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Monday, 26 November 2012
Page: 9652


Senator ABETZ (TasmaniaLeader of the Opposition in the Senate) (10:59): The Fair Work Amendment (Transfer of Business) Bill 2012 was one of the stunts that we have now come to expect from the would-be Prime Minister and current workplace relations minister, Mr Bill Shorten.

Senators may recall that the genesis of this legislation was Mr Shorten's rushed trip to Queensland to try to make very cheap, nasty, ugly, political capital out of the tough decisions needed to be taken in the state of Queensland by the newly elected premier. Queensland had an unsustainable—still has—debt burden, and I will go through the details of that later on.

Having been confronted with an eight-week illegal blockade and strike at the Queensland Children's Hospital, Mr Shorten saw no need to visit Queensland and call off that dispute. He saw no need to go to Queensland to argue for justice for the workers who actually wanted to go to work at the Queensland Children's Hospital. But, oh yes, it was vitally important for him to go to Queensland to announce the Fair Work Amendment (Transfer of Business) bill. It gives you an indication of the minister's quite warped priorities and what his political motivation is: an eight-week illegal strike blockade, not to be worried about, not worthy of a visit, but to try to slap Premier Newman around the face—that is most definitely worthy of a visit to announce a bill that did not have the normal consultative process applied to it.

This bill is wrong in principle, and will in fact have a perverse outcome for Australian workers. That is the shameful thing about this bill: those public servants, in Queensland in particular, who have been made redundant will find the opportunity of gaining employment so much harder. Allow me to briefly encapsulate that at the commencement of my remarks before going into the details of the bill.

What the bill seeks to do is to say that any public servant, even if they accept a voluntary redundancy from the Public Service, if they are picked up by a private employer that then provides services back to the Queensland public service, will be entitled to all their entitlements that they had as a public servant if they are employed within three months of that redundancy; even a voluntary redundancy—namely, that they voluntarily resigned, accepted the conditions and then tried to gain employment with an employer that might be providing services back to the state government.

I have specifically asked the government and, unusually, they have responded quite clearly. So if I as a prospective employer of a redundant public servant said to that public servant, 'I'd love to employ you but I'd have to employ you on public service conditions. I can't do so. I will not do so. Therefore you won't get the job,' that ex public servant will have no redress in any way, shape or form. So the question is: how does this legislation actually benefit those that it is alleged to protect? It does not. It was a rushed stunt with the perverse consequence of making redundant Queensland public servants and other public servants less employable than they otherwise would be, as a result of which their difficulty will simply be enhanced courtesy of this legislation.

So despite their rhetoric, the government is wrong in relation to motivation behind this bill.

Yes, it certainly helps trade union bosses—and you would expect nothing less from a Labor government made up predominantly of former union officials—but it will leave workers worse off and see employees finding it harder to sell themselves in the employment market as a result.

At the time of the introduction of the then Fair Work Bill the coalition warned:

The Bill as drafted proposes a radical new approach to established transmission of business principles. It replaces the accepted approach of ‘asset transfer/business character’ with a broader concept of ‘transfer of work’. This has the practical effect of overturning the High Court authorities …

Here we have yet another Labor bill deliberately designed to overcome that which the independent umpire determined was a fair and reasonable thing. In this case, it was the highest umpire in the country: namely, the High Court. The Australian people can ask themselves a very simple question: is the collective wisdom of the High Court in relation to these matters to be accepted over and above the wisdom of one Mr Bill Shorten, ex-trade-union-boss? I have no doubt where the majority of Australians would place their faith. They would place their faith in the judgement of the High Court of Australia rather than with this particular decision of Ms Gillard's and Mr Shorten's.

At the time the bill was introduced, we observed:

… the Bill widens the circumstances in which an industrial instrument transfers with the relevant employees affected by a business sale or restructure. The potential also exists for such industrial instrument to form the basis of employment for any new employee that commences after the business has been transferred.

The reason for such a fundamental shift from universally accepted and well settled principle—

a definition settled by the High Court—

is unclear.

It is equally as unclear today.

The proposed transfer of business provisions are at best problematic and economically restrictive, and at worst they are a disincentive to achieve ongoing employment for affected employees. Indeed, Labor's chief or preferred business advisers at the Australian Industry Group were unequivocal about the detrimental affect of the new provisions and had this to say:

The provisions are anti employment and would create a huge incentive for companies not to employ workers of businesses they take over.

That is, of course, what was found by the Labor government's own Fair Work Act review. Remember that hand-picked panel of Labor sympathisers and the skewed terms of reference designed to force a particular outcome? Even they were mugged by the reality that the existing transfer of business provisions were a disincentive for re-employment. Even they came to that conclusion, yet Mr Shorten, instead of acting on the Fair Work Act review, went backwards even further. One has to wonder what the motivation is.

As recently as this month, on 6 November, Mr Shorten received a letter from the Australian Industry Group Chief Executive. He wrote:

I am writing to communicate Ai Group’s strong concerns about the Fair Work Amendment (Transfer of Business) Bill 2012 which was introduced into Parliament—

and I stress this—

without any consultation with industry, despite the fact that the legislative amendments will have a major impact upon many Ai Group member companies and other private sector employers.

The Government dispensed with the usual process and did not refer the Bill to the Committee on Industrial Legislation (COIL) before introducing it into Parliament. The Bill was introduced into the House of Representatives and voted upon extremely quickly which did not provide the opportunity for adequate scrutiny. This is very disappointing.

I would be pleased to hear from the government what the urgency is in relation to this legislation that they did not consult, did not go through COIL and did not undertake the normal consultations, and why it had to be forced through the parliament in such an inappropriate manner.

