Large Australian companies that fail to meet gender equality targets will be publicly named and shamed and may be blocked from Commonwealth work under a Labor government plan that has been given the green light by a Senate Committee.

Legislation introducing a scheme requiring Australian companies with 500 or more employees to achieve, or at least improve on, measurable targets in a three-year cycle was introduced to Parliament late last year.

The Senate Standing Committee on Finance and Public Administration handed down its report on the bill late last month, recommending it be passed with a handful of amendments, and the Senate is expected to debate it this week.

Under the scheme, large employers will be required to commit, achieve and report to the Workplace Gender Equality Agency (WGEA), which sits within the Department of Prime Minister and Cabinet, on “measurable genuine targets to improve gender equality in their workplace”.

Organisations will be required to select three gender equality indicators from a “menu of targets” to be determined by the government, including the make-up of boards, the gender pay gap, the availability of flexible working options, and efforts to address and stamp out sexual harassment.

“The bill will introduce a world-first targets scheme to accelerate action on gender equality by large Australian employers,” Assistant Minister for Women Kate Thwaites said in Parliament.

“In creating obligations to set and achieve targets, this bill seeks to cement Australia’s status as a global leader in gender equality.

“Targets will lead to more ambitious commitment and progress, which then meets community expectations and is in line with the broader momentum towards gender equality in Australia.”

Three years after setting the targets, a business that fails to improve on them may be publicly named and shamed, and while there are no direct financial penalties associated, this could also mean the business is ineligible for Commonwealth procurement work.

Given the go-ahead

With the government-led Senate Committee giving the bill the green light and the Greens signalling that it will support its passage, it will likely pass the Senate when it is debated on Thursday, potentially the last Senate sitting day before the election.

The committee’s report recommended that the government develop guidelines around what a “reasonable excuse” for non-compliance will be, and for the WGEA to consult closely with unions on the development of guidance for businesses to comply with the scheme.

It also said there should be consideration around blocking companies that don’t meet their gender equality targets from government grants as well.

The committee rejected a push from a number of submitters to the inquiry that civil penalties should be enforced for non-complying companies, saying that this was “unnecessary for the time being”.

The Australian Council of Trade Unions had told the committee that fines were needed to “drive good behaviour” and that “without adequate enforcement there is a significant risk that there will be many employers who simply don’t comply”.

The gender equality targets will be blocked by the Opposition, with Coalition senators on the committee rejecting it as placing “onerous financial implications on businesses that we rely on”.

Greens throw support behind the bill

The Greens senators backed the legislation but pushed for it to go further and apply to all companies with 100 or more employees.

Australian companies with more than 100 employees are already required to report data to WGEA annually on the gender pay gap, and information on efforts to prevent and respond to sexual harassment.

The first release of this data last year revealed that the overall media gender pay gap for salary is 14.5 per cent, and that this increases to 19 per cent when all remuneration is considered.

More than 60 per cent of the reporting companies had a median employer gender pay gap of over five per cent in favour of men.

The WGEA has also revealed that nearly a third of reporting Australian companies are failing to collect data on how common sexual harassment in the workplace is, despite having formal policies on this issue.