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Monday, 11 August 2003
Page: 13024

Senator MACKAY (4:46 PM) —I rise today to speak in opposition to the Workplace Relations Amendment (Termination of Employment) Bill 2002. Labor opposes this bill because it is yet another example of this government being driven by anti-worker ideology and political expediency. The bill will not even achieve what it ostensibly aims to do—that is, in the words of the Minister for Employment and Workplace Relations, Mr Abbott:

... a more unified national workplace relations system ...

This would mean, in his words again:

... less complexity, lower costs and more jobs.

Those are noble sentiments from the minister, sentiments that no-one on this side of the chamber would oppose, obviously. However, we oppose this bill not only because it will not deliver those aims which the minister has set out but also because it deliberately and unfairly sets out to further erode protection for Australian workers.

Let me examine in detail each of the minister's claims about this bill. He claims there will be less complexity. Instead of removing complexity, this bill adds to the complexity of the current situation. As the Queensland government's submission on this bill to the Senate committee pointed out, the bill establishes:

two different sets of federal laws and procedures governing unfair dismissal matters, depending on the size of the respondent;

different federal and state unfair dismissal regimes for incorporated and unincorporated entities;

different federal and state unfair dismissal regimes for incorporated entities depending on whether they meet the definition of a `constitutional corporation';

concurrent but separate federal and state jurisdiction over different aspects of workplace relations in the one business, for example a federal regime governing a business' unfair dismissals and a state regime governing workplace harassment and industrial dispute; and

concurrent but separate federal and state jurisdiction over different aspects on the one employee's claim (for example, the federal regime for unfair dismissal and the state regime for insufficient notice or unpaid entitlements).

The Queensland government's submission was far from being the only one to point out the defective design of this bill and the additional complexity that it would bring about for workers and employers alike. Professor Andrew Stewart, in his submission, discussed the complexity of the Workplace Relations Act that many more workers and managers would have to come to terms with should this legislation be passed. In particular, Professor Stewart, writing about the provisions of the act, said:

They are very hard for ordinary workers or managers to understand, necessitating legal advice for even the simplest procedures. Instead of simply empowering the Australian Industrial Relations Commission (AIRC) to deal with certain claims and providing broad guidance as to how to do so, as most State laws do, the legislation seeks to regulate each step of the process in ever-increasing detail. As is generally the way when Parliament tries to anticipate and counter every eventuality, this level of detail simply creates potential gaps and uncertainties for litigants and the lawyers to exploit.

So much for the minister's stated aim of less complexity!

Let me now turn to the alleged aim of lower costs. I do not need to go into the claim of the minister in detail other than to point out that, given the nightmare of complexity that he is apparently hell-bent on creating, there is no hope of lower costs. In fact, the opposite will result: costs will have to increase for workers and employers alike as they will need to seek legal advice for, in Professor Stewart's words, `even the simplest procedures'.

Lastly, I turn to Minister Abbott's claim that the passage of this bill will mean more jobs. For some time the government has been holding onto the claim that making it easier for the employer to unfairly sack a worker will make the employer more likely to take the step of employing the worker in the first place. We on this side of the chamber have more faith in the employers of this nation than it appears the government does. Nobody believes for a minute that when considering whether or not to take on a new worker an employer thinks, `No, I won't take someone on because when I treat them unfairly and sack them they might be able to come back at me.' That is not how employers think. That is not how small business employers, whom the government thinks are most likely to want to treat people unfairly, think at all. I think that when deciding whether or not to take someone on a potential employer looks at the turnover of their business and what skills are needed and whether there is sufficient work and resources to allow for an additional worker. But the government does not think that. The government thinks that the only thing holding back small business from taking on more staff is the risk of not being able to unfairly dismiss those workers down the track. I believe that is just not a factor in the minds of small business employers.

The Senate Employment, Workplace Relations and Education References Committee conducted an inquiry into small business in 2002. The committee's findings released in February this year found:

Consistent with survey rankings of small business concerns, unfair dismissal did not arise as a major issue during the inquiry.

