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Monday, 22 March 2004
Page: 21463

Senator MURRAY (12:41 PM) —The Workplace Relations Amendment (Termination of Employment) Bill 2002 [No. 2] is before the Senate a second time, and I should point out that Democrat amendments were previously rejected by both parties the first time around. The bill is now potentially another double dissolution trigger. I have concerns about it because it attempts to extend the coverage of federal law on unfair dismissals while simultaneously proposing to exempt small business from unfair dismissal law through the Workplace Relations Amendment (Fair Dismissal) Bill 2002 [No. 2]. The failure of this bill would concern me because of those two contrary objectives.

Schedule 1 of the bill would amend the Workplace Relations Act 1996 to cover the field of harsh, unjust or unreasonable termination. It would extend the operations of the federal unfair dismissal system by covering all employees of constitutional corporations through making greater use of the corporations power in section 51(xx) of the Constitution. In Minister Abbott's second reading speech he said that the covering the field provision meant that the percentage of employees covered by federal unfair dismissal provisions would increase from about 50 per cent to about 85 per cent and that the number of workers covered by unfair dismissal provisions should increase from about four million to about seven million. Schedule 2 provides differential criteria for small business as opposed to large business regarding unfair dismissal by giving them a longer probationary period andother things. Schedule 3 tightens unfair dismissal processes, sharpens relevant considerations and confirms reinstatement as the primary remedy.

The first Workplace Relations Amendment (Termination of Employment) Bill 2002 was considered in March 2003 by the Senate Employment, Workplace Relations and Education Legislation Committee, on whose findings we wrote a minority report. The bill was dealt with on 11 August 2003 and rejected. The bill advances Democrat philosophy and policy in a number of respects, revisits areas we have previously rejected on principle and in practice and advances a few process improvements on unfair dismissals.

The Workplace Relations Amendment (Termination of Employment) Bill concerns me for another reason. As I said in my speech in the previous second reading debate on this bill, it represents something of a crossroads in the development of industrial relations law in this country because it seeks to cover the field in a manner which has not before been attempted in industrial relations law at the Commonwealth level. This, senators, could be a historic occasion. In recent industrial relations history I think there have been two major and significant events. The first was the Keating inspired changes to the Workplace Relations Act, or the Industrial Relations Act as it was known then, in 1993. The second was the referral of Victoria's industrial relations powers to the Commonwealth. I believe that an amended version of schedule 1 of this bill would be the third significant event. That Keating first wave changed our IR system dramatically, from a centralised one to an enterprise based one. The Victorian referral represented a great and historic step away from a state based, fragmented and inconsistent system towards a national and uniform one.

I want to repeat briefly what I have said before on a unitary industrial relations system. This bill attracts the Australian Democrats' qualified support because it advances our philosophy and policy on a unitary industrial relations system. As I have said many times before both inside and outside this chamber, we need one industrial relations system, not six. We have a small population, yet we have nine governments, 15 houses of parliament and a ridiculous overlap of laws and regulations. There are areas of the economy that genuinely require a single national approach. Like finance, corporations or trade practices law, labour law is one of those areas. Apart from the attractions of efficiency and simplicity, a unitary system would mean that all Australians—employers and employees alike—would have the same industrial relations rights and obligations regardless of where they lived.

This bill does advance unfair dismissal 85 per cent of the way to a unitary system for unfair dismissal. A nearly unitary system for unfair dismissal would have three prime benefits. Firstly, it would achieve for the majority of Australian workers common human rights across Australia, rights which differ at present. The second motivation is economic. Common, easily administered rules and laws make for more efficient, competitive and productive enterprises and for more efficient, competitive and productive national markets. This bill moves towards that objective. Thirdly, the bill facilitates more comprehensive coverage for workers. There have been estimates of up to 800,000 employees not covered by federal or state awards or agreements—for example, the former employees of OneTel, who would now be covered under this bill.

