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Monday, 14 August 2000
Page: 16249


Senator LUDWIG (4:28 PM) —I rise to speak on the Workplace Relations Amendment (Unfair Dismissals) Bill 1998. The bill amends the quite one-sided and awful Workplace Relations Act 1986. It actually seeks to, firstly, exclude new employ-ees of businesses from being able to use un-fair dismissal laws and stop employees from accessing the unfair dismissal laws of bus-inesses with 15 or fewer employees. The bill has two refrains. One is to make employees understand that Mr Peter Reith is not a min-ister to help or assist employees in this country. Clearly, his mandate is to ensure not only that small business get an unjust leg up but also that all business in the federal sphere will get an unfair advantage at the expense of workers.

This bill seeks to take away from working people an avenue that they have for complaint and the redress of wrongs, one that is so typical of our society: to be able to complain and to have an avenue for redress. To ex-clude this group of workers on arbitrary lines not only is unfair but smacks of privileges going to employers in our society and of workers' rights being trammelled. The real shame of this bill is that, as Mr Reith said on radio this morning—I think it was on the ABC—he will keep trying to put this bill up, not-withstanding that it was rejected by the Sen-ate as recently as 25 March 1998. Since that time nothing has happened to alter the view of Labor, nothing has occurred which would otherwise convince Labor that this pro-posal has merit. Mr Reith argues that he has had a renewed mandate to pursue this item since the October 1998 election. What a spur-ious argument! It is ridiculous to suggest that every piece of federal legislation should simply be agreed upon because in the House of Representatives the Liberal Party achieved a majority and could form government. Admitt-edly, the composition of the Senate has alt-ered but not significantly and certainly not as far as the views of this house in relation to this bill are concerned. This house has a responsibility to ensure that bills are individually scrutinised and considered against a frame-work of what is fair. From my particular point of view, this bill is also against the terms of what Queensland workers covered by this legislation would consider to be fair and not good legislation.

This is not good legislation. It is ad hoc, arbitrary and is likely to cause unfairness and confusion over who is or is not caught by the bill. However, not content with trying this item again, Mr Reith has included another even more onerous and unfair provision that did not form part of the bill when it was last before the Senate. Of course, I am speaking about the six-month qualifying period for new employees. It is one of those matters that can only be described as having been plucked out of the air. It is a long period indeed. You would think a good employer, a decent employer or even perhaps a bad employer would be able to assess, certainly before six months, whether they were going to keep an employee on. In fact, I would go so far as to suggest that it seems to be nothing more than a device to ensure that there is churning in the labour market—job turnovers—and that employers have the ability to hold employees for six months and then turn them over. Some persons are already excluded from seeking redress for unfair dismissal under the provisions of the Workplace Relations Act 1996. This act, in section 170CB, specifies those who can access the dismissal laws and by regulation has restricted certain other groups. That list includes high income earners, some temporary employees, some trainees and some contractors.

Quite apart from this, this bill has dubious value in achieving the stated claims of Mr Reith. Mr Reith has whipped small business into a frenzy about it. Now he finds himself in a position where he cannot step away from convincing small businesses that it will benefit them. He has put it on the record that it will benefit them and he has stated in his rhetoric that it will benefit them. Now he is caught in that land of not being able to resile from his own stated goals in respect of this legislation. Therefore we find ourselves once again having pushed to us from the House of Representatives this piece of legislation, which, in his own words, he knows has little prospect of success. Today in the second reading debate the Democrats advised that they would not support the bill. There is little hope of this bill in its present form passing though this house.

Some of the matters that are argued in relation to the bill for the maintenance of the exemption seem right out of the ark. It is simply unfounded to argue that these amendments are necessary. It is worthwhile going through some of the stated benefits that the bill is supposed to bring. One of them is to ensure the continued growth of small business. Already we have heard Senator Hill, in question time today, going through what the champions of this government are saying—that growth is on the up and up. If that is the case, this legislation is not needed. What he has also gone on to say is that it reflects the `special burdens' carried by small business—in other words, we have to help small business by providing this short exemption process. That is ridiculous. There are better ways of dealing with small business in a more proactive and businesslike manner than providing exemptions in dismissal legislation. The other issue that gets put up is that it is supported by surveys of small business. This is simply spurious.

