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Thursday, 1 November 2012
Page: 12942


Mr FLETCHER (Bradfield) (10:45): I am very pleased to rise to speak on the Fair Work Amendment (Transfer of Business) Bill 2012. As the House would be aware, this forms part of a flurry of legislation introduced by the Minister for Employment and Workplace Relations. A similarly titled bill, the Fair Work Amendment Bill 2012, was debated and indeed passed by this House yesterday—not before the member for Throsby got sufficiently confused as to spend all of his time speaking about the measures contained in the bill that is before the House today. I think that is a powerful indicator of the chaotic process of administration of this House that we are seeing from the present government.

The bill we have before us today certainly meets the standard of being chaotic. This is a piece of legislation that that coalition will not be supporting, and, in the time available to me, I want to make three points about the bill before the House this morning. Firstly, it is a pure piece of politics from a minister with a rich history of such stunts. Secondly, its substantive effect will be to make workers worse off. That is to say, this bill, brought before the House by the party which supposedly is the champion of workers rights, the party that purportedly stands for the worker—notwithstanding the fact that very few Labor members of parliament have ever been on the shop floor and that their association with working people is purely theoretical in the career trajectories of most—if passed into law, will make workers worse off.

The third point I wanted to make is that this is a terrible piece of policy if it is our objective, as it ought to be, to maximise employment, and if it is our objective, as it ought to be, to facilitate sound public administration by state governments in the areas for which they have responsibility.

I turn, firstly, to the proposition that this is a pure piece of politics from the minister. The minister jumped on a plane to Queensland to announce that he was going to boldly intervene to protect state public servants in Queensland and other places. He issued a press release which was redolent with soaring rhetoric:

The Gillard Government will not stand idly by and let the Liberal State Governments cut wages and conditions by stealth.

And you could see the glint in his eye as he sought out the television cameras and waved them in his direction so he could make this bold and sweeping commitment. When you analyse this statement, it is rather odd that he is accusing a Liberal state government of acting by stealth. The process of achieving reductions in the public sector in Queensland has clearly been a highly public and transparent one. Nobody says it is a pleasant process, nobody says it is an enjoyable process and nobody says it is an easy process for the many people who are affected and are being made redundant. Governments are called upon to make difficult but necessary decisions, and that is what the Queensland Newman government is doing as it seeks to deal with the inheritance of many years of poor public administration in that state.

As has been pointed out to the House, there does appear to be something of a contradiction between the bold actions of the minister in this case and the minister's shrieks of silence when, in its 2011-12 budget, the previous Queensland Labor government introduced redundancies to reduce staffing by 3,500 positions over 2011 to 2013. There were similar shrieks of silence from the minister, this apparent bold defender of state public servants, when the South Australian Labor government announced it was reducing the Public Service by 1,400 positions. And in Tasmania there will shortly be 2,300 Public Service workers made redundant due to actions taken by that state Labor government.

Again I emphasise: I do not criticise those state governments for taking those decisions. I do not engage in the infantile point-scoring that has characterised the minister's approach to this issue. I make the point that these are difficult questions of public administration, but these are issues that state governments are charged with managing. They receive a finite amount of money, some of it from state taxes and charges, with the vast majority of it being payments transferred to them from the Commonwealth, and they have large and growing public expenditure commitments in areas like health, education, police and so many other important areas. It is those governments that are charged with making difficult choices to optimise the resources they have available to them. We have the extraordinary scenario now of a Commonwealth minister engaging in short-term petty politics and making it considerably more difficult for state governments to get on with discharging the responsibilities which, under our Constitution, are squarely their responsibilities.

As I have pointed out, and as other coalition speakers have pointed out, there is a yawning contradiction between the minister's so-called bold actions here and his failure to take action in other situations.

That is a powerful piece of evidence that what the minister is engaging in is a pure piece of politics. His actions are redolent with contradiction, but perhaps that is not surprising for a former national secretary of the Australian Workers Union who is also an old boy of Xavier College and also a former son-in-law of a Liberal member of parliament.

