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Monday, 14 August 2000
Page: 16187


Senator GIBBS (1:44 PM) —Senators would be forgiven for having a sense of deja vu. We have been here before debating the Workplace Relations Amendment (Unfair Dismissals) Bill 1998 and, given this government's lack of forward vision for Australia, I am sure we will be back here again in the future doing exactly the same thing. This government does not have any plan for the future direction of Australia. All it knows is the past. This government has no notion of the challenges that will confront Australia and its work force into the 21st century. This government is stuck in an ideological time warp, delivering social and economic policy that is date stamped `circa 1950'. This government has no notion of providing progressive social and economic policy for a changing country. It has no idea how to provide legislation that is fair to both employers and employees. The government does not have any new or innovative policies so it is forced to resurrect failed old ones.

Having lost on almost every single issue the government has put before this parliament, Mr Reith seems to think he can wear us down with repetition. He is wrong. No matter how many times he puts these measures before us, no matter what steps he takes to disguise them, the Labor Party will reject them. The Labor Party will reject them because they are unnecessary and they are unfair. If introduced, the Workplace Relations Amendment (Unfair Dismissals) Bill would require a six-month qualifying period of employment before new employees, other than apprentices and trainees, could access unfair dismissal remedies under the act. It would also exclude new employees, other than apprentices and trainees, of small businesses with 15 or fewer employees from having the unfair dismissal remedy under the act.

These regulations have quite a long history, and it is probably worth going over that history because it demonstrates how desperate this government and this minister have become. The government introduced the Workplace Relations Amendment Act in 1996. The act amended the previous Labor government's unfair dismissal laws. Regulations to exclude access to the unfair dismissal laws by employees who had less than 12 months continuous employment and those who worked for a business with 15 or fewer employees were introduced by the government in mid-1997. The Senate disallowed the regulations. The Workplace Relations Amendment Bill 1997 proposed a permanent exemption for small businesses with 15 or fewer employees from the unfair dismissal laws. It was introduced into the Senate in September 1997 and referred to the Senate Economics Legislation Committee for inquiry and report. The minority reports of the Labor and Democrat members recommended that the bill not be passed. It was defeated in the Senate in October 1997. Another bill with identical provisions was introduced into the parliament in November 1997 and was defeated in the Senate in March 1998. On 12 November the government introduced the Workplace Relations Amendment (Unfair Dismissals) Bill 1998 into the House of Representatives. So here we are again, beholden to a government that is devoid of any original policy initiatives.

A few weeks ago the Labor Party held its national conference. We discussed positive policies in education, health and employment that would lead Australia into the future. What were the coalition senators doing while we were there? They were polishing their speeches on a piece of legislation that has been before this place in one form or another four times—a piece of legislation that has been before us time and time again and was rejected each time.

The Labor Party has three main concerns with this bill. The first concern is that the amendment contravenes the Prime Minister's key commitment to the Australian people that under his government employees would not be worse off under the government's industrial relations legislation. In the run-up to the 1996 federal election, Mr Reith publicly promised that all employees would have access to appeal if they thought they were dismissed unfairly. On 28 February 1996 Mr Reith said:

Look, our position is very clear. If you have been unfairly dealt with at work you should have a right of appeal.

And if the minister's own words were not good enough, the commitment was reflected in the coalition's pre-election policy, Better pay for better work, which said:

The Coalition believes that employees should have access to a fair and simple process of appeal against dismissal, based on a principle of a fair go all round.

In his second reading speech Mr Reith made much of the so-called mandate from the 1998 federal election, saying:

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-Fischer government.

This is a spurious argument, demonstrated by the fact that the coalition obtained less than 50 per cent of the House of Representatives vote and about 40 per cent of the vote in the Senate. These amendments clearly discriminate against workers who are in a small business with 15 or fewer employees. They also discriminate against those new employees that are on a six-month qualifying period. It is blatantly obvious that these employees will be worse off under the legislation. It takes away from a substantial group of employees the right to access proper protection from unfair dismissal. It makes an absolute mockery of claims by this government that workers will not be worse off under this legislation and have received `a fair go all round'.

Our second main concern, and our ultimate concern really, is that the exemption remains unfair. As Labor senators noted when the Senate Employment, Workplace Relations, Small Business and Education Legislation Committee first looked at this bill, the exemption is discriminatory and arbitrary and will lead to increased job insecurity. The bill did not address these issues when it was subsequently put before us and it does not address them now. Evidence to the inquiry further emphasised the unfairness involved. A number of case studies presented by various groups highlighted the unjust behaviour that would be allowed without recourse if we passed this bill.

