Introduction

1. In the lead-up to the 2007 Federal Election campaign, the Australian Labor Party (Labor) outlined its Forward with Fairness workplace relations policy. The policy sought to balance two core principles: providing flexibility for business; and ensuring fair laws exist which protect workers. Labor’s policy included provision of resources to small business organisations to undertake an education and information campaign for their members about the new workplace relations system.¹

2. Following its election in late 2007, the Labor Government set about implementing the Forward with Fairness policy. The current national workplace relations system subsequently began to take effect for employees and employers with the commencement of the Fair Work Act 2009 (the Act) on 1 July 2009.² The key elements of the new system were:

• a safety net for employees, including National Employment Standards (NES), and modern awards for industries and occupations³;
• a collective bargaining framework for enterprise agreements;
• unfair dismissal protections for employees; and
• a changed institutional framework for the administration of the workplace relations system.

The Fair Work Education and Information Program

 3. To support the transition to the Act, in March 2009 the then Prime Minister approved the $12.9 million Fair Work Education and Information Program (FWEIP). FWEIP was a relatively small, one-off national program which provided grants to employer, employee, small business and community organisations to deliver education and information on the Act. FWEIP education and information activities took place between July 2009 and April 2010.

4. FWEIP’s objectives were to allocate grants to organisations to enable them to provide:

• education and information services to assist employees, employers and small business in understanding the new workplace relations laws and their practical applications, with specific focus on:
  • collective bargaining; and
  • the new unfair dismissal laws, including the Small Business Fair Dismissal Code.
• … employees and employers with timely advice and assistance on the new workplace relations system, in particular to ensure groups such as Indigenous Australians, those from non English speaking backgrounds and people with disabilities receive targeted advice and assistance.⁴

Program administration

5. As part of the changed institutional framework for the administration of the workplace relations system, the Act established the Office of the Fair Work Ombudsman (FWO). Among its functions, FWO offers people a single point of contact for accurate and timely information about Australia’s current workplace relations system, and educates people working in Australia about fair work practices, rights and obligations. FWO had not commenced operations at the time FWEIP was approved by the then Prime Minister and the Act received Royal Assent (April 2009). As a consequence, it was determined that FWEIP would be administered by the Department of Education, Employment and Workplace Relations (DEEWR) in the first instance, before being transferred to FWO to form part of its broad service delivery program. As events unfolded, DEEWR administered the program through to its conclusion.

6. At the outset of the program, DEEWR developed a project plan that set out the proposed timing of implementation activities for FWEIP. These covered: the grant selection process, including the invitation of organisations to apply for a grant; establishment of funding agreements; and development of education and information content. Program planning sought delivery of the education and information activities in a relatively short timeframe, to coincide with the commencement of the Act.

7. DEEWR administered a targeted or restricted grant selection process for FWEIP. In consultation with the Department of Innovation, Industry, Science and Research (DIISR) and the then Minister’s office, DEEWR identified and invited 25 organisations⁵ to apply for a grant. These organisations were invited to apply following DEEWR’s consideration of their role as peak bodies, experience in delivering similar training and audience reach. Subsequently, 14 other organisations that were not initially invited requested to apply for a grant following a media release on the program. DEEWR considered that seven of these organisations were also peak bodies with relevant experience and audience reach, and they were invited to apply. In total, DEEWR received 34 applications which were assessed against criteria published in the Fair Work Education and Information Program Guidelines for Applicants (Guidelines for Applicants).

8. DEEWR approved 19 grants with funding per grant recipient (service provider) ranging from $70 000 to $2.5 million. The amount of each grant was determined on a case-by-case basis with regard to total available funding, delivery of a suitable program of education and information activities, and each applicant’s estimated costs.

9. Following the selection of service providers, DEEWR entered into funding agreements with each of them on behalf of the Commonwealth. The funding agreements specified the education and information activities to be delivered by providers, and other funding terms and conditions. The funding agreements included a progress report and milestone payment framework.

