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Wednesday, 13 November 2002
Page: 8853


Mr ABBOTT (Minister for Employment and Workplace Relations and Minister Assisting the Prime Minister for the Public Service) (9:31 AM) —I move:

That this bill be now read a second time.

This bill has three objectives: first, to improve federal unfair dismissal law for small business; second, to improve federal unfair dismissal law generally; and, third, and most important, to widen very significantly the federal law's coverage.

Since my predecessor, Peter Reith, launched a series of discussion papers in late 2000, it has been government policy to explore options for working towards a simpler, fairer workplace relations system based on a more unified and harmonised set of laws. Maintaining six separate industrial jurisdictions makes as much sense as keeping six separate railway gauges. A national economy needs a national regulatory system and the sooner we can achieve this, the better. A more unified national workplace relations system means less complexity, lower costs and more jobs.

The government would prefer to proceed by agreement and by referral of powers along the lines pioneered by Premier Kennett in Victoria. In the absence of referrals by other states, the government proposes to use its existing constitutional powers, where it reasonably can, in a step-by-step progress towards a more unified system. In this case, the government proposes to ensure that workers and business people operate, as far as is constitutionally possible, under one system of laws governing unfair dismissal.

At present, only workers employed on federal awards or agreements have access to remedies under the federal unfair dismissal laws, unless they happen to be employed in Victoria or the territories. This legislation will ensure, in addition, that any worker employed by a corporation is within the scope of the federal unfair dismissal jurisdiction and, further, that workers within the scope of the federal system will be governed by it rather than by any state unfair dismissal law. This `cover the field' provision means that the percentage of employees covered by federal unfair dismissal provisions should rise from about 50 per cent to about 85 per cent and that the number of workers covered by federal unfair dismissal provisions should increase from about four million to about seven million.

If this bill passes, the authority and coverage of the Australian Industrial Relations Commission will be strengthened. If the bill passes, just 15 per cent of employees, mostly working in unincorporated small businesses, will remain covered by state unfair dismissal systems. The government believes that an expansion of federal jurisdiction on this scale should eventually lead to a `withering away of the states' at least in this aspect of workplace law.

Even as it stands, the federal unfair dismissal law is generally less burdensome to employers and less destructive of employment growth than the state laws. Even if this were not the case, there would be advantages in having to deal with only one imperfect set of laws rather than several. The government hopes to achieve not only one set of unfair dismissal provisions covering Australian workplaces but also the best possible set of provisions covering Australian workplaces.

A new Melbourne Institute of Applied Economic and Social Research study provides evidence of the confusion caused by overlapping federal and state unfair dismissal laws and also of the damage these laws can do. Based on a Yellow Pages survey of nearly 2,000 small to medium businesses, the study found that almost a third of businesses did not know whether they were covered by federal or state unfair dismissal laws. If business managers are confused by this complexity, workers can be expected to be just as confused and, as a result, might fail to seek redress or to lodge an application in time.

The Melbourne Institute study also showed that the cost to small and medium sized businesses of complying with unfair dismissal laws is at least $1.3 billion a year and that these laws have played a part in the loss of over 77,000 jobs from small and medium business. This study amply justifies the government's continued determination entirely to exempt small business from the reach of the unfair dismissal laws, as well as the provisions in this bill to make these laws less unfair to business and less damaging to job creation.

For small business, this bill:

· extends the standard qualifying period for employees' access to unfair dismissal provisions from three to six months;

· allows the commission to deal with some claims `on the papers'—that is, without a hearing;

· halves the amount of compensation that can be awarded to an employee;

· streamlines the criteria for determining whether a dismissal was unfair; and

· refines the penalty provisions for lawyers and agents who encourage unmeritorious claims.

For business generally, this bill:

· requires the commission to take into account any contributory conduct by an employee when determining compensation;

· limits dismissal claims where an employer no longer has work for an employee—in other words, redundant employees will not usually have access to unfair dismissal claims to supplement any redundancy entitlements;

· requires the commission, when making an order for back pay, to take account of any income an employee who is to be reinstated may have earned since his or her dismissal;

· requires the commission to consider whether the safety and welfare of other employees was a factor in the dismissal; and

· emphasises reinstatement as the primary remedy.

Prominent members of the Australian Democrats have offered support for a single, more simplified unfair dismissal system providing a better balance between the interests of employers and employees without impeding job creation. This bill contributes substantially towards achieving that aim. This bill is the first legislative step towards a single workplace relations system for the whole country. On those grounds, I very strongly commend this bill to the House and I present the explanatory memorandum.

Debate (on motion by Mr Melham) adjourned.