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Fair Work (Transitional Provisions and Consequential Amendments) Bill 2009

CHAIR —Do you have any amendments or additions to your submission?

Mr Platt —No, I do not.

CHAIR —We invite you to make an opening statement to the committee to be followed by questions.

Mr Platt —Thank you. One thing I would like to go through is that there have been a number of changes in our industry and indeed in the economy in general since the Fair Work Act was developed and since the Senate hearings into the Fair Work Act and now the transitional bill. I was at a meeting of industry leaders only last week where they provided some information that was quite instructive. One of the gentlemen was the CEO of a nickel mine and he told us that in December 2007 the nickel price was pretty close to US$30,000 a tonne and the cobalt price, which is also a product that they manufacture, was about US$40 per pound. Their key input was sulfur which cost about US$80 a tonne. In the one year since December 2007 the nickel price plummeted from US$30,000 a tonne to US$10,000 a tonne. The cobalt price plummeted from US$40 a pound to US$10 a pound and yet their input had increased tenfold from US$80 a tonne to a historic high of US$800 a tonne. As a result, the net worth of the company reduced from US$3 billion to US$300 million and the share price reduced from US$6.25 to 28c.

It was also accompanied by changes in profit. From making a profit of $270 million, they were making a loss of $20 million. The CEO told me that, essentially, the last year was a year of two halves. In the first year they were looking at consolidating their production and going forward and opening new businesses. In the second year they were in survival mode. The downturn in the economy in terms of commodity prices and demand had basically removed most of the controls that they had in respect of their business successes. Another CEO told me that their expectation of the ETS impact is approximately $34 billion, which translates to 26,000 jobs. The reason I tell you this is not to rely on the global financial crisis or, indeed, the potential of an ETS system as a foil but to point out that, in this current climate, we have to look at everything we do in the same way that our businesses are looking at every cost that they have, and we have to consider the impact it will have on our productivity and on jobs. As you know, in our sector, about 12½ thousand jobs have already been lost. All but 15 per cent of our industry are considering redundancies, and there are more redundancies to come. Whilst that is regrettable, we need to make sure that the bill that is passed by parliament does not impede our capacity to export Australian materials and employ people. The last thing we want to do is to be exporting jobs.

In relation to the detail of the transitional bill, the report is before you. The key areas that we have are in respect of representational orders. What we are concerned about there is that union rights and demarcation disputes can be dealt with only after the event and we would like to deal with them before. We are proposing that representation orders in relation to union rights of entry should be linked to coverage by an award or an agreement. In relation to the National Employment Standards, we are saying that that should not apply to pre-existing agreements and any no detriment test should be a global test rather than a line-by-line test to take into account circumstances and other benefits that might be contained in agreements, remembering where they were made, without having the future application of the NES in mind. We suggest that there should be more options for Fair Work Australia when dealing with the NES and its interaction with pre-existing agreements.

In relation to modern awards, we have proposed a mechanism to deal with unintended consequences earlier than a two-year interim review. Again, the consequences we are talking about are consequences which have an impact on productivity and/or employment. What we are concerned about is that there are a large number of modern awards. The process is being undertaken at a very rapid pace and we are concerned that something might slip through that needs to be addressed, and we propose that you should not have to wait two years to do that. In relation to enterprise awards, some companies were early adopters of workplace agreement making, and this was a form of a workplace agreement. What we say is that enterprise awards should be retained unless it is in the public interest not to do so.

In relation to take-home pay, we say that such orders represent only half the equation and that there is another commitment that the award modernisation process should not increase costs for employers. We say that should also be dealt with. In relation to agreement processing, we are still experiencing considerable delays from the department, and we ask that something be done to speed that up.

The final point in my summary is that I know Professor Andrew Stewart is appearing later today. We are aware that he is proposing a solution that all of the pre-existing agreements be killed off. We know this has been raised before. We recognise that the government has made a sensible decision to retain pre-existing agreements. People entered into those agreements based on the law at the time, and we encourage you not to resile from that position. To do so would cause chaos within our industry and result in, essentially, a super bargaining round upon the date the agreements would terminate. Those are my introductory remarks.

CHAIR —Thank you, Mr Platt.

Senator ABETZ —Thank you for your very detailed submission. I will use my time to go through elements of your submission, and there is no place like the beginning. In paragraph 1.2 of your submission you have set out a number of questions that you believe have been left unanswered. Can I ask whether AMMA was involved in the consultation process with the department in the development of this legislation?

