The ABS reported on October 15, 2020, that the youth unemployment rate increased by 0.4 points to 14.5% in the month of September 2020 and by 2.7 points over the year to September 2020 (in seasonally adjusted terms). This is compared to the overall unemployment rate which currently sits at 6.9% across all age groups.
In simple terms, these figures tell us that young people are finding it harder than others to get work during the pandemic.
It’s for this reason that the federal government has decided to incentivise businesses to employ young people through the JobMaker hiring credit scheme, which will see employers receive a wage subsidy for hiring new employees between the ages of 16 and 35.
The explanatory memorandum to the Economic Recovery Package (JobMaker Hiring Credit) Amendment Bill 2020 provides that the scheme will “support businesses to hire additional employees and expand their organisation to ensure young people can access new employment opportunities as the economy recovers from the Coronavirus”.
The government estimated the scheme would cost taxpayers $4 billion and support 450,000 positions, although Treasury indicated last week it expects only 10%, or 45,000, of these jobs will be “genuinely additional”.
It’s hard to argue with the purpose of the scheme. Young people have been hit hard by the pandemic and a wage subsidy should, at least in theory, help curtail the rise in youth unemployment.
However, the scheme has drawn criticism from some for potentially encouraging a form of age discrimination, after job advertisements began to surface which made eligibility for the scheme a requirement for applicants. As a result, the lawfulness of the scheme itself is also being called into question.
So, is it lawful to exclude applicants on the basis of age or JobMaker eligibility?
And if so, is it a good idea?
Let’s take a look at the current legislative landscape facing both job applicants and employers who may be looking to take advantage of the scheme.
At a federal level, section 351 of the Fair Work Act 2009 (Cth) prohibits an employer from discriminating against a prospective employee (in other words, a job candidate) on the basis of age. For this reason alone, any advertisement that seeks to exclude applicants on the basis of age should generally be avoided.
However, this section is subject to a series of exemptions under anti-discrimination laws at both the state and federal level.
For example, in Victoria there are “special measure” provisions in the Equal Opportunity Act 2010 (Vic) which provide that a person does not discriminate against another person by taking a special measure for the purpose of promoting or realising substantive equality for members of a group with a particular attribute (e.g. age).
A special measure must, among other things, be justified because the members of the group have a particular need for advancement or assistance.
The act provides the following example of a special measure: “A company operates in an industry in which Aboriginal and Torres Strait Islanders are under-represented. The company develops a training program to increase employment opportunities in the company for Aboriginal and Torres Strait Islanders.”
Some employers will likely argue that an advertisement referring to the JobMaker program is a special measure, insofar as it is seeking to promote the employment of young people who need particular assistance given the disproportionate impact of COVID-19.
A similar provision exists in section 33 of the Age Discrimination Act 2004 (Cth) which allows for “positive discrimination” where an employer is seeking to provide a bona fide benefit to persons of a particular age or is seeking to reduce a disadvantage experienced by people of a particular age.
The act provides the following example of positive discrimination: “Older people are often more disadvantaged by retrenchment than are other people. This paragraph would therefore cover the provision of additional notice entitlements for older workers, because such entitlements are intended to reduce a disadvantage experienced by older people.”
Again, some employers will likely argue that an advertisement referring to the JobMaker program is a form of positive discrimination as it involves the provision of a bona fide benefit that reduces the disadvantage experienced by young people as a result of the pandemic.
However, a real question arises here regarding intent.
When a business places an advertisement seeking JobMaker-eligible applicants only, is it doing so in good faith for the purpose of promoting substantive equality for young people? Or is it doing so simply to obtain a wage credit and excluding older applicants in the process? Chances are it’s the latter.
If so, the employer may be acting outside the purpose and scope of the exemption, thereby rendering the conduct unlawful. Another reason why advertising age or JobMaker eligibility as a pre-condition to employment is a bad idea for employers.
Given these difficulties, some employers might seek to avoid reliance on the exemptions altogether, by distinguishing between age and eligibility. That is, by arguing that the candidate was not excluded from consideration based on age, they were excluded from consideration based on their eligibility for a government scheme.
Given that one is so inextricably linked to the other in this instance, it seems almost impossible to divorce the two in this way.
Interestingly, section 41A of the Age Discrimination Act 2004 (Cth) provides specifically for “exempted employment programs” which are programs, schemes or arrangements conducted by or on behalf of the Commonwealth government that are intended to improve the prospects of participants getting employment or increase workforce participation.
This section provides that discrimination is not unlawful if it is engaged in as part of an exempted employment program.
The Age Discrimination Act 2004 (Cth) provides the following example of an exempted employment program: “A Commonwealth program that provides young people with an opportunity to get work experience with a view to improving their prospects of getting employment would be covered by this subsection.”
Accordingly, if the JobMaker hiring credit scheme is construed as an exempted employment program, it may provide a wide exemption that employers could rely upon, assuming that they act “in accordance with” the scheme.
This would mean that employers could essentially “piggy-back” off the purposive intent of the federal government when hiring employees as part of the JobMaker scheme. It may not however extend to the blatant exclusion of older candidates.
Finally, both the Equal Opportunity Act 2010 (Vic) and the Age Discrimination Act 2004 (Cth) also contain provisions which allow other acts to declare that certain conduct is not discriminatory.
This would allow parliament to pass legislation providing that certain recruitment practices related to the JobMaker program are not unlawful.
While a scheme that incentivises the employment of workers of a particular age may seem inherently discriminatory, both state and federal legislation contain provisions allowing certain discriminatory practices that are adopted for the bona fide purpose of achieving equality.
Exemptions also exist to facilitate government programs such as the JobMaker scheme that are targeted at particular age brackets.
This does not mean that it is lawful for employers to place advertisements that exclude applicants on the basis of age by citing JobMaker eligibility as an essential requirement.
In any event, legalities aside, any recruitment practice that excludes a significant portion of the market is a poor one as it narrows the pool of talent from which you can choose.
As with any government scheme targeted at a particular group, some people are going to miss out and are going to be unhappy. However, we shouldn’t allow this, or the practices of some potentially unscrupulous employers, deter us from implementing policy that aims to assist disadvantaged sectors of the workforce.
At the same time, employers should not exclude good candidates from applying for roles simply because they cannot deliver a wage subsidy to the business.
If legislated correctly, the JobMaker hiring credit scheme will provide opportunities for both businesses and young people to recover as quickly as possible from the economic and social impact of the pandemic and should therefore be welcomed.
Disclaimer: This article should not be construed as legal advice and is not intended as such. If readers wish to obtain advice about anything contained in this article, they should speak with a lawyer and discuss their individual circumstances.