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Thursday, 22 March 2012
Page: 3984


Mrs ANDREWS (McPherson) (12:15): I rise today to speak on the Fair Work Amendment (Textile, Clothing and Footwear Industry) Bill 2011. The bill is set to extend more provisions of the Fair Work Act to outworkers in the textile, clothing and footwear industry by deeming them employees. The bill will also extend right of entry provisions to circumstances in which suspected breaches affect TCF outworkers so that the provisions may apply to the industry broadly, with an exception for normal right of entry rules to apply for the principal place of business of a person who possesses appropriate accreditation. Other changes will allow TCF outworkers to recover unpaid amounts up the supply chain, a restriction of the flexibility clauses in enterprise agreements that deal with TCF provisions, and the ability for a TCF outworker code to be issued.

Currently, the Fair Work Act describes an outworker in the textile, clothing and footwear industry as an individual who performs work in the textile, clothing and footwear industry for the purposes of a contract for the provision of services but does so at a residential premise or another premise that would not conventionally be regarded as being a business premise. The bill, however, will amend the act to allow for contracted TCF outworkers to be considered as employees if they directly or indirectly perform work for an employer considered to be a Commonwealth outworker entity, which includes corporations and the Commonwealth itself.

Here we see Labor again trying to define more independent contractors as employees in its fair work regime, as this bill has the potential to cover many independent contractors in the TCF industry, to their disadvantage. Only a couple of weeks ago, I spoke in this place on the Road Safety Remuneration Bill, in which the government is trying to cover independent contractors and owner-drivers under new provisions that bear the mark of the fair work regime. I think it might actually have been last week. The bill being debated today will extend the scope of the provisions in the current act. It means that upcoming designers with university degrees who do not want to be bound by an employee-employer relationship will nonetheless be treated as employees. Further, the changes will act as a disincentive for businesses, who will not want to hire outworkers because they will have to adhere to the same conditions as they have to for normal employees.

The Council of Textile and Fashion Industries of Australia noted in its submission that, due to the definitions of what an outworker is and what TCF work is in this bill, many outworkers who do not display the characteristics of vulnerability due to their possession of qualifications, knowledge and skills will be treated in the same manner as those who do bear those characteristics. This bill assumes that all outworkers do not want to be outworkers, and that is simply not the case.

The current Fair Work Act allows for employees and their employer to create an individual flexibility arrangement based on the genuine needs of both parties. This can be done via the modern award or through an enterprise agreement. Even though this bill will classify outworkers as employees in many cases, the bill points out that, if the enterprise agreements include terms that would be considered outworker terms in the modern award, the flexibility term of that enterprise agreement 'must not allow the effect of those outworker terms to be varied'. Yet this provision may deny outworkers, whether they be TCF outworkers or not, the ability to attain an IFA, despite the better overall test, which ensures that outworker terms are not able to be undercut by IFAs or other enterprise agreement terms. As the Council of Textile and Fashion Industries of Australia put it:

If this proves to be the case, the intention to provide nationally consistent rights for those outworkers, regardless of whether they are employees or contractors, may not be achieved.

In the majority report from the Senate Standing Committee on Education, Employment and Workplace Relations, the Labor members stated:

… the committee was struck by the words of Deputy President Riordan of the Australian Conciliation and Arbitration Commission, who presided over a case in 1987 …

The comments expressed by the then deputy president that the committee referred to were in relation to the plight of outdoor workers, or outworkers, who he considered were an unorganised section of the workforce. It was true that, at that time, outworkers were largely an unorganised section of the workforce. There was little union organisation of that sector at the workplace, and that situation continues to a large extent today.

I have a lot of respect for Deputy President Riordan, who went on to be Senior Deputy President Riordan, whom I appeared before on numerous occasions. But I believe the comments he made in relation to outworkers, which the Senate committee has put so much weight on, must be viewed in the context of what was happening in the TCF industries at that time. We are talking about the late 1980s through until the early 1990s. The TCF industries in Australia were undergoing unprecedented change. The industry had been receiving high levels of assistance though tariffs and quotas, but this was being reduced. I do not intend to discuss the merits or otherwise of tariffs and quotas right now—I may well do so at a later date—but it is important to recognise that these issues had a significant impact on TCF industries from the late 1980s and that this continues today. In the late 1980s and early 1990s in particular, many textile, clothing and footwear manufacturers found themselves under huge cost pressure and found themselves competing with countries such as China which had, and continue to have, much lower labour costs. There were three main areas that employers focused on at that time. First was implementing total quality management principles to increase the quality of their products and also to maximise output from their production processes. Second was downsizing their production capacity or closing altogether. Third was reducing labour costs through reductions in overtime and casual work in the first instance but later through reducing the working week from five to four days. There were many enterprise agreements entered into and certified by the commission that provided for a four-day working week in order to secure as much employment as was possible.

