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Something needs to change - The impacts of pregnancy and return to work discrimination on the gender gap in retirement savings

Sex Discrimination

Women in Super Road Show


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Good morning everyone, and thank you to Women in Super for inviting me to speak on this ‘National Road Show’. I am so pleased to be here - to have an opportunity to bring into focus the critical issue of the gender gap in retirement incomes and savings and, particularly, the role that workplace discrimination plays in creating this gap.
One of the great joys of being the SDC is that I get to work with such a diverse range of people – many of whom are Aboriginal and Torres Strait Islanders.  I would like to acknowledge the traditional owners of the land we are meeting on today and pay my respects to their elders past and present.
I also wish to acknowledge Aboriginal and Torres Strait Islander people in the audience with us today. What we do know is that the superannuation gap is even more pronounced for Aboriginal and Torres Strait Islander women, reduced life expectancy being part of this issue.
I want to congratulate Women in Super – they are a small organisation that packs a big punch.  I acknowledge Sandra Buckley, Cate Wood etc. the Executive officer for Women In Super, for organising this National Road Show and for all the good work she has done in the area of women’s superannuation – particularly in the area of the low income superannuation contribution. 
As we know, across Australia, one of the core gender inequalities that exists is the gap in retirement income and savings between men and women.
Women face unique challenges in saving for retirement.  They are likely to live at least 3 years longer than the average man, they retire earlier so have less time to accumulate super, they earn less and they take regular breaks from paid work to undertake unpaid caring work. One in 3 marriages ends in divorce.  When couples split, women try to keep the family home and custody of the children.  Men often keep the financial assets like superannuation.  We know that divorced men have significantly more money at retirement than divorced women.
Average superannuation payouts for women in Australia being just over half (57 per cent) those of men.
To address the gender gap in retirement incomes and savings, and to facilitate women’s workforce participation, it is imperative that Australia does more to recognise and value unpaid caring work, particularly that undertaken by women.
In our report Investing in Care, I identified a number of options for reform that could make a significant difference in recognising and valuing unpaid caring work.  For example:
• the national Paid Parental leave scheme should have a superannuation layer;
• I have spoken about replacing the existing system of taxing superannuation with a new, more progressive system of tax offsets; and
• I have spoken about the possibility of introducing carer credits in the form of direct credits to the superannuation accounts of individuals with parental care responsibilities and carer responsibilities (either out of the workforce or working part-time) that would be paid annually at the end of the tax year by the government into the individual’s superannuation account through adult life. 
More recently, I have been examining another dimension contributing to women’s lower workforce participation and hence the gender gap in retirement savings, namely the impact of pregnancy and return to work discrimination on women’s engagement in the workforce and our attachment to the workplace.
This is the fourth critical inequality contributing to the gap in superannuation and retirement savings, and the area I would like to focus on today.
Over the last months and weeks there has been much focus on PPL and childcare - and that is as it should be.  But if our aim is to lift women’s workforce participation, to give women greater economic independence then there is one piece of the puzzle that up until now has been missing.  That is an examination of workplace environments.  Because you can have the best PPL scheme in the world and a childcare system that delivers but if pregnant women and new parents are not welcome in workplaces none of this will matter.  That is where our National Review comes in. 
Just over a week ago now, on the 25 July, I launched the Report of the National Review into discrimination in the workplace related to pregnancy, parental leave and return to work.
The Report followed a request by the federal Attorney-General in June 2013 to conduct a National Review to identify the prevalence, nature and consequences of discrimination related to pregnancy, parental leave and return to work after parental leave, and to identify some leading practices. 
I was keen to undertake this review for a number of reasons.  As Australia’s Sex Discrimination Commissioner and a parent of two children, I believe that caring is one of the most important roles any of us undertakes - it’s the ultimate expression of our humanity.
I also strongly believe that caring and work should not be offered up as opposite ends of one hard choice.
The issue of pregnancy, parental leave and return to work discrimination sits at the very heart of women’s workforce participation. 

This National Review was never just an academic exercise.
In 1996, the issue of managing pregnancy and return to work presented as a very real business issue for me.  At that time, I was a partner in a law firm, managing a talented team of eight lawyers, a team I had built up over several years. I had a day that started like any other.  That afternoon, two of my lawyers came to tell me the happy news about their pregnancy. When the third lawyer came to tell me about her pregnancy the very next day, I had to share my own news - I was pregnant too.  So, yes we had half our legal team, yes fifty per cent of our legal capacity, out on parental leave at exactly the same time!

The question for me was how would I meet the needs of the organisation whilst meeting my obligations to my team and making sure they all returned? It couldn’t be a choice between the business and my pregnant employees - both were vital to our continuing success.

