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Monday, 18 June 2007
Page: 78


Senator MARSHALL (5:39 PM) —The Senate conducted an inquiry into this amendment of the Work Choices bill. Senator Troeth, who has just made her contribution, is chair of that committee and I am deputy chair. There was a dissenting report from the opposition senators, and all other political parties represented in this Senate also put in dissenting reports. I guess if one reads both reports you will see a very stark contrast in the conclusions that both groups—government and opposition senators—have made in their contribution. While I accept that both parties can grab figures from here and there to back up and argue their case, it is ultimately the Australian people who will make the final decision on this.

The differences represented in this chamber are also the differences that are represented out in the community. It is one of the issues that most starkly defines the difference between the coalition government and the Labor Party. We believe our criticisms of this bill are well founded. We believe our criticisms of the original Work Choices bill are well founded. I accept that the government argues the same from their point of view. Again, this is a debate we will have and it will ultimately be a debate decided by the Australian people.

This Workplace Relations Amendment (A Stronger Safety Net) Bill 2007 simply seeks to amend the flawed Work Choices legislation. The Work Choices legislation is flawed for this fundamental reason: it assumes that there is equality in the bargaining position between an employee and an employer. Simply, there is not. Employers decide the terms and conditions of employment, the way in which the work will be done, when the work will be done, and what sort of work will be done. They have all these matters under control. Employees do not have the ability to negotiate around those issues unless the employer seeks to allow them to do so.

This is the argument the coalition will not win, because every Australian worker—whether they are the chief executive of one of our largest companies or one of the lowest paid workers in this community—understands and knows that there is no equality in the bargaining position between employers and employees. Some will argue that that is right—that that is the way it should be. We in the Labor Party do not agree. We believe that it ought not be that. Employees ought to have a large set of conditions that give them employment protection, that are protected for them and not able to be simply stripped away because an employer decides to do so. The reality in life—the reality which this government seeks to ignore or pretend simply does not exist—is that AWAs are offered on a take it or leave it approach. Most AWAs are template or pattern AWAs and there is no negotiation. AWAs are simply offered on a take it or leave it basis.

The flexibility often promoted as a benefit of the government’s industrial relations policy is one-sided and mostly delivers flexibility to the benefit of employers. The rhetoric associated with flexibility as the most desirable characteristic of workplace agreements is wilfully misleading. There is rarely any real negotiation with employees, who are often faced with the prospect of signing an AWA as a condition of employment, promotion, transfer or wage increase. Most AWAs are standardised documents that do not take into account an individual’s circumstances. Work Choices allows simply for wages and conditions to be gouged with no regard at all to the productivity or the flexibility that this government seeks to champion. It is simply a race to the bottom. This government often confuses the difference between productivity and profitability. Simply allowing employers to gouge the wages and conditions of employees does nothing to enhance productivity; it is all about profitability. Of course, time and time again we have seen in a similar industry one employer who reduces the cost of the wages component in their production putting pressure on every other employer in that industry who competes with that employer, and we see the downward spiral and the race to the bottom.

The government will argue that that is not happening and it will bring out all sorts of statistics—and if I get a chance I will address some of those later in my contribution—to try to say that that is not happening. But the government will fail to convince the Australian people because it is the Australian people who are actually experiencing this. They know how it works. They are the ones who are suffering under this legislation. They are the ones out there, day in and day out, with those sorts of pressures being brought to bear on their employment. This government has simply sided against working people, and Work Choices is the result of that.

The government claims that this amending legislation is required to address the perception of unfairness—simply the perception. It may assist the government’s political agenda in addressing the perception, but it will do very little to address actual fairness. This is what the Treasurer had to say in an interview with Laurie Oakes on the Sunday program on 6 May. Laurie Oakes asked the Treasurer:

Staying with IR though, the hundreds of thousands of people that have already signed AWAs would not get any protection from the new measures announced last week by the Prime Minister. So you have a two tier system. Where is the fairness in that?

