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Monday, 17 March 2008
Page: 996


Senator BOYCE (6:07 PM) —I was a member of the Senate Standing Committee on Education, Employment and Workplace Relations which enquired into this bill. I would like to say I am very pleased to hear Senator Andrew Murray’s comments in regard to the need to keep individual statutory agreements within our workplace relations system. The coalition has made it very clear that we have no problem with the intentions of much of this bill—the intentions of the bill relating to award modernisation and relating to the introduction of an easy-to-administer no disadvantage test. I repeat: the intentions of this bill. I do have very serious concerns, which I know are shared by many of my colleagues in this place, about the bill’s intention to end the use of individual statutory agreements within the Australian workplace relations system.

I have used the term ‘intention’ in relation to what I see as both the positive and the negative aspects of this bill advisedly, because no-one has a clue what the reality of this mishmash of legislation will be. It was very clear from the evidence that was given to the committee that the bill was poorly drafted and that many of the witnesses considered it was very likely to have unintended consequences—consequences which at the moment we can only guess. I suppose the most concerning part of all this is that even the government does not appear to have a clear idea of the consequences of aspects of this legislation. I believe that the passage of this bill will be a sad day for Australia. It will be a sad day for the peaceful and profitable future of our businesses, large and small, and for the workers of Australia.

I note that Deputy Prime Minister Julia Gillard, in her second reading speech, said:

A workplace relations system that works for all Australians should be fair and flexible, simple and productive.

That is possibly one of the few statements that the Deputy Prime Minister and I would agree on. In fact, all employers and their staff—particularly the ones who have been leaving the unions in droves over the past few years—all over Australia would agree that a workplace relations system that works for all Australians should be fair and flexible, simple and productive. Australian businesses want to retain flexibility and they want that flexibility offered by individual statutory agreements, subject to a safety net, just as much as by award modernisation and by the provision of a simpler way of going about collective agreements. The only problem, of course, with this particular bill is that it has absolutely nothing to do with flexibility; it has very much to do with the Labor Party paying its dues to the unions. The bill is actually called ‘forward with fairness’. I would suggest that it should be more accurately titled ‘forward to the unknown’, or even ‘when first we practise to deceive’ would do the job.

As I said, employers and employees do want flexibility in Australia’s IR system and they are very dismayed by the inflexible confusion of the system that the government is intending to bring in. They are very dismayed by the inflexible confusion of this legislation as it has been presented to the parliament. I am not sure that senior union executives would appreciate true flexibility within our workplace relations system, but that is probably where we get to the real reasons for the haste, the extraordinary flaws and the pig-headedness of this legislation. This bill is about what the Labor Party perceives to be good politics; it has nothing at all to do with good policy.

Let’s have a look at this brave new world in relation to award modernisation. The only problem is that no-one appears to believe that the Australian Industrial Relations Commission has a hope in hell of getting the process done within the time frame set by the government. Witnesses to the Senate Standing Committee on Education, Employment and Workplace Relations inquiry repeatedly expressed their scepticism about meeting the 2009 timetable. Even the government’s own Department of Education, Employment and Workplace Relations could only manage to assert that they believe the timetable for the award modernisation process was ‘not impossible’. I think we all know what a bureaucrat means when he says his minister’s time frame is ‘not impossible’.

Like the bill itself, the minister’s timetable is not about good policy; it is about politics and meeting time frames set by others, particularly union demands that were brought to the fore during the last election campaign. This bill and its raison d’etre get murkier and murkier. Deputy Prime Minister Gillard would have you believe that this bill kills AWAs—a very irresponsible and empty-headed aim in itself, in my view. Individual statutory agreements, as Senator Andrew Murray said, have a much needed position within our workplace relations system. Despite the Deputy Prime Minister’s ambition to kill AWAs, she appears to have not even got that quite right. Evidence from the Senate committee inquiry suggests that AWAs that are currently in place, and probably ITEAs, may just have the ability to go on and on and on, as long as the parties want them to.

Once again, this legislation has done nothing to assist the people who are trying to run businesses in this country; it has only set out to confuse them. The people who should be the real masters of the Deputy Prime Minister of Australia, Julia Gillard—the businesses and the workers of Australia—are confused by this aspect of the legislation. They are not assisted. The confusion will push some employers and others towards quickly going into collective agreements, and that, of course, means that the Deputy Prime Minister can then satisfy her real masters, the dogma-driven unions of Australia.

We heard within the Senate inquiry evidence that collective agreements will not work in many sectors and even that many mum-and-dad businesses will rethink employing extra staff. It was pointed out by the Electrical and Communications Association of Queensland that:

It is the small mum and dad companies—which have been the engine room of the economic drive in the last 10 years—that are employing these people, that are now starting to reconsider: ‘Do I really want to go through the hurdles of possibly having to deal with the union to negotiate an agreement?’ Not all of them will want to, not all of them will need to. But that is now the possibility that they are looking at, and they are the ones who will start saying, ‘I do need another person, but I don’t need them that desperately,’ or, ‘I might take them on as a subcontractor and just pay them 50 bucks an hour and that’s that.’ No other conditions, no protection, and that is the end of it. I do not believe that that is where we want our industry to go either.

These are people who are trying to earn a living and employ staff in Australia right now. They are frightened by, confused by and feeling coerced by this particular attempt at legislation.

