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Thursday, 15 May 2014
Page: 3870


Mr KELVIN THOMSON (Wills) (11:43): The Fair Work Amendment Bill 2014 claims to strengthen protections for employees by requiring employers to ensure that under individual flexibility arrangements workers' genuine needs are met and they are better off overall, but on the flipside it implements a 'get out of jail free' card for employers regarding this obligation, by providing them with a legal defence where they will not be held liable for breaching the flexibility terms if they enter into an individual flexibility arrangement 'believing' they were complying with those terms. The new rules say that all an employer needs to do is to claim that they had a reasonable belief that they were doing the right thing in order to avoid prosecution.

The Prime Minister used to say that Work Choices was, 'dead, buried and cremated', but in insidious ways, as demonstrated by this amendment bill, the reality is otherwise. Recently the union United Voice recounted the story of Jackie Petts, a Victorian cleaner. Jackie was presented with an individual agreement by her employer, Spotless, which cut her weekend shift pay, and she refused to sign it. As she explained: 'Spotless came up with a form for all of us to sign. It cut our weekend shift pay. The supervisor came round and said, "Sign this or you won't have any weekend shifts." Those that signed kept their normal shifts. I didn’t sign and I lost my weekend shifts. None of those who signed talked about it, they just signed. I kept my job, but without the weekend shifts it was not enough to live on.' Individual flexibility arrangements are supposed to be voluntary, but Jackie's experience demonstrates that this is not how they work in practice. When employers put individual agreements in front of their employees, people are under pressure to sign—even though it means a pay cut.

Jackie was working a six-day week, relying on that sixth weekend shift in order to earn a living wage. Modern cost-of-living pressures, including the rising cost of housing, electricity, rates, water, gas bills, which are outstripping CPI, can mean that shift allowances and penalty rates are crucial. In Jackie's case, her shift allowance is extremely important as she is paying off her house on her own. Weekend and evening rates make up anywhere from 10 to 30 per cent of the take-home pay of shift workers. The removal of weekend rates can mean shift workers lose up to $270 per week or up to $14,000 a year before tax. The Liberal government's individual contracts could mean some Australian workers will be forced to support their families on just $577 per week after tax. Under this amendment, it would become legal for Jackie to sign away her weekend and evening rates for no extra pay.

The Liberal Party talks about workers and employers having the flexibility to sit down and negotiate unfettered by red tape. This is simply a euphemism for eliminating checks and balances. The reality is starkly different. There was no mutual chatting, when the 150-odd cleaners at Westfield Doncaster were handed their individual agreements. Jackie was punished for daring to refuse, as should have been her right, what was being offered. These laws are part of a concerted attack, aided and abetted by right-wing free market ideologues and some in the business lobby, to strip away penalty rates and shift allowances, and to undermine collective bargaining and access to union representation. This sort of stuff is Work Choices by stealth. As the former Labor Prime Minister Paul Keating said:

When John Howard decided to go after workers with his WorkChoices legislation, he did so not out of any economic necessity, as the economic record for wages and inflation attests. He did it simply to break the back of the unions. His motivations were ideological and spiteful, telling us he had learned nothing from the fact that there had been no wages breakout in Australia for 26 years …

The same is true again today. We hear Liberal government ministers blaming workers for excessive wages and conditions. In a speech to the Sydney Institute, the Minister for Employment, Senator Eric Abetz, warned about employers being too ready to acquiesce to unions. He claimed that Australia risked

… seeing something akin to the wages explosion of the pre-accord era when unsustainable wage growth simply pushed thousands of Australians out of work.

The reality is very different. Recent Wage Price Index data revealed that 2013 had seen the lowest annual rise in wages since the ABS began calculating them back in 1997. In seasonally adjusted terms wages rose only 2.6 per cent in the 12 months to December. In trend terms it was even lower at just 2.5 per cent. As Greg Jericho, from The Guardian Australia, said in reference to this index:

If we’re about to see a wages explosion, then someone better hurry up and light the fuse.

Wages increased in 2013 by less than inflation did, which suggests that real wages actually fell last year. The last time this has happened was during the GFC.

The record low wages growth fairly destroys the arguments of the Liberal and National parties and certain sections of the media who, even before Kevin Rudd was elected in 2007 and well before the Fair Work Act was introduced in July 2009, have been predicting a wages boom, blowout or explosion.

Piers Akerman in the Daily Telegraph, for example, wrote in 2007 that the policies proposed by then opposition leader Kevin Rudd risked a “breakout in wages growth that would inevitably force the RBA to impose interest-rate hikes of a magnitude not seen since the Hawke-Keating era”.

Instead we have record low wages growth and record low interest rates.

When the overall wages data did not provide the wage-boom truthers with the picture they predicted, they moved onto federal enterprise agreements. These agreements are done through collective bargaining and thus involve unions. But here a similar picture emerges. Annual average wages growth of enterprise agreements is lower now than at any point since 2000 and wages growth in public sector enterprise agreements is actually lower than that of the private sector. As for the Manufacturing Workers Union acting like it is boom time, that is equally fanciful. In the manufacturing sector the growth in wages under enterprise agreements is at its lowest since 1994. Any way you slice it, wages growth across the economy has fallen in line with the falling demand in the economy. That is how you would expect the system to work and that is how it has worked. People who look at the last four years and still utter the phrase 'wages boom' are the economic equivalent of climate change deniers.

