Centrelink could face a wave of legal action from Australian jobseekers over what employment groups say is a “growing crisis” arising from penalties or abrupt suspensions of welfare payments imposed by private employment companies.

The legal action is being canvassed by the Australian Unemployed Workers’ Union and seeks to examine the behaviour of the private companies to which the government has given the task of managing employment programs.

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The potential legal action could challenge Australia’s heavily privatised employment scheme, which relies on companies effectively making decisions on behalf of the welfare provider, Centrelink, about the conduct of participants in the “work-for-the-dole” scheme.

The president of the AUWU, Owen Bennett, said jobseekers were increasingly contacting the union with stories of abrupt suspensions or penalties to their unemployment or disability allowances. He said some of these decisions were made unfairly, without natural justice and without the companies providing a reasonable opportunity to allow those affected to respond.

“This is pushing these people to a point where they’ve really got nothing to turn to, and it pushes them over the edge in many cases,” Bennett said. “They’re putting people in very vulnerable positions to the point where their health and generally their wellbeing is being placed under threat.”

A spokesman for the Department of Employment acknowledged that private contractors played a role in assessing the behaviour of income support payment recipients, but said it provided clear requirements and training on how to appropriately monitor them.

Leigh Markovic approached the AUWU after her experiences with her employment provider left her willing to give up her Centrelink payments and become homeless, simply to avoid the stress.

The 21-year-old was part of an employment scheme run by Max Employment. The company is one of the largest private contractors involved in the administration of jobseeker programs.

But she said she found dealing with the company to be difficult, and said some caseworkers had been unsympathetic and had treated her with contempt. She wanted to find a hospitality job but found the work-for-the-dole program to be increasingly stressful.

“I would just start crying at every appointment,” she said. “I didn’t realise how much worse my mental state was when I was dealing with them. I went in with all these high hopes and goals and just left there feeling stupid, like nobody was going to help me.”

Markovic suffers from depression and anxiety, and underwent surgery in August. But she had an appointment scheduled with Max Employment three days after the surgery, which she didn’t believe she would be well enough to attend, so contacted the company repeatedly to ask it for another date.

The company sent her a text message, seen by Guardian Australia, advising her that the appointment would be pushed back several weeks. But later on the same day she received another text that said her Centrelink payments had been suspended.

“Hi LEIGH. Pls call us ASAP … as you have missed an appt and your Centrelink payment has been suspended under the law. MAX Employment,” it said.

Markovic said she had not been given an opportunity to respond. Bennett said the decision was part of a broader problem: private companies were being delegated the power to make decisions on Centrelink’s behalf.

“It puts an extraordinary amount of power in the hands of private companies,” he said.

The suspension was revoked a day later by Max Employment, but Markovic said it caused her considerable distress. She finally lodged a complaint with the Department of Education, which oversees complaints relating to the jobseeker contract. Guardian Australia has contacted the department to determine the outcome of the complaint, but it said it could not respond due to privacy reasons.

Max Employment’s chief operating officer, Darren Hooper, acknowledged the text message had been sent in error to Markovic due to a different staff member logging the appointment change, and that there had been no impact on her payment because the suspension was revoked a day later.

Hooper said he had apologised to Markovic about the suspension notice. But he said his staff strove to support Markovic and all their clients, and that Max Employment’s “whole office service is about creating a positive environment”.

“Our staff do act professionally. We provide training, education and we have regular audit checking,” he said. “That doesn’t mean that on some occasions there aren’t errors in judgment and mistakes.”

“I would say that we could have serviced her better and that there were actions we took we shouldn’t have taken around the appointment.”

He also said Max Employment was not contacted by the Department of Employment in relation to Markovic’s complaint.

Bennett said while the private companies bore some responsibility, it was ultimately the government that should be overseeing employment schemes more effectively, and that it was “the role of government” to ensure the job scheme was working appropriately.



“All they [the companies] do is just press a button and 10% of their unemployment entitlement can be taken away, and it will take them three months to get it back.”

For a person to successfully appeal a decision to cancel their Centrelink payments they must challenge the decision in the administrative appeals tribunal, which can take months.



Legal advice provided to the AUWU said there may be a number of types of “potential unlawfulness” that the government is engaged in, and recommended that they begin to collect documentation from affected jobseekers.



When asked about the AUWU’s potential action, a spokesman for the Department of Employment said: “The Department of Human Services has responsibility and delegation to investigate and determine if compliance failures have occurred under social security law.”

“The Department of Employment contracts employment services providers to deliver the jobactive programme. When job seekers are required to participate in work for the dole, jobactive providers are required to monitor participation and where non-attendance occurs, follow up with the job seeker and seek to re-engage the job seeker in the activity.”

“If jobactive providers are unable to contact the job seeker to discuss the reason for non-attendance, or do not believe the reason given for the non-attendance is satisfactory, they are able to report the non-attendance to DHS. Job seekers then need to make contact with DHS to discuss the reported non-attendance prior to receiving their next fortnightly instalment. DHS will not make a decision until they make contact with the job seeker and investigate the report.”

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The union and a coalition of other organisations and individuals have signed a joint statement decrying a “punitive social security and growing employment crisis”.

The signatories include the Australian Council of Trade Unions, the Australian Council of Social Services, the Anti-Poverty Network South Australia, the Fair Go for Pensioners Coalition and the Guardian Australia columnist Van Badham.

“It is imperative that all parties in the federal parliament take responsibility for Australia’s worsening employment crisis and work together to support Australians without work,” they wrote.

Although Centrelink is responsible for the direct administration of payments, the examination of complaints about job service providers rests with the Department of Employment. The AUWU is calling for an independent body to handle complaints.