10. Using education and information content developed by DEEWR, the providers designed and delivered a range of activities, including seminars and workshops, web-based information and webinars⁶, printed materials and targeted consultations. DEEWR required all of these activities to be delivered free of charge; and to members of provider organisations and any non members who wished to attend.

Audit objective, criteria and scope

11. The audit objective was to assess the effectiveness of DEEWR’s administration of FWEIP. The three high level criteria that were used to make this assessment were the appropriateness of DEEWR’s:

• program planning and design;
• selection and engagement of providers; and
• program monitoring, reporting and evaluation.⁷

12. The audit also assessed program performance using information collected and reported by providers.

Overall conclusion

13. The Fair Work Act 2009 (the Act) established Australia’s current national workplace relations system. The Act brought about wide reaching changes in workplace relations, including new minimum employment terms and conditions, a collective bargaining framework for enterprise agreements, unfair dismissal protections for employees, and a changed institutional framework for administration of the workplace relations system. Given the scope and impact of these changes, the Government approved a national program, administered by DEEWR, to deliver initial education and information on the new workplace relations system to employees, employers and small business.

14. The Fair Work Education and Information Program (FWEIP) was developed in 2009, and in the 10 months following the commencement of the Act, 19 FWEIP grant recipients (service providers) delivered some 3550 education and information activities across Australia. Reported activities exceeded the number providers were funded to deliver by 9 per cent. In excess of 56 000 people participated in face to face or web-based activities⁸, and over 82 000 people visited education and information websites. Feedback from activity participants was positive in terms of their increased awareness of the new workplace relations system.

15. Overall, DEEWR’s administration of FWEIP was reasonably effective in facilitating delivery of suitable education and information activities on Australia’s current national workplace relations system in the period following commencement of the Act. DEEWR’s program planning and design generally were appropriate in light of the nature of the program; the department selected and engaged a well-positioned cohort of service providers to deliver broad ranging activities; and, for the most part, program monitoring, reporting and evaluation were adequate given the key characteristics of the program, including its size. Nonetheless, there were shortcomings in the processes used by DEEWR to invite organisations to apply for grants and assess applications received. There was also scope for improvement in the department’s assessment of program performance. Improvements in these areas had the potential to further strengthen the reach and impact of the program.

16. The process used to select grant recipients should be transparent, equitable and likely to select proposals that best represent value for money in the context of the objectives of the grant program. DEEWR sought to balance transparency, available timeframes⁹ and competition among applicants, by first inviting selected organisations, and then appraising applications received against published assessment criteria, including cost-efficiency. In practice, there were some elements of the grant selection process which could have been managed better.

17. DEEWR did not promote the grants program, or publish the organisational attributes used as the basis for selecting the original 25 organisations that were invited to apply for a grant, until the program (including the already completed invitation process) was made public as part of a media release. Following the media release, another 14 organisations that were not initially invited requested to apply for funding. Seven of these organisations were permitted to apply on the basis that DEEWR considered they also had suitable attributes for the delivery of education and information on the Act¹⁰, and could comply with the closing date for applications, which was not extended. Earlier and better promotion of FWEIP, including eligibility criteria, would have supported more open, transparent and equitable access to the grants. It would also have helped avoid excluding suitable organisations that may not have applied because they were not initially invited, were unable to submit an application by the closing date, or were unaware of the program.

18. DEEWR assessed the 34 grant applications it received against assessment criteria published in the Guidelines for Applicants. The criteria were clearly linked to the program’s objectives and considered value for money provided by proposals. Some aspects of the appraisal process did not however follow generally accepted procedures. Specifically, applications that did not provide all mandatory information and assurances, such as a risk management plan, were not excluded from further assessment; and some of the successful applications received ratings of ‘poor’¹¹ for one or two of the criteria, including the cost efficiency criterion¹². In recommending some, but not all, services proposed by applicants, and the allocation of less than their requested funding, the selection panel advised the DEEWR decision-maker that all recommended proposals would be ‘cost-effective’.