Mr Platt —Yes. I attended COIL, the Committee on Industrial Legislation, on behalf of AMMA. There were also a number of meetings between me, DEEWR officials, my CEO and members of the government.

Senator ABETZ —Of course, you would have been signed up to one of these—

Mr Platt —I signed my life away—yes, I did.

Senator ABETZ —confidentiality agreements, so you cannot tell us what happened at COIL. But am I allowed to ask whether you raised these questions that are enumerated in paragraph 1.2 at the time? It would be perfectly understandable to me that those questions may have arisen after discussions, when more thought was put into the process, but I am interested to know whether they had previously been raised with the department or not.

Mr Platt —Certainly AMMA was on the public record, I think during the period when the Fair Work Bill was originally being drafted, in relation to the drop date. That was a serious concern to us, and so that matter was raised publicly with the government well before the COIL meeting on the bill, together with the potential for union turf wars. The COIL process was an extensive one and allowed us to critically examine and question much of the material that was contained in the bill. So, without going to any particular issue—from a technical perspective—we were very satisfied with the COIL process. The outcome we would say was not perfect, but someone might challenge me and say, ‘Well, I’d never agree that anything was perfect,’ but we do not have any complaints in relation to the levels of consultation.

Senator ABETZ —That seems to be the overwhelming evidence of the participants in the COIL process. They thought that they were, as a minimum, listened to. Whether what they were submitting was acted upon, of course, is another issue and we will not go there. The chair, possibly the secretariat and hopefully the department are already aware of AMMA’s submission, but if the department tomorrow could be prepared to answer those questions in paragraph 1.2, I think that would be very helpful—if not to the committee, at least to me.

CHAIR —We have indicated to the department that the committee would appreciate the same form of response that they did on the Fair Work Bill, which was quite a detailed paper which they presented to us at the beginning of the submission. We have encouraged them to do that again, but we will convey that request to them directly.

Senator ABETZ —Thank you, Chair. I must say that, yes, the department was most helpful with the Fair Work Bill. I would agree with you on that. Can I ask a question in relation to union representation orders—this is paragraph 1.10.1. A number of employers have submitted to us along similar lines that employers should be allowed to proactively seek orders. If you only raised it in the COIL process and you got a response that you cannot comment on, that is accepted, but can I ask you: has that been raised separately with the government and have you had a response that you are able to share with us as to what might be the arguments against this proposal?

Mr Platt —AMMA did put a submission on representational orders to the government prior to COIL, and that submission was made public. Essentially, the position that we put is that there ought to be a mechanism to determine a union’s eligibility and therefore a whole range of rights under the act before the rights are acted upon. For example, if there were going to be a debate about a union right of entry, either a union, an employer or both jointly could go before Fair Work Australia, have the issue sorted out once and for all and determine that XYZ union is or is not entitled to exercise a right of entry onto those premises.

The alternate position that we put was that, otherwise, if the union came on site and exercised a right of entry and there was a dispute about it, then essentially the ball stopped bouncing at that time and everybody went back to the umpire to determine whether or not there was a legitimate right of entry. The idea was that, where there was going to be a known dispute, if the parties wanted to sort it out beforehand they could do so and not have an argument about it at the front gates. If you did not do that then you took your chances that there may well be a challenge to your right of entry, and that would then have to go to Fair Work Australia. We put those positions to the government and the same positions in relation to representation orders generally. The response that we have is the transitional bill.

So, in part, some of our proposals have been accepted, but our concern is that there has to be a dispute—although I can say that in the explanatory memorandum there is a slightly different discussion, which indicated to us that there might have been a different view on it. But our concern is there has to be a dispute. We would like a mechanism available so that if people wanted to pre-empt a dispute then that could be done and it could be done in a timely fashion and still allow a union which wanted to exercise an entry to do so, but in the knowledge that they had the right to do so and the employer could understand that that union did have a right and then afford it to it.

Senator ABETZ —What you are saying makes a lot of sense to me, and that is why I was interested as to whether you had received a response from the government as to why they would not or could not meet your request. In your submission, you tell us the Fair Work Bill does not appear to allow orders to be proactively sought and the transitional bill also does not allow for the automatic transfer of current demarcation orders. Was any argument put to you as to why the seeking to pre-empt disputes would be a bad thing from a public policy point of view or were any arguments advanced against the proposition you are putting to us?

Mr Platt —No, no argument has been put against it at this point.

