6 Reporting and Responding to Potential Breaches

Introduction

6.1. If it appears to a Centrelink officer that a jobseeker has failed to comply with a requirement, such as attending a Centrelink interview or reporting income, the officer may decide to investigate the non-compliance with a view to possible imposition of a breach. Where a requirement relates to the jobseeker's relationship with a provider, such as attending an appointment with the provider or a course specified by it, the DEWR contract with providers requires them to report non-compliance to Centrelink within seven days of becoming aware of it. Centrelink now calls this report a "participation report". Once such a report has been submitted, Centrelink policy is to investigate and decide whether a breach has occurred.

6.2. Our inquiries indicate that problems arise in the following key areas:

• reporting potential breaches;

• responding to those reports.

Reporting potential breaches

6.3. As mentioned above, providers are required by their contract with DEWR to report apparent non-compliance within seven days. There is no contractual obligation on providers (except in relation to "work for the dole") to make any attempt to contact the jobseeker in order to ascertain the reasons for non-compliance and/or investigate ways in which compliance could be achieved. Our inquiries show that many providers have complied strictly with the terms of the contract, reporting apparent non-compliance within seven days and often within a much shorter period, sometimes without any attempt to contact the jobseeker.

6.4. The performance of each provider is audited by DEWR. Failure to submit a non-compliance report within seven days may lead to adverse comment in the audit and could have a bearing on the provider's prospects of contract renewal. Some providers may also be reluctant to expend time on further attempts to achieve compliance or to investigate possible causes. They will be aware that prompt non-compliance reports can lead to jobseekers being removed from their list and quickly replaced with other jobseekers who may be easier to work with and to place in employment, thereby generating greater fee income for the provider.

6.5. Some providers, however, do make considerable efforts to contact the jobseeker and provide a fresh opportunity to meet the requirement, particularly when they are aware of circumstances which might explain the non-compliance and they believe the jobseeker will comply if further prompted, counselled or supported. They may do so even where their attempts take longer than the seven days permitted by the DEWR contract before submission of a non-compliance report. Providers appear more likely to pursue this approach where they have already been working with the jobseeker but some do so even where there has been a failure to attend the initial appointment with them.

Guidelines for preparing reports

6.6. In April 2001, DEWR published a Guide for providers which states that reports should be made a minimum of 24 hours after apparent non-compliance in order to allow for possible jobseeker contact which would avoid the need for a report. The Guide does not explicitly require, however, that providers make any attempts to contact the jobseeker before submitting a report. It states that a report should be submitted if the provider has been unable to contact the jobseeker or considers that the jobseeker has not given a reasonable excuse for non-compliance. The Act states that a reasonable excuse exists if the cause of non-compliance was outside the jobseeker's control or not reasonably foreseeable by them. DEWR goes further, however, by specifying in the Guide that the jobseeker must have taken some subsequent action to remedy the situation (such as ringing to arrange a new appointment) or be able to verify what happened.

6.7. The sections of the Guide relating to making contact and investigating whether the jobseeker has a reasonable excuse need to be expressed more firmly, prominently and clearly. As already applies to "work-for-the-dole" providers, at least two contact attempts should be required. Emphasis should be placed on using additional methods of communication, particularly in relation to especially vulnerable jobseekers. The Guide should also explicitly state that a report should not be made if the jobseeker has now taken reasonable steps to achieve compliance. Retention of the very strict seven-day time limit for reporting, and fear of adverse audit reports for breach of it, militate against providers giving due attention to the processes and criteria suggested in the Guide. Accordingly, there is a strong case for extending that limit.

6.8. We have referred earlier to the advantages which some providers may gain by reporting non-compliance very rapidly and repeatedly so that they can free up a place in their quota for another jobseeker with whom it may prove easier and more remunerative to work. After three breaches, the referral is withdrawn and the jobseeker is removed from the provider's quota. The current Guide appears to give this motivation more encouragement than is appropriate. In order to reduce this incentive for achieving rapid and multiple breaching, it might be considered appropriate to specify that, if one breach has been imposed and further reasonable attempts to contact a jobseeker have been unsuccessful, he or she should no longer count as part of the quota even though remaining referred to the provider. However, this raises the questions whether any further efforts would be made by providers and what scope this arrangement might permit for manipulation by providers in order to evade quotas. Other measures canvassed above seem to be preferable options.

