Close Search
News  |  Careers

Union Canvassing to Sue Centrelink Over Privatisation of Job Schemes

26 September 2016 at 11:23 am
Wendy Williams
An organisation “by the unemployed, for the unemployed” is canvassing to take legal action against Centrelink amidst claims the “privatisation” of job schemes is penalising unemployed workers.

Wendy Williams | 26 September 2016 at 11:23 am


Union Canvassing to Sue Centrelink Over Privatisation of Job Schemes
26 September 2016 at 11:23 am

An organisation “by the unemployed, for the unemployed” is canvassing to take legal action against Centrelink amidst claims the “privatisation” of job schemes is penalising unemployed workers.

The Australian Unemployed Workers’ Union is building a case after receiving reports from Work for the Dole jobseekers that welfare payments were being penalised or suspended at the behest of private employment companies.

Under the current scheme private contractors play a role in assessing the behaviour of income support payment recipients, effectively making decisions on behalf of Centrelink.

AUWU founder and president Owen Bennett told Pro Bono Australia News it was giving private companies “extraordinary power” over the lives of unemployed workers.

“Giving privately owned companies, many of whom are for profit, such power over unemployed workers, it’s really, let’s not beat around the bush, it’s the power of life and death,” Bennett said.

“They can cut people off payment whenever they want, and when you have got a compliant department of human services that is rubber stamping their compliance orders that gives job agencies and private companies extraordinary power over the lives of unemployed workers, so we want that to stop.”

A Department of Employment spokesperson confirmed to Pro Bono Australia News that service providers were contracted by the department to monitor jobseeker’s participation in return for income support, but they did not make any decisions to suspend or reduce a jobseeker’s payment.

“Where a provider becomes aware of a jobseeker not meeting their mutual obligation requirements (ie they missed at an appointment or activity without giving a good reason beforehand), the provider is required to try to contact the jobseeker to find out why they couldn’t attend and couldn’t let the provider know beforehand,” they said.

“If contact is made and the jobseeker has a reasonable explanation for missing their appointment or activity and for not letting the provider know, then no further action is taken.

“If the employment services provider is unable to contact the jobseeker to discuss the reason for non-attendance, or if they do not think the jobseeker’s explanation is reasonable, they can report this to the Department of Human Services (DHS).

“DHS will then check that the jobseeker was in fact subject to mutual obligation requirements on that day and, if so, DHS can suspend the jobseeker’s payment. Where that occurs, the jobseeker is informed. In many instances jobseekers can receive multiple messages about this and a key part of the message is that the jobseeker needs to make contact with their provider as soon as possible as their income support payment has been affected.”

But Bennett said the correct checks were not being carried out.

“There are a few levels of checks and balances of how the system is meant to work but ultimately Centrelink are the ones that make the compliance decision, and that really struck us… that’s not what’s happening on the ground at all,” he said.

“Actually what’s happening is these job agencies threaten people with all sorts of compliance orders and when they are imposed Centrelink simply just rubber stamp them and they don’t do the investigative work they are meant to do to make sure that that particular compliance order is fairly imposed.”

Bennett said they had been building a case over the last 12 months, following a complaint from  member Daryl McDonald who received an “unfair” no-show, no-pay penalty for inappropriate behaviour while attending a Work for the Dole activity.

“We were quite shocked about what had happened because we hadn’t really struck that before,” said Bennett.

“When he told us about how the penalty came about he said he wasn’t even informed of the penalty until he got a letter saying that the penalty would be imposed, a no show no pay penalty, which would reduce 10 per cent of his Newstart and a further 10 per cent per day until he re-engages.

“And he thought ‘well this is so strange, I’ve been fined this money without anyone calling me and asking me what my side of the story is’, and he had a very, very strong case.

“It was a completely unfair penalty, it was later actually overturned, the AAT had to spend about three months chasing that money back, which was taken out of his account.”

Bennett said one of the problems was that even if the penalty is later overturned it can take months for people to get their money back which can have a massive impact on their wellbeing.

“In the case of Daryl McDonald… he lost $60 out of his payment and then he had to spend three months chasing that back and in the meantime he was put in severe financial stress and as a result he had to go to charity for food,” he said.

