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Inquiry into Stolen Wages

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SUBMISSION TO THE SENATE LEGAL AND CONSTITUTIONAL
REFERENCES COMMITTEE INQUIRY INTO STOLEN WAGES

1 August 2006

Human Rights and Equal Opportunity Commission

Level 8, 133 Castlereagh St

GPO Box 5218

Sydney NSW 2001

Ph. (02) 9284 9600

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A. Introduction

  1. The
    Human Rights and Equal Opportunity Commission (‘the Commission’)
    makes this submission to the Inquiry into Stolen Wages (‘the
    Inquiry’) being conducted by the Senate Legal and Constitutional
    References Committee (‘the
    Committee’).
  1. The
    Commission welcomes the Committee’s Inquiry. Many issues involving the
    underpayment, withholding and misappropriation of wages earned by Aboriginal and
    Torres Strait Islander people remain unresolved. The failure to adequately
    compensate Indigenous people who were discriminated against in employment on the
    basis of their race remains a significant human rights issue in Australia and a
    matter of great concern to the
    Commission.

B. Scope
of this submission

  1. The
    Commission has been, and continues to be, involved in a number of cases
    involving claims of racial discrimination in Queensland under the Racial
    Discrimination Act 1975     (Cth)
    (‘the RDA’), relating to the underpayment of wages to Aboriginal and
    Torres Strait Islander people. As a result of its involvement in these matters,
    the Commission has chosen to focus this submission on these cases and related
    developments.
  1. This
    submission highlights the following significant issues that the Commission urges
    the Committee to take into account:
  • The
    importance of underpayment in any comprehensive examination of ‘stolen
    wages’;
  • The
    limited coverage of the Queensland government’s Underpayment of Award
    Wages scheme for Indigenous people whose wages were underpaid by the
    State;
  • The
    exclusion from the Queensland government’s Underpayment of Award Wages
    scheme of those Indigenous people who were employed by church organisations on
    mission communities that were funded by government;
    and
  • The
    difficulties faced by Indigenous people seeking a remedy under the RDA for
    underpayment of wages.
  1. The
    Commission is conscious of the important work done by other groups and
    individuals concerning allegations of the failure to pay money held by
    governments ostensibly on trust for Indigenous workers. The Commission also
    regards these allegations as raising serious human rights issues and welcomes
    the current Inquiry as a forum in which these issues can be further
    examined.
  1. The
    Commission supports the suggestion in the terms of reference that there is a
    need to ‘set the record straight’ through a national forum to
    publicly air the complexity and consequences of government control (direct and
    indirect) over Indigenous labour and finances.
  1. The
    focus of this submission on developments in Queensland should not be understood
    as suggesting that the issue of stolen wages is exclusively, or even primarily,
    one affecting Indigenous people in that State alone. This focus follows from the
    fact that the cases brought under the RDA upon which the Commission’s
    submission focuses have, to date, originated in
    Queensland.

C. Underpayment
and the terms of reference

  1. The
    terms of reference do not make specific reference to underpayment. However, the
    Commission submits that underpayment of wages by government to Indigenous
    workers clearly falls within paragraph (b) of the Inquiry’s terms of
    reference: ‘all financial arrangements regarding their wages’.
  1. While
    wages ‘stolen’ by means such as fraud and misappropriation form an
    important part of the present Inquiry, the Commission submits that the issue of
    underpayment should also form a significant component of it. As the information
    presented in this submission demonstrates, it is an issue that affects many
    Indigenous people.

D. Employment
on church-run missions and the terms of
reference

  1. The
    terms of reference commence ‘With regard to Indigenous workers whose paid
    labour was controlled by Government...’ (emphasis added). The Commission submits that the word
    ‘control’ should not be narrowly construed. It should include forms
    of indirect control and the Committee should consider the employment of
    Indigenous people by church organisations on ‘mission’ communities
    that were funded by government and were regulated by State legislation, as
    occurred in Queensland.
  1. As
    will be seen from this submission, Indigenous people employed by church
    organisations on missions, but not directly employed by the Queensland
    government, are a group otherwise facing significant difficulties in obtaining
    compensation for underpayment of their wages.
  1. In
    the alternative, the Commission urges the Inquiry to seek an extension of its
    terms of reference to explicitly include the position of all Indigenous people
    employed on church-run ‘mission’
    communities that
    were funded by government.