The Treasurer’s answer was:

Well I think Laurie, the fact of the matter is to go back through all of those contracts, to go back through all of those conditions again would lead to an enormous dislocation, and there is no real evidence, no real evidence at all that there have been any egregious cases. So what the Government has announced is protection measures for the future in relation to fairness. I think they are sensible measures, I think they will work and I think you will see the benefit in relation to the workforce.

So the Treasurer does not believe there has been any real evidence of any egregious cases. But of course that flies in the face of the facts—the government’s very own facts. It is quite a ridiculous assertion by the Treasurer. We know from the Senate estimates of May 2006 that there was a sample of AWAs at that time—and I admit it was a small sample and we would like to have much bigger samples. But of those sampled AWAs, 100 per cent excluded at least one of these so-called protected award conditions, 64 per cent removed leave loadings, 63 per cent removed penalty rates, 52 per cent removed shiftwork loadings, 41 per cent did not contain gazetted public holidays, 31 per cent modified overtime loadings, 29 per cent modified rest breaks, 27 per cent modified public holiday payments, 22 per cent did not provide for any wage increase over the life of the agreement and 16 per cent excluded all of the so-called protected award conditions and simply replaced them with what the government calls the fair pay minimum standard.

That was the first set of data. Then there was the data leaked to the Sydney Morning Herald—data the government denied it was collecting. The Office of the Employment Advocate was collecting it, even though they denied to Senate estimates that they were doing so. That data was from a much larger sample, taken much later and from a much broader group. It said that just under 45 per cent—note, the figure is now around 45 per cent—excluded all of the protected award conditions, 30 per cent excluded rest breaks, 70 per cent excluded incentive based payments and loadings, 59 per cent excluded annual leave loadings, 23 per cent excluded declared public holidays, 53 per cent excluded public holiday pay, 67 per cent excluded days to be substituted for public holidays, 57 per cent excluded allowances, 52 per cent excluded overtime loadings, 76 per cent excluded shiftwork loadings and 68 per cent excluded other forms of penalty rates. So that evidence is out there. And the Office of the Employment Advocate now admit they were collecting sample data and they have not denied that that leaked data is the data they were collecting. The Treasurer says there is no evidence. But what further evidence do we need?

The government’s own amendments in this legislation are simply an acknowledgement that AWAs have eroded standards of living, left many workers worse off and attacked traditional values and quality of life. They have created an industrial relations system where the basis of social justice and a fair go, or protection for society’s most vulnerable workers, have been undermined. On 4 May Minister Hockey said:

“We are introducing a stronger safety net for working Australians. It was never the intention that it should be the norm for penalty rates to be traded off without proper compensation and that’s why the Government is going to introduce new laws that, simply put, employees must receive fair compensation if they agree to trade away conditions such as penalty rates, shift and overtime loadings, monetary allowances like travel allowance or tool allowances, annual leave loadings, public holidays, rest breaks and incentive and other types of bonuses.”

This statement is simply untrue. It was always the intention of Work Choices to allow for the removal of every so-called protected award condition. Take the government’s own example of ‘Billy’ from the original Work Choices advertising campaign and contained in print in their WorkChoices booklet. This is a case study to demonstrate to employers what you can actually do with Work Choices. The booklet says:

Billy is an unemployed job seeker who is offered a full-time job as a shop assistant by Costa’s who owns a clothing retail store in Canberra. The clothing store is covered by a federal award. The job offered to Billy is contingent on him accepting an AWA—

take it or leave it—

The AWA Billy is offered provides him with the relevant minimum award classification wage and explicitly removes other award conditions.

As Billy is making an agreement under WorkChoices the AWA being offered to him must at least meet the Fair Pay and Conditions Standard.

The AWA Billy is offered explicitly removes award conditions for public holidays, rest breaks, bonuses, annual leave loadings, allowances, penalty rates and shift/overtime loadings.

Billy has a bargaining agent assisting him in considering the AWA. He understands the details of what is in the AWA and the protections that the Fair Pay and Conditions Standard will give him including annual leave, personal/carer’s leave and parental leave and maximum ordinary hours of work. Because Billy wants to get a foothold in the job market, he agrees to the AWA and accepts the job offer.

