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Tuesday, 3 October 2000
Page: 17707


Senator PATTERSON (Parliamentary Secretary to the Minister for Immigration and Multicultural Affairs and Parliamentary Secretary to the Minister for Foreign Affairs) (5:03 PM) —I table a revised explanatory memorandum relating to the Family Law Amendment Bill 2000 and move:

That these bills be now read a second time.

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

Leave granted.

The speeches read as follows—

FAMILY LAW AMENDMENT BILL 2000

The Family Law Amendment Bill 2000 gives effect to a number of the Government's election promises on families and family law, marking it as an important step in the process to reform the Family Law Act 1975.

The Government recognises the extraordinary stress that is placed on people experiencing relationship difficulties and is committed to assisting people to maintain stable, healthy relationships. When people do experience relationship difficulties, however, the government is committed to assisting them to resolve those difficulties with a minimum of stress and as fairly as possible.

The bill will help separating couples achieve greater financial equity and certainty by implementing a number of recommendations contained in the 1992 Report of the Joint Select Committee on Certain Aspects of the Operation and Interpretation of the Family Law Act 1975.

The bill has two broad aims.

The first aim, given effect by amendments in Schedule 1 of the bill, is to streamline and enhance the enforcement of parenting orders by the introduction of a new three stage parenting order compliance regime.

The second aim is given effect by amendments in Schedules 2 and 3, which provide for the introduction of binding financial agreements and enable the commencement of private arbitration of disputes about property. The object of the amendments in Schedules 2 and 3 is to provide greater choice for parties in property settlements and to provide a more efficient and less costly means of dispute resolution in property matters than that which is currently available through the Family Court.

Turning to the amendments in Schedule 1, the bill will address an area of significant public concern, the enforcement of parenting orders.

Under the current law, in many cases, contact order compliance, in particular, is seen as being optional. When the Court makes an order about the parenting of a child, it must be observed. However, Family Court orders are different to other court orders in two important respects. First, they must balance the emotional distress that often accompanies relationship breakdown. Second, the opportunity for the breach of a parenting order providing for contact comes about on each occasion of contact.

Because of the unique nature of parenting orders, a new three stage parenting compliance regime will be introduced covering prevention, remedial measures and ultimately sanctions. The three-tiered approach in this bill was recommended by the Family Law Council in June 1998. That recommendation followed the Council's detailed study of enforcement cases and broad ranging community consultation on alternatives for improving compliance with parenting orders, particularly contact orders.

The Government is committed to encouraging parents who separate to consider carefully the needs of their children and to put in place workable parenting arrangements that promote the best interests of their children. The first stage of the parenting compliance regime will therefore be preventative. The aim of the first stage will be to ensure that parents are aware of their parenting obligations, the responsibilities imposed by any orders and the consequences if they fail to observe the orders. The bill will achieve this by requiring courts to include in parenting orders a range of standard clauses to this effect.

This stage is also intended to improve the communication between parents. The court or a legal practitioner who is representing a party will therefore supplement the information in the standard clauses by further explaining the effect of the parenting order. This information will be required to be given in language that the person receiving the explanation is likely to understand. People who make registrable parenting plans will also be able to obtain an explanation of what they are agreeing to and the consequences of failure to comply with the agreement.

The second stage of the parenting compliance regime will contain remedial measures.

When a breach of an order occurs for the first time, the court will be able to send parents to a range of post-separation parenting programs as well as making an order to compensate for lost contact. The aim of the educative programs will be to help parents resolve issues of conflict about the parenting of their children, and to this end, a court will be able to order both the parent who contravened the parenting order and the other parent to attend a program. Parents will be required to attend such programs provided that they are available within a reasonable distance from the person's place of residence or work. The Attorney-General will compile, each year, a list of the programs that will satisfy the requirements.

When the court requires a person to attend one of the listed programs, the court will also be required to provide information to the program provider, including the details of the person ordered to attend. In some cases, the program provider will be required to notify the court of the person's suitability for attendance and any absence. These cases will be where the person has failed to attend the program as ordered, or the person has been deemed unsuitable to attend, or to continue to attend, the program. When the court is notified of a failure in the program, the court may then make further orders concerning the person's attendance at a program.

