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Wednesday, 31 October 2012
Page: 12778


Mr STEPHEN JONES (Throsby) (12:39): With all the confected outrage that one might expect in a cheap pantomime performance, the member for Farrer has posed the question: why can't the employer choose where their workers' superannuation goes? She may as well ask: why can't the employer choose which bank their employees put their savings into? Why can't the employer choose what sort of car their employees drive? Why can't the employer choose what school they send their kids to? These questions demonstrate one thing, and one thing alone: those opposite have learnt absolutely nothing from the Work Choices debacle. That demonstrates in a nutshell their views about the relationship between the employees and the employers of this world, because they believe that it is entirely appropriate for an employer to be the one who chooses where their employees put their life savings. I say, and all those on this side of the House say, that that is entirely inappropriate.

Continuing the confected outrage, the member for Farrer stood here and at one moment claimed that she is a defender of the independence of Fair Work Australia—defending the right of that quasi-judicial institution to independence and defending it from slings and shots—and at the next moment she said that there are somehow conflicted parties within Fair Work Australia who could not make an independent determination about where an employee's superannuation goes. It shows that, when it comes to industrial relations, members of the opposition have not learnt a thing and that they speak out of both sides of their mouths.

This is a good piece of legislation that we have before the House, and I commend the minister for bringing it before the House and responding in such a prompt way to the outcomes of the review by the expert panel. Of course, it stands in line with all the other reforms that our government has introduced since it was elected in 2007—starting with the scrapping of Work Choices, then more recently the support for equal pay for community workers and ensuring that those who drive trucks on our roads are paid safe rates so that they go home safe and that everybody who shares the road with them can do so in a safe manner. Then, of course, we increased superannuation from nine per cent to 12 per cent. These were all landmark Labor reforms to workplace relations arrangements in this country.

But the matters that I would like to concentrate my attention on are the matters which are referred to as the 'transmission of business' provisions. 'Transmission of business' is shorthand for the arrangements that are put in place when a business is transferred from one legal owner to another legal owner, through whatever means, and the conduct of the industrial relations arrangements—that is, the transfer of employees and their rights and entitlements—throughout that transfer of ownership arrangements.

The provisions have existed in Australian federal law since at least 1914 and been mirrored in similar state legislation since around about the same time. The reasons for the existence of these laws were well summed up in the High Court decision of George Hudson Limited and the Australian Timber Workers Union—a decision of the High Court of Australia in 1923—where Justice Higgins said:

But nothing would be so likely as to prevent agreement as the knowledge, on the part of the unions, that the employer could get rid of at any time of his obligations under it by assigning his business—even by assigning it to a new company having the same shareholders holding shares in the same proportion as in the former company.

The provisions that we are debating today have their history in those 1914 amendments and that 1923 decision, where Justice Higgins stated quite clearly that what we are trying to do with these sorts of provisions is maintain industrial harmony and ensure that for employees, once an agreement is made or an award is struck, the settlement of that dispute and the outcome of those negotiations—the reaching of that agreement—is maintained and assists any transfer of that business or undertaking from one ownership to another or the restructuring of that business from one ownership to another.

As Justice Higgins would say, nothing is more likely to prolong a dispute or drag out negotiations than the apprehension on one side of the negotiations that, as soon as that agreement is reached, those on the other side of those negotiations might be able to avoid that agreement by corporate rearrangement.

Australia is not the only jurisdiction to have these sorts of provisions. A number of countries regard the maintenance of wages and conditions, in the event of a transmission of an enterprise, as an important part of corporations and industrial relations law. In the European Union, the European directive 77187EEC protects an employee's entitlements where a transmission of business occurs. Many European countries have subsidiary arrangements in place to give effect to that directive. In the United Kingdom, Transfer of Undertakings (Protection of Employment) Regulations 1981 were designed to comply with the European Union's directive and preserve an employee's wages and conditions in the event of a transfer. In Canada, the Canada Labour Code applies a collective agreement to a new employer upon transmission, and even in the United States the National Labour Relations Act protects, to some extent, wages and conditions in a collective agreement when a transmission constitutes a substantial continuity of the company.

