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Tuesday, 28 June 1994
Page: 2132

Senator CHAPMAN (8.22 p.m.) —In leading this debate on the Industrial Relations Amendment Bill (No. 2) 1994 for the opposition, let me say at the outset that we in the opposition recognise the importance for industry and business of the amendments contained within this legislation, particularly the amendments relating to unfair dismissal provisions which have wrought havoc in business across the nation and have threatened small business with the prospect of potential bankruptcy. That is why we are pleased to see this bill make an appearance this week after being taken off the Notice Paper last week. I remind the Senate that the opposition certainly has not been responsible for any delay in the passage of this bill. The government must accept any responsibility in that regard.

  However, we do, of course, have particular concerns about some aspects of this bill, which I will detail later, and we certainly continue to have very grave concerns about this government's administration of industrial relations in Australia. That is why I move, on behalf of the opposition, the following amendment to the second reading motion:

At the end of the motion, add:


  (a) the Senate notes:

    (i)the distress caused by Australia's continuing high rate of unemployment,

    (ii)that a heavily regulated labour market contributes to unemployment,

    (iii)the OECD's criticism of Australia's dilatory rate of labour market reform, and

    (iv)that the Government has itself acknowledged the need for greater flexibility in the labour market to address these issues;

  (b)the Senate expresses its view that this bill will do nothing to achieve such flexibility; and

  (c)the Senate urges the Government to abandon its Industrial Relations Reform Act because it has not only failed to relieve labour market deficiencies, it has also exacerbated them".

In the last few months we have had an enormous fanfare from the government about its Industrial Relations Reform Act, the legislation that was passed through this chamber at the end of last year. The government has spent a great deal—$540,491 to be precise—in advertising the act nationally. That is more than half a million dollars of taxpayers' money to promote a flawed, prejudicial, nonsensical and unworkable act which has so many problems associated with it that the government continually comes back to tinker around the edges without tackling the real and central problem.

  The real problem is that this out of touch, tired government is still beholden to its union masters who refuse to acknowledge the degree to which a rigid, complicated, legalistic and totally inflexible labour market cripples industry and prevents industry from employing those who have been painfully sidelined during the recession `we had to have'. In a period of growth when it could be reasonably expected that many of the unemployed would become unemployed, we found that the centrepiece of the government's Working Nation white paper, the training wage, the advent of which we in the opposition have been advocating for some time in its present form, was seriously threatened.

  While we welcome the government's initiative in its introduction of a training wage and the abolition of the traineeship scheme, and, indeed, this initiative for a transitory phase from payment by age to payment by competency, we condemn the government for subjecting employers to the uncertainty created by its unfair dismissal provisions. We condemn it for prolonging that uncertainty and we condemn it for the effect such a delay has had on the unemployed, who have had to wear the reticence of business to take on new employees because of that very uncertainty.

  The training wage was nearly jeopardised because the government, in its arrogance, failed to consult with industry and employer group representatives, the representatives of the companies to whom the nation looks to supply jobs for young unemployed people. It may yet be jeopardised despite recent assurances from all concerned that Mr Crean `has taken care of it' because the government has been misguided by the training bureaucracy mentality of its union mates in forcing the training wage through its too rigid award system.

  In the shadow of the failed traineeship scheme, which achieved less than 20,000 places for young people, nowhere near its touted 75,000 places, this training wage system may also be doomed to failure because it places the interests of unions above the interests of the unemployed and ignores the demands of Australians that the youth of this country be given a chance. Mr Crean was forced to meet twice with employer groups in Melbourne last week to allay their fears about the proposed training wage announced in May as part of the white paper for jobs.

  Some employer groups complained that the wage, particularly the youth wage component, would force businesses to pay higher wages than currently exist under the award system. The government would be well advised to take heed of what the Business Council of Australia and the Australian Chamber of Commerce and Industry have had to say. It would be well advised, in this instance, to take heed of what the MTIA has had to say—loud warnings that the government's training wage levels are not appropriate across all industries, that the training wage is too high and, to quote the Chief Executive of the MTIA, Mr Bert Evans, `alarmingly higher than existing awards for metal industry workers aged 20 and under'. Consequently, many businesses may still be deterred from hiring young unemployed people, especially long-term unemployed. Labor's rigid award system has priced Australia's adolescent youth out of the labour market.

