Response to the Discussion Paper:
Improving the employment participation of people
with disability in Australia
February 2013
A comprehensive strategy is required to improve the employment rate of
people with disability
NDS applauds the Government’s interest in improving the employment rate of
people with disability, but we are not convinced that the introduction of mandatory
reporting will confront the range of barriers and drive the required raft of reforms.
The causes of the low employment participation rate of people with disability are
complex and require a multi-faceted response. This is not the typical labour market
problem of seeking to reduce unemployment caused by a mismatch between the
demand and supply of skills, because many people with disability have skills that are
in demand. Nor is it a problem of ‘discouraged workers’ needing motivation, as
people with disability typically want to work.
NDS modelling using the ABS survey on Ageing Disability and Carers 2009 (SDAC)
shows that, if people with disability were able to achieve their stated work intentions,
up to 200,000 extra people could enter the labour force (see Appendix 1). This
analysis shows that inflexible work arrangements, narrow job specifications and lack
of ongoing support in the workplace are key impediments to gaining employment or
seeking to participate in the labour market.
Encouraging employers to provide flexible working arrangements for people with
disability is an important part of the policy response to the low employment rate of
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people with disability; but, as the reform framework outlined in the Government’s
National Mental Health and Disability Employment Strategy recognises, action is
needed on multiple fronts.
From NDS’s perspective the measures required fall into four key areas:
•
reduce work disincentives arising from the interaction of income support
(DSP) and wages;
•
ensure that employment pathways are readily available and easy to navigate;
•
ensure that disability employment services—open and supported—are
effective, accessible and financially viable; and
•
encourage employers and purchasers to create more job opportunities for
people with disability.
Appendix 2 describes some of the measures needed. Any comprehensive
employment strategy should also recognise that some of the barriers to employment
for people with disability lie outside the workplace – in the lack of accessible public
transport, for example.
The discussion paper calls for comments on specific measures to foster greater
employment of people with disability in private sector workplaces. It asks questions
about mandatory reporting, targets and quotas (at items 2.1-2.3).
Reporting should be encouraged, but not mandatory
In NDS’s view, all businesses should develop a disability action plan and collect data
on their employment of people with disability as part of managing their plan. Public
reporting of such data should be encouraged, but not compulsory.
It is important that employers come to see the employment of a diverse workforce
which includes people with disability as integral to good employment practices and
being an employer of choice. If reporting were mandatory, they would see it as red
tape and a compliance burden imposed by government, not as the promotion of
good practice.
The population of people with disability is diverse. For most of the 16% of people of
workforce age who report having a disability, the disability is not a significant barrier
to employment. Employers compelled to report their disability employment rates
could meet their targets by employing people with mild disability, which would not
assist and could further marginalise people with more severe disability.
Mandatory reporting alone is unlikely to be effective at driving reform. The Australian
Public Service reports its disability employment rate as part of its annual State of the
Service report. But disability employment levels in the APS have not lifted as a
result.
Most employers in Australia are small and medium-sized businesses. Imposing
reporting requirements on ASX-listed companies which produce annual reports
2
would miss the bulk of employers with whom most Disability Employment Service
providers interact.
A positive measure would be to work with corporate leaders to initiate an Australian
Employment Covenant (AEC)i for the employment of people with disability. The AEC
has secured commitments from the private sector to employ more than 50,000
indigenous Australians.
Quotas can have unintended outcomes
A number of EU countries apply quotas on companies to employ people with
disability. The German model, for example, requires a firm of 20 employees or more
to ensure that 5% of the workforce is made up of people who have significant
disability. Companies which fail to comply face a fine of up to 260 euros per month.1
The quotas applied in a range of European jurisdictions risk unintended
consequences.
One unintended consequence is that a person with disability may be employed in a
role to fill a quota rather than because they are the right person for the role. Even if
they are the right person for the role, other workers may not see it like that, which
could reinforce the prejudice which is too often encountered by people with disability.
In the case of prescriptive quotas, as in Germany, there is the risk of employers
making employment decisions to avoid the imposition of the quota. An employer
who is just under the threshold for the imposition of the quota may seek to avoid the
quota by not employing additional persons or by using sub-contracting or temporary
work arrangements. In such cases, the quota distorts the labour market.
