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Monday, 18 June 2007
Page: 66


Senator MURRAY (4:51 PM) —The Workplace Relations Amendment (A Stronger Safety Net) Bill 2007 will amend the Workplace Relations Act 1996, which became Work Choices after the act’s radical transformation at the end of 2005. The bill is ostensibly to strengthen the safety net and protections for employees. The common perception is that this change is not driven by conviction or a sense of fairness but by fear of the coalition losing the 2007 federal election because of Work Choices. The bill has been widely viewed as a cynical attempt by the government to improve its standing in the opinion polls.

The most obvious problem with the Stronger Safety Net Bill is that it seeks to build onto a legislative house that has unsafe and shaky foundations. The main structure is faulty, and add-ons cannot alter that fact. The bill sets up a fairness test for workplace agreements and sets up two statutory agencies: the Workplace Authority, which replaces the Employment Advocate, and the Workplace Ombudsman, which replaces the department’s Office of Workplace Services. The proposed amendments are: to ensure that fair compensation be provided in lieu of any modification or exclusion of protected award conditions that apply to employees; to establish the Workplace Authority director and the Workplace Ombudsman as statutory office holders and create the office of the Workplace Ombudsman and the Workplace Authority as statutory agencies; to establish a compliance framework to ensure the effective operation of the fairness test; to provide additional protections for employees when protected award conditions are modified or removed or an agreement fails the fairness test; to clarify and simplify the provisions prohibiting bargaining service fees; and to remove the requirement that federally registered organisations have a majority of members in the federal workplace relations system in order to become registered or remain registered.

Although the government claims that the fairness test will guarantee fair compensation to workers who trade off conditions, significant concerns were expressed in evidence to the committee. However, the test is a modest advance on the present system. It was clear when Work Choices was rammed through the Senate in December 2005 that this coalition government had ridden roughshod over the rights and conditions of many Australian workers and, not only that, it was clearly enjoying the ride. The coalition is and was driven by an antagonism to union power, because the coalition sees the unions as inseparable from its Labor political foes. That drives its political objective.

But the coalition also had—and it still has—a policy objective. At the heart of the coalition’s agenda was a belief that it was good economics to increase the profit share and decrease the wage share and to give employers greatly increased leverage in the employment contract. To achieve that, workers had to be made more vulnerable, not just to exploitation but in the sense of having less power. The speed with which, and the extent to which, some employers have taken advantage of the new imbalance in the industrial relations system to strip back core workers’ entitlements has been alarming. There are numerous anecdotal reports highlighted in the media about workers being offered unfair agreements and told they could ‘take it or leave it’. The coalition has taken fright at the political effect of its economic agenda. It has been reminded by the Australian people that there are many millions more workers than bosses—hence this bill.

The erosion of protections for workers commenced in March 2006, when Work Choices became law. Work Choices undermines the principle of a fair go for workers. Fundamentally, these laws attack the historic principle of Australian workers doing a fair day’s work for a fair day’s pay and being able to bargain to achieve that. By so doing they attack the very foundation and nature of our egalitarian Australian society.

There are numerous anecdotal reports highlighted in the media about workers now being offered unfair agreements and told to ‘take it or leave it’. To now argue that Australia’s low unemployment figures and strong economy do in fact justify this policy and are directly the result of the Work Choices reforms is just plain wrong. The jobs produced since March 2006 are not all because of Work Choices. We have all noted the language technique the coalition use in praising the job growth since 2005. They use the word ‘since’, meaning for it to be understood as ‘because of’ Work Choices. It is not because of Work Choices. Jobs growth is not a sudden change because of Work Choices. Welcome as it is, the fall in unemployment is essentially a continuation of the positive downward trend pre Work Choices, which has many causes. Principal amongst them are the resource boom and a strong Australian economy, coupled with strong global growth. Those are the main contributors to jobs growth and economic prosperity, not Work Choices.

Fifteen months on, Mr Howard now presents himself as a listener who is responding to public opinion. He has already spent millions of taxpayers’ dollars on advertising telling us he is listening—advertising that, I might say, with respect to this bill, not only borders on fiscal impropriety but is also in contempt of parliamentary processes, as it preceded the legislation now subject to parliamentary debate. This bill would not have been necessary had the coalition not dismissed and vilified the arguments of those who warned them of the perils of their unamended Work Choices proposals.