“That is a lot of money and for someone who is on Newstart they know they have to budget for every dollar and when you lose $60, you have to come up with some extra money quick or charity to make ends meet.

“And the amount of distress it’s putting people through, not only losing the money but the stress of having to appeal it, having to submit all these forms and contact the job agency and make a complaint and try to transfer your job agency because you feel like you being bullied by your job agency so it becomes almost a full time job just being unemployed when you’re dealing with these punitive job agencies who are fining you for all sorts of reasons that aren’t fair.”

After consulting a lawyer, Bennett said they were searching for more cases to prove it was a systemic issue and not a “one-off”.

“We’ve found a lot of people who have faced this exact same treatment where they have received fines and received penalties without any contact from Centrelink who are legally obliged to contact them to make sure they get to hear their side of the story,” he said.

“We’re still building our case, so we’ve got a lot of people who are interested in joining the legal challenge, probably about 15 to 20 nationwide, who have got a strong case and are interested in joining. We’re at the point now where we need to get a full statement from them and they have to sign off on that statement and then we have to start requesting FOIs on their behalf.”

The employment group is calling for a review of the system and better regulation for private companies given the task of managing employment programs by the government.

“We want Centrelink to actually perform the function they are meant to, going by the law of looking into each case and making sure the penalty is fairly imposed and also, its related to this case, we want the Department of Employment to actually regulate the industry because the amount of unfair penalties imposed, it’s clearly showing the system isn’t working,” Bennett said.

“We need more regulation for these job agencies, they are meant to be regulated by the Department of Employment but unfortunately that’s just not happening at all.

“We also want the government to set up an independent regulatory body to review the system, the employment services industry that is causing so much distress and abusing so many unemployed workers, we want that to be regulated as soon as possible. We’re asking for the establishment of an independent ombudsmen actually to help us review the system.

“It’s a massive black hole actually, because there is no service that is offered to unemployed workers to help them deal with employment services agencies. It’s like the wild wild west… it’s like the government has deliberately left this whole industry just completely unregulated and not giving unemployed workers any services or any information about how to actually deal with these private companies.

“And when you’ve got the profit motive for these private companies… they are a business like any other, they need to make money and they are going to do whatever it takes, and a lot of them do… and when you’ve got no service for unemployed workers about how to actually ensure their rights are respected, it’s just a recipe for disaster and that’s what’s happened.”

The Department of Employment said the purpose of the income support payment suspension was not to penalise the jobseeker but to “prompt rapid contact between the jobseeker and their provider”.

“This contact will often occur before the jobseeker is next due to be paid, so their payment is not delayed,” the spokesperson said.

“Once the provider and the jobseeker have made contact, the provider must re-engage the jobseeker in their mutual obligation requirements (for example by booking a re-engagement appointment). Attendance at that re-engagement appointment is typically the way that the payment suspension is then lifted (and the jobseeker then receives full back pay if their payment has been delayed at all).

“The provider may also decide to ask DHS to consider if a financial penalty should be applied. Only DHS has responsibility and delegation under social security law to investigate and decide if a financial penalty (ie loss of part of the jobseeker’s payment for the fortnight) should occur.”

The spokesperson said the department provided clear requirements and training to employment services providers on how to monitor and report non-attendance at activities.

“While the action of an employment services provider in reporting non-compliance may initiate compliance action by DHS – to suspend payment and sometimes to apply a financial penalty – employment services providers do not make any decisions to suspend or reduce a jobseeker’s payment,” they said.

“The Department of Human Services makes all suspension and penalty decisions under social security law.

“If a jobseeker is not happy with their treatment by their provider, they are encouraged to discuss any concerns with the provider in the first instance. If still not satisfied, the jobseeker can call a national customer service line to lodge a complaint which then instigates a formal complaints process.”

Wendy Williams  |  Editor  |  @WendyAnWilliams

Wendy Williams is a journalist specialising in the not-for-profit sector and broader social economy. She has been the editor of Pro Bono News since 2018.


