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Thursday, 30 August 2001
Page: 30614


Mr ABBOTT (Minister for Employment, Workplace Relations and Small Business) (9:46 AM) —I move:

That the bill be now read a second time.

This bill will amend the Workplace Relations Act 1996 and the Trades Practices Act 1974 to ensure that the workplace relations system better meets the needs and circumstances of small business.

There is a compelling case for the passage of this bill. A vibrant and innovative small business sector is crucial to Australia's economic growth and social welfare. The changes introduced in 1996 to the Workplace Relations Act significantly improved access for small business employers and employees to the workplace relations system. Many small businesses in the federal jurisdiction now have a greater choice of agreement types, including non-union agreements and individual agreements. There is less scope for uninvited third party intervention and there is a simplified award safety net underpinning workplace bargaining. However, further reform is required to maximise the opportunities for small business growth, and to drive unemployment down even further.

The bill will help achieve this. Its reforms will create more jobs, protect small businesses and their employees from unwanted and unwarranted third party interference, reduce red tape and create more choice.

This bill demonstrates the government's continuing commitment to small business and shows that the government is serious about reducing workplace relations red tape and unjustified third party interference.

The bill proposes amendments to the principal object of the Workplace Relations Act and the objects of particular parts of the act to include reference to the special circumstances of small business. The Australian Industrial Relations Commission will be required to take into account the circumstances of employers and employees in small business in the exercise of its powers, including, where appropriate, modifying its principles and procedures. The president of the commission will be required to undertake a review of the rules of the commission, in the light of the changes to the act, in particular the changes to the objects of the act. The president will provide a report to the minister within an eight-month period after the commencement of this bill about the outcome of the review of the commission's rules and will be encouraged to consult with small business employers and employees in the process of the review.

Many small businesses are not members of registered employer organisations and, consequently, are not represented in the commission's hearings and cases. They often do not have the resources or opportunity to influence commission proceedings and outcomes. These changes are intended to make the commission, and the system generally, more accessible and responsive to small business.

Survey evidence suggests that potential unfair dismissal claims discourage a significant proportion of small businesses from recruiting additional staff. For example, the Yellow Pages Small Business Index survey conducted in October and November 1997 found that 38 per cent or proprietors surveyed indicated that they would be more likely to recruit new employees if they were exempted from the current unfair dismissal laws.

The government is determined to continue to pursue the exemption for small business employers from unfair dismissal provisions when employing new employees. This bill contains a proposal that is essentially the same as the exemption contained in the Workplace Relations Amendment (Unfair Dismissals) Bill 1998, except that this bill would exclude employees in businesses with fewer than 20 employees rather than 15 or fewer employees. The proposal would not affect existing employees or trainees or apprentices and would not exclude new employees from making unlawful dismissal claims—for example, dismissals for discriminatory reasons.

Defending an unfair dismissal claim, however groundless that claim may be, is especially burdensome for small business. In larger enterprises more expertise and resources can be put into recruitment, human resource management and termination procedures and consequences. Small businesses have limited resources. Even attending a commission hearing, particularly for regional and rural Australians, can be extremely difficult, given that the location of proceedings is usually in capital cities and many small business operators would have to attend in person.

The bill proposes other amendments to continue to ease the burden of unfair dismissal claims on small business. Members of the commission will be given the power to decline to deal with unfair dismissal applications against small employers when they are first lodged. The commission member will be able to seek further particulars from an applicant and a response from the small employer by correspondence, rather than having the parties appear in person. Claims that are then determined to be clearly not within the commission's jurisdiction or unmeritorious or vexatious could be rejected without any hearings being convened. This process will not apply to applications concerning unlawful dismissal.

This amendment will complement the proposed small business unfair dismissal exclusion, by providing a simple and appropriate means for dealing with invalid applications by excluded employees. For applications by small business employees who are not exempt—for example, apprentices, trainees, or employees employed before the commencement of the exclusion—commission members could dismiss an application if reasonably satisfied it is frivolous or vexatious or lacking in substance or falls outside the commission's jurisdiction.

These amendments will build on the recent success the coalition has had in enacting the Workplace Relations Amendment (Termination of Employment) Act 2001 which starts to lighten the burden of unfair dismissal claims on all businesses, particularly small businesses.

The bill proposes to further encourage agreement making, particularly for small business. The proposed amendments will provide employers and employees with simple and more streamlined agreement making processes. The proposed amendments are consistent with the Workplace Relations Act's focus on the right of all employers and employees to determine their own working arrangements at their workplace, whether those arrangements involve formalised individual agreements, AWAs, formalised collective agreements, CAs, or informal agreements.

While agreement making at the enterprise level has been enthusiastically embraced in Australian workplaces, small business has been consistently under-represented among workplaces with agreements in place. The current procedures for certifying agreements need to be made less time consuming, less complex and less costly, particularly for small business.

This bill introduces provisions to streamline agreement making processes, as well as limit the scope for the unwelcome involvement of third parties. For example, the legislation removes the current requirement to recommence the 14-day `consideration period' for a collective workplace agreement each time a new employee begins work during that period.

In addition, the current practice of the commission conducting formal hearings for the certification of collective agreements will be limited to exceptional circumstances. This aspect of agreement making has long been seen as unnecessarily formal and difficult, especially for small business. The new provisions mean that no longer will parties have to wait for their application to be listed for hearing and then take time out of work to attend.

The current filing and approval processes for AWAs will be amalgamated to provide a much simpler and quicker one-step formalisation process. An AWA will take effect from the date of signing, the date specified in the agreement or the date employment commences, whichever is the later. Employers will be able to start new employees on AWAs as soon as they agree, rather than having to wait for a specified number of days. The act will also provide for a cooling-off period to protect employees who may subsequently change their mind.