19. The grant selection process resulted in approval of grants of $9.5 million to 15 employer organisations; $2.9 million to two employee organisations; and $446 000 to two organisations targeting both employers and employees, in accordance with the recommendations of the selection panel.¹³ The service providers were selected to deliver broad ranging activities across many industries in metropolitan, regional and remote locations. Funding awarded varied according to the organisation’s reach and specifically, their agreed program of education and information activities. Having selected the service providers, DEEWR engaged them through funding agreements which provided a reasonable basis to protect the Commonwealth’s interests. The providers were also given appropriate education and information content which they adapted for their delivery mechanisms and audience.

20. DEEWR subsequently monitored the service providers’ delivery of education and information through analysis of their progress reports, day to day interaction and direct activity monitoring.¹⁴ While established monitoring arrangements were suited to the program, in practice DEEWR undertook less by way of direct activity monitoring than envisaged.¹⁵ This was despite identifying a number of delivery issues for the few activities that were directly monitored.

21. In addition to provider monitoring, DEEWR reviewed, reported on (internally and externally) and evaluated the overall program. In this context, service providers collected and reported attendee feedback which was used by DEEWR to assess the increase in participants’ understanding of the new workplace relations system (the first program objective). No performance information was collected to allow DEEWR to assess the extent to which Indigenous Australians, people from non-English speaking backgrounds and people with disabilities received targeted advice and assistance (the second program objective). While recognising DEEWR conducted an evaluation of FWEIP, it is important in implementing programs to have regard to the performance information required, so that performance against a program’s stated objectives can be assessed over time, and in the context of an evaluation.¹⁶

22. The audit does not make any recommendations as the program has now been completed. The audit does however highlight the importance of effectively promoting a grant program, carefully considering the process to be used to assess grant applications, and establishing during the implementation of the program the information required to assess performance against key program objectives.

Key findings by chapter

Administrative arrangements (Chapter 2)

 23. DEEWR’s allocation of departmental roles and responsibilities for FWEIP, and the delivery model for education and information, were generally appropriate in light of the size, nature and objectives of the program. The program design addressed a number of key issues. Peak employer, employee, small business and community organisations were to be targeted for funding, which supported the program’s reach and timely commencement of education and information delivery. Further, education and information content was to be produced by DEEWR to help ensure its efficient development and the consistency of material with the new legislation.

24. DEEWR developed a succinct project plan for FWEIP which outlined the steps required to implement the program, the proposed timing of each step, required consultation and any approvals required for each step. The steps covered by the plan were suitable for the initial implementation of FWEIP. The plan did not however give specific focus to how the performance of the program would be measured. DEEWR also developed a risk plan for FWEIP which covered relevant matters, although the risk plan could have been used more systematically to inform program management.¹⁷

Selecting and engaging providers (Chapter 3)

Selecting providers

25. DEEWR invited 25 selected organisations to submit applications for grant funding on the basis that they: were peak employer, employee or community organisations; were reputable providers of industrial relations advisory and educational programs; and had an ability to reach a broad and/or diverse target audience group. Following a media release which announced the program and stated 25 organisations had been invited to apply for grants, a further 14 organisations requested to apply for funding. DEEWR agreed to accept additional applications from seven of these organisations because they were also considered to be peak bodies with experience in delivering similar training and audience reach. As previously mentioned, earlier and better promotion of the grant program would have supported more open, transparent and equitable access to the grants.

26. DEEWR assessed 34 grant applications¹⁸ in accordance with an evaluation plan, particularly against the published assessment criteria: capacity to deliver; services to metropolitan, regional and remote areas; breadth of reach and/or diversity of target audience; presentation of innovative ideas for delivery; and cost-efficiency. The three member selection panel’s report to the DEEWR delegate clearly set out the application process, the factors considered in the selection of applicants, and recommended funding.

27. Nineteen of the 34 grant applications that achieved a minimum total score¹⁹ against the assessment criteria, and did not score less than two out of five for any single criterion, were recommended for funding. Almost half of the successful proposals were rated two out of five or ‘poor’ for cost-efficiency, and one-third were rated ‘poor’ for their ability to reach a broad and/or diverse audience. The selection panel recommended lower funding than requested to cover only certain proposal deliverables, and considered that as a consequence all recommended proposals would be cost-effective. In the case of reaching a broad and/or diverse target audience, DEEWR advised that it considered holistic coverage as well as providers’ individual coverage, and determined that a larger group of providers would be more appropriate. In this context, there would have been merit in DEEWR clarifying through the Guidelines for Applicants, processes that would be used to determine actual funding amounts.

