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Wednesday, 30 May 2007
Page: 112


Mr HOCKEY (Minister for Employment and Workplace Relations and Minister Assisting the Prime Minister for the Public Service) (5:30 PM) —I thank members for their contributions to this debate. Whilst opposition members in this place have sought to condemn the fairness test, they are going to vote for it. They are going to vote for it because they do not want to create, in their view, a political battle about the fairness test and its application. In fact, the Deputy Leader of the Opposition says that this makes a one per cent difference, but they are going to vote for it. That one per cent difference is costing $370 million, but still they are prepared to pretend to be against it while voting for it.

I remind the House that the Workplace Relations Amendment (A Stronger Safety Net) Bill 2007 establishes a fairness test which will strengthen the existing safety net provided to workers, provides greater employee protection to ensure the legitimacy of the fairness test and establishes a Workplace Authority and a Workplace Ombudsman as independent statutory agencies. And with a funding package of $370 million the bill gives significantly increased resources to the organisations that are going to provide protection for Australian workers. Let us be perfectly clear: under this system—for Australian workplace agreements and collective agreements that satisfy the requirements for the test to be applied—there will be a third, independent party that will verify that employees are getting fair compensation for traded protected conditions.

Under the Labor Party policy there is no independent third-party analysis of a common-law contract and the adjoining award. Under the Labor Party policy there is a lesser protection for individuals signing work contracts than under the coalition government’s policy of Australian workplace agreements. Under our policy, workers will be guaranteed a protection that ensures that they will have a third-party analysis of the contract. If it is deemed that an AWA or a collective agreement fails the fairness test, the Workplace Authority will go back to the employer and the employee with suggestions on how the contract can be changed to make it fairer and to satisfy the requirements of the fairness test. They will have 14 days in which to make sure that the contract is fair and that fair compensation is paid for traded protected conditions. If it is not amended within 14 days then the contract will cease to exist and the employee will go back to the applicable employment arrangements.

We undertake this initiative given that the Labor Party cannot accept the fact that workers and their bosses make agreements without union involvement. Labor struggles to appreciate and fails to accept that AWAs and collective agreements will be checked by an independent authority. We have heard a number of misleading claims from the Labor Party during this debate, particularly from the Leader of the Opposition. The first claim was that it is unfair for protected award conditions to be exchanged for things that are not protected, such as redundancy or long service leave. At the end of the day the agreement must be determined by the Workplace Authority director to provide fair compensation, with the primary consideration being the monetary value of the compensation. There will be a capacity to consider the employee’s personal circumstances, including the likelihood of the entitlement being accessed by the employee. Labor attacks the fairness test for not including redundancy as a protected award condition and yet the Labor Party will provide no redundancy entitlements for any employees in businesses of fewer than 15 employees. It is spelt out on page 9 of their policy document Forward with fairness. Redundancy remains an award entitlement and able to form the subject of agreements. Redundancy entitlements are preserved for 12 months after the termination of an agreement unless a new agreement is reached in the meantime. As to the criticisms regarding long service leave, statutory long service leave entitlements under state or territory legislation are not excluded from operating under the Workplace Relations Act. State or territory long service leave legislation continues to operate.

Claim No. 2: the Workplace Authority will not be able to make informed decisions about the fairness of an agreement, because it cannot talk to employees. This is just deadset wrong. This bill clearly states:

... the Workplace Authority Director may inform himself or herself in any way he or she considers appropriate including (but not limited to) contacting the employer and the employee, or some or all of the employees, whose employment is subject to the workplace agreement.

This could be done in writing or through other means such as by telephone. This is much clearer than the Australian Labor Party’s policy under which Fair Work Australia would approve agreements ‘on the papers’, they say—whatever that means—with no requirement for consultation or a hearing.