  What was the union's response to this warning? The ACTU threatened to withdraw support for the training wage and stated that it would retaliate with the pursuit of higher wages if the training wage rates were reopened for negotiation. Largely because of the unions' tiresome and erroneous arguments for a rigid labour market and the government's maintenance of the union stance, high long-term unemployment and youth unemployment have persisted. While a rigid labour market exists, unacceptable employment levels will continue. While these amendments are a step in the right direction, and we in the opposition will not oppose them, the procedures for determining Labor's competency standards add to the inflexibility of the youth labour market and lock out many of those whom they are intended to assist. The procedures adopted must be realistic and practical and include experience as a competency factor.

  The call for a flexible and efficient labour market was heard very recently at the International Labour Organisation annual conference held this month. First World labour policies have been criticised for being too prescriptive and not conducive to the economies of the Third World. I suggest that this government's labour policies are too prescriptive and not conducive to the Australian economy. The nations which have rejected the ILO Labor policies are precisely the nations with fast growing economies and with which Australia competes in our region.

  For the interest of the Senate, I have a list of 53 ILO conventions ratified by Australia as at December 1993, which appeared as appendix B of the government document tabled last week entitled National action plan on human rights. I seek leave to have the list incorporated in Hansard.

  Leave granted.

  The list read as follows

Appendix B

ILO Conventions Ratified by Australia as at December 1993

ILO Convention No 2 Unemployment (1919)

ILO Convention No 7 Minimum Age (Sea) (1920)

ILO Convention No 8 Unemployment Indemnity (Shipwreck) (1920)

ILO Convention No 9 Placing of Seamen (1920)

ILO Convention No 10 Minimum Age (Agriculture) (1921)

ILO Convention No 11 Right of Association (Agriculture) (1921)

ILO Convention No 12 Workmen's Compensation (Agriculture) (1921)

ILO Convention No 15 Minimum Age (Trimmers and Stokers) (1921)

ILO Convention No 16 Medical Examination of Young Persons (Sea) (1921)

ILO Convention No 18 Workmen's Compensation (Occupational Diseases) (1925)

ILO Convention No 19 Equality of Treatment (Accident Compensation) (1925)

ILO Convention No 21 Inspection of Emigrants (1926)

ILO Convention No 22 Seamen's Articles of Agreement (1926)

ILO Convention No 26 Minimum Wage Fixing Machinery (1928)

ILO Convention No 27 Marking of Weight (Packages Transported by Vessels) (1929)

ILO Convention No 29 Forced Labour (1930)

ILO Convention No 42 Workmen's Compensation (Occupational Diseases) (Revised) (1934)

ILO Convention No 45 Underground Work (Women) (1935)*

ILO Convention No 47 Forty-Hour Week (1935)

ILO Convention No 57 Hours of Work and Manning (Sea) (1946)

ILO Convention No 58 Minimum Age (Sea) (Revised) (1936)

ILO Convention No 63 Statistics of Wages and Hours of Work (1938)

ILO Convention No 76 Wages, Hours of Work and Manning (Sea) (1946)

ILO Convention No 80 Final Articles Revision (1946)

ILO Convention No 81 Labour Inspection (1947)

ILO Convention No 83 Labour Standards (Non-Metropolitan Territories) (1947)

ILO Convention No 85 Labour Inspectorates (Non-Metropolitan Territories) (1947)

ILO Convention No 86 Contracts of Employment (Indigenous Workers) (1947)

ILO Convention No 87 Freedom of Association and Protection of the Right to Organise (1948)

ILO Convention No 88 Employment Service (1948)

ILO Convention No 92 Accommodation of Crews (Revised) (1949)

ILO Convention No 93 Wages, Hours of Work and Manning (Sea) (Revised) (1949)

ILO Convention No 98 Right to Organise and Collective Bargaining (1949)

ILO Convention No 99 Minimum Wage-Fixing Machinery (Agriculture) (1951)

ILO Convention No 100 Equal Remuneration (1951)

ILO Convention No 105 Abolition of Forced Labour (1957)

ILO Convention No 109 Wages, Hours of Work and Manning (Sea) (Revised) (1958)

ILO Convention No 111 Discrimination (Employment and Occupation) (1958)

ILO Convention No 112 Minimum Age (Fishermen) (1959)

ILO Convention No 116 Final Articles Revision (1961)

ILO Convention No 122 Employment Policy (1964)