In this House in 2009, I spoke about just how profound the impact of Work Choices had been on women. An article published in the Journal of Industrial Relations, titled 'The Impact of 'Work Choices' on Women in Low Paid Employment in Australia: A Quantitative Analysis', studied the experiences of 121 women across five Australian states who were affected by the changes arising from Work Choices. Contrary to the spin of the previous Liberal government that Work Choices would facilitate direct negotiation between an employer and an employee, the study revealed that low-paid women were vulnerable to a take-it-or-leave-it culture, and they were vulnerable to unilateral action. Most employees made it clear that they were not in a position to negotiate directly with their employers, and would not be able to unless they had some job protection. This scenario is the same as that encountered by Jackie Petts. It is likely that vulnerable people, such as those in casual work, people from non-English-speaking backgrounds and workers with family responsibilities, will be most at risk of being pressured into signing the Liberal government's version of individual contracts. In particular, the more than one million non-Australians who are in Australia on temporary visas, which have accompanying work rights, are vulnerable to precisely this kind of exploitation.

Too many Australian workers are already struggling to deal with the impact of insecure work, and amendments like this will only accentuate this problem. In the Centre for Policy Development's book, Pushing Our Luck, a chapter on Australian workplaces made the following point:

This insecurity creates first and second-class citizens, with temporary migrant workers relegated to an even lower rung on the ladder.

The real workplace relations issue we have in this country is not lack of workplace flexibility but lack of job security and poor work-life balance. Indeed, a recent survey conducted by the OECD reports that the No. 1 problem identified by Australians—not so much in other countries but certainly by Australians—was poor work-life balance.

Despite the repeal of WorkChoices the transformation of Australia's job market to more precarious employment means that many Australians are at risk of going through their working lives as if WorkChoices was never repealed. As further outlined in Pushing Our Luck:

It is sometimes argued that workers like casual jobs because they are more flexible. Submissions to the ACTU's Inquiry on insecure work detailed the experiences of many people who found that the opposite was the case. One such testimony highlighted the lack of flexibility available to casuals. The worker recounted being unable to take time off work because, as the breadwinner, she needed to make money while she could, and with no permanent position she couldn't be sure when she would have a job again.

The transformation of the labour market has created an underclass of workers who miss out on many of the protections offered by employment regulation. Their reality can include chronic uncertainty, inadequate income, lack of access to mortgage and credit facilities, inability to afford health care, no paid access to family, carer's or annual leave, limited savings and a general slide into debt and potentially poverty. They report being victimised if they raise their concerns and they are less likely to be unionised.

This is a stark reality for too many Australian workers today … as business owners sidestep regulation by entering into arrangements that limit the rights of workers and take them beyond the protection of Australia's employment standards.

Migrant workers, particularly those on 457 and student visas, are particularly vulnerable to exploitation through insecurity.

It is not just 457 visas workers who are exploited. In March the ABC's Matt Peacock reported that thousands of Taiwanese on working holiday visas, the 417 visas, were being ripped off in Australian abattoirs, working long hours for little pay. According to the Australian Meat Industry Employees Union, the Primo Meatworks in Scone, New South Wales has replaced local workers with international workers, who in many cases do not pay tax. Meatworkers union secretary Grant Courtney estimates there are over 10,000 temporary international workers working in the meat industry on backpacker visas. Many of these 417 visa workers are being paid cash.

The way to clean up this exploitation and tax avoidance is to require the principal employer, the owner of the business, to be the one who engages the workers. We need to get rid of the $2 labour hire companies who fold up and go into liquidation if they are ever investigated. Moreover, why do we allow backpackers to have access to an ABN? Applying for a tax file number should be part of the 417 visa application so that they pay tax in the same way that 457 visa workers pay tax. A real workplace problem is the issue of lack of secure or guaranteed work, with what I have heard referred to overseas as 'zero-hour contracts' replacing full-time or permanent-part-time positions.

I was very concerned to hear from Grant Courtney that, since Matt Peacock's 7.30 program investigation, some 13 of the 14 workers at the Primo Meatworks who had signed a petition in support of workers alleging sexual harassment by a Primo employee had been told that their services were no longer required, despite their generally having worked six days a week for the previous six months.

Rather than seek to blame workers and legislate to make their employment more insecure, the Liberal government would do better to ditch their discredited ideology on workplace relations, and look to enhancing protections for casuals, contractors and labour hire workers, who face insecurity at work with no end in sight.

Denmark, Norway and Sweden have achieved both a healthy economy and a healthy society, high wages and productivity, flexible working arrangements and the world's highest rate of workforce participation, especially among women. These three countries boast workforce participation rates of almost 80 per cent, and female participation of about 76 per cent, according to OECD figures. Female participation is a full six percentage points ahead of that which prevails in Australia, the US and Britain. We should follow and learn from those northern European countries, which have cooperative industrial relations models rather than adversarial ones, greater rights for workers and greater income equality. Also, they have better workforce participation and employment outcomes as a consequence. I support the amendment to the motion moved by the member for Gorton.