Retail Industry National Employee Relations Summit

Paid maternity leave - will it become a reality for the retail industry?

Speech presented by Commissioner Pru Goward Federal Sex Discrimination Commissioner at the Retail Industry National Employee Relations Summit, Sunshine Coast Queensland, 23 May 2002.

Ladies and gentlemen, when Valuing Parenthood: Options for paid maternity leave was launched, it was intended to begin an informed and fair-minded public debate about the need or otherwise for a national paid maternity leave scheme for Australia.
Apart from a most annoying diversion over whether or not employers should pay, which has never been recommended in either the paper or in any public comment I've ever made, more of that furphy a little later.
To be honest the most we hoped for was that the Government might agree to pay for some economic modelling on a couple of options.
Well weren't we under-achievers!
None of us anticipated the strength and depth of the public support for the issue. But perhaps we should have.
Perhaps we should have known that if work wasn't working for women, then it wouldn't be working for anyone else much either- their parents, partners, their children and babies.
Perhaps we should have believed that the anxieties we hold for the struggle women still face in Australia were anxieties shared by others, a lot of others.
Perhaps we should have realised that if we think we can no longer put off facing up to some of the profound social challenges emerging in Australia, then the rest of the country might be thinking the same way.
And they are.
Challenge Number One is a profound challenge to the future of human existence- the challenge of who will have our children.
Every year, slightly fewer women of child-bearing age in Australia, as elsewhere, decide to have children.
Every year they get older when they have their first child, every year maternity becomes medically more difficult.
A variety of economic, biological and social changes have contributed to this trend.
First- education and training periods are longer, meaning earning capacity begins later in life for most young men and women.
Then, the nature of work has changed. Few young people enter the workforce with permanent full time jobs the Bank is going to lend money for a home on. Contract and project work is very common, with the consequence that not only do home mortgage lenders feel understandably uncertain about the young couple's prospects, but so does the young couple! They too, are unwilling to commit to family responsibilities when the job is over in a few months time!
Next, the long run economic viability of families today means that paid work today is compulsory for most parents, whether they are mothers or fathers. Sure, one parent might only need to work part time, but work they both do.
It's not about saving up for the overseas family holiday, if indeed it ever was.
Today the majority of women will have to work part or full time for at least part of their parenting years.
Why? Because the real cost of living is high. In particular, housing affordability, Australia-wide, has declined by 29% with in the space of a generation. You need two incomes to carry the mortgage on the slum of your dreams, forget the 4 bedroom mansion with the spa bath and optional pool room!
Finally those hard one qualifications and work experience soon get out of date.
As employers, you know the first question you ask recruits is "when was your last job?"
Qualifications and jobs of five or seven years ago do not count any longer.
Workforce qualifications and experience toady very rapidly reach their used-by date.
Into this heady pressure pack, you can now add the fact that women still bear children and somehow have to cope with all this while juggling a major responsibility that hasn't changed for thousands of years and isn't likely to!
God might have given us university degrees but he forgot to change our child bearing years!
Young women find out, very quickly, that there is considerable workplace disadvantage to be had as a result of their motherhood.
As Sex Discrimination Commissioner, the workplace discrimination that women face as a result of their pregnancy or potential pregnancy is my point of entry on this issue.
Women receive less pay, less opportunity, less financial support in the workplace because they bear children. They still only earn 84 cents in the male dollar, when comparing average weekly ordinary full time earnings.
This disparity most obviously occurs when earnings of men and women over 30 are compared.
Before this the earnings of men and women are about the same.
It is no coincide that 30 is the age when women are most likely to be combining work and family. It occurs because they won't take the promotion, they won't do the extra hours, they won't act in a senior position at the interstate office for three months, because they need to get home to their kids.
Once you add in casual and part time workers, the majority of whom are women, and almost entirely because they want and need to be full time mothers, and the disparity is even greater. The earnings ratio drops to 66 cents in the dollar.
It still comes as something of a shock for many independent and confident young women when they discover a whole new world of discrimination or barriers to work when they enter parenthood.
During pregnancy, there are still many employers who consider that women's brains turn to mush, that they do not work as productively, while pregnant- they often demote or dismiss them, deny them training or otherwise allow their careers to stagnate.
That is the story of complaints received by the Human Rights and Equal Opportunity Commission.
This treatment does not end after the birth.
