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Thursday, 3 December 1998
Page: 1166

Senator IAN CAMPBELL (9:49 AM) —I move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard .

Leave granted.

The speech read as follows

Madam President, the Coalition is determined to continue to generate strong and sustained jobs growth through sound economic policies and fiscal management, workplace relations reforms and initiatives to support small business, and further improvements to the national training system to strengthen the competitiveness of Australian businesses. There are no short term or easy solutions to the problem of unemployment. But this bill is an important step in creating more jobs.

This bill will amend the Workplace Relations Act 1996 to exclude new employees of small businesses (other than apprentices and trainees) from the federal unfair dismissal regime and to require a six month qualifying period of employment before new employees (other than apprentices and trainees) can access the federal unfair dismissal remedy.

Madam President, these initiatives were specifically outlined by the Coalition parties during the recent federal election campaign in our workplace relations policy, More Jobs, Better Pay . We have a specific electoral mandate to proceed with their implementation as a matter of priority. In regard to the small business exemption we have a fresh mandate, given the rejection by the Senate of similar proposals during the first term of the Howard/Fisher Government.

In our first term we made substantial progress in labour market reform, of particular benefit to small business. We introduced a new unfair dismissal system, which is more balanced and fair to both employers and employees. But we have not gone far enough in removing the burden of unfair dismissal laws off the backs of Australian employers, or the unemployed. For small business, we must continue to give priority to the reduction of paper work and the compliance burden.

It is an unavoidable fact that the defence of an unfair dismissal claim, however groundless, is especially burdensome for small businesses. In many larger businesses, expertise and resources can be put into recruitment and termination procedures. Small businesses have no such resources. Even attendance of witnesses at a hearing can bring a small business to a standstill.

The Government has been listening to the concerns of small businesses, their experiences of the impact of unfair dismissal claims, and their fears that the simple fact of employing someone makes them vulnerable to unfair dismissal claims. There is extensive evidence of the difficulties that unfair dismissal laws cause for those small businesses who experience a claim: not just the cost of settlement, where that occurs, but the time and location of hearings, stress, costs to business in lost time, disruption to working relationships and the costs of defending the application. And the fear of these burdens affects employing intentions, even amongst businesses which may not have themselves experienced a claim. This is the most important reason that this bill should be brought into law, as soon as possible—it will promote jobs growth.

Senators who spoke against the previous bill to introduce the small business exclusion said there was insufficient evidence of the need for the bill, and its benefits. There was plenty of evidence, but they would not allow themselves to be convinced.

That evidence included the Morgan and Banks' 1996 survey, the April 1997 Recruitment Solutions survey, released in April 1997, and the May 1997 New South Wales Chamber of Commerce and St George Bank survey. The Council of Small Business Organisations of Australia said that small business would create 50,000 jobs if the bill was passed. `Trends in Staff Selection and Recruitment', a report by the National Institute of Labour Studies in May 1997, commissioned by the then Department of Employment, Education, Training and Youth Affairs, found that unfair dismissal laws strongly influenced hiring decisions.

Then there was the Yellow Pages Small Business Index Survey conducted in October and November 1997, and further surveys conducted in March 1998 and July 1998 by the New South Wales, South Australian, and Queensland Chambers.

These surveys, and others like them, make completely plain the importance which business attaches to this issue.

The introduction of a six month qualifying period provides a fairer balance between the rights of employers and employees in this statutory cause of action. It will provide some relief for medium and larger businesses which may not benefit from the small business exemption. It will also provide employees with an opportunity to achieve longer service before determining whether they genuinely seek the relief sought by such claims. It will deter frivolous claims. This standardisation of a six month period will remove the uncertainties that can affect businesses relying on probation periods introduced for specific employees. The six month period is reasonable for Australian employees and employers, and may be compared with qualifying periods in place in other countries, such as the United Kingdom, Canada and Germany.

I turn now to the terms of the bill itself.

The exemption is to commence on Royal Assent. However, it will not affect existing employees. As it is intended to encourage new employment, the exclusion will only apply to employees who are first engaged by the relevant employer after the commencement of the amendment.

The exemption is from the federal unfair dismissal provisions, only. Employees will still be protected by other provisions of the Workplace Relations Act in respect of unlawful termination.

The exemption does not in itself affect the rights of apprentices or trainees.

The exemption applies only to businesses employing 15 or fewer employees. This size of small business was chosen because of the precedent provided by the Employment Protection Act 1982 (NSW), introduced by the Wran Government, and followed by the then Australian Conciliation and Arbitration Commission in the 1984 Termination, Change and Redundancy Test Case.

The bill provides that, in counting the number of employees in a business, casual employees are only to be counted if they have been engaged on a regular and systematic basis for at least 12 months. The intention of this exclusion is to reflect the fact that a business which occasionally engages additional casual employees is not necessarily a large business.

The qualifying period of six months will need to be continuous employment. The regulations will be able to prescribe circumstances to be disregarded in determining whether employment is continuous or not, much as is presently done in calculating length of service for the purposes of the entitlement to pay in lieu of notice (except in cases of serious misconduct).

This bill will have no significant impact on Commonwealth expenditure.

I commend the bill to the Senate.

Debate (on motion by Senator O'Brien) adjourned.