Age Equitable Employment in the Public Sector

• be more focussed and supportive of mature aged workers who wish to remain in the workforce, and
• establish strategies which encourage the retention of young employees.
  

2. CPSU will support young and mature aged worker in the public sector by requiring certified agreements, supplementary policies and other arrangements to:

• commit to non discriminatory employment practices, and monitor these arrangements to ensure that all recruitment and selection is based on merit
• establish flexible, innovative and best practice arrangements.
  

3. Encourage and support mature aged workers to mentor and transfer their skills before separation from the workforce.

Note: This paper identifies arrangements for mature aged workers. A further paper is being prepared in regard to issues associated with the engagement and retention of young workers.

The ageing of the Australian workforce and potential labour shortage

There is extensive research which identifies that the Australian population is ageing and that labour shortages may be created in future years as there will be insufficient new employees to replace employees that are retiring.

This paper acknowledges this research and focuses on actions that should be taken within the CPSU’s primary area of coverage, the Australian Government employment sector.

Further details regarding the ageing population are contained in Attachment 1.

The Public Sector response to the ageing workforce In 2003, the Australian Public Service Management Advisory Committee released a report entitled Organisational Renewal. This report identified a number of mature aged workers issues including:

• The APS is increasingly reliant on mature aged employees in general;
• Agencies need to plan ahead and ensure their management and work practices are geared to optimising the contribution of mature-aged employees;
• Mature aged employees seek more flexible work options;
• There is a relatively high incidence of retrenchment for mature aged employees;
• The CSS “54/11” resignation issue is manageable and will cease to exist within the next 8 years, but it has implications for APS recruitment patterns.

The report suggests retaining mature-aged employees by offering them an AWA which increases superannuable salary (to offset the 54/11 ‘loss’), and/or to offer phased retirement. Other options are to re-engage employees after they depart as a non-ongoing employee or as a contractor.

A multi faceted problem.

The CPSU believes there are a range of options that can be established with public sector employers or the Government to support and encourage the retention of mature aged workers. These are identified in this paper as:

1. Best practice in mature aged worker recruitment and retention
2. Use of agreements and policies
3. Superannuation arrangements
4. Eliminating discrimination of mature aged workers and debunking the myths relating to mature age workers.

Best practice in mature aged worker recruitment and retention

Significant research is being conducted into retaining mature aged workers in employment, but there is probably nothing as yet that could be described as best practice.

The retention strategies used by Brisbane Council were identified in a Drake White paper The age chasm, successful managing age in your organisation as: Linked strategies in:

1. Safe and healthy workplaces
2. Active and healthy workforce
3. Sound and fair ‘people management’ decision across all ages
4. Employer of choice to attract optimum age mix
5. Reshaping the workforce strategy to correct labour supply to market
6. Learning and development to skill up the workforce at all ages
7. e-Enabled workforce.

The CPSU believes that the above list provides a sound approach to building a strategic framework for public sector employers.

In addition, the Drake White paper recommends that employers should conduct age audits every few years which review recruitment practices to ensure that selection is free of any age bias.

It needs to be acknowledged that there is sensitivity over perceptions that mature aged workers are being advantaged by being provided with incentives or support to remain in employment after minimum retirement age. The union should seek broad discussions with members on the implication identified in the government’s Intergenerational Report and the Management Advisory Committee reports and establish explicit requirements for mentoring and skills transfer in bargaining agendas.

Use of agreements and policies to support mature aged workers

In the context of certified agreements, analysis suggests public sector agencies are only paying lip service or placing only limited effort into establishing retention strategies for mature-aged employees. Only a small number of agencies have included commitments to investigate strategies to retain mature aged workers or identify specific initiatives. Some work flexibility would normally be available using current flex and part time arrangements within CAs, but these have not progressed far beyond general provisions and in some agencies access to these arrangements is virtually non existent for mature-aged employees.

The use of AWAs, as part of a 54/11 retention strategy, or to provide one off flexibility arrangements also appears limited.

The CPSU believes that mature aged worker recruitment and retention arrangements should be established primarily in certified agreements. Any industrial arrangement to retain mature aged workers should in all cases be voluntary and mutually agreed between the employee and employer. In addition, CPSU support the introduction of Mature Aged / Age Equity Network Policies which recognise the contributions of mature aged workers and support their ongoing employment.

CPSU will continue to raise and promote our mature aged worker issues within an organising and bargaining framework. We will seek to have certified agreements made more innovative and comprehensive in regard to mature aged worker issues including flexibility options. A range of certified agreement clauses covering mature aged worker issues are available as an attachment (Attachment 2) to this paper.

