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Review of the Equal Opportunity for Women in the Workplace Act 1999 – Submission

Victorian Government

1. Introduction

1.1 The Victorian Government welcomes the opportunity to make a submission to the Review of the Equal Opportunity for Women in the Workplace Act 1999 (EOWW Act).

1.2 The Victorian Government is committed to women’s equal participation and representation in all aspects of Victorian life, including employment.

1.3 The Victorian Government supports equal opportunity as a fundamental principle guiding employment in Victoria and has demonstrated its commitment to achieving equal employment outcomes for women through a range of policy and program responses which will be further outlined in this submission.

1.4 The Commonwealth and State/Territory Governments clearly have a central role to play in enhancing legislation, policies and programs that improve employment outcomes for women. This Review offers an opportunity for the Commonwealth Government to enhance the EOWW Act to accelerate equal employment outcomes for women in workplaces across Australia.

1.5 Although some progress has been made in improving female employment outcomes, this has taken over twenty years to achieve and in many areas outcomes or measures are going backwards. The Victorian Government contends that it is now time to strengthen the EOWW Act so that organisations are required to take more action to improve employment outcomes for women at a faster pace.

1.6 This submission outlines the Victorian Government’s contentions in relation to the Review’s Terms of Reference and key issues raised in the Review’s Issues Paper.

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2. The value and impact of equal employment opportunity for women

2.1 The Victorian Government believes that equal opportunity legislation is necessary to improve employment outcomes for women. Since the introduction of the Affirmative Action (Equal Employment Opportunity for Women) Act 1986, business awareness about inequities in female employment has increased, as has the understanding of workplace barriers impeding equal employment outcomes for women. Many organisations have realised the social and economic imperative for addressing inequities in female employment and have implemented policies and practices to improve employment outcomes for women in their organisations.

2.2 However women still experience considerable inequities in a number of areas of employment.

2.3 While female participation in the labour market has increased, women are still more likely to be engaged in non-standard forms of employment such as part time, casual and contract work where on-going employment, leave entitlements, training and career progression are often minimal or absent. According to the 2006 Victorian Workplace Industrial Relations Survey (VWIRS), while casual employment accounts for 25 per cent of the Victorian workforce, women make up almost 60 per cent of casual employees.1

2.4 The labour market also remains highly segregated. In Victoria almost 60 percent of the workplaces which have less than 20 per cent of female employees are in the traditionally masculine industries of manufacturing, construction, and transport storage. In contrast 58 per cent of workplaces, where more than 75 per cent of employees are female, are in retail, health, education and recreation and personal services.2

2.5 There is still a substantial gap between female and male earnings in Victoria and this widened by 2.1 per cent between May 2004 and May 2006, from 87.1 per cent to 85 per cent of ordinary time average weekly earnings.3 If overtime earnings are included, the gender pay gap widened by 1.9 per cent between May 2004 and May 2006 from 82 per cent to 80.1 per cent.

2.6 The gender pay gap is attributable to a number of factors including the way in which pay is set – with Australian Workplace Agreements (AWAs) and common law contracts contributing to the widening of the gap.

2.7 The gender pay gap is also related to the industries and occupations in which many women work. The VWIRS showed that workplaces with a large proportion of male workers were more likely to pay higher wages than those workplaces with a large proportion of women workers and the divide tended to increase as the proportion of female workers increased.4

2.8 For example 51 per cent of workplaces with no female workers paid average wages greater than $1000 per week, compared to only 29 per cent of workplaces where more than 75 per cent of employees were female.5

2.9 Even when men and women are in similar senior management roles, a significant gender pay gap exists. The EOWA Census of Women in Leadership Report found a gender pay gap of 28.3 per cent for the top 200 ASX key management positions, which is even larger than the national average gender pay gap of 17.2 per cent.

2.10 As the Australian Human Rights Commission Report, Accumulating Poverty?6 found, the gender pay gap has repercussions not only for women while they are in the workforce but also for when they retire. Due to the inequality they experience over the lifecycle, women are not able to accumulate wealth at the same rate as men.

