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Wednesday, 25 June 2003
Page: 17536


Ms BURKE (5:51 PM) —The Workplace Relations Amendment (Transmission of Business) Bill 2002 currently before the House seeks to do one thing and one thing only: reduce the employment conditions of employees who work for a business that is sold to another organisation. This is something that happens daily—one business is acquired by another business—and so this affects many thousands of ordinary Australian workers. Ordinary Australian workers who have done nothing wrong face the prospect of reduced pay and conditions on the basis of their employer company being sold. This is patently unfair, and I support the amendments that have been put forward by the member for Barton.

It is interesting to consider that the current government has stripped from the Industrial Relations Commission power to arbitrate and conciliate on many disputes. The government has reduced its impact as an industrial umpire. When the Australian Industrial Relations Commission is a convenient mechanism to reduce the wages and conditions of employees who have previously agreed to a certified agreement, the government is all in favour of increasing the powers of the AIRC. According to the government's view of the industrial world, the commission cannot sort out disputes but it can arrange matters so that ordinary Australians receive reduced pay packets for no other reason than the company they now work for is owned by somebody else.

The bill deals with circumstances where a business is sold or otherwise transferred to another entity and will allow for the effective cancellation of a binding certified agreement without the consent of the employees of that company. This is not the first time that these proposals have been before the parliament. The first time was in that great bill called More Jobs, Better Pay and in a subsequent bill in 2001. At the time, the relevant Senate committee considered the provisions contained in the bill. The Labor senators' report described the bill as follows:

... to overcome an obstacle to the business plans of employers who wish to reduce wages and conditions of employees inherited from businesses they have taken over. Currently, certified agreements are transferable with the employees who are party to them.

Currently, as you would expect, employees who are doing substantially the same work maintain their wages and conditions following the transmission of business. This transfer of wages, conditions and entitlements is quite reasonably seen as an ongoing cost to the business that a purchaser is liable to meet upon purchase of that business. But the government wishes to give purchasing employers the ability to say, `Bad luck.' Even though employees are doing the same job, walk through the same front door in the morning and sit at the same desk or work at the same workstation, employers are trying to give them a pay cut.

This is not the only way that businesses attempt to do this. One of my most famous and more entertaining outings to the commission in my previous life was when the famous HIH overtook a company called CIC. We spent many days in the commission with the legal representatives from HIH arguing that it was not a transmission of business but a share action transaction involving HIH, and HIH was swapping shares in acquiring CIC; therefore, it was not a transmission of business. This went round and round in circles until Deputy President Maher said to the lawyer in question, `If it smells like a transmission of business, if it looks like a transmission of business, it is a transmission of business. And there is such a thing called a transmission of business. One day you are sitting at this desk and it is owned by this company. The next day you are sitting at the same desk and it is still owned by the same company. With two insurance companies amalgamating, you cannot tell me the terms and conditions should not go with those employees.' Nothing changed in their day-to-day life, but we spent many hours in the commission trying to negotiate this through. We eventually won the case and all CIC employees maintained their terms and conditions, to the chagrin of the ever mighty Ray Williams at HIH.

This is not the only way employers attempt to weasel out of the reasonable terms and conditions that their staff are enjoying. Staff are not looking for something new; they are just looking to maintain what they have already got. The only reason they are getting a pay cut—despite having a certified agreement—is that somehow it is somebody else's company. You are doing the same work and you have an existing agreement with conditions and monetary compensation for your work, but to the purchaser company it will be useless.

It has been claimed that through this process the bill will introduce more flexibility into the industrial relations arena. I think that to some extent at least it is true. It gives the purchaser of a business the ability to implement downward flexibility without the consent of employees. This was certainly the case with Suncorp Metway when they attempted to reduce the conditions of GIO staff. This is still going on, with matters before the court. An article in the Sydney Morning Herald in June last year by Brad Norrington titled `Union fights Suncorp bid to slash staff conditions' clearly outlines the actions by Suncorp Metway. The article states:

Up to 3000 GIO Australia staff being absorbed by Suncorp/Metway face changed hours, less overtime pay and cuts to benefits like sick leave, with the company accused of wanting to rid itself of union involvement. The Finance Sector Union is fighting Suncorp/Metway in the Australian Industrial Relations Commission, where the company is trying to transfer 110 new GIO employees to an existing company agreement. That agreement would require them to work longer hours before receiving overtime, and would reduce employees' sick leave, retrenchment pay, long service leave and the number of paid rest breaks. GIO employees who previously worked between 7am and 8pm Monday to Friday could be required to work “any day of the week, and at any hour of the day” under the company plan.