Claim No. 3: an employee’s personal circumstances will be subject to undue scrutiny by the Workplace Authority. An employee’s personal circumstances may be taken into account by the Workplace Authority in deciding whether fair compensation has been provided—and for no other reason. The test is deliberately drafted so that it is the value of the entitlements to the employee that counts. The Workplace Authority has no power to demand information. It is up to the employee—who, in the first place, willingly agreed to the contract—to provide such information if they wish to satisfy the authority. Of course, it will only be in cases where the employee has sought an agreement that has terms such that he or she has sought to take into account his or her personal circumstances.

Claim No. 4 from the Labor Party: the Workplace Authority will conduct the fairness test in its own time and without any limits. In fact, the authority will be subject to operational time limits in conducting the fairness test. It will administer the fairness test efficiently, and will make decisions as soon as reasonably practicable, most likely within seven to 10 days. In the event that an agreement fails the fairness test, as I said, compensation is payable from the date of lodgement—so it gets back-paid. Also prelodgement assessments are available so that parties can have agreements checked in advance. This gives them more certainty when they come to lodge the agreement. In these cases, approval will be fast-tracked.

Moreover, as I outlined in the second reading speech, the Workplace Authority will receive funding of over $300 million over the next four years. However, the Deputy Leader of the Opposition complains that too much funding is going towards the bureaucracy. The Deputy Leader of the Opposition is actually criticising the government for funding extra positions to help administer a stronger safety net for Australian workers. She is criticising the Australian government for helping the workers of Australia, and criticising the Australian government for taking some of that burdensome involvement in detailed contracts off small business and doing it itself, so that small businesses do not have to go through some of the administrative nightmares that are part and parcel of the Labor Party’s common-law contract process.

Claim No. 5: employees will be in a ‘dark wilderness’ because they will not know whether their workplace agreement passes the fairness test. That is just dead wrong. It will be a requirement that parties be notified at various stages of the process, including about how their agreement can be changed if it does not pass the fairness test.

Claim No. 6: the decisions in relation to the fairness test are not subject to external review. I can inform the Deputy Leader of the Opposition that the Workplace Authority will have simple administrative processes, not lengthy legalistic ones. And this reflects the processes of the Employment Advocate in administering the old no disadvantage test. If an agreement does not initially pass the fairness test, the Workplace Authority will provide guidance to the parties about how the agreement can be amended so that it does pass the test. This effectively ensures that parties are aware of the problem and have the flexibility to fix it themselves without unnecessary tribunal interference.

The opposition’s criticisms lose sight of the fact that the fairness test is a beneficial scheme, capable of providing additional employee benefits over and above those contained in the agreement itself. Decisions made under the fairness test cannot disadvantage employees. Compare this with Labor’s plan for unfair dismissal cases, which involves placing officials from Fair Work Australia in sole control. They will be able to ask the parties questions and seek their views about issues raised, but there will be no written submissions, no cross-examination and no hearing. And the Labor Party’s policy has no appeals. So Labor’s unfair dismissal cases will be judged against a fair dismissal code. But Labor has given no details about what will be in this code, who will decide what is in it, what Labor’s so-called ‘genuine compliance’ will be, how this will be decided, or what right to appeal there will be. These criticisms demonstrate that the Labor Party cannot comprehend how to create a system that provides both fairness and flexibility. They are captive to the ideology of the union bosses—and, gee, we’ve heard that over the last few days, haven’t we? They say they are all for flexibility—but only as long as it is based on awards set by a central body. In contrast, we believe we ensure that choice of flexibility starts at the workplace and remains the fundamental building block of workplace agreement making.

The fairness test is not a return to one-size-fits-all arrangements. While it is mostly expected that a higher rate of pay will be provided in lieu of penalty rates, if an employee wants family-friendly working hours instead, they can do that. And, secondly, let us not forget, trading entitlements for non-monetary compensation occurred under the old no disadvantage test. The sky did not fall in then and it is not going to fall in now.