The third stage of the parenting compliance regime will contain sanctions for serious initial breaches or subsequent breaches. At this stage the court will have a discretion on a second or subsequent breach to order the party to attend another post-separation parenting program if the court is satisfied that it is more appropriate for that contravention to be dealt with under stage 2.

Where there are persistent breaches, or where the first breach is particularly serious, the court will be able to impose a range of sanctions including community service orders, fines, bonds or, ultimately, imprisonment.

For the court to impose one of the range of sanctions available in the third stage of the parenting compliance regime, the person must previously have been ordered to attend a post-separation parenting program or, alternatively, the court must have ordered compensatory contact. These requirements will not apply if a post-separation parenting program was not reasonably available or the court considered that it was not appropriate for the person to attend such a program or considered that it was not appropriate to order compensatory contact.

Community service orders will be a valuable alternative sentencing option under the new three tiered parenting compliance regime. Such orders offer a valuable alternative sentencing option for the court to consider. The bill includes imprisonment as a sanction available for the non-payment of court ordered maintenance where the contravention was intentional or fraudulent. The Joint Select Committee recommended, in 1992, that imprisonment should be an option in such cases. The bill makes it clear that imprisonment is not available in respect of child support assessments under the Child Support (Assessment) Act 1989.

The bill defines the meaning of contravene an order with the emphasis being on the intent of the parent in failing to comply with the parenting order, or that of another person who assists a parent to contravene a parenting order.

The changes to the parenting compliance regime for children's matters will apply to orders made before as well as after the commencement of the bill, and will apply regardless of whether the contravention occurred before or after the commencement.

I now turn to the amendments contained in Schedule 2 to the bill. These amendments will enable binding financial agreements to be made before or during marriage, or after separation.

Currently, under the Act, people can make pre-nuptial agreements about their property. However, the use of these agreements has been limited because the agreements are not binding. Despite the existence of an agreement, the court has been able to exercise its discretion over any of the property dealt with in the agreement.

The settlement of the financial affairs following separation has remained basically unchanged since the Act commenced in 1976. However, the Australian community - and its attitude to marriage - has undergone substantial change during that time. The changes in this bill will attempt to bring the Act into line with prevailing community attitudes and needs.

Binding financial agreements will be of particular benefit to people who are entering subsequent marriages as well as to people on the land and those who own family businesses.

The aim of introducing binding financial agreements is to encourage people to agree about how their matrimonial property should be distributed in the event of, or following, separation. Agreements will allow people to have greater control and choice over their own affairs in the event of marital breakdown. Financial agreements will be able to deal with all or any of the parties' property and financial resources and also maintenance. An agreement may cover how property would be divided or how maintenance would be paid. Particular assets, such as rural properties, would be able to be preserved.

People will be encouraged, but not required, to make financial agreements. For these agreements to be binding, each party will be required to obtain independent legal advice before concluding their agreement. The provider of the advice will certify, on the agreement, that the advice has been given. Requiring parties to obtain independent advice will mean that couples will be aware of the implications of the agreements that they are entering into and will not unknowingly enter an agreement that is not in their best interests.

Because parties will have obtained prior advice, the court will only be able to set aside an agreement in certain limited circumstances reflecting the contractual nature of the agreement. For example where there is fraud (including non-disclosure of a material matter), where the agreement is void, voidable or unenforceable, where it is impractical to enforce the agreement and, most importantly, where there are material changes in circumstances relating to the care, welfare and development of a child such that a party to the agreement would suffer hardship.

Schedule 3 of the bill contains provisions to increase the range of non-judicial dispute resolution services.

The Government has already increased family and relationship counselling and mediation by providing additional primary dispute resolution services through community based counselling and mediation services and through conferencing in legal aid commissions to assist families to resolve disputes. The Government's aim is to ensure that wherever possible, where people cannot resolve their relationship difficulties, they are able to avoid costly legal fees and emotionally debilitating court proceedings and resolve their marital, separation and parenting disputes sensibly and respectfully.

The amendments in Schedule 3 to the bill also pro-mote these aims by introducing a workable scheme of private arbitration that will allow quali-fied arbitrators to settle disputes and make en-forceable decisions about the distribution of prop-erty on marriage breakdown. The amendments will mean that if people are unable to agree about property on marriage breakdown, they will be able to use the services of arbitrators rather than needing to resort to a court to resolve the dis-pute. Therefore, people who utilise the services of arbitrators will have access to a less expensive and quicker option to resolve their dispute.

