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Tuesday, 24 March 1998
Page: 1189


Senator MURRAY (5:29 PM) —The Australian Democrats, as is well known, will reject the Workplace Relations Amendment Bill 1997 [No. 2] outright. In doing so, I want to put the case for that. During the 1996 election, the coalition promised to replace Labor's unfair dismissal laws with what they described as `a fair go all round' for employers and employees. Little detail was provided at that time because it was the coalition's practice to run a policy free zone until the last five weeks of the election. But it was clear that all workers would have access to the regime, and that the test for unfair dismissal would be closer to the pre-1993 rules when Labor's laws were changed.

The Democrats, prior to the election in 1996 and since, supported the coalition's policy direction on unfair dismissals. During the election campaign, the Council of Small Business Organisations of Australia, known as COSBOA, asked the coalition, the Democrats and Labor to support an exemption for small business from the unfair dismissal laws. It is important to note that all three parties refused on the basis that it would breach the `a fair go all round' approach. So, going into the election, all three parties refused to do what the government is now putting before us.

The 1996 Workplace Relations Act passed through the Senate with the Democrats' support, implementing the `fair go all round' approach and implementing the unfair dismissal regime. The unfair dismissal regime now relies mostly on the corporations power rather than the external affairs power allowing the act to avoid the procedural difficulties which it had before. It is a much simplified act with regard to unfair dismissals. In our view, the current laws are pro-business and pro-employment—to such an extent that it is Labor's view, as I understand it, that they go too far.

There were 10 key changes by the coalition with our support to Labor's laws on unfair dismissals. They were: a change in the onus of proof—instead of an employer having to prove they had a valid reason for the dismissal, the employee now needs to prove the dismissal was unfair, harsh or unjust. Hearings are now held in the commission instead of proceedings being in the Federal Court. Costs may be awarded against employees if an employee proceeds with a frivolous or vexatious claim. An application fee of $50 applies and acts as a disincentive to speculative applications. The fee is waived only if the employee is in financial difficulty. The viability of an employer is taken into account in damages. The commissioner is required, among other things, to take into account the viability of the employer in deciding whether to award damages for termination in lieu of reinstatement. Procedural fairness is no longer a mandatory requirement—a fair dismissal cannot become unfair because of a technicality, as could happen before. Probationary employees are excluded—the new act extends the eligibility period for probationary employees to three months, so for three months they can be dismissed without regard to the unfair dismissal laws. Casual employees cannot apply for unfair dismissal until they have been employed for more than 12 months. For employees on specified term contracts, the exemption is excluded, so those employees are not covered by the unfair dismissal laws. Lastly, state systems are reinforced.

All those changes have resulted in a reduction of federal unfair dismissal claims by 49 per cent. In our view, the act is now working and working well and only genuine cases are being heard. The percentage comes to 0.7 per cent of all employers. About half of those might be expected to have to agree to a settlement. I suggest that it would be defying the bounds of commonsense or reason to imagine that there are no rogue employers at all in small business, and that none of this 0.7 per cent are likely to abuse their power or their rights in this regard.

We believe strongly that it is a vital function of our society to protect the human rights of Australians. We think that the federal unfair dismissals law is part of that human rights situation. That is why for us this is a matter of principle. We think it is unacceptable that up to 2.9 million Australian employees could lose the right to challenge an employer who has sacked them harshly, unjustly or unfairly, which is the test in the act.

As the parliament and much of the country know, the Workplace Relations Act was passed as the result of an agreement between the Democrats and the coalition. Within that agreement, we came to the view with government that no further major change would occur to the act until the next election, in which case every party was entitled to put forward whatever policies they wished. In our view, this proposition put forward by the government is specifically a breach of that agreement. This is not a technical amendment; it is a breach of the principles which the government, the Democrats and Labor agreed in 1996 should apply; and those which the government and the Democrats agreed after the election on the format, as with the new bill. We are deeply disturbed by any government that would be willing to break an agreement in this manner.

The next area I wish to deal with is the area of facts and statistics. I mentioned earlier that federal unfair dismissal applications have fallen by 49 per cent. I have spent more than a year vigorously pushing the government to provide the statistics, which they were unwilling to do, and which I now put before you. Firstly, the federal unfair dismissal applications have fallen from 14,533 to 7,463 under federal law. It was always my belief that many of the unfair dismissal applications involved big business and not small business. Finally I was able to push that point through, because I was able to get the information out of government.

We have discovered that 65 per cent of federal unfair dismissal applications are from big business and only 35 per cent are from small business. We are now down to 2,580 federal unfair dismissal applications. Of those 2,580, based on percentage figures supplied to me by the minister, in certain states such as Tasmania and Western Australia that translates to as few as 16 federal unfair dismissal applications. Listeners might well say, `What is all the fuss about?' The fact is that the majority—60 per cent—of all unfair dismissal applications in this country are under state laws, not federal laws.

If the government has a problem at all, it is with the lack of harmonisation and consistency in the laws of this country which lead to great confusion. That confusion is exhibited in every letter I get from small business organisations. I do not blame them. You cannot expect people standing behind a till, working a lathe or working at a computer to know whether they fall under state or federal laws. Neither can you expect them to understand or to know what the laws are.