There we have it. We have got the Treasurer saying that there have been no problems with the application of Work Choices so far, no egregious effects at all. That is simply wrong. Then we have Minister Hockey saying that it was never the intention of the bill to allow these things to be traded away without fair compensation. But there it is in the Work Choices documentation first up

The tragic thing is that, as it appears in this legislation, the Billy example can still get through the new so-called fairness test. Let us listen to what the Prime Minister had to say on the same day as Minister Hockey. He said:

But where the penalty rates etcetera are taken out or are modified in any way there’ll be a fairness test and the fairness test will inquire whether adequate compensation has been provided in return. Now in the great bulk of cases that compensation will take the form, probably of an increase in the hourly rate to take account of the non payment of penalty rates but the compensation can take a non-monetary form and in examining whether adequate compensation’s been paid, the authority will have a look at all aspects of the agreement. In some cases extremely flexible working arrangements can be given in return for the non payment of penalty rates, in other cases additional entitlements can be given.

It can be the case that a particular beneficial arrangement is made by a parent in relation to leave to do things concerning their children in return for an understanding that if that parent is required to work at irregular hours then penalty rates are not to be paid. Now these are all assessments that will be made. The economic circumstances of the firm can be taken into account, the employment opportunities and experience of the individual employee can be taken into account but it would be my belief and the belief of the government that in the great bulk of cases the judgement would be made in relation to monetary matters but I would not want to excluded non monetary ones.

So there we have it: Mr Hockey saying that it was never the intention of the government to strip away the so-called protected award conditions without proper compensation and arguing that the fairness test will enshrine that, and on the same day we have the Prime Minister saying that it does not necessarily have to be monetary compensation and all these personal issues such as unemployment status or employment experience will be taken into consideration.

That brings us to the fundamental flaws of these amendments. As Senator Wong has indicated, even if one individual does benefit from the so-called new fairness test—and I suspect it would mainly be because there may be a fix in the perception where employers do not seek to exercise their rights under Work Choices to simply take away all these conditions—we would support the legislation. But let us make no mistake, the holes in this fairness test will be driven through by employers who want to still seek to remove the so-called protected award conditions and either pay no monetary compensation or very little. The case of Billy from the original Work Choices legislation is still there and it can still pass the test.

Who is going to apply this test? Again, this is one of the major concerns that we have and I can only suspect that the government has drafted it this way so that it will be a weak test. We have an arrangement where the old Office of the Employment Advocate will shortly be called, with the passing of this legislation, the Workplace Director. The Workplace Director will have the full realm of subjectively deciding what is appropriate and what is not appropriate. People may say that it is good to have someone independently doing that. Let me say two things to that. All that will be done in secret. No-one will know what weight the Workplace Director will put on any of those matters. If Billy were unemployed and seeking to get, as the WorkChoices booklet said, a ‘foothold in employment’ what value would the Workplace Director put on that? He can put any value he likes on that. He can put any value he likes on the removal of penalty rates. It does not have to be publicised; it does not have to be justified; no-one will necessarily know about this or how it was arrived at.

Where does that leave the employees? In terms of the old no disadvantage test that used to apply prior to Work Choices all these things were always negotiated in an open forum where decisions were publicised and precedents were made. Other employees and employers could get an understanding of what penalty rates were worth, what parental leave was worth, what carer leave might be worth, what the ability to have flexibility would be worth. Agreements would be negotiated based on those transparent, non-secret processes, and people could be satisfied that what they were forced to trade away in AWAs that were given to them as a take-it-or-leave-it process were in fact compensated for fully. There is going to be no right to appeal if you are unhappy. Agreements will simply go up to the Workplace Director and will come back as passing the unfair disadvantage test.

I would like the time to speak much more about many of the other flaws in this legislation on Work Choices. Clearly, here we are with a government that seek to make a quick political fix. They know they are in trouble because the Australian workers know that Work Choices is unfair as they come under more and more pressure to lose their wages and conditions and they are already judging the effectiveness of Work Choices. All of a sudden we see the government rushing to put the word ‘fair’ back into Work Choices with amendments as they seek to fix a perception. In the government’s own words, this is about ‘fixing a perception’, not fixing fairness. (Time expired)