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Wednesday, 31 October 2012
Page: 12773


Ms LEY (Farrer) (12:17): I rise to speak on the Fair Work Amendment Bill 2012. It absolutely astounds the coalition that this legislation, which was introduced at I think 4.30 yesterday afternoon, has now appeared on the Notice Paper for debate at the second reading stage. We have had less than 24 hours to consider the ramifications of this bill. It is a bill that will affect each and every employee, independent contractor and employer in Australia, yet this parliament has had so little time to consider it. The minister would have us believe that the process which brings this amendment bill before the House has integrity. I say that it does not. The minister explained it this way in his own second reading speech. He promised a review of the Fair Work Act. He then appointed an independent panel to conduct the review. The independent panel had wide-ranging terms of reference approved by a regulatory office within the Department of Finance and Deregulation. It came up with 53 recommendations and today we are discussing the first tranche of 17 of those recommendations.

That is what the minister said, but the reality is quite different—and I note that, along the way, the minister has been mugged by reality. Having promised this review, which the government could not back away from, the minister hand-picked the three members of the independent panel. I do not want to name those individuals or cast aspersions on them, but anyone can look at their remarks on the public record over a long period of time and make up their own mind as to whether they are independent or not. The minister's office then skewed the terms of reference originally drafted by the department, which probably were quite wide ranging. Freedom of information documents prove that beyond a doubt. The terms of reference having been skewed and, in the process, narrowed—so that they did not include productivity, red tape, flexibility or the effect of union militancy—these narrow terms of reference were then used by this not independent panel to come up with, unsurprisingly, a statement that said the Fair Work Act is working well, meeting its objectives and economic outcomes and is all quite favourable.

But, as I said, the minister was mugged by reality, because among these 53 recommendations that the minister has to take note of are some that he is not taking note of in this legislation today, which he is rushing before the parliament even though we could have a serious and sensible Senate investigation in the three weeks before the parliament rises at the end of the year. Yes, it would be good to get it through in the spring sitting—and we have got four weeks to go—but what we see now is a 24-hour process. I condemn that utterly because it is not reasonable, it is not sensible and it is not in good faith.

The minister was presented with a review into the Fair Work Act back in June. Having strung out the time line lends even more incredibility to the sudden introduction of the legislation into the parliament. The minister was presented with a review in June. It was publicly released in late July or early August. The minister then took until October to deliver his response. He had what he described as genuine consultation. To say it was a sham consultation would probably be a little bit unfair, but a lot of people were not consulted—and have not been consulted on this bill either. The coalition certainly were not consulted, even though we have made ourselves available in good faith as oppositions do from time to time when it comes to important pieces of legislation.

So the response was delivered in October and now we have to consider this legislation within a matter of hours. Rushing it through the parliament does nothing for the integrity of the parliament and it does show disrespect for members.

The first tranche of reforms that the minister brings to the parliament today has some major omissions. In fact, I think what the minister has done is pick the least contentious ones—creating an atmosphere of activity and an agenda that is happening but really picking the least contentious. We think, as a priority, these initial reforms should address the strike first, talk later mentality that has pervaded the more militant unions and has been demonstrated in the JJ Richards case. I want to remind the House of that case because it demonstrated a major inconsistency between the stated Labor government policy on workplace bargaining and the written legislation. The waste disposal provider JJ Richards was unsuccessful in its attempts to overturn a Fair Work Australia decision, a decision that sets the precedent of allowing unions to take strike action without the support of a majority of workers. We would contend that that inconsistency between the government's stated legislative intention and reality, as proved in the Federal Court, is something that—if the minister really does want to address something in a hurry—should be addressed in a hurry. In fact, the justices of the Federal Court said:

… the ability to take protected industrial action 'is to be seen as part and parcel of the statutory regime for bargaining in pursuit of, or in resistance to, the making of such agreements'.

However, they said the drafting of the Fair Work Act (s.443) meant it was simply not possible to construe the Act's requirements in that way.

I am not a lawyer, but I would say that that is a clear indication from the Federal Court that there is a need to change the law to properly meet, and bring legislative clarity to, this area. The hypocrisy of this government is that the legislation does not reflect its previously stated position on the issue of unions taking strike action in circumstances where they cannot muster the support of the majority of workers for such action.

In the first instance, the Federal Court's judgement accepted that the argument advanced was understandable and reasonable but for the specific wording in the Fair Work Act which entitles unions to obtain protected action ballots in circumstances where reasonable people would argue that that should not be allowed. The fact that the minister has refused to even comment on the review recommendation that would fix this up is alarming and could be seen as an indication that this was their original intent—appeasing their union comrades. This is despite the then government leader, Kevin Rudd, promising that the Fair Work Act would not allow the return of strike first, talk later.