I still get people writing to me complaining about Labor's laws who do not realise that they fall under the state law not the federal law. We have a situation in which the largest number of unfair dismissal applications falls under state laws not Commonwealth laws. The largest number relates to big business not small business, and the number of federal unfair dismissal applications is relatively minute.

The government has made the claim—and it was repeated in the second reading speech to this bill—that the exemption from unfair dismissal for small businesses with 15 employees or less would create jobs. The government repeats COSBOA's estimate of 50,000 jobs. I have made it my business to inquire where that number of 50,000 jobs comes from. It turns out that it is a guess. There was no survey, no empirical study, no evidence, no research—it is a guess.

I think it is the guess of the chief executive of that organisation, whom I have been told said, `Oh well, there are a certain number of small businesses out there. Let's assume that a certain percentage of them would employ one person extra.' It is extremely difficult to accept the proposition that a guess at job employment of that kind should generate a bill which would destroy the rights of those who now put their case for unfair dismissal and who are mostly genuine cases.

This bill gives a small minority of employers, of which even fewer would be rogue employers, the right to sack workers unfairly. The government says that this will only apply to new employees of small business. What is the turnover rate of staff in small business companies? I have not been provided with that figure, but anecdotal evidence tells me that it can reach up to 60 per cent. Within a couple of years you have a turnover in many small businesses which would result in many people who presently fall outside the scope of this act falling within it.

We think this is a stalking-horse for big business anyway, because all businesses—and we understand that—and particularly small businesses want as little regulation and law controlling them as possible. One chair of a small business committee said to me, `Look, if I want to employ or fire somebody because they have got blue eyes and fair hair, I should be allowed to do that.' That is how they think. I understand that but, as a legislator, I am certainly not going to agree with it.

Right from the beginning we have thought that this bill is predicated on the need for the government to have a trigger for a double dissolution. We think there is no other reason. The government has had a great deal of difficulty in arriving at bills to provide it with a double dissolution trigger. According to what I have seen statistically, this Senate is the most cooperative in seven years. As at December 1997 from the election in 1996, this Senate has passed 317 bills. The number of bills carried forward from 1997 to 1998 is the lowest that I have seen for seven years. No bills are being held up apart from the five that we know about.

Let us go through those five bills. The first is the Workplace Relations Amendment Bill 1997 [No. 2] —the unfair dismissal exemption bill for federal small business, not state small business—which is before us. Indisputedly, if that bill is rejected by the Senate it will form a double dissolution trigger. The next one which would have formed a double dissolution trigger was the Charter of Budget Honesty Bill 1996 [No. 2] —otherwise known as the optional honesty bill—but Labor has advised us that it has agreed to let that through, so that cannot form a trigger.

Then there are three sets of bills—the Public Service bills, the legislative instruments bill, and the native title bill—which were laid aside in the lower house. The advice that the Senate has had from the clerk is that that makes them constitutionally suspect. The government says that it has contrary advice, and well it might, but we all know that we have been pushing it hard to provide that advice. My assumption is that if the government cannot front up, it must have a shaky case, so this is the only bill on which it can really deliver a double dissolution trigger. I think that is what it has been about all along.

Minister Peter Reith is a very intelligent, experienced politician. If anyone out there honestly thinks he believes this exemption for federal small businesses below 15 employees, a law which only affects 2,580 small businesses, is going to deliver 50,000 jobs, they underestimate his intelligence. No, this is just straightforwardly a cynical political device which, unfortunately, is supported by small business organisations who, I think, should know better.

The protection of rights is the responsibility of every section of the community. It is no good small business screaming, and quite rightly screaming, about standover tactics from landlords on tenants or from franchisors on franchisees or any other kind of supplier of heavy-handedness and say, `It is okay. We can go and give our employees a whack.' Everyone's rights are the responsibility of everyone else. I think it is most unfortunate that the workers of Australia, the working battlers of Australia, are subjected to this kind of discrimination between one class of workers and others.

The case of the government is that the public good of generating jobs justifies the private harm done to this minority of employees. But if you cannot prove your case, if you have no empirical basis, no logical rational basis for saying that 50,000 employees will be created by taking away the rights of 2,580 Australians, then the entire credibility of your case, the entire moral justification for it, falls away.

The Australian Democrats believe that this bill should be rejected on the grounds of human rights, on the grounds of economics and on the grounds of plain commonsense. Why do we say economics? Because the statistics we have from the ABS show that from November 1996 to August 1997, which are the latest figures I have, small business employment rose anyway by four per cent whilst large business employment fell by 1½ per cent. During the time of Labor's laws alone, job growth in small business under those laws, which were regarded both by us and the coalition as going too far, was still double that of large business. The problem for small business, as exhibited in the recent yellow pages Index of Small Business Attitudes, is economic conditions and finance conditions. They are still paying about the highest real interest rates in the OECD. So on economic grounds this does not match up.

We do not think Mr Reith can guarantee that all 890,000 small business employers in Australia will treat their workers fairly and justly if we allow him to remove the minimum protection they enjoy. He has not offered any additional funding for management training. He has not proposed to make it easier for small business to expand in other ways. Whilst he has addressed some of his responsibilities about the concerns of small business, those he has not attended to. In summary, we say the federal laws work, that they deal only with genuine cases, and that it is a minority of small businesses affected. (Time expired)