E. Underpayment
of wages in Queensland

  1. This
    section provides an overview of litigation and government responses to the issue
    of underpayment of wages to Indigenous workers in Queensland. This is a
    significant issue and many aspects of it remain
    unresolved.



(i) The
Palm Island Wages Case

  1. In
    1985 and 1986, a number of Aboriginal people from Queensland’s Palm Island
    lodged a complaint of racial discrimination with the
    Commission[1] alleging underpayment of wages by the State of Queensland. They claimed that they were discriminated against because of their Aboriginality in that they were

  • paid
    wages at a rate less than that paid to people who were not Aboriginal;
    and

  • employed
    on terms and conditions significantly less favourable than were provided to
    people who were not Aboriginal.

  1. The
    claims covered the period 31 October 1975 (the commencement date of the RDA) to
    31 May 1984 (when the administration of Palm Island was transferred from the
    government to an elected Aboriginal council under the Community
    Services (Aborigines) Act
    1984     (Qld)).
  1. A
    decision was handed down by the Commission in 1996, finding that six of the
    complainants had been discriminated against by the State: Bligh and
    Ors v State of
    Queensland    [2] (‘Palm
    Island WagesCase    ’).
    Commissioner Carter concluded that the complainants were ‘demonstrably the
    victims of racial discrimination’ by reason of the entrenched policy of
    the Queensland government during the relevant time to pay Aboriginal workers
    less than non-Aboriginal workers doing the same
    work.[3]
  1. While
    evidence received by the Commission suggested that the loss of income for
    individual complainants ranged from $8,573.66 to
    $20,982.97,[4] Commissioner Carter decided to award $7,000 to each of the successful
    complainants. [5] This was due to difficulties in precisely and accurately assessing their loss,
    including the lack of records and faulty recollection of
    details.[6]



(ii) Responses
to Palm Island Wages
Case



Underpayment
of award wages process

  1. In
    response to the decision in the Palm
    Island Wages Case    , the
    Queensland government introduced the Underpayment of Award Wages Process
    (‘UAW process’) on 31 May 1999. This process made a single payment
    of $7,000 available to Aboriginal and Torres Strait Islander people employed by
    the government on Aboriginal reserves between 31 October 1975 (the commencement
    date of the RDA) and 29 October 1986 (from which point Award wages were paid to
    all workers).
  1. It
    is understood that 5,729 claims were paid under the UAW process, totalling
    approximately $40
    million.[7]
  1. There
    were, however, a number of features to the UAW process which limited its
    capacity to compensate people for their
    loss:
  • The
    amount of $7,000 was a flat sum, paid regardless of the total amount by which a
    person was
    underpaid.[8]
  • The
    period of 1975-1986 covered by the process, while reflecting the dates during
    which the underpayment of wages was potentially discriminatory under the RDA,
    excluded earlier periods of employment during which people were
    underpaid.
  • People
    employed by church organisations on ‘mission’ communities (such as
    Hopevale, Wujal Wujal, Doomadgee, Arukun and Mornington Island) were not
    eligible     for compensation as
    they were not directly employed by the
    State.
  • People
    accepting payment under the UAW process were required to sign a deed to waive
    their rights to recover further
    compensation.
  • The
    closing date for applications was 31 January
    2003.
  • The
    UAW process only compensated those people alive as at 31 May 1999. The estates
    of workers who had died before that time were therefore not eligible for
    payment.
  1. The
    Commission is also concerned that people eligible for payment under the UAW
    process may not have been in a position to make an informed decision about
    whether to accept payment under it. People considering accepting this one-off
    capped payment were unlikely to have access to records that would have enabled
    them to properly determine the extent of any liability that the government may
    have had for underpayment. The problem of the unavailability of records and
    incomplete recollections was recognised in the Palm
    Island Wages
    Case    .



