Disrupting Regulation Overkill

23rd September 2016

Digital disruption is the latest fashionable phrase punctuating the world of management consulting, government and academia. It seems we are doomed unless we get disruptive. If that is the case, why is the Australian political class desperate to tie business up in more and more regulatory knots? As newly appointed Senator Hansen would say, please explain?

This conundrum of over-regulation in a business world urging ever more risk, occurred to me whilst listening to another highly paid expert panel lecturing us how we must change our ways lest we be swept aside by the disruptive forces of the market.

In a subsequent session I suggested to speaker Professor Gillian Triggs, President of the Australian Human Rights Commission, that it would be a good idea for one or more of our federal and state human rights agencies to vacate the field of employment regulation. Fourteen statutes proscribing unlawful discrimination accompanied by at least 10 tribunals, multiple conciliators, commissioners and multi-million dollar budgets to oversee an Australian workforce of 11.6 million was a bit overkill.

Stunned silence from Her Honour. It seems this is not the sort of disruption our political masters have in mind for us.

Unlawful discrimination in the area of employment proscribed by the four statutes administered by the Australian Human Rights Commission is mirrored in the Fair Work Act 2009, and eight State and Territory statutes. The Fair Work Act doesn’t override these ‘mirror laws’, but does preclude anyone from getting a hearing if they have shopped their complaint around to multiple jurisdictions. No one can explain the efficacy of multiple touch points for anti-discrimination complaints where there is only one for unfair dismissals.

Not convinced? Then how about this? In the financial year 2014/2015 the Human Rights Commission received 988 complaints in the area of employment based discrimination and harassment from a total of 2388 complaints covering race, colour, sex, religion, political opinion, national extraction, social origin, age, medical record, criminal record, marital or relationship status, impairment, mental, intellectual or psychiatric disability, physical disability, nationality, sexual orientation, and trade union activity. The Fair Work Commission, which receives more than 14,000 unfair and unlawful dismissal complaints every year has more than enough capacity to absorb this small overlapping case load.

Forty-eight percent of complaints finalised by the Human Rights Commission were either terminated, declined, withdrawn or discontinued. That’s right, almost half of all complaints didn’t cut the mustard! Nevertheless, hapless employers were required to undergo the expense of responding to spurious, frivolous and vexatious complaints. If I was the cynical type, I might conclude the Human Rights Commission is entertaining the type of employment related complaints least likely to succeed. It looks like the court of last resort.

Another statistic worth weighting is the $15.9m yearly payroll of the Human Rights Commission. According to the latest annual report, the senior executive management including commissioners cost Australian tax payers approximately $3.5m each year. Add $2.9m in professional services purchased by the Commission and $1.5m in official travel and you can see this is nice work if you are lucky enough to get it. A $25m budget to conciliate 1148 complaints of which only 72% were resolved successfully. If I attracted such meagre business for such a large investment each year I would go broke.

Surely the world of employment regulation could benefit from a bit of disruption. One could just as easily make the case for disrupting many other statutory authorities exercising control over our personal and business decisions. Nevertheless, if there ever there was a body ripe for disruption, it is this one.