Disabled people paid below the minimum…


The Royal Commission on Violence, Abuse, Neglect and Exploitation of People with Disabilities learned this week that people working in Australian Enterprises for the Disabled (ADE) are paid a fraction of the minimum wage and often stay in a supported employment for years.

Public Hearing 22, The experience of people with disabilities working in Australian Disability Companiesran from 11-13 April and focused on the experiences of people working in ADEs, salary assessments, supported salary levels and the relationship with Disability Support Pension (DSP), and training and development opportunities offered.

The Commission also sought to understand whether the right policies and systems are in place for EDAs to ensure that people with disabilities have choice and control in their environment.

Assistant Principal Solicitor Kate Eastman says the current adult minimum wage in Australia is $20.33 an hour, but people with disabilities can legally be paid much less in ADEs, which were once known as sheltered workshops.

“Applying the wage assessment tools, workers who work in ADEs are allowed to be paid as low as 12.5% ​​of the minimum rate, the $20.33, and that then constitutes a rate of 2 $.54 an hour,” says Eastman.

“As part of the Fair Work Commission’s review, the Commission received evidence of the average hourly rate of pay for people working in ADEs in 2019, and that average rate was $7 per hour.”

Despite the low rate of pay, the Fair Work Ombudsman’s submission noted that he undertook 43 EDA investigations, resulting in three enforcement actions and reimbursements of over $24 million in underpayments for 6,477 employees.

“As part of the Fair Work Commission review, one proposal is to set a minimum wage for people working in ADEs and the proposal is that the minimum wage be $3.50 an hour,” explains Miss Eastman.

“An important development to note is that from January 1, 2021, ADE workers must receive a retirement pension at the same rate as the rest of the workers, 9.5% of ordinary earnings or 15 dollars per week, whichever is greater.”

Ms Eastman added that the pay rates that the Commission has heard from many people working in ADEs are paid at a rate that will not affect their DSP payments, so there is a close connection between the two.

There is also a lack of people with disabilities represented on EDA boards and in management, Ms Eastman says.

Around 16,000 Australians work in an ADE and data provided to the Commission showed that most are in jobs such as packaging, gardening, landscaping, cleaning, laundry services and catering services.

There are currently 161 ADEs registered with the National Disability Insurance Agency (NDIA) and these ADEs apply for funding through the National Employee Disability Insurance Scheme (NDIS) schemes for the services provided.

Supported employees are not treated the same

Several of the witnesses who appeared at the hearing told the Commission that they or their family members liked working for an ADE, although they often mentioned that the rate of pay could be higher.

Two witnesses, parents of adults with disabilities who worked in ADEs, told the Commission that their children had benefited from working in ADEs, but that there were also disadvantages.

Both parents had children who experienced negative incidents in the workplace, such as being ignored or yelled at, and sometimes helped peers with personal care tasks for which they were neither paid nor trained.

Chief Executive Officer (CEO) of Inclusion Australia (the National Council on Developmental Disability), Catherine McAlpine, told the Commission that many people in ADEs are not treated equally and receive low wages due to the uneven system.

“Disability businesses in Australia…are frequented primarily by people with intellectual disabilities…more than 80% of people in ADEs are people with intellectual disabilities,” says Ms McAlpine.

“So we see them as segregated environments where people with intellectual disabilities are sent to work and where pay rates are very low.”

Ms McAlpine also discussed Inclusion Australia’s definition of a social enterprise and the importance of distinguishing between this and the definition used by many EDAs.

“A social enterprise is generally thought of as where people with and without disabilities or disadvantaged and non-disabled people work together,” says McAlpine.

“We believe the terminology is co-opted, because our understanding of ‘social enterprise’ is – a place where people are paid decently, so people are paid at least minimum wage.

“And we see the language of ‘social enterprise’ being co-opted by Australian Disability Enterprises because people with disabilities and people without disabilities work together, but not as equals.

“One of the things that comes up even this morning is that an ADE is supposed to be an employment aid, but you keep hearing people without disabilities being referred to as ‘supervisors’. The supervisors who take care of it. Not the supporters who help [you] work.”

Yesterday, representatives of National Disability Services (NDS), the supreme body representing non-governmental disability service providers, told the Royal Commission that their definition of social enterprise was different from that of Inclusion Australia.

NDS employment manager Kerrie Langford says the organization uses social enterprise to describe ADEs who want to move away from the old model of funding and services that existed before NDIS and into the new NDIS funding model that the system began transitioning to 18 months ago.

“We use the NSW Government’s definition of social enterprise, which is a business that negotiates to intentionally drive social change,” says Ms Langford.

“This definition matches the mission of many disabled people’s businesses.”

Transitions to open employment are not consistently supported

Each of the Commission’s witnesses this week had little opportunity to develop their professional skills or advance in the ADEs and continued to perform repetitive tasks for years, not receiving the support they needed to transition to a open job.

Their schools also did not help them explore their employment options before leaving school.

In fiscal year 2020 to 2021, 295 NDIS participants reported moving from an ADE to open employment, or 1.7% of the total number of people working in ADEs.

Ms McAlpine refers to the system of not helping people with disabilities explore more employment options as the ‘refined route’.

“I’ve talked about the polite way and…it’s particularly about being segregated from an early age in separate education and how the systems all work together to make it easier to stay in those systems and move on from school to other segregated environments, including segregated employment,” says Ms McAlpine.

Low pay rates in ADEs lead to many other segregation issues throughout a person’s lifetime, Ms McAlpine adds.

“The problem with ADEs is that people don’t work on an equal footing with others. They don’t have the opportunity to earn a living. They don’t choose their work freely and they don’t have an open and inclusive work environment,” she says.

“So we have this ongoing effect that if you have no income, you’re completely dependent on the pension, you’re completely dependent on the jobs that ADE tells you you have to do, and then there’s this ongoing impact who you are more likely to live a totally isolated life because you are more likely to only be able to afford to live in a group home or only be able to get the support you need in a group home.

NDS CEO Laurie Leigh told the Commission that the organization is working towards a vision in which ADEs would develop employee skills, provide a range of options and settings, deliver high quality services and lead sustainable businesses using the new NDIS Funding system.

The vision includes higher salaries for supported employees and better supports to explore other employment options, however, Ms. Leigh stressed that the organization still believes EDAs are an important employment option.

“This is an area where there is still development to be done, but the other important thing to remember here is that it is about the choices people with disabilities can make so that people are not pushed into an option that they are not comfortable with,” says Ms Leigh.

Ms Langford adds: “Everyone has the right to choose and try to work in an open job, there are not always the means and they are not always successful.”

To get higher salaries and other aspects of NDS’ vision, Ms. Langford says the government needs to be involved in grants and more funding.

But Inclusion Australia says fair wages are needed now as they are the ‘first step in moving away from the segregated model that underpins most EDAs’.

Inclusion Australia is also calling for a government, industry and community supported five-year transition plan for EDAs to become open employers and move completely away from the sheltered workshop model.


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