2.11 Inequality is also evident in terms of women’s career progression. As the 2008 EOWWA Australian Census of Women in Leadership report demonstrated, female representation at board and executive levels in the top 200 companies of the Australian Stock Exchange (ASX) remains extremely low and even more disturbingly has fallen at both board director and executive management levels.7

2.12 Women make up only 8.3 per cent of board directors in the top 200 ASX companies. 51 per cent of companies have no women on their boards including 35 companies in the top 50 and 70 in the top 100.They occupy only 2 per cent of CEO roles (down from 3 per cent in 2006) and 10.7 per cent of executive management positions (down from 12 per cent in 2006).8

2.13 In addition, an increasing proportion (45.5 per cent) of companies have no females in executive management positions, compared with 39.5 per cent in 2006. While the percentage of women in line management roles rose from 4.7 per cent in 2003 to 7.4 per cent in 2006, in 2008 this declined back to 5.9 per cent.9

2.14 Australia’s track record in this area is behind the rest of the world. Norway now has 44 per cent of women on boards as a result of amendments to the Public Limited Companies Act, which require publicly listed companies to ensure that women hold 40 per cent of board positions. The proportion of women on private sector boards is 27 per cent in Sweden, 26 per cent in Finland and 15 per cent in USA.10

2.15 The argument that women do not have the skills or experience to move into senior leadership roles is no longer valid. Although women’s educational attainment is increasing, this has clearly not translated into increased female representation at senior management or board levels. For example the EOWA Census of Women in Leadership found that women make up 62.7 per cent of bachelor degree candidates and the 2006 ABS Census showed that 51.24 per cent of post graduates are women. Despite higher proportions of women than men having undergraduate and post graduate qualifications, there are not similar proportions of women at senior management levels in organisations.

2.16 Data obtained from the Australian Institute of Company Directors also reveals that nearly 30 per cent of graduates from the Australian Institute of Company Directors course in 2009 were women, again indicating that women with appropriate skills are available and obviously interested to serve on boards.

2.17 The lack of female representation at senior leadership levels in organisations has a significant economic cost. Research shows that companies recording the best performance are those with a higher proportion of women in management.11 McKinsey and Company analysed 89 European companies and found that on average, companies with three or more women directors outperformed their sector in terms of return on equity (11.4% compared with an average 10.3%), operating results (earnings before interest and tax 11.1% compared with 5.8%), and stock price growth (64% compared to 47% over 2005 to 2007).

2.18 A Catalyst study examined 353 companies on the USA Fortune 500 list between 1996 to 2000 and found that companies with the highest representation of women on senior management teams had a 35 per cent higher return on equity and a 34 per cent higher total return to shareholders than companies with the lowest women’s representation12. An Australian study by Galbreath in 2008 also reinforced the positive relationship between women directors and economic and social performance.13

2.19 EOWWA research has identified a number of issues that contribute to women’s low participation in leadership positions in the workplace:

2.20 The Victorian Premier’s Women’s Summit on 8 September 2009 addressed women’s leadership in the workplace. A number of business and non¬government leaders participated in a round-table consultation about barriers and strategies to support women’s leadership in the workplace. The key strategies for increasing women’s leadership identified at the Summit included:

2.21 Given that there is still substantial inequality in female employment, measures still need to be taken by governments and employers to:

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3. Victorian Government actions to promote equity

Addressing work and family balance

3.1 The Victorian Government recognises that equal employment outcomes are dependent on both men and women being able to access working arrangements that make it easier for them to meet their work and family commitments.

3.2 In 2007 -2008 the Victorian Government committed budget funds to build upon and promote ways2work -an online toolkit to assist parents and carers to make the transition back to work and to help employers develop family friendly work practices.

3.3 In August 2007 Victoria became the first State to set up a Working Families Council. This Council is an advisory group comprising representatives from industry and unions as well as academic experts that will provide advice to Government on strategies that benefit workers, families and the Victorian community.