For women who want and choose to breast-feed, many work places cannot or will not provide suitable conditions for this (even for the expressing of milk).
Women often experience a lack of sufficient financial support during maternity, no guarantee that a job is there when they return from maternity leave, difficulty accessing affordable childcare, difficulty finding hours that suit their families, or poor access to flexible work conditions which would allow them to occasionally take time off for family reasons.
In addition to the implications of this for earnings ratios, women are also the ones who end up taking large amounts of unpaid leave, or just time out of the workforce, further contributing to the direct economic cost they bear for having our children. And if you feel all this works out in the end, if you think that families share their income, let me remind you of the high rate of divorce over the long term and the official figures that demonstrate the higher reliance of older women on social welfare compared with the reliance of older men.
But I digress. What is the consequence of all these new social and economic forces for family formation? - Fundamental.
Young people are understandably reluctant to partner until they are sure of their economic futures.
Young women in particular are increasingly reluctant to forego the investment they have made by withdrawing from the workforce in order to have children. Their parents, who have often sacrificed a great deal to get their daughters through endless TAFE courses or a university degree, understand how they feel!
The average age of mothers of first children is now 29.8 years.
People wishing to have children today are forced to 'family cram'.
The biological clocks start to tick and there is a scramble for the pram.
This is assuming there can be - women who haven't borne a child by the age of 35 are most unlikely to do so after that age. The ability to conceive and complications of pregnancy and birth all start to compound as women enter their thirties.
At the same time there is still a mortgage to be paid, a cost of living to be met and a career to be established. Women have to keep working.
This is a social paradigm shift that can't be reversed - and the sensible thing is to work with it, not against it.
This is where a national scheme of paid maternity leave comes in.
In writing this options paper I have consulted widely with employer groups, employee groups, unions, Government and academics.
The message from most is clear - the time has come to introduce a national scheme of paid maternity leave in Australia.
Another clear message from those with whom I have consulted is that any national scheme of paid maternity leave should not be funded by individual employers.
Inevitably, whether we introduce a national scheme of paid maternity leave is not up to myself or the groups with whom I have consulted, but up to Australia as a nation.
In making this decision there are only two questions we need answer.
One, what can a paid maternity leave scheme do for us? And two, to what extent do existing schemes already cover it?
A decision is then simple.
If we believe that a national scheme of paid maternity leave can meet worthwhile aims not currently being met by the existing government benefits on offer - we introduce paid maternity leave.
What are the possible aims of a national paid maternity leave scheme?
There are three I would like to highlight today:
First, while the birth of a child is often a special time for families for women it is also a time characterised by colic, croup, cracked nipples, six feeds a day and sheer physical exhaustion. Post natal depression is common, as is the need for a physical recovery from caesarean section births.
The 'family cram' means that dragging yourself out of bed after your head has just hit the pillow-following feed number five- to go to work is 'that's life' for many women with newborn babies.
Paid maternity leave will allow women the time needed directly after the birth of a child to recover physically from childbirth and establish a feeding routine without being forced to return to work due to financial necessity.
Secondly, a period of paid maternity leave can also play a role in addressing Australia's disturbing trend towards a fertility strike - we are literally becoming a society without a future generation.
The current fertility rate is 1.75. This figure sits well below the replacement rate of 2.1. Since 1961, when it hit a high of 3.6 children per woman, it has slid continuously- a decade ago this rate was 1.9.
We need a next generation to financially support Australia's increasingly aging population.
More importantly, we need a future generation to ensure that we continue to be a functioning society - we need a next generation of consumers, innovators, creators and workers.
At the moment this is far from guaranteed.
Let me show you what I mean.
Overhead 1: The current age structure (or spread of ages in Australia). Based on the total fertility rate in 2000, 1.75, and migration of 80,000 persons per annum.
As you can see we have a nice beehive shaped structure, with a slight bulging in the 34-44 age groups. But still, more tax payers and worker bees than dependents.
Now let's look at age structure projections for Australia in 2050.
Overhead 2: Standard projection for the year 2050. Assumes that the total fertility rate falls to 1.65 in 2005 however remains stable at this rate.
Assumes also that the number of migrants remains constant.
What do we get?
Perhaps a few more queen bees and a few less worker bees as we see the bulge rise slightly, to the 44-64 years age groups, however our beehive structure still remains. There are still more workers than dependents.