Where the parties choose, some aspects of their property may be arbitrated: for example, parties may choose to have complex issues, such superannuation, arbitrated, with the remainder being settled either by financial agreement or by court order. Even where proceedings have commenced in the Family Court, the court may, with the consent of the parties involved, order that particular issues be arbitrated. Similarly, the bill will permit an arbitrator, prior to making their arbitral award, to refer a question of law to a single judge.

Decisions of the arbitrator will be subject to review on questions of law by the Family Court and the Federal Magistrates Service. Confining the review of arbitral awards to questions of law will ensure the finality of arbitral resolutions.

Arbitrators, in order to be eligible to perform arbit-rations under the Act, will be required to satisfy prescribed qualifications and experience crit-eria. People will be able to choose an arbitrator easily from a list of arbitrators who meet the req-uired criteria maintained by the Law Council of Australia.

Finally, the bill will make a number of other amendments to the Act designed to assist the smooth functioning of the court, to facilitate transfer of proceedings between courts, to make minor changes to child maintenance orders, to extend the application of location and recovery provisions of the Act to international child abduction cases, to limit the application of the separate representative provisions in international child abduction cases and to provide the court with broader powers to make Rules of Court about enforcing property and financial orders.

These changes are intended to benefit persons involved in family law matters. This bill will not only improve the procedural efficiency with which matters can be dealt with by the courts, it will also open up a new range of choices for separating parties to resolve their disputes with dignity. This bill is an important step in minimising the distress and trauma that arises when families break down.

FAMILY AND COMMUNITY SERVICES AND VETER-ANS' AFFAIRS LEGISLATION AMEND-MENT (DEBT RECOVERY) BILL 2000

This Bill gives effect to one of the measures announced in the Government's 1999-2000 Budget. The changes made by the Bill will clarify, simplify and strengthen the debt recovery processes of the Department of Family and Community Services as well as those of the Department of Veterans' Affairs.

Under the current provisions of the Social Security Act 1991 and the Veterans' Entitlements Act 1986, the Commonwealth's right to recover excess payments is unclear in some circumstances. This uncertainty means fewer debts are recovered than would be the case if the provisions were more transparent in their operation. The changes in-tro-duced by this Bill will ensure that, when a per-son receives a social security payment, a family assistance payment or a Veterans' Affairs pay-ment that exceeds the amount that should have been paid, the excess amount is a debt and is recoverable.

At present, an interest scheme exists under which a debtor may incur an interest charge because the debtor is making no attempt to repay the debt. A loophole exists in that scheme which effectively allows some debtors to avoid the liability to pay interest even though they are not making payments in respect of the debt. The changes made by this Bill close that loophole.

The Bill also provides for an administrative charge to be payable where a person becomes liable to pay interest. The administrative charge can be incurred only once in respect of a debt. Like the interest scheme, that charge is intended to encourage debtors to enter arrangements for repayment. The charge also recognises the cost incurred by the Commonwealth in recovering debts in those circumstances where people fail to voluntarily enter arrangements to repay.

The Bill also provides for the recovery of payments directly from financial institutions where payments have been made incorrectly. This is the most efficient and cost effective method of recovery for incorrect payments of this nature.

SOCIAL SECURITY AND VETERANS' EN-TITLE--MENTS LEGISLATION AMEND-MENT (PRIVATE TRUSTS AND PRIVATE COM-PANIES - INTEGRITY OF MEANS TEST-ING) BILL 2000

This bill gives effect to the measure announced in the 2000-2001 Budget, which is intended to restore equity and integrity to the social security and veterans' affairs means tests.

Under current social security and veterans' affairs legislation, assets held in private trusts and private companies generally cannot be assessed under the social security means test. This means that individuals can use private trusts or private companies to hold and control assets outside the bounds of the current means test.

People who arrange their affairs this way are therefore often treated more favourably under the means test than a person holding similar levels of assets directly. Thus well-off or even quite wealthy people can receive income support payments.

This isn't how the community expects the income support system to operate. It is also at odds with the principle that people with similar levels of private resources should receive similar levels of payment. This measure is about providing a level playing field for all social security customers, no matter how they choose to hold their assets or income.

