totalling 13.5 hours. Working enables his daughter to interact with others and keeps her both physically and mentally active. It supports her self-esteem and allows her to feel like she is contributing to society. AT considers that work plays an important part in managing his daughter’s condition and without this outlet his daughter’s mental state would be negatively impacted and would most likely result in severe depression. AT further stated that the time she spends at work enables her family to take a break from carer duties and if she was unable to continue working this would mean additional stress on the family.

  HB works as a supported employee, performing packaging since 2014. She states that the best thing about her job is being with her friends, and that receiving training is fun as she enjoys doing courses. Her supervisor encourages her to learn new jobs. HB likes that the organisation she works for listens to its employees. HB would like to keep working at her current workplace and would be really sad if she no longer worked there.

  BM is a member of Our Voice and a parent of a supported employee. He stated that there had been many benefits to his son and family since his son started working. Working provided his son the opportunity to learn valuable practical trade, workplace and social skills. BM’s confidence has improved enormously, and his family are now working towards transitioning him towards independent living.

  KS is a member of Our Voice and a parent of a supported employee. KS’s daughter has been working at her current workplace for three years and is currently paid a pro-rata wage calculated on elements of competency, productivity, skill and flexibility and also claims the DSP. KS stated that a wage system based solely on productivity would be unfair as higher skilled jobs would not be rewarded, and if the Commission were to accept this tool and her daughter’s workplace was as a consequence forced to make job cuts, young people with intellectual disabilities who could work in open employment would be forced to stay at home. KS said that this would be demoralising, depressing and stressful to the entire family. Her view was that the current system should be left as it currently stands.

  MG is a member of Our Voice and sole parent of a supported employee. MG supports her daughter in every aspect of her life so that she is able to function each day. This includes assisting her daughter with physical care tasks, preparing her meals, laundering her clothes, managing her finances, providing transport and providing love and emotional support. Participating in supported employment has enabled her daughter to feel a sense of achievement and purpose and gives her invaluable self-worth. MG’s daughter feels a great sense of satisfaction from relating to others as an equal working adult. Having time away from home allows MG and her daughter to talk about interesting things that have happened in her daughter’s day, and independence has allowed her daughter to mature considerably. Without supported employment for her daughter, MG would not be able to continue working full-time herself and would need to become a full-time carer. This would negatively impact on her family’s financial situation and lifestyle. Further, her daughter would have little interaction with her peers and could become lonely and isolated. Her daughter’s days would be void of stimulating activity, her self-worth would decline, and this would have a detrimental effect on her mental health. It would be unlikely for her daughter to gain open employment.

  BM is a supported employee who has worked in his current role for 16 years. He is able to learn new skills and complete courses that improve his work opportunities as well as supporting his individual needs. If he was no longer able to work at his job, he does not think that he would be able to pay his bills or have a superannuation fund for when he retires. BM stated that without this income he would be living in a group home which he does not think he would enjoy. Work gave him a reason to get up in the morning, and he found his workplace to be very friendly and understanding of employees’ disabilities and needs, as well as providing an avenue for social interaction.

  CM is a member of Our Voice and also a sole parent of a supported employee. CM’s daughter has been in her current role for approximately five years. CM stated that her daughter is able to live “a bit of a ‘normal’ life” by going to work like her brother and sister. It also enables CM to work part-time, providing them with a reasonable home life.

  ES is the mother of a 40-year-old man who has worked at ADEs for 22 years. He has a severe intellectual disability with no literacy, numeracy, money, or travel skills. He could never work in open employment as he has previously attempted this. His employment is a sense of his identity. He looks forward to work, feels productive, never complains about getting up early, works hard and has to be coaxed to stop for morning tea and lunch. Any extra dollar he earns will reduce his pension by 50 cents and increase his rent in social housing by 25 cents, and she considers that the current proceedings have placed his job in jeopardy for the sake of 25 cents in the dollar. ES and her husband have cared for their severely disabled son and were only able to do so because of the support of the education system and the ADEs. If ADEs were made unviable, the flow on effect would be devastating not only for people with disabilities but also their families. Without ADEs, it could be expected that there would be a large number of dissatisfied, bored and lonely people with nothing to do, families no longer willing or able to care for adult family members and an increase in demand on the NDIS.

  LD is the parent of a man who has worked in supported employment for the last 25 years. LD and his wife are aged in their nineties. Employment is a huge part of his son’s life, providing him with structure and a reason to get out of bed. His siblings are also relied on to provide help in his overall support structure. LD and his wife would not be able to provide more support and care time if he was unable to work and stayed at home.

  RD is the brother of a supported employee who has been working at an organisation for 25 years. He has done a variety of jobs including packing, checking weights and peeling sweet potatoes. It is a big part of his life in which he takes pride, and he would be devastated if he could not continue to work with his lifelong friends. The remuneration he receives is almost irrelevant in the “big scheme of things”. Going to work each day makes him feel like he is contributing to society in a meaningful way. His employment is an integral part of the life of his family, which includes RD, his wife and five children, as they assist their ageing parents provide the quality family care that underpins his supported accommodation and his job. The continued ageing of RD’s parents means the role of siblings will increase over time as he will always need specialised assistance in his life.

  AC works as a supported employee and has been working at the same organisation for 20 years. His duties include making metal tags and fence posts and sometimes working in the laundry. AC said that he likes his job and feels good about himself. He loves living at home with his parents and does not like staying alone at night. He would be upset if he could no longer work at his workplace.

  JMM is a parent of a supported employee and has been the carer for her son for over 56 years. JMM has attended an ADE since he was eighteen years old and continues attending today. He is illiterate and has poor conversational skills, and would never be considered for any open employment. His attendance at an ADE daily has enabled JMM and her other children to live a better lifestyle too. Their town has a high unemployment rate and an ADE is desperately needed to supply an alternative for the disabled seeking employment.

Consideration - wages structure

General findings re the supported employment sector

[245] In our consideration of the claims concerning the wages structure of the SES Award, it is necessary to begin by making four general findings about the supported employment sector. The first is that we consider that the employment opportunities which the supported employment sector provides to disabled persons is of immense value to Australian society. We have summarised in detail the uncontradicted evidence given in witness statements made by numerous disabled persons and their carers/family members concerning the personal importance to them of employment in ADEs. Those statements make it clear that disabled persons place great weight upon the companionship, stimulation, independence, learning opportunities and the sense of dignity, achievement and self-worth which supported employment provides them. For the carers and family members of disabled persons employed in ADEs, the support and respite which employment in ADEs provides them, and the positive personal effects such employment has on the disabled person, is regarded as being of huge worth. It is also necessary to emphasise that ADEs are not just employers of disabled persons in the normal sense, but also provide a range of additional support services which an ordinary employer does not, including training in life-skills as well as vocational training, counselling and behavioural support, and transport assistance.

[246] Some organisations in the disability sector (such as PWDA) deprecate supported employment and characterise it as “segregated employment”. For them, open employment should be the objective in all cases, and supported employment does not sufficiently facilitate that objective or indeed acts as an impediment to its achievement. We do not agree. While we accept that open employment is a generally desirable objective, for more severely disabled persons it will not be practicable either at all or at least within the current framework of government support. Jobs in ADEs represent for such persons the only realistic opportunity for employment they will ever have. Accordingly, a factor foremost in our consideration of the wages structure of the SES Award is to ensure that, subject to the requirements of the FW Act, the capacity of ADEs to continue to employ disabled persons is not prejudiced.

[247] Second, it must be recognised that the nature of employment is markedly different in the supported employment sector than in the general labour market. It is trite to say that the normal state of affairs is that employers will establish a job for the purpose of the performance of certain work functions which it requires to be performed in order to carry on its business. It will then hire a person whom it considers capable of performing those functions to the required standard to fill that job. Where the job is one that falls within the coverage of one of the Commission’s modern awards, the prescribed minimum rate of pay for that job will be determined by matching the duties and responsibilities of that job to one of the pay classifications in the award. The operating assumption when the Commission makes or varies its awards is that this normal state of affairs applies.

[248] ADEs operate in a different paradigm. The purpose of their existence is to provide employment opportunities for disabled persons who have restricted work capacity, typically on a not-for-profit basis. Accordingly, they seek only those business opportunities which will generate jobs capable of being filled by disabled persons, which necessarily limits the types of commercial activity they can engage in. Further, they do not arrange their workforces simply on the basis of a job structure that will allow the necessary work to be performed in the most productive and efficient fashion, and then recruit persons to fill those jobs. Rather, they create or tailor jobs in such a way that they are capable of being performed by a particular person with a particular disability or by persons with a class of disability. This may mean, for example, that a set of work functions which is capable of being performed as a single job by a single person not relevantly affected by disability is broken up into a number of discrete tasks, each of which will be made into a separate job that aligns with the work capacities of a particular disabled person. This is not the normal case of the employer requiring the employee to perform only a very confined task because the employer considers this to be the most efficient way to conduct its business; rather it is a case of the disabled employee’s restricted work capacity effectively dictating the nature of the job in which the employer may employ them. The disabled person does not therefore perform the “whole job” which the relevantly non-disabled person is capable of performing, notwithstanding that the duties performed by the disabled person may constitute part of those that might be performed by the relevantly non-disabled person. This creates difficulties when it comes to the award regulation of such employment, as discussed later.

[249] Third, arising from the low-productivity nature of ADE operations as just described, they cannot financially be sustained by commercial revenue alone and are dependent to a large degree upon government funding. The Commonwealth Government is the principal source of funding, and immediately prior to the introduction of the NDIS it provided funding to ADEs using a case-based funding model. Under this model, financial support was provided to ADEs on the basis of an agreed number of employment places, with the amount of funding for each place calculated on a supported employee’s individually assessed support needs.

[250] Under the NDIS, individual persons with disability are funded for activities related to education, employment, social participation, living arrangements and other matters as identified in their approved NDIS plan. It is based on the concept that disabled persons should have independence, control and choice in respect of their life goals and supports. It is intended that registered providers of supports shall sell their services to disabled persons in a competitive market. The prices they receive for various services will be as determined by the NDIA, an independent authority. ADEs must become registered providers as part of this framework.

[251] Funding for ADEs is currently transitioning from case-based funding to NDIS funding. When supported employees have become NDIS participants and have an approved NDIS plan providing for employment supports, the Department ceases to provide case-based funding in respect of that person, and instead the ADE receives payment for the supports it provides the person in accordance with the established pricing framework. The majority of supported employees have by now transitioned to the NDIS, and it is anticipated that all or nearly all such employees who are under 65 will have transitioned by 30 June 2020 (different arrangements apply to those over 65, who are not eligible to be NDIS participants). Case-based funding will continue to 30 June 2010 on a transitional basis for those supported employees who do not yet have approved NDIS plans providing for employment supports.

[252] Having regard to the revenue sources of ADEs, it is apparent that the capacity of ADEs to respond to any significant change in minimum wages levels is far more restricted than for ordinary businesses. They have no capacity to increase the substantial proportion of their revenue which comes from government funding to pay the increase (unless there is an independent decision of government to adjust its funding levels accordingly). Their capacity to increase the prices it charges to its commercial clients is likely to be limited due to the low-productivity nature of the goods and services they provide. Nor can they reduce employment and improve productivity without vitiating the very purpose of their existence. This means that the exercise of considerable caution is necessary in considering changes to the wage structure in the SES Award lest ADEs be rendered financially unviable.

[253] Fourth, although the evidence demonstrates that supported employees under the SES Award earn, on average, about $7.00 per hour, consideration of the appropriate minimum wage setting mechanism for disabled employees in ADEs must necessarily take into account the fact that such employees are invariably also in receipt of the DSP. For a single person 22 or more years of age, the basic fortnightly rate of the DSP (including the pension supplement and the energy supplement) is currently $933.40. Receipt of the DSP is subject to an income test by which, for every dollar a recipient earns over $174.00 per fortnight, the DSP is reduced by 50 cents. This means, as an example, that for a disabled employee currently working only 15 hours per week at an assessed rate of $5.00 per hour, a pay increase of a dollar an hour would result in a reduction of the fortnightly pension payment of $15.00. Thus, the benefit of the pay increase is significantly mitigated, although not entirely diminished, as a result of the tapering of the DSP payment. An employee in receipt of gross employment income of about $461.20 per week will receive, together with their income-tested DSP payment, a gross weekly income equivalent to the National Minimum Wage. The income needs of disabled employees in ADEs must be considered in this context.

History of wage fixation in the supported employment sector

[254] In order to understand the process by which the current system of wage fixation for disabled employees contained in the SES developed, it is necessary to examine the history of wage fixation for disabled employees over the last 30 years. An examination of that history exposes the origin of many of the issues that have arisen in these proceedings, and points to the appropriate methodology for resolving some of those issues.

[255] In the 1980s, it remained the case that the employment of disabled persons was dealt with by way of “slow worker permits” issued under State legislative regimes where the payment of a full award wage was not a viable proposition. A transformation of that position began with a discussion paper commissioned by the Australian Government in 1989 concerning four issues relating to the employment of people with disabilities, one of which was the “payment of productivity-based wages”. This followed the enactment of the Disability Services Act 1986 (Cth) which included in its objects in s 3:

. . .

(c) to ensure that services provided to persons with disabilities-

. . .

(ii) enable persons with disabilities to achieve positive outcomes, such as increased independence, employment opportunities and integration in the community; and

. . .

(f) to achieve positive outcomes, such as increased independence, employment opportunities and integration in the community, for persons with disabilities who are of working age by the provision of comprehensive rehabilitation services…

[256] The discussion paper which was subsequently published in 1990 was prepared by Chris Ronalds with the assistance of the Labour Research Centre and was entitled “National Employment Initiatives for People with Disabilities” (Ronalds Report). The executive summary for the Ronalds Report described the existing way in which the industrial relations system dealt with disabled workers as follows:

“People with disabilities who currently are employed are under one of four wage systems. The first system, which applies to the majority of workers with disabilities, is full award wages. The second, which applies to an extremely small number, is working with a slow worker permit for some proportion of an award wage. The third, which applies to most holders of slow workers permits, is a proportion of award wage supplemented by government income support, usually the invalid pension. The fourth is receipt of an income support supplemented with a wage payment. This last option applies to workers in sheltered workshops and some workers in supported employment programs.”

[257] The Ronalds Report identified a number of serious problems with the existing ways of employing disabled persons including, in relation to employees on slow worker permits, that their wage income was insufficient to cover living costs and that the receipt of income support “may make them vulnerable to unscrupulous employers who are prepared to pay minimal wages regardless of the worker’s level of skills”. Broadly speaking, the Ronalds Report called for the development of a new skills-based wages system for disabled employees. The executive summary in this respect stated:

“There is a clear need to develop a new system to ensure all workers with disabilities are paid an equitable wage which recognises their work and their
contribution to society. The development of such a system must be informed by an examination of the systems which currently operate both for general wage fixation and for skills based wages.

Previous work in the area of wages for people with disabilities has used the term ‘productivity based wages’. An example of the pertinent issues in the discussion paper led to the conclusion that the term is no longer appropriate, as it is too narrow to encompass all types of variations envisaged. Consequently, the term ‘skills based wages’ is used to describe the possible future direction for wages policy for people with severe disabilities. This is in line with the terminology being used in the industrial relations arena during the award restructuring processes…

Obviously, the target group for any new wage policy is not all people with disabilities in the general labour market. There are already many people working on or above full award wages and they will not be affected by such a policy.

The target group to potentially benefit from such a policy are only those workers who, because of the nature or extent of their disability, are unable to operate competitively in the labour market as their level of skills is not the same as their coworkers. Their level of skills may be limited or restricted by a variety of factors, including the effects of their disability, job design, job duties, access and training. The level of skills may increase over a variety of times, depending on the same range of factors. There will be some people with more severe disabilities who need a skills based wage for a limited period only, while they are trained to perform the full range of job duties. Others may need such a wage for the entire time they work in that job, as the limiting or restricting
factors may result in their level of skills not being able to be increased to the level of their co-workers.”

[258] The Ronalds Report made recommendations for the Commonwealth Government to establish “a national and comprehensive system of skills based wage assessment processes which enable the same principles and structures to apply to all relevant parties around Australia”, and that a “working party be convened to undertake development of a system of
measurement of skills for workers with disabilities in the target group
”. In respect of these recommendations, the executive summary to the Ronalds Report said:

“There is an obvious need for standard methods of assessment, implementation, monitoring and evaluation, review and renewal processes and settlement of disputes to operate throughout Australia.

The current systems run by state governments are not able to meet the needs of workers with disabilities who are able to work productively but at a reduced skills level. A new system needs to be developed to facilitate access for such workers into the general labour market.

. . .

A new system of job evaluation and skills assessment needs to be developed, which is value-free and which represents an accurate method of assessing the workers capacity in relation to other workers performing the same tasks.”

[259] In the 1990/91 Budget the Commonwealth Government announced a package of labour market and income support reforms for disabled persons which was known as the “Disability Reform Package” and had the objective of integrating disabled persons into the labour market. The DSP was introduced as part of this package to replace the former Invalid Pension. The package also made provision for the establishment of a new wages system for disabled persons in accordance with the recommendations of the Ronalds Report. The Disability Task Force, an interdepartmental consultative group, was established to oversee the implementation of the Disability Reform Package. The Disability Task Force set up a Wages Subcommittee with the following terms of reference:

  Consider a supportive wages system from a Commonwealth perspective and to develop a general proposition on a supportive wages system.

  Determine the target group for a supportive wages system.

  Undertake further analysis on the various options (contained in the Ronalds Report) and recommend a wage options or approach.

  Oversee the work of a consultancy to develop assessment guidelines.

  Undertake negotiations with unions and employers on wage options and assessment guidelines.

[260] The Wages Subcommittee defined the concept of the “supportive wages system” as follows:

“The supportive wages system for disabled persons recognises that some persons, because of their disabilities, will be unable to work for a full award wage. In these circumstances the wage system should provide for a supportive wage arrangement consistent with the skills and competencies of the individual.”

[261] The Wages Subcommittee then engaged a consultancy to develop assessment guidelines for the envisaged supportive wages system. The terms of reference for the consultancy included the following:

“The Consultant will provide a report incorporating a consistent set of guidelines for the operation of an assessment process to determine the percentage of the award rate to be paid to disabled workers. These will cover key factors common to the placement of people with disabilities in relation to:

- assessment of individual job requirements; and

- assessment of the individual’s skills and competencies against those required for competent performance of the job in question.

These guidelines will provide for a cost-effective, simple, practical and readily accessible system, which is free of disability and other bias, and is suitable for application throughout Australia …”

[262] The consultant engaged to prepare the report was Don Dunoon, a director of a human resources consultancy with expertise in the disability services field, with specialist assistance from Jennifer Green, a lecturer in the Education Department of the Australian Catholic University who specialised in “habilitation for people with disabilities, special education and communication”. Their report 72 (Dunoon/Green Report) was published in January 1992. The Dunoon/Green Report described the extent of the application of the supportive wages system they proposed in the following terms:

“…the consultants have developed the assessment system with a view to it operating in conjunction with, and complementary to, the existing industrial relations framework that regulates mainstream working life. The foundation for the operation of industrial relations and wage setting in Australia is the award system. Accordingly, the consultants have developed the assessment system to have regard to award structures and coverage. The ‘benchmarks’ against which assessment would be performed would be the wage rates and classification standards established within awards.

Clearly, the prime objective of the consultancy is to develop an assessment system for operation in the open labour market. The system as developed here is designed to be capable of implementation in a straightforward manner in all instances where people with disability are working in individual jobs in open employment, where there is award coverage. The overwhelming majority of workplaces would be covered by awards. It is the expectation (indeed, the legal requirement) that the wages and conditions for employed people with disabilities would be covered by an award operating in the workplace.