3.4 The Council meets quarterly and aims to assist employers to implement family friendly conditions for working families. Employers who understand and respond to the importance of fair and flexible employment practices for working families are recognised and promoted by the Council. Sixteen Victorian employers received the inaugural Awards in July 2009.15

3.5 In 2008 the Victorian Government amended the Victorian Equal Opportunity Act 1995 to provide better protection from discrimination for workers with family responsibilities. The Act provides that an employer must not unreasonably refuse to accommodate an employee’s parental and carer responsibilities. A contravention of this requirement constitutes discrimination.

Addressing pay equity

3.6 The Victorian Government is committed to promoting equal remuneration for work of equal value.

3.7 On 25 March 2004, the Minister for Industrial Relations announced the establishment of a Pay Equity Inquiry to identify the extent of the gender pay gap in Victoria, and to investigate the factors contributing to the continuing differences in pay rates between men and women in Victoria.

3.8 In June 2004, a working party was established to oversee the Inquiry. Independent research was commissioned to inform the working party's deliberations about issues related to pay equity and to guide its recommendations to government, employers and unions on ways to work towards pay equity in Victoria.

3.9 The report16 found that overall, women in Victoria were paid 11 per cent less than Victorian men, and there had been no substantial improvement in s pay in relation to men'women's since 1986. Although the gender pay gap in Victoria (and Australia) is not as great as in some other OECD countries, it was still significant and needed to be addressed.

3.10 The reasons for the gender pay gap identified in the report are related to:

3.11 The Victorian Government has demonstrated its commitment to advancing pay equity through a range of policy responses targeted at the industry and workplace level. This has included supporting and facilitating industry partnerships to undertake pay equity audits at the National Australia Bank and in the Victorian local government sector. It has also made a submission to the Commonwealth Government’s Pay Equity Inquiry17.

Increasing female representation on boards

3.12 Victoria has taken action to increase the diversity of executive and board composition in the public sector, by establishing the Victorian Women’s Register and by setting targets for the proportion of women on government boards and committees.

3.13 The Register enables women to register their interest in participating on Government boards and committees. Government departments can then use the Register to identify female candidates for their boards and committees.

3.14 As a consequence, the proportion of women on State Government boards and committees has increased from 31 per cent in 1999 to 40 per cent in 2008.

3.15 Building on the 40 per cent target it set in 2001, the Victorian Government has now set a target of 50 per cent women for all new appointments to Government boards.

3.16 The Victorian Government has also called on the private sector to increase female representation on boards. The Attorney-General has written to the top 200 ASX companies twice in 2009, urging them to consider reviewing their selection protocols and placing greater emphasis on the recruitment and training of potential employees from more diverse backgrounds, and encouraging them to take proactive steps to achieve a better gender balance on their boards.

3.17 On 6 November 2009 the Ministerial Council for Corporations agreed to the Attorney-General’s request to ask the ASX Corporate Governance Council to consider proposals to rectify the gender imbalance on Australian boards.

3.18 The Victorian Government’s commitment to equal opportunity for women in the workplace is also demonstrated through contractual obligations in obtaining legal services. As a significant user of legal services, the Government is committed to greater equity in the distribution of work to male and female barristers. Panel firms, the Victorian Government Solicitor’s Office and Departments apply the Victorian Bar’s Equal Opportunity Briefing policy in their briefing of barristers for government work and monitor and report on their expenditure on barristers briefed by gender and jurisdiction, seniority and type of work. Annual reporting of briefs to barristers by both private sector law firms and public agencies demonstrates accountability and transparency, and encourages firms and agencies to take proactive steps to improve their briefing practices.

3.19 Panel firms are also required to report annually on equal opportunity practices within their firms, including the number and level of men and women lawyers who work full time and part time (defined as working less than 5 days a week or less than 40 hours a week) and those by gender and full or part time employment status.

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4. Objectives and coverage of the EOWW Act

Current objectives and employment matters.