This measure has been prompted by the increased use of private trusts and private company structures to gain social security and veterans' affairs entitlements. A primary aim of the measure is to forestall the continued growth in the use of this strategy. Because assets held in these structures currently may be exempt from the means test they are often the strategies behind advertisements in the personal investment pages of newspapers which ask “Would you like a pension?” or state “How to maximise your social security entitlements”.

The measure seeks to avoid a loss of public confidence in the system, which could be expected if well-off and even wealthy people are receiving taxpayer-funded income support when they have the means to support themselves.

The proposed new means test treatment is seen by the Government as helping to ensure an affordable, sustainable social security and veterans' affairs systems through continued targeting of benefits to those most in need.

The proportion of income support recipients affected would be very small: less than 1 per cent of all income support recipients. In total, it is estimated that only some 35,000 existing Centrelink customers (including 14,000 partnered parenting payees and 11,000 age pensioners) and 2,500 Veterans' Affairs customers would be affected. Of these, about half would have their payments reduced and half cancelled under the proposed rule changes. Even though only a relatively small number of customers will be affected by this measure the Government anticipates there will be significant savings for the taxpayer of more than $100 million per year from the commencement of the measure on 1 January 2002.

Those who are affected would be those with considerable resources with which to support themselves. This is because of the `free areas' and `taper' ranges allowed under the income and assets tests. The largest proportion of the savings is expected to occur through the application of the assets test. It does not come into play until significant assets are available. For example, a homeowner couple can currently have $407,000 in assets excluding their home before losing all entitlement. Non-homeowners have even more generous allowable levels of assets.

The Government's proposal to alter the means test treatment of private trusts and private companies in no way signifies any discrimination against these legal forms of holding investments and conducting business. It is designed to ensure that income support entitlements are based upon a person's level of resources, not on the way in which he/she holds those resources.

Only trusts and companies of a small and private nature will be the subject of this measure. Customers' holdings of shares or units in publicly listed companies or unit trusts (with more than 50 members) that they own in their own name will not be affected by this measure, as their value is already included in assessments for social security.

The fundamental change being proposed under this measure is that when a private trust or private company is recognised as a designated private trust or company, the assets and income of these private trusts and private companies may be attributed to a person who controls or has contributed to these structures. Two alternative tests will be applied:

· First, there is the “control test”. It is clear that often the controller of a structure can be considered to be the de facto owner of the structure's assets where he or she can use the assets for his or her own purpose or benefit. This test will also make it possible to determine who is the ultimate, or actual, controller of a structure. It is possible for the actual controller of a structure to be different to the apparent controller. This test will make reference to the concept of an “associate”. An “associate” is a person who may, because of their relationship with the actual controller assist this controller with maintaining control of the structure. The relationship between the controller and an associate is broader than just a family relationship.

· Secondly, there is the “source test”. This test is designed to identify the ultimate source of assets in a structure. It may be that this source needs to be traced back through several intermediaries. It is recognised that, generally, a person transferring assets to an interposed structure does so either because the assets will continue to be used for that person's benefit, or will be used for their family's benefit. If a person claims that assets transferred to a trust or company were gifted to that entity then the person will need to demonstrate that a genuine gift has occurred. This may be difficult to establish where the person retained an involvement with that structure. The source test will only apply to contributions made to structures after 7.30pm on the 9th of May 2000.

Once it has been established that a person passes the control or source tests the facts of that person's case will be examined closely, with a view to working out whether, and to what extent, the assets and income of the relevant private trust or private company will be attributed to the person. This process will be guided by decision-making principles that will be set down in a disallowable instrument. Regard will also be given to publicly available policy guidelines that will further elaborate aspects of the attribution process. Draft decision making principles, in this regard, are being prepared for the consideration of the Parliament, and will be formally tabled following the passage of this bill.

It is proposed that the measure will affect entitlements from 1 January 2002. However, it will be necessary to collect information from social security and veterans' affairs customers prior to this date, so that both Departments will be in a position to determine entitlements from 1 January 2002.

Where a person is attributed with assets or income of a private trust or private company as a result of this measure, the person will still, where practicable, be able to access existing means test concessions that would be available to a customer who held the same level of assets or income in their own right.