The disgracefully brief 2005 Senate inquiry into this bill clearly brought to the government’s attention that, among other matters, workers would be unfairly disadvantaged if the award system was uncoupled from Australian workplace agreements. It also stressed that if the pre Work Choices global no-disadvantage test was abolished there would be profound effects for workers.

In essence, the government left itself exposed to attack by grossly overplaying the economic benefits and underplaying the social costs to Australian workers and their families. The sensible small ‘1’ liberal advocacy of the merits of choice, flexibility and freedoms for workers and employers was badly compromised by a clumsy, hostile takeover of state systems, a mangle of over-regulation and red tape, and an ideological determination to maximise profits at the expense of wages.

If the government loses office because of Work Choices, part of the blame will lie with the failure of government senators to provide a steadying influence on an adamant and ideologically driven Prime Minister and his executive. The government senators did have the evidence before them, and they did not respond to it in the main. Had Mr Howard listened back in 2005 when serious concerns were raised about the unfair nature of Work Choices, he could have avoided the current fallout. Because the coalition did not listen then, their credibility and motive for introducing the fairness test is now under attack.

The government’s claim that this bill will restore the rights lost by working Australians under Work Choices is misleading. Addressing just one element of Work Choices cannot remedy the act as a whole. The Democrats are of the opinion that the fairness test does not go far enough to establish an adequate safety net for workers. It has a number of fundamental deficiencies. First, the proposed safety net excludes large proportions of workers. The ACTU estimates that around 2½ million workers will be excluded from protection because the test only comes into operation prospectively from 7 May 2007. This figure includes those workers already on registered AWAs and agreements since Work Choices came into operation—apparently around 961,000 workers. To lock them out from any monetary or other compensation for the remaining years of the employment contract is grossly unfair. The bill entrenches and promotes unfairness towards those workers with inferior rights under Work Choices up until May 2011. Also excluded will be those who earn more than $75,000 annually—about 1.14 million workers—if they sign an Australian workplace agreement. The inquiry pointed out that this cap could exclude key sectors and industries such as teachers and IT workers, many of whom would otherwise enjoy award protections under the old system. Also, as the limit is to be applied pro rata for part-time workers, many of these workers earning well under $75,000 will miss out. Additionally, as the cap incorporates casual loading, a casual worker attracting an annual salary of $62,501 would also miss out on the test. Arguably, there should be no cut-off at all.

A concerning exclusion raised during the hearing was that employees on NAPSAs would only be covered by the fairness test if they had been on these agreements immediately preceding the making of a workplace agreement when Work Choices was introduced. This is completely contrary to the supposed intent of the provisions, which is to ensure employees traditionally covered by industries usually regulated by an award have appropriate protection. Additionally, award-free workers will also not be covered by the test, which could exclude at least 1.16 million employees. In essence, an award must be a federal one, which would exclude many workers. The bill also excludes those regulated or underpinned by a state award. I remind the chamber that up to 25 per cent of workers are still under some state systems. Another deficiency is that the new test fails its claim of fairness by not covering all existing award conditions when determining compensation, even if they were to be viewed globally as a whole, as with the pre-Work Choices no disadvantage test. This problem was overwhelmingly raised during the inquiry into this bill.

A range of award and/or statutory entitlements could still be bargained away because they fall outside the category of ‘protected award conditions’. For instance, long service and paid maternity leave could be removed from employment agreements with no compensation. Also not included are limitations on rostering, including minimum shift lengths and limitations on working more than one shift per day. Further, the right to request flexible working hours to assist with family responsibilities are not protected. Of particular concern is that redundancy or retrenchment pay entitlements are not covered. Even if these provisions in terminated agreements were allowed to remain in effect for up to five years, there is no guarantee that such pay could be included in a subsequent agreement and, if removed, there would be no compensation payable. Again, this highlights the dangers in the broader Work Choices legislation as there have been examples of workers unfairly dismissed for so-called rather than genuine ‘operational reasons’.

The third deficiency is the problem of there being no independent umpire to administer the ‘fairness test’. The two new statutory bodies to be created—the Workplace Authority and the Workplace Ombudsman—will only be answerable to the minister. The Workplace Authority will replace the Employment Advocate and will be responsible for assessing the test. Its decisions will not be transparent and they will be made in private. Of even more concern is that there is no requirement for reasons to be given for decisions, and decisions will not be reviewable. This is a breach of natural justice and seems to be inconsistent with the claims of fairness. The lack of details provided for the Workplace Authority is worrying. Concerns were raised in the inquiry from employers and unions about what fair compensation would be and how it would actually be calculated. Without such details, the authority will end up vulnerable to allegations of inconsistency and suspicions about its competency or its motives. This lack of clear guidelines at this stage raises questions of just how genuine the government is in its attempt to provide workers protection for the loss of entitlements. Indeed, it can be argued that the fairness test actually provides an escape route for a number of employers who undercompensate.