ILO Convention No 123 Minimum Age (Underground Work) (1965)

ILO Convention No 131 Minimum Wage-Fixing (1970)

ILO Convention No 133 Accommodation of Crews (Supplementary Provisions) (1970)

ILO Convention No 136 Worker's Representatives (1971)

ILO Convention No 137 Dock Work (1973)

ILO Convention No 142 Human Resources Development (1975)

ILO Convention No 144 Tripartite Consultation (International Labour Standards) (1976)

ILO Convention No 150 Labour Administration (1978)

ILO Convention No 156 Workers with Family Responsibilities (1981)

ILO Convention No 158 Termination of Employment (1982)

ILO Convention No 159 Vocational Rehabilitation and Employment (Disabled Persons) (1983)

ILO Convention No 160 Labour Statistics (1985)

Total Number of Conventions ratified by Australia: 53

*Denounced in 1988

Senator CHAPMAN —I thank the Senate. Australia's position is not looking too rosy, given the prediction of ANZ economists that Australia's job growth will level out to a rate between 1.5 and two per cent for the rest of the year. The Labor government's estimate of five per cent growth by the year 2000 is looking highly questionable.

  The OECD has stated quite clearly that the rigidity of labour markets is a major contributing factor to high unemployment. This government's Industrial Relations Reform Act, which was raced through without consultation by the government with anyone, has entrenched that rigidity and has effectively prevented employers from taking on new staff. It is pleasing to see that the minister is finally showing some sense in amending the act's onerous unfair dismissal provisions, but one cannot overlook the fact that this occurs a mere two months after their introduction.

  I concur with my colleagues in the other place, particularly with shadow minister John Howard, in their view that these amendments make a ludicrous situation slightly better. We applaud the government for its commitment to review these provisions after another 12 month period, but condemn it for not getting it right in the first place. However, one only needs to look at the ACTU's response to these amendments to be highly suspicious of such a review.

  Perhaps the government will see fit to listen to industry and employers and realise just how crippling to industry the unfair dismissal provisions are and how they deter business, especially small businesses which face the prospect of being bankrupted by a claim, from employing new staff. Perhaps it will be only the massive failure of this government to generate jobs, to ease the unemployment in this country, which will give it the courage to say no to its union bosses. Perhaps then it will make a genuine attempt to achieve a reduction in unemployment instead of merely fudging the figures by moving people from the unemployment statistics and hiding the numbers in mature age and training categories.

  Whether the unemployed are under 17, over 17 and training, any age and disabled, or over 60 and mature, they are still looking for jobs which do not exist. While industry is shackled with inflexible, legalistic, complex and expensive labour and taxation rules and regulations, and paperwork required for on cost systems—such as the prescribed payment scheme and superannuation—which stifle innovation and prevent small business from operating efficiently, industry will continue to be deterred from hiring.

  It is encouraging to learn that the Australian Taxation Office is proposing to simplify the fringe benefits tax regime. The move to simplify record keeping rules—for example, log books required to calculate the value of motor vehicle fringe benefits—must be welcome news for business. There are obvious productivity gains to be made by business in the relieving of tedious administrative time taken to comply with this aspect of FBT requirements. However, for each step forward there are two backwards. Even attempts by industry to conform with the government's new look enterprise agreements are thwarted by unwarranted and unwelcome union intervention.

  Two weeks ago employees of the Toys `R' Us firm negotiated an agreement with their employer for a $40 per week increase above the state award in exchange for greater flexibility in working hours and the elimination of the 17 1/2 per cent annual leave loading. The Shop Distributive and Allied Employees Union had access to these negotiations and presented a case to the employees which the employees themselves rejected. The union then sought and obtained federal award coverage for these employees totally disregarding their interests and wishes. So much for the government's move to enterprise agreement negotiations. It is simply a facade, and does not exist in reality.

  Similarly, the Australian Services Union sought and obtained a federal interim award covering major retailers including K-Mart, Myer, Safeway, Brashs, Georges and Target, rendering ineffective individual employment contracts made between retailers and clerical workers.  On 9 June a small Melbourne company, Able Demolitions and Excavations, was forced to convert a workplace agreement into a certified agreement with the CFMEU after being hit with work bans. The Victorian Trades Hall Council industrial officer, Brian Boyd, was quoted as saying to the Financial Review:

We will be determined as hell to make sure Able or anyone else does not break out of the process and try to bypass the unions.