The committee found that more pressing concerns for small business were the difficulties they faced complying with the government's new tax system, the need for better business management and problems with recruiting suitable employees. Where unfair dismissal laws were raised as a concern, the committee reported that the main issues were a `lack of understanding in how to dismiss staff consistent with the law, the costs and complexities of the current processes for determining claims and the uncertainty for outcomes'.

The committee noted that what was most lacking were personal management skills in the small business sector, and reported a need for more training and support. But the government does not offer this training and support; what it offers through this bill, as my colleague has already said, is a sledgehammer approach: fix the problem by having yet another go at Australia's workers and remove their protection from being treated unfairly, rather than providing the education and training to employers about their obligations.

I do not think anybody has forgotten that it was this government in its previous term who turned dogs onto Australian workers under the previous minister, Minister Reith. That image will be seared forever into the consciousness of many Australians, I believe. But just because this attempt by the government to snatch conditions and protection from workers has a less dramatic modus operandi, that makes it no less abhorrent. Minister Abbott, in introducing this bill, was trying to achieve three things: less complexity, lower costs and more jobs. The minister needs to go back to the drawing board, Labor believes, because this bill demonstrably will not achieve any of those things.

At the risk of teaching the minister how to do his job, Labor suggests that a good place to start would be to consult with the states. This bill will have a considerable effect on states' industrial relations jurisdictions. The rationale for this dramatic change is replete with rhetoric and generalisation but has very little by way of evidence or detailed analysis. As Ron McCallum, Blake Dawson Waldron Professor in Industrial Law and Dean of Law at the University of Sydney, said in his recent speech to the 11th Annual Labour Law Conference:

If the provisions of this bill concerning the coverage of federal law over employment terminations are enacted into law in their present form, they will strike a blow at the five remaining state systems of employment regulation that may mean the beginning of the end of state employment regulation in Australia.

That is something I would not have thought the federal government would want. Professor McCallum went on to say that, due to the expanded coverage of this legislation with about 85 per cent of workers having recourse to only federal mechanisms, state regulators would be left with very little to do. He believes that this—and I quote:

...would have a telling impact upon the viability of these state-based systems of labour relations regulation, especially in the smaller states of South Australia and Tasmania.

As these state systems do much more than simply regulate laws governing wages and employment conditions, to leave them gutted and unviable would impact on other areas of state law—areas that the Australian parliament has no interest in. So why would the federal government wish to go down this particular path? Their past record would suggest that having a go at workers may be their main motivation; however, some of the more charitable amongst those on this side of the chamber may suggest that the government is attempting to simplify industrial relations law and create a single, national system. So let us assume that that is the motivation.

Senator Murphy —Like the tax system!

Senator MACKAY —That's right. Thank you, Senator Murphy. However, this bill, whilst achieving the first, certainly fails to do the latter. In my home state of Tasmania, despite the lack of consultation from the federal government, a considerable amount of work has been done to examine the implications of this bill, and I commend the state government for the quality of their submission to the Senate committee and wholeheartedly support their recommendation to reject these proposals.

As part of the work done on examining the effect of this bill, the Tasmanian Industrial Commission assessed the last 300 filed applications. These 300 applications related to 326 individuals. The results of examining these applications were as follows. Firstly, the Tasmanian Industrial Commission determined that 202 of the 300 applications—67.3 per cent—were possibly applicants employed by constitutional corporations and would therefore be subject to the jurisdiction of the Australian Industrial Relations Commission. Secondly, of the 202 applications, 67—that is, 33.2 per cent—could be excluded from pursuing an application in either the Tasmanian Industrial Commission or the Australian Industrial Relations Commission by regulation 30BA and section 170CC of the Workplace Relations Act 1996. Thirdly, of the 300 applications, 128—that is, 42.7 per cent—also included claims in respect of underpayment of wages, long service leave and/or redundancy entitlements. A number included multiple claims. Fourthly, 93 of the 202 applications—46 per cent—would require applications to be lodged with both the Australian Industrial Relations Commission and the Tasmanian Industrial Commission as they sought entitlements as well as a claim for alleged unfair dismissal.