The question of the possible extension of the supportive wages system to workshops and other specialist disability employment settings raises a number of sensitive and difficult issues, one of which relates to award coverage. As noted earlier, many workshops and other specialist disability employers are not subject to award coverage, and in some states such coverage is precluded by industrial legislation. Without award coverage - and specifically award coverage of wages and not only conditions – there are no benchmarks against which wage rates may be determined.

Other issues which bear upon the question of the assessment system to workshops include:

  the need to foster the process of transition for workshops, in line with Government policy that workshops will increasingly focus their resources on offering open employment opportunities

there is a concern that the general application of the supportive wages system in sheltered workshops may create an incentive for people to remain within workshops, thereby impeding the achievement of integration into mainstream working life

  the need to more effectively define the employment relationship in workshops

many workshops provide both employment and activity therapy; some refer to their workers as trainees. The line separating persons in an employment relationship from those in activity/training relationships is at present unclear

  the ability of workshops to pay wages linked to awards

if required to pay wages linked to minimum classification rates, many workshops would be likely to have great difficulty in paying, and could even be forced out of business.”

[263] After concluding that similar issues applied in respect of “specialist disability employers (such as enclaves, crews and benchworks)”, the Dunoon/Green Report went on to say:

“In the view of the consultants, the difficulty of the issues raised above is that the implementation of the supportive wages system in other than individual jobs in open employment is impractical in the near term. If it is considered necessary to implement the supportive wages system in sheltered workshops and in specialist disability employment services other than individual jobs agencies, there may be a need for transitional arrangements, under which wage rates are progressively increased to the levels commensurate with supportive wage assessments. Ultimately, these are matters for determination in the context of the Government’s broader disability reform program.”

[264] The above makes it clear that the authors of the report had in mind a system which was to apply to open employment, at least in the first instance. The Dunoon/Green Report went on to identify a number of principles for the design of the supportive wages system that had been established by the Wages Subcommittee. These included:

“The mere fact of some disability should not in itself imply that a worker is not entitled to a full award wage.

- Such an approach would be inherently discriminatory.

- A disability (however assessed) is not in itself a reliable proxy for the skills, competence or productiveness in any job (let alone in all jobs).

It needs to be recognised that workers in certain jobs, because of their disability, may be unable to fulfil the full requirements of the position – either because of insufficient skills (e.g. due to a particular intellectual or psychiatric disability) or an inability to apply certain skills (e.g. due to a particular [physical disability).

- The skill “shortfall” in practice may significantly affect the range of duties that can be performed or the pace at which a given set of duties may reasonably be executed.

- Where this arises, the work value (e.g. the scope of duties) of the job in question may be affected directly and/or the productiveness of the employee is unavoidably constrained.

- In such instances, there is a prima facie case for departure from the award rate prescribed for a particular existing classification to which the disabled employee may be appointed.”

[265] Pursuant to these principles, the authors of the Dunoon/Green Report proposed a wage assessment system for disabled employees which would consist of the following steps:

“(1) Identifying the parties

(2) Determining the requirements of the job

(a) defining the job

(b) considering the value of the job

(c) providing the differing times spent on individual tasks/competencies

(d) determining performance standards to form the basis of assessment

(3) Assessing the job seeker’s performance against the standards

(4) Adjusting for the time weighting

(5) Determining a provisional assessment

(6) Adjusting for supervision and other work-related factors

(7) Describing the process of arriving at the assessment

(8) Preparing a skills development plan

(9) Commenting on the process

(10) Reaching agreement.”

[266] In respect of step (2)(b), “Considering the value of the job”, the Dunoon/Green Report said:

“Work value considerations are a central feature of wage fixing in the mainstream industrial arena. Industrial tribunals have regarded work value as reflecting the skills and responsibilities performed by workers, and the conditions under which the work is done. Since the objective of the supportive wages system include that it should “promote integration of people with disabilities into mainstream working life” and that it should “be consistent with current industrial practice and reforms”, it is appropriate that the supportive wages assessment system take account of work value considerations.

To clarify the concept of work value, consider two workers employed under the same industrial classification in a particular workplace. One worker with a disability is fully employed on a restricted range of duties, A, B, and C. Co-workers, without disability, perform duties A, B, C, D, E, and F. For ease of reference, the two jobs will be referred to as the restricted and non-restricted jobs. In considering the work value of the two jobs, the first point to note is that the concern is with the worth of the job performed, not the efficiency or productiveness of the worker with the disability in comparison with co-workers. The latter issue needs to be dealt with separately.

In the example cited, the non-restricted job may be more valuable to the employer than the restricted job if:

  the additional duties performed in the non-restricted job require more skills within the classification which are of a higher order, or which are more important in the workplace, than those in the restricted job

  there is a cost in terms of lost productiveness or flexibility to the employer of maintaining the restricted job (for example, if the employer needs to take on part-time staff to provide skills which are not included in the restricted job but which are required in the non-restricted job; or if as a result of irregular work flows, the employer needs to be able to flexibly allocate employees between a range of duties within the classification).”

[267] The authors of the report went on to identify some circumstances where the difference in work value between a restricted and non-restricted job might be “offset”, for example where “workers in the non-restricted job are rarely called on to apply the skills not required in the restricted job”. They also distinguished between the concept of “reasonable adjustment” to job requirements and the work environment, being “adjustments which might reasonably be expected to be put in place without a discount being applied to the value of the job” and “[m]ajor restrictions on duties [which] go beyond what is implied by reasonable adjustment, and may justify the job being assessed as of lower value”. Ultimately two principles were posited in determining whether it was appropriate to make an adjustment to work value. The first was that the onus should be on the employer to demonstrate the need for a work value adjustment. The second was:

“the case for the adjustment must be based on the worth of the job to be performed by the person with disability (once any necessary job redesign has been undertaken), and not the efficiency or productiveness of the worker with disability in comparison with co-workers.”

[268] In relation to the process of determining an appropriate work value adjustment, the Dunoon/Green Report said:

“If a work value adjustment is considered appropriate, there is a question of what size this adjustment should be. There is no neat, “scientific” ways of determining an appropriate adjustment; this is a particular area where subjective judgment is required. However, there are a number of factors which the parties (and assessors) should take into account in making a judgment about work value. These include:

  the requirements of the job as specified in the classification

  the range of duties performed by co-workers

  the range of duties performed by the worker with disability

  the levels of skill associated with the various duties

  the frequency with which co-workers actually apply skills not required in the job as defined for the worker with disability

  any costs accruing to the employer in terms of reduced flexibility and work unit productiveness

  any offsetting gains in workplace productiveness and flexibility resulting from the worker with disability performing a restricted range of duties

In the consultants’ view, it would be a rare and exceptional case when a work value adjustment exceeding 10 percent was appropriate.”

[269] We note that the authors’ conclusion that a work value adjustment in excess of 10 per cent would only be appropriate in a rare and exceptional case was made in the context of a work assessment process which, as earlier stated, was intended for open employment, not supported employment.

[270] In respect of step (2)(b), the Dunoon/Green report said:

“The inclusion in the assessment system of scope for a work value adjustment is in recognition that the individual with disability may, as a result of the disability, not be able to perform the same range of duties as co-workers. There is, however, and additional consideration, which is that the disability may affect the pace at which the worker is able to perform the duties in his or her job.

Accordingly, the assessment system needs to provide for some measure, or standard, of the level of performance that might reasonably be expected from a non-disabled worker, against which the worker with disability may be assessed. Such yardsticks are termed performance standards.

The following are two key points about the use of performance standards in the proposed system:

  standards should reflect the minimum level of performance which would be expected from a competent worker without disability, performing the same duties as the job-seeker

  standards need to be set only for those tasks/competencies where the individual’s disability has some bearing on performance. For any parts of the job clearly unaffected by the disability, the worker may be assumed to meet the standard without any assessment being applied.”

[271] In relation to step 6, the Dunoon/Green Report stated, among other things, that there might be a 10 per cent downwards adjustment in pay if the disabled worker “requires significantly more supervision than would be reasonably expected for a comparative worker without disability”.

[272] Attachment 5 to the Dunoon/Green Report set out a “mock-up” of an “Assessment Instrument – Application for Authority to Pay a Supportive Wage”. Where the employer sought an initial adjustment to be made in respect of the work value of a disabled person’s job under step (2)(a), the proposed instrument contained a table which required details to be filled in concerning “Tasks and competencies performed by the job-seeker” (i.e. the disabled worker), “Task/competencies/duties specified in award classification” and “Tasks and competencies performed by co-workers”, and then required reference to work value “guidelines” (which the report proposed be developed) and a conclusion to be reached as to the “Assessed value of job (as % of minimum classification rate)”. In relation to step (2)(d), there was a further table which required the identification of each “task/competency” and its “time weighting” (the proportion of time on the job spent undertaking that task) and the “Minimum performance level that a competent worker without disability would be expected to be capable of achieving”. A separate table then required the “job-seeker’s” performance to be measured against performance standards (at increments of 10%) for each task/competency, and for these to be totalled on a time-weighted basis.

[273] Following the Dunoon/Green report, the Disability Task Force Wages Committee engaged in a process involving a range of outside groups including the ACTU and employers to design the supportive wage system envisaged by the report. The outcome was the SWS. It is not possible now to ascertain how this outcome was arrived at, but it is clear that the SWS was and is not consistent with the supportive wages system envisaged in the Dunoon/Green report in that it does not take into account the work value of the job being performed, only the relative productivity of the person performing it.

[274] This process culminated in a joint application made by the ACTU and the Australian Chamber of Commerce and Industry under s 113 of the Industrial Relations Act 1988 to vary a range of awards to include a model clause to make provision for the operation of the SWS. In a decision issued by a Full Bench of the Commission on 10 October 1994 73, the application was granted. The Full Bench stated:

“The ‘Supported Wage System’ facilitates the employment of workers with disabilities in open employment at a rate of pay commensurate with the employee's assessed productive capacity. The system is an important social and industrial advance.

The model clause, referred to above, defines the conditions to apply to employees who, because of the effects of a disability, are eligible for a supported wage under the terms of the clause. The clause among other things:

  specifies the applicable percentages of minimum award rate of pay payable to an employee having regard to the employee's capacity;

  provides for the assessment of an employee's productive capacity and its documentation in an assessment instrument;

  requires the lodgment with the Registrar of all assessment instruments, including the appropriate percentage of the award to be paid to the employee; and

  provides that, where an assessment has been made, the applicable percentages are to apply to the wage rate only and that employees will be entitled to the same terms and conditions of employment as all other workers covered by the award paid on a pro rata basis.

The model clause constitutes part only of the ‘Supported Wage System’. Other parts of the system include a disability wage supplement paid through the social security system and other forms of support, such as on-the-job support and financial support for employers with respect to some of the additional costs of employing a person with a disability.

Where, in the awards before us, the model clause replaces an existing ‘slow’ or ‘infirm’ workers clause, it is agreed that a savings provision be added to the model clause to enable persons employed under the ‘slow’ or ‘infirm’ workers clause to continue to be paid under that clause as if the model clause had not been inserted in the award.

At the conclusion of proceedings on 20 July the Commission indicated that it intended to grant the applications to insert the model clause into the awards before it.

The Commission is satisfied that there is a jurisdictional basis for the proposed variations to each award and that the model clause is consistent with ILO conventions, the Disability Discrimination Act 1992, the Disability Service Act 1986, the objects of the Act and the Commission's own wage fixing principles. The Commission is also satisfied that the proposed model clause contains appropriate safeguards to ensure that the wages paid are equitable and that workers with disabilities are not exploited.

The Commission is conscious of the fact that the consent applications before it are an historic initiative which has attracted unanimous support from all the parties involved, and has been the result of extensive consultative processes. The model clause is, as the parties submitted, facilitative only; i.e. it will not be sufficient in itself to promote greater employment opportunities for people with disabilities. The clause, to be effective, requires a commitment by the industrial parties to make use of the award provisions. We confidently expect that this commitment will be forthcoming and that the model clause will be implemented in workplaces to assist those people with disabilities who may have previously found it difficult or impossible to compete for jobs in the open labour market. We hope that other awards of the Commission will be varied to include the model clause and that the parties to those awards will implement its provisions. The Commission congratulates the parties on their co-operation and considerable efforts in developing the ‘Supported Wage System’ which, we hope, will encourage industry to employ workers with disabilities and assist the integration of disabled workers into the general workforce.”

[275] The model SWS clause which was adopted was the progenitor of what is currently Schedule D of the SES Award (and is also contained as a schedule in every other modern award). The awards which were varied to include the model SWS clause all operated outside of the supported employment context.

[276] It was initially anticipated that the model SWS clause would become universal in all of the awards of the AIRC, but this never happened, and awards were only varied to include the clause on a case by case basis. The legislative amendments effected by the Workplace Relations and Other Legislation Amendment Act 1996 (Cth), by which the Industrial Relations Act 1988 metamorphosed into the Workplace Relations Act 1996, included provisions to support the SWS. Section 88B(3)(c) required the AIRC in the exercise of its functions to have regard to “the need to provide a supported wage system for people with disabilities”, and s 143(1C)(e) required the AIRC in making a decision or determination that was an award or an order affecting an award to ensure that the decision or determination, relevantly, “where appropriate, provides … a supported wages system for people with disabilities”. By 2001, 58 of the 100 most used awards contained the model SWS clause.

[277] However, awards applicable to supported employment were not in that period varied to include the SWS. It appears that the first award made by the AIRC to apply to supported employment was the Federated Miscellaneous Workers’ Union Supported Employment Award (Flagstaff Group) 1991 74 which, as its title suggests, was an enterprise-specific award applicable to Flagstaff only. The award was made on 15 November 1991. It provided for a transitional wages system involving the payment of a percentage of a full wage to supported employees. It also contained a provision which anticipated the development of a “National Productivity Assessment System” by the Disability Task Force and required the parties to confer to reach agreement on a new salary assessment system once this occurred, or to have it arbitrated by the AIRC.

[278] On 2 February 1993, the AIRC made, by consent, the Australian Liquor, Hospitality and Miscellaneous Workers Union Supported Employment (Business Enterprises) Award 1993 75 (1993 Award). This award applied to respondent employers operating “a supported employment business enterprise which employs able body workers and people with disabilities in either a workshop, enclave or work crew” (clause 3). The coverage clause of the award noted the following:

It is acknowledged that the organisations and services covered by this award do not, as a general rule, operate pure employment services in a strictly commercial sense. Rather, the organisations operate in an employment-like environment in which a range of additional support services are provided: Including vocationally-related training, work experience, assistance with progression to open employment (where possible), and a range of support services. Thus, the primary relationship that exists between the service agency and its “employees” who are disabled extends beyond that which is generally expected in an “employer: employee” relationship.

It is further acknowledged that this primary relationship will have a direct impact on the operational costs of the service concerned, and may impact on the conditions of employment that can be provided. (Refer also to Clause 17(e)(ii)).

[279] The wages clause (at clause 17(b)(i)) contained a classification structure with seven grades, and the classification descriptors for these grades (in Schedule A) were expressed in terms virtually identical to the current classification definitions in Schedule B of the SES Award. In respect of disabled employees, clause 17 relevantly provided as follows:

Employees with disabilities

(c) Employees with a disability shall be paid such percentage of the rate for the employee’s grade as equals the skill level of the employee assessed as a percentage of the skill of an employee who is not disabled.

(d) (i) From the date of commencement of this award, an employee with a disability shall be paid:

(1) In the case of employees employed at the date of commencement of this award - the rate then being paid to that employee;

(2) In the case of employees who are employed after the date of commencement of this award - the rate assessed by the company for that employee in accordance with the company’s method of assessment in operation at the date of commencement of this award.

(3) The employees rate of pay shall be converted to the percentage of the rate specified in subclause 17(b) for the employees classification.

(4) The percentage so determined shall be adjusted as follows:

(5) The percentage so adjusted of the rate specified in subclause 17(b) shall be converted to a rate which shall be the employee’s new rate.

(ii) All rates shall be subject to variation pursuant to National Wage Case decisions, provided that a flat amount increase shall be converted to a percentage having regard to the employee’s rate of pay.

(iii) The company and the union shall confer with a view to reaching agreement on salary assessment system that properly remunerates people for their skills and abilities. Failing agreement the matters shall be arbitrated by the Commission. Any new salary assessment system shall operate from such a date as ratified or determined by the Commission.

. . .

Long term objectives

(f) Both parties are committed to the long term aim of achieving full award wages for employees with disabilities through improved employment opportunities, training, and the introduction where applicable of a wage subsidy paid by the Government.

[280] The 1993 Award was never varied to include the model SWS clause. It was replaced on 13 March 2002 by the Australian Liquor, Hospitality and Miscellaneous Workers Union Supported Employment (Business Enterprises) Award 2001 76 (2001 Award). The 2001 Award was a consolidated version of the 1993 Award which had undergone the award simplification process required by the WR Act. When made it did not include the modified SWS clause.

[281] In 1995 the then Government advanced a proposal and funding for the development by 1997-1999 of a single “objective, practical and cost-effective” wage assessment process for the supported employment sector. This implicitly recognised that the SWS was not designed or appropriate for that sector. However after a change of government in 1996, a different policy approach was taken and this proposal was abandoned. ADEs were instead required as a condition of government funding to develop or adopt their own structured wage assessment tools, provided such tools met certain criteria. This led to a number of ADEs (such as Greenacres and Flagstaff) entering into certified agreements approved by the AIRC under the WR Act which made provision for their own wage assessment tools.

[282] In 2000 the then Commonwealth Department of Family and Community Services conducted a review of the ADE sector in conjunction with the Australian Council for the Rights of the Disabled, an organisation which represented ADEs. As part of the review, KPMG Consulting was commissioned to prepare a report concerning the sector. The report which was produced, entitled “A Viable Future - Strategic Imperatives for Business Services” (First KPMG Report), found among other things that ADEs had concerns about the application of the SWS to their sector and the use of productivity as the sole measure for the assessment of wages. The report recommended that remuneration for disabled employees in the sector be linked to “an individual’s productivity and to an agreed industry-wide system for assessing general work competencies”. This recommendation appeared to suggest a return to the objective of a single wage assessment mechanism designed specifically for the ADE sector.

[283] In 2001, the Department of Family and Community Services published the “Supported Wages System Evaluation” report (Second KPMG Report) which it had commissioned KPMG Consulting to prepare. In its executive summary, the Second KPMG Report said that it had examined:

“…the effectiveness of the SWS in assisting people with disabilities gain and maintain employment, the efficiency of the SWS from an operational and administrative perspective, the appropriateness of the SWS within the workplace relations environment and the ability of the SWS in meeting current and future demand for services.”

[284] Key findings of the Second KPMG Report, as set out in its executive summary, included the following:

  a core strength of the SWS was its capacity to assist people with disabilities gain and maintain employment within an industrial relations framework consistent with the requirements of the Disability Discrimination Act 1992;

  it was recognised by all stakeholder groups that the SWS provided opportunities that would not otherwise exist by enabling access to employment for people with disabilities through the use of productivity-based wages;

  stakeholders also viewed the SWS as the preferred industrial mechanism for the determination of productivity-based wages;

  the SWS was at present best suited to individuals whose disability has a consistent impact on their productive capacity and who are in types of employment where productive capacity is easily measured; and

  a key policy question was whether the SWS should maintain this focus, or should be expanded to encompass the needs of people with a disability who are unable to consistently work eight hours per week, or whose productive capacity is variable, or where the nature of employment is such that the measurement of productive capacity is far more complex and involves a broader range of skills.