Furthermore, there is nothing in these initial reforms to address concerns raised by the High Court in a unanimous judgement in the Barclay v The Board of Bendigo Regional Institute of TAFE case, where it was found that union bosses should not be an untouchable class in the workplace—something also recommended by the Fair Work Act review. Yet the minister himself intervened in this case, on the side of the union boss, Mr Barclay, arguing that it was actually the intention of the Fair Work Act to make union bosses untouchable, even if they did the wrong thing. Regarding this intervention, Justice Heydon said:

… the Minister’s stance before and during the oral hearing was not that of an intervener, but that of a partisan. For example, some of the Minister’s oral submissions were directed to factual material. This is hardly the province of an intervener.

This intervention, by the way, came at a cost of $160,000 to the Australian taxpayer—that is, arguing that it actually was the intention of the Fair Work Act to make union bosses untouchable even if they did the wrong thing. This is a minister who could not leave the judicial process to run its course and reach its conclusions without that demonstratively partisan intervention.

It is important to briefly consider the Fair Work Act review itself. I have touched on a couple of the recommendations that have not been listened to by the minister in this initial round of reforms, but I think we also need to contemplate the terms of reference for the review of the Fair Work Act. There were a number of key omissions, as I said earlier, because the terms of reference did not mention productivity, flexibility, concerns around union boss militancy and red tape. A freedom of information request has proved beyond reasonable doubt that the initial terms of reference submitted by the department to the minister's office underwent significant changes at the hands of the minister's staff. Clearly, they are skewed in a particular direction, and I suspect that considerable union consideration was given to the draft terms. In addition to the terms of reference, we should acknowledge the make-up of the panel, which I alluded to earlier. While the panel claimed to be independent, I consider that their left-leaning credentials coupled with those skewed terms of reference that they were asked to consider demonstrate a blatant attempt by the government to influence the findings.

In total, as I said, the Fair Work Act review proposed 53 reforms to the act. The government has put forward 17 recommendations in this initial tranche. However, these 17 reforms are not much more than tinkering at the edges. For the most part, they are not actually overly contentious. So, in this first wave of reforms, we have seen little real indication of a serious attempt on the part of this government to introduce meaningful, necessary reforms. It must be said that this is a somewhat haphazard attempt at reform, not only dealing with the reform of the act but also including changes to superannuation, plus to Fair Work Australia itself.

It is also interesting to see that the review panel's clear recommendation that Fair Work Australia be renamed and include the word 'commission' and not 'fair work' has been partially rejected. Labor could not bring themselves to get rid of the 'fair work' name. They have stuck to their Orwellian and borderline obsession with the 'fair work' mantra. It is interesting that, along with the panel, the President of Fair Work Australia himself has suggested that the name be changed.

Why? I think members opposite have to acknowledge that the entire 'fair work' brand has been well and truly damaged by the HSU saga, by that tawdry series of events that has not yet played out. If you ask people in the community what issues they might associate with Fair Work Australia, they will bring up the HSU scandal. We do not want that. We do not want the independent, quasi-judicial body Fair Work Australia to have its brand trashed or damaged.

We do not want people not to have confidence and faith in the independent umpire. We have always stated that we have confidence and faith in the independent umpire. We do not have any confidence or faith in the minister, and we make that clear. But why wouldn’t you change the name? I think the reason is that this whole Fair Work mantra belongs to the Prime Minister. It was well and truly her baby, and for that reason it stays. Comments made in the Fair Work review espoused the views of the new President of Fair Work Australia, Justice Iain Ross. It states:

He is also a strong advocate for changing the name of the tribunal, arguing that the current title undermines its independence and creates confusion. He proposed that as a minimum the tribunal be changed to ‘Fair Work Commission’, but said it would be preferable to separate it from the ‘Fair Work’ brand altogether, and rename it the ‘Australian Employment Commission’ or the ‘Australian Workplace Commission’.

That has not happened.

Another concern held by the coalition surrounds the extension of powers to the president of Fair Work Australia. The coalition believes the powers of the president should not be further widened and that it would be better to maintain the current arrangements, by which failures to comply with sections of the Fair Work Act are grounds for termination. Currently there are two vice-presidents, nine senior deputy presidents and five deputy presidents, and there is a line-up of commissioners and panel members that can be called on for particular inquiries and investigations. So the architecture of Fair Work Australia is quite substantial.

There are some elements of the bill which the coalition applauds. For example, on the issue of costs, consideration 'on the papers' and vexatious applicants, the coalition has long advocated for change, with Senator Abetz on the record calling for this. These calls have seen him attacked by Labor and its union bosses, but, when they are stated in a $1 million review, they are praised and adopted by the government. So we do appreciate the adoption of the position that we have been putting for some time on costs and vexatious applicants, but we note that there are other serious inconsistencies.