Engaging providers, including product development

28. The FWEIP grant funding agreements provided a reasonable basis to protect the Commonwealth’s interest, including by: specifying the type, number and broad location of activities to be delivered by providers; and linking progress payments to milestones and reporting deliverables. Although the application process required submission of details on estimated participant numbers, this information was not included in funding agreements, despite its centrality to program success. Including estimated participant numbers in funding agreements would have sharpened providers’ focus on their estimates.²⁰ This could have strengthened the quality of key information used to assess applications, and created a key benchmark to be used in assessing each provider’s performance.

29. DEEWR developed five Fair Work Act 2009 education and information content modules in accordance with the program’s objectives and priorities. These modules were adapted by the selected providers for their target audience and delivery mechanisms. DEEWR then cleared providers’ adapted materials before they commenced education and information activities. This approach avoided excessive delays in development of education and information; helped to ensure the consistency of education and information with legislation and between providers; and mitigated the risk that presentation of information by providers would be affected by a conflict of interest. Providers were generally positive about the suitability of DEEWR’s content modules, and DEEWR’s timely clearance of their adapted education and information material.

Monitoring providers and assessing program performance
(Chapter 4)

Monitoring providers

30. DEEWR established three mechanisms to monitor each provider’s compliance with the funding agreement, inform milestone payments and program delivery, and to help assess the contribution of activities towards program objectives. These mechanisms were provider reporting, day to day interaction with providers, and direct activity monitoring. The provider reporting framework was appropriate given the nature and timing of the program. DEEWR’s review of provider reports, and adjustment of payment timing and amounts in some instances, demonstrated appropriate program oversight, including of compliance with funding agreements.

31. DEEWR attended or examined a total of 16 provider activities compared to a departmental recommendation of at least 38. Two activities were directly monitored in September and October 2009 with the remainder monitored in February and March 2010, after a large majority of provider activities had been delivered; and no such activity monitoring was undertaken for seven of the providers. Issues identified²¹ for those FWEIP activities that were directly monitored suggested benefit in DEEWR meeting the recommended level of direct activity monitoring, and better timing this monitoring to increase assurance over program delivery.

Assessing program performance

32. Performance information captured and reported by providers, particularly attendee feedback forms, assisted DEEWR to evaluate performance against the first program objective: understanding of the new workplace relations laws, and their practical application. No information was collected to enable DEEWR to assess performance against the second program objective: timeliness of advice, and target advice and assistance to non English speaking people, Indigenous Australians and people with a disability. If DEEWR had developed performance indicators at the outset of FWEIP, commensurate with the program’s size and nature, this would have provided a better basis for assessing the program’s performance.

33. In the nine months following commencement of the Act, some 3550 education and information activities were held across a broad spread of metropolitan, regional and remote locations, with reported activities exceeding the number providers were funded to deliver by 9 per cent. More than 52 000 people attended face to face education and information activities, over 4000 people participated in web based activities, and over 82 000 people visited relevant websites.

34. Seminars and workshops were considered by the providers to be the most relevant delivery mechanism of the program. Attendee feedback for these events was very positive regarding both the quality of the presentations and increased awareness of the topic presented. Online education and e learning modules were important for individuals not able to participate in face to face activities, and the limited feedback obtained for these activities was positive. Take up rates versus expectations for providers’ web-based education varied markedly, highlighting that close attention should be given to estimates of demand when considering potential cost-effectiveness of web-based proposals.

Summary of DEEWR response

35. DEEWR provided the following summary response. DEEWR’s full response is shown at Appendix 2.
The Department of Education, Employment and Workplace Relations (DEEWR) welcomes the ANAO’s finding that DEEWR’s administration of the Fair Work Education and Information Program was reasonably effective in facilitating delivery of suitable education and information activities on Australia’s national workplace relations system.