We recognise that the bill cannot go as far as it needs to; constitutional limitations prevent complete coverage. As we have stated earlier, the Democrats are concerned that relying on the corporations power alone will still leave large chunks of employees working for non-incorporated businesses, many of these in small business with still no protection from state or federal laws. We agree that the most effective way to get a single industrial relations system would be by referral of powers to the Commonwealth by the states, as opposed to using the corporations power from the Constitution. Victoria successfully referred its powers, with Democrat support and Labor opposition, in 1997. With that referral also came a category of several hundred thousand Victorian employees under inferior employment conditions under the state law of the time. In 2003, changes were finally made to enable all Victorian workers under common rule awards to be covered by the full federal award safety net. How much better off has Victoria been with one system, not two. The Victorian Labor government have had the balance of power at any time in the recent past to take back the industrial relations system and recreate a state system. But they have not done so for the very good reason that, although Labor would once have opposed the referral in Victoria, they now recognise the value of a unitary system for that state.

Further referrals are unlikely as there are just too many vested interests, so the alternative is to use corporations power to cover the field. The NSW government have said that if the feds do that they might mount a High Court challenge. I think that would be good. If the use of corporations power to achieve a more unitary industrial relations system were confirmed by the High Court, it would probably result in these powers being more widely used to cover the field in other industrial relations areas. Unfortunately, without government support for all of the Democrats' amendments, those particular waters are unlikely to be tested. Any government that goes the route of using constitutional heads of power must also use sense and, for the greater cause, try to adjust its law to lessen vested interests' opposition. This bill, in its origins and its timing, regrettably had too much politics interfering with its policy, and it might have had an easier and earlier passage if there had not been that mixed thinking.

With respect to unfair dismissals, there are two main issues: process and access. On process, I believe that the federal process is the best in the country, stopping bludgers from both sides taking advantage, and there is no reason to give way on this stricter regime. Access, though, is a different matter. Concerns have been raised that some employees—such as short-term casuals, those on fixed-term or task contracts and high-earning non-award workers, trainees and managers who in some states are able to challenge their dismissal if it is unfair—would not be covered by the federal system. Since the early 1990s, employers have increased their use of casuals, contractors and labour hire forms of employment, often on a long-term basis. The growth in precarious and atypical employment has meant that, increasingly, legitimate workers are excluded from recourse to the industrial relations system as a whole. While many state unfair dismissal legislation regimes make an effort to cover legitimate employees in precarious employment, the federal unfair dismissal regime does not go far enough. In an attempt to address this issue, the Democrats previously proposed an amendment that sought to define `employees'. While we would still like to see a definition of `employee' in the act, we recognise that at this time the government will not agree to our proposed definition. I suspect a Labor government would not agree to that particular proposed definition either.

The Democrats have the view that we should ensure that employees who are considered such under state law but not under federal law should still be able to access the state system, and we will move amendments today to reinforce our view. We will have to continue to lobby the government on this issue and we are pleased that in our discussions with the government they have indicated that they are willing to conduct an independent review of the scope, meaning and effect of the definition of `employee' for the purposes of accessing the unfair dismissal remedies under the Workplace Relations Act. Whatever the outcome of this bill and this debate, we urge the government to still do this, because the definition in law is unclear.

The other key area with respect to access is the issue of access for casuals as in a number of states casuals have better access than under the federal regime. When we first revised the unfair dismissal regime in 1996 and agreed to the government's proposition of 12 months probation for casuals, casuals were entirely different from what they are today. Today the estimates are that there are about 2½ million Australians in casual employment, and most of those fall under the state jurisdictions.

In Western Australia and in Tasmania, both of which have Labor governments, there is a very strange provision in that there is no probationary period for casuals—which seems remarkable and unreasonable to me. In the other four jurisdictions, casuals on probation are excluded from accessing unfair dismissal laws—rightly, I think. In the Commonwealth, Queensland—where there is a Labor government—Victoria, the ACT and the Northern Territory, the exclusion period is 12 months. In New South Wales and South Australia it is six months. The question in my mind is not whether there should be a probationary period for casuals but what the length of that period should be.