Mr Reith has argued that it has been re-endorsed by the electorate. Again, the electoral mandate has been touted by this government, but nobody takes this seriously. It is a very narrow view, I suggest, to take industrial relations and deal with it by an exemptions process in the shorthanded fashion that this bill sets out. It is far better to deal with industrial relations proactively, something Mr Reith seems unable or unwilling to do. If there is a perception that small business is not performing well because of concerns about supposedly bad workplace practices or of being flooded by supposedly litigious employees seeking to take out unfair dismissal claims—claims, I might add, which do not add up, judging by the statistics from his own department—there are always more sensible ways of tackling the problem than by introducing inequitable and unfair legislation. It seems so typical of this government to address perceived problems by trying to legislate them out of existence. Assuming for a minute that there is a problem, this government cannot seriously think that the best way of tackling the problem is by amending the act in this way, by simply providing two exemptions—a small couple of amendments to a bill—and hoping that a broad-brush approach will provide job creation, jobs growth and an incentive for employment.

There is a raft of things that this government could do to ensure that small business can cope adequately with the issues that confront it. It is true that small business is confronted by many challenges, which can include lack of capital, lack of experience, lack of training, lack of access to markets and lack of time spent on improving the foregoing. To give small business a false halo will not assist it. Clearly, the other problems that confront small business will not vanish as a consequence of addressing this problem; they will continue. What can happen is a simple transferral of the problem to another area. Employees faced with a grievance and with nowhere to go to air the grievance will not simply forget about the grievance. They will not simply let it go into the ether. Rather, they will transfer it to another area to try to resolve it. It might then manifest itself in another way. What will we then have? Government trying to address the transferred grievance. What do we see next? More legislation to try to address that problem—and so on and so forth.

In respect of the two artificial thresholds—that is, the six-month qualifying period for new employees and the `15 employees and under' exemption—as I said earlier, they are artificial and arbitrary. As far as I can understand, no research has been done on whether or not there is going to be any perceived benefit at the end of the day, on whether those are the best amounts, on whether the figure of six months or 15 is the catch, on whether they discriminate badly against employers who want to employ 16 or on whether the legislation favours businesses that are highly capital intensive and use a very small labour force and discriminates against those employers that are service oriented and require more employees. It does not seem to even itself out. It appears to be simply based on the number of employees rather than on the business size, its turnover, the ability of the business to compete or even the type of business that it is.

One of the effects of the legislation is to encourage some businesses—and not very good businesses, I might add—to keep below the threshold, so the legislation might have the opposite effect to that envisaged. For whatever reason—perhaps due to poor judgment or perhaps because it might be better to work under the legislation—businesses might decide to constrain the growth in their business. They may believe that, because Mr Reith has set an arbitrary limit, they should abide by that to avoid the unfair dismissal laws. Rather than being pro job creation, I suggest the legislation could stifle job creation as businesses restructure their businesses to remain below that threshold. With some jobs, the legislation may also cause businesses to hire short-term employees rather than make commitments to longer term employees, thus simply adding to the churning of jobs in the labour market in order to keep below the threshold.

To think that businesses will not do this is very short-sighted. My personal experience of this was as an industrial inspector in the difficult area of trading hours. States sought to introduce and to regulate trading hours, with some governments seeking to deregulate them and to alter them. My experience of that has shown me that some firms, even large firms with many employees, will strive to restructure their businesses, even artificially, to obtain some perceived benefit. For example, some large firms split up their businesses into smaller trading entities in order to avoid the trading hours legislation in Queensland, legislation which was based on the amount of employees. You could have a large business with colour coded areas on the shop floor which belong to different trading entities so that each entity could keep under the employee limit in the legislation. So under the whole roof you could have far in excess of the limit on employee numbers that would allow the business to trade lawfully under the legislation, but they would be trading lawfully because they had split the floor into four or five different colour coded areas—splitting the business into subsidiaries and different trading entities to allow the business to continue. It was a sham, but it makes you wonder why they would go to that sort of length. They went to that length to ensure that they could meet some arbitrary figure that was set within legislation. That example demonstrates that it is not an argument to say that it will not happen; it has happened and it does happen. Businesses do set their size by the size that is in the legislation.