[285] The Second KPMG Report included the following statistics concerning the use of the SWS:

  a total of 3459 persons were employed under the SWS in 1999/2000;

  the median wage for SWS employees was $100.35, and the median number of hours worked was 20 per week;

  about 15.4 percent of employees received the minimum SWS wage rate;

  the median assessed productive capacity was 50 percent;

  69 percent of all assessment achieved 40-70 per cent productivity;

  26.9% of employees of persons who accessed the SWS in the period June 1997 to June 2000 ceased their employment without gaining ongoing employment;

[286] The Second KPMG Report stated that most employers expressed positive views about the SWS assessment process and the professionalism of assessors. The report said in this respect:

“Of those interviewed as part of the evaluation process, a high percentage indicated that they were engaged by the assessor, that they were well informed and able to contribute to the negotiations with regard to the establishment of a suitable wage rate. Many employers indicated that the assessment process relieved them of the burden of being seen to be potentially exploiting people with disabilities. Interestingly, most employers were unaware as to where the assessor came from, many assuming that they were from the ‘government’.

People with disabilities made similar comments about the assessment process with many commenting that they believed the assessment process was fair and objective.”

[287] There were some instances where the Second KPMG Report identified shortcomings in the SWS assessment process, including the following:

“…from an employer’s perspective, the tool is not seen to measure critical work behaviours and/or an individual’s performance over extended periods of time. Other employers commented that it is too solely focused on productivity and does not account for competencies or work attitudes.”

[288] However the above conclusion related mainly to the use of the SWS in open employment. In respect of the use of the SWS in “business services” (that is, ADEs), the Second KPMG Report said (emphasis added):

“Access to the SWS in business services is limited.

The main reasons for this relate to the more general issues associated with the provision of employment conditions within business services.

As a result of the recent Business Services Review, and consistent with the policy directions of FaCS, business services will increasingly move to provide the full range of conditions associated with being an employer. This will by necessity include the provision of wages.

As yet no agreed system exists at an industry level for determining suitable wages within business services. The main mechanisms currently used within the industry involve workplace agreements and, to a much lesser extent, the AWAs.

The SWS assessment process is seen to have relevance and application within business services while other elements of the system are seen to require modification before they could be applied within such a setting.

Up until now, the emphasis of the SWS has been on open employment. It is seen that consideration should now be given to the potential application of the existing or a modified version of the SWS for business services. The use of the SWS has the potential to usefully inform the development of an industry wide mechanism for assessing wages within business services. It is intended that this be implemented as part of the Award Based Wages Strategy being undertaken by FaCS.”

[289] This led the Second KPMG Report to recommend (as Recommendation 3) that the Department of Family and Community Services “modify the guidelines and associated mechanisms of the SWS to enable its adoption in Section 13 business services”.

[290] In May 2001 the Department of Family and Community Services published a report which it had commissioned Health Outcomes International Pty Ltd (HOI) to prepare entitled “Wage Assessment in Business Services - A Guide to Good Practice Wage Determination” (First HOI Report). The First HOI Report commenced its analysis by stating:

“There has been a significant amount of research and development focused on the assessment and payment of ‘fair’ wages for people with disabilities. Until relatively recently, this work concentrated on people with disabilities in open employment settings. Previously, Business Services had tended to pay wages to employees based on historical arrangements or ad hoc assessment processes.”

[291] The First HOI Report identified four categories of wage determination processes then operating in the business services sector: historical or ad hoc wage payments usually not involving formal assessment; productivity-based assessments, including the SWS (which it referred to as the Supported Wage Assessment Tool or SWAT); competency-based assessment; and hybrid models. It was concluded that none of these constituted best practice. In respect of the SWS, the First HOI Report set out the perceived advantages and disadvantages of the SWS as obtained from consultations. The perceived advantages included that the assessment was independent and the process was transparent; that it was widely accepted particularly by those involved in or familiar with open employment services; and that there was infrastructure, accredited assessors and monitoring systems already in place. The perceived disadvantages included that costs were likely to increase significantly due to increased wages; that it was difficult to gauge activities of co-workers or develop benchmarks due to the tailored nature of some jobs; that the SWS did not assess people against all components of the job, only the tasks that were being undertaken (which tended to overstate productivity); and it assumed basic competencies were held by the worker and was less suitable for people with high support needs. The First HOI Report’s conclusion concerning the SWS was:

“The Supported Wage Assessment Tool is a valid, reliable and accepted form of wage assessment that has already been implemented by some Business Services. The SWAT is deemed to comply with relevant legislation and standards. It is, however, a costly system with considerable resource requirements to appropriately support its implementation. It is also noted that the SWAT does not formally link to structured training and professional development strategies. Further, it is recognised that the initial target of the SWAT was the open employment environment. It is apparent that business profitability is a key determinant associated with the adoption or implementation of the SWAT. Business Services applying the SWAT, as with any wage determination tool, should consider the financial implications of doing so. Research found that those currently using the system or in support of its broader adoption tend to be those services with either profitable business operations, high proportions of workers with low support needs and/or access to Commonwealth subsidised assessments (that is, section 10 services).”

[292] The First HOI Report also reviewed other types of productivity assessment methods, which it criticised. The criticisms relevantly included that the use of internal assessors might limit the objectivity of the assessment process and that variable assessment processes limited consistency across the sector, meaning a worker might be assessed at a different level for the same job in different business services. In respect of competency assessments, the First HOI Report began by stating that such assessments were different from productivity assessments because, among other reasons, “a person is assessed not in competition with others but against standard criteria or benchmarks”. A growing trend was identified of business services moving towards incorporating competency-based assessment procedures in the determination of wages, although this was usually as part of a hybrid wage determination model. The First HOI Report concluded that a pure competency-based model had a number of advantages including that such a system “enhances the employee’s potential to progress through a structured career path, and enables transferability of assessment between workplaces, even if the job changes, as many common or generic competencies apply to a variety of industries”. It also identified disadvantages, the primary one of which was as follows:

“If competency-based assessment does not take worker productivity into account, the wage determination would indicate that anyone with a set of competencies is entitled to 100% of the award wage. This would be considered inappropriate in many Business Services (and in the ‘usual’ workplace), as the rate of output of these employees significantly influences the profitability (and therefore capacity to pay) of the Business Service. The incentive to employ people with disabilities would therefore be dramatically reduced.”

[293] Hybrid models were those which involved a combination of productivity and competency-based assessment, such as the Greenacres tool. The First HOI Report noted that such a hybrid tool was most commonly cited as constituting best practice, with the most effective hybrid tools being described as those which “included an initial competency assessment component that broadly ‘streamed’ employees by competency level, with subsequent productivity assessment to determine exact wage rates against appropriate benchmarks”. In describing the advantages of a hybrid model, the report said:

“As may be expected, the hybrid model has the potential to utilise the best components of both productivity and competency based assessment tools, although the research team is reluctant to recommend any of the current models as an ideal example of best practice.”

[294] Disadvantages were identified including complexity and the potential for manipulation, but the First HOI Report nonetheless concluded that a hybrid model represented the most appropriate method of wage determination in business services (without recommending that any existing tool represented the “absolute best practice method of wage assessment for all services”).

[295] The First HOI Report then compared in a matrix the different models of wage determination in business services, using the following criteria:

  compliance with relevant legislation and standards;

  validity - the extent to which the assessment was assessing what it claimed to be assessing (that is, competence or productivity);

  reliability – the extent to which different assessors would achieve the same result when assessing the same person (inter-rater) and the extent to which the same assessor achieves the same result for similar situations or for the same person at different times (intra-rater);

  wage outcome – an assessment of the fairness and appropriateness of the wage outcome from the assessment in accordance with assessed scores;

  practical application of the tool; and

  administration and cost implications of instituting the system.

[296] In respect of the “fairness” standard in the fourth criterion above, the First HOI Report said:

“… a fair wage for a Business Service employee is considered as:

  Linked to an award or industry standard for the type of work undertaken;

  Reflecting the capacity of the employee to complete the tasks constituting their job;

  Reflecting the training level attained by the employee (including qualifications, licences etc.);

  Taking the worker’s supplementary skills into account (eg. supervision, quality assurance, OH&S awareness); and

  Representing an incentive to achieve higher level skills or qualifications.”

[297] The matrix recorded generally positive ratings on these criteria for the SWS, the hybrid model and, specifically, the Greenacres tool. In relation to the SWS, the First HOI Report identified its “Limitations” as being that it was “Designed for open employment settings”, “May be difficult to compare with non-disabled co-worker due to nature of job”, “Potentially costly” and “Assessed level reflects comparative performance over short term only”. In respect of the hybrid model, the identified limitations were: “May increase wages beyond capacity to pay”, “May ‘doubly penalise’ employees if not appropriately structured”, and “May be costly if not planned/implemented effectively”.

[298] The Department published a second report prepared by HOI entitled “Research into Pro-Rata Wage Assessment Tools for People Working in Business Services - Discussion Paper” in June 2001 (Second HOI Report). The Second HOI Report covered some of the same ground as the First HOI Report in its review of wage determination processes in the business services sector, and it identified advantages and disadvantages in historical models, the SWS, other productivity-based models, profit sharing models, competency-based assessments and hybrid models. It then set out a total of 16 recommendations, of which the first ten are of particular relevance here and are set out in full below:

Recommendation 1

A single wage assessment tool for wage determination in Business Services should be developed on behalf of FaCS. The assessment tool should be developed in close consultation with the sector, undergo extensive testing and build on the strengths of existing assessment processes.

Recommendation 1A

In the design of the single assessment tool, the following existing assessment mechanisms should be reviewed in further detail, as these systems exhibited some sound elements:

• The SWAT

• The Greenacres tool (Wollongong, New South Wales)

• Wangarang Industries (Orange, New South Wales)

• WestCare Industries (Perth, Western Australia)

Recommendation 2

The assessment tool should combine elements of both competency and productivity assessment, which links directly to endorsed industry standards wherever practicable. The development of the assessment tool should include identifying the competencies incorporated in industry training packages that are most applicable to Business Service activities.

Recommendation 2A

The dual assessment elements should not compound reductions in wage rates. For example, an employee with 50 per cent of level x competencies working at 50 per cent of the productivity benchmark should not receive 25 per cent of the relevant award wage (that is, 50 per cent x 50 per cent). A 'sliding scale' approach should be adopted.

Recommendation 3

The preferred tool should include provisions for a minimum wage 'safety net' for employees of Business Services. Further, the minimum wage should be in the order of $50 per week, appropriately indexed to increases in award rates of payment (or the CPI). Pro-rata payment of the safety net wage is not considered appropriate.

Recommendation 4

The assessment tool should be applicable to all industry settings in which Business Services operate. This may require the conduct of an industry audit. This will enable identification of the appropriate industry training packages (and competencies) with which the assessment tool should be linked.

Recommendation 5

The assessment tool should provide a direct and rational link to appropriate awards. Current wage structures that link historical pay rates to an award by identifying a proportional award payment without a defined assessment process are not considered appropriate.

Recommendation 6

The single assessment tool should be not only a valid and appropriate assessment system, but the calculation of corresponding wage rates should also be considered. It is considered that the wage determination process should be incorporated into the assessment tool.

Recommendation 7

As part of the development and trialing of a single assessment tool, comparative studies in some Business Services should be conducted to monitor the impact of implementing the new tool on the cost of wages.

Recommendation 8

Wage determination assessments should be conducted by independent assessors (endorsed by FaCS), who hold the national units of competence for conducting assessment (or equivalent), namely:

• BSZ 401A Plan Assessment

• BSZ 402A Conduct Assessment

• BSZ 403A Review Assessment.”

[299] In response to these recommendations, the Department of Family and Community Services commissioned HOI Ltd to produce a proposal for a new wage assessment tool consistent with the recommendations of the Second HOI Report. In proceeding to develop the new tool, there was wide consultation with ADEs, the ACTU and unions, and advocacy groups within the disability sector.

[300] On 1 July 2002, the Disability Services Amendment (Improved Quality Assurance) Act 2002 came into effect. Relevantly, this Act provided for the establishment of service standards in supported employment, compliance with which would be a prior condition for the receipt of government funding. The Disability Services (Disability Employment and Rehabilitation Program) Standards 2002 made pursuant to this Act, which also came into effect on the same date, provided in respect of employment conditions for disabled employees of ADEs as follows:

Standard 9: Employment conditions

Each person with a disability enjoys working conditions comparable to those of the general workforce.

KPI 9.1 The service provider ensures that people with a disability, placed in open or supported employment, receive wages according to the relevant award, order or industrial agreement (if any) (consistent with legislation). A wage must not have been reduced, or be reduced, because of award exemptions or incapacity to pay or similar reasons and, if a person is unable to work at full productive capacity due to a disability, the service provider is to ensure that a pro-rata wage based on an award, order or industrial agreement is paid. This pro-rata wage must be determined through a transparent assessment tool or process, such as Supported Wage System (SWS), or tools that comply with the criteria referred to in the Guide to Good Practice Wage Determination including:

  compliance with relevant legislation;

  validity;

  reliability;

  wage outcome; and

  practical application of the tool.”

KPI 9.2 The service provider ensures that, when people with a disability are placed in employment, their conditions of employment are consistent with general workplace norms and relevant Commonwealth and State legislation.

KPI 9.3 The service provider ensures that, when people with a disability are placed and supported in employment, they, and if appropriate, their guardians and advocates, are informed of how wages and conditions are determined and the consequences of this.

[301] Contrary to the recommendation in the First KPMG Report, the above standard appeared to contemplate the continuation of a multiplicity of wage assessment tools.

[302] In the latter half of 2002, a draft of the new wage assessment tool which HOI had been commissioned to provide was produced. This was the tool which ultimately became the BSWAT. It was subsequently trialled at a number of ADEs and, based upon the results of the trial, was revised and tested further. A report from HOI containing the proposed BSWAT was published in December 2002. This report emphasised that the BSWAT, unlike the SWS, was a hybrid assessment system which measured competency as well as productivity, and consequently produced on average lower wage outcomes than the SWS. The report recommended that the BSWAT be implemented after a further trial. There was further trialling and evaluation of the BSWAT in 2003, which resulted in a further recommendation for the introduction of the BSWAT. It then proceeded to implementation. The Department of Family and Community Services supported its implementation by providing the independent wage assessors with the tool required. The BSWAT came into widespread use, such that by August 2004 there were 155 ADEs using it.

[303] Reflecting union support for the BSWAT, on 13 September 2004 the Australian Liquor, Hospitality and Miscellaneous Workers Union (LHMU), as the UWU was then styled, filed an application in the AIRC to vary the 2001 Award to require the rate of pay for disabled employees to be determined in accordance with the BSWAT or a “tool with an equivalent or better wages outcome, assessed objectively and transparently”. In its application the LHMU contended that the BSWAT was a fair and transparent wage assessment tool and complied with Disability Service Standard 9 set out above. This application prompted a new round of sectoral consultation, and the Department of Family and Community Services sought to assist the process by commissioning Jenny Pearson & Associates (Pearson) to produce a report assessing all wage assessment tools in widespread use in the ADE sector. The initial report produced by Pearson in February 2005 assessed the Civic Industries, Elouera Association, FWS, Greenacres, Hunter Contracts, Phoenix Society, PHT, Skillsmaster and Yumaro wage assessment tools and compared them to the BSWAT. The report concluded that each tool complied with Disability Service Standard 9 and the criteria for “Good Practice Wage Determination” set out in the First HOI Report.

[304] Following the initial Pearson report, the parties to the 2001 Award reached a consent position whereby the 2001 Award would be varied to provide for the use, at the employer’s discretion, of the BSWAT, the SWS and the nine other tools assessed in the report. The 2001 Award was varied by the AIRC (Commissioner Gay) to reflect this consent position effective from 27 June 2005. 77 The Commissioner’s decision stated:

“[1] This matter concerns an application made under s.113 of the Workplace Relations Act 1996 (the Act) by the Liquor, Hospitality and Miscellaneous Union (LHMU) for variation of the Australian Liquor, Hospitality and Miscellaneous Workers Union Supported Employment (Business Enterprises) Award 2001 (the Award). The Award, which will hereafter be known as the Liquor, Hospitality and Miscellaneous Union Supported Employment Services Award 2005, regulates the employment of employees within employment services and where employees frequently have disabilities requiring high levels of support.

[2] The application initially sought to include the Supported Wage System as approved by the test case decision of the Full Bench of 10 October 1994, per O’Connor J, McIntyre VP and Gay C [Print L5723]. Following proceedings in the Commission, initially before Lawler VP, and latterly in conciliation before the Commission as constituted, discussion between the parties has seen agreement reached as to the form of the variation.

[3] By the amended application the Award is sought to be varied to include a range of wage assessment tools presently in operation and including the Business Services Wage Assessment Tool (BSWAT). The BSWAT is a result of several years’ work by the Department of Family and Community Services (the Department) and following trialling and much discussion within a development group which included the LHMU, the Australian Council of Trade Unions (ACTU) and stakeholder groups within the disability sector. All the tools set out in the award as varied have been approved by the Department as satisfying the relevant standards set for the sector. The undertaking from the LHMU to not unreasonably withhold consent in relation to a tool proposed to be added to the list has been reflected in the order [PR961610].

[4] Included in the variation is recognition of the need for a phased approach to increases in wages which may result from these changes – which phasing will conclude by May 2008. The variation will also provide that while various of the tools contain mechanisms intended to address intra-service disputation (including as to assessment), there will exist the capacity should disagreement continue, for such a matter to be resolved in the Commission.

[5] It should be recorded that prior to hearing the application consultation occurred with his Honour the President in satisfaction of Principle 10 of the Commission’s wage fixing principles.

[6] Having accepted that varying the Award in the terms sought is consistent with those principles and that the terms of the order are consistent with ss.88A and 88B of the Act, at the hearing on 27 June I considered the objection to the application made by Ms Wilson, intervening for Disability Employment Action Centre (DEAC). In this regard the Commission has noted that Mr Macken, intervening in support of the application for the Minister for Employment and Workplace Relations, stressed that in the view of the Commonwealth no particular tool ought to be mandated and further, that there ought to be capacity to use tools other than the BSWAT or any other single tool.

[7] As indicated in the short reasons given in the transcript of 27 June 2005, the Award will be varied as sought with effect from the beginning of the first pay period to commence on or after today’s date. The accompanying order to this effect will remain in force for a period of three months.”

[305] A “final” report was issued by Pearson in April 2006. In Part 2 of this report, a further ten wage assessment tools in use were assessed and determined as complying with Disability Service Standard 9 and the criteria for “Good Practice Wage Determination” set out in the First HOI Report. However there was a further Pearson report prepared for the Department and issued in October 2007 in which another nine tools were assessed as compliant.

[306] The SES Award was made arising from the award modernisation process conducted by the AIRC pursuant to Part 10A of the WR Act. The process by which it was made was largely consensual. An exposure draft award was issued by the AIRC on 25 September 2009 which reflected discussions between interested parties. The wages provision in the exposure draft award allowed for wages for disabled employees to be assessed using the BSWAT, the SWS, and all except two of the other wage assessment tools assessed as compliant in the three Pearson reports. In a decision issued on 4 December 2009, the AIRC award modernisation Full Bench determined to make the new award on the basis of the exposure draft, subject to minor modifications including, relevantly, that organisations who had been using an otherwise restricted wage assessment tool on or before 27 June 2005 could continue to do so. 78 The SES Award subsequently took effect on 1 January 2010.