4.1 The EOWW Act seeks to address systemic discrimination in employment. Its objectives are to:

4.2 Employers are required to analyse their workforce profiles and develop a workplace program to ensure appropriate action is taken to eliminate all forms of discrimination against women in employment matters and to ensure that measures are taken to contribute to the achievement of equal opportunity for women in relation to “employment matters”.

4.3 As defined, “Employment matters” include: recruitment procedures and selection criteria for the appointment or engagement of persons as employees; the promotion, transfer and termination of employment of employees; training and development for employees; work organisation; conditions of service; arrangement for dealing with sex-based harassment of women in the workplace; and arrangements for dealing with pregnant or potentially pregnant employees and employees who are breast feeding their children.

“Employment matters” to be extended to include flexible working arrangements and pay and remuneration

4.4 The Victorian Government believes that the definition of “employment matters” in the EOWW Act should specifically refer to flexible working practices for both men and women who have family commitments and to pay and other forms of remuneration (e.g. superannuation, bonuses, employee share ownership). This would require companies to report on pay rates and total remuneration paid to men and women at each occupational and classification level in their organisation. They would also be required to report on and offer flexible work practices and the take up of these by men and women respectively. This reporting should be incorporated into companies’ annual reports. Employers would then be required to identify action in their workplace program on how inequities in pay and remuneration and access to flexible working arrangements are to be addressed.

Workplace program targets

4.5 The Affirmative Action (Equal Employment Opportunity for Women) Act (1986) used forward estimates and objectives to be set by employers. This requirement was removed in the 1999 Act and we have not seen a significant sustainable improvement in female representation at senior organisational levels since then.

4.6 Targets have worked in Victoria as well as in other states to increase the proportion of women on government boards and committees. As noted at paragraph 3.14 above, since 2000 in Victoria there has been an increase in the proportion of women on State Government boards and committees from 31 per cent in 1999 to 40 per cent. The proportion of women as chairs of government boards and committees has increased from 12 per cent in 1999/2000, to 32 per cent in 2007/2008.

4.7 Given the success of targets in the Victorian public sector, aspirational targets could be applied to the private sector with good results. If aspirational targets for the private sector are supported by the findings of this review the Victorian Government would support the development of such targets.

4.8 The setting of targets for the promotion of women to more senior levels would require companies to take action to train, develop and advance the careers of women in their organisations in a more targeted and systematic manner.

4.9 Consideration could also be given to requiring all EOWWA reporting organisations to provide annual public reports on their progress towards reaching their targets.

4.10 If aspirational targets fail to encourage an increase in the proportion of women on company boards alternative mechanisms could be considered. There are many possible mechanisms which could address such a failure, however these will vary depending on the company and corporate climate in which it operates. Therefore, if targets are not met an individualised and effective suite of responses should be tailored to encourage further sector uptake.

Small business encouraged to develop workplans

4.11 The EOWW Act covers higher education institutions and employers with 100 or more employees, excluding the Commonwealth, States and Territories who have their own EO and reporting requirements.

4.12 As large businesses have still not delivered equal employment outcomes for women, the Victorian Government believes that at this point in time the Act should remain focused on employers with 100 or more employees.

4.13 Small business makes up 96 per cent of businesses in Victoria and many female employees work in small business. However these workplaces are not covered by the EOWW Act. It would be valuable for EOWWA to work more closely with smaller businesses to encourage them to prepare workplace plans geared to the size of their operations on a voluntary basis.

4.14 EOWWA should monitor the take-up of plans by smaller businesses over the next five years with a view to making recommendations to Government about whether the Act should be extended to cover employers with between 50 and 99 employees in the future, and the form that reporting requirements could take for smaller businesses given their organisational structures and resourcing.

Powers of EOWWA

4.15 EOWWA’s functions are largely informational, educative and advisory in nature. It advises and assists employers with the development of workplace programs; issues guidelines to employers; monitors the lodgement of reports; evaluates the effectiveness of workplace programs and reports to the Minister on matters related to equal opportunity for women.

4.16 These functions remain important – however compliance and enforcement functions are also necessary to ensure that the Act is taken seriously by employers and has full effect.