The alternative to unfair dismissal regulations is that workers may be forced to sort out their problems in the courts. Will we be subject to the types of litigation we see in the United States where people are regularly awarded millions and millions of dollars because of problems arising from workplace dismissal? Surely it would be better for us to provide a regulatory framework to solve as many of these problems as possible before they go to court. Not offering that facility to employees and employers in the small business sector may involve high costs for both groups. There is also a legitimate concern about some companies creating shelf companies to avoid their obligations to workers. Setting the exemption at 15 employees could encourage unscrupulous employers to structure their company arrangements to avoid obligations to provide secure employment.

The third main concern with this bill is that, in reality, the exemption is unnecessary. The government has delivered a lot of rhetoric about why the small business exemption is warranted—a lot of rhetoric, but little solid evidence. There are three basic reasons why the proposed exemptions are unnecessary. The first comes from the government itself. The government has already amended the unfair dismissal laws and told us that no further change is needed. The original changes to the Workplace Relations Act came into effect on 1 January 1997. At the time, Mr Howard said:

We have swept away Labor's jobs-destroying unfair dismissal laws.

And Peter Reith said:

We have delivered a workable system for dealing with unfair dismissal.

Surely those statements by the Prime Minister and Mr Reith demonstrated that the government believed that further amendment to unfair dismissal laws was unnecessary. What changed between 1997 and 1998? The Democrats also believed that further exemptions for small business were not necessary. In his minority report in October 1997, Senator Andrew Murray said about the unfair dismissal provisions of the Workplace Relations Amendment Bill 1997 that:

The federal government now has the law it wanted in these respects, with only minimal changes. Indeed, the new federal law is even more attuned to the needs of small business than the pre-Brereton 1993 state laws.

The Democrats have delivered what we think is a fairer balancing between the rights of employers and employees. To go further would be to create a new unfair dismissal problem in reverse—the same sort of situation which in 1993 led to the campaign for federal laws on unfair dismissals in the first place.

The government commissioned a task force into small business which concluded that the small business exemption was unnecessary. The Bell task force, chaired by Mr Clarrie Bell, concluded that an exemption was not needed. After an extensive report, the only recommendation that the task force came up with in relation to unfair dismissal laws was that the unfair dismissal laws should be reviewed after 12 months operation to ensure that they were delivering a more balanced and flexible approach to small business. The further reality is that the changes already put in place have affected the unfair dismissal claims and made further amendment unnecessary.

In evidence to the Economics Legislation Committee, which examined the 1997 workplace relations bill, the Department of Employment, Workplace Relations and Small Business produced the following data in relation to the effect of the original amendments to the unfair dismissal laws. As a result of the amendments, there has been a significant decrease in the number of applications made under the federal unfair dismissal legislation. In the first 37 weeks, there were 10,408 applications under the then Industrial Relations Act 1988. In the 37 weeks up to 12 September 1997, there were 4,801 applications under the Workplace Relations Act. That is a decrease of 54 per cent. This decrease is not just the result of the change to the scope of the federal jurisdiction; combined totals of federal and state applications, excluding applications in Queensland in either federal or state jurisdictions, decreased by 20 per cent for the period from January to July 1997 compared with January to July 1996.

Data available as recently as last year was provided by the Department of Employment, Workplace Relations and Small Business in its submission to the Employment, Workplace Relations, Small Business and Education Committee on 21 January 1999. From December 1996 to December 1997, in the first 12 months of operation of the new provisions, 7,461 applications for unfair dismissal were filed. This was a 49 per cent reduction in claims compared with the same period in 1996. From January to December 1998, there were 8,186 applications in respect of termination of employment that were within the federal jurisdiction. This was a 44 per cent decrease compared to the same period in 1996. This reduction had a direct impact on small business as the number of small business claims has remained in proportion to their share of the work force during this decline. There is also no credible evidence to suggest that unfair dismissal laws actually need to be changed.

Data from the 1995 Australian workplace industrial relations survey addressed the question of whether the unfair dismissal laws prevent small business from employing new staff. In response to a survey which asked, `Why haven't you recruited new employees?' 68 per cent of businesses responded that they did not need more employees. A total of 33 per cent provided as their reason insufficient work, lack of demand for their product or low profitability. Unfair dismissal laws did not rate a mention but may have been a fraction of the six per cent response of `high employment costs'. The most relevant piece of the survey evidence—it was unpublished but was reported in several places—was the survey into reasons for not recruiting employees during the previous 12 months: 66.2 per cent of small business respondents indicated that they did not need any more employees and 23 per cent listed insufficient work as the main impediment. Only 0.9 per cent of respondents nominated that they had not recruited employees due to unfair dismissal laws. I seek leave to continue my remarks later.

Leave granted; debate adjourned.