[307] The Nojin proceedings were commenced in 2008 but were not finally decided until well after the SES Award commenced operation. The proceedings concerned an employee of Coffs Harbour Challenge Inc, an ADE which by the time the matter was decided had gone into liquidation, and another employee employed by Stawell Intertwine Services Inc., also an ADE (although the employee concerned was actually in open employment). The Commonwealth was the first respondent in the matters. Each employee had been assessed free of charge by an agency of the Commonwealth using the BSWAT. The applicants in each matter sought, relevantly, a declaration that the employees were unlawfully discriminated against in contravention of s 15 of the Disability Discrimination Act 1992 by requiring them to undergo a BSWAT assessment in order to receive higher wages. The first instance judgment of Gray J 79 identified the two aspects of the BSWAT which were said to be discriminatory as follows:

“[5] …The first is that, as well as testing for productivity, BSWAT requires testing for what are called competencies. There are four units of core competency prescribed and up to four units of industry-specific competency, which are agreed between the assessor and the relevant ADE. If fewer than four industry-specific competencies are chosen, then a person assessed can achieve only a maximum of 25% of the total possible score for industry-specific competencies for each such competency tested. The second discriminatory requirement or condition alleged is that the competencies are tested by means of question and answer. An inability to answer, or an answer regarded by the assessor as incorrect, in relation to any of the questions that are part of the testing of a particular competency will result in a score of zero for that competency as a whole.”

[308] The contentions of unlawful discrimination were rejected at first instance. However, on appeal, the Federal Court Full Court determined by majority (Buchanan and Katzmann JJ, Flick J dissenting) that the opposite conclusion should be reached. The matter was decided by reference to the definition of discrimination in s 6 of the Disability Discrimination Act, which at the relevant time provided:

For the purposes of this Act, a person (discriminator) discriminates against another person (aggrieved person) on the ground of a disability of the aggrieved person if the discriminator requires the aggrieved person to comply with a requirement or condition:

(a) with which a substantially higher proportion of persons without the disability comply or are able to comply; and

(b) which is not reasonable having regard to the circumstances of the case; and

(c) with which the aggrieved person does not or is not able to comply.

[309] The proceedings focused on the competency element of the BSWAT, which (consistent with the recommendations of the Second HOI Report) was a hybrid tool which assessed employees by reference to competency and work value. As to the former element, the BSWAT required a disabled employee to be assessed by reference to “core competencies” and “industry competencies” even though - on the evidence in the matter – such competences might not be relevant to the job actually being performed by the employee. Buchanan J considered that there was “substantial support” in the evidence for the proposition that the measure of competencies involved in the BSWAT was “theoretical, artificial and irrelevant to the practical circumstances of intellectually disabled workers…” in circumstances where the work they performed was process-based and not knowledge-based. 80 And, because assessment in these competencies involved abstract concepts and the need to give expression to an understanding of those concepts in a formal interview requirement, this posed special difficulty for intellectually disabled persons.81 In respect of the elements of discrimination in s 6(a) and (c), Buchanan J concluded:

“[127] On the evidence to which I have referred, disabled people who are not intellectually disabled are more likely to achieve results on BSWAT to their advantage, than intellectually disabled people like Mr Nojin and Mr Prior. That is so in two senses. First, they are not at the same risk of having their productivity score effectively reduced through an inability to score at least as well on competencies. Secondly, they have the realistic possibility of enhancing their productivity score, if it is low due to a physical disability, by demonstrating knowledge and understanding which is not reflected in actual work performance. In either case, their prospects of achieving higher pay are enhanced. By contrast, as the evidence in this case (including the evidence about Mr Nojin and Mr Prior) clearly shows, the prospects for intellectually disabled people are worse because they cannot take advantage of either aspect available to disabled people without intellectual disabilities.”

. . .

[130] In the present cases, Mr Nojin and Mr Prior could certainly submit to an assessment which used BSWAT, but on the unchallenged, accepted, expert evidence their opportunity and ability to obtain a higher wage commensurate with their actual work, productivity and applied job skills was reduced by their intellectual disability. In my view, to adopt the language in Hurst, each was “deprived of the opportunity to reach his ... full potential”.

[131] In each case, the productivity scores obtained by Mr Nojin and Mr Prior were effectively reduced by taking into account their competency scores. It is not to the point that in Mr Nojin’s reassessment there was only a modest difference between his productivity and competency scores. The fact that disabled workers without intellectual disabilities might enhance their overall scores by showing greater competency than productivity, whereas an intellectually disabled worker was unlikely to be able to do so, shows the disadvantage to which intellectually disabled workers were subject by the use of BSWAT.”

[310] Katzmann J came to the same conclusion. 82

[311] In respect of the reasonableness element in s 6(b), Buchanan J held that the impugned requirement was not reasonable, for four reasons:

  the assessment of unreasonableness introduced an examination or assessment of matters which played no part in the evidence range of work for which a Grade 1 rate was fixed in the 2001 Award;

  disabled workers in open employment are not subject to the risk that their wage might be reduced or discounted by reference to an assessment of abstract matters in which they have more difficulty than other people;

  on the evidence, non-disabled workers on Grade 1 rates of pay assessed in average terms would not achieve a 100% wage assessment under the BSWAT, but would not have their pay reduced for that reason; and

  the BSWAT discriminated against intellectually disabled workers in ADEs because as a class of people that had imposed on them a tool to measure their wage contribution which, compared to a Grade 1 worker, did not measure like for like, resulting in an understatement of their actual contribution relative to a Grade 1 worker. 83

[312] Ultimately Buchanan J concluded:

“[141] I accept that BSWAT is skewed against intellectually disabled workers. The preponderance of the evidence was to that effect. The findings of the trial judge are to that effect. That feature of BSWAT has the consequence, in my view, that intellectually disabled workers are disadvantaged by comparison with other disabled workers.

[142] In my view, the criticism of BSWAT is compelling. I can see no answer to the proposition that an assessment which commences with an entry level wage, set at the absolute minimum, and then discounts that wage further by reference to the competency aspects built into BSWAT, is theoretical and artificial. In practice, on the evidence, those elements of BSWAT have the effect of discounting even more severely, than would otherwise be the case, the remuneration of intellectually disabled workers to whom the tool is applied. The result is that such persons generally suffer not only the difficulty that they cannot match the output expected of a Grade 1 worker in the routine tasks assigned to them, but their contribution is discounted further because they are unable, because of their intellectual disability, to articulate concepts in response to a theoretical construct borrowed from training standards which have no application to them. It seems impossible, furthermore, to resist the inference that the tool was adjusted so that it would not produce a better result than a simple productivity measure. The only alternative was a worse result. The disparity between the two results has, on the evidence, simply grown over the years.

[143] The award makes clear what the Grade 1 rate of pay is fixed for. The rate of pay for a disabled worker is to be fixed by reference to that rate and as a percentage of it. The Grade 1 tasks are, by definition, routine, basic, repetitive and involve minimal judgment. On the evidence, neither the Grade 1 rate, nor persons employed on that rate, are assessed by reference to any notion of competencies of the kind measured by BSWAT.

[144] In the case of disabled workers, some basic threshold of suitability for employment has, it must be assumed, already been crossed. Accordingly, it has been accepted that the worker in question, whether disabled or not, whether employed in an ADE or in open employment, can work in a suitably safe way and communicate in a fashion adequate for the tasks to be performed in the environment in which they are to be performed. In those circumstances, the very nature of the work to be done, even by a non-disabled worker seems to leave little room for theorising about some of the competencies examined in BSWAT…

[145] In my view there was no persuasive evidence that, in the case of either Mr Nojin or Mr Prior, testing for competencies added meaningfully to an examination of their output in their allotted tasks. At a more general level, testing for competencies at this level of employment faces many other questions. It is not used at all in open employment at this level. If used, it would suggest a wage reduction for non-disabled workers at the Grade 1 level. Both those matters raise real questions about whether it is a realistic assessment. The second, at least, suggests that it is not. Indeed, it gives considerable support to the notion that the test is fixed (deliberately perhaps) at too high a level.

[146] There is no doubt that BSWAT has support at many levels. In my view, that is not sufficient to render reasonable the requirement imposed on Mr Nojin and Mr Prior that any increase in their wage rate could only occur through the use of BSWAT, and not by a more direct examination of their actual work. There seems to be no practical need to borrow from industry standards and training packages a range of competencies, core or otherwise, when making the assessment of whether a disabled worker should get all, or some lesser percentage, of the wage fixed for a worker at the lowest work grade in the award. Such workers are not themselves assessed that way. That is because it would be irrelevant to their real work value to do so. It was equally irrelevant to the real work value of Mr Nojin and Mr Prior. They were subjected to a process which produced an assessment score that did not fairly relate to what they actually did. The assessment made did not provide a comparison with a Grade 1 worker. It provided a comparison with a theoretical idea, which had been adjusted so as to be not too easily attained, rather than a straightforward comparison with the efforts and output of someone working at the Grade 1 level – i.e. a comparison which related to what the Grade 1 rate of pay was fixed for. Such a comparison occurs for disabled people in open employment. BSWAT, in my view, does not make such a comparison – it does something else.”

[313] Katzmann J was somewhat less unequivocal in her conclusion that the s 6(b) element was satisfied and found the question of unreasonableness difficult having regard to the scope for legitimate differences of opinion about the issue. Katzmann J concluded that the requirement was not reasonable for the following reasons:

“[265] Looking at the matter objectively, and giving due weight to all the relevant factors, like Buchanan J and for largely the same reasons, I am persuaded that it was unreasonable to use the “all or nothing” competency testing and the question and answer method of assessment for which the BSWAT provides to determine whether the appellants’ wages should have been increased. Put another way, I am satisfied that the requirement or condition was not reasonable. In particular, it strikes me as manifestly unreasonable that the appellants’ wages be determined (even in part) by their ability to undertake tasks they would never be called upon to perform, by a method of assessment that imposes real disadvantages on them because of their intellectual disabilities and which, as Buchanan J puts it, understates the value of their actual work contributions, and when they also have to fulfil criteria that non-disabled employees against whose wages their wages are to be measured need not fulfil.

[266] Furthermore, there was evidence of a substantial disparity between competency and productivity scores in both trials of the BSWAT and in this case. Mr Prior scored zero on each competency unit while at the same time achieving productivity scores of over 50% on his two BSWAT assessments. Mr Nojin managed to achieve an overall competency score of 12.5%, although his productivity scores were far lower than Mr Prior’s. It is difficult to disagree with Mr Cain’s observation that the lack of correlation between the BSWAT productivity and competence scores suggests a flaw in its design.”

[314] We draw the following broad conclusions from the above analysis of the history of wage fixation for disabled employees:

(1) Independent reports concerning the appropriate method of wage fixation for disabled persons who would, because of their level of disability, be unable to obtain employment in the labour market at full award rates, have consistently recommended that their wage rate be assessed by use of a hybrid mechanism which takes into account the value of the work they perform and the employee’s level of productivity in performing that work. Views consistent with this approach have been stated in the Ronalds Report, the Dunoon/Green Report, the First KPMG Report, the First HOI Report and the Second HOI Report.

(2) The SWS was not designed or intended for use in the ADE sector, and its use in that sector has only even been envisaged as being subject to major adaptive change or as one of a number of available wage assessment tools. However, as a measure of productivity simpliciter, it has been recognised (particularly in the Second KPMG Report) as fair and objective.

(3) The Nojin litigation demonstrates that the work value element of the wage assessment of a disabled employee in an ADE environment should not proceed on the basis of notional core or industry competencies which have no substantive relationship to the classification descriptors for minimum pay rates in the applicable award or to the work actually performed by the employee. An assessment carried out on this basis will be likely to be inherently disadvantageous to and thereby discriminatory towards intellectually disabled employees.

The AED Legal Centre claim – whether the SWS should become the sole wage assessment tool

[315] We have earlier set out in full the variations to the SES Award which are sought by AEDLC. In essence, the grant of the AEDLC claim would involve the acceptance of two propositions:

(1) The existence of a multiplicity of wage assessment tools in clause 14.4 of the SES Award does not achieve the modern awards objective in s 134(1) or the minimum wages objective in s 284(1) of the FW Act and, contrary to s 153, is discriminatory in nature or at least permits discrimination to occur.

(2) The SWS should be the sole wage assessment tool, operating in conjunction with the existing classification structure.

[316] Consistent with the provisional views we expressed in the April 2018 Statement, we accept the first proposition but not the second. We will deal with each proposition in turn.

[317] We consider that the submissions, evidence and other material demonstrate the following:

(1) The existence of a multiplicity of wage assessment tools means that many ADEs are permitted, in practice, to set their own minimum wages for supported employees rather than have them determined objectively pursuant to the provisions of a modern award. In this respect, disabled employees are treated differently to non-disabled employees both within the SES Award itself and more generally.

(2) The capacity of employers to access differently-constructed wage assessment tools at their discretion also means that disabled employees may be paid differently depending upon which tool is chosen by the employer. This means that disabled employees performing work that is the same or is of the same work value across different enterprises are permitted to be paid different minimum rates of pay. In this respect, they are again treated differently from non-disabled employees under the SES Award, who will always be entitled to the same minimum wage rate for the same work or for work of the same work value, regardless of the employer for whom the work is performed.

(3) Some of the wage assessment tools listed in clause 14.4(b) of the SES Award may, in their application, result in disabled employees having an entitlement to a minimum wage rate which is less than that applying to a non-disabled employee under the SES Award for the same work or work of the same value.

(4) Some of the wage assessment tools listed in clause 14.4(b) are constructed in a manner that is similar to the BSWAT and may in their application contravene the Disability Discrimination Act for reasons similar to those found in the Nojin decision.

(5) The wage assessment tools are generally complex, contained in documents external to the SES Award, and lack transparency and enforceability.

(6) A number of the wage assessment tools listed in clause 14.4(b) are obsolete.

[318] The first five of the above points may be illustrated by reference to the Greenacres and Skillsmaster tools, two of the most commonly used tools. The last point is not, as we understand it, in contention.

[319] The Greenacres tool was developed by Greenacres in association with the LHMU in the 1990s and was specifically designed for persons with an intellectually disability. The tool provides for six wage levels under which the employee is paid a percentage of the SES Award rate for their position (which will usually be Grade 2 and sometimes Grade 3). The wage level structure is as follows:

[320] Employees who are above the 55 percent wage level are assessed using the SWS.

[321] Assessment for the purpose of assigning employees to the percentage wage levels above is based on three criteria: performance of “task skills”, “underpinning work skills” and “productivity”. The task skills are the fine motor, gross motor, spatial, planning/problem solving, multiple coordination, language, literacy and numeracy, and machinery/equipment/tools skills required to successfully complete a job. Underpinning work skills are the general vocational skills necessary to maintain successful employment, such as teamwork, punctuality, and working consistently. Productivity is the rate of work output per individual employee over a predetermined time period and is normally measured against the productivity rates of peers rather than able-bodied rate. An employee commences employment in the Training and Support level, and when they are assessed as meeting 100 percent of the performance criteria for 4 jobs or stages of jobs, and 80 percent of the underpinning work skills for that level, they may progress to Level A. Thereafter, an assessment of the employee’s performance of task skills and underpinning work skills will determine to which wage level they are assigned, and a productivity assessment will then determine which band in the wage level applies. The productivity assessment is undertaken by assessing performance relative to the employee’s peers, so that employees who measure in the bottom 25 percent are placed in the “Entry” band, employees measured in the middle 25-75 percent range are placed in the “Competent” band, and employees in the top 25% are placed in the “Advanced” band. The assessment process is carried by trained workplace assessors employed by the relevant ADE.

[322] There are defined task skill and underpinning work level skill criteria for each wage level. For example, the task skills for Level A are as follows:

Fine Motor Skills – KC7

  Basic hand-eye co-ordination, e.g. can hold one item and complete task with remaining hand.

  Elementary level of dexterity i.e. holds items firmly or gently as required.

  Placement of items/ objects into bags, containers, boxes, jigs, etc.

  Basic assembly (with/ without a match to sample item and/ or jig).

Gross Motor Skills – KC7

  Basic hand-eye co-ordination, e.g. can hold one item and complete task with remaining hand.

  Basic gross motor skills e.g. pull a lever to a set level, press buttons/ foot pedals.

  Placement of items/ objects into bags, containers, boxes, jigs, etc.

  Basic assembly (with/ without a match to sample item and/ or jig).

Spatial Skills – KC5

  Recognises concepts such as: on/ off, front/ back, top/ bottom, basic colours.

Language Literacy & Numeracy – KC5

  Counting to 10 (with/without the use of a jig).

  Organises a limited number of items (2-3) into sequential order.

Machinery/Tools – KC7

  Use of basic tools (if automated, a jig/ template would be in place), eg. guillotine, spanner.

  Basic machinery operation, eg. heatsealer, stapler (with/without use of a jig/template)

[323] The underpinning work skills for Level A are:

Independent work practice – KC3

  Works with moderate ongoing supervision

  Works without supervisor present for limited periods

  Continues to work when distractions are present for limited periods

  Remembers instructions minutes after they are given

  Makes basic decisions regarding own work

Working consistently – KC3

  Stays on task during key production periods

Flexibility – KC4

  Adapts to change, e.g. moves to a new task with clear directions

Quality control – KC6

  Can check work and recognise errors

OH&S – KC1

  Follows basic safety procedures

Workstation – KC3

  Maintains a clean and tidy workstation

Teamwork – KC4

  Demonstrates positive interaction with co-workers

[324] By comparison, the tasks skills for Level E are:

Fine Motor Skills – As for previous levels

Gross Motor Skills – As for previous levels

Spatial skills – KCs 1, 3, 5

  Uses higher level cognitive abilities to pre-plan, prioritise, organise and judge properties of a task such as: balance, safety issues and task resources required. Eg. Operating a forklift to load product from a ground level location to the next floor.

  Applies prior knowledge, judgment and spatial abilities over a wide range of conditions, Eg. Makes deliveries over long distances such as 50km.

Planning/Problem Solving – KCs 1, 3, 5, 6

  Very limited levels of supervision required, such as: supporting the decision making skills of the employee through confirmation and feedback.

  Read relevant references and apply the information to the task requirements, e.g. reading a basic street directory, following the directions and reaching the correct destination.

  Applies prior knowledge, judgment and spatial abilities over a wide range of conditions, e.g. Makes deliveries over long distances such as 50km.

Multiple Coordination – KCs 1, 3, 4, 5, 6

  Applies multiple skills eg. basic literacy, fine/ precise dexterity, task sequences and manual/ automated procedures to complete basic transactions, Eg. using a cash register for standard customer purchases.

  Co-ordinate multiple skills (eg. physical actions, spatial perception, precise judgment and prior knowledge of key rules & regulations) and apply these simultaneously to meet the requirements of the task over a wide range of conditions, eg. Transporting large volumes of product in a truck (up to 8 tonnes GVM)

  Oversees small groups of employees for limited periods.

[325] The underpinning work skills required for Level E are:

Independent work practice – KC2 & KC3

  Makes basic decisions for work section

  Requests explanation and clarification of instructions where necessary

Working consistently – KC2 &KC4

  Encourages co-workers to maintain on task behaviour

Flexibility – KC4

  Takes independent action to meet urgent requirements of the work section

  Able to work in different work sections as required

Quality control - KC6

  Checks work completed by co-workers and corrects where necessary

OH&S – KC1 & KC6

  Has sound knowledge of general OH&S issues and rules

  Identifies potential safety hazards with machinery/ tools and notifies relevant staff

Workstation – KCs 2, 3, 4

  Helps set up work stations for team members and organise work materials

  Completes basic documentation for workstation

Teamwork – KC3 & KC4

  Is aware if workplace schedules and encourages co-workers to meet production demands.

[326] The “KCs” referred to are key competencies.

[327] ADEs using the Greenacres tool effectively assign particular jobs to particular wage levels. This is done by identifying and recording the task and underpinning work skills embedded in each job and aligning them (based on the highest skill levels in the job) with the key competencies in the wage level structure.