The next proposition that I want to put to the House this morning is that the actions that the minister has taken through the legislation that he is introducing are in substance going to make workers worse off. Let us analyse the effect of these provisions. When a worker is made redundant from a state government department, that worker will in quite a wide range of circumstances find himself or herself in the position such that, when they seek employment with a private sector employer, the previous terms of conditions will attach to them and it will not be open to a private sector employer to employ that worker unless those terms and conditions apply. That is so regardless of whether the redundancy was voluntary or not and regardless of the terms and generosity of the redundancy package.

What is more, it is clear—and the government has confirmed this—that the transfer-of-business provisions will apply at a whole-of-government level and not just at an individual departmental level. Let me explain what that means. If it is the case that the department of education has engaged in an outsourcing process but an employee from the department of health is made redundant and seeks employment at the organisation to which the department of education has outsourced certain activities, then that employee will also be subject to these transfer-of-business provisions. The effect will be that redundant public servants seeking employment with private providers will potentially be disadvantaged.

What is more, as the government also has confirmed, if a private employer refuses to employ a redundant public servant because of the transfer-of-business provisions, then that person is not in a position to do anything about that. As a consequence, this nakedly political stunt is actually likely to make workers worse off. It will be harder for them to get a new job because in effect the Gillard government will have tied an albatross around their neck by imposing on them certain minimum terms and conditions.

Proposed section 768AK of this bill describes something called a copied state employment agreement. That copied state employment agreement will apply by operation of the law to the employee as that employee goes to work for the new employer. The practical consequence of that will be that private sector employers considering employing somebody who has this particular albatross around their neck are likely to conclude that the potential employee is not somebody they wish to take on. Instead, they will choose to take on somebody who is not subject to those particular terms and conditions. In other words, we have a bill before the House that is going to impose upon a certain class of people who have been made redundant by a state public service a set of terms and conditions that will bind a certain class of employers who might be considering taking them on. The effect in substance will be to make those individuals less attractive to future potential employers. A recent survey of human resources managers conducted by the Australian Human Resources Institute indicated that 37 per cent of respondents agreed that the transfer-of-business provisions had a negative or very negative impact on business.

The third proposition that I would like to put to the House today is that this is a poor piece of policy. In arguing that point I would like to quote from an article written recently by former Keating government minister Gary Johns. He wrote:

Bill Shorten not only delivered the Ben Chifley oration on the weekend, he wants to bring back Chifley-like policy. How else to explain his extraordinary intervention to save state public servants' entitlements if, and when, their jobs are outsourced by the Queensland government?

Chifley, for example, started the Commonwealth Employment Service in 1946 to provide for 'the re-establishment in civil life of members of the forces'.

It's as if Shorten wants to pretend that Australia is emerging from a war and that protection of privileged union-controlled public-sector employment is the way to prosperity.

Shorten wants to protect state public service entitlements where a state government outsources work or sells assets to private-sector employers by introducing an amendment to the Fair Work Act.

That is a good analysis of the impact of this bill.

When you analyse the relevant provisions of this bill, including proposed section 768AD, the test as to whether there is in fact a connection between the old state employer and the potential new employer is extremely broad, and there are certainly likely to be a wide range of unintended consequences. You are likely to find a significant number of potential private sector employers conclude that employees who have been made redundant by a state government are unattractive as potential employees because—through no fault of their own but as a consequence of the operations of this bill—those employees will have certain terms and conditions attached to them and the new employer and the potential new employee have no choice as to whether those conditions continue to apply. As a consequence, employers are likely to say that it makes more sense for them to seek out somebody else to work for them rather than a person who comes, through the operation of this act, with certain terms and conditions attached to them.

I might also add that, as a matter of public policy, to see a Commonwealth minister engaging in gratuitous interference in the capacity of state governments to deal with matters which are properly their responsibility—the allocation of resources, including human resources—is deeply regrettable and makes it harder than it needs to be for state governments to discharge the responsibilities that under our Constitution are allocated to them.

For a host of reasons this is a very bad piece of legislation. It is motivated by a political stunt of the minister, a former union secretary, wanting to appear a hero. On analysis, the impact of these provisions will be that workers will be worse off. The coalition does not support this legislation.