DEEWR notes the ANAO’s comments in relation to effective promotion of grant programs, consideration given to grant application assessment processes, and establishment of key performance indicators during the implementation phase. DEEWR is of the view that these comments will result in the strengthening of future grant implementation and administration within the department.

Footnotes

[1]   Australian Labor Party, Forward with Fairness—Policy Implementation Plan, August 2007, p. 20.

[2]   The national workplace relations system covers all employment in constitutional corporations and in: Victoria, the Australian Capital Territory and the Northern Territory—all other employment; New South Wales, Queensland and South Australia—all other private sector employment (from 1 January 2010); and Tasmania—all other private sector and local government employment (from 1 January 2010). See <http://www.fwa.gov.au/index.cfm?pagename=transchanges#the> [accessed 9 May 2011].

[3]   Most employees covered by the national workplace relations system are entitled to the 10 National Employment Standards, which are enforceable minimum employment terms and conditions. Modern awards establish additional minimum employment terms and conditions, which vary by state, industry and employer. The National Employment Standards and modern awards commenced on 1 January 2010.

[4]   DEEWR, Fair Work Education and Information Program Guidelines for Applicants, April 2009, p. 2.

[5]   The invitation to two of the organisations encouraged them to extend the invitation to any affiliates they deemed appropriate.

[6]   An interactive seminar conducted via the Internet.

[7]   In assessing DEEWR’s performance in relation to the audit criteria, the audit considered the following policy and guidance applicable at the time FWEIP was developed and the grant selection process was conducted: the December 2007 Finance’s Minister’s Instructions and the ANAO’s May 2002 Administration of Grants Better Practice Guide.

[8]   Of these, 40 per cent were employers, 40 per cent were employees and 20 per cent did not specify.

[9]   DEEWR planned to commence delivery of education and information activities under the program prior to 1 July 2009. The Act received Royal Assent in April 2009, leaving little time to complete the grant selection process, establish funding agreements and commence delivery.

[10]   The reason given in the selection panel’s report to the decision maker for not accepting requests from the other seven organisations was that DEEWR considered they did not have the ability to reach a broad and/or diverse target audience group. However, the ability to reach a broad and/or target audience was one of the five application assessment criteria, and one-third of successful applicants were rated two out of five or ‘poor’ for this criterion as part of the application assessment process.

[11]   ‘Poor’ was two out of five and defined as: ‘Specification requirements poorly addressed in some areas or not at all. Claims largely unsubstantiated. High Risk.’ Some successful applications received ratings of ‘poor’ for either or both of the following criteria: ability to reach a broad and/or diverse target audience; and the cost-efficiency of the proposed activities.

[12]   The full criterion was: ‘the cost efficiency of the applicant's proposal, having regard to the amount of funding being sought, the scope of services proposed to be provided and the applicant's compliance with the draft funding agreement’.

[13]   Appendix 1 details a list of providers by type and their allocated grants. Although the organisations are identified by type as employer or employee; activities were open to both employers and employees.

[14]   Direct activity monitoring included attendance at face-to-face education activities; participation in webinars; and review of websites and online training tools.

[15]   The FWEIP Event Monitoring Guidelines recommended at least two public education events be monitored by the administering department for each grant recipient, of which the first should occur early in the program.

[16]   Providers’ proposals were required to cover how they would target assistance to groups such as Indigenous Australians, and DEEWR could have sought feedback from providers on their delivery of this assistance.

[17]   For example, an internal audit of FWEIP found the risk management plan was not used to target monitoring of activities; and risks from the plan were not updated in a systematic way.

[18]   The 34 applications comprised 20 applications from original invitees, eight applications from their affiliates, five applications from organisations that requested to apply, and one unsolicited application.

[19]   The minimum score was 14 out of a possible 25.

[20]   The majority of applicants provided details of their membership or reach, while others more accurately based their estimates on previous experience in delivering similar education programs.

[21]   For example, low attendance and the non-arrival of a presenter.