  • Disappointed in the system says:

    I have experienced the dark side of these job agencies. Although I myself have not been penalised, and do my best to achieve what is asked of me, I have experienced the threats and abuse of power that some of these case managers engage in (it must be said that there are also some very helpful and encouraging ones too). We were told by one particular case manager that our best chance of gaining employment is through our own efforts in our own time, do not rely on the JSP to find us work, which makes one ask – what exactly is the role of this “job service provider” and why are we wasting our time here? We were also constantly threatened with having our payments cut at every turn, with no excuses acceptable. Call me old fashioned, but I think going to a “job service provider” should be a positive and uplifting experience that gives the unemployed encouragement and hope. But what we have right now is the total opposite – mostly cranky case managers that abuse their power and cause a lot of stress and anxiety. The current system is a failure.

  • Kelli W says:

    I was in a DES agency, back problems, just lost my career due to my back problems and suffer from mental illness.
    No one really wanted to employ me, can’t blame them, I’m an insurance liability, asked for help finding fulfilling employment that could work with my capabilities. I was offered two jobs in two years, one which was interesting, one demeaning.. I said yes on both accounts (the second time round I was half way through my pregnancy).. They offered a group “mental health sessions” I though why not!! They wanted to take away my actual psychologist sessions to go to something that I don’t even believe was being performed by a professional!!
    They told me it was all up to me to do job searching, no help with nothing!!
    My back was bad enough I couldn’t catch public transport, if someone couldn’t take me last second I’d have to cancel.. Which was classified under “not good enough”.
    I also at times had such bad anxiety I’d cry and to the point I couldn’t move my body. I’d have to wait until my panic attack calmed down to call up, once again “not good enough”.
    The didn’t care, didn’t want to care. They just pretended to build a rapport, but instead you were a number.
    My partner for once in his life ever needed centrelink, signed up to a job agency, they couldn’t help him as he was too high of a chance of employment (WHAT?!), he asked for help to get better employment and more stable work. Nope. Still wouldn’t do a thing to help him, he started to work casual and would know his shifts the night before so couldn’t say when he could actually make an appointment, all of a sudden they actually cared about him. Cared about him enough to cut the much needed pay all because he couldn’t guarantee he’d make it, nor make it on time!
    I look at the people in a DES agency, seeing that there are more intense situations than mine and realised what a sad reality it must be to be forced into a situation you do no matter how you feel or you have to scavenge for food!
    They should be there to help you and want to help you! I lost my careers, I was told if I found a job that needed funding for me to be “suitable” that they could help… Until I found that job and yet, I lost it because of them!

  • pete says:

    what job agency has EVER helped people get into employment NONE.!!!!
    ,shameful system,should be changed completely

  • Grace says:

    I am currently employed under the wage subsidy scheme. I was given opportunity to work after being unemployed for 4 years. I have been paid under the award wage and been treated like an idiot. Harrassment and bullying at work and by disability employment services provider. I have notified fairwork who say I Have grounds to take them to smallclaims tribunal. They have submitted many inaccurate documents to my employer and made agreements with out me knowing.
    Has any else sued the job service providers

  • Chase Gardner says:

    I notified my job network provider by email 3 days before my appointment that I couldn’t attend as I had no phone credit to call and no money for transport due to housing issues in that fortnight. I was then cut off the day before my payment and sent msg that I had to contact them by phone even though mutual obligation guidelines don’t specify what form of contact you need to use as email is a completely legal form of correspondence. After borrowing money from a family member for phone credit I was told I had to attend an appointment 2 days later before my payment would be reinstated even after I explained it was a three hour walk with a knee injury was not possible. It took 3-4 hours of calls between the Conplaints service and my provider before my payment was finally reinstated. I thought they were meant to take your personal circumstances into consideration well they certainly didn’t in my case and I had already attended 3 appointments that fortnight.


What contributes most to a positive workplace culture?

Deborah Wilson

Friday, 10th May 2024 at 9:00 am

Navigating Success: A Guide to Setting Yourself Up in a New Role

Lisa Redstall

Friday, 3rd May 2024 at 9:00 am

Lifelong learning… the secret to getting a new job!

Kerri Hansen

Friday, 26th April 2024 at 9:00 am

pba inverse logo
Subscribe Twitter Facebook