[328] Although the Greenacres tool nominally operates by reference to SES Award rates of pay, it is in reality a self-contained, autonomous classification system which operates independently of the SES Award. The five-level classification structure, and the process by which jobs are assigned to those classifications by reference to the tasks, skills and underpinning work skills utilised, have no real reference point in the SES Award. For example, the skills required to be classified at Level E of the Greenacres structure, under which employees are entitled to payment at 45-55 percent of the award rate, are in the terms described at least the same as or are in some instances higher than for a Grade 2 employee under the SES Award. The Level E employee, as set out above, is required to check and correct the work of co-workers, but in the SES Award quality control of the work of other employees does not appear as a responsibility until Grade 4. Level 5 employees may be required to “oversee small groups of employees for limited periods”, but the Grade 2 employee under the SES Award has no such responsibility and it is not until Grade 4 or 5 of the SES Award that any element of supervision or responsibility for other employees arises. One of the task skills of a Level E employee is said to be “transporting large volumes of product in a truck (up to 8 tonnes GVM)”, and associated navigation skills are required. Road transport work is not included in the indicative tasks set out in the SES Award classification structure, but under the Road Transport and Distribution Award 2010 such work is performed by a Grade 3 employee, which is roughly equivalent in terms of pay rate to a Grade 4 employee under the SES Award. Assessed as a whole, there is nothing in Level E which discloses any impediment or restriction on the capacity to perform explicit and implicit work skills as compared to a non-disabled employee classified under Grade 2 of the Award, and perhaps also compared to non-disabled employees classified higher than that.

[329] The percentage of the award rates assigned to Level E, and to each of the other wage levels, have been determined externally to the award-making process. These percentages appear to be arbitrary, so that for example it is unclear why a Level E employee (who, as discussed, appears to undertake equal to or exceeding a Grade 2 SES Award employee) is assigned a maximum 55 percent of the award rate, which thus forms the upper limit of the whole structure. On its face, it appears that a disabled employee who would qualify at Grade 2 in the SES Award by reference to the tasks performed by the employee may, by the use of the tool, be paid significantly less than minimum pay rate for Grade 2 (or Grade 1) under the SES Award. By permitting the use of the Greenacres tool, the SES Award in effect authorises the employer to use a method of wage fixation for disabled employees which effectively was designed and established and operates independently to the modern award system and is in some respects inconsistent with it. There is no analogue of this in the modern award system applicable to non-disabled employees.

[330] We emphasise that this conclusion is not intended to be read as a finding that, on the evidence, any disabled employee employed by an ADE using the Greenacres tool has not in actuality been paid a wage rate that is objectively appropriate having regard to the employee’s disability. The evidence before us did not descend to the circumstances of individual employees. Our conclusion is essentially one based upon a conceptual or “desktop” analysis of the Greenacres tool compared to the SES Award.

[331] The Skillsmaster tool, which is software based, involves the development of a “skills matrix” containing “competency standards” for employees in particular positions. It was initially developed in the 1980s outside the ADE context as a tool for training needs analysis, and had the purpose of breaking down industry competency standards (as well as enterprise-specific competency standards) into workable tasks known as “units of competency” or “units of skill”. Employees could then be assessed by reference to each unit of competency to identify their training needs. The operation of the Skillsmaster system by reference to industry competency standards aligned with modernised award classification structures based on qualifications and training.

[332] It appears that the Skillsmaster tool was adapted for use or applied in the disability sector in the 1990s. A disabled person’s work will be assessed by reference to a “whole job” in a particular “work stream”. A particular “whole job” will be aligned to an award classification to identify the starting point rate of pay for that job. A “job model” is developed for each whole job consisting of units of skills, in the form of core and task skills. An employee must have all the skills in a particular job model in order to be eligible for 100% of the award rate. The units of skill are identified as relevant to the indicative tasks in the SES Award classification but are themselves external to the award and are derived from industry and enterprise-specific competency standards. An example of a job model (or “skills matrix”) is that for a Gardener found in the Witmore Enterprises Inc. (Supported Employees) Workplace Agreement 2017. The position is aligned with Grade 2 in the SES Award and assigned the rate of pay for that grade as it was at the time the agreement was made ($714.90). The “whole job” falls within the “Lawn and Garden Maintenance” work stream. The “core skills” for this position (set out in Schedule B of the agreement) are set out as follows:

“CS27 - Understand Personal Health and Hygiene requirements of the job

CS13 - Using own workspace

CS12 - Contribute to Health and Safety of the Workplace

CS10 - Maintain Personal Health and Hygiene

CS09 - Implement Emergency Procedures

CS05 - Making choices at work

CS04 - Staying on the Job

CS03 - Work Co-operatively with others

CS02 - Workplace Communication

CS01 - Basic Communication Skills

CS25 - Cleaning Tasks.

CS08 - Participate In a Team

CS07 - Follow an established schedule

CS14 - Respond to Enquiries

CS16 - Basic workplace literacy

CS15 - Basic workplace numeracy

CS11 - Take responsibility for own work

CS22 - Assist in training others at Work

CS19 - Plan and organise own work

CS18 - Workplace literacy

CS17 - Workplace numeracy

CS06 - Basic problem solving

CS20 - Plan and organise others’ work

CS28 - Contribute to Quality Control

CS26 - Participate in a team to achieve given tasks

CS24 - Co-ordinate work of others

CS23 - Supervise the work of others

CS21- Participate in allocation of team tasks”

[333] The “task skills” for the “whole job” of gardener are described in Schedule B as follows:

“Refer to the Job Model contained in the SkillsMaster´┐Ż System

GM01 - Bagging Grass

GM02 - Using basic hand tools

GM03 - Hand Held Watering

GM04 - Raking

GM05 - General Cleaning

GM06 - Use of push mower

GM07 - Use of brush cutter

GM09 - Use of a blower vac

GM10 - Fuelling push mowers and brush cutters

GM11 - Routine maintenance of push mowers and brush cutters

GM14 - Safely participate in roadside litter reduction

GM15 - Assist support worker with quality control

GM16 - Assist support worker with OH& S requirements

GM19 - Maintenance of all equipment

GM20 - Gutter cleaning

GM21 - Water pressure cleaning

GM22 - Tree lopping

GM23 - Pruning

GM26 - Navigating for vehicle driver

GM28 - Assist support worker with staff training and supervision

GM29 - Liaising with customers

GM30 - General administration support”

[334] The above units of competency or skill for the “whole job” of gardener bear little resemblance to the Grade 2 classification descriptor in Schedule B of the SES Award. The generic “core skills” are not drawn from the award and include skills which, under the SES Award, would only be expected to be exercised at higher grades. For example, “Co-ordinate work of others”, “Supervise the work of others” and “Participate in allocation of team tasks” are functions which are classified as either Grade 4 or Grade 5 under the SES Award. Similarly, the “task skills” go well beyond the indicative duties in the SES Award for a Grade 2 gardener, which are “basic grounds and lawn maintenance, including use of lawn-mower and whipper snipper; re-potting; and/or basic labouring”. A number of these tasks match with the indicative duties of higher grades; for example, maintenance of gardening equipment first appears as a Grade 4 function, and gutter cleaning and water pressure cleaning, although not specifically referred to at all, would probably be functions of a trade-qualified gardener at Grade 5. We infer that the “task skills” originate from a template job model generated by the Skillsmaster system. The only conclusion available is that the “whole job” described is not that of a Grade 2 gardener under the SES Award, and is likely one that would entitle the employee to a higher pay grade under the award.

[335] The Skillsmaster wage assessment process requires a disabled employee to be assessed for their competency and performance (or productivity) in relation to each of the task units in the job model. Each task unit is assigned a maximum score of 6 points so that, in the case of the gardener’s job model above, the maximum score for the 22 task units is 132. Under the assessment process, it is necessary to achieve the maximum score in order to be paid 100% of the SES Award rate. The first stage of the assessment process assesses the competency of the employee at each task in a unit, and a “yes” or “no answer” is provided. If the answer is “no”, the task unit is removed from the assessment process, and this serves as an identifier of where the employee requires further training. If the answer is “yes”, the employee is then assessed according to a “Performance Assessment Guide” under which they must be rated for each task unit as to whether they are “Very poor” (1 point), “Poor” (2 points), “Fair” (3 points), “Good” (4 points), “Very good” (5 points) or “Excellent” (6 points). Each grade has a set of descriptive assessment criteria, so that for a “Very good” rating, for example, the criteria are: “Employee can set up a job or perform the task with minimum supervision to a very high standard following training. The employee has well above average levels of output”.

[336] Using the example of the gardener, if the employee was assessed as not competent on 7 of the 22 task units, perhaps because they had not performed those tasks before (a matter to which we will return), and they were rated as “Very good” on the remaining 15 tasks units, they would achieve a score of 75 out of 132. Scores are banded into percentage increments of five percent up to fifty percent, and in ten percent increments above fifty percent, and the score when converted into a percentage is rounded down to the increment below. This, on the example of a score of 75 out of 132, converts to a percentage of about 57 percent, which is then rounded down to the 50 percent increment, and would entitle the employee to 50 percent of the current Grade 2 SES Award rate of $20.06. This outcome is said by the Skillsmaster tool to represent “the assessment of an employee’s competency and performance demonstrated as a percentage of the employee’s ability to undertake all the indicative tasks required to complete a whole job described in the award”.

[337] Again, as with the Greenacres tool, the Skillsmaster tool is essentially a self-contained system of wage fixation for disabled employees which only has a nominal reference point in the SES Award. The “whole jobs” or “job models” used to match actual jobs with the SES Award classification structure involve the exercise of skills which do not bear any consistent relationship with the general classification descriptors or indicative tasks in the SES Award, with the result that the wage rates produced by the application of the Skillsmaster tool will not correlate with the award rates. What the Skillsmaster tool actually does is to produce wage rates for disabled employees which are based on the employee’s assessed capacity to perform a proportion of the duties and productivity of a “whole job” that is designated by the tool itself rather than the SES Award. In authorising the use of the Skillsmaster tool, the SES Award again allows the employer effectively to self-regulate in respect of the minimum wages for disabled employees in a way that has no analogue for non-disabled employees.

[338] A comparison of the Greenacres and Skillsmaster tools shows that, at the broadest conceptual level, they bear a degree of similarity. Both recognise that a job performed by a disabled employee at an ADE might be constituted of a task or tasks which represent only a proportion of the tasks which might reasonably be required to be performed by an award classified employee, and that the performance or productivity of the disabled employee with respect to that task or tasks might in turn be only a proportion of that capable of being achieved by a relevantly non-disabled employee. In that sense they may both be characterised as hybrid tools. However beyond that point they radically differ. They use distinct means to measure the skills and competencies assigned to the job performed, with the Greenacres tool using a self-contained classification structure with its own pay rates that sits below the lowest classification in the SES Award and the Skillsmaster tool assessing employee’s competencies by reference to self-created “whole jobs” consisting of a bundle of skills and tasks. They also assess productivity differently: the Greenacres tool assesses a disabled employee’s productivity by reference to his or her peers, while the Skillsmaster tool rates employees by reference to their performance with an “Excellent” employee being the benchmark.

[339] Consequently, there is no serious likelihood that, if both the Greenacres tool and the Skillsmaster tool were applied to the same disabled employee performing the same job, they would produce the same wage assessment outcome. It is not possible on a “desktop” analysis basis to determine which would produce the higher wages outcome, or even whether one would produce a consistently higher wages outcome. The evidence does demonstrate however that different tools in their application do produce significantly different wage outcomes at the individual level: Ms Eagles, for example, described how the assessed pay rate of her daughter was significantly reduced when her ADE moved from the BSWAT to the Skillsmaster tool. The current system, whereby multiple wage assessment tools are authorised for use by the SES Award at the employer’s discretion, does not ensure that persons performing work that is the same, or of the same work value, are entitled to the same minimum rate of pay. Indeed, its clearly foreseeable and actual effect is to allow differential treatment of employees at least across different ADEs.

[340] Our analysis of the Skillsmaster tool exposes a further significant difficulty. Because of the way employees are assessed by reference to the task units which are assigned to the notional “whole job”, their percentage score (by which the proportion of the award rate to be paid is determined) is likely to be affected by an assessment of skills or competencies which the employee is not actually required to perform. If a disabled employee, for example, only performs 10 of 20 task units in a “whole job”, the employee will presumably be assessed as not competent in these tasks (because the employee has never performed them), and they will count as zero in the percentage scoring process (meaning that the maximum percentage the employee can achieve is immediately reduced to 50 percent). It is of course the case that for non-disabled employees under the SES Award, their minimum wage cannot be discounted because they are assessed as not competent to perform tasks they are not actually required to perform. While it is not necessary for us to make any conclusive finding about the matter, this position appears to us to be highly similar to that which caused the Full Court majority in Nojin to conclude that the application of the BSWAT in that case constituted a contravention of the Disability Discrimination Act. Our examination of the evidence and material concerning other wage assessment tools authorised for use by the SES Award suggests that the same is likely to be the case with a number of the other tools listed in clause 14.4(b).

[341] We have attempted in the above analysis to set out an accurate summary of the way in which the Greenacres and Skillsmaster tools work. This has not been an easy task. The information about both tools has been derived from documents external to the SES Award. The tools are complex, detailed and not easily comprehensible to the layperson; indeed, we suspect that only workplace assessors trained in their use would have a full understanding of their operation. Although they constitute the means through which the modern awards system regulates the minimum wages of disabled employees in ADEs, they are not easily accessible and in any event would likely to be opaque to disabled employees and their families. Practically speaking, it is difficult to see how any employee could ascertain and enforce an entitlement to a particular wage rate under these wage tools if an employer failed to apply them correctly, particularly as their outcomes are largely dependent upon value judgments made by workplace assessors employed by the employer.

[342] For these reasons, we do not consider that clause 14.4, insofar as it represents the means by which the SES Award sets minimum wages for disabled employees, meets the modern awards objective in s 134(1) by providing a fair and relevant safety net of terms and conditions. In this connection we have had particular regard to paragraphs (a), (e) and (g). In respect of paragraph (a), disabled employees to whom clause 14.4 applies are the lowest paid persons within the entire modern award system, and while there are as earlier discussed important social and economic policy reasons for this, it is essential that the award system regulates them fairly, equitably, consistently and in a non-discriminatory, transparent and enforceable way. The current system does not do this. Paragraph (e) of s 134(1) is concerned with equal remuneration for men and women workers, as the definition of that expression in s 302(2) makes clear. As we have demonstrated, the use of the different wage assessment tools authorised by clause 14.4(b) of the SES Award results in a situation whereby an employee of one gender performing work at a particular ADE using a particular authorised tool will not be entitled to the same rate of pay as an employee of another gender performing the same work, or work of equal or comparable value, at a different ADE using a different authorised tool. As to paragraph (g), the current system is as we have stated complex and lacking in transparency and is not “simple [or] easy to understand”.

[343] For similar reasons we do not consider that clause 14 of the SES Award meets the minimum wages objective in s 284(1). Paragraphs (a)-(d) of s 284(1) are repetitive of considerations in s 134(1), and our conclusions in respect of them are relevantly the same. In respect of paragraph (e), we do not consider that clause 14 provides for minimum wages for employees with a disability that are “fair”, because as explained they result in outcomes which do not provide consistent minimum wage outcomes for work of equal or comparable value and treat disabled employees differently to non-disabled employees.

[344] However, we do not consider that the establishment of the SWS as the only wage assessment tool is the solution to the problem we have identified with clause 14.4 or would meet the modern awards objective. In this respect, we confirm the provisional views we expressed in paragraph [15(3)] of the April 2018 Statement. Before we elaborate on what we consider to be the shortcomings of the SWS in its current form in the ADE context, it is necessary first to briefly summarise the way in which the SWS operates in the ADE context.

[345] The main features of the SWS, as described in the evidence of Mr Cain, are as follows:

  it provides a wage assessment process which assesses the productivity of a disabled employee where the employee is unable to obtain a job at the full award rate due to the effects of disability on their productive capacity;

  it is meant to be used only when it is clear that the disabled employee is unable to work at the level of productivity expected for the award rate of pay;

  the assessments are undertaken by assessors contracted by the Commonwealth Department of Social Services and without direct expense to the employer;

  the SWS assessment compares an agreed performance standard of what is required to earn the full award rate of pay under the relevant award for each job task with the assessed performance achieved by the employee for each job task;

  the comparison is based on the concept that a disabled employee receives the same rate of pay for the same volume of work output as an employee performing the same tasks at the same rate;

  where more than one task is performed and assessed, the tasks are given a weighting which takes into account the time spent on each job task;

  the SWS focuses on the actual job tasks of the disabled employee, not “skills” or “competencies” that are not part of an employee’s job;

  the SWS does not treat customised jobs differently, and proceeds on the principle that a job with a narrow range of job tasks, relative to a job with a broad range of job tasks on the same award level, is not grounds for devaluing the right of a disabled employee to the relevant award rate for the job tasks they are performing; and

  the SWS does not assess the level of training, support or supervision in determining the pro-rata award wage rate.

[346] The modifications to the SWS effected by the October 2017 decision were intended to include in the assessment process the use of workplace data collected by the employer to measure variations in the productivity performance of the employee which might not be captured in a single time-limited assessment conducted by a SWS assessor.

[347] It is necessary to observe, before describing what we consider to be the problems associated with the use of the SWS in ADEs, that the SWS has a number of virtues, not least because as we will explain later we consider that the SWS has an important role to play in the regulation of the employment of disabled persons in ADEs. These may be summarised as follows:

(1) The SWS is conducted by assessors engaged by the Commonwealth rather than the ADE, and thus has both the appearance and reality of impartiality and independence.

(2) Because SWS assessors are currently funded by the Commonwealth, which we presume will continue in the future (as discussed later), this frees up resources for ADEs which use the SWS, as compared to ADEs which use other wage assessment tools and therefore have to devote internal resources to the administration of such tools including the employment of wage assessors.

(3) The methodology of the SWS is conceptually straightforward and robust (although perhaps less so in practice, as discussed later), and there is ample material published by the Commonwealth which explains its workings, which allows for substantial confidence that it is transparent and comprehensible to disabled employees and their families.

[348] The fundamental difficulty with the SWS, as was identified by a large number of the witnesses, is that it assesses wages on the basis of productivity only and otherwise assumes that the job being performed by the disabled person is one to which the relevant award classification was intended to apply and set minimum remuneration for. This assumption is flawed. As we have earlier set out, it is an essential feature of ADEs that, rather than simply recruiting disabled persons to perform jobs which pre-exist in the labour market and might otherwise be performed by non-disabled persons, ADEs create and/or tailor jobs specifically for the purpose of providing work to disabled persons which they are capable of doing. This might mean, for example, that a single job consisting of a number of tasks which might reasonably be expected to be performed by a single non-disabled person might be broken up into a number of tasks or even sub-tasks in order to provide jobs for a number of disabled persons that is within their capacity to perform. In such a case, it will be evident that the work value of the jobs established for disabled persons in this way, as measured by the level of skill and responsibility involved, will be significantly less than the whole, multi-task job which the non-disabled person is capable of performing. However the SWS does not recognise this, and regardless of the nature of the task performed by the disabled person, simply measures the productivity of the disabled employee by reference to the benchmark of a relevantly non-disabled employee performing the same task.

[349] The AEDLC submitted that this approach was appropriate because the SES Award entitles a non-disabled employee classified at a particular grade to be paid the full rate for that grade, regardless of whether the employer assigns the employee the full range of tasks that might be required to be performed at that grade or simply assigns them one simple task at that grade. Thus, the AEDLC reasoned, when it came to disabled employees, the only variable required to be measured was the productivity of the employee in performing the task which the employer assigned to them, and the SWS did this.