They say ‘necessity is the mother of invention’ and not wanting to lose either, I took a business proposal, built on workplace flexibility and individual responsibility, to upper management.  As they were forward-thinking individuals, it was adopted. And so we set about redesigning our work practices, to include for instance, options to work remotely from home, job sharing and the implementation of effective flexible work arrangements.  With everyone on board, the team went on to even greater success. And of course we had four beautiful babies with us!

What I learned was that well designed flexible workplace practices can accommodate the caring roles of staff and deliver strong organisational outcomes at the same time. I also learned that supporting women during their child bearing years creates strong employee loyalty like nothing else.

My story had a happy and constructive outcome. And there are many stories like mine.  But I am the first to admit that this is not representative of all workplaces. And I will return to this point shortly.

The National Review is informed by a rigorous evidence base including a national prevalence survey and widespread consultation with employers and employees in every state and territory.

Firstly, I established a Reference Group with key representatives of business and industry, unions, community organisations and academics to help shape the methodology.  This group assisted us to consult as widely as possible - to understand both the experiences of individuals affected by discrimination and those of employers in managing these issues.

We conducted the first nationally representative survey of mother’s experiences of discrimination in the workplace related to pregnancy, parental leave and return to work.

We now stand with only a handful of other countries that have this depth of analysis. 

In addition, we conducted, what we believe is the first of its kind, a prevalence survey of the experiences of fathers and partners. This survey provides an important snapshot of what it’s like for these carers who take time out of the workforce to care for a child on their return to work.

Alarmingly, what these Surveys revealed is that discrimination not only exists, it is widespread.

I thought I’d spend just a few minutes talking about some of the most the surprising findings from the prevalence data - things I didn’t expect to find.

These findings were all the more startling given that there is a strong legal framework in place aimed at preventing discrimination based on pregnancy and return to work.

One in two (49%) mothers reported experiencing discrimination in the workplace at some point during pregnancy, parental leave or on return to work.   They were mothers from all walks of life.  No sector or industry was immune.

The survey reported that the discrimination took many forms - from negative and demeaning attitudes right through to job loss. 

What was most surprising and indeed distressing was that discriminatory attitudes and behaviours were not just perpetrated by men. Women too, many of them with children, were often guilty of these practices. Relating her experience, one woman told me,

My direct manager (female)…told me that I needed to ‘decide what I wanted - a family or a senior role in the company’. [She said] ‘You can't have both.’

Our research is clear, discrimination directly impacts on women’s workforce retention. Let me give you some facts and figures:
• Nearly a third of mothers (32%) who experienced discrimination at some point either looked for another job or resigned. 

• Mothers who experienced discrimination during pregnancy were less likely to return to their job or return to the workforce at all.  One in five (18%) mothers indicated that they were made redundant / restructured / dismissed, or that their contract was not renewed because of their pregnancy, when they requested or took parental leave, or when they returned to work. 

• 22% of women who were discriminated against did not return to the workforce compared to 14% who were not discriminated against.
The survey found that the large majority of mothers (91%) who experienced discrimination did not make a formal complaint.  They suffered in silence. Many feared victimisation and being labelled a troublemaker.

Turning to the fathers and partners survey, the survey showed that even those who take very short periods of parental leave (under 1 month and usually just 2 weeks) also face discrimination.

Over a quarter (27%) of fathers and partners reported experiencing similar discrimination to mothers, when requesting or taking parental leave or when they returned to work.  

The discriminatory attitudes and behaviours had a significant impact on their mental health, family, finances and career and job opportunities.

Like mothers, a substantial proportion of fathers and partners, 23%, who reported experiencing discrimination looked for another job a further 10% resigned.

Another unexpected finding from the Surveys was that the rates of pregnancy and return to work discrimination were higher in larger organisations.  It appears then, that large organisations can have the best policies in the world but if they are not widely publicised and properly implemented, discrimination will still occur.  It also seems that small businesses can be more agile and innovative in their pregnancy and return to work policies, possibly having deeper relationships with their employees as a result of size. Often small businesses operate as an extended family.

Before I speak about the issues identified by employers and some of their leading practices, let me turn to the stories of men and women affected by discrimination.  I met with mothers and fathers from all walks of life – from factory floors to the highest echelons of the business, law and medical worlds.

Too often I heard distressing stories of pregnant women and parents being bullied, demeaned and marginalised in their workplace often by other work colleagues or their manager. I listened to one woman’s experience - she told me that when heavily pregnant, her manager refused to provide her with a stool to sit on while working, or with extra toilet breaks. It was disturbing to hear that pregnant women still suffered physically and were left in embarrassing situations when they weren’t provided with such minor adjustments. These issues go to the heart of dignity and respect.