Indigenous
Wages and Savings Reparation Process

  1. The
    Queensland Government also introduced the Indigenous Wages and Savings
    Reparation Process in November 2002. This was not related to the issue of underpayment of wages. The process offered
    limited payments to people whose wages and savings were controlled under
    Queensland ‘Protection Acts’. People alive on 9 May 2002 who were
    born before 1952 were eligible for payment of $4,000 and people born between
    1952 and 1956 were eligible for
    $2,000.[9]
  1. Many
    of the concerns raised above in relation to the UAW process apply equally to the
    Indigenous Wages and Savings Reparation Process. In particular, the Commission
    is concerned about the limited availability of, and access to, information that
    would have enabled those eligible under this scheme to make an informed decision
    about whether to accept the payment offered. In circumstances where the offer
    under the scheme was available only for a limited time and was made on the basis
    that its acceptance would conclusively determine any rights to compensation, the
    lack of access to information raises a particular potential for
    unfairness.
  1. The
    previous Aboriginal and Torres Strait Islander Social Justice Commissioner, Dr
    William Jonas AM, also expressed concern at the time that the Indigenous Wages
    and Savings Reparation Process was announced that there had been inadequate
    consultation with people potentially affected. Dr Jonas
    stated:

Only
about 10% of people potentially affected took part in the consultation process;
it was presented as a once only 'take it or leave it' offer, placing
considerable stress on people often living in dire economic circumstances; there
was a lack of independent legal advice on the implications of accepting the
offer; and there was significant confusion as to the purpose of the
consultations...[10]

  1. Dr
    Jonas was also critical of the compensation offered under the scheme, suggesting
    that the amounts of $2,000 and $4,000 were arbitrarily chosen and
    inadequate.[11]



(iii)
Baird v State of Queensland

  1. As
    noted above, the Queensland UAW process did not extend to Indigenous people who
    were employed on church-run mission communities. The decision in Baird v
    State of
    Queensland    [12] (‘Baird’)
    illustrates the difficulties that may be
    faced by people seeking a remedy under the RDA in those circumstances.

The
applicants’ case

  1. The
    Indigenous applicants in Baird claimed that between 1975 and
    1986 they were employed on one or other of the Hope Vale and Wujal Wujal
    missions by the Queensland Government (‘the Government’). They
    alleged that during this period they were paid rates less than other
    non-Indigenous persons employed by the Government to perform similar work and/or
    below relevant levels established by applicable industrial awards.




  1. Wujal
    Wujal and Hopevale were ‘reserves’ for the purposes of the Aborigines
    Act 1971     (Qld). During the
    period covered by the application, the Government had placed the reserves under
    the management of the Lutheran Church of Australia (‘the Church’) in
    accordance with that
    Act.[13] These cases therefore differed from the Palm
    Island Wages Case     where the
    management of the community was directly in the hands of the Government.




  1. The
    Government provided funding to the Church for the running of the missions by way
    of annual grant. The level of such funding was found to reflect, to some extent,
    the cost to Government of managing reserves. Grants included amounts identified
    as being for wages payable to Indigenous residents and these amounts reflected a
    wage rate less than the relevant award rate. However, once the grants were made,
    it was essentially for the Church to decide how the grant money was to be
    spent.




  1. The
    applicants claimed that the underpayment of their wages constituted race
    discrimination for which the Government was ultimately responsible. The Church
    was not a respondent to the
    litigation.[14] The race discrimination was said to be contrary to two provisions of the
    RDA:

  • section
    9, the general prohibition against discrimination, and

  • section
    15, the specific prohibition on discrimination in
    employment.

The
Court’s decision

  1. The
    Court accepted that some of the applicants had proven economic loss of between
    $8,000 and $37,000 as a result of underpayment of their
    wages.[15] However, the underpayment was not the result of discrimination by the Government
    contrary to the
    RDA.

