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Thursday, 6 November 2003
Page: 22288


Mr ANDREWS (Minister for Employment and Workplace Relations and Minister Assisting the Prime Minister for the Public Service) (9:20 AM) —I move:

That this bill be now read a second time.

The workplace relations system plays an important role in Australian society and contributes directly to our social and economic wellbeing. An effective, fair and carefully targeted system will help grow our economy, raise living standards, lift productivity, reduce disputes and help the unemployed find jobs.

Despite its importance, much of the system this government inherited is complicated and inefficient. It is certainly not a rational system for the Australian labour market in the 21st century.

Since late 2000 it has been government policy to work towards a simpler, fairer workplace relations system based on a more unified and harmonised set of laws.

A national economy needs a national regulatory system. Maintaining six separate industrial jurisdictions just does not make sense.

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

The government is reintroducing this bill because it firmly believes that a more unified national workplace relations system means less complexity, lower costs and more jobs. This bill is a significant step towards a national workplace relations system.

The government would prefer to proceed by agreement and by referral of powers by the states. But, in the absence of referrals by the states, the government will do what it reasonably can to move 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 under federal awards or agreements have access to remedies under the federal unfair dismissal laws (unless they are employed in Victoria or the territories). This legislation will ensure that any worker employed by a corporation is within the scope of the federal unfair dismissal jurisdiction and that all workers within the federal system will be governed by it rather than any state unfair dismissal law. This `cover the field' provision means that the number of workers covered by federal unfair dismissal provisions should rise from about four million to about seven million—that is, from about 50 per cent to about 85 per cent of all employees.

If this bill is passed, the authority and coverage of the Australian Industrial Relations Commission will be strengthened. 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 would be an important step towards national consistency.

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, it is self-evident there would be advantages in having to deal with only one 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.

A study by the Melbourne Institute of Applied Economic and Social Research 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 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 to exempt small business from the reach of unfair dismissal laws, and justifies the provisions in this bill to make these laws less onerous for business and less damaging to job creation.

It is precisely because we are committed to creating jobs that we are reintroducing this bill.

For small business, this bill:

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

allows the Australian Industrial Relations 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, the 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 pay they may otherwise have received;

requires the commission, when making an order for back pay, to take account of any income an employee who is to be reinstated has 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.

This bill contributes substantially towards achieving a better balance between the interests of employers and employees without impeding job creation.

The bill is also an important legislative step towards a single workplace relations system for the whole country. For these reasons the government believes it is essential to reintroduce it and I commend it to the House. I present the explanatory memorandum to this bill.


Dr Emerson —I move:

That the debate on this federal grab for power be—


The SPEAKER —The member for Rankin will find himself out of the House unless he deals with the matter as provided by the standing orders.

Debate (on motion by Dr Emerson) adjourned.