... ... ...

The union's national secretary, Tony Beck, accused Suncorp/Metway of trying to circumvent the existing entitlements of former GIO staff, who he said would continue to perform the same work.

I am pleased that I never had to deal directly with the infamous Suncorp Metway, the group who set up their own in-house union to try to circumvent all reasonable employment conditions for their staff, because their track record of employee relations is nothing short of appalling.

The actions and intent of this company were clear: to reduce the existing wages and conditions of the GIO staff upon taking control of that entity. The No. 1 factor in most of these cases is to reduce people's redundancy entitlements. The company acquire the business and make people redundant, but generally employees' terms and conditions will be a lot worse than those they fought for in their agreement. However, the company claim that the transfer of staff to their new employer would leave them pretty much on the same conditions. This is blatantly untrue. The kind of flexibility that this bill would allow includes longer hours before receiving overtime, reductions in sick leave, reductions in retrenchment pay, reductions in long service leave and an increase in the range of hours that an employee could be required to work—all this without the consent of the employees who would be affected by these changes. This is not the only action taking place.

Currently in the Federal Court action is being taken by the Finance Sector Union against the Commonwealth Bank. In the mid-1990s the bank set up Comsec as a share-trading company to operate within the CBA group. Late last financial year, they made a decision to transfer all employment out of one of the CBA business units, Premium Financial Services, into Comsec. They are doing this by forcing all current employees who want a promotion for one of these new roles to resign from CBA and start up with Comsec. This entails the compulsory acceptance of an individual contract. The conditions of this contract significantly undercut those under the CBA agreement. They include no RDOs, unlimited hours, no overtime, no loading, reduced redundancy entitlements and changes to leave arrangements. Staff had the choice of refusing all promotions and staying with the Commonwealth Bank or having career advancement by resigning and taking inferior conditions. Staff are not even leaving a company; it is just a different business unit. It is not as if companies need the protection of this bill. They are already trying weird and wonderful ways to reduce entitlements by saying that staff now work for someone else.

This bill proposes a process whereby employers, following the transmission of business, can pay staff less and arrange their working conditions in a way detrimental to the employees without their consent. It is important to remember that certified agreements are only possible with the consent of the employees to be covered by that agreement. There needs to be a vote. This means that the people who work for a business have agreed to provide their labour in exchange for an agreed upon set of conditions. As a result of this, alterations to a certified agreement also require the approval of those covered by the agreement—both the employer and employees. This requirement may be removed were this bill to pass in the form that the government has put forward. The opposition alone in this place recognise the importance of genuine industrial democracy when determining the employer-employee relationship.

The government claims to support agreements between employers and employees but has put forward a bill that allows a certified agreement to be changed without the consent of those who are parties to that agreement. The government—and, particularly, the minister for workplace relations—speaks of industrial relations but, in order to reduce wages and conditions, is happy to put in place circumstances that mean that any concept of democracy or consent can just be trashed. This is simply an outrage. The government supposedly supports the concept of democracy when it can be used to reduce the ability of employees to take industrial action, but it is not in favour of democracy when it depends upon the consent of employees to cut their wages and conditions.

There are currently remedies for an employer, even one who has just acquired a business, who wishes to vary or terminate a certified agreement. They can apply to the Australian Industrial Relations Commission for a variation. The big difference between the current provisions, which apply to all employers, and the provisions in this bill, which would apply upon transfer of business, is that a valid majority of employees covered by a certified agreement are currently required to agree to any variation. The government is asking this House to agree that employees can enter into certified agreements with their employer, but that the agreements can be varied without the consent of employees upon transfer of the ownership of the business. It wants the purchaser of a business to have a clean slate from which to organise industrial arrangements in a workplace.