[350] This submission is correct only in a narrow and technical sense. It is true that, where an award classification sets out a range of duties which might be required to be performed at that pay level, the employee is entitled to be paid at the full rate of pay regardless of whether they are assigned all, some, or just one of those duties. However in a broader sense award classifications, particularly in industry awards such as the SES Award, are established on the basis that the classification of an employee at a given grade carries with it a reasonable expectation that the employee is capable of performing work at a certain level of skill and responsibility and, if required and after the appropriate training, can perform any duties at that classification level. That was often explicitly stated in industry awards following the move to broad-banded classifications in the early 1990s but is more often than not implicit in modern awards since it has become the working assumption as to how award classification structures operate. Certainly, modern award classification structures and their associated rates of pay have never contemplated the situation applying in ADEs whereby jobs are often specially created or tailored to align with the limited capacities of disabled persons. The fact that the classification structure in the SES Award, the very award intended to apply to ADEs, does not make the implicit position explicit is a defect which requires remedy, as we will come to.

[351] The defect in the way the SWS operates in the ADE environment may be illustrated by reference to two jobs performed by disabled persons which we had the opportunity of observing during the inspections which we conducted. The first job involved a reasonably complex sewing task with ancillary duties. This was not a job which had been created or tailored for the disabled person performing it, since a non-disabled person was performing the same job side-by side with the disabled person. It was a job which to our estimation would be classified at Grade 3 of the SES Award. In the circumstance described the SWS could readily be applied to the productivity of the disabled worker, using the non-disabled worker as a benchmark, and the percentage of the Grade 3 rate payable to the disabled employee pursuant to clause 14.4(a) can be identified.

[352] The second job involved a disabled person whose only task was to sort cutlery (between knives, forks and spoons) which had previously been washed and was to be packed for use during meal services on scheduled air flights. The person involved had very limited work capacity, and the job had been specially constructed to match with the person’s capabilities. Although in a technical sense an employee classified at Grade 2 in the SES Award might be required to perform such a task from time to time, it is perfectly apparent that the Grade 2 classification and the rate of pay associated with it was never intended to set remuneration for a job consisting only of this one basic, repetitive task. Jobs of this nature simply do not exist in the open labour market in Australia and could only ever arise in the special context of an ADE. However the SWS makes no practical distinction between the first and the second job (beyond the fact that the starting-point rate of pay in the SES Award may be different). Because the SWS methodology does not account for the work value associated with the job being performed, but only measures the relative productivity of the person performing it, the second job is assessed in the same way as the first – that is, the productivity of the disabled person sorting cutlery is compared to the productivity of a relevantly non-disabled person performing the same task. If in respect of both the first and second job the productivity of the person performing the task is, say, 70 percent of that of a non-disabled person performing the same task, then that is the percentage of the award rate which the disabled employee will receive in either case. That is a result which is patently at odds with the relative work value of the two positions and means that the pay rate of the second job bears no proper relationship to the work value of that job.

[353] Compounding this problem is the fact that SWS generally measures employees’ productivity by measuring their performance exercising a single skill. This means that the greater work value associated with an employee being capable of performing multiple skills is not measured by the SWS.

[354] In his evidence Mr Cain contended that where an employee has a greater level of work skills, that will usually be reflected in the productivity performance measured by SWS. As a general proposition it may be accepted that higher skilled employees are likely to demonstrate higher productivity at a given skill than lesser skilled employees. However, it does not follow from this that the SWS results in pay outcomes which accurately reflect relative work value. Employees are assessed on the major skill or task which they perform in their own work; they are not all tested on the same task. A higher skilled employee will generally be tested on a more difficult and complex work task than a lower skilled employee because of the differing nature of the jobs they are likely to perform. In the example we have described above, that may result in the two employees achieving the same productivity score because they are being assessed on tasks of different complexity. The first employee would no doubt achieve a much higher productivity score if tested on the same task as the second employee, but that is not what the SWS does. The result may even be, as Mr MacFarlane accepted, that the employee performing the more complex job ends up being paid less than the employee performing a single basic and routine task. 84 That is a perverse outcome.

[355] It is not surprising that the SWS does not by itself operate as an effective wage assessment mechanism in ADEs. As our earlier analysis of the history of wage fixation for disabled persons has demonstrated, the SWS was designed for use in the different context of open employment, and every external study of wage fixation for disabled employees in ADEs since the 1980s has recognised the need for a hybrid model which measures both the employee’s level of work skill and competency and the employee’s productivity in the performance of the work tasks of their job.

[356] The evidence before us has made it abundantly clear that the application of the SWS to ADEs results in large increases in wage costs. In summary, the evidence demonstrated the following in respect of ADEs which use or have trialled the use of the SWS:

  Centacare moved from the use of the BSWAT to the SWS, and the result for a core group of 50 employees was an 83 percent increase in wages cost.

  Greenacres trialled the modified SWS prior to its implementation in the October 2017 decision, and the trial showed that wage costs would increase by 60-115 percent.

  DSA began to assess 12 of its employees under the SWS after it stopped using the BSWAT, and this resulted in significant wage increases.

  Mambourin moved from the BSWAT to the SWS, and when it did the assessed wage rate of 2 of its 14 employees went down very slightly, but in the case of the remainder the assessed wage rates rose significantly to close to double what they had been.

  Help’s wages bill increased by approximately 25 percent when it moved from the BSWAT to the SWS.

  Christie’s wages bill increased by 18 percent after it began using the SWS.

  Multicap’s wages bill increased by 41 percent after it transitioned from the BSWAT to the SWS.

  Impact’s wages bill increased by 41 percent when it adopted the SWS.

  PAI’s wages bill increased by 62 percent when it moved from the BSWAT to the SWS.

  An external consultant’s report concluded that Blueline’s wages costs for its 81 supported employees would increase by almost $400,000 per year if it moved from its current wage assessment tool, the BWAT, to the SWS.

  Endeavour had trialled the use of the SWS in 2016, and concluded that it would result in wage increases which it considered to be commercially unsustainable.

[357] It might be said that, in a number of the above cases, the move to the SWS and the consequent increase in wages costs occurred as a result of the abandonment of the BSWAT, which was found in the Nojin decision to operate in an unlawfully discriminatory fashion, and therefore involved the correction of a wage injustice. This proposition would have force if the SWS was an appropriate tool for the fixation of wages in ADEs, but it is not. Because, as explained, it takes no account of the value of the work being assessed, it is inherently biased towards an inappropriate escalation of pay rates in respect of the performance of work of the lowest value. This is demonstrated by the fact that the evidence shows that the introduction of the SWS significantly increases wages costs no matter what wages assessment tool was previously used.

[358] The evidence equally demonstrates that the increases in wage costs which would flow from the mandatory use of the SWS would be likely to have a significantly detrimental effect on the commercial viability of ADEs, and thus adversely affect their capacity to employ disabled persons. We accept the evidence of witnesses such as Mr Christodoulou, Mr Harvey, Mr Dickens, Mr Baker, Ms Fitze, Mr Fraser and Mr Donne that if ADES were required to use the SWS as the only wages assessment tool, the result would be the loss of commercial contracts and consequently the loss of jobs in supported employment or even the closure of ADEs. Making the SWS mandatory would having varying effects on ADEs depending upon the nature of the work they performed, with the effect likely to be most significant to those ADEs which provided employment at the lowest skill levels to employees with the greatest level of disability. We note that the commercial and employment consequences for those ADEs who had transitioned from the BSWAT to the SWS had not yet fully manifested itself because, at the time the evidence was received, they remained in receipt of transitional wage subsidies by the Commonwealth which had not yet completed their phasing-out period.

[359] We consider, having regard to our earlier findings concerning the social value of supported employment in ADE’s, that the loss of employment which would occur consequent upon the mandatory use of the SWS would be a calamitous outcome. Numerous disabled persons and their carers have given uncontradicted evidence that the loss of supported employment would result in social isolation, boredom, financial detriment, a loss of skills development opportunities and a diminished sense of self-worth amongst disabled persons, with a significantly greater burden being placed on their carers and other family members. There is no evidence that this would be ameliorated by any compensating increase in open employment for disabled persons.

[360] It must be said that some of those in the AEDLC’s camp did not appear to fully share our level of concern about the future of the ADE sector should it have a very significant wage adjustment forced upon it. Mr Cain accepted that the ADE sector had a role to play, but he perceived this as being only to act as a transitional pathway for disabled persons to be placed in open employment. Mr MacFarlane opposed the ADE model outright, which he regarded as “segregated employment”. His views aligned with those of PWDA, which publicly advocates for a plan to close all ADEs and transition all ADE workers into open employment or, in the case of older workers, progressive retirement.

[361] We do not share these views. We have paid very close attention to the evidence of Ms Powell, who described the experience in the UK after a policy decision was made to close down supported employment in favour of the disabled working in open employment. The result, as we have earlier recounted, was that the vast majority of disabled persons formerly in supported employment were left without any employment at all. That is not an outcome which we are prepared to contemplate.

[362] There are two other difficulties with the SWS which we identified in the April 2018 statement, although these are in a different category because they are both remediable. First, the SWS in the form it was prior to the October 2017 decision suffered from the additional difficulty that it only assessed the productivity of supported employees during a defined period, which often had the result that periods in working time during which more severely disabled employees were not “on task” because of emotional distraction or an inability to maintain focus was not captured. This tended to result in an over-estimation of the productivity of employees at the lower end of the productivity range. The variations effected to the SWS by the October 2017 decision were intended as a consensus measure to remedy this by allowing the incorporation into the assessment process of “workplace data” concerning the employee’s productivity performance over an extended period of time if such data is collected by the employer. Clauses D.5.3, D.5.4 and D.5.5 of Schedule D of the SES Award now provide that, where the disparity between the SWS productivity assessment and the workplace data is 20% or less, each will be given a 50% weighting in the overall assessment. This is, we consider an appropriate way to deal with the identified problem. However, where the disparity is more than 20%, clause D.5.5(b) provides that the SWS assessment will be the sole determinant of the outcome. This is, we consider, counter-intuitive and illogical. It is where the disparity is high that the problem of the SWS not capturing non-productive working time will be of most significance, and that is the very circumstances where it is most necessary to take workplace data into account. In our view, where workplace data is collected, it should always constitute 50% of the overall assessment.

[363] The second problem concerns the establishment of a performance benchmark for the purpose of conducting the SWS productivity assessment. The evidence of a number of witnesses indicated that, in practice, the identification of a benchmark was conducted in a somewhat haphazard, ad hoc and methodologically unsound fashion. Mr Cain, for example, accepted in cross-examination that the application of the SWS in practice often involved the benchmark being arrived at as a result of a time-limited, pragmatic negotiation with the employer. 85 Mr MacFarlane said that the benchmark negotiated with the employer was based on what the employer considered was a level of productivity appropriate to attract the full award rate of pay, notwithstanding that the SES Award said nothing about productivity standards in its classification structure.86 Mr Burridge gave evidence that after Centacare adopted the SWS, a single work task was selected by Centacare as the benchmark for all supported employees, apparently regardless of what work they actually performed at the relevant time (although all the employees had performed the task at some time). This was done without any input from the SWS inspectors, and they accepted this without ever inquiring what the actual duties of the employees being assessed was.87 This approach appears to have been inconsistent with the SWS methodology which, as we understand it, requires the SWS inspector to check and validate the benchmark, and to measure all the main tasks actually performed, not just one task which may not even be performed. The SES Award currently makes no provision as to how the benchmark is selected to ensure that it provides a proper basis for the productivity assessment. Because the validity of any SWS assessment is anchored on the establishment of an appropriate benchmark, these are matters of real concern.

[364] Our conclusion, based on the above analysis, is that the adoption of the SWS as the single mandatory wage assessment tool within the current wage structure of the SES Award as proposed by the AEDLC would not achieve the modern awards objective of a fair and relevant minimum safety net of terms and conditions. In this respect we have paid particular regard to paragraphs (a), (c) and (f) of s 134(1) as being of relevance and weight. In relation to paragraph (a), the adoption of the AEDLC proposal would likely have the effect of increasing the wages paid to many supported employees, although the financial benefit of this would be diminished by a reduction in their DSP payments. In respect of paragraphs (c) and (f), the mandatory adoption of the SWS as proposed would lead to a very large increase in the employment costs, which would result in a significant loss of jobs for disabled person in ADEs and thus would diminish rather than promote the social inclusion of disabled person by reducing their level of workforce participation. With respect to the minimum wages objective, we have taken into account the considerations in paragraphs (a)-(d) of s 284(2) in the same way as the equivalent considerations in s 134(1). In respect of the paragraph (e), we do not consider that that the adoption of the SWS in its current form as the sole determinant of wages for disabled persons in ADEs would be “fair” to either ADEs and employees or disabled employee for the reasons we have earlier given.

The ABI claim – whether its work value classification structure should be adopted

[365] In relation to the ABI proposal for a new work value classification structure, we confirm the provisional view which we stated in the April 2018 statement. It appears conceptually to be similar to the Greenacres tool, in that it establishes a classification structure for disabled employees sitting below the current SES Award classification structure into which employees may be graded on the basis of an assessment of their work duties, skills and level of responsibility, and then has pay bands within each classification which operate on the basis of an assessment of the employee’s productivity compared to their peers. It removes some of the defects of the Greenacres tool: the structure provides for incremental pay progression all the way up to 100% of the award rate rather than stopping at an arbitrary 55%, and the classifications descriptors do not contain work requirements which equal or exceed those for Grade 2 in the SES Award. Insofar as the ABI proposal is a hybrid one which seeks to take into account both the work value of the job being performed by the supported employee and the level of the employee’s productivity, it is we consider conceptually sound. ABI’s primary position was that its classification structure should be adopted as a new mode of wage assessment to operate alongside the existing wage assessment tools, but it was in the alternative prepared to acknowledge that it might also be adopted in order to replace entirely the existing tools - a position which we consider was the only realistic one to take. We also acknowledge that ABI regarded its proposal as, in effect, a work in progress which would benefit from further adjustment with input from other cooperating parties. We accept that it constituted a good faith attempt to grapple with the difficult issues raised in this proceeding. However we do not ultimately consider that the proposal is the appropriate way forward, for two related reasons.

[366] The first is that the proposal, although said to be based on work value, is in fact in its proposed classification descriptors more focused on the personal characteristics of the individual employee. For example, the proposed classification descriptors for Level A include that the employee “is incapable of organising their work” and “has some difficulty staying on task or remaining at their work station”. The well-established concept of work value is not based on the personal characteristics of the employee, but rather on an objective analysis of the level of skill and responsibility required to perform a particular job, whoever performs it. It may be accepted that traditional work value considerations may need some adjustment in the context of supported employment, where jobs are established or tailored to align with the capacities of individual employees. However we consider that the fundamental concept must remain, otherwise the classification structure would descend into a form of individual performance pay. The second reason, which flows from the first, is that ABI’s proposed classification structure requires a series of discretionary and subjective assessments to be made by the employer concerning the capacities and behavioural characteristics of individual employees. The result would be a system which lacks objectivity, transparency, simplicity and enforceability. Accordingly we do not consider that the adoption of ABI’s proposal would achieve the modern awards objective.

The preferred approach

[367] What then is the way forward? We begin with the agreed principles set out in the October 2015 statement, which we have earlier set out. Insofar as the wage outcomes produced by the SES Award for disabled employees must be “fair, equitable and non-discriminatory”, we consider that the wage fixation mechanism in the award must remunerate disabled and non-disabled persons in a way consistent with the value of the work they perform, must take into account the productivity of disabled persons into order to ensure that any restrictions on their work capacity caused by their disability does not price them out of a reasonable prospect of employment, and must ensure as far as possible equivalent wage outcomes for disabled persons performing the same work or work of equal or comparable value wherever they might be employed. The principles that there be “[c]ontinued opportunity for employment in supported employment settings..”, that there be “[s]ustainable employment opportunities in viable ADEs” and that there be provided “security and confidence to employees, parents and carers for the future” require that any new wage fixation system for disabled employees under the SES must not cause commercial disruption to ADEs by a sudden large escalation in their employment costs. Although any new system may result in the need for adjustments to the existing remuneration of disabled employees, and some increase to the absolute minimum pay rate for disabled employees may be warranted, we do not see this as an opportunity to effect a major across-the-board increase in employees’ wages. No party presented a proper case referable to work value of disabled employees generally to suggest that this would be warranted, nor do we consider in any event that this could be done within the current funding framework without endangering the viability of ADEs and their capacity to provide employment opportunities to disabled persons.

[368] We confirm the view expressed in the April 2018 system that the existing wage assessment tools should be phased out, that the SES Award classification structure should be redesigned, and that there should be a new wages structure for disabled employees. We have already set out, in the context of our consideration of the AEDLC’s claim, our reasons as to why we consider that the current situation whereby the employer may choose from a multiplicity of wage assessment tools to set wages for disabled employees is unsatisfactory and does not achieve the modern awards objective. We have also earlier adverted to the unsatisfactory nature of the current classification structure in the SES Award, which does not make clear what work may reasonably be required of an employee who is to be paid the full award rate (particularly in Grades 1-3) and lends itself to the interpretation that a job consisting of a single most basic and routine task established to align with the restricted capacities of a significantly disabled person is one that is classifiable under the award.

[369] We also confirm that there should be a new hybrid wages structure for disabled employees which takes into account the value of the work they perform and their productivity level where this is affected by their disability. In the context of our consideration of the AEDLC claim and our analysis of the SWS, we have set out the reasons for our conclusion that a purely productivity-based assessment would not be fair or appropriate or achieve the modern awards objective and that it is necessary to take into account the work value of the employee’s job. This is an approach which has conceptually been endorsed by every independent review of wage fixation for disabled persons, as we have earlier recounted.

[370] In our April 2018 statement, we envisaged that the work value component of the wage fixation process for disabled employees would involve an assessment of the “size” of the job being performed as compared to a job that would attract the full award rate of pay. Under this concept, jobs would be “sized” having regard to the complexity of the work tasks, the skills required to perform them and the degree of support necessary to allow the employee to carry out those tasks. However, after further consideration and having regard to the parties’ further submissions, we have decided not to proceed with this concept. There are two principal difficulties in this respect:

(1) The starting point for “sizing” a job performed by a disabled person must be an identification of what constitutes a “whole job” that attracts the full rate of pay. We have been unable to identify a practical working mechanism by which this may be done. The SES Award classification structure currently does not, and could not conceivably, identify any particular bundle of duties which constitutes a job that is classifiable at a particular grade. Each classification is intended to cover a wide range of work functions across the ADE sector, and different ADEs may engage in entirely different commercial activities, so the number and nature of potential jobs that may be classifiable at a particular grade is not readily identifiable. The award classification structure currently sets out a range of indicative tasks for certain work functions at each grade, but there is no basis to conclude that the actual jobs which exist in the sector, even if performed by a relevantly non-disabled employee, consist of all of the listed indicative tasks. They may not include all of the tasks, and may include other tasks which are not listed. One party, in a good faith attempt to assist us in implementing the provisional conclusions in the April 2018 statement, proposed the development of standard job descriptions for each potential job in the industry at each classification level. Leaving aside the sheer difficulty and complexity of this task, such an approach would we consider run the real risk of treating disabled employees in an unfair and discriminatory, in that their jobs may be “sized” (and their potential wage rate diminished) by reference to a theoretical “whole job” classifiable under the award which may not in reality be actually performed by any relevantly non-disabled person.

(2) It is not possible to identify a simple, objective and transparent mechanism by which the “size” of a job performed by a disabled person relative to a classifiable “whole job” may be determined. If, for example, the “whole job” consists of a certain collection of work tasks and the actual job consists of just one or a proportion of those tasks, an assessment would be required as to the relative complexity and importance of those tasks that are performed and those that are not performed. It is difficult to conceive of a consistent methodology by which this could be done which involves more than just a subjective evaluation by the employer.