In that respect, if we are going to address the growing numbers that are in this field of employment and minimise the angst of the states about those who can presently access their regimes and who should be entitled to have access to the federal regime, we think it is appropriate to produce a compromise. We have therefore shifted from our view that 12 months is appropriate to the view that six months is long enough to determine whether the casual employee is suitable for the position. Consequently, we are recommending that the standardised casual probationary period be six months. This is not a policy that the government is attracted to. For those states whose access period is less than six months we sought agreement by the government to provide a grandfather clause that on commencement of the bill would enable those casuals to still access their state regime for six months.

We did manage to reach agreement with the government in some other key areas. The Democrats drafted and gained agreement from the government to an amendment that provides a commencement date that will prevent the government from calling a double dissolution election, passing the Workplace Relations Amendment (Fair Dismissal) Bill 2002 [No. 2] which exempts all small business from unfair dismissal, and using that bill to exempt all those caught up by the bill we are discussing today. Concerns were also raised by stakeholders that the federal unfair dismissal system would lead to reductions in the resourcing of state industrial tribunals and hence their ability to perform their other roles, and that workers in regional and rural areas who currently can attend local courts visited by state commissioners would incur increased costs to attend the federal commission, which some expect will be based solely in capital cities.

While parts of the industrial relations system will remain with the states, the Democrats are sympathetic to the states' concerns and propose that federal unfair dismissal cases should also be able to be heard through state commissioners by having dual state and federal appointments. The government agreed to such an amendment and worked with us to redraft our original amendment. To facilitate the expansion of the unfair dismissal regime to the federal system, the government were also willing to not insist on the small business exclusions in schedule 2 of the bill, which the Democrats oppose. As I have said before, there continues to be little hard evidence to support the view that fair unfair dismissal laws have an adverse effect on overall employment levels although there is evidence to show that unfair dismissal laws that are unfair, or that allow process abuse, do affect business attitudes to employment.

Economics aside, fundamentally the Democrats have consistently said that, on both human rights and equity grounds, we will not accept reducing the rights of employees just because they are employed by small business. The Democrats are willing to support improvements to process and hence we amended the bill to apply to all businesses the provisions on vexatious and frivolous applications. The Democrats believe that the provisions covering vexatious and frivolous applications will be another important step to reducing unfair dismissal claims that do not have merit and reducing the burden on the system to free up time and resources for genuine claims.

The list of amendments I have outlined demonstrates that the Democrats have been talking at length with the government to find common ground. To their credit, the government moved considerably on a number of issues. Where does that leave us today in this chamber? The sticking point is that while the Democrats desire a unitary industrial relations system, we will not do so at any cost. As I stated earlier, access to the unfair dismissal regime is important. We cannot use this historic opportunity to come to an agreement, because we cannot get the government to compromise on reducing to a fair and reasonable period the probation period—which we think should be six months—for casuals to access unfair dismissal laws. And this is a pity.

If this bill goes down, I hope that after the election, if the coalition is returned, the government will return to this issue with us. I hope—but I think it is a vain hope—that if Labor is returned they will also recognise that it is about time to bite the bullet and take some of these issues away from the states. It is important for Australia that we move towards a unitary industrial relations system. In the meantime, while the bill has been a very contentious issue for a number of parties, in particular the states—especially some of the states' trades and labour councils—it has brought to the fore a supposed willingness of various state governments to be involved in discussions about a harmonised national approach so long as it is done in a consultative and cooperative manner. I have read the history of such things and they come in waves; I do not have high hopes about that but perhaps I am being cynical.

The states noted that the federal government have yet to make any genuine attempts to elicit cooperation—and that is a great pity. It is interesting to note that many parties in this debate—including some members of the opposition, unions and industry groups—have expressed a desire to move toward a unitary system. My own strong campaigning in this area has led me to an understanding that more and more people are starting to accept its desirability and are trying to work towards making it a reality. There is obviously still the problem of agreement, and I suggest—to whichever government gets returned at the next election—that it would be valuable for a summit to be held to bring all parties concerned together to try and explore ways in which a national unitary system can be advanced. I hope that by now our amendments have been circulated. We will be dealing with those in committee.