'It will create significant unfairness'

Ai Group unhappy with procurement provision in workplace gender equality bill

'It will create significant unfairness'

The Australian Industry Group is not happy with a proposed bill that aims to introduce gender equality targets for employers with 500 or more employees.

The Workplace Gender Equality Amendment (Setting Gender Equality Targets) Bill 2024 says that not meeting these targets could affect a company's eligibility for Australian government contracts.

Louise McGrath, head of Industry Policy and Development with the Ai Group, told the Senate Standing Committees they have "serious concerns" about the bill.

"It will create significant unfairness for our members, particularly in relation to the proposed application of the targets to procurement eligibility," she said in the statement.

According to McGrath, the proposed bill removes the existing discretion for procurement officers to consider gender equality within the procurement process. It also:

  • discriminates against businesses with over 500 employees, contradicting the core principles of the Commonwealth Procurement Rules and the World Trade Organisation Agreement on Government Procurement
  • applies in a discriminatory and unfair way against employers who have made significant progress
  • creates an unfair competitive environment for domestic as compared to overseas businesses
  • will result in different targets being applied to different businesses, undermining the principles of competitive neutrality and a level playing field
  • provides no certainty on what is a "reasonable excuse," instead leaving it to WGEA's discretion
  • fails to provide an external mechanism for review of WGEA decisions, despite these potentially having a significant financial impact on a business.

McGrath added that making employers ineligible for government work is "entirely inconsistent" with the WGEA Act's objectives of promoting gender equality by supporting employers.

"Locking members out of government procurement is not light touch and is not collaborative - especially in circumstances where there is no ability for members to adapt targets during the three-year period, "reasonable excuses" for failures to improve or achieve the targets are at the discretion of WGEA and where members have no access to an external review mechanism," McGrath said.

"On that basis, we recommend removing this mechanism from the Bill."

What the bill means for employers

The WGEA Bill 2024 was first introduced in November 2024 and is now at the Senate Finance and Public Administration Committee. It aims to mandate "designated relevant employers" to meet specific gender equality targets every three years and report on their progress.

According to the bill, the minister will set the gender equality targets and the rules governing how employers select them, as well as specify the criteria for target selection and improvement requirements.

The introduction of the legislation is in fulfilment of one of the recommendations of the Workplace Gender Equality Act review in March 2022.

Benefits of setting gender equality targets

The Diversity Council of Australia (DCA) said the bill will help facilitate and monitor gender parity initiatives in larger organisations.

"DCA strongly supports the passage of the Workplace Gender Equality Amendment (Setting Gender Equality Targets) Bill 2024," it said in a statement.

Citing data from the 30% Club Australia, the DCA highlighted that meaningful change can be achieved through voluntary targets, as evidenced by the attainment of 30% female representation on ASX 200 boards.

It also noted the bill's support on Australia's progress on the UN Sustainable Development Goals, such as:

  • SDG 5: Achieve gender equality and empower all women and girls.
  • SDG 8: Promote inclusive and sustainable economic growth, employment and decent work for all.
  • SDG 10: Reduce inequality within and among countries.

It also supports several international human rights obligations of the government, including:

  • The right to equality and non-discrimination
  • Freedom from discrimination in employment
  • Protection against discrimination on the ground of sex
  • The right to the enjoyment of just and favourable conditions of work