Workers should not be required to disclose a disability
The consultation paper seeks advice on how disclosure and privacy issues are best
addressed (items 2.4-2.6)
A study by the National Disability Agency (NDA) in Ireland indicates that the decision
to disclose may be influenced by the person’s attitude towards their disability and
whether they view it as a barrier to employment.2 If a person feels their disability has
no impact on their ability to function in the workplace, they may feel it is not
necessary to disclose their disability to employers (Madaus et al, 2002). There is
also evidence to suggest that the type of work environment and employer-employee
relationships may also impact on disclosure decisions. Employees who have
established good relationships with superiors may feel more at ease to disclose
1
See National Disability Authority of Ireland publication: Statutory targets on employment of
people with disabilities in the public sector Chapter 2.
2
Ibid, Chapter 3.
3
(Wilton, 2006). The research suggests that the culture of the organisation has a
pronounced effect on disclosure by employees. If organisations develop strategies to
enhance disability employment, this will affect disclosure decisions positively
(Goldberg and Kileen, 2005, Ellison et al, 2003).
Ideally, employees should feel free to disclose their disability to their employer;
however, this should be a decision for the employee. Disclosure should not be
mandatory unless a medical condition of an employee creates potential workplace
hazards. The response of government should be to facilitate changes in corporate
behaviour to foster greater recognition of the benefits of employing people with
disability and the positive role that support in the workplace can provide for those
who need it.
The question good employers will ask job candidates and employees is not ‘do you
have a disability?’ but ‘are there adjustments to the workplace which will enable you
to maximise your productivity?’ A mandatory reporting regime will encourage the
former question, but not necessarily the latter.
The definition of ‘disability’ should be consistent with the ABS SDAC
The consultation document (see items 2.7- 2.8) seeks feedback on what is the most
suitable definition of ‘disability’ for the purpose of disability employment disclosure
arrangements.
The definition in SDAC underpins the calculation of Australia’s disability employment
rate (including figures quoted in the discussion paper). Using a different definition for
reporting by employers would make comparisons between company performance
and national and State trends problematic. Adopting a broader definition (such as the
DDA definition) would have the effect of ‘inflating’ disability employment performance
without the real situation improving.
The consultation document (see item 2.9) asks if there is any additional information
that could or should be sought from employers.
It would be useful for listed companies to report on their diversity strategies for
disability employment. For larger employers, this could include the processes by
which people with disability are recruited and consider whether the interview
processes are tailored to the needs of the candidate.
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Appendix 1: Why reform is needed
The discussion paper seeks feedback on the main barriers faced by people with
disability in entering the labour market or securing employment. An analysis of
employment restrictions as expressed in SDAC 2009 (does the respondent have a
specific employment restriction, what is it, how severe is it?) shows the following:
Table 1: Disability, Ageing and Carers, Australia, 2009
Employment restrictions (15-64 years) by Number of Persons
Number
of
Persons
(000's)
% of stated
restrictions as
a proportion of
stated
restrictions
(excluding not
able to work)
Restricted in number of hours
465.8
19.41%
Difficulty changing jobs or getting a preferred job
605.5
25.23%
Need for time off from work (at least one day per week)
266.7
11.11%
Need for employer provided equipment and/or special arrangements
156.7
6.53%
Need for support person at work
25.5
1.06%
Need for ongoing supervision or assistance
96.9
4.04%
Is receiving assistance from a disability job placement program or agency
17.2
0.72%
Permanently unable to work
589.6
Ignored
Restricted in type of job
765.9
31.91%
Total
1489.9
100.00%
Number of Persons
Employment restrictions (15-64 years)
Source: SDAC 2009 CURF and NDS analysis
Table 1 shows that almost 1.5 million Australians aged 15 – 64 years, with a
disability and living in households, state they have an employment restriction. Each
of these respondents then identified their restriction (in many cases including more
than one restriction) or stated that they cannot work. Chart 1 compares the
frequency of the stated employment restriction relative to the severity of restriction
(as distinct from the severity of the disability per se). Table 1 and Chart 1 form an
analytical base to evaluate the significant barriers people with disability face in
gaining employment. Numerically, the most significant restrictions in Table 1
(excluding being permanently unable to work) relate to the nature of the job type,
inflexibility in hours or changing jobs followed by the need for time off work. So, at
this level, the impediments relate to inflexibility in employment arrangements for
people with disability.