Innovative issues covered in these clauses are summarised in the following table:

Table 1

1. Employer commitment to non discriminatory practices in employment, training or career opportunities;
2. Fractional or averaged work, where an employer works part time hours or days averaged over a 12 month period;
3. Acknowledging that re-engagement as an on-going or non-ongoing employee is available;
4. Employee nomination of prospective retirement date and provided with up to 10% additional pay;
5. Organisations continuing to pay contributions to superannuation at full time rate although employee working part time;
6. Deferred Salary scheme, a 4 year in 5 year arrangement (comparable to the 48/52 week pay arrangements);
7. Conversion of minimum of half untaken long service leave into superannuation contributions;
8. Changing roles, including phasing out management or higher level responsibilities;
9. Employer funded access to financial advice before an employee elects to retire.

Attachment 2 identifies a sample of current certified agreement clauses which relate to supporting or retaining mature aged workers.

Note: Some of the above options e.g., Long Service Leave cash out may not be possible in a public sector environment because of legislative limitations.

Where members choose an AWA, especially as a strategy to offset any loss derived from 54/11, CPSU will continue to offer services to assist them in establishing acceptable AWA agreements.

The re-engagement of an employee as a contractor and therefore ‘outside’ of an agreement, as recommended in the Organisational Renewal paper, is discouraged as it undermines the employment relationship.

Superannuation arrangements

Changes to superannuation arrangements including the establishment of the PSS (accumulation plan), the reviews of the CSS and PSS (defined benefit), and the introduction of transition to retirement arrangements will provide further opportunities to advocate for retention strategies for mature aged workers.

The Government during 2004 announced their intention to introduce ‘transition to retirement’ arrangements, where an employee above minimum retirement age could have limited access some of their accrued superannuation whilst still working. In December 2004, in response to a Treasury Discussion Paper on the subject, the CPSU provided a submission which supported the establishment of transition to retirement as a means of assisting employees who wish to remain in the workforce. Continuing to pursue the early introduction of transition to retirement arrangements into the Australian Public sector could deliver benefits to employees above minimum retirement age. 54/11 option Further options like allowing CSS employees at 54 years 11 months to transfer into PSS (Accumulation Plan) and preserve their CSS contributions should be considered. This arrangement could also be attractive to employers as it may reduce the need for any additional work in establishing an AWA or in providing additional incentives to retain key employees.

Indexation of pensions

The ongoing issue of the indexation of public sector superannuation pensions being based on CPI rather than a waged based index continues to cause concern amongst mature age worker in the public sector. It is noted that the Superannuated Commonwealth Officers Association (SCOA) has an ongoing campaign of seeking political support to have the indexation based on movements in Male Total Average Weekly Earnings (MTAWE), rather than CPI.

In recent years the CPSU has presented two submissions to Senate Inquiries and appeared in a Senate Committee to support changing the indexation measure. We have also raised this in our discussion with the Department of Finance (DoFA) on reforms to the CSS and PSS. DoFA has recently advised us that the Government has rejected any changes in the indexation methodology.

CPSU is committed to continuing its campaign to change the indexation arrangements for Commonwealth Superannuation Pension. CPSU supports changing the indexation measure to Male Total Average Weekly Earnings (MTAWE) rather than CPI.

CPSU supports the development of measures to fund the Commonwealth’s currently unfunded superannuation liability and notes the Treasurer’s announcement (May 2005 Budget) for the creation of a “Future Fund”. CPSU does not support the full privatisation of Telstra as a means of meeting this future liability, but believes funding can be met from other measures including future Budget surpluses.

Eliminating discrimination and stereotypes

In 2004 the Federal Age Discrimination Act was introduced. The Act is administered by the Human Rights and Equal Opportunity Commission (HREOC). HREOC identify age discrimination occurring ‘when an opportunity is denied to a person solely because of their age and where age is irrelevant to the person’s ability to take advantage of that opportunity’ . HREOC also identify that

‘Stereotypes or negative attitudes towards younger and mature aged workers can affect decision-making choices in employment.

Within employment, age discrimination commonly takes place in decisions about recruitment, promotion, training, retirement and redundancy

Common stereotypes among amongst employers include perceptions that the skills of mature aged job seeker are outdated and that they are harder to train. Many employers also assume that mature aged job workers are either unable or unwilling to adapt to new technology.

These attitudes can discourage many older people from attempting to remain in or re-enter the workforce”

These mature aged worker stereotypes were reported by Chris Kossen in a recent (2005) presentation to a HREOC Conference being that they are;

• slower and therefore less productive
• more prone to accidents and illness
• less trainable
• less flexible
• leave job sooner because they are near retirement

A significant body of research disputes all these stereotypes. Both Government and employers need to debunk these myths.

Peter Feltham, CPSU Legal and Technical Unit