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Monday, 22 March 2004
Page: 21543


Senator LUDWIG (6:02 PM) —I rise to speak on the Workplace Relations Amendment (Termination of Employment) Bill 2002 [No. 2]. The bill was introduced into the House of Representatives on 6 November 2003. It is identical to the Workplace Relations Amendment (Termination of Employment) Bill 2002, which was defeated in this house. The current bill is another piecemeal approach to industrial relations. The government seem to be wedded to having a piecemeal approach to industrial relations.

I have said before in this chamber that this has been a golden opportunity for the government to talk to people about industrial relations and about any effective changes that they require. But the government seem quite unable not only to talk to but also to consult the states, employers, employees and unions about how to change the industrial relations system to one that might be fairer all round. What the government tend to do is try to divide people. They tend to be divisive, to be negative and to carp. Although they accuse us of that, I think the Liberal Party, along with the National Party, take a pre-eminent position in being the carpers on industrial relations.

The government fail to appreciate that industrial relations is about people. It is about people's lives, it is about their livelihoods and it is about their spending eight, nine or 10 hours—sometimes truck drivers spend 12 or more hours—a day performing for reward. In some instances that reward is not very much. In some instances workers are well rewarded. But the government fail to understand that there is a continuum of workers in both the state system and the federal system of industrial relations who have expectations about entitlements and conditions from that system.

The government seem to be hell-bent on creating a divide. In this legislation the government have chosen to introduce a number of changes, which I will go to later. Standing on their own, none are beneficial. It is not beneficial legislation that the government are trying to implement; it is negative legislation. It is legislation designed to reduce people's entitlements, to remove people's entitlements or to otherwise deal with them negatively. It is not legislation that seeks to achieve the removal of the mischief. There is no underlying causal problem that this legislation seeks to remedy. So this legislation is not trying to remedy a fault that has been discovered in the system. The government are not trying to say in this legislation: `We've discovered a huge problem. This is the reason for the problem; therefore, we need to fix the problem.' This piece of legislation not only takes away people's rights but remedies mischiefs that do not exist.

I can think of only two reasons for this bill. Either it has been introduced with a view to creating another double dissolution trigger on unfair dismissal laws or Mr Andrews has got his riding instructions from the Prime Minister to pursue it again. It is quite surprising that Mr Andrews, whom I would have put a little bit ahead of Mr Abbott and even Mr Reith on industrial relations, appears to be simply following their agenda—the one that was set by Peter Reith. I can understand that. Mr Reith was a true zealot in reforming industrial relations, in his view, but it was in a negative way. He was dedicated to the cause. Mr Abbott was perhaps not so dedicated. He has now moved to health, and the government have left Mr Andrews with this portfolio. Rather than take a backward step to assess and look at what he can do in industrial relations, Mr Andrews has simply fallen into someone else's shoes—not into Mr Abbott's shoes but into those of Mr Reith. He is carrying the torch on behalf of all of those associations that would destroy an industrial relations system and allow a free market to exist. He would rather do that than step back and look at the industrial relations system and talk to the shadow minister about ways of improving it.

This bill is typical of the 10 or so bills that have been pushed up to the Senate from the House of Representatives and reflect the same agenda. I do not think it is the agenda of Mr Andrews. I do not think he would truly agree with some of the things he expects us to agree to. The bill aims to expand the unfair dismissals jurisdiction of the Australian Industrial Relations Commission to all constitutional corporations, excluding people who work for partnerships and sole traders, who would remain under state laws. This would result in the Commonwealth taking over 85 per cent of state unfair dismissal systems. It is not 100 per cent—there is still a gap—so why would you do that? If you cannot negotiate with the states to have a single, unified system—whether the minister has even tried to do so is a moot point—why would you move to take over part of a system when the rest of the system will continue to exist? You would have a dual system.

The government have created another problem in the system. Employees will be unsure of whether they were employed by a corporation, an association, a partnership or a sole trader. Many employees will be concerned about which legislation covered their rights and where they should lodge their complaints. They could lose rights by lodging a complaint in the wrong tribunal, only to discover later that it should have been lodged somewhere else. They would then have to do a paper shuffle to ensure that their rights were still protected. This has all been brought about to remedy a mischief or a problem that does not exist. It cannot be beneficial legislation if it creates this type of outcome.