Senators at the inquiry were also told that the rigidity of Labor’s proposed system could destroy many council community services in regional Australia, and Senator John Watson referred to this earlier. Amongst the programs that were spoken about were local pools, programs for disadvantaged children and dog- and stock-catching services, just as examples. One person who gave evidence to the inquiry said:

If I might just give one example: in one of our regional centres, the only swimming pool in the town was leased out to a person prior to the HIH collapse. That person ran the swimming pool, they ran the shop and they ran swimming classes, and their income came from that. They leased it out for a minimal cost to the council and council was happy because there was a service being provided. The bottom line is that the cost of public liability became too expensive for that particular lessor to continue with the arrangement, so they are going to close the pool. The cost of council taking it on and having to pay that person for the normal hours that they would work to run the swimming program, which were generally outside of what we would call normal working hours—because the nature of a swimming pool is that it is mainly for children and it is used after school and before school and on Saturdays and Sundays—was triple costs for overtime, working on weekends. There is the cost of that under the ordinary award, plus then you bring in the plethora of allowances for running shops and for expert swimming tutors et cetera et cetera, and it would just become too expensive for the council to continue to run it. We arranged an AWA in that case, and that allowed the person to continue to work as an employee. The council took on the cost of the public liability. The person’s wages were supplemented. They had part of their income under the AWA from the gate takings and from running lessons, so it continued the old lease arrangement but allowed the council to take on the public liability. In that particular instance, that pool probably would have closed or, at best, it would have cost the council an enormous amount of extra dollars which would have had to be taken off some other services that council would have provided.

This was, in the view of the coalition senators, an example of just the sort of flexibility that should be in the system and that must be in the system if it is going to do anything towards the intention of creating a modern industrial relations system. We can argue however we like about where you might fit that sort of thing otherwise, but why are we trying to create a new system of complexity and inflexibility when we have—with some adjustments and some changes—the sort of flexibility that suits the modern Australian industrial relations scene?

The coalition, in the House of Representatives, has asked the minister to look at recasting this bill in its entirety because of the many flaws, and many of these are covered in the dissenting report which, I understand, has been tabled just now in the Senate. I must admit that I am, personally, bitterly disappointed that the bill will destroy the ability for employers and employees to negotiate an individual statutory agreement subject to a no disadvantage test. I am bitterly disappointed by this because of the effect that I know it will have in certain segments of Australian business and industry. Australian businesses themselves are, of course, at bottom a realistic and pragmatic lot, and they will keep on keeping on. They will work with whatever the system is that the government gives them. They would, however, very much appreciate understanding what the intentions of the system that they are about to get are. Master Builders Australia Inc, for instance, commented in its submission:

ITEAs will not be a component of the new industrial relations system that will come into effect in January 2010. Master Builders advocates that the underlying safety net is the important consideration when assessing whether or not an industrial instrument is fair. There is nothing per se unfair in the use of individual statutory agreements and, for this reason, the Master Builders’ policy position is that employees and employers from January 2010 should continue to be permitted—

to use them on a case-by-case basis. The Electrical and Communications Association submission said that the new system will not ‘allow contractors to adequately or appropriately reward employees for individual productivity gains’.

The Labor government seem to take the view—which is somewhat naive in my view—that telling us that they intend to have the capacity for flexibility within modern awards will somehow do the trick and will create flexibility. That certainly was not the view of a number of the witnesses at the Senate inquiry. We heard evidence that in fact people were concerned that there is already allegedly the provision for flexibility within awards but it is not used. To think that by using the term ‘flexibility’ in an award you are creating something that might have even the slightest chance of replacing the flexibility available with an individual statutory agreement subject to a fairness or no-disadvantage test is naive in the extreme.

I am very concerned about what will happen to smaller businesses. My background and experience lies in manufacturing. I understand trades and how they operate and work. There is an assumption underpinning this bill that all employers are out to harm all employees. Within Australia there are millions of family businesses, large and small, where this would be anything but the truth—where people work together productively for what they perceive to be their joint benefit. There were examples given during the inquiry about this sort of thing. Employees would want to make arrangements outside of the award and the concern of some employer organisations was that employers who agreed to this were putting themselves in technical breach of an award if there was no other way of coming to an agreement with their employee. I note the comment from the witness from the Master Plumbers Association of Queensland who said:

One of the biggest concerns I had had as an individual trying to assist small plumbing contractors was that quite often they would have an arrangement with their employees or their workers which suited both parties but they did not formalise it by way of some form of registered agreement and, in not doing so, they had a technical breach of the award. We saw the ability for them to register those agreements as being a way of providing some guarantee to the employee as to what the arrangements were, and some protection to the employer should there be a technical breach of the award identified.

It was unutterably sad to me to listen to people suggest that because a small number of people use individual statutory agreements—the best guess seems to be that it is between five and 10 per cent—we should just throw the whole lot out: we should throw that flexibility completely out of the system. I do not think we are acknowledging in any meaningful way the ability for Australia’s family businesses and many other small businesses to relate to their employees and what their employees want. We are destroying a level of trust that has grown in some areas because of the ability to do this. I acknowledge that I have no personal experience of the hospitality and retail industries. It would appear that, yes, there certainly were some serious issues with that, but the basic point is that most Australian employers want to have employees who want to come to work and who are there because they share the goal of creating a better, bigger, more profitable, more interesting or more innovative business. There is very little point in having employees who are simply there because there will be a penalty for not being there. That is not the way to go forward as a productive nation; it was something that, certainly in some sectors of industry, the individual statutory agreements were helping to overcome so that people were actually working together with both parties having the opportunity to say, ‘This is what would help me to do my job better.’

Labor seems to be very concerned about flexibility or the lack of flexibility, but I think this is perhaps more designed to assist the Deputy Prime Minister to tell the unions that she has gotten rid of flexibility so that they will be pleased. The Deputy Prime Minister earlier today said that she thought she was dancing on the grave of AWAs. She might well be, but she is also dancing on the graves of many Australian small businesses and she is dancing on the graves of council services in the bush. Ultimately I believe she is potentially dancing on the grave of the Australian economy.