This is evidence that what we have in our Australian law is consistent with history and consistent with international practice. The problem is simply this: when an award or agreement exists and binds the employment arrangements within a workplace and the corporate identity of that workplace changes, we need orderly and secure arrangements to ensure that the employees are not left worse off in those arrangements. For most of the last century this problem was dealt with by other means: the existence in the state jurisdiction of common rule awards. These applied across an industry or a calling, so it did not matter if a business was transferred or if the identity of a business changed; the award continued to bind by force of the common rule. In the federal jurisdiction it occurred through the practice of roping-in awards or, more commonly, through constructive industrial relations practices, where employees and their representatives would simply reach agreement to flow the old conditions across to the new employer.

When collective agreements gained primacy in the 1990s the framers of the industrial relations legislation simply transported the old award provisions over to the new collective agreement arrangements. This occurred through the 1993-94 amendments to the industrial relations legislation. Indeed, it even occurred when the Howard government introduced its Workplace Relations Act 1996 reforms and again, with some significant modifications, in the 2007 legislation by this government.

Throughout the greater period of the last century the problem of a transmission of business was dealt with by other means. Dispute and conflict over this issue was re-enlivened by the late 1990s and early part of this century.

Mr Fletcher: Mr Deputy Speaker, on a point of order on relevance: Would the member for Throsby inform the House whether he is speaking about the Fair Work Amendment Bill or the Fair Work Amendment (Transfer of Business) Bill?

The DEPUTY SPEAKER ( Mr Mitchell ): There is no point of order. The member for Throsby is to continue.

Mr STEPHEN JONES: The importance of this is that—

Mr Fletcher: Mr Deputy Speaker—

The DEPUTY SPEAKER: Are you calling another point of order?

Mr Fletcher: On a point of order on relevance: the question is whether he is speaking about the bill that is presently before the House.

The DEPUTY SPEAKER: I am sure that if you listened, as I was listening, you would have heard that he is speaking about the bill before the House. It has been wide ranging. There have been other speakers who have drifted away from the bill on your side whom we have allowed to go through, so you should show the member for Throsby the same respect that you would expect to be shown to you and others.

Mr Fletcher: With due deference, Mr Deputy Speaker, the simple point I make is that there is a bill—two bills later on—that deals with transfer of business and, as I have listened to the member, the issues he has been talking about have been about transfer of business.

The DEPUTY SPEAKER: As I said, there is no point of order. The member for Throsby will continue.

Mr STEPHEN JONES: As I was saying, these matters were re-enlivened throughout the 1990s and the earlier part of the last decade as awards were replaced by collective agreements, as the gaps between wages contained in collective agreements and awards grew, as restructuring and corporatisation ensued, as fragmentation around traditional understandings of industries occurred and through the opening up of our economy and the public sector to competition and contestability.

These provisions have a long history. The reforms that we find ourselves debating before the House today have a long history. This legislation is important because it applies and extends the legislation to current state system employees. It matters a lot because there is currently a lot of action in this space. We see state governments—currently, state conservative governments—who are taking very aggressive action. In your state, Mr Deputy Speaker, we see the Baillieu government sacking state public servants and corporatising state public entities and ensuring that the long-settled wages and conditions of state system employees are now under threat.

This legislation is important because it provides some security to those public sector employees and others. They know that, if there is some change to the ownership or legal entity of their employer, they have some security of their wages and conditions and the comfort of knowing that these will be protected by federal law in the event of such a transfer.

With those brief comments, I commend the package of legislation to the House.

I think it is good legislation. It is legislation in keeping with those reforms I outlined before: the riddance of the dreaded Work Choices legislation, the introduction of equal pay for community sector workers, the introduction of safe rates for transport industry workers and the improvement in superannuation arrangements—all of which, I might say, were hotly contested by those opposite. Further to that, there is a willingness to ensure that, when issues do arise and we do need to refine the law—when we consult with business, when we consult with unions and when we talk to employees—we are ready, willing and able to make the appropriate modifications to ensure that they are continuously fit for purpose. I commend the legislation to the House.