[371] We have concluded that the issue of the work value of jobs that are created or tailored for the purpose of providing work which is within the capabilities of disabled person should be dealt with by the more direct, simple and traditional means of establishing new award classifications and pay rates applicable to such jobs. That will necessarily mean that there will be classifications in the SES Award will provide for rates of pay that are below the National Minimum Wage. There is nothing in the FW Act which requires that minimum pay rates in an award be at or above the level of the National Minimum Wage, and the current position is that the SES Award expressly provides for the payment of wage rates below the National Minimum Wage. No party contended for any change this position, and the claims of the AEDLC and ABI were advanced on the basis that disabled employees would under their proposals be paid amounts below the National Minimum Wage. We are of course proceeding on the basis that the affected employees are in receipt of the DSP, and this will operate in conjunction with the prescribed pay rate to ensure that the employee receives a total income that it socially acceptable in contemporary circumstances.

[372] We consider that:

(1) There should be two new classifications (Grades A and B) below the current Grade 1 in the SES Award. The classifications should be applicable only where the employer has created a position consisting of tasks and a level of supervision that has been tailored or adjusted to meet the circumstances of the employee’s disability and which does not fall into Grades 1-7 of the classification structure. We emphasise here that we are not talking about the situation where an employer simply makes a reasonable adjustment to allow a disabled person to perform a pre-existing vacant position. Additionally, the employee must meet the criteria for eligibility to receive the DSP.

(2) Grade A shall provisionally have a rate of $7.00 per hour, and shall apply to employees who perform one or more simple tasks consisting of up to three sequential actions under direct supervision and constant monitoring.

(3) Grade B shall provisionally have a rate of $14.00 per hour, and shall apply to employees who perform one or more simple tasks consisting of more than three sequential actions, which may involve the use of mechanical or electrical equipment or tools, under direct supervision with regular monitoring.

[373] The classification descriptors for the existing Grades 1-7 will be modified so that they are expressed in terms of generic indicators of work value. We consider that the current lists of indicative tasks should be removed to make it clear that the mere performance of one of those tasks in circumstances in relation to job which has been established or tailored to align with a disabled employee’s level of capacity is not sufficient or intended to fall within any of these grades. Instead, alignments with other award classifications which provide for the performance of work commonly performed in the ADE sector will be included to provide proper guidance as to the work intended to be comprehended at each classification level. Grades A-B and 1-7 will, taken together, provide a classification structure which accommodates in a comprehensive way the jobs which the evidence shows actually exist in the ADE sector and properly reflects their work value.

[374] We consider that disabled employees classified in any grade (Grades A and B or 1-7) may be paid a percentage of the specified rate for the classification based upon an assessment of their productivity as compared to that of a relevantly non-disabled person. The only wage assessment tool which may be used for that purpose will be the SWS, subject to the following modifications:

(1) Where an employee performs more than one major task in their job, the SWS assessment must measure a representative sample of the tasks performed and weight them appropriately.

(2) The SWS assessor must independently determine that benchmark to be used for the assessment is valid and appropriate.

(3) Where an employer collects workplace data as to the employee’s productivity levels, that data must be assigned a 50% weighting in the overall assessment, regardless of the degree of disparity with the result of the SWS assessor’s assessment.

(4) There will be an absolute minimum payment of $3.50 per hour. This amount will also serve as the minimum rate payable to a disabled employee during an initial assessment period in their employment.

[375] Finally, we consider that no existing ADE employee should suffer a reduction in remuneration as a result of the introduction of the new wages structure which we propose.

[376] The establishment of a requirement to use the SWS with the above modifications and in conjunction with the new classification structure will, we consider, utilise the benefits of the SWS which we have earlier identified while resolving its problematic aspects. In order to give effect to our decision, it will be necessary for the Commonwealth to provide funding for a greater number of SWS assessors. We also consider that it is vital that the new wages structure we propose be trialled at a number of representative ADEs to ascertain the cost impact it will have on ADEs before it is implemented, having regard to our earlier statement of intention in respect of this. We anticipate that Commonwealth financial support will also be required to allow ADEs to participate in the trial. We look forward to advice from the Commonwealth as to its readiness apply the funding announced in the 2019-20 Budget for a transition to a new wage assessment tool for this purpose. And, although as explained we do not intend to impose upon ADEs any large increase in labour costs, it will be unavoidable that there will be some increase as a result of the fact that some employees will inevitably become entitled to a higher rate under the new system and no employee is permitted to have their wage rate reduced. There will need to be some consideration of Commonwealth assistance in this respect also.

[377] The determination we are currently minded to make, which incorporates replacements to clauses 13 and 14 and Schedules B and D of the SES Award, is contained in Attachment A to this decision. Our conclusion at this stage, subject to what follows immediately below, is that these variations would serve to ensure that the SES Award meets the modern awards objective in s 134(1) of a fair and relevant safety net. Of particular weight and relevance are paragraphs (a), (c), (f) and (g) of s 134(1). In respect of paragraph (a), we consider that the proposed variations would at least protect and may in some cases enhance the current needs of the low paid supported employees covered by this award. As to paragraphs (c) and (f), we consider that the proposed wage structure would not have a significant impact on employment costs, would ease the regulatory burden for many ADEs (by externalising much of the cost of the wage assessment process to the Commonwealth’s SWS assessors), and would tend to promote social inclusion by giving ADEs the confidence to continue to employ disabled persons and thus increase workforce participation. As to paragraph (g), we consider that the variations would make the SES Award simpler and easier to understand and place it on a stable and sustainable footing. The balance of the considerations in s 134(1) we consider to be neutral. We also consider that the proposed variations would meet the minimum awards variation in s 284(1). In that respect, we take into account paragraphs (a)-(d) of s 284(1) in the same way as we have the equivalent considerations in s 134(1). We have given particular weight to paragraph (e) of s 284(1), since for the reasons we have explained we consider that the proposed variations constitute what is necessary to achieve a comprehensive range of fair minimum wages to employees with a disability. We are also satisfied that the variations would not involve any contravention of s 153(1), having regard to s 153(3)(b).

[378] It will be necessary to undertake a number of steps before any determination arising from this decision takes effect. Firstly, we wish to give parties an opportunity to make further submissions about the determination which we presently consider should be made. We would particularly be assisted if such submissions addressed the proposed rates of pay and classification descriptors for the new Grades A and B, the new classification descriptors for Grades 1-7 and the implementation timetable (see below), as well as any other issues the parties consider relevant. We would also be assisted if the Commonwealth could advise as to its preparedness to provide the financial support which we have identified as being necessary. Secondly, we propose then to conduct a conference of those parties who are interested in endeavouring to achieve a consensus position as to the terms of the award variations to give effect to this decision, having regard to the draft determination in Attachment A. With the benefit of the submissions and the conference process, we will then be in a position to finalise the new wages structure which is to be the subject of the trial.

[379] We consider that the trial should be conducted over a period of three months, subject to any submissions on this issue which might be received. Once the trial is completed, the results should be made public, and interested parties will then be given an opportunity to make further submissions. We will then issue a final determination varying the SES Award. The results of the trial in terms of any changes to overall labour costs will be taken into account by us in setting the final wage rates for the new Grades A and B. We consider that the determination should not take effect until a further 14 months have passed, in order that ADEs have a proper opportunity to phase out the use of the existing wage assessment tools and transition to the new wages structure.

[380] The timetable we currently envisage is as follows:

17 December 2019 - receipt of further submissions concerning the new wages structure and advice from the Commonwealth Government concerning funding support.

20 December 2019 - conference of interested parties concerning the new wages structure.

31 January 2020 - Commission determines the final wages structure for the purpose of the trial.

1 March - 31 May 2020 - conduct of the trial of the new wages structure.

26 June 2020 - public release of information concerning the outcome of the trial.

17 July 2020 - receipt of any further evidence and submissions concerning the outcome of the trial and any consequential further modifications that might be required to the new wages structure.

10-14 August - further hearing if necessary.

30 October 2020 - final determination varying the SES to delete the existing wage assessment tools and add the new wages structure issued.

1 January 2022 – operative date of final determination, upon which existing wage assessment tools cease to operate and the new wages structure comes into operation.

Superannuation

[381] We have decided to grant the UWU’s claim in respect of superannuation. Two propositions which may be derived from the evidence and submissions justify that conclusion:

(1) The original award provision which is now clause 19.5 of the SES Award was constructed at a time when the superannuation guarantee levy was only 3%. It was evidently designed to benefit the lowest paid disabled employees by requiring contributions to be the greater of 3% or $6.00 per week. Now that the superannuation guarantee levy is 9.5%, the original rationale has been inverted such that clause 19.5 only serves to visit an arbitrary and discriminatory detriment upon the lowest paid disabled employees.

(2) The amount of contributions prescribed is too low to provide employees with any appreciable level of retirement savings once the effect of administrative fees and fees for required insurance products are taken into account. That is, the provision in its current form serves no beneficial purpose.

[382] We note that consideration was given by the AIRC award modernisation Full Bench in its 4 December 2009 decision 88 as to whether this provision should appear in the SES Award. The Full Bench said:

“[93] In relation to superannuation, we have decided not to alter the provision, not adjusted for many years, whereby an employee with a disability being paid less than 80% of the full award wage has a superannuation contribution made of either 3% of ordinary time earnings or $6.00 per week, whichever is the greater. This payment has relevance in this sector because significant numbers of employees with a disability earn less than $450 per month. Mindful that many employers not currently bound by the award do make provision at varying levels for superannuation contributions for employees with a disability, we have concluded that the current provision should be included in the modern award. We have also noted the National Disability Services 16 October 2009 written submission, ‘…that the contribution level should not be adjusted at this stage’ and the Parliamentary Secretary for Disabilities and Children’s Services 30 November 2009 correspondence to the Commission, indicating that it was the Australian Government’s intention to consult relevantly with stakeholders early in 2010. Should an application be made in the future for review of this provision it will be dealt with in the normal way.”

[383] There is no evidence before us as to any outcome of the Australian Government’s consultation with stakeholders about this issue (or whether this even occurred). No party before us advanced any industrial rationale for the continuation of clause 19.5. We consider that it plainly does not meet the modern awards objective in s 134(1) having regard to the two propositions stated above, and in reaching that conclusion we have placed particular weight on the needs of the low paid as referenced in s 134(1)(a). The only question concerns the cost impact to ADEs of moving disabled workers earning less than $450 per month to the standard contribution rate of 9.5% or $15 per week. We propose to deal with this issue by giving the variation a prospective date of operation of 1 October 2020, which will allow ADEs to prepare and also to engage with the Commonwealth about the issue. This is reflected in the draft determination in Attachment A to this decision. However, in accordance with the timetable set out in paragraph [380] above, we will invite further submissions concerning the operative date to be filed by 17 December 2019.

Rights at Work for Supported Employees clause

[384] We are wholly persuaded that the SES Award should be varied to include a clause concerning “Rights at Work for Supported Employees”, as proposed by Our Voice. The evidence makes clear that disabled employees working in ADEs are a vulnerable group, and are likely to require information, representation, consultation and assistance concerning workplace decisions which affect their interests to an extent that is far greater than for non-disabled employees. It is equally clear that it is necessary for such employees’ parents, family members, carers, guardians, nominees, advocates or union, as relevant, to be involved. No interested party opposed the provision, and we consider that it is necessary to include it in the SES Award in order to meet the modern awards objective. A provision of this nature will be of particular importance having regard to the significant changes in the minimum wages system for disabled employees which will be implemented as a result of this decision. The new clause should take effect from 1 March 2020.

[385] The new clause, which we have re-drafted to some degree for clarity, is contained in the draft determination in Attachment A to this decision. Parties may make further submissions concerning its drafting by 17 December 2019.

Coverage of the Award

[386] The earlier submission of the Department concerning the coverage of the SES Award are noted. Our provisional view is that no change to the definition of “supported employment services” in clause 3.1, by which the coverage of the award as expressed in clause 4.1 operates, is required. As explained at the outset of this decision, the award definition incorporates by reference the definition of “supported employment services” contained in s 7 of the Disability Services Act 1986. We do not consider that the change to the funding model for ADEs which we have earlier described has altered the validity of this definition. However, to ensure that the coverage of the SES Award is not inadvertently altered by independent legislative changes, we propose to place the statutory definition directly into the award. If any party opposes this course, they may file a submission in that respect within 14 days of the date of this decision.

VICE PRESIDENT

Appearances:

J Fleming for the Australian Council of Trade Unions

J Zadel on behalf of Civic Disability Industries

P Barker, A Botros, R Freeland, S Jordan, S Mulders-Jones, A Thomson and B Willsmore for the Department of Social Services, Commonwealth

C Brattey and M Stroppiana for Endeavour Foundation

Kerry Langford and P Musso for the National Disability Service

N Ward and S Zevari for the National Disability Service, Australian Business Industrial and the New South Wales Business Chamber

P Amos for Practical Workplace Relations

R Leibhaber and L Svendsen for the Health Services Union of Australia

M Walsh for Our Voice Australia

M Harding of counsel and K Wilson for the AED Legal Centre

C Christodoulou and T Dron for Greenacres Disability Services

S Bull for the United Workers’ Union

Hearing details:

2018

February

5, 6, 7, 8, 9, 12, 13, 14, 16

May

29

November

29

Printed by authority of the Commonwealth Government Printer

<PR714801>

ATTACHMENT A

PROPOSED DETERMINATION

The Supported Employment Services Award 2010 is varied as follows:

1. Insert the following new clause:

9A. Rights at Work for Supported Employees

9A.1 When dealing with employment matters affecting supported employees the employer shall take all reasonable steps to provide such employees with the information they require to exercise their employment rights.

9A.2 Such reasonable steps will include but are not limited to the following.

  Providing information to supported employees of their right to be a member of the union and be represented in the workplace by a union representative.

  Providing information in relation to seeking information and or assistance from the Fair Work Ombudsman.

  Providing information to a supported employee about their right to have their nominee, guardian, carer, parent or other family member, advocate or union assist them in making decisions about employment matters.

9A.3 In addition to those matters listed in clause 9A.2 the employer shall take reasonable steps to provide the opportunity to the supported employee to have their nominee, guardian, carer, parent or other family member, advocate or union involved in, or consulted or act as the employee’s representative in employment matters that affect or may affect the supported employee’s interests.

9A.4 Such matters shall include but not be limited to:

  consultation about significant workplace change under clause 8;

  consultation about changes to rosters or hours of work under clause 8A;

  any dispute under clause 9 or other grievance;

  wage assessments under clause 14.4(a) and Schedule D;

  any disciplinary matter; and

  performance appraisals.

2. Delete clause 14 and insert the following:

14. Minimum wages

14.1 Upon engagement, an employee will be graded by the employer in one of the grades in Schedule B—Classifications having regard to the employee’s skills, experience and qualifications and the nature of the position in which the employee is employed.

14.2 Subject to clauses 14.314.4 and 14.5 the following minimum rates of pay will apply for the grades set out below:

NOTE: For the purpose of this award, the hourly rate for all employees will be calculated by dividing the weekly rate by 38, then rounded to the nearest cent.

14.3 National training wage

(a) Schedule E to the Miscellaneous Award 2010 sets out minimum wage rates and conditions for employees undertaking traineeships.

(b) This award incorporates the terms of Schedule E to the Miscellaneous Award 2010 as at 1 July 2019. Provided that any reference to “this award” in Schedule E to the Miscellaneous Award 2010 is to be read as referring to the Supported Employment Services Award 2010 and not the Miscellaneous Award 2010.

14.4 Wage assessment—employees with a disability

(a) An employee with a disability may be paid such percentage of the rate of pay of the relevant grade in clause 14.2 as assessed under the Supported Wage System in accordance with Schedule D.

(b) No decrease—regression of disability

An employee with a disability will not have their rate of pay reduced as a result of a wage assessment made pursuant to clause 14.4(a). This clause does not cover the circumstance where the wage of an employee with a disability may need to be reduced due to the regression of the employee’s disability. However, a wage assessment that determines a lower percentage than an earlier wage assessment of the employee against the same duties is of no effect unless the reduction in percentage is solely due to the regression of the employee’s disability. Before the wage of an employee may be reduced the employer must exhaust all reasonable training options and options to allocate the employee new tasks to avoid the regression.

14.5 Higher duties

Employees will be paid at a higher grade if carrying out the duties of a higher grade for two or more hours in any shift. If an employee is carrying out the duties of a higher grade for less than two hours in any shift they will be paid at the higher grade for the time so worked. This clause will not apply whilst an employee is carrying out work in a higher grade for training purposes only.

3. Delete clause 19.5 and insert the following:

19.5 Employees with disabilities

Where an employee with a disability is being paid less than $450 per month in accordance with clause 14.4, contributions for such employees will be either 9.5% of their ordinary time earnings or $15.00 per week whichever is the greater.

4. Delete Schedule B and insert the following:

Schedule B—Classifications

B.1 Explanation of Classification Structure

B.1.1 Grades A and B of the classification structure in this Schedule apply to any employee with a disability:

(a) who meets the impairment criteria for receipt of a disability support pension; and

(b) for whom an employer has created a position consisting of duties and a level of supervision tailored or adjusted for the circumstances of the employee’s disability that does not fall into Grades 1-7 above.

B.1.2 Grades 1-7 apply to employees with or without a disability who undertake the duties and exercise the level of skill and responsibility specified in the classification descriptors.

B.2 Grade A

Employees at this grade will perform a simple task or tasks consisting of up to three sequential actions under direct supervision and constant monitoring.

B.3 Grade B

Employees at this grade will perform a simple tasks or tasks consisting of more than three sequential actions, which may involve the use of mechanical or electric equipment or tools, under direct supervision with regular monitoring.

B.4 Grade 1

Employees at this grade will undertake on the job induction and/or training to perform work in Grade 2 or above for a period not exceeding 3 months.

B.5 Grade 2

Employees at this grade will perform a basic task or tasks in accordance with defined procedures under direct supervision. Such employees will understand and undertake basic quality control/assurance procedures including the ability to recognise basic quality deviations/faults. This may include the performance of work included in the following awards classifications:

  Food, Beverage and Tobacco Manufacturing Award 2010: Level 2

  Gardening and Landscaping Services Award 2010: Level 1

  Manufacturing and Associated Industries and Occupations Award 2010: Level C13

  Textile, Clothing, Footwear and Associated Industries Award 2010: Skill Level 1

B.6 Grade 3

Employees at this grade will perform work above the beyond the skill of an employee at Grade 2 and to their level of training. Such employees will perform a more complex task or tasks than at Grade 2 in accordance with defined procedures under routine supervision.  This may include the performance of work included in the following awards classifications:

  Dry Cleaning and Laundry Industry Award 2010: Laundry employee level 2

  Food, Beverage and Tobacco Manufacturing Award 2010: Level 3

  Gardening and Landscaping Services Award 2010: Level 2

  Manufacturing and Associated Industries and Occupations Award 2010: Level C12

  Storage Services and Wholesale Award 2010: Storeworker grade 1

  Textile, Clothing, Footwear and Associated Industries Award 2010: Skill Level 2

  Waste Management Award 2010: Level 2

B.7 Grade 4

Employees at this grade will perform work above the beyond the skill of an employee at Grade 3 and below and to their level of training. Such employees will hold a qualification at or equivalent to AQF II or above. Employees at this grade will:

  work independently from complex instructions and procedures; and

  assist in the provision of on the job training for other employees; and

  co-ordinate work in a team environment or work individually under general supervision; and

  be responsible for ensuring the quality of their own work.