6.9. In chapter 5 we discussed the need to ensure that activity agreements are properly negotiated and that the obligations in them are reasonable and appropriate in the particular jobseeker's circumstances. This applies both at the time of agreement and thereafter, as those circumstances may change significantly. In order to encourage improvements in these respects, and to reduce the risk of unfairness to jobseekers, providers considering whether to report non-compliance with such an obligation should be required to review whether the obligation was inappropriate at the time and the jobseeker had reasonable excuse for non-compliance.

6.10. At present, there is no requirement that providers include in their participation reports substantial details about the circumstances surrounding an apparent non-compliance, including any extenuating circumstances and any efforts that have been made by the provider to achieve contact and compliance. Our inquiries suggest that many providers do not submit such material and, as a result, Centrelink is not given an adequate foundation for its investigations and the likelihood of inappropriate imposition of breaches is substantially increased. Improved reporting in these respects could therefore enhance the accuracy, fairness and cost-effectiveness of the system.

The name of the report

6.11. In our view, it would be helpful if these reports to Centrelink by providers were called "compliance reports". At present, they are officially called "participation reports" but are often referred to as "breach reports" or "breach recommendations". None of these current usages, however, is appropriate. The reports frequently relate to matters that cannot accurately be described as failures to "participate" and use of the term "participation report" can induce providers to misunderstand the need to focus on whether non-compliance has occurred rather than merely non-participation. On the other hand, use of the word "breach" in this context tends to induce and reinforce common misconceptions within Centrelink that the report necessarily connotes a belief by the provider that a breach should be imposed. It also tends to reinforce misconceptions that the report is sufficient basis to impose a breach without further investigation or consideration. Moreover, it leads many staff and jobseekers incorrectly to regard the decision to breach as being made by the provider rather than Centrelink.

6.12. These problems are exacerbated by the common tendency for Centrelink and provider staff to describe the submission of a participation report in terms such as: "They breached her" or "I'm going to breach you". For a jobseeker to be told they have been "breached" by a provider misstates the true position, risks misleading the jobseeker into believing the decision has been made already, and risks unnecessarily damaging the relationship between jobseeker and provider.

R18. Attempts to Achieve Compliance

(1) If it appears to providers that a jobseeker may have failed to comply with an obligation in such a manner as to constitute a breach, they should be required to make documented efforts during at least the next fourteen days in order to contact the jobseeker, investigate whether he or she had a reasonable excuse and, where appropriate, arrange future compliance.

(2) Providers should be required to make at least two efforts to contact the jobseeker and to arrange a direct interview or telephone call. These efforts should include use of additional contact methods, particularly in relation to especially vulnerable jobseekers, rather than only the principal postal address.

(3) If the relevant obligation was written into an activity agreement, the provider should specifically review whether the obligation was reasonable.

R19. Preparation of Compliance Reports

(1) After the fourteen day period for investigation, the provider should send a written compliance report (currently called a "participation report") to Centrelink if, and only if
• it is satisfied that the jobseeker did not have a reasonable excuse for the apparent non-compliance and has not subsequently made reasonable attempts to comply; or

• it has had no response to the specified attempts at making contact with the jobseeker.

(2) It should be made clear to all Centrelink officers, providers and jobseekers that compliance reports do not recommend or impose breaches.
(3) Compliance reports should be required to record
• the nature of the apparent non-compliance;
• details of the attempts made by the provider to make contact, investigate circumstances and achieve compliance;

• details of the provider's reasons for considering that the jobseeker had no reasonable excuse and has not subsequently made reasonable steps to comply.
(4) All compliance reports should have to be signed by the senior staff member in the relevant office of the provider.

Responding to reports

6.13. It is Centrelink's responsibility to inquire into apparent non-compliance and to decide whether a breach has occurred. This requires close attention to two key aspects in order to avoid inaccurate and unfair decisions, inefficient use of administrative resources and a less effective employment services system.

