Back to Work: Australia

Improving the Re-employment Prospects of Displaced Workers

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Job displacement (involuntary job loss due to firm closure or downsizing) affects many workers over their lifetime. Displaced workers may face long periods of unemployment and, even when they find new jobs, tend to be paid less and have fewer benefits than in their prior jobs. Helping them get back into good jobs quickly should be a key goal of labour market policy. This report is the fourth in a series of reports looking at how this challenge is being tackled in a number of OECD countries. It shows that many displaced workers get new jobs relatively quickly in Australia, mostly thanks to a flexible and dynamic labour market. A small minority of displaced workers receive special support via the labour adjustment programmes, but some displaced workers who would need specific assistance, in particular in the older worker and/or low-educated groups, do not get sufficient support or only too late. There is room to improve policies by moving away from the current sectoral approach to special assistance programmes for workers collectively dismissed, towards an approach covering all sectors of the economy, with the intensity of intervention tailored to the circumstances and needs of the displaced workers. Expanding the training component for displaced workers and making use of skills assessment and training to better target the training and enhance its effectiveness would also help displaced workers transition to sustainable jobs of a certain quality.



Managing restructuring: Labour adjustment programmes for displaced workers in Australia

Australia relies on a flexible labour market to promote worker transitions from declining firms and sector to expanding ones, and, consequently, government actions to prevent dismissals are relatively limited. There are few legislative restrictions on employers wishing to retrench employees, except with respect to unfair dismissals, and there is no short-time work scheme to prevent layoffs due to cyclical downturns. When workers are displaced, targeted assistance is restricted to sectors covered by structural adjustment programmes, thus reaching a small minority of displaced workers. This may be particularly damaging for the re-employment chances of older and less-educated displaced workers not covered by these programmes. Early intervention by the public authorities to provide assistance to workers at risk of being retrenched requires early notification of redundancies. However, in Australia, the statutory notification period is low relative to most other OECD countries for individual dismissals and there is there is no legislated additional notification period in case of mass layoffs. There is also scope to improve the co-ordination of assistance measures provided by the employer, the federal and state governments. Australia is quite advanced in providing recognition of prior learning to displaced workers covered by structural adjustment programmes, but there is room to increase investment in effective training for displaced workers. More generally, the coverage of displaced workers benefiting from these programmes remains limited. A more systematic approach should be taken to providing specialised intensive employment services based on an assessment of the risk of displaced workers not successfully transitioning into a sustainable new job.



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