This may include the performance of work included in the following award classifications:

  Dry Cleaning and Laundry Industry Award 2010: Laundry employee level 3

  Food, Beverage and Tobacco Manufacturing Award 2010, Level 4

  Gardening and Landscaping Services Award 2010, Level 3

  Manufacturing and Associated Industries and Occupations Award 2010, Level C11

  Storage Services and Wholesale Award 2010, Storeworker grade 2

  Textile, Clothing, Footwear and Associated Industries Award 2010, Skill Level 3

  Waste Management Award 2010, Level 3

B.8 Grade 5

Employees at this grade will perform work above the beyond the skill of an employee at Grade 4 and below and to their level of training. Such employees will hold a trade certificate or equivalent qualification. Employees at this grade will perform work primarily involving the skills of their trade and may also perform work that is incidental to that work. This may include the performance of work included in the following awards classifications:

  Dry Cleaning and Laundry Industry Award 2010: Laundry Employee Level 4

  Food, Beverage and Tobacco Manufacturing Award 2010: Level 5

  Gardening and Landscaping Services Award 2010: Level 4

  Manufacturing and Associated Industries and Occupations Award 2010: Level C10

  Storage Services and Wholesale Award 2010: Storeworker grade 4

  Textile, Clothing, Footwear and Associated Industries Award 2010: Skill Level 4

  Waste Management Award 2010: Levels 4, 5 and 6

B.9 Grade 6

This grade is equivalent to Level C7 of the Manufacturing and Associated Industries and Occupations Award 2010. Employees at this grade will perform work above the beyond the skill of an employee at Grade 5 and below and to their level of training. Such employees will hold a qualification at or equivalent to AQF IV or above. Such employees will perform the work described below:

  assess the ability of an employee with disability to carry out specific work tasks; or

  design, develop and provide individual instruction or training for an employee with a disability; or

  undertake specialist functions in the workplace such as procurement or marketing; or

  supervise employees in a section of the workplace.

B.10 Grade 7

Employees at this grade will hold a qualification at or equivalent to AQF IV or above, of which one third of the competencies are related to the supervision or training of employees. Employees at this grade will perform work above and beyond the skill of an employee at Grade 6 and below and to their level of training. Such employees will be:

  co-ordinating and supervising employees; or

  conducting on the job training; and

  capable of operating all of the equipment or tools to be used by employees that they are supervising or training.

5. Delete Schedule D and insert the following:

Schedule D—Supported Wage System

D.1 This schedule defines the conditions which will apply to an employee who meets the eligibility criteria in clause D.3 and who is the subject of a wage assessment using the Supported Wage System under clause 14.4(a).

D.2 In this schedule:

approved assessor means a person accredited by the management unit established by the Commonwealth under the supported wage system to perform assessments of an individual’s productive capacity within the supported wage system

assessment instrument means the tool provided for under the supported wage system that records the assessment of the productive capacity of the person to be employed under the supported wage system

disability support pension means the Commonwealth pension scheme to provide income security for persons with a disability as provided under the Social Security Act 1991, as amended from time to time, or any successor to that scheme

relevant minimum wage means the minimum wage prescribed in this award for the class of work for which an employee is engaged

supported wage system (SWS) means the Commonwealth Government system to promote employment for people who cannot work at full award wages because of a disability, as documented in the Supported Wage System Handbook. The Handbook is available from the following website: www.jobaccess.gov.au

SWS wage assessment agreement means the document in the form required by the Department of Social Services that records the employee’s productive capacity and agreed wage rate

workplace data means data collected by an employer with respect to an employee’s productive capacity in accordance with the Supported Wage System Handbook

D.3 Eligibility criteria

D.3.1 Employees covered by this schedule will be those who are unable to perform at the required productive capacity because of the effects of a disability and who meet the impairment criteria for receipt of a disability support pension.

D.3.2 This schedule does not apply to any existing employee who has a claim against the employer which is subject to the provisions of workers compensation legislation or any provision of this award relating to the rehabilitation of employees who are injured in the course of their employment.

D.4 Supported wage rates

D.4.1 Employees to whom this schedule applies will be paid the higher of the following amounts:

(a) a percentage of the relevant minimum hourly rate of pay equal to the assessed productive capacity of the employee determined in accordance with clause D.5 rounded to the nearest whole percentage; and

(b) $3.50 per hour.

D.4.2 For the avoidance of doubt, there is no minimum amount payable to an employee per week.

D.5 Assessment of capacity

D.5.1 For the purpose of establishing the percentage of the relevant minimum wage, the productive capacity of the employee will be assessed in accordance with the Supported Wage System by an approved assessor, having consulted the employer and employee and, if the employee so desires, a person identified in clause 9A.3.

D.5.2 The productivity benchmark(s) used for the conduct of an SWS assessment must:

(a) take into account the major task(s) performed by the employee; and

(b) be independently verified by an SWS assessor as being valid and appropriate.

D.5.3 All assessments made under this schedule must be documented in an SWS wage assessment agreement, and retained by the employer as a time and wages record in accordance with the Act.

D.5.4 The approved assessor will assess the productive capacity of the employee having regard to:

(a) where an employer has collected workplace data with respect to an employee:

(i) the workplace data—50% weighting; and

(ii) the data collected by the approved assessor in accordance with the Supported Wage System—50% weighting;

(b) otherwise—the data collected by the approved assessor in accordance with the Supported Wage System.

D.5.5 Where, in undertaking an assessment in accordance with clause D.5.3(a), there is a disparity of greater than 20% between the overall productivity percentage calculated from the workplace data and the overall productivity percentage calculated from the data collected by the approved assessor, the employee, employer and approved assessor may agree to collect additional data. The additional data should be collected as soon as practicable and added to the existing data with respect to the employee for the purpose of undertaking the assessment in clause D.5.3(a).

D.5.6 In addition to an employee’s general right to access clause 9Dispute resolution in relation to the process or outcome of a wage assessment, an employee or an employer may:

(a) raise a dispute in accordance with the dispute processes outlined in the Supported Wage System Handbook; and

(b) after exhausting the process provided in clause D.5.6(a), raise a dispute in relation to the assessment of the employee's assessed productive capacity in accordance with clause 9. In those circumstances, the Commission may, in exercising its powers under clause 9.6, make a determination as to the employee's productive capacity, having regard to the reasonableness of the workplace data and the data collected by the approved assessor and fairness between the parties in all of the circumstances.

D.6 Lodgment of SWS wage assessment agreement

D.6.1 All SWS wage assessment agreements under the conditions of this schedule, including the appropriate percentage of the relevant minimum wage to be paid to the employee, must be lodged by the employer with the Fair Work Commission.

D.6.2 All SWS wage assessment agreements must be agreed and signed by the employee and employer parties to the assessment. Where a union which has an interest in the award is not a party to the assessment, the assessment will be referred by the Fair Work Commission to the union by email to the union’s nominated email address and the agreement will take effect unless an objection is notified to the Fair Work Commission within 10 working days.

D.7 Review of assessment

For the purpose of clause 14.4(a):

(a) the wage assessment of each employee will be reviewed after 12 months’ service with the employer since the initial assessment, and the rate of pay adjusted accordingly;

(b) subsequently, the wage assessment of each employee will be reviewed within a period not exceeding three years' service with the employer since the previous assessment, and the rate of pay adjusted accordingly; and

(c) a wage assessment may be reviewed at the initiative of either the employee or the employer, once every six months and not more than four times every three years, and the rate of pay adjusted accordingly. Unless an employer and an employee agreed prior to 1 May 2017 to undertake reviews in other circumstances, such a review may only be initiated in circumstances where an employee has changed jobs or the processes involved in the work undertaken by the employee have changed.

D.8 Other terms and conditions of employment

Where an assessment has been made, the applicable percentage will apply to the relevant minimum wage only. Employees covered by the provisions of this schedule will be entitled to the same terms and conditions of employment as other workers covered by this award on a pro rata basis.

D.9 Workplace adjustment

An employer wishing to employ a person under the provisions of this schedule must take reasonable steps to make changes in the workplace to enhance the employee’s capacity to do the job. Changes may involve re-design of job duties, working time arrangements and work organisation in consultation with other workers in the area.

D.10 Trial period

D.10.1 In order for an adequate assessment of the employee’s capacity to be made, an employer will employ a person under the provisions of this schedule for a trial period of at least 13 weeks, but no longer than 26 weeks.

D.10.2 During that trial period the assessment of capacity will be undertaken and the percentage of the relevant minimum hourly rate of pay for a continuing employment relationship will be determined in accordance with clause D.4 and clause D.5.

D.10.3 The employee must be paid at least $3.50 per hour for each hour worked during the trial period.

D.10.3 Once an assessment of capacity has been undertaken pursuant to clause D.5 and the employee's rate of pay is determined in accordance with clause D.4, the employer will apply any higher rate of pay determined in accordance with clause D.4.1 with effect from thirteen weeks after the commencement of the trial period.

D.10.4 Work trials should include induction or training as appropriate to the job being trialled.

6. Variation 1 above shall take effect on 1 March 2020. Variation 3 shall take effect from the beginning of the first pay period commencing on or after 1 October 2020. Variations 2, 4 and 5 above shall take effect on 1 January 2022.

 1   [2018] FWCFB 4984 at [52]

 2   Shop, Distributive and Allied Employees Association v The Australian Industry Group [2017] FCAFC 161, 253 FCR 368, 272 IR 88 at [38]

3 Shop, Distributive and Allied Employees Association v National Retail Association (No 2) [2012] FCA 480, 205 FCR 227, 219 IR 382 at [35]

4 Penalty Rates Decision [2017] FWCFB 1001, 265 IR 1 at [128]; Shop, Distributive and Allied Employees Association v The Australian Industry Group [2017] FCAFC 161, 253 FCR 368, 272 IR 88 at [41]-[44]

 5   Re Annual Wage Review 2017-2018 [2018] FWCFB 3500, 279 IR 215 at [21]-[24]

 6   Edwards v Giudice [1999] FCA 1836, 94 FCR 561 at [5]; Australian Competition and Consumer Commission v Leelee Pty Ltd [1999] FCA 1121 at [81]-[84]; National Retail Association v Fair Work Commission [2014] FCAFC 118, 225 FCR 154, 244 IR 461 at [56]

 7   Shop, Distributive and Allied Employees Association v The Australian Industry Group [2017] FCAFC 161, 253 FCR 368, 272 IR 88 at [33]

 8   National Retail Association v Fair Work Commission [2014] FCAFC 118, 225 FCR 154 at [105]-[106]

 9   Ibid at [109]-[110]; albeit the Court was considering a different statutory context, this observation is applicable to the Commission’s task in the Review

 10   Ibid at [28]-[29]; Shop, Distributive and Allied Employees Association v The Australian Industry Group [2017] FCAFC 161, 253 FCR 368, 272 IR 88 at [49]

 11   Shop, Distributive and Allied Employees Association v The Australian Industry Group [2017] FCAFC 161, 253 FCR 368, 272 IR 88 at [48]

 12   CFMEU v Anglo American Metallurgical Coal Pty Ltd [2017] FCAFC 123, 252 FCR 337 at [23]; cited with approval in Shop, Distributive and Allied Employees Association v The Australian Industry Group [2017] FCAFC 161, 253 FCR 368, 272 IR 88 at [45]

 13   See generally: Shop, Distributive and Allied Employees Association v National Retail Association (No.2) [2012] FCA 480, 205 FCR 227, 219 IR 382

 14   Ibid at [46]

 15   PR529171

 16   [2009] AIRCFB 345

 17   [2012] FCAFC 192, 208 FCR 1, 298 ALR 410

 18   The UWU was at all relevant times during these proceedings until 11 November 2019 named “United Voice”, but we will refer to it by its current name in this decision.

 19   PR568011

 20   [2015] FWC 7134

 21   [2017] FWCFB 5073

 22   An error in the paragraph numbering in the AEDLC’s draft determination has been corrected.

 23   ABI's proposed Work Value Classification Structure

 24   [2018] FWCFB 2196

 25   [2018] FWCFB 5712

 26   Witness Statement – undated, Exhibit 15; Further Witness Statement – 21 October 2017, Exhibit 16; Further Witness Statement – 14 December 2017, Exhibit 17; Oral Evidence – Transcript 9 February 2018, PNs 2088-2594

 27   Witness Statement – 21 November 2017, Exhibit 9; Oral Evidence – Transcript 8 February 2018, PNs 1336-1936

 28   Witness Statement – 2 February 2018, Exhibit 48;

 29   Witness Statement – 2 February 2018, Exhibit 49

 30   Witness Statement – 21 November 2017, Exhibit 13; Further Witness Statement – 14 December 2017, Exhibit 14; Oral Evidence – Transcript 9 February 2018, PNs 1954-2068

 31   Witness Statement – 21 September 2017, Exhibit 22; Further Witness Statement – 14 December 2017, Exhibit 23; Oral Evidence – Transcript 12 February 2018, PNs 2813-3027

 32   Witness Statement – 28 September 2017, Exhibit 93; Witness Statement – 25 September 2017, Exhibit 94; Witness Statement – 25 September 2017, Exhibit 95; Witness Statement – 25 September 2017, Exhibit 96; Witness Statement – 28 September 2017, Exhibit 97; Witness Statement – 9 November 2017, Exhibit 83; Witness Statement – 14 November 2017, Exhibit 117; Witness Statement – 13 November 2017, Exhibit 118; Witness Statement – 13 November 2017, Exhibit 119; Witness Statement – 13 November 2017, Exhibit 120; Witness Statement – 13 November 2017, Exhibit 121; Witness Statement – 14 November 2017, Exhibit 122; Witness Statement – 20 November 2017, Exhibit 123

 33   Witness Statement – 25 September 2017, Exhibit 68; Witness Statement – 28 September 2017, Exhibit 69; Witness Statement – 25 September 2017, Exhibit 70; Witness Statement – 10 November 2017, Exhibit 73; Witness Statement – 9 November 2017, Exhibit 74; Witness Statement – 10 November 2017, Exhibit 75; Witness Statement – 9 November 2017, Exhibit 76; Witness Statement – 9 November 2017, Exhibit 77; Witness Statement – 14 November 2017, Exhibit 78; Witness Statement – 9 November 2017, Exhibit 79; Witness Statement – 13 November 2017, Exhibit 80; Witness Statement – 9 November 2017, Exhibit 81; Witness Statement – 9 November 2017, Exhibit 82

 34   Witness Statement – 25 September 2017, Exhibit 28; Further Witness Statement – 25 October 2017, Exhibit 29; Further Witness Statement – 12 December 2017, Exhibit 30; Oral Evidence – Transcript 12 February 2018, PNs 3221-3343

 35   Witness Statement – 21 September 2017, Exhibit 4; Further Witness Statement – 15 November 2017, Exhibit 5; Further Witness Statement – 8 December 2017. Exhibit 6; Oral Evidence – Transcript, PNs 653-1325

 36   Witness Statement – 25 September 2017, Exhibit 50

 37   Witness Statement – 8 November 2017, Exhibit 59

 38  

 39   Witness Statement – 21 September 2017, Exhibit 20; Further Witness Statement – 14 December 2017, Exhibit 21; Oral Evidence – Transcript 12 February 2018, PNs 2679-2809

 40   Transcript 12 February 2018, PN2729

 41   Transcript 12 February 2018. PN2730

 42   Witness Statement – 3 November 2017, Exhibit 101; Witness Statement – 8 November 2017, Exhibit 102; Witness Statement – 2 November 2017, Exhibit 103; Witness Statement – 8 November 2017, Exhibit 104; Witness Statement – 8 November 2017, Exhibit 105; Witness Statement – 6 November 2017, Exhibit 106

 43   Witness Statement – 22 September 2017, Exhibit 31; Further Witness Statement – 21 November 2017, Exhibit 32; Further Witness Statement – 24 December 2017, Exhibit 33; Oral Evidence – Transcript 12 February 2018, PNs 3350-3667

 44   Further Witness Statement – 21 November 2017, Exhibit 32 at [14]

 45   Witness Statement – 22 September 2017, Exhibit 89; Witness Statement – 22 September 2017, Exhibit 90; Witness Statement – 22 September 2017, Exhibit 91; Witness Statement – 25 September 2017, Exhibit 92; Witness Statement – 25 September 2017, Exhibit 71; Witness Statement – 25 September 2017, Exhibit 72; Witness Statement – 14 November 2017, Exhibit 84; Witness Statement – 13 November 2017, Exhibit 115; Witness Statement – 13 November 2017, Exhibit 116

 46   Witness Statement – 20 November 2017, Exhibit 52; Further Witness Statement – 14 December 2017, Exhibit 53

 47   Witness Statement – 25 October 2017, Exhibit 25; Oral Evidence – Transcript 12 February 2018, PNs 3045-3208

 48   Witness Statement – 21 November 2017, Exhibit 60

 49   Witness Statement – 9 November 2017, Exhibit 57; Oral Evidence – Transcript

 50   Witness Statement – 25 October 2017, Exhibit 42; Oral Evidence – Transcript 14 February 2017, PNs 4300-4354

 51   Ibid at [2]

 52   Witness Statement – 1 November 2017, Exhibit 54

 53   Witness Statement – 6 November 2017, Exhibit 56

 54   Witness Statement – 25 September 2017, Exhibit 51

 55   Witness Statement – 25 October 2017, Exhibit 61

 56   Witness Statement – 25 September 2017, Exhibit 63; Further Witness Statement – 14 December 2017, Exhibit 64

 57   Witness Statement – 21 November 2017, Exhibit 19; Oral Evidence – Transcript 9 February 2018, PNs 2606-2665

 58   Witness Statement – 21 November 2017, Exhibit 39

 59   Witness statement – 21 November 2017, Exhibit 39 at [72]

 60   Witness Statement – 25 October 2017, Exhibit 58

 61   Witness Statement – 25 October 2017, Exhibit 55

 62   Witness Statement – 21 November 2017, Exhibit 44; Oral Evidence – Transcript 14 February 2018, PNs 4362-4642

 63   Witness Statement – 21 November 2017, Exhibit 41; Oral Evidence – Transcript 13 February, PNs 4204-4270

 64   Witness Statement – 21 November 2017

 65   Witness Statement – 2 February 2018, Exhibit 40; Oral Evidence – Transcript 13 February 2018, PNs 4038-4192

 66   Witness Statement – undated, Exhibit 183

 67   Witness Statement – 20 November 2017, Exhibit 62

 68   Witness Statement – 21 September 2017, Exhibit 35; Further Witness Statement – 21 November 2017, Exhibit 36; Further Witness Statement – 14 December 2017, Exhibit 37; Oral Evidence – Transcript 12 February 2018, PNs 3677-3884

 69   Witness Statement – 7 November 2017, Exhibit 107; Witness Statement – 8 November 2017, Exhibit 85; Witness Statement – 6 November 2017, Exhibit 108; Witness Statement – 6 November 2017, Exhibit 86; Witness Statement – 6 November 2017, Exhibit 110; Witness Statement – 3 November 2017, Exhibit 110; Witness Statement – 6 November 2017, Exhibit 87; Witness Statement – 3 November 2017, Exhibit 111; Witness Statement – 6 November 2017, Exhibit 112; Witness Statement – 6 November 2017, Exhibit 113; Witness Statement – 6 November 2017, Exhibit 114

 70   Letter to the Commission – 20 November 2017, Exhibit 45

 71   Witness Statement – 25 September 2017, Exhibit 181

 72   Dunoon, D. (1992). Development of a National Assessment Framework for a Supportive Wage System. Report to The Wages Subcommittee of the Disability Task Force. Department of Industrial Relations. AGPS, Canberra.

 73   [1994] AIRC 1635, Print L5723

 74   Print K0325

 75   Print K6264

 76   PR915202

 77   PR961607, 19 August 2005

 78   [2009] AIRCFB 945 at [90]-[94]

 79   [2011] FCA 1066, 283 ALR 800

 80   Ibid at [90],[109]

 81   Ibid at [110]

 82   Ibid at [241]-[244]

 83   Ibid at [139]-[135]

 84   Transcript 8 February 2018, PNs 1553-1565

 85   Transcript 9 February 2018, PN 2377-2379

 86   Transcript 8 February 2018, PNs 1768-1785

 87   Transcript 12 February 2018, PNs 3259-3281

 88   [2009] AIRCFB 945