Current approach

Australian employers are highly compliant with the Act. In the 2019-20 reporting period, 97.5 per cent of relevant employers complied with the Act. WGEA works closely with relevant employers to assist them in complying with their gender equality reporting obligations. WGEA has a collaborative regulatory posture in applying its legislative functions.

Compliance

All relevant employers must report against the gender equality indicators. This requires employers to report data. But it does not require employers to report their action or progress toward meeting any particular target. For example, employers with 500 or more employees meet the ‘minimum standard’ simply by having a formal policy or strategy to support gender equality. There is no requirement to assess the effectiveness of the policy or strategy, or take action to improve gender equality in the workplace. Employers currently comply with the Act if they:

• submit to WGEA an annual report with the required data on time
• have the CEO sign the public report
• comply with notification and access requirements (this requires employers to inform employees, members and shareholders of their report and provide access to comment on it)
• meet the minimum standards (as discussed earlier in ‘Bridge the action gap with new gender equality standards’, this only requires employers with 500 or more employees to have one policy or strategy of one of four gender equality indicators)
• provide information to review compliance if asked by WGEA, and
• do not include anything false or misleading in their report or in the extra compliance information WGEA may request.

The Act enables WGEA to review an organisation’s compliance and seek further information from employers. For example, WGEA does ask for further information to ensure data quality. WGEA also issues compliance certificates to employers to confirm that an employer is compliant with its obligations under the Act.

Enforcement

In instances where employers do not comply, WGEA may publicly name employers as non-compliant (section 19D of the Act).

Non-compliant employers ‘may not be eligible to compete for contracts under the Commonwealth procurement framework and may not be eligible for Commonwealth grants or other financial assistance’ (section 18 of the Act).

Responsibility for procurement and grants is shared across several Australian Government departments:

• the Department of Finance is responsible for both Commonwealth procurement and grants policy
• the Office for Women in the Department of Prime Minister and Cabinet is responsible for the Workplace Gender Equality Procurement Principles
• the Department of Industry, Science, Energy and Resources (DISER) is responsible for the Business Grants Hub
• the Department of Social Services (DSS) is responsible for the Community Grants Hub, and
• individual policy entities are responsible for administering their grants and applying the Commonwealth procurement and grant frameworks.

The Workplace Gender Equality Procurement Principles describe the Australian Government procurement policy associated with the Workplace Gender Equality Act (https://www.wgea.gov.au/what-we-do/compliance-reporting/wgea-procurement-principles).

Proposed approach

Stakeholders called for WGEA to have stronger enforcement powers. Many consider WGEA’s existing enforcement powers inadequate, while a number of stakeholders asked that there be no change to the existing powers.

Procurement and grants

Stakeholders strongly support making it clearer that relevant employers must comply with WGEA’s reporting obligations to receive Commonwealth procurement contracts and grants. As there are not many enforcement mechanisms in the Workplace Gender Equality Act it is important they are clear and effective. That is why it is recommended that relevant employers must comply with WGEA’s reporting obligations for Commonwealth grants eligibility and Commonwealth procurement participation (Recommendation 8.1).

During the consultation process, the relevant Australian Government departments (Department of Finance, the Office for Women, DISER and DSS) agreed with views expressed by stakeholders that there is scope to strengthen the effectiveness of the procurement and grants.

In response to stakeholder concerns that it is not clear how the Commonwealth Government applies the procurement principles in practice, it is recommended that the Workplace Gender Equality Procurement Principles be reviewed (Recommendation 8.1). Issues to consider in reviewing the principles include whether any exemptions might be needed. For example, an exemption might be needed to apply to a procurement where there are limited suppliers due to type or location of an activity. Recommendation 8.1 was developed in consultation with the Department of Finance, the Office for Women, DISER and DSS.

To increase the effectiveness of using eligibility for grants as a compliance tool, some stakeholders suggested that there should be a grants policy similar to the Workplace Gender Equality Procurement Principles. However, the grants and procurement frameworks operate differently. Unlike procurement, the Department of Finance advises that it is not necessary to have a grant‑connected policy if the Workplace Gender Equality Act is amended to require employers to comply with WGEA’s reporting obligations to be eligible for Commonwealth grants. If the Act is amended to require WGEA compliance to be eligible for Commonwealth grants, standard clauses could be developed about WGEA compliance for inclusion in grant agreements.

Additional compliance and enforcement tools

Stakeholders also suggested that WGEA should have additional compliance and enforcement tools. Some noted WGEA cannot seek a penalty order from a court or an order for specific performance. Many stakeholders recommend strengthening WGEA’s enforcement functions with remedies such as financial penalties, improvement notices, and mandatory training. Some also noted that WGEA has an audit power (section 19A of the Act) but it is under-utilised and should be used more.

Stakeholders noted that the high compliance rate with WGEA’s reporting obligations can be explained by the low bar in the Workplace Gender Equality Act for compliance (discussed earlier in ‘Bridge the action gap with new gender equality standards’). If reporting obligations are increased stakeholders said WGEA’s enforcement tools should also be strengthened. This is because it would be expected that compliance rates will fall if the requirements for compliance are increased.

However, financial penalties, and compliance or improvement notices are not recommended at this stage. As noted above, WGEA has a collaborative regulatory posture. It supports employers meet their obligations to achieve progress on gender equality in Australian workplaces. If the Government adopts the recommendations in the report, WGEA should assist employers meet the ambitious proposed new standards in the first instance rather than enforce new punitive compliance mechanisms.

After employers have had an opportunity to adjust to any new standards flowing from this report, any future review of the Workplace Gender Equality Act (see Recommendation 10) should assess whether stronger enforcement powers are needed. That will be an opportunity to consider additional enforcement powers, such as improvement notices and financial penalties, if there is a reduction in the high compliance rate.