Overhead 3: This projection assumes our fertility rate continues to decline.
It falls to 1.65 in 2005 and then to 1.3 in 2015 where it remains constant. Again, immigration remains constant.
The result?
A grim projection.
The bulge moves to the 50-70 year old age groups.
Our beehive structure is replaced by a coffin. Dependents out-numbering supporters.
Why am I showing you this? Because this is the macro picture, that is the result.
And often, as in this case, the macro picture is the sum of many micros.

And here the micro issue is about women and choice - at the moment women not having choice - not having the choice to be both mothers and workers.

Not having certain rights, entitlements and support. And the impact this lack of choice has on society as a whole.

I am not suggesting that paid maternity leave alone can rectify this trend and ensure the existence of a next generation. It must be part of a suite of measures that supports families and work.
What a period of paid maternity leave can do however is respond to some of the financial concerns discouraging women from having babies at all, or having only one, or delaying having babies.

Paid maternity leave means that following the birth of a child there will not be a total loss of income by one, or sometimes the only income earner in a family. It means new mothers can choose to stay home from work!
As 'saving for a baby' gets added onto the family crammers' list of things to do, the provision of payment through a paid maternity leave scheme may mean that families are more able to have children at a time when they want to, rather than having to delay the decision for money reasons.
France and Sweden have been much more ambitious. France has introduced paid maternity leave as a deliberate attempt to tackle their birth rate drop- France for example, got down to 1.7 in the year 2000. But they recognised that substantial periods of paid maternity leave must be offered. In France it's 16-26 weeks paid maternity leave and in Sweden it is well over a year - and social insurance pays.
In most countries the introduction of paid maternity leave is too recent to test its effect on fertility rates, however since introducing paid maternity leave for a third child, the streets of Singapore are said to be full of strollers.
A third objective of a national scheme of paid maternity leave is benefits for the Australian labour market and the fostering of Australia's economic growth.
In 2000 women made up 46 per cent of all Australians with post school qualifications.
Women are spending years studying and training to enter the workforce - Women are attending university, entering TAFE and doing other a variety of other training courses.
They are qualifying as lawyers, accountants, chefs, beauticians and aroma therapists. That's an enormous public and private investment.
At the same time, the majority of women are having children between the ages 30-34.
It is when women have committed at least 10 years to their field, in study and/or experience, and are often on their way to becoming leaders in their fields, that they leave the workforce.
If they leave for five to seven years, those hard won qualifications and years of experience are out of date.
Australia therefore fails to maintain its most skilled labour force, crucial in the increasingly competitive global market.
None of you here today need to be told that high pressure and low margins make retailing increasingly difficult in this market.
· Most retailers struggle to differentiate themselves on their product. It is their staff that value-add.
And who are retail staff?
Women.
You don't need me to tell you that 60-70 percent of retail sector employees are female. Most are aged between 20-40 years.
Large numbers of retail sector employees are women retuning to work part-time or casual after having children.
These casuals make up 30 per cent of the retail sector. They work approximately 15 per cent of all retail hours. Together with part-timers they make up a large number of retail sector employees - And the majority are women.
Overall, the retail sector is starting on the right path to valuing their most precious commodity - your people. But there is a long way to go.
Your workforce has particular challenges - high turnover and shift work means your workforce is not always stable enough so that problems like harassment can easily be picked up.
When it comes to turnover, the retail sector has a rate of 60-100 percent per annum. Most of this is explained by the extra staff put on over Christmas or school holiday periods; and employment in the retail industry being seen as 'job experience' rather than a career.
This turnover rate indicates however that most employees leave the retail sector within a year.
This is a huge cost for retailers and one that is regularly incurred.
A major retailer found that it costs a minimum of $3800 to recruit a new full time employee. [1] This does not include calculations for training or loss of experience.
The provision of paid maternity leave, if the experience of other employers is any guide, could reduce this cost as women using this leave are most likely to return to work.
Despite professing otherwise, hiring and training someone to fill the position of a woman on maternity leave will actually benefit retailers who operate in competitive markets and incur high levels of turnover and associated costs.
Paid maternity leave may see their pool of committed and skilled workers grow as they retain women who return after having children and benefit from newly trained employees. This gives retailers greater flexibility in increasingly competitive marketplaces.
Perhaps greater staff valuation, through offering entitlements such as paid maternity leave would actually reduce staff turnover in this sector, dominated by young female employees.
Business case arguments suggest that it would. Paid maternity leave can reduce attrition rates and encourage women to return to the workforce and their employer - AMP reported an increase in retention rates from 52% in 1992 to 90% in 1997, following the introduction of paid parental leave. [2]
At the employer-of-choice level, this has been achieved through employer-provided pay. A national government funded scheme would not have this retention effect for individual firms.
These are just some of the aims that paid maternity leave can meet.
Are these aims important?
They certainly address issues relevant to the retail sector.
Are they of national significance?
I think they are and that anyone would find it hard to disagree.
Next it is worth looking at whether existing government benefits are meeting the aims I just outlined.
The government provides a range of income support payments to families to assist with the cost of raising children.
Last financial year, the Federal government committed over 10 billion dollars to direct family assistance, including the maternity allowance, family tax benefits A and B and a maternity immunisation allowance.
Add the amount spent on child care and parenting payments and this amount increases to 16 billion.
None of these existing benefits respond directly to the main aim of a paid maternity leave scheme - the need to financially support women in employment at the time of childbirth and immediately thereafter. To help them stay home.
The Government's new First Child Tax Rebate, costing half a billion dollars a year, will also not assist that rising number of women who presently need to go back to work within the first year.
The lack of direct financial support by the Government for women who are in employment and have children, suggests to me that the rapidity with which the generation jam has descended upon us has not been picked up in Canberra. That is easy to change.
Facts help.
For 100 years Australian taxpayers have supported families.
Now that the family has changed, the sort of support we give them has got to change.
Public debate on paid maternity leave has recognised this. It has focused on who should bear the cost for paid maternity leave.
This is good news.
Our debate is merely about what type of national scheme of paid maternity leave we wish to introduce.
In this 'who pays' debate two issues have repeatedly emerged.
I would like to address both of these briefly.