It seems ludicrous for them to try to obtain some perceived benefit. The perceived benefit is not there, but some businesses will believe it is there. They will believe the rhetoric of this government, and they will try to establish their trading entities under the limit. It is quite ridiculous. The labour market then gets skewed along these artificial lines to the detriment of the customers, the employees and, ultimately, the business itself as its structure becomes unworkable or is exposed as a sham. It would be far better for this government to spend time and energy improving the conciliation powers of the commission rather than introducing restrictive legislation such as this.

In truth, Mr Reith is promoting this legislation because he sees it as a way of promoting the powers of employers at the expense of employees. It goes too far and it is unnecessary. Changes were made by Labor in this field, and the balance has been addressed since 1994. Changes were made, and there is really no evidence to support making these changes and going beyond the current legislative position. In fact, there is argument that the current position is unnecessary and that it should be looked at once again. If anything, the introduction of the Workplace Relations Act in its current format went too far in respect of unfair dismissals. There has been a general decline in the application of unfair dismissals. I think businesses are starting to cope; they are starting to learn to deal with the legislation and are working harder and better to compete rather than worrying about the number of employees they should employ and for what qualifying period. The marginal utility of this bill must now be in considerable doubt. What we do know is that it sends all the wrong messages to both employers and employees. It sends the message of conflict, divisiveness and unfairness.

Mr Reith said during his second reading speech that he was determined `to generate strong and sustained jobs growth through sound economic policies and fiscal management, workplace relations reforms and initiatives to support small business'. We are still waiting for the bill that will actually do that. Mr Reith has introduced quite a different bill from the one that I have read. There is no support in this bill for job creation, there are no training initiatives for small business employers or employees, there is no industry assistance for small business to access markets and there is no assistance to help small business cope with changes in our society to ensure that they can address business imperatives. In contrast, in what came out of the Queensland industrial relations task force we do find a government in Queensland willing to sit down and address some of these concerns of small business and to work through them. We find that through their wage line they are actually looking at the issue, trying to encourage employers to understand the legislation and trying to encourage employers to apprise themselves of the legislation and to work through dismissals, as unpleasant as they can be, in a proactive and positive way. I quote from one of the Queensland sources on dismissal legislation which I think highlights and encapsulates some of the contrast between this legislation and the Queensland position. It reads:

Queensland's industrial relations law provides a fair and balanced system to deal with applications for unfair dismissals. It ensures that all employees have equal access to remedies for unfair dismissal.

It has in addition requirements for assistance to employers on what they should do. It reads:

To ensure dismissal is lawful, the employer should comply with the Industrial Relations Act 1999.

What they have also then done is provide some guidelines to set some ground rules to assist and to support employers in employment rather than simply trying to create a bill which detracts from employees' rights.

In addition, during the time of the Senate inquiry into the Workplace Relations Legislation Amendment (More Jobs, Better Pay) Bill 1999—we remember it well—the Queensland state government produced a report for the Senate to examine. At 4.1 it highlights the difference between the two approaches. It states:

The issues dealt with in this section are fundamental to a healthy economy and society. The Queensland government recognises that a primary imperative for any civilised society is to encourage employment and training opportunities for those out of work, and that workers are less likely to be productive if they have fears about job security, if their terms and conditions of employment are under threat, if they do not have a right to fair treatment at work.

That underpins what a state Labor government is doing about employment, about small business and about job creation, in contrast to the Workplace Relations Amendment (Unfair Dismissals) Bill 1998, which is divisive and simply throws up conflict in trying to introduce arbitrary provisions. The Queensland approach in dealing with this issue has proposed, particularly in relation to unfair dismissals, at 4.3 of that report:

The Queensland Government recognises the importance of fair and balanced unfair dismissal laws as a significant protection for the individual rights of employees in relation to job security. In essence, the law should ensure that employees are treated decently and fairly and they are afforded natural justice.

That is quite different from what this bill proposes to do. It is quite unfair and quite divisive in its import.