Australia’s privatised employment services “market” has been reformed several times since the late 1990s. The latest incarnation, Workforce Australia, commenced last month and has been plagued by problems, including several cases reported in The Guardian. It is now being examined by a parliamentary committee.

jobactive was the Australian Government employment service which ran from July 2015 to June 2022. Workforce Australia replaced jobactive on 4 July 2022. One jobseeker, Nathan, who did not want to be identified and who is now on disability support, told the Guardian Australia that under the previous scheme, job providers did little to help his search while they claimed thousands of dollars each time he found work on his own.

After nearly 15 years navigating the system meant to help Australians find jobs, Nathan’s mental health was so badly damaged that he was unable to work. The 46-year-old says the private companies profiting from the multibillion-dollar job services industry did little to help him find work throughout that time, but documents show they legally made thousands of dollars whenever he found employment for himself.

His case illustrates some of the issues jobseekers have experienced with the privatised employment market, and the incentives built into a system that allow job providers to profit while the onus to comply with “mutual obligations” remains entirely with their clients. Staffing agencies get an “outcome payment” from the government when a jobseeker moves into work and maintains that employment. There is no requirement for them to have found the client the job. This payment is additional to the “service fees” per client.

Freedom of information documents Nathan requested, seen by Guardian Australia, suggest Max Employment – now Max Solutions – claimed an AUD 4,400 (USD 3,095) outcome payment for the job Nathan got himself.

“There is no question the client found his own employment with LAFM,” Max Employment later told the Department of Employment, according to documents filed in a complaint. “Max Employment delivered Post Placement Support to the client over the course of his employment,” it said.

Nathan recalls that weeks into the job, he received an email from his Max Employment consultant asking him to sign a document confirming 13 weeks of employment. He was offered an AUD 50 “incentive payment” to do so, according to documents seen by Guardian Australia. Nathan says he told the consultant he believed the form was not accurate and didn’t sign it. He then found his Centrelink payments, which he needs to pay his rent, had been stopped for non-compliance with his mutual obligations. Centrelink later “revoked” Max’s non-compliance report against Nathan – he had been accused of missing an appointment he knew nothing about.

Since the new Workforce Australia scheme has been launched, jobseekers have reported a raft of issues, including being unable to access the app and online portal, being recommended jobs based in states they do not live in, and further confusing communication. Social services advocates also voiced concern many of the "punitive" aspects from jobactive remained a part of Workforce Australia, and a new points-based system would force people into more mutual obligations sooner.

Workforce Australia was passed under the Morrison government (Liberal Party) and supported by the Labor Party prior to the May election they won. Contracts with job service providers worth AUD 7 billion (USD 4.9 billion) were also signed.

Employment Minister Tony Burke said when announcing the parliamentary review that, while Labor supported the principles behind Workforce Australia, including mutual obligations, some aspects required "fresh parliamentary scrutiny and oversight". 

The committee is scheduled to report back to parliament in September 2023.