The bill makes some important steps in the right direction. The coalition strongly supports the alignment of the time limit for unfair dismissal and general protections claims at 21 days. In fact, I believe that brings the situation back to where it was under the previous Workplace Relations Act. It was the coalition that amended the Fair Work Act, with the support of the Independents, to extend the unfair dismissal time limit from seven to 14 days.

Regarding the changes being made to Fair Work Australia, I do not believe that the minister has made suitable justification for the appointment of an additional two vice-presidents. I mentioned the substantial architecture of the membership of Fair Work Australia and the fact that further concentration of power seems to now rest with the president. We do not think that is reasonable. Why couldn't the system operate as it does now, with the vice-presidents effectively managing the workload that the president cannot? The concentration of power at the top of the organisation has to be questioned and then responded to by this government. Two more vice-presidents are to be appointed even though power is going to be concentrated in the president. The scuttlebutt is that the minister wants to appoint a couple of his friends to these positions and that that appointment needs to happen sooner rather than later—evidence, we would say, of further intervention in the operations of an independent Fair Work body.

In addition, the government has made no genuine attempt to address the current closed-shop, anti-competitive arrangements for the selection of default superannuation funds under modern awards through Fair Work Australia. The minister has taken the opportunity to use the Productivity Commission review—which he finally got around to initiating—of superannuation and the default superannuation funds that appear in modern awards to respond to that. But he has not done so satisfactorily.

The current process for the selection of default funds under modern awards, initiated by this government and run by Fair Work Australia, lacks transparency, is littered with inherent conflicts and inappropriately favours union dominated industry super funds. If this bill is passed by parliament, it will see the continuation of a process where conflicted parties within Fair Work Australia continue to select default super funds under modern awards. There will not be genuine competition. There will be an additional layer of government intervention, because, in appearing to address this very real problem—this very real unfairness—the minister has announced that an expert panel will be appointed, that the expert panel will create a shortlist, that the shortlist will go back to the President of Fair Work Australia and that then the president will decide what funds will be inserted into modern awards.

Why can't the employer choose the default funds? Why can't the employer choose from the list of funds that would be ticked off under MySuper so that their governance and their accountability is fine, so that they are good funds and so that those who put their money in them would not be putting their money at risk? They might, of course, be retail funds—that is the problem with the minister's approach. Why can't the employer select them? Instead, we have to go through another expensive, convoluted process: a panel, a shortlist and a decision by the President of Fair Work Australia. What is the decision based on? It is based not on working conditions but on what default super funds sit in modern awards. This smacks of intervention in this area by the government, which we oppose.

The government is also seeking to limit the number of MySuper products in modern awards to just 10, contrary to the clear recommendation of the Productivity Commission which was that there should be an unlimited list of default funds. Given that the government is currently in the process of imposing additional consumer protection requirements to all default superannuation funds, there is no rhyme or reason in restricting the MySuper products in the modern awards to 10. All compliant superannuation funds should be made eligible.

There are further recommendations made by the review that the government has also failed to heed. The Productivity Commission's proposed default superannuation panel will not be created as recommended; it will be subsumed into the existing Minimum Wage Panel.

The new panel is not the final decision maker under this bill, as recommended. The full bench of Fair Work Australia will approve default funds in each award after a recommendation. The process of including funds in awards will only occur every four years, starting in 2014, when modern awards are due for review, as opposed to an ongoing application process. All awards must have default funds; currently there are 13 awards that do not list default funds.

The coalition thinks it is regrettable that the review's recommendations on the name change from Fair Work Australia to Australian Workplace Relations Commission has not been accepted. Despite the Labor's rushing this bill through with such haste and sitting on the review for four months, there has been no excuse from those opposite as to why it is suddenly so urgent. I suspect that there is a sense of urgency to appoint these additional two mates to the vice-presidency roles. I cannot think of any other reason that Labor would take this position. So I ask the minister to rule out those rumours that are flying around in the IR community that people have been promised vice-presidential positions from February next year.

Whilst there a number of elements within this bill that we do support, having had less than 24 hours to consider this bill we make a very strong statement that this is shabby treatment of the parliamentary process and of an opposition that would act, in this instance, in good faith. Had time permitted we would have sought to have drafted a number of substantive amendments. To give some sense to people of the undue haste I can say that the officers involved in the drafting process within the parliament could not have drafted the amendments by the time I rose to my feet today to speak on this bill. So it is not just the opposition that has been treated shabbily; it is the whole process, including the people who would draft the amendments that we would have brought here. Given these time constraints, there has not been time to do the requisite work. We will seek to refer this bill to a Senate committee when it gets to the other place. At this stage we will not be opposing the bill.