2. The Supported Wage System
2.1 What is the Supported Wage System?
The Supported Wage System (SWS) is a Commonwealth Government program designed to address the barriers to employment in the open workforce faced by people with a disability whose productivity and employment competitiveness are reduced because of their disability.
People in such circumstances can choose to access a process of productivity-based wage assessment and related workplace-specific assistance to help them gain appropriate jobs in the open workforce. The SWS assessment process measures the productivity of the worker against the basic performance levels for other people in equivalent positions in the same workplace. The worker is then paid a pro-rata award wage that equates to their assessed productivity (for example, 70 per cent), with all other employment conditions being the same as those of their co-workers. The productivity of the worker is reviewed annually, with the aim of SWS being that the worker will eventually improve and reach (or get close to) 100 per cent productivity, enabling payment of full award wages.
2.2 A brief history
In the late 1980’s it was recognised that Competitive Employment and Placement Services were struggling to place those people who wanted to work in open employment but were just not productive enough to be employed on full award wages. Whilst it was recognised that there needed to be an industrial solution to the problem, it was some time before employer groups and unions successfully negotiated on the issue to develop an effective tool.
Workers with a disability that affected their productivity could be legally employed under a ‘Slow Worker’s Permit”. These permits were issued on an individual basis by the Commissioner for Industrial Relations in each state. The specialist disability employment agency would complete an application for a Slow/Inexperienced/Infirm Worker Licence. The Commissioner, if deciding to proceed, would invite the agency, the worker, the employer and the union for a hearing. The application form identified the proposed wage as calculated by the agency, by rating the disabled worker against able bodied workers by timings and observations, with the result being a percentage of the award rate. All parties were required to agree for the Permit to be issued, and it was reviewed annually with all parties again having to appear at the Industrial Relations Commission to give their approval for the permit to continue. This system continues to be used on a very occasional basis where industrial awards/agreements do not allow for the use of SWS.
Eventually the SWS was developed in conjunction with the Australian Chamber of Commerce and Industry (ACCI), the Australian Council of Trade Unions (ACTU), disability peak bodies and specialised employment agencies for people with disabilities. It was to be administrated by FaCS operating within the existing industrial relations framework and accessible in every State and territory.
The SWS commenced operation in 1994. Initially, resources were allocated to assist 1,000 people Australia-wide each year. In the FaCS 1999−2000 Annual Report it was stated that there were 1,063 SWS placements in the 1999−2000 financial year. In all, 2,284 people accessed the system in 1999/2000 (this figure includes new and recurrent workers). An average of 1,000 workers move out of SWS each year for various reasons including achievement of full wages, new employment or cessation of employment.
The SWS is managed by SWS Management Units in FaCS State and Territory Offices. The units’ key responsibilities are to process applications; arrange assessments; approve and make payments; train and accredit assessors; and to liaise with employer and trade union organisations. There are approximately 400 accredited SWS assessors in Australia who provide independent and impartial initial wage assessments and annual reviews.
2.3 Who is eligible to use the Supported Wage System?
The majority of workers seeking to use the SWS are clients of specialist disability employment agencies, but people who are independent of such agencies may also access the system. SWS is available to workers commencing employment and where the continued employment of an existing employee at full wages may be in jeopardy.
In order for a worker to qualify for the SWS, they must:
- be eligible for or in receipt of Disability Support Pension, or medically assessed to determine whether disability would affect productivity;
- be an Australian citizen;
- be at least 15 years old; and
- have no outstanding workers compensation claims against the employer.
2.3.1 Requirements for participation in the Supported Wage System
To access the SWS there must be industrial coverage to legally pay a productivity-based wage through one of the following:
- alliance to an award that contains the SWS Model Clause (see Appendix B)
- a Certified Agreement that contains the SWS Model Clause
- an Australian Workplace Agreement that contains the SWS Model Clause
- a Certificate of Exemption/Slow Worker’s Permit granted under the jurisdiction of a State Government Industrial Legislation.
The SWS cannot operate under Common Law Contract. The minimum number of hours an employee can work is eight hours per week, and the minimum wage payable is $50 per week or the amount specified in the relevant award or workplace agreement, regardless of assessed capacity. The National Training Wage (for traineeships and apprenticeships) cannot be accessed in conjunction with the SWS.
2.3.2 Assistance for employees and employers
When a worker with a disability finds a suitable job and it is agreed that the SWS is the best option, the worker can be given a trial period of up to 12 weeks to learn the job, before the assessment takes place. During the trial period the worker is paid a negotiated wage that is currently a minimum of $50 per week or the amount specified in the relevant award or workplace agreement. Following the assessment and signing of the SWS agreement, the employer will pay the assessed wage and superannuation as required in the same way as for other workers in that workplace.