The Tasmanian Industrial Commission's inquiries indicated that there would be a significant impact on the work of the commission and that the bill would result in a number of potential applicants—33-odd per cent of their sample—not being able to pursue a claim in either jurisdiction. Also, a number of clients—46 per cent of the sample— would need to pursue their claims in both the Australian Industrial Relations Commission and the Tasmanian Industrial Commission. For anybody who is still with me, I think what we have here, from a Tasmanian perspective, is an increase in the complexity of the industrial relations system at both the Tasmanian and Australian level. So much for a more simple method of operating and an aspiration to a unified system. The clear evidence is that this legislation is fundamentally flawed. If Minister Abbott had consulted with the states, including the Tasmanian state government, he would have found this out for himself. I will say again that this bill does not achieve what Minister Abbott sets out to achieve at a practical level. All that we are left with, therefore, is the assumption that this is an ideological obsession with diminishing protection.

So let me now turn to what effect this bill would have on protection for workers in the event of unfair dismissal. The first and most glaringly unjust provision of this bill is its attempt to treat workers employed by small businesses in a different way from workers employed by medium and large enterprises. None of us on this side of the chamber can see any reason why the size of the business that the employee works for should determine their ability to seek redress in the event of unfair treatment. To argue otherwise is to argue for an inequality of rights and sets Australia on a very dangerous path indeed. As the Senate committee found, one of the major issues identified by small businesses was `problems with recruiting suitable employees'. Creating an environment where there is less security and fewer rights for employees of these businesses will only make it harder, in fact, for them to attract suitable, skilled staff, which is completely contrary to the objective of this bill.

This bill seeks to differentiate between employees of small businesses and those employed by larger businesses in a number of ways. For an employee of a small business the qualifying period of employment before an application for a remedy can be made will be extended from three months to six months. The maximum compensation payable to a small business employee who has been unfairly dismissed will be reduced from six months remuneration to three months remuneration. I ask why. Is the unfairly dismissed employee of a small business more readily able to find alternative work? Do small business employees have less financial commitments than other employees? Do the children of small business employees have less need for education or health care— things that under this government are costing families more and more each day? Of course they do not. So how can it possibly be fair to discriminate against employees of small businesses in this way? It cannot be. That is why Labor will not be supporting this bill: a bill that attempts to set up two classes of workers in this country and effectively, in the case of small business, an underclass.

Minister Abbott has made some cursory attempt to justify what would seem, prima facie, to be discriminatory treatment of workers by some relatively poorly explained and ill-defined notions of imbalance. Like my Labor colleagues on the committee, I do not accept this attempted justification. As they noted in their report, there were strong arguments put before the committee:

... that small business may have compensating advantages that undermine any argument for concessional treatment in regard to employment laws.

In particular, they noted Professor Keith Hancock's submission in which he stated:

There is a wide variety of forces at work that determine the `make-up' of the economy between small and large business. Some of these favour large businesses and others small businesses. The oft-cited importance of small business in the overall economy is of itself evidence that by no means all advantages lie with bigness.

So there goes the final of the minister's arguments. Add to that the lack of protection for that substantial proportion of the work force who will still remain beyond the reach of federal law and those for whom the system will become immensely more complicated and you are not left, on the face of it, with much to support. As I said, this is a bad bill that does not achieve even the less distasteful elements of the minister's agenda. The minister, if he is serious about making some changes to bring about a more coherent regulatory system, has to go back to the states.

To finish, I would like to return to the words of Professor Ron McCallum, who said:

We are a federation and will remain so. It is possible to work towards a national system of industrial relations law: However, such a program requires cooperation, discussion and patience on all sides. If this Bill is enacted into law in its present form, then in my view it will ... set back federal and state cooperation on industrial law reform by several decades.

We cannot afford to do that, so in the interest of future, better-intentioned reform and in the interests of Australian small business workers and Australian small businesses themselves, Labor will continue to oppose this legislation.