People with disability are packing boxes, cleaning and gardening for legal pay rates as low as $2.27 an hour, a royal commission has heard.
The disability royal commission is holding a three-day hearing into Australian Disability Enterprises (ADEs), which provide supported employment to people with moderate to severe disabilities.
Senior counsel assisting the commission, Kate Eastman, told the inquiry on Monday it would hear evidence that the lowest wage an hour for a supported employee at one large ADE was $2.27 an hour.
The highest rate was $23.85 an hour, while the average rate at that ADE was $6.28 an hour. The national minimum wage is $20.33 an hour.
However, the commission heard the low rates of pay are legal, with wages calculated using an assessment tool said to measure the “productivity” of employees. People working in ADEs are also on the disability support pension, which is $987 a fortnight for a single person.
Disability advocacy organisations argue ADEs where workers are paid such low wages amount to exploitation and segregation, and hark back to the “sheltered workshops” in which they arose. Most ADE workers have an intellectual disability, though this is not always the case.
Eastman said those working at ADEs generally did work such as packaging, gardening, landscaping, cleaning, laundry services, and food services.
National Disability Services, which represents some ADEs, has told the inquiry all ADEs would need to shut if they needed to pay award rates, which it claimed would see a “large number” of those people “marginalised from the labour force”.
Phillip Shoolman, 67, who is deaf, told the inquiry he had worked in both “open” employment and also at an ADE where he was packing boxes, including packing Easter bags for the Easter show.
He said via an interpreter that he had earned $5.65 an hour when he started at the ADE in 2012. The inquiry heard it had reached $12 an hour when he left that job seven years later.
Shoolman said he believed he should have been paid more, though insisted there were also positive aspects to the job.
His low rate of pay meant he had to watch his finances closely. “I always looked at the cheap stuff and had to really make sure I was in control of my budget,” Shoolman said.
Despite the employer being an ADE, Shoolman said there was no interpreter, meaning he and two other deaf people were often lost during work meetings.
Mahdi, who is blind, speaks Dari as his first language and has limited English, recounted his experience at an ADE in 2020.
His statement to the commission said he initially paid $3.70 an hour working packaging and recycling. He said he was told by staff: “When your work improves your wage can go up to $21 an hour,” but they did not say when.
“One of my tasks at the ADE was to open a pallet … and sort those boxes into groups,” his statement said. “I recognised objects by touch and through other senses.”
After several requests for a pay rise because his wife and child were soon due to arrive from Afghanistan, the inquiry heard Mahdi was given a wage assessment in February 2021.
His wage was lifted to $10 an hour, and when he requested $21 an hour, he was rebuffed. He resigned, citing the low pay.
“I’m not working now, currently without the job I feel hopeless,” Mahdi said. “I feel that no one will offer me a job with a fair wage because of my disability.
“A wage of $10 an hour is nothing in my opinion,” he added. “I believe the low wages earned by people with disability who work at the ADE is some kind of discrimination and that I was discriminated against.”
Catherine McAlpine, chief executive of Inclusion Australia, which represents people with intellectual disability, acknowledged some people did have positive experiences working at ADEs and often felt “valued”.
“One of the issues is if you have an intellectual disability and people … say to you, ‘this is what everyone else does,’ but it’s not made clear that no one else goes and does it for $2.50 an hour, it’s actually not the same.”
She said there was a $9,000 gap between the disability support pension and the minimum wage.
“We think that … governments should top that up and then over a period of a transition period … the wages paid by employers actually pick up appropriately and in a structured manner.” she said. “And the amount that needs to be subsidised by government would decrease.”
About 17,000 people, or 7% of all national disability insurance scheme participants, work at ADEs in Australia.
ADE workers only started receiving superannuation – paid as the greater of either 9.5% of their earnings or $15 a week – on 1 January 2021.
The inquiry continues.
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