The second statutory body provided for under the bill is the Workplace Ombudsman, which will replace the Office of Workplace Services. It will supposedly offer additional protection for workers by ensuring employers comply with their obligations. However, the term ‘ombudsman’ is being corrupted here as by definition an ombudsman should be a body or person independent from government. To ensure a genuine, fair and balanced approach in applying the test, it is essential there be a role for an independent umpire to scrutinise workplace agreements. The independent employment rights legal centre, Job Watch, was right to point out in their submission that:

… the Fairness Test is a poor substitute for the no disadvantage test which, prior to the WorkChoices changes, was applied by the Australian Industrial Relations Commission and the Office of the Employment Advocate … before collective agreements could be certified and AWAs could be approved.

Work Choices is badly flawed. Work Choices is unfair and it has to go. The Democrats support that approach. As yet, however, the alternative offered by Labor is far from clear. Turning to the coalition: should they win the election, people should understand they will have a mandate for this legislation and they will have a mandate to further tighten the IR screws. But even if they did that, that will still not be enough because, looking into the future, how on earth are the coalition going to make this complex overregulated system simpler? How on earth are they going to make it work?

It is clear that Australian workers need a new deal, one that gives them clear direction. We Democrats have a very clear idea of what we think needs to be done. We have our long experience in this area to draw on. One advantage we do have is that we are not beholden to unions, and we are not beholden to business. We are in the business of trying to strike a balance. Our plan comprises reforms that would deliver productivity, efficiency, jobs growth and competitive gains. And it would do so in accord with the values and goals of a progressive First World society. We need to end the complexity and confusion of having six industrial relations systems across state borders, which we still do have. We need to end the system that we have whereby the states, to try and restore fairness, are chipping away at the fabric of the edifice that has been constructed. What Australia needs is for the federal and state governments to cooperate in introducing a single and genuine national unitary system comprising four essential elements.

The first element is the setting up of a single, strong, independent industrial relations commission that would absorb the state industrial relations commissions into one national commission. It should be appointed on merit and take up the determination functions of the federal Employment Advocate, now to be the Workplace Authority, and the Fair Pay Commission. It should have the restored powers to ratify, vary and determine awards and agreements and to resolve disputes.

The second element would be to set up a well-resourced, national, strong and independent workplace regulator that would absorb the regulatory functions of state departmental inspectorates. It would also take up the regulatory functions of the Employment Advocate, Office of Workplace Services—now the Workplace Authority and Workplace Ombudsman—and the Australian Building and Construction Commission. The third element would be the provision of a genuine safety net. It would have a fair and balanced minimum wage awarded annually; it would have at least eight minimum conditions for all workers, whether on statutory or common-law agreements; and it would have national or industry based simplified awards with at least 16 allowable matters.

The fourth and last element would be the provision of a genuine flexible bargaining system that would have a mix of industrial instruments available. It would have union and non-union agreements, it would have collective and individual agreements and it would have statutory and common-law agreements. This system would also enshrine the right to collectively bargain in good faith and would enshrine freedom of association.

Importantly, it would abolish Work Choices AWAs and replace them with statutory individual agreements with a global no disadvantage test referenced back to the relevant award. We would replace Work Choices AWAs with individual agreements ticked off by the Industrial Relations Commission and underpinned by a real no disadvantage test and the relevant award. Statutory agreements would be regulated so that they did not exploit workers. We would also support common-law agreements.

The Democrats have always been modernisers in the field of industrial relations. We have followed clear principles. We supported the important advances made by the first wave of the Keating Labor industrial relations reforms in 1993. We also supported the second wave of coalition industrial relations reforms in 1996, but to those we were able to negotiate 176 fair and balanced changes to swing them back from the Right to the Centre. Unfortunately we did not have the opportunity to do that with Work Choices. We did not support the flawed legislation that is Work Choices. We will join the opposition in supporting the Stronger Safety Net bill because we do think something fairer is better than nothing at all. I do hope, however, that it will be amended to strengthen it.