The bill also proposes to change the processing of unfair dismissal claims and to alter eligibility and available remedies, especially for small business. The bill will effectively create a new class, a `small business class'. The Industrial Relations Commission will have a separate tier of dismissal legislation that will affect not all but some. You can see where we are heading with this. Clearly, the coalition believe in a divided, class based system. They are trying to rediscover their old habits.

The government claim that the bill makes a constructive move towards a unified and simplified system of workplace relations regulation, but they have not been able to demonstrate that here. It really is a grab for power, coupled with a reduction in workers' protection and rights. In simple terms, the purpose of this bill is to extend federal unfair dismissal coverage from four million workers to about seven million; however, in so doing, it displaces the present state jurisdiction for unfair dismissals for incorporated entities. The bill introduces different criteria and consequential compensation provisions for the Australian Industrial Relations Commission to apply in those circumstances. In making the shift away from state coverage, it will reduce that protection and the rights of those employees.

It also extends the qualifying period of employment for small business employees. It creates a second tier for small business employees. As if these lofty gains are not enough, the bill will also do a few more things. At present, the AIRC has coverage of unfair dismissals for employees who work in a corporation under a federal award. It also has coverage for groups such as Commonwealth employees, waterside workers and Victorian and Territory workers. This bill would remove the requirement for a person working for a corporation to also be a federal award employee. The deletion of the federal award criterion would mean that all state award employees who work in corporations would be covered by the Workplace Relations Act's unfair dismissal provisions.

The bill does more than simply remove that; it attempts to prevent unfair dismissal applications arising where the termination was made for operational reasons. That is generally regarded as a redundancy situation. It would create an incomplete, lesser system. The bill seeks to limit compensation payable by all businesses by having the commission consider any contributory conduct of the employee, for instance the earnings whilst in other employment of the employee who is to be reinstated. On the face of it, the proposal may lead you to believe it is about establishing a system of reinstatement jurisdiction which the government is trying to categorise as one step in the right direction. I think it is a backward step. What the government should do is examine the Sweeney report and the Hancock report and perhaps then go to the heads of industrial relations in the various states and examine some of those issues if it wants to provide a seamless rather than a uniform system.

There are many other ways of achieving world's best practice, or even Australian best practice or states' best practice, rather than adopting this model the Commonwealth now propose. In truth, they are offering a milksop to small business by saying, `We'll push for change here.' They are offering a milksop to corporations by saying, `We'll water down the unfair dismissal provisions and allow you to have a little more ease in dismissing employees.' I do not think that washes with the Australian population at all.

According to the explanatory memorandum, this bill would result in the Australian Industrial Relations Commission annual unfair dismissals caseload increasing from around 8,000 cases to 14,000 cases. The Howard government could use that to appoint more commissioners to the Australian Industrial Relations Commission. This would not be an appropriate way to do it. Given the highly biased nature of appointments to the commission by this government, that alone is enough to say: `Stop! Oppose this bill.' However, a complete scheme has not been proposed in this arena in any event. What we have is the divide between incorporated entities and unincorporated entities and partnerships and sole traders, who would not be covered. That is the latter group. You would then have a federal award system which covered federal award employees but only to the extent of termination. So not only is it split into two streams but you also have the divide that exists with small business.

It appears then that the bill fails the test of a move towards uniformity, in any event. Without cooperation on behalf of the states, it would appear that this attempt is going to fail, but a lot depends on the Democrats' position and on the government's position on this bill. Those matters in themselves are enough to oppose the bill. It is apparent that it is better in most instances to discuss and consult with the states and come to an agreement, rather than trying to force a poor uniform system of industrial relations on the states. The system is only part uniform. It is not complete and it is piecemeal rather than uniform. In truth it has the potential to reduce termination laws to the lowest common denominator.