It was dispiriting to hear from talented people who had missed out on promotions and job opportunities because they were pregnant or had parenting responsibilities. And to hear from mothers and fathers who were pressured to accept a reduction in their salary or their position and to forget any prospect of career progression when negotiating to return to work flexibly. In the words of one woman:

While I was on maternity leave…[my boss] told me that there had been a business decision that I was no longer suitable for the role I was in previously (they had offered it full-time to my maternity leave [replacement]). [My boss] said, don’t worry I have managed to secure you a position in another department – but it was a $20,000 pay difference.

Unsurprisingly, the experiences of discrimination had considerable short and long term negative impacts. In the words of one woman and I quote:

I would describe my experiences during pregnancy, whilst on parental leave and on returning to work as harrowing, disappointing and probably the worst experience of my life. I spent much of my pregnancy feeling anxious (and sometimes in tears), despite being thrilled about the pregnancy and being physically well. I felt powerless, vulnerable and fearful about my job security and couldn’t understand why I was being treated so badly, especially given my unquestionable commitment to the organisation over the previous seven years. 

In some of the most distressing cases I heard, pregnant women under severe stress from discrimination in the workplace either suffered miscarriage or had difficulties continuing breastfeeding.

Instead of feeling excited and happy about having a baby, I heard of talented and successful women suffering from a lack of self-esteem and self-confidence, which for some, developed into severe anxiety disorders and depression.

Let me share with you what I heard:

I was told I was a bad mother and a bad employee for working while having a young family.  

And another:

I was embarrassed and ashamed…and my confidence as a result of the …. discrimination still suffers. I no longer work in the legal arena because of a lack of confidence and a feeling of shame. 

Income insecurity, job loss and redundancy also had the effect of placing families under financial pressure. I heard of pregnant women losing their entitlements to the government and employer paid parental leave schemes by being forced out of work when they announced their pregnancy, through for instance, what appeared on its face to be “sham restructures”. Other people told me that they were forced to sell their homes. I was told:

At the end of it all I was left with no job, on the brink of losing my home, dealing with a miscarriage. I lost all my friends at work, and was left just utterly broken. 

All of these voices and many hundreds more, scattered throughout the report, bring to the fore some of the lived experiences of pregnant women and those returning to work. These voices teach us that discrimination is a real and pervasive issue - that its impact can be devastating - and that discrimination in this area is a major barrier to the full and equal participation of parents, in particular, mothers, in Australia’s workforce.

But this issue is complex and has many faces.  The National Review heard much about the practical challenges faced by employers in managing pregnancy and return to work.

Employers identified issues such as lack of access to clear, easily accessible information and advice on pregnancy rights and obligations – which prevented them from fully understanding and discharging their obligations.  They talked about the limited availability and affordability of childcare as a determining factor for parents returning to work.

They raised practical concerns including:
• Balancing the competing demands of the business with the needs of a pregnant employee or employees returning to work requesting flexible arrangements
• Management skills gap
• Finding and training replacement employees while someone is on parental leave
• Keeping in touch with parents on parental leave, and operating without certainty about when that employee may return.
These challenges are summed up in the words of one employer:

The first thing is that you try to be very excited on behalf of the person who’s telling you [that they are pregnant]. Secretly what you’re [thinking] is how the hell am I going to replace this person for the next year? With the best intentions in the world not to discriminate in any way, how can you avoid being concerned: how am I going to run this company and meet my objectives in the next year or two?

And another employer stated:

You’re in a very tough environment, a very competitive environment, where you’re absolutely having a hell of a lot of pressure coming down on you globally on costs. So it’s a balancing act and I think it’s what creates difficulty.

Importantly, harmful stereotypes among managers and other staff can disadvantage pregnant employees and parents, such as that only women make good carers, as well as undermine effective implementation of policies and practices.

Having heard of the challenges, some of the rewarding moments of the National Review included meeting with employers who have developed and implemented innovative and successful strategies to overcome these hurdles, with ultimate benefits for both the organisation and the individual. And importantly, these strategies are embedded in the organisation, so they will be sustained once the founders of the organisation, the CEO or leaders move on.

It was these employers who really understood the case for change – that gender diversity creates better performing organisations – that retaining skilled employees requires organisations to support people across the life cycle.

This leads me to some of the leading practices and strategies we came across and which are highlighted in the report.

Each organisation will have a unique capacity to manage pregnancy, parental leave and return to work.  Many of the strategies outlined in the report are not costly – they just require a change in attitude – they require that everyone is treated with dignity.

At its simplest, smart organisations start with an open conversation with their pregnant employees and those returning from parental leave about needs, plans and expectations. I heard time and time again that open communication and reciprocity sits at the very core of successfully managing these issues in the workplace. The tight-knit work environments in small businesses can foster close relationships - strong communication and understanding between employer and employee. This simple strategy helped a small business to build trust and avoid uncertainty surrounding leave and absences during pregnancy, and on return to work.