In recognition of the importance of succession planning issues to the rural community this measure contains a special concession for farmers who hold their farming property in a family trust. Under certain conditions a farmer may pass their farming business on to a younger family member and still retain some powers in regard to the trust deed, without the assets or income of the trust being assessed against the retiring farmer under the means test. This concession will be available where the retiring farmer, and their spouse, owns or controls primary production assets of less than $750,000 and has income of less than the family tax benefits threshold, being approximately $28,200. Both of these amounts are subject to indexation.

This concession is offered to help an older farmer retain some control over the farm that they have built up and worked so hard on during their lifetime. The retiring farmer will be able to retain a power of veto over the sale of the farm, together with a power to appoint a new trustee in the event of the death or invalidity of a current trustee. Even though the retired farmer will no longer be able to exercise day to day control over the farming business, he or she will be able to access a social security pension, and ensure the farm remains in the family.

Maintaining the integrity of the means test is essential if Australia is to continue to have an effectively targeted, needs-based and sustainable safety net system that supports the most vulnerable and those in genuine need.

At present people operating private trusts or private companies are often treated more favourably under the current means test arrangements than are individuals, sole traders or people in partnerships, of otherwise similar means.

This is inequitable and inconsistent with the objectives of the income support system, which are to provide a “safety net” for those who cannot adequately support themselves, and to encourage self-provision by those who can.

These practices already involve substantial costs to the social security and veterans' affairs budgets and the taxpayer. These costs are likely to rise, as increasing numbers of Australians retire with substantial superannuation wealth to invest in order to secure a retirement income, and are advised by an increasingly competitive financial advice industry.

Unless the Social Security Act 1991 and the Veterans' Entitlements Act 1986 are amended to address these practices, the taxpayers' burden will increase further and the integrity of our social security and veterans' affairs systems and the support it has in the community will be undermined.

WORKPLACE RELATIONS LEGISLATION AMEND-MENT (TERMINATION OF EMPLOY-MENT) BILL 2000

The Coalition's 1998 workplace relations election policy More Jobs, Better Pay contained commitments to further legislative reform in our second term of office.

These commitments were reflected in four pieces of legislation already introduced by the Government since October 1998, dealing with small business unfair dismissal exemptions, superannuation, youth wages and multiple reform issues in the Workplace Relations Legislation Amendment (More Jobs, Better Pay Bill) 1999.

That bill was passed by the House of Representatives on 14 October 1999 but subsequently blocked by the combined opposition of the Labor Party and the Australian Democrats in the Senate.

Since opposing the More Jobs Better Pay Bill 1999 last November, the Democrats have publicly indicated that they prefer to deal with the contents of that bill on an issue by issue basis, not as an omnibus piece of legislation.

In a speech to the ACT Industrial Relations Society on 6 April 2000 Democrats spokesman Senator Murray said, and I quote, “In my view only technical bills should be general and broad ranging. Policy Bills should be specific. It is far better for a reformist government to deal with one issue at a time on a specific and limited basis.”

And again, in the course of the inquiry by the Senate Employment, Workplace Relations, Small Business and Education Legislation Committee into the bill, the Senator said, “It seems to me the Act can be conveniently broken up into major sectors....I find these kind of omnibus bills result in a lot of negativity and it is very difficult to progress them.”

Taking these sentiments into account, the Government has sought to accommodate the preferences of the Australian Democrats by proceeding, other than on technical issues, with an issue by issue consideration of policy matters arising from the More Jobs Better Pay Bill 1999.

The first of these issue by issue bills was a bill dealing with pattern bargaining and related matters which passed the House on 1 June 2000, but which is now also being opposed in the Senate by the Labor Party and, so far, by the Democrats.

The Government is now in a position to introduce further single issue bills drawn from the More Jobs Better Pay Bill 1999.

This bill proposes amendments to the termination of employment provisions of the Workplace Relations Act 1996. The current provisions in the Act are based on the concept of a `fair go all round'. This bill is designed to maintain the fair balance between the rights of employees and employers while addressing some of the procedural problems that have become evident during the operation of the Act. The bill contains a range of provisions designed to reinforce disincentives to speculative and unmeritorious unfair dismissal claims, introduce greater rigour into the processing by the Australian Industrial Relations Commission of unfair dismissal claims, and to remove unnecessary procedural burdens that unfair dismissal applications place on employers.