CHAIR —You said you should be able to seek representation orders in a timely manner. In the pre-emption of a dispute, what sort of time frame would you have in mind?

Mr Platt —The timely manner that I was thinking of is essentially if a union wanted to exercise a right of entry, and it was an area where they had not had any involvement before and they expected there would be some resistance, then they could pre-empt a challenge and go off and get an order in the same way as the Office of the Employment Advocate used to do a pre-review of an agreement. If you were not sure whether it passed the test you could send in the agreement. They would do a review and give you a view, and in that way you could proceed with a level of certainty. It is the same sort of approach.

I think it is useful in the real industrial relations world, where people do not have books and books and books of demarcation disputes and union rules to read, that they should know where they stand. I would see benefits from the side of both the employer and the union if you knew in advance of exercising a right that you had that right and that it was not going to be subject to a challenge. And so what we are suggesting is that there ought to be access to a representational order that Fair Work Australia has considered the competing arguments in relation to a right of entry and they have decided that there is or is not a right of entry, so everybody knows where they stand.

CHAIR —The only issue that I am a bit concerned about is how it would work in practice. There are situations where a number of unions may have coverage of the same work, but traditionally different unions in different geographical areas or states or industries cover that area. I would be concerned if representation orders were gained by people who technically had coverage but practically did not. Also, employers may use that to go union shopping, which actually would destabilise the traditional, the norms—the custom and practice.

Mr Platt —I think your concern is a valid one, and it is one of the reasons why we sought it. You can have technical coverage of a particular worker but for some reason the union does not become involved. But the Fair Work Act does not make a distinction between technical coverage and real-world coverage. So there may be a change of heart by the union officials with technical coverage, and they might pursue coverage in that area when they have not done so before. That was why we put in our proposal a whole range of factors that Fair Work Australia should consider before it makes a representational order, including the history of agreement making and representation in the industry, the views of the employees, the views of the employer, the existence of demarcation disputes and the conduct of the parties. That is designed to essentially preserve the status quo. We are not proposing that representational orders result in some huge union turf war or brawl for coverage, on day one of the introduction of this act. What we are proposing is that there ought to be a mechanism for these disputes in relation to the rights of entry and the right to make application for scope orders and majority support orders and the like, and also demarcation disputes, in a manner that can be done before a dispute blows up rather than afterwards.

Senator ABETZ —On another topic, who currently decides union rules?

Mr Platt —The organisational branch of the Industrial Relations Commission deals with union rules. There are some criteria in the RAO section, schedule 1 of the Workplace Relations Act, which essentially sets out the status of existing unions. If a new union starts—or a new employer organisation—there is a process and a set of criteria to go through to work out whether they can start and whether their rules can be approved. If you want to modify your eligibility rules, there is a process of advertisements and objections, and the commission makes orders in respect of that.

Senator ABETZ —And you are concerned that some of these rules as currently expressed are a bit obtuse or not easily understood?

Mr Platt —They are even more obtuse than the previous act, which was pretty obtuse. They are not written for laypersons, and some would argue that they are not even written for lawyers. So what we are proposing is that, in an ideal world, you would have a plain-English version of the union rules. We recognise that that may change the legal context of the rules, so we have stolen an idea from the insurance companies. Essentially they have a plain-English insurance policy but behind it, no doubt, is a much more complex insurance policy with all the legal jargon. But 95 per cent of the time you can read your insurance policy and know what your rights and obligations are. We are proposing exactly the same process for union rules, and that there be a central database so that people would be able to access the rules and understand what a union or an organisation is entitled to do and where they are entitled to go.

Senator ABETZ —I refer to point 6, under the heading ‘Recommendations’, at the foot of paragraph 1.10.1. We could achieve that result by the minister simply changing her direction and sending a letter to Fair Work Australia. Or do you think that would require an amendment to the transition bill?

Mr Platt —In my view, it is an administrative process. So it would be a direction to Fair Work Australia to prepare summaries of the rules in plain English. Because it is administrative, it would not be legally binding. But, in my view, for 95 per cent of the time it would resolve most of the questions about coverage. Remember that, because of the award modernisation process and the way that we have removed union respondency from awards, there will be a whole range of overlap of union coverage within awards. We have a whole bunch of new employers who are going to be covered by the system as a result of the expansion of the awards, and they will not have a clue who is entitled to go in and who is not.