This was especially the case in the footwear industry. Ultimately, and very sadly, this was a relatively short-term solution as factory after factory closed. Many workers in the industry were migrants, and it was fairly common for the male in the household to work in the textiles or footwear industries and for the female in the household to work in the clothing industry as an outworker from home, where she would also care for children or older family members. It was absolutely devastating for those families when one lost work and it was often the female outworker who had the responsibility for earning the income for her family. For many of those women, working in a factory environment would not have been an acceptable option. They needed and wanted to continue to work as outworkers.

Were their conditions poor in the 1980s? For some that was undoubtedly the case. Have circumstances and provisions for outworkers improved since the time of Senior Deputy President Riordan's statement? Most certainly they have. Should there be an opportunity for people to continue as outworkers? Absolutely. Outwork provides many opportunities for increased workforce participation, and we have a responsibility to take appropriate action to ensure that workforce participation is maximised, particularly for women, who are already underrepresented.

I listened to the member for La Trobe speak on this bill and I was disappointed with her level of negativity, particularly in her opening remarks. If, as the member for La Trobe said, the government are all about workers and fairness then why will they not vote for an amendment that no worker or contractor be worse off as a result of this bill? I question the motives behind the government introducing these bills now.

Mr Mitchell: That's because you don't care about workers!

Mrs ANDREWS: I do care about the workers and I have had a lot more to do with them then you have.

Why did the government not seek to make these changes when it brought in the Fair Work Act 2009? Further, why has the government waited—

Mr Mitchell: How many years did you spend in the TCF industry?

The DEPUTY SPEAKER ( Mr Murphy ): Order! The member will be heard in silence.

Mrs ANDREWS: Further, why have the government waited all this time to bring this legislation forward if they knew the issues were not thoroughly dealt with when the Fair Work Act was first passed? The Council of Textile and Fashion Industries of Australia and the Australian Chamber of Commerce and Industry both expressed concerns over the references used to justify the bill and the fact that there is a failure here to acknowledge the gains made in recent years.

I believe that this casts doubts over the judgment of the Prime Minister, who said back when she was the Minister for Education, Employment and Workplace Relations in the Rudd government:

I believe the Fair Work system is right.

…   …   …

We worked hard to get the balance right and I believe that the Fair Work act is right.

If the Fair Work Act is right, as the Prime Minister claimed, then why is it necessary to make these amendments today?

The coalition recognised when it was in government that there was a need to provide the TCF industry with additional protections, which were granted. At about the same time, the coalition government established the Office of the Australian Building and Construction Commissioner, recognising that the building and construction industry required additional protections as well. The Office of the Australian Building and Construction Commissioner worked. In 2010-11, the ABCC found 900 contraventions of Commonwealth workplace relations law. It conducted 401 investigations and successfully prosecuted 74 cases. It saw a drop in the number of working days lost per thousand employees and saw a 10 per cent increase in productivity in the building and construction industry. Yet the Prime Minister—the same person who claimed that the Fair Work Act was right, the same person who claims to want a robust industrial relations framework—is taking the sledgehammer to the ABCC and all the headway it has made in making the building and construction industry stable again.

Mr Mitchell: What's this got to do with the TCF?

Mrs ANDREWS: If you had actually been here at the beginning of the speech, you might have understood.

The DEPUTY SPEAKER: Order! The member will fail to respond to interjections. The member will be heard in silence.

Mrs ANDREWS: The government claims to be removing the ABCC because it discriminates against certain workers, and because industrial relations in this country should be determined by a one-size-fits-all approach. However, the government comes to this place today with this bill that will affect only the TCF industry and outworkers. In short, this bill clearly contradicts Labor's view with regard to the ABCC and workplace relations as a whole.

It is no surprise that this government is of two minds about workplace relations. The Prime Minister herself was of two minds when it came to the carbon tax: one month she did not want it; the next month it was back on the agenda. Australians have certainly come to expect this two sided approach to policy from Labor and we are, quite frankly, sick of it. I note that at the present time the government is conducting a review into the Fair Work Act. I think the Prime Minister and the Minister for Employment and Workplace Relations need to explain why this bill and its provisions have not been made a part of that review as they should have been in the first place.

The most disturbing part of this bill is the effect it will have on businesses. With a harder export market due to the higher Australian dollar, rising operating costs and higher labour costs compared to other countries such as China, TCF businesses across the country would struggle under these changes, especially considering the latest industry figures show that there are only 1,701 clothing businesses in Australia that earn more than $200,000.

This bill should have been part of the Fair Work Act review being conducted rather than brought before the House. This would have allowed for a thorough review of this country's workplace relations scheme and what it is currently lacking. By bringing the bill before the House today, the government is running away from scrutiny and kicking the union movement a free goal. Further, many up-and-coming designers will be disadvantaged by these changes, and that is not good enough. Rather than providing a disincentive for this, we need to provide encouragement to those people. We need to maximise workforce participation, and the government should not be putting obstacles in the way of achieving this.

Patterns of work have changed over the years and need to continue to do so. Manufacturing industries are critical to the future of Australia, and we need to be proactive and forward thinking to make sure that we maintain at least as broad a base of manufacturing as we have now. The government has failed to provide evidence that its changes are in the best interests of the industry and those who work in it, whatever their capacity. This bill should not be passed.