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Monday, 4 December 2017
Page: 9433


Senator PATRICK (South Australia) (10:39): As I was not able to contribute to the second reading debate on the Fair Work Amendment (Repeal of 4 Yearly Reviews and Other Measures) Bill 2017, I wanted to make some brief remarks about the position of the Nick Xenophon Team on the penalty rates amendment moved by Senator Cameron. At the outset I want to make it clear that NXT is on the record as opposing the Fair Work Commission's decision to cut penalty rates to low-paid workers. It is the formal position of the Nick Xenophon Team that workers should not have their pay rates cut at a time of low wage growth. The NXT also supported a bill by the member for Dawson, Mr George Christensen, which seeks both to stop those cuts and to put an end to sweetheart deals between big unions and big business to avoid paying penalty rates through a distortion of the enterprise bargaining agreement process—something small business cannot do.

This amendment replicates the private member's bill moved in the House of Representatives by Mr Christensen and seconded by my colleague the member for Mayo, Rebekha Sharkie. It also gives effect to a recommendation made by former Senator Xenophon in the Education and Employment References Committee inquiry into penalty rates. This amendment goes one step further than the bill by the opposition. It overturns the decision of the Fair Work Commission but also ensures that workers are not penalised by enterprise agreements which seek to trade away their penalty rates.

The practice of trading away penalty rates, usually by the Shop, Distributive and Allied Employees Association, is why former Senator Xenophon moved for an inquiry. This inquiry heard important evidence about the practice of trading away penalty rates engaged in by major retailers and the SDA, which leave many workers worse off than if they were employed under relevant modern awards. I want to make it clear that trading away a penalty rate for another benefit, such as a higher base rate of pay, may not be objectionable practice as a general principle, so long as the individual worker is in fact better off. It becomes an objectionable practice when a worker who benefits and relies on penalty rates, when predominantly working evenings, weekends and public holidays, loses out because of a higher base rate that has been secured for a traditional Monday-to-Friday, nine-to-five worker.

Unfortunately, it appears that enterprise agreements where many workers are not better off overall are all too common, especially in the fast food, hospitality and retail sectors. These deals have negatively affected hundreds of thousands of workers, and it has been estimated that each year these deals cost approximately 250,000 employees more than $300 million collectively. This amendment would put an end to those deals. While the ACTU has labelled the bill moved by the member for Dawson as counterproductive and warned that it could make workers worse off, introducing a dangerous distraction that will potentially threaten the take-home pay of an entirely new group of workers, I take comfort in the fact that the opposition has decided to adopt the bill. If the proposal moved by the member for Dawson were to put these workers at risk, I'm sure the opposition would not be moving it.

Before I conclude, I would like to address the claim that around 700,000 people would have an effective pay cut because of the penalty rate decision. This figure has been repeated by the Leader of the Opposition, Mr Shorten, many times. On ABC TV's Q&A program on 26 June, 2017, the opposition spokeswoman for justice, Clare O'Neil, said:

… on Sunday, in fact, this penalty rate cut will take effect - 700,000 of the poorest-paid people in the country are going to have an effective pay cut.

The great team at RMIT ABC Fact Check looked into this claim and their verdict was that it was fanciful. In a piece for The Conversation,The University of Melbourne's Dr Josh Healy applied Australian Bureau of Statistics estimates of people who work on Sundays and/or on varying days and came up with the figure of 355,000 people potentially affected. Professor Mark Wooden of the University of Melbourne tells Fact Check:

Given the broad assumptions made, the 700,000 figure is not credible and far too high, but no one really knows what the net effect will be.

Although there has been some debate about the numbers, what is known is that there will be a large number of workers who will be negatively affected by the decision of the Fair Work Commission to cut penalty rates. This amendment will protect not only these workers but workers who end up worse off because of deals between unions and big business that trade away penalty rates without any real benefit.

The CHAIR: The question is that opposition amendments (1) and (2) on sheet 8173, moved by Senator Cameron, be agreed to.