With the introduction of this legislation, the government has yet again confirmed that it does not understand our job creators. Let me remind the Senate: governments do not create jobs; employers do. Governments have a role in creating an environment in which businesses are able to flourish, do business and employ people. This legislation does the exact opposite of that.

The transfer of business provisions have created a disincentive for an incoming employer to retain employees engaged within a business. In other words, it is a lose-lose. The business taking over the other business loses the corporate knowledge of the employee and the employee loses the opportunity of ongoing employment. It is a lose-lose. That is what the Fair Work Act review itself found. But, oh, no; Mr Shorten knows even better and wants to cement this inequity even further.

Secondly, they encourage the retention of business practices that may be uneconomic or failing. Of course, that is often one of the reasons that one business takes over another—because the existing business that is being taken over does not have a viable business model. This means that employers, as I said, lose corporate knowledge and employees become less employable—both are worse off. That is Labor's double whammy in this bill. They destroy both the employer's prospects and the employee's prospects.

The coalition appreciates that these provisions are intended to be anti-avoidance in nature and reflect evidence highlighting that some inappropriate practices by some businesses have been engaged in in the past and will undoubtedly, if given the opportunity, be engaged in in the future. However, such evidence must be balanced against the need to ensure that workplace relations do not negatively impact upon normal business transactions or operate in a manner that costs jobs and leaves workers and employers worse off.

That is why we as a coalition say that the High Court of Australia actually got the balance right. They got the balance right, but Labor, of course—Ms Gillard and Mr Shorten; intellectual giants that they are—know better than the High Court. Not surprisingly, the Fair Work review has recommended changes to the existing transfer-of-business provisions to bring them back into line with—guess what?—the High Court decision. Indeed, they could not have been clearer. Let me quote:

The Panel recommends that s. 311 be amended to make it clear that when employees, on their own initiative, seek to transfer to a related entity of their current employer they will be subject to the terms and conditions of employment provided by the new employer.

That is the finding of the government's own Fair Work review, which was announced on 20 December last year by the Minister for Employment and Workplace Relations, and the recommendations of the government's own panel are completely at odds with this legislation. This can only mean one thing: the bill and the measures proposed in it are yet again a political measure and not a practical measure.

Further proof, if it is necessary, that this is a political measure rather than a practical measure, as Mr Shorten is so wont to do: the Fair Work review's recommendations did not stop Mr Shorten, in the other place, from strategically using it to try and vindicate this bill. He conveniently cherry-picked certain sentences from the review document, strung them together and—guess what?—they then said what he wanted them to say. Mr Shorten will never let a review's findings get in the way of his spin, even when it is a Labor government's review and the findings are completely at odds with the government's proposals.

As I have indicated, Mr Shorten announced this in the wake of Premier Newman indicating the need for some 10,000-plus redundancies from the Public Service in Queensland. Let me paint the picture: Labor left the state of Queensland in dire financial circumstances and this bill seeks to make a difficult situation so much worse for thousands of workers.

Hard decisions had to be taken—and, might I add, they had to be taken to ensure that Queensland did not catch the Euro-virus and the 'Greek disease'. Make no mistake; Queensland was on that trajectory. Let's look at what Labor did to Queensland. It is no wonder, when you reflect that the former Prime Minister and the current Treasurer are both Queenslanders, that the Commonwealth books are in the shonky state they are in today.

In Queensland, Public Service numbers increased on a full-time equivalent basis by 40 per cent in the decade between June 2000 and June 2011. Wages growth in the Queensland Public Service outstripped other jurisdictions, with average weekly earnings increasing by 16.7 per cent in real terms since 2000-01 and with the public sector nationally only increasing by 12.7 per cent. As a result, the Queensland public sector became a high-wage jurisdiction over the last decade and was bloated with its 40 per cent increase. But now Queensland is faced with a $62.7 billion debt. To put that into perspective, it is about half the size of the Commonwealth's debt, and that is just in one state of Australia. Queensland represents about 20 to 25 per cent of the population—I am not sure; a Queensland senator might be able to assist with that figure—and has about half of the Commonwealth debt visited upon it because of the mismanagement of state Labor.

So the independent commission of audit predicted that debt in Queensland could balloon out to as much as $100 billion in 2018-19 unless urgent corrective action was taken, and that is what the Queensland government sought to do. In this ill-advised stunt, what Mr Shorten did not tell the Australian people was that Queensland and New South Wales public sector employees were not covered by the Fair Work Act. Why? Because successive state Labor governments did not refer the powers. Also, Labor's transfer-of-business regime leaves workers and employees worse off—which the Fair Work Act review has found.

Also, Labor's own modelling projects that 4,200 full-time jobs and up to 12,000 jobs will be stripped out of the Commonwealth Public Service. But there is no need for legislation if they are doing it down here in Canberra! No need for it for Tasmanian redundancies! No need for it with South Australian Public Service redundancies! Why? They are Labor governments of course. But, when a coalition government in Queensland does it, it requires a visit from the minister to make merry hell.

But this backfired very badly because, shortly after this announcement by Mr Shorten, who should sack and make redundant a lot of workers only to harness and outsource some of this work? None other than the ACTU. The Australian Council of Trade Unions made a lot of workers redundant and said that they would then source this workforce from the private sector. Exactly what Mr Newman did. But did Mr Shorten fly to Melbourne and stand outside ACTU headquarters to condemn this? Of course not. Mr Shorten's silence was overwhelmingly deafening. This legislation was a political stunt; it will make employers worse off and it will make workers worse off, and that is why the coalition opposes it.