The provision in respect of small business is particularly harsh on small business employees, not that this government seems to care. The provision defines a small business as an employer of fewer than 20 people, including the employee who was terminated and any long-term casuals. Bear in mind the difficulties in trying to define some of those terms. Some people manage their business to try to reduce the number of employees to fall within the definition of an employer of fewer than 20 employees. One problem is that when employers try to do that they remove or exclude long-term casuals. You have another group of small business people who say, `Irrespective of the number, I need so many people to run a business.' If that happens to be 21 rather than 20, they employ 21. Therefore, they are excluded from the legislation. It seems to be a very false way of trying to establish a divide to allow businesses to operate with certainty. At any stage during the growth period they could fall outside the legislation or, at least, into another category.

This type of arbitrary mechanism is unworkable. The government seem to be stuck on these types of unworkable provisions. In truth, I do not think they want the legislation to pass in any event. That is why they keep serving it up in this form rather than trying to reform the system, and sit down and talk meaningfully with people to work out workable solutions. It is the same legislation, being served up again, that Peter Reith served up as a zealot when trying to destroy the industrial relations system. It also creates another artificial divide in compensation to employees who have been unfairly dismissed—three months for businesses with more than 20 employees but six months for other businesses. There is very little justification for having these divides. You then start to have a `creeping divide', if you want to come up with a new term. The government are forever trying to work out one position for one group and another position for another group. They do it by halving the entitlements you might otherwise be able to get in the dismissal or reinstatement jurisdiction—three months for small businesses with fewer than 20 employees and six months for other businesses.

One thing that always amazes me is that, no matter how much you try to direct here, there has to be a case in the Industrial Relations Commission. An employee on their own or represented by a solicitor, a union or another advocate has to be able to run the case, fight the case and win the case before an industrial relations commissioner, who is experienced in these areas and able to bring their own experience to bear in deciding these matters. Put in that context, it is far preferable to leave as much latitude to the parties to negotiate and come to a settlement and avoid the commission, if possible. That is a far cheaper option, I can tell you from experience. If you are going to run a case, it is far better to let the commission—an independent tribunal—determine all the facts and come to a solution based on the evidence put before it, rather than to use the Workplace Relations Act not as a framework to set up a tribunal to allow it to deal with these issues but to try to tinker.

That is what I think the government is doing with this legislation. It is trying to tinker in the Industrial Relations Commission by trying to narrow definitions. It gets itself in a terrible bind. You get inconsistencies; you get strange outcomes; you get strange clauses being proffered with serious consideration by the government, but they are not serious clauses and they do not deserve serious comment.

The legislation seems to introduce a contributory requirement. This means that the amount of compensation should be reduced if the commission is satisfied that the employee's conduct contributed to the employer's decision to terminate the employee. As I indicated earlier, during the course of a hearing or a settlement, a lot of those issues are taken into consideration, maybe not explicitly but certainly implicitly, as to how these matters are dealt with. You do not require provisions which direct the parties to do what they generally do in any event. Of course, the difficulty is that, when you have provisions that provide that sort of direction, it is a small hurdle—in some cases, a large hurdle—for the commission, the parties or other participants in the system, to try to leap over. Occasionally, people trip over those hurdles with unfair results.

This means that overall the government is about lowering the level of entitlements to employees generally. It has done that since Peter Reith's day, then in Mr Abbott's day and now in Mr Andrews's day, by trying to serve up legislation that is not beneficial and has no mischief to overcome. Labor has agreed that, if there is a true mischief that requires to be overcome and it can be made out, then Labor will support industrial relations legislation. What this government has tried to do becomes quite stark when it comes to the big end of town. Look at the corporate sector and ask: has the government's response to industrial relations been consistent with the response to corporate greed in the big end of town and business? The answer is simply no. We do not see a plethora of bills being served up in the Senate in relation to the big end of town. We have had a number of CLERPs, up to nine—perhaps nine is the exception, but I will wait—that up until now have not addressed the big end of town in any real sense in comparison with what Mr Andrews, Mr Abbott and Mr Reith have done in relation to workplace relations. The use of these laws can be summarised in three ways: they weaken protection for workers; they are an attempt by the Howard government to take over state unfair dismissal systems against the will of the states, unfairly and without justification; and they are absent of a cooperative approach, resulting in a substantial sector of the work force remaining in state systems anyway. These concerns remain.