This is an unrealistic expectation. When someone purchases a business, the contracts and liabilities of that business transfer with it. As with any other contract that a business agrees to, employment conditions and agreements transfer as well. The report by Labor senators that I mentioned earlier also addresses this point. It states:

Labor senators support the notion that industrial participants should bargain in good faith, and the corollary of that proposition, that they should be bound by the outcomes of that process. The capacity for one party to seek relief from the conclusions of their own bargain is simply wrong. In no other aspect of the commercial relationships entered into by the previous owner of a business would such an outcome be tolerated. Ordinary contractual relations entered into by a business survive the sale of the business, so what rationale exists for treating employment relationships any differently?

This is, clearly, a logical proposition that I support. As with any other commercial contract, the purchaser of a business can clearly identify the costs of the contract when negotiating the purchase of that business. The industrial arrangements of certified agreements are not exactly a secret. They are certified and lodged with the commission; you would know exactly what they were when you entered into purchasing that business. Anyone who undertakes to purchase a business without undertaking appropriate and comprehensive due diligence investigations is, quite probably, someone who has not thought through the purchase or their obligations. You only need to look again at the wonderful HIH and their acquisition of FAI to see that, if you do not do due diligence, you get into trouble. If you do due diligence, you find out what your obligations are.

There is a clear obligation upon the purchaser of a business to meet existing contractual obligations, and obligations to employees are no different. That is why the amendments moved by the member for Barton are so important. They recognise that it is essential that there be a tightened test for transmissions of business to ensure that employees who perform substantially the same work before and after the transmission do not suffer reductions in the terms of their employment. This is a matter not only of fairness but also of principle. Once an agreement has been entered into by consenting parties—in this case, between employer and employees—it is reasonable that that agreement be set aside only with the consent of the parties to it.

In his second reading speech on the Workplace Relations Amendment (Transmission of Business) Bill 2002, the Minister for Employment and Workplace Relations stated as its justification:

This bill will provide a mechanism for resolving complexities which may arise due to the existence of multiple or inappropriate certified agreements following a transmission of business. At best, these complexities can lengthen the transmission process. At worst, they can deter the parties from undertaking it. In other words, they cost jobs.

This is, at best, a stretch of the minister's credibility and, at worst, simple hypocrisy. This government and this minister—and even the Prime Minister, in question time yesterday—are always keen to talk of the flexibility that individual contracts, or AWAs, offer. They put them forward as the optimal method of organising employee-employer relations. Let us take a hypothetical business with 100 employees. This business could very well have 100 different contracts with varying conditions in each. This is the government's proposal. This is what they are pushing with respect to AWAs. This does not seem to be a problem for the government, especially when the provisions of such contracts provide for reduced conditions of employment for employees.

According to the minister's second reading speech, to have more than one certified agreement covering employees at a workplace costs jobs. This claim simply does not stack up when you look at the minister's numerous speeches selling the AWA system and trying to claim that it is the best way to go. It is ludicrous to say that you cannot have lots of agreements in a workplace. Even if the existence of more than one certified agreement is a bit too cumbersome for an employer who has recently purchased a business—a proposition I do not accept—it is open to that employer to seek to alter that certified agreement. That can be done through negotiation upon the expiry of the agreement, or even during its life if the employer reaches agreement with the people covered by that certified agreement. It is not that difficult.

A certified agreement does not last forever; it has a specified period. At the expiry of an agreement, a subsequent agreement is negotiated with the consent of the employees and the employer. This is one way to deal with a problem that a party has with an agreement: wait for its expiry and renegotiate. The other way is, of course, to seek the agreement of the parties covered by the certified agreement for it to be altered, and then apply to the commission for an alteration. That way, you get the consent of the people covered by the agreement, you go to the commission and you have the new agreement certified. It is not that complicated. If it is for some people, maybe they should not be in business.

The simple reason we are debating the bill before us is to provide yet another mechanism for employers to reduce the wages and conditions of staff without their consent. For this reason, the bill should be rejected. We should look at the sensible and reasonable alternatives proposed by the member for Barton to ensure that employees who are being affected by transmissions of business are not impacted upon by anything more than the uncertainty they are already undergoing when one company acquires another. They are already concerned about the prospect of losing their jobs. They should not have to think that their hard won terms and conditions might be whittled away as well.