There is also the example of the attempt by Optus to pursue an enterprise flexibility agreement. Only 100 Optus staff have joined the Communication Workers Union and yet we find the CWU attempting to enforce a union shop. It has applied to the Industrial Relations Commission to have a bans clause inserted into the agreement to give the union unrestricted access to Optus workplaces. This is yet another example of unwarranted, unnecessary and unwanted union interference in enterprise agreements between an employer and its employees.

  The government ought to realise that something is drastically wrong with the industrial relations path it is on when all states have joined in a case against the Commonwealth to block state employees moving to federal awards. Such across-the-board action should alert the government that something really is amiss.

  The current industrial relations legislation is ineffective; it does not allow for genuine enterprise bargaining and gives excessive power to the unions. The Labor government preaches one thing and its union bosses practise quite another. The Industrial Relations Reform Act is iniquitous and biased in favour of the unions. Unfair dismissal provisions have opened the door to a flood of claims being lodged—some 600 in two months.

  It is no wonder that the Australian Chamber of Commerce and Industry in its recently published document, The federal Industrial Relations Reform Act 1993: an employer review has concluded:

The contents of the Act make it quite clear that it was not the result of a process of reviewing the needs of industry. It was the result of an extensive dialogue with the union movement in which the needs of trade unions and employees were reviewed. In fact the only way to genuinely assist employees is to assist industry to become more competitive and profitable, and therefore able to provide more job security and employment. This Act does not assist the private sector and therefore will not benefit employees.

Many important issues were not addressed. For example no real attempt was made to enter into discussions with State Governments, employers and unions, to develop by consensus a simple and fair national enterprise agreement procedure through joint federal/State legislation. Instead, State Governments were simply overridden by use of the external affairs power—

I should say the abuse of the external affairs power—

precisely the reverse of the sort of cooperative federalism that is required. No attempt was made to promote greater decentralisation in trade union structures.

That is a damning indictment of this legislation by the employers' organisation. It clearly indicates that there is no incentive in the legislation to move to a more flexible enterprise based industrial relations system and, therefore, no incentive for industry to employ people.

  It is therefore also no wonder that on 30 May 1994 the Australian Chamber of Commerce and Industry lodged a complaint with the International Labour Organisation Committee on Freedom of Association against the federal Industrial Relations Act. In that submission and complaint, the ACCI will argue that the legislation does not allow employers to bargain freely with their employees without being impeded by compulsory arbitration and the award system.

  The present industrial relations system is not compatible with enterprise focused industrial relations. The complaint of the ACCI focuses on those elements of the system which impede an emphasis on workplace agreements. These include the general system of compulsory conciliation and arbitration, entrenchment of the award system, the procedures for approval of non-union agreements, the limitations on non-union agreements, the overriding of awards and agreements made in state jurisdictions and the complexity of the legislation.

  It is the most far-reaching ILO complaint ever lodged about the Australian system. The complaint claims that Australia has breached its obligations under ILO convention No. 87, the convention concerning freedom of association and the protection of the right to organise; and convention No. 98, the convention concerning the application of the principles for the right to organise and to bargain collectively. These conventions are integral to the ILO constitution and are applied by virtue of a country joining the ILO, whether it ratifies them formally or not.

  Australia has ratified these two conventions and the 1993 Industrial Relations Reform Act relied on them in introducing a right to strike in support of a claim for an enterprise agreement. The Australian government has been extremely selective in its approach to ILO conventions. The challenge for it now will be for it to take a more even-handed approach, which will require it to make changes to Australia's industrial relations system, which will be strongly opposed by the trade unions whose policies it has given priority in its legislative performance.

  While not opposing the second reading of this bill, our concern about the government's overall mishandling of industrial relations is reflected in the second reading amendment which I have already moved. We also have concerns with particular aspects of the bill, which I will address by proposing amendments in the committee stage. The first concern is the discrimination between award and non-award employees with regard to access to unfair dismissal provisions, which is detrimental to non-award employees.

  Secondly, the onus of proof provisions relating to termination of employment are particularly distressing for employers. Thirdly, the bill discriminates between award and non-award employees with regard to payment of compensation for unfair dismissal when there is no reinstatement, again to the detriment of non-award employees. These shortcomings clearly demonstrate that the government's industrial relations policies and legislation are framed to advantage its union mates rather than to create the circumstances for the betterment of all Australians.