In the Australian Democrats Minority Report of the Senate inquiry into the More Jobs, Better Pay Bill, Senator Murray stated that “[t]he Democrats have consistently opposed removing the right to access unfair dismissal provisions, but have always supported improvements to process.”

In a speech to the Victorian Employers' Chamber of Commerce and Industry on 27 October 1999, Senator Lees stated, “I think that there are still some problems in the way that unfair dismissal applications are dealt with by the Commission.” She then went on to say, “But there is some scope at least, to simplify the Commission's proceedings to prevent employers being forced to pay `hush' money to litigious but unworthy employees.”

Discouraging abuses of the process and unmeritorious and speculative claims

In the Australian Democrats Minority report into the Workplace Relations Amendment (Unfair Dismissals) Bill 1998, Senator Murray acknowledged that some parties to termination of employment applications engage in “deliberate time wasting” and impose “cost pressure...for tactical reasons”.

This phenomenon is also recognised by the Australian Industrial Relations Commission. In a recent decision involving an application for costs against a legal practitioner whose conduct had resulted in the other side incurring costs unnecessarily, the Commission suggested that a reconsideration of the limits currently imposed by the current costs provisions may be in the interests of justice.

Senator Murray further highlighted the problem in his speech to the Industrial Relations Society of New South Wales, on 19 May 2000, where he said:

“...we acknowledge that the unfair dismissal laws are to some degree being abused with speculative claims by employees, sometimes encouraged by lawyers on contingency fees. I have constantly stated the Democrats view that it is necessary to reform process and cost issues in unfair dismissal cases. I think this is an area of law that does need some further refinement to ensure the laws do provide the `fair go all round' they were designed to deliver.”

This bill proposes to make amendments that will ensure that the laws do provide the `fair go all round'. In response to these concerns, the costs provisions of the Act will be amended to allow the AIRC to make orders for costs against parties in respect of a wider range of proceedings, and in relation to a wider range of conduct.

In the Senate Minority Report into the Workplace Relations Amendment (Unfair Dismissals) Bill, Senator Murray also made the following recommendations:

“(b) if either party, in the opinion of the Commission, is abusing the process, deliberately wasting time or deliberately applying cost pressures, the Commission should be given the power to award costs against that party's legal practitioners, or those advising the applicant or respondent, which should specifically be precluded from recovery from the client; and

“(d) the Commission must have regard to disciplining any legal firm whose ethical approach is coloured by commercial predation.”

Unfortunately, conferring power on the Commission to award costs against third parties is probably beyond the Commonwealth's constitutional power. Hence, to give effect to the spirit of Senator Murray's recommendations, the bill proposes to insert a new series of provisions, which will contain a prohibition on advisers from encouraging people from instituting or pursuing speculative or unmeritorious unfair dismissal claims. Where an adviser contravenes this prohibition, a respondent to an unfair dismissal claim will be able to apply to the Federal Court for a penalty against that adviser.

The bill gives the Commission the discretion to require an applicant who is seeking a remedy in respect of termination of employment to provide security for costs. This will also serve as a disincentive to unmeritorious or speculative claims.

The amendments also address the role of legal representatives and advisors by enabling the Commission to ascertain whether they are engaged on a costs or contingency arrangement. This is in response to another of Senator Murray's recommendations in his report into the Workplace Relations Amendment (Unfair Dismissals) Bill 1998, where he stated that, “...cases being conducted on a `no win, no fee, contingency' basis should be made a matter of public record”.

Streamlining the process

A number of amendments in the bill are designed to improve the efficiency of the process for conciliating and arbitrating claims.

To help ensure the efficient processing of claims, the bill confirms the Commission may hear applications by the respondent to have an application dismissed for want of jurisdiction at any time. It also confers express power on the Commission to dismiss an application where the applicant fails to attend a hearing. The bill also includes amendments to clarify the circumstances in which out of time applications should be accepted.

To improve the effectiveness of the conciliation process and reduce the number of unmeritorious cases which proceed to arbitration, the bill also includes amendments to the requirements for the issuing of conciliation certificates. These proposals, which have been amended to take into account concerns expressed by the Australian Democrats, place an onus on the Commission to make a finding at the conciliation stage and prevent unfair dismissal applications from proceeding to arbitration where the Commission is satisfied that the applicant does not have a substantial prospect of success. This will enable parties to have a clearer view of the merits of the case so it will be more likely that applications are resolved early, either by settlement between the parties or by being dismissed by the conciliator, and before large costs are incurred.