Provision has been made for the following assistance for employers through the SWS, although some elements of the assistance package have been restricted pending the final outcome of the recent SWS evaluation:
- a payment of $1,000 is available to offset the cost of employing a worker with a disability under the SWS, although a number of eligibility conditions apply;
- workplace modifications or special or adaptive equipment have been subsidised to assist people with disabilities perform at their full potential (this funding is separate from the SWS and is available through the Workplace Modifications Scheme administered by FaCS and available to all workers with disabilities); and
- some assistance for on-the-job support is available under the SWS, for instance, if a worker receiving a supported wage requires specialised assistance and/or training at work.
Expectations of employers
Whilst most employers are well informed of the requirements, responsibilities and processes associated with the SWS, the research team found that there are some employers that have unreasonable expectations of the system. Most often, these expectations relate to the prospect of 'cheap labour', and SWS assessors often find themselves having to explain that the SWS is not about enabling employment of a cheap worker, but is about paying a person on the basis of their capacity to do the job. These misconceptions occasionally put the placement of the worker in jeopardy, sometimes requiring the job placement agency to seek alternative employment options for the person with a disability.
2.4 Costs involved in administration of the Supported Wage System
Apart from the incentives available to employers that have already been discussed, and the general costs of administration by the SWS Management Units in each FaCS State and Territory Office, the other major cost factor is the payment to accredited assessors for wage assessments. Accredited assessors in each state assess participants using the SWAT.
A ceiling of $800 (plus GST) applies for the initial wage assessment. A further $600 is made available for the first review and $400 for the next and subsequent wage reviews. The assessor provides an invoice that includes their hourly rate and the number of hours taken to conduct the assessment. Professional assessment and travel costs must be met within these limits. Assessors provide their own worker’s compensation and professional indemnity insurance coverage.
2.5 Industrial relations
The SWS can only assist a worker if the position is covered by industrial provisions that allow the payment of a productivity-based wage. For this reason, the ACTU and ACCI developed a Model Clause to be inserted in Federal and State Awards. All agreements to employ people under the SWS are lodged with the relevant Federal or State Industrial Registrar, depending on the position in which the worker is placed. The SWS assessor normally lodges the agreement on behalf of the employer. Once the SWS agreement has been lodged with an Industrial Registrar it remains in force for 12 months from the date it is signed (unless a further wage review is conducted before then).
When the SWS assessor receives a request to provide a wage assessment, they are provided with the contact details of the relevant union. The assessor must contact the union, prior to commencing the assessment, to advise them that it is occurring and to invite them to participate in the process and the signing of the agreement if they wish. The usual response is that the unions are pleased to be advised of the SWS assessment but do not wish to be involved in the process, apart from receiving copies of the signed agreement.
Where the appropriate union has signed the SWS wage agreement, the Industrial Registrar will advise the employer that the assessment has been successfully filed. If the Registrar receives a wage agreement not signed by the appropriate union, they will notify the appropriate union of the existence of the wage assessment and give the union 10 working days to lodge an objection with the Registrar. If no objection is received the employer is advised that the wage agreement has been successfully filed. Union objections are not very common but if lodged usually relate to an incorrect rate of pay and are easily resolved. All objections are dealt with and resolved according to correct industrial practices.
The research team found that for the most part, union involvement in the negotiation of SWS wages is limited, particularly during the assessment phase. Most commonly, the relevant union merely 'signs off' on the SWS documentation provided by the assessor, although it was reported that occasionally even this response is not forthcoming.
2.6 Conclusion
In conclusion, the SWS is a system that is designed to assist people with disabilities find and maintain open employment, by supporting the jobseeker and making the employment of the person a low-risk and high-benefit option for employers. It is important to make the distinction between the assessment tool for determining wages and the SWS system as a whole. Whilst the SWS is focused on open employment, some Business Services have identified the potential applications of the SWAT in the Business Service setting, adapting it according to specific industries and individual worker needs.
However, if the SWAT was the sole basis upon which wages in Business Services were determined, a number of issues, which must be acknowledged and addressed include:
- the system’s design was for the open employment sector, and it may not be applicable to some jobs in Business Services;
- the cost of assessment (if not subsidised) may be a prohibitive cost for many Business Services without adequate infrastructure. In turn, this may influence the objectivity of assessment if internal assessors are used;
- the SWAT does not provide formal links with workplace training, professional development or career path structure;
- the SWAT generally does not consider established industry benchmarks (for example, National Competency Standards);
- the skills and consistency of assessment may be compromised unless formal accreditation and monitoring of assessors applies; and
- the objective comparison of the disabled worker to a non-disabled co-worker may be problematic, particularly in circumstances where a job has been tailored to a specific person.