First, there has been much concern expressed that employers alone will be forced to pay for maternity leave.

This is of particular concern to small business - in the retail industry alone although 50 per cent of retail employees are employed by the top 50 companies there are still many small businesses unable to afford to pay for maternity leave.
· As stated in the options paper, mandatory payment of maternity leave by employers to employees is not a desirable option.
Why ever the employer pays option become so central to our debate is surprising for a number of reasons.
First, the discussion paper clearly identified the problems of such a scheme.
Second, it is the third world scheme.
No where in the developed world is paid maternity leave funded through mandatory employer payments alone.
Third, International Conventions such as the ILO discourage it.
Next, the Federal Government and the Democrats have not shown support for an employer funded scheme, while the Opposition talks of a partnership approach.
Finally, employers and employer group spokespersons keep telling us that women would suffer under this scheme.
Employers, especially small business, would stop employing women of child bearing age to avoid this cost.
Any scheme which would result in women being further discriminated against in the workforce is obviously unacceptable and must be avoided.
There are more appropriate options for a national scheme of paid maternity leave as set out in the interim paper.
These are largely based on schemes that have been successfully implemented in other countries.

They are worthy of meaningful consideration and include:
- Government funded universal payment: A payment through the welfare system to women who give birth; a separate payment for unemployed women would be provided.
- Government funded employment based mode: Flat payment to women, made via either the tax or welfare system. Alternatively paid by employers who are reimbursed by the government.
- Social insurance/superannuation style scheme: Government, employers and employees contribute to a fund from which maternity leave would be paid.
- Employer levy: Employers pay a levy based on total salaries to avoid men being hired over women. Small businesses may be exempt.
We have decided we support the introduction of paid maternity leave. We have identified a number of options for funding it at a national level, now what?
The next step is submissions from the public and consultations with employee and employer groups, business organisations, unions and experts in the field on the feasibility of these options.
Submissions outlining other options for funding paid maternity leave are welcome.
These submissions will form the backbone of the final report on the options for paid maternity leave due out towards the end of this year.
The second issue that has been repeatedly raised in Australia's debate on paid maternity leave concerns the choice to parent.
The argument has been made that as parenting is an individual choice why should society contribute to the payment of maternity leave? In particular women without children and men.
From the outset, this notion of choice needs to be challenged.
Governments support many personal choices - such as living in a country town or playing elite sport. They support these choices when there are also benefits for all of us in doing so.
And the choice to have children is a peculiar one; it is far from universal: the fact is if women do not have children, no one will - biology bestowed women with this child bearing role and science has not yet been able to delegate it to men.
And I don't see any queues forming demanding it.
What women can choose however is if they have children, when they have them and the number of children they have.
The trend towards fewer children, later in life, if at all tells us women are choosing.
Now the rest of us have to make a choice.
We either - support women in their dual role as members of the workforce and as bearers of children - or we don't - we tell them to go home - or we support all groups of women, whatever combination of work and family they choose.
If we want them to go home it makes more sense to stop them from being in the workforce altogether… at least once they are married. We could re-enact the marriage bar.

No, marriage is too late. Let's take women out of university... such a waste for a five year job…and school, and then I suppose, it's hardly possible to justify reading and writing…
We'll tell young girls today, there's a nice spot for you in the home.

Barefoot, pregnant and in the kitchen.
Or we take the other road. With work with, not against, the wishes of our young women. We support women and men so that they can manage a combination of work and family responsibilities. Paid maternity leave is part of doing that. Just ask the rest of the world.

1. Human Rights and Equal Opportunity Commission consultation with Phil Naylor, CEO Australian Retailers Association 19 September 2001; Australian Retailers Association, Department of Employment and Workplace Relations and Equal Opportunity for Women in the Workplace Agency Balancing the Till: Increasing profits and building a better workforce Commonwealth of Australia Canberra 2002, 11.

2. George Trumbell "Creating a culture that's good for business" in E.M. Davis and V. Pratt (eds) Making the Link: Affirmative Action and Industrial Relations No. 8 Labour-Management Studies Found Sydney 1997, 31 -33 at 32.

Last updated 14 June 2002.

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Paid maternity leave - will it become a reality for the retail industry?

Speech presented by Commissioner Pru Goward Federal Sex Discrimination Commissioner at the Retail Industry National Employee Relations Summit, Sunshine Coast Queensland, 23 May 2002.

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