Chart 1: Frequency and Severity of Employment Restriction
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Source: SDAC 2009 Tablebuilder applied by NDS (Numbers of people in ‘000s)
If we deepen the analysis to include the severity of the restriction, we find some
interesting additional information. If we ignore those profoundly restricted (who
cannot gain work usually) and those with a mild restriction, the key restrictions
continue to relate to job type and the lack of flexible working arrangements. For
those with a severe restriction, the need for ongoing support and assistance in the
workplace is quite significant. So we can conclude that the major restrictions, as
shown in the ABS data, relate to inflexibility of work arrangements (type of jobs,
hours, difficulty in changing a job or getting the right job) and the need for ongoing
support as the severity of the disability increases.
NDS has undertaken this analysis to estimate the pool of persons with disability who
can work with support. A stated employment restriction is taken as a positive work
intention unless the person with disability stated they cannot work even with
supports. The research indicates that 27% of those with disability not in the labour
force (not seeking work at present) want to work (if support is available). This
amounts to approximately 200,000 people.3
3
This research is available on the NDS website and has variant of it has been published by Brendan
Long from NDS “Applying SDAC 2009 to the OECD Integration Scenario for Disability Employment”,
Brendan Long, in Australian Economic Papers Volume 51, Issue 2, pages 274–285, June 2012.
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Appendix 2: Measures to improve the employment of people with
disability.
The National Mental Health and Disability Employment Strategy 2009 recognised
that improving the employment rate of Australians with disability required action on
multiple fronts.
From NDS’s perspective the key measures required fall into four areas:
•
reduce work disincentives arising from the interaction of income support
(DSP) and wages;
•
ensure that employment pathways are readily available and easy to navigate;
•
ensure that disability employment services—open and supported—are
effective, accessible and viable; and
•
encourage employers and purchasers to create more job opportunities for
people with disability.
Reducing disincentives and risks for jobseekers
The interaction between income support (and associated entitlements) and wages is
complex. The potential (and perceived) loss of benefits is a significant disincentive
for DSP recipients to seek paid employment and partly accounts for the very small
proportion of DSP recipients (around 8.5%) who have any income from paid
employment. Even if the financial benefits of work are greater than the financial
value of DSP, DSP may be a preferred option for people who worry that employment
is insecure. Of particular concern to DSP recipients is the risk of losing the Pensioner
Concession Card which entitles them to discounts on pharmaceuticals, transport
fares and a range of other benefits. In addition there are the additional costs that
some people with disability incur in employment participation.
There is a need to move from a ‘welfare or work’ approach, in which welfare benefits
and employment are seen as mutually exclusive, to a ‘welfare and work’ approach in
which welfare benefits can combine with work income to a greater extent than
currently. Measures worth considering include:

Extend the Work Bonus to DSP and Carer Payment recipients. Introduced
in 2009 as an incentive to encourage Age Pensioners to remain in the
workforce, Work Bonus allows half of the first $500 of earned fortnightly
income to be excluded from the income test.

Reduce the withdrawal rate for DSP and Carer Payment from 50 cents to
40 cents in every dollar earned above the ‘allowable income limit’.
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
Introduce an Employment Bonus (of equal value to the Carer Bonus) for
people on DSP who achieve 26 weeks of employment. This would reward
voluntary participants in employment programs.

Enable DSP recipients in employment to retain their Pensioner
Concession Card for an extended period.

Introduce a supplementary ‘participation allowance’.

Increase the Mobility Allowance—and at the very least, make the higher
rate of Mobility Allowance available to all eligible people.
Adequate funding of the Disability Employment Services program
Disability Employment Services (DES) are a critical link in the welfare-to-work chain,
helping people with disability to prepare for, find and maintain employment.
While total government funding for the DES program has increased and the program
was uncapped in 2010 – a welcome initiative - real funding per service user for DES
is declining. The analysis in the chart below uses the Portfolio Budget Statements of
DEEWR and Departmental Annual Reports; the Wage Price Index from Budget
Paper No.1 in various years has been chosen as the index factor with 2011-12 the
base year. Chart 2 shows that the lack of indexation causes a consistent and steady
downgrading in real funding. Effectively, the funding allocation for the program has
been reduced by 19% in real terms between 2010-11 and 2015-16 and 11%
between 2007-08 and 2015-16.