The Employment Advocate will be able to approve all AWAs, without being required to refer an AWA to the commission where there are concerns about whether or not it meets the no-disadvantage test. The proposed amendments also remove the requirement for employers to demonstrate that they have not acted unfairly or unreasonably in failing to offer identical AWAs to comparable employees.

The bill proposes amendments to section 87 of the Trades Practices Act 1974 to allow the Australian Consumer and Competition Commission, the ACCC, to bring representative actions in respect of contraventions of sections 45D and 45E of the Trade Practices Act. Section 45D of the Trade Practices Act prohibits secondary boycotts undertaken for the purpose of causing substantial loss or damage. Section 45E prohibits certain contracts, arrangements or understandings with organisations of employees which affect the supply or acquisition of goods or services.

At present, section 87 of the Trade Practices Act allows the ACCC to bring representative actions in respect of contraventions of all of part IV of the Trade Practices Act, except for sections 45D and 45E. The problem of access to remedies for contraventions of section 45D and 45E will be addressed by ensuring that the ACCC has clear powers to enable it to bring representative proceedings on behalf of businesses and consumers. In the absence of these amendments, business, particularly small businesses, will continue to be effectively denied the protection purported to be offered by the Trade Practices Act and hence will continue to bear the costs of the loss or damages produced by unlawful conduct.

The bill also proposes amendments that will enhance the ability of small business to resist attempts to rope them into federal awards. A dispute with an employer with fewer than 20 employees will only be taken to exist, in a roping-in or log of claims process, where the union demonstrates that it has a member employed by the employer. The identity of individual union members, however, will be kept confidential.

Further, the commission will be required not to make any finding of dispute in respect of any employer where the alleged dispute was notified on the ground that the employer had not agreed to demands set out in a log of claims, unless satisfied that:

· the log of claims, when served, was accompanied by a notice containing prescribed information, including the rights an employer has to defend itself against the log of claims;

· the alleged dispute was not notified until at least 28 days after service of the log;

· the party notifying the alleged dispute had given the employer at least 28 days notice of the time and place for hearing of the dispute notification; and

· the log of claims did not include any demand requiring conduct or provisions contrary to the freedom of association provisions of the act, or outside the scope of the employment relationship, or inadmissible because it restricts the use of contractors.

The bill will also require the commission to inquire into the views of identified small business employers affected by the making of an award, rather than only attending to the views of employers who appear or are represented at hearings.

The bill proposes to limit the disruption to business, in particular small business, caused by union entry to the workplace. This will be achieved by requiring unions to provide five working days written notice of their intention to enter the workplace and allowing the relevant employer or occupier, within certain limits, to propose an alternative date in writing for union entry. This will ensure greater flexibility for businesses and their employees and allow them to avoid disruption during critical periods.

An invitation from a member employed at the workplace will be a prerequisite to union entry, ensuring that unions exercise their right to enter workplaces only where there is support from members. Invitations will be valid for three months from the date given to the union, or, where the inviting employee wishes to remain anonymous, from a date certified by the registrar.

Employees who issue an invitation to a union can choose to do so confidentially. In such cases the union will be able to apply to the registrar for a certificate that can be shown to the employer or occupier in place of the invitation.

In addition, union entry for discussions with employees will be limited to once every six months. More frequent entry for inspection purposes will still be permitted.

The bill also proposes to ensure that all parties are well informed about the new arrangements. In their notice to the employer and occupier and upon entry, union officials will be required to provide prescribed information setting out the rights and obligations of employers, occupiers and union officials in relation to workplace entry.

Other amendments propose to ensure that the relationship between a business and a contractor, including contractors hired through intermediaries such as labour hire firms, is essentially a commercial and not a workplace relations arrangement. It includes amendments to ensure that awards and agreements do not restrict employers from entering into contracts for services, or require employers to include particular terms or conditions in such contracts. It goes without saying that small business proprietors should not be prevented from engaging contractors to provide services to their businesses or their clients.

Award restrictions on the use of contractors commonly require a respondent employer that contracts out work covered by the award to include a term in the contract binding the contractor to observe the rates and conditions of the award. Such clauses may raise complex compliance issues for contractors, as a different award may also bind them.

At present provisions in agreements constrain the use of contractors in a number of ways, for example by:

· defining and limiting the circumstances in which contractors may be used;

· placing procedural requirements on the use of contractors;

· requiring contractors to make certain types of industrial agreements; and

· requiring contractors to observe certain industrial behaviour, such as observing work bans or strikes.

Preventing such restrictive provisions will benefit an important segment of the small business community by improving the freedom of contractors to make commercial arrangements according to their business needs. These changes will enhance labour market flexibility and efficiency by removing artificial restrictions on the use of contractors and labour hire.

The bill provides an exemption to maintain appropriate protections for low-paid workers in the textiles, clothing and footwear industry.

In introducing this bill, the government is demonstrating its commitment to making the workplace relations system better meet the needs and circumstances of small businesses. This is vital to maximise the opportunities for growth and innovation for the approximately 1,075,000 private sector, non-agricultural, small businesses in Australia. These businesses account for 96 per cent of all businesses—and the workplace relations system must be more responsive to their needs. The changes made to the Workplace Relations Act in 1996 improved access for small businesses and their employees to the workplace relations system. This bill accelerates that process of reform.

Measures which benefit small business in Australia are good for jobs. Small business is the engine room for jobs growth in our economy. It is clearly in the public interest to open the door to the new jobs that can be created by small businesses if we continue to ease the pressure that excessive industrial regulation presents for Australia's hardworking small business men and women.

I commend the bill to the House and present the explanatory memorandum.

Debate (on motion by Mr Griffin) adjourned.