6.14. First, the investigation must be based on application of the relevant statutory and policy criteria. Other considerations such as governmental policies and instructions must not be applied if they are inconsistent with those criteria and should not be expressed or applied with undue rigidity. There is a complex diversity of statutory and policy criteria relating to extenuating circumstances for possible breaches. They include whether a jobseeker "unreasonably delayed" in entering an activity agreement; took "reasonable steps" to comply with an activity agreement; had a "reasonable excuse" for failing to declare income or to accept a suitable job offer; or "knowingly or recklessly" failed to declare income accurately. It is important that the correct criteria are identified and applied by all Centrelink staff who are responsible for investigating and deciding upon potential breaches.

6.15. Second, while jobseekers must notify Centrelink of any extenuating factors which may suggest that the relevant criteria have not been met (such as having a reasonable excuse for not declaring income on time), this does not mean that Centrelink can simply conclude that a breach has been committed if no such circumstances are notified. For example, Centrelink must make reasonable efforts to obtain such notification from the jobseeker and, even in the absence of notification, must investigate and consider whether in the particular case it can be satisfied that no such circumstances exist. This is particularly important in relation to especially vulnerable jobseekers. Every compliance report must be investigated thoroughly and fairly in order to enable a decision to be made in accordance with the relevant criteria.

Current practice

6.16. Our inquiries indicate that substantial problems exist in relation to each of these areas, as a consequence of which incorrect decisions to impose a breach are made. Some of these problems arise from inadequate attention to or understanding of the relevant criteria or from placing an incorrect onus on the jobseeker to establish that no breach has occurred. Others arise from failure to conduct thorough investigations; in particular, from failure to make sufficient efforts to provide jobseekers with a reasonable opportunity for explaining their apparent non-compliance and failure to obtain sufficient information and assistance from providers or other relevant parties.

6.17. In relation to the statutory and policy criteria, and the onus on Centrelink to be satisfied that a breach has occurred, we have already recommended some measures to dispel misunderstandings that providers' compliance reports are determinative, recommendatory or establish a presumption that a breach has occurred. There is also a strong case for simplifying and rationalising the criteria, ensuring that governmental policies are strictly consistent with them and with the correct legal onus on Centrelink, and strengthening training and monitoring to ensure that the legal requirements are being correctly understood and applied. In particular, a decision to impose a breach should require endorsement by another Centrelink higher-level officer who has special training and experience in applying the criteria. In addition, all relevant governmental policies, instructions and other statements (whether from Centrelink, DEWR, DFACS or elsewhere) should be made public so that their legality and appropriateness can be monitored and, if necessary, questioned.

6.18. In relation to the conduct of investigations, we have already recommended improvements in the material that is made available by providers when submitting compliance reports and by Centrelink staff when preparing comparable records of apparent non-compliance which comes to their attention. Our inquiries also indicate a clear need for Centrelink to strengthen the training and human resources that are devoted to its investigation of potential breaches. Some training should involve input from Centrelink's social workers and other specialist officers about issues of particular relevance to especially vulnerable jobseekers.

6.19. It is clear that greater emphasis needs to be placed on Centrelink contacting the jobseeker during the investigation. This should include using additional contact methods for that purpose, including any that have been identified (as recommended earlier) in the jobseeker's earlier dealings with Centrelink or the provider, and seeking other relevant information and assistance from the provider. Closer attention should be given to following up any indications in compliance reports of possible extenuating circumstances; often this may necessitate speaking directly with the provider. There should also be a requirement that jobseekers be provided with a copy of the compliance report so that they can comment upon it. In most cases, at least in relation to especially vulnerable jobseekers, it should be regarded as difficult to be satisfied that a breach has occurred unless direct contact has been made with the jobseeker by telephone or interview so that an oral or written explanation can be provided readily.

6.20. The need to improve the thoroughness and fairness of these investigations should be made a high priority in seeking to reduce inappropriate incidence of breaches. One of the most effective ways of doing so would be to require that decisions to breach cannot be made in less than a specified period of, say, fourteen days (subject, perhaps, to a few limited exceptions).

