Hundreds of employment service providers across Australia have lost their government contracts under a $4 billion overhaul of the Job Network, forcing up to 2500 staff to join dole queues with their clients.
But an embarrassing crash on the website of the Department of Education, Employment and Workplace Relations, which was to list the successful tenderers for new employment services, angered the providers, with some still unsure of where they stood last night.
Major church providers of social services have called for an independent review of the process for allocating the contracts, following the release of the Jobs Services Australia deals.
"Today's decision challenges the nature of the relationship between the Government and the non-profit sector, which increasingly provides outsourced social services," said Frank Quinlan, director of Catholic Social Services Australia.
More than a quarter of the job agencies -- up to 100 businesses -- missed out on contracts.
The biggest losers were the Wesley Mission, the Salvation Army, Sarina Russo Job Access and Mission Australia, which between them will slash several hundred jobs.
The Government's claims that two new British providers would take only 2 per cent of the market were blown away after it emerged that a US job agency in the system, MAX Employment, increased its business share.
Staff at two top-rated agencies in the electorates of those driving Labor's shake-up of services to help the jobless find work are heading for unemployment themselves.
Shock waves were felt across the industry yesterday as hundreds of workers, including those at the Salvation Army and Wesley Mission, were told their agencies had lost contracts in the shift to the new system devised by the federal Government.
But Deputy Prime Minister Julia Gillard insisted that staff whose agencies would fold would be in great demand by other firms that had won contracts to train and find work for the jobless in their local areas.
Djerriwarrh employment and education services acting chief executive Trish Heffernan was also stunned after telling 36 workers — 26 of them permanent — that they would have to look for jobs.
"The staff are incredibly disappointed and concerned about their futures," she said.
Lisa Fowkes, chief executive of Job Futures, a network of community-based groups in the sector, said many agencies with strong track records that had not been awarded contracts in a "flawed process" that relied too heavily on paperwork and not enough on results.
"I can only imagine that what has happened is that the reliance has been on words on a page rather than the reality of service delivery in the community," she said. "I think that in future, it will be really important to test the claims of tenderers in terms of whether they have those local connections, grassroots knowledge and connections to make the services work."
Asked if she was comfortable about any job losses, Ms Gillard sought to reassure staff.
"Of course there will be some change, but for people who work in a service now and that service hasn't succeeded, there will obviously be new opportunities in their locality for the services that have succeeded in the tender round," she told ABC2.
But Opposition Leader Malcolm Turnbull was scathing about the process, which he deemed a "colossal bungle".
"What a shambles that is," he said. "Hundreds of people being thrown out of work, instability in the whole employment services area precisely at the time where you need continuity and commitment. Again, one bungle after another."
I know a bit about Djerriwarrh, a lean, not-for-profit organisation with a considerable track record of serving job seekers and other disadvantaged people in outer western Melbourne. I'd like to know on what criteria they failed to measure up to the other applicants. Probably having a strong connection to the local community was not one of them.