$'000 2011/12
dollars
890,000
790,000
Chart 2: Real funding declines: DES, DEN/VRS
DES
Funding includes
'other employment
VRS
DEN
690,000
590,000
490,000
390,000
290,000
190,000
2007-8
2008-9
2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
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Non-indexation of the DES program undermines a key plank of the workforce
participation agenda in relation to people with disability. The decline in real funding
erodes the quality of services and the financial viability of DES providers.
Increase Government procurement from ADEs
Australian Disability Enterprises (ADEs) provide supported employment opportunities
to around 20,000 people with disability. Around three-quarters of supported
employees have a severe or profound disability and are generally not suited to
employment in the mainstream labour market. The Australian Government funds
ADEs to provide on-the-job support to their employees with disability.
There is a specific Australian Government procurement exemption4 in place for
ADEs, but there is evidence that the exemption (that allows government agencies to
engage directly with an ADE and eliminates the need to seek suppliers via an open
tender) is rarely used.
NDS has worked closely with the NSW Government since mid-2010 to implement
the Disability Employment Procurement Program in that State. The Program aims to
reduce the high rates of unemployment and underemployment of people with
disability by using Public Sector Procurement opportunities. This NSW initiative has
its legislative basis in a similar procurement exemption for ADEs.
To assist in this process, NDS also offers a contract management service for a small
fee. The NDS contract management service assists NSW Government agencies find
the appropriate ADE for their specific project.
The results to date have been very encouraging and by the end of November 2012,
over 33 ADEs had commenced projects valued at over $4.5m (with a further
potential of $2m of contract extensions). Over 290 people with disability have already
been engaged on the project, in either a part-time or full-time capacity. More than 65
projects are underway throughout NSW involving many NSW Government agencies.
NDS strongly encourages the Australian Government to implement a national
procurement program for ADEs similar to the successful NSW program.
Uncap the supported employment program
The cap on the number of funded places in ADEs is a significant employment barrier,
which prevents ADEs responding to the demand for jobs among people with
significant disability. The uncapping of DES places in March 2010 was an important
reform, which the Government should extend to ADEs. It is inequitable and
inconsistent with the Government’s commitment to increase the workforce
participation of DSP recipients that people who seek to work in an ADE do not have
4
Commonwealth Procurement Guidelines 2008, Exemption 16.
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the same entitlement to an employment service as people who seek to work in open
employment.
Ease the barrier between supported and open employment
The current rules for employees of ADEs seeking to obtain a position in the open
labour market are too restrictive. They force a supported employee who is seeking
DES assistance to resign from their job in the ADE. Forcing a person to resign from
their current job before they seek a new job is intrinsically unfair and poses too much
risk for the supported employee.
NDS recommends that supported employees be able to access a DES while
retaining their supported employment for a period of at least two years. Once a
supported employee is anchored in a job in the open labour market, the funded ADE
position need no longer be held for them.
Encouraging and enhancing access to VET for people with disability
The Vocational Education and Training system is a key pathway to employment, yet
the representation of people with disability in this system is very low. A low level of
education generally among people with disability is one of the factors contributing to
their low rate of labour market participation. Evidence suggests that for people with a
disability who are not working, completing a VET qualification can significantly
increase the likelihood of subsequent employment – and more so for people with
disability than without5.
Initiatives to increase the linkages between DES and the VET system are needed.
Transition to Work programs should be available to school-leavers with disability in
all parts of Australia, closely connected to open and supported disability employment
services.
February 2013
Contact: Dr Ken Baker
Chief Executive
Ph 02 6283 3200
Mbl 0409 606 240
[email protected]
See “The role of Vocational Education and Training in the labour market outcomes of people with
disabilities”, Polidano and Mavromaras, NCVER, 2010.
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About National Disability Services
National Disability Services is the peak industry body for non-government disability services.
Its purpose is to promote and advance services for people with disability. Its Australia-wide
membership includes around 800 non-government organisations, which support people with
all forms of disability. Its members collectively provide the full range of disability services—
from accommodation support, respite and therapy to community access and employment.
NDS provides information and networking opportunities to its members and policy advice to
State, Territory and Federal governments.
i
http://www.fiftythousandjobs.org.au/AEC_JMS/
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