Indicators and guidelines

6.21. A substantial influence on the conduct of Centrelink investigations into participation reports is that its contract with DEWR includes a "Key Performance Indicator" involving Centrelink completing its consideration of at least 80% of all participation reports within ten days of receipt. Failure to achieve that percentage has an adverse impact on the level of DEWR funding to Centrelink. The existence of this indicator, and the extent to which offices comply with it, are widely disseminated and emphasised within Centrelink. As we have recommended earlier that the minimum period should be 14 days, it follows that, if such an indicator is retained in the contract, the specified period should be equal to or longer than 14 days. This will reduce the risk of encouraging speed at the expense of thoroughness and fairness.

6.22. Development of comprehensive and publicly accessible guidelines on the investigation and consideration of potential breaches would help substantially to clarify and improve existing policies and practices. Detailed consultation for this purpose with people outside Centrelink who work closely with unemployed people would be essential. The guidelines should be particularly firm and specific in relation to jobseekers who are especially vulnerable or are being investigated about a potential third breach. Some useful guidelines are already in operation but they need to be consolidated, clarified and more readily accessible.

6.23. The proposed guidelines would help to address the problem, demonstrated repeatedly by our inquiries, of substantial inconsistency on these matters between different Centrelink offices. There is undoubtedly a difficult balance to strike between rigidity and flexibility in this area but it is more likely to be struck by the development of a set of open and comprehensive guidelines than by piecemeal, ad hoc or undisclosed arrangements.

Referral to specialist officers

6.24. We have mentioned earlier the Third Breach Alert process that was introduced by Centrelink in the latter part of 2001. In essence, this process seeks to achieve a more thorough investigation of possible extenuating circumstances, and of ways in which compliance can be achieved, where the jobseeker has already incurred two breaches. When establishing this process, Centrelink explicitly recognised that many jobseekers who incur breaches do so because of "significant barriers to economic and social participation" and that it should make greater efforts to identify and address those barriers in a supportive manner. This includes closer consideration of possible problems relating to matters such as accommodation, health and literacy.

6.25. The Third Breach Alert process, which appears to have been beneficial, generally accords with the thrust of recommendations in this report. There are, however, two crucial differences. We recommend greater focus on these barriers at the initial Centrelink interview (in order to identify and assist especially vulnerable jobseekers from the outset) and also during investigation of each potential breach rather than only the third.

R20. Centrelink Investigations

(1) Before considering whether to impose a breach, Centrelink should be required to
• make at least one attempt to contact the jobseeker through his or her primary postal address, enclosing a copy of the relevant compliance report;

• make at least two further attempts, including use of any additional method that may have been agreed previously by the jobseeker (especially involving direct interview or telephone contact).
(2) Centrelink should also be required to ensure that
• the provider's compliance report complies with the above requirements and receives close consideration, usually including direct discussion with the provider;

• investigations adequately cover all relevant statutory and policy criteria, including those relating to possible extenuating circumstances.

R21. Referral to Specialist Officers

(1) When investigating a potential breach, Centrelink staff should be required to consider referring the jobseeker for interview by a social worker, occupational psychologist or other specialist officer.

(2) Such a referral should be mandatory for all second and subsequent breaches and for all especially vulnerable jobseekers, unless it has occurred previously and is unlikely to be of significant further benefit.

R22. Imposition of Breaches

(1) Centrelink should place greater emphasis in its guidelines for staff on its onus of establishing a breach and the need for close attention to relevant statutory criteria such as "without reasonable excuse" and departmental policy criteria such as "reckless or fraudulent".

(2) Consideration should be given to legislative reform that would reduce the diversity of terms used in the statutory criteria.
(3) Centrelink should be required to ensure that no breach is imposed unless
• the contact attempts and other required actions have been complied with;
• any recommendation to impose a breach has been considered and endorsed by a higher-level officer with special training and experience in making such decisions;

• at least fourteen days have elapsed since the investigation commenced.

R23. Guidelines, Training and Monitoring

(1) All policy statements and key procedural guidelines in relation to investigation and imposition of breaches should be in consolidated form and publicly available.

(2) Designation, training and monitoring of Centrelink staff who are responsible for investigation and imposition of breaches should be improved substantially.