Another organisation recognised that those on parental leave can sometimes be overlooked for promotions and development opportunities, and over-represented in layoffs. So they put in place a system that monitors any changes to the roles of employees on parental leave and ensure that any proposed changes must be approved by the head of Human Resources, or relevant senior leaders.

One organisation told us:

The biggest revolution for us is the return to work interviews which have given us insight into how the employee feels, how the manager is working and it helps us identify key issues. I read every interview and so does my managing director … It has allowed us to come up with new things and enable us to profile successful women returning to work and flexible arrangements.

Another organisation conducts risk assessments together with employees who have just announced their pregnancy to identify health and safety issues in the workplace. This proved to be an effective way to ensure that the pregnant employee is protected from unsafe physical work and environments.  

And another employer provides transitional coaching opportunities for parents on parental leave. This involves a one-on-one customised service for parents returning to work to identify their needs and circumstances; and discussions to help reignite careers on return to work. An information portal and tailored seminars are also offered to parents in this organisation while on parental leave.

A public sector organisation provides their full and part-time employees with up to two paid breaks for breastfeeding or expressing of up to 30 minutes each day. This policy promotes the wellbeing of mothers and their babies and at a symbolic level, demonstrates the value that the organisation places on its employees who are mothers. 

Finally, through our research, we learned about a retail chain that enabled employees to have increased schedule control, or self-rostering, in addition to other flexible work options. One particular store found that these strategies resulted in positive outcomes such as improved health of staff and reduced work-family conflict, reduced staff turnover rates (as much as 90%), and increased productivity within teams by an average of 41%. 

There are many more leading practices set out in the Report. It is important that they are shared.
So where to from here? The National Review makes a small number of high impact recommendations.
They address four critical areas:

Firstly, the gap in understanding rights and obligations in regards to pregnant workers and parental leavers. This requires the dissemination of clear, comprehensive and consistent information about employer obligations, employee rights and leading practices and strategies. Through the national Paid Parental Leave (PPL) scheme we can now reach the vast majority of pregnant working women and every employer that registers for the government scheme – so it provides a mechanism through which information can be automatically disseminated to working mothers, fathers and employers. Producing a pregnancy and return to work resource, and utilising the national PPL and other mechanisms to disseminate it will go a long way to help drive change and build productive workplaces.

Secondly, organisational cultures that give rise to harmful stereotypes, practices and behaviours about pregnant women and working parents must be changed.

Such change will require strong and visible leadership. It will also require overturning policies and practices that perpetuate harmful stereotypes and mythologies about the ideal worker. 

Thirdly, while the legal framework in Australia is extensive, some key reforms will strengthen protection against discrimination in the workplace and provide greater clarity for employers on their obligations.  Amongst these we recommend 1. a strengthening of the Sex Discrimination Act particularly to provide stronger protection for individuals with family responsibilities, 2. In the Work Health and Safety area the development of guidance material for employers on the requirements of pregnant women, IVF and miscarriage to be developed by Safe Work Australia; and 3. clarifying the provisions under the NES of the Fair Work Act to ensure employees can use personal leave for prenatal appointments, and that they are allowed breaks for breastfeeding.  

Finally, ongoing monitoring, evaluation and research is essential to shape effective action. We now have solid benchmark data which should be updated every 4 years to assess progress. 

In 2014, the fact that 1 in 2 women experience pregnancy or return to work discrimination is shocking.  As importantly, that 27% of the 1,000 fathers we surveyed had had a similar experience speaks to the pervasiveness of the challenge.

As I sat there listening to the stories, I resolved that I would never be that manager who tells her pregnant worker that she must choose between having a family and her career. Indeed, I would not want to work in an organisation that allows such attitudes and behaviours to persist.
Whilst my experience of pregnancy and work was indeed a positive one, it does not have to be unique.  Just as I have learnt, work and care do not have to sit at opposite ends of a hard choice.  We can do both.  And when we are supported in this choice, that’s when we all flourish – individuals and organisations alike.
Now is the time for bold and innovative thinking and for collective commitment to create workplaces where people can balance work and care, so that in the near future, no one will be excluded from the workforce because they are a woman or a parent. Such steps are critical to increasing women’s participation and engagement in paid work and bridging the gender gap in retirement incomes and savings.
Lifting women’s workforce participation will require a three pronged approach – a focus on parental leave, a focus on childcare and the development of workplaces that welcome and support pregnant women and parents.  This report provides a robust evidence base to help policy makers and workplaces understand what supports are necessary if we are to have non-discriminatory organisational environments.

It is up to all of us then – men and women in workplaces around Australia – to play our part in transitioning to a non-discriminatory future where gender equality lies at the heart.

Thank you.

Elizabeth Broderick, Sex Discrimination Commissioner