  1. The
    Court rejected the application in relation to s 15 (discrimination in
    employment) on the basis that the Government did not employ the applicants. The
    Court
    stated:

No
doubt the Government allowed and expected the Church to perform functions on the
missions, which functions the Government would, itself, have performed in the
absence of the Church. However, that does not lead to the conclusion that
persons apparently employed by the Church... were employed by the Government.
Nothing in [the relevant legislation] suggests that the Church or council was
authorised to employ staff on behalf of the
Government.[16]]

  1. The
    Court also rejected the applicants’ argument that the calculation and
    payment of grants by the Government involved discrimination contrary to s 9
    which provides a general prohibition against discriminatory acts. The applicants
    argued that use of pay rates in the calculation of grants which differed from
    rates paid to non-Aboriginal Government employees and/or specified in awards
    discriminated against them.


  2. The
    Court found
    that:
  • There
    could be no doubt that Indigenous people in Queensland were, for some or all of
    the period in question, significantly disadvantaged and one such disadvantage
    was that wage levels paid on reserves were lower than levels prescribed by
    awards and therefore paid in the general community;


  • It
    is probable that the system of reserves established and maintained under
    Queensland legislation was a cause of such disadvantage;


  • The
    Government’s apparent acceptance of the fact that the Church was not
    paying award wages on the missions also contributed; and


  • Such
    acceptance was the natural consequence of the fact that the Government was
    paying below-award wages to Indigenous workers on the reserves which it
    administered.[17]
  1. The
    Court nevertheless held that there was no discrimination in the payment of
    grants by the
    Government:

The
applicants have established that the grants were not sufficient, themselves, to
enable the Church to pay award wages, but there is no basis for asserting that
the calculation of the grants involved any discriminatory element. Any
discrimination arose from the discrepancy between the amounts paid to indigenous
workers (which amounts were derived from the grants) on the one hand, and
amounts paid to other workers (which amounts were unrelated to the grants) on
the other. That discrimination was the result of numerous factors, unrelated to
the acts upon which the applicants rely. For this reason
that discrimination
was not involved in those acts. In these proceedings the applicants complain of
discrimination against them as employees, not that they failed to receive a fair
share of public resources
generally.[18]]

  1. The
    Court nevertheless expressed the following concern at the end of its
    reasoning:

At
least after [29 May 1979] the Government was aware that indigenous workers on
reserves were entitled to award wages. It was also aware that the RDA might
require that indigenous workers be paid at equivalent rates to non-indigenous
workers. Notwithstanding my conclusion that the applicants cannot succeed in
this
action,
it is of grave concern that the Government should have chosen to ignore breaches
of both Queensland and Commonwealth legislation. This is particularly so when
it was at the expense of vulnerable citizens. However it
is fair to say that this attitude was the culmination of a long history of
neglect of indigenous people, based on a tacit assumption that they were
disadvantaged by choice. That assumption was false. In the 1970s and early
1980s our attitudes were changing, but such changes have only gradually been
reflected in our treatment of indigenous people. Thus the Government treated
its obligation to meet the basic entitlements and needs of these people as a
matter of relatively low priority, to some extent conditional upon further
funding from the Commonwealth.

It
is no doubt an inevitable part of inter-governmental dealings in a federation
that there be haggling concerning funding and responsibilities. However
governments should not lose sight of the fact that hard bargaining can
disadvantage those whom they are obliged to
protect.[19] (emphasis added)

Appeal

  1. The
    decision in Baird was appealed to the Full
    Court of the Federal Court. The appeal was heard in February 2006 and a decision
    is, at the time of writing, reserved. The Commission was granted leave to appear
    in that matter as an intervener and made written and oral submissions which
    argued that the Court at first instance had erred in its approach to a number of
    issues.[20]
  1. Although
    the outcome of the matter is still unknown, the matter nevertheless highlights
    the potential difficulties faced by people seeking a remedy for underpayment of
    wages through litigation under the RDA.



(iv) Other
current litigation

  1. Indigenous
    people from other former mission communities, namely Doomadgee, Mornington
    Island and Aurukun, are also engaged in litigation seeking a remedy for alleged
    racial discrimination in the underpayment of wages. The Commission’s
    Aboriginal and Torres Strait Islander Social Justice Commissioner and Acting
    Race Discrimination Commissioner has been granted leave to appear in three of
    those
    cases.[21]
  1. At
    the time of writing, the State of Queensland has sought to have one set of
    proceedings permanently stayed. The basis for the application is that the State
    is unable to defend the application due to the time that has passed since the
    events and the consequent unavailability of significant evidence including that
    of witnesses who are deceased or unable to recall matters due to age and/or
    ill-health.
  1. The
    Court has, at the time of writing, reserved its decision on the application for
    a permanent stay. However, the matter again highlights the difficulties faced by
    people seeking a remedy for alleged underpayment of wages through litigation
    under the RDA.