Taking the needs of employers into account

Unfair dismissal claims can be a particular burden upon certain types of businesses, especially small businesses, and in certain circumstances. The bill contains a number of provisions to assist in reducing such special burdens.

Crucial amongst these is the proposal to require the Commission when determining whether a termination was harsh, unjust or reasonable to have regard to the size of an employer's operations and the degree to which this would be likely to affect the procedures followed by the employer. This would enable the Commission, for example where a respondent employer is a business which is too small to have a separate human resources function, to determine that different procedures may be reasonable for such a small business compared to larger businesses with greater resources, specialised personnel and greater capacity for more formal procedures. These provisions would not deny employees of smaller businesses a fair go, but would recognise that expectations as to administrative processes need not be the same in smaller businesses as they are in larger businesses.

Termination on the ground of operational requirements presents a particular situation in which it is inappropriate for there to be scope for unfair dismissal claims to be made. Such situations of redundancy are difficult for employers and employees alike and if an employer establishes that terminations were genuinely required for operational reasons, the employer should not then be required to justify the fairness of those terminations in the Commission. It will not prevent, however, employees making applications in regard to unlawful termination in such circumstances.

Establishing certainty in jurisdiction

The bill also proposes amendments to ensure certainty in jurisdiction. The Act is designed to ensure that “Federal award employees” who were not employed by an employer within the constitutional reach of the unfair dismissal provisions of the Act are still able to apply for a State unfair dismissal remedy. The unintended effect of these amendments has been to enable forum-shopping between federal and State jurisdictions. This undermines the authority of the legislation, results in inconsistency of treatment and creates considerable uncertainty for employers concerning their obligations. Amendments in the bill will remove the scope for forum-shopping by potential applicants.

Similar uncertainty for employers and scope for double jeopardy situations can arise under the current provisions, which enable an employee to bring multiple actions under the Workplace Relations Act in respect of the same termination. The bill proposes to ensure that only a single application can be made in respect of a dismissal, ensuring that once an employee has had his or her `day in court' then that settles the matter conclusively.

Two other amendments in the bill aimed at ensuring certainty in jurisdiction will make it clear firstly, that independent contractors do not have a remedy for termination of employment, consistent with the original intent of the Workplace Relations Act and secondly, that the demotion of an employee does not constitute termination of employment where that demotion does not result in a significant reduction in remuneration and the employee continues to work for that employer.

In addition, the bill proposes amendments to preclude the Commission and the Federal Court from taking certain non-economic factors into account in determining compensation in lieu of reinstatement.

The bill also proposes to make a number of minor and technical amendments.

In introducing this bill I am clearly indicating that the Government is determined to proceed on an issue in respect of which there appears to be Democrat support. The Government is prepared to consider amendments to refine the detail of the procedures proposed by the bill, if it is the detail that is the barrier to the bill's passage through the Parliament.

This bill will build on the objects of the 1996 reforms and improve the process of dealing with termination of employment claims in the interests of employers, employees and small business.

Of course this matter has already been before a Senate committee. However, the government would welcome further Senate scrutiny provided that such a committee will review the bill in order to achieve a scheme that truly ensures a `fair go all round'.

The right of the Coalition to implement its workplace relations mandate, subject to constructive Senate review, is a principle that has been acknowledged by the Democrats - and one that they should now act upon.

On 15th June 1996 the then Leader of the Australian Democrats (now Labor shadow Minister Kernot) said on the issue of workplace relations, and I quote:

“The Democrats accept that the Government has been elected to govern and that it has its right to present its legislative program to the Parliament for consideration. But the Democrats have been elected to do a job, and that is to closely scrutinise legislation to ensure that it is fair, and workable and the best solution to an identified problem.”

“...the Democrats have no intention of being obstructionist in this Senate. As we have done for 15 years of holding balance of power, we will carefully review legislation, suggesting ways to make it work better if possible.”

Adopting a just say `no' attitude to this bill would be inconsistent with not only the proper role of the Senate as a House of Review, but also breach the principle under which the Democrats themselves marked out their past approach to these issues, at least until 1997.

Debate (on motion by Senator Denman) adjourned.

Ordered that the bills be listed on the Notice Paper as separate orders of the day.