Claim No. 7 from the Labor Party: the member for Hotham—who is a former president of the ACTU—suggested that there is no safety net under the government’s laws. In this claim he continues the deception of the Labor Party. It took a coalition government to enshrine a minimum wage—the minimum wage being the 11th commandment that was forgotten by the Deputy Leader of the Opposition: ‘Ten minimum standards—oops! We forgot the minimum wage, No. 11!’ I am still living with this picture in my mind, of poor old Moses coming down from Mount Sinai carrying the tablets with the 10 minimum standards on them. He gets down there and finds the Deputy Leader of the Opposition with a chisel and a hammer, trying to get the minimum wage in as No. 11. And Dean Mighell picks up the tablets and smashes them! And poor old Moses has to go up to the top of Mount Sinai again and try to find the 11th commandment—another set of tablets!

It took a coalition government to enshrine such things as annual leave, personal carer’s leave, unpaid maternity leave and ordinary hours of work in the legislation. Unpaid maternity leave—that is interesting to reflect on. Remember the Labor Party policy on unpaid maternity leave? They guaranteed in their policy that it would be two years. And then the member for Rankin lets the cat out of the bag and we find out that they only guarantee it for 12 months. And if the employer says no, well, that is the end of it. That doesn’t sound like a guarantee. It is a Labor Party guarantee—it is not real.

This legislation represents a stronger safety net for more than 7½ million Australian workers, and they are going to earn more under this arrangement, not less. And the Labor Party have said they support the bill on the basis that it might make a difference for one employee. While the opposition might try in vain to understate the scope and significance of the amendments, can I remind the House of the evidence I presented during my second reading speech. Nearly 90 per cent of adult non-managerial employees earn less than $75,000, so the overwhelming majority of non-managerial employees covered by the federal system will have the benefit of this test. Members of the opposition have criticised the bill for not protecting enough employees, and they claim the fairness test will be conducted under a cloak of secrecy. Gosh, the Labor Party talking to us about a cloak of secrecy! Talking of cloaks, that comes from ‘Batman’! Yet Labor want to build a workplace relations system around common-law contracts which, as we on this side of the House know, are not subject to any independent third party scrutiny—common-law contracts where someone can trade away all their penalties and leave loadings for 45c an hour. Oops, an honest mistake! The fairness test applies to agreements lodged on or after 7 May, the first business day after the announcement by the Prime Minister and me.

This bill indicates why this government is the people’s preferred economic manager. We know where to draw the line in the balance between fairness and flexibility. We listen, we adjust. We are not like the Labor Party—which does not consult with business but instead tells its senior business adviser that he is just another voice—or the Deputy Leader of the Opposition, who told business to keep out of the political debate or they would get ‘injured’.

Only where they are exceptional circumstances and it is not contrary to the public interest will the Workplace Authority look at the industry, location or economic circumstances of the employer and the employment circumstances of the employee. This is a more difficult test to meet the equivalent public interest test under the no disadvantage test that applied for a decade before the 2006 amendments. These provisions recognise real-life problems—sometimes compromises are reached to help businesses deal with short-term crises. But the Labor Party again reveals the extent of its hypocrisy. It claims that this bill does not protect workers. Rather than compromise its devotion to the centralised wage fixing system, Labor would prefer that businesses go to the wall. Labor has completely ignored the solid protections for employees in the bill. Employees cannot be dismissed if the agreement fails the fairness test, and they cannot be coerced to give up protected award conditions.

In conclusion, in the motion to suspend standing orders, the Deputy Leader of the Opposition said that this government will be ‘judged’. I accept that. While the ALP flounders in a sea of confusion and backflips, the government will be judged on a record that has produced 4.4 per cent unemployment, more than 10½ million Australians in jobs, an increase in real wages of more than 20 per cent since 1996 and the lowest level of strikes since records were first kept in 1913.


The DEPUTY SPEAKER (Mr Quick)—The original question was that this bill be now read a second time. To this the honourable member for Lalor has moved as an amendment that all words after ‘That’ be omitted with a view to substituting other words. The question now is that the words proposed to be omitted stand part of the question.

Question agreed to.

Original question agreed to.

Bill read a second time.