(v) Voluntary
work of community organisations and individuals

  1. The
    Commission recognises the significant work done by community organisations,
    lawyers and other individuals acting on a voluntary basis or with very limited
    resources, to assist people to assert their rights under the RDA and make
    decisions in relation to government compensation schemes,


  2. The
    scale of the task involved in providing this assistance, given
  • the
    potential numbers of Indigenous workers involved,
  • the
    difficulties in accessing relevant records,
  • the
    necessary forensic/accounting exercises that follow from any such access, and
  • the
    complexity of litigation

makes
this task a difficult one. The Commission therefore welcomes the intervention of
this Inquiry and the opportunity for detailed scrutiny it will bring to these
issues.

F. Conclusion

  1. The
    issue of underpayment of wages to Indigenous workers in Queensland employed by
    government and on government-funded missions is one that is yet to be resolved
    satisfactorily. The Commission urges the Committee to recognise in its report
    the importance of this issue with a view to achieving just outcomes for those
    who have suffered loss as a result of this
    discrimination.
  1. The
    Commission supports the suggestion in the terms of reference that there is a
    need to ‘set the record straight’ through a national forum to
    publicly air the complexity and consequences of government control (direct and
    indirect) over Indigenous labour and finances.
  1. The
    Commission has sought to focus these submissions on a particular issue of
    relevance to the Committee about which it has special knowledge. The Commission
    would, however, be pleased to provide the Inquiry with further assistance in
    relation to human rights issues that arise in the course of the Inquiry,
    particularly once more of the facts relating to the issue of ‘stolen
    wages’ become clear.





1
August
2006

Human
Rights and Equal Opportunity Commission

[1] At that time, the Human Rights Commission, the forerunner of the current Human
Rights and Equal Opportunity Commission.

[2] [1996] HREOCA
28.

[3] Ibid part 11.

[4] Ibid part
9.

[5] Ibid part
15.

[6] This calculation of damages has been strongly criticised: see Scott McDougall
‘“A Certain Commonality”: Discriminating Against the
Discriminated in the Compensation of Queensland’s Underpaid
Workers’, [2002] ILB 5, available at
http://www.austlii.edu.au/au/journals/ILB/2002/5.html.

[7] Communication with Department of Aboriginal and Torres Strait Islander Policy,
25 July 2006.

[8] Of course, one result of this is that the process potentially overpaid some people.

[9] See ‘Indigenous Wages and Savings (1890s-1980s) Reparation Process
Information Sheet:
http://www.datsip.qld.gov.au/pdf/reparations/final_infosheet.pdf.

[10] See Aboriginal and Torres Strait Islander Social Justice Commissioner, Media
Release 8 November 2002,
http://www.humanrights.gov.au/media_releases/2002/81_02.html.

[11] Ibid. See also Media Release 22 November 2002,
http://www.humanrights.gov.au/media_releases/2002/84_02.html.

[12] [2005] FCA 495.

[13] Ibid
[115]-[116].

[14] Initially the Church was named as a respondent but the applicant discontinued
the proceedings against it. It can be noted that it was not suggested in Baird that the Church had profited from the underpayment of wages – it had paid
out in wages amounts equivalent to the grants received. However, those grants
anticipated payment at under-award rates.

[15] Ibid [148]-[163].

[16] Ibid
[119].

[17] Ibid [135].

[18] Ibid [138].

[19] Ibid [167]-[168].

[20] The Commission’s submissions are available at:
http://www.humanrights.gov.au/legal/intervention/baird.html

[21] Douglas and Others v State of Queensland QUD389/2005; Chong and Others v State
of Queensland and Uniting Church in Australia Property Trust QUD301/2005; Giblet
and Others v State of Queensland and Uniting Church in Australia Property Trust
QUD2000/2005.