4.17 At present, companies that do not lodge reports or fail to provide more information when asked to are currently named in an annual report to the Minister which is tabled in Parliament and made available on the website18. Consideration should be given to the extent to which this acts as an effective deterrent for non-reporting by employers.

4.18 EOWWA should monitor non-compliance of employers over the next five years, with a view to exploring whether other methods of encouraging compliance are warranted.

4.19 If non-compliance continues consideration could be given to bolstering the EOWWA’s ability to assess reports submitted by employers to ensure that they are an accurate reflection of the action that is being taken by companies to address inequities.

Relationship with other agencies

4.20 The Victorian Government submits that, given the entrenched barriers to gender equity in workplaces, a dedicated and independent authority such as EOWWA is clearly still required to promote gender equity in the workplace and to ensure that companies take action to remove systemic discrimination.

4.21 As an independent agency, EOWWA should continue reporting to the Minister for Women’s Affairs given that its focus is on promoting equal employment opportunities and outcomes for women in workplaces and given that its work will inform future government policy on women’s employment.

4.22 Although there are a number of pieces of legislation and a number of agencies such as the Australian Human Rights Commission, Fair Work Australia and Fair Work Ombudsman working to address discrimination and promote equal opportunity, these agencies have distinctive but complementary roles that should not formally merge.

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5. Conclusion

5.1 The Victorian Government is committed to ensuring that women can participate equally in all aspects of Victorian life including in employment opportunities. This includes ensuring that women have the opportunity for equal participation in leadership roles and that they are paid at an equal rate to men for comparable work when doing so.

5.2 The Victorian Government submits that the Commonwealth should provide ongoing support and commitment to removing systemic discrimination in employment as a necessary component in achieving pay equity, improved work and family balance and flexible work opportunities, better training and career progression for women and increased representation of women at senior management levels and on boards.

5.3 On this basis, and to address the issues and challenges identified in this submission, the Victorian Government submits that the EOWW Act should be strengthened in the ways proposed by this submission.

  1. Women in the Victorian Workplace -Findings from the Victorian Workplace Industrial Relations Survey 2006 https://www.business.vic.gov.au/busvicwr/_assets/main/lib60047/irv-pay-equity-women-in%20work.pdf
  2. The Victorian Government’s submission (with supporting data) to the Commonwealth Government’s Pay Equity Inquiry can be accessed from: http://www.aph.gov.au/house/committee/ewr/payequity/subs/sub136.pdf p.20
  3. Ibid p.15
  4. Ibid
  5. Ibid
  6. Accumulating poverty? -Women’s experiences of inequality over the lifecycle: An issues paper examining the gender gap in retirement savings -Australian Human Rights Commission, 2009 http://www.hreoc.gov.au/pdf/sex_discrim/accumulating_poverty.pdf
  7. Equal Opportunity for Women in the Workplace Agency, “2008 EOWWA Australian Census on Women in Leadership
  8. Ibid
  9. Equal Opportunity for Women in the Workplace Agency, “2008 EOWWA Australian Census on Women in
    Leadership” Media Release 28 October, 2008
  10. Women Matter – McKinsey & Company, 2007
  11. Ibid
  12. The Bottom Line: Connecting Corporate Performance and Gender Diversity, 2004
  13. GSB Working Paper Drivers of Sustainability in Australian Firms: Do Women on Corporate Boards Matter?, Curtin University of Technology, July 2008.
  14. Generation F: attract, engage, retain, EOWWA, 2008
  15. Details and case studies of the inaugural Award winners can be accessed from: http://ways2work.business.vic.gov.au/employers/awards,-grants-and-programs/employer-recognition-program/winners
  16. http://www.business.vic.gov.au/busvicwr/_assets/main/lib60047/04_payequityurcot.pdf
  17. http://www.aph.gov.au/house/committee/ewr/payequity/subs.htm -No. 136
  18. http://www.eowa.gov.au/Information_Centres/Resource_Centre/EOWA_Publications.asp

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