Senator ABETZ —Thank you for that. It looks as though we might be able to do that by ministerial direction. Can I take you to paragraph 1.10.6 of your submission. In the first line of that paragraph it says that AMMA is concerned at ‘the intended consequences of award modernisation’. Is that correct?

Mr Platt —Sorry, that should say ‘the unintended consequences of award modernisation’.

Senator ABETZ —I thought it might be. So we have an amendment to the submission, Chair.

Mr Platt —A deliberate mistake!

Senator ABETZ —Yes—to see if we had read it! And the good news is: the committee has passed the test—we picked up the deliberate error. But, more seriously, can I ask: are there any real life or realistic examples that you would seek to proffer to us as to where some unintended consequences might arise, where an early review of modern awards would be helpful?

Mr Platt —I do not have any real-world examples that I could give you. The ones that we know about would be lobbying the commission to change now. But I suppose what I am concerned about is this. In the hard rock sector of the mining industry, we have put together about 25 awards into one. That is a positive move. Instead of having 25 different classification structures, we now have one. And we have a translation structure from the old system to the new system that we will be putting to the commission for them to introduce. But it may well be that we have missed something—that there is a person whose classification is not mentioned, or the hours of work provisions may have all been written in a way such that an existing arrangement cannot be operated. It is those sorts of unintended consequences that, in my view, you should not have to wait two years to fix, particularly in an environment now where we are challenged by the global financial crisis and we are going to be challenged by the impact of the ETS. The last thing that we want is an unintended consequence to hang over our heads for two years before it can be resolved. Remember, though, that there are a myriad of awards, not just the ones in the mining industry, and according to the laws of probability you would expect there to be a mistake somewhere.

Senator ABETZ —Just so that I understand this: Fair Work Australia will be drafting what are called modern awards. They would, under the normal time frame, be reviewed every four years—is that right?

Mr Platt —That is correct. And there is a special review of two in the transitional bill.

Senator ABETZ —And then there is a special provision for a two-year review, but only to occur once, so that after an award is locked in after that four-year period it would then be reviewed every four years—is that right?

Mr Platt —Yes, and we say that is sensible, because it needs to be stable. But what we are concerned about is that these things are not going to be road-tested until 1 January 2010, and that is when you are going to find your problem—after a few months of road-testing. What we are saying is: in relation to that first period, there ought to be a mechanism by which to bring on something for an earlier review if there is an unintended consequence.

Senator ABETZ —To me, that makes eminent sense. I am just wondering why you would not have a clause. Whilst you would want the overwhelming detail of the award to be, if I can use the term, locked in for four years, if there are unintended consequences from the first draft—and it is more likely, I agree, to occur within the first two years, because there may have been a drafting error or an oversight—what about if other things, just changed circumstances or whatever, that might require a review come up in the future? Would you be supportive of a general mechanism for an urgent review in the event that, let us say, a mistake was not picked up in the first two years, or that there is a part of the award which is only now being tested because, until it came into dispute, nobody realised that there was some ambivalence about the potential interpretation of it?

Mr Platt —There is a mechanism for ambiguity.

Senator ABETZ —In fact, I think I used the word ‘ambivalence’; I meant ‘ambiguity’. Thank you.

Mr Platt —There is a mechanism for resolving ambiguities in the act, so I think that will be okay. There is also a provision in the act which, essentially, allows for a review if it is undermining the principles of having a safety net and the like, which I think would cover the sorts of circumstances you are thinking about in the longer term. Again, I think the system needs to be stable, and the problem is that if you have too many doors open then people from both sides of the fence will be using them, perhaps for a purpose for which they were not designed. I personally think that these initial issues should be resolved, certainly within a two-year time period. All I am saying is that you should not have to wait two years before you can address them.

Senator ABETZ —So in relation to other general issues you are satisfied with the framework of the legislation, you are just concerned that in that initial two-year period drafting things is always fraught with dangers and there are unintended consequences that might need to be addressed on an urgent basis.

Mr Platt —That is correct.

CHAIR —My understanding of the two-year review was a review of the whole award and its operation. I did not read that that necessarily excludes dealing with any unintended consequences that could be done independently. I thought you alluded to some of those examples too. I am not quite sure what you say the problem will be.

Mr Platt —What I say the problem is is that you should not have to wait for two years to fix any unintended consequences.

CHAIR —But do you have to? The two years is a review of the whole of the operation of the award, but there are mechanisms in place that deal with—

Mr Platt —You have got your ambiguity mechanism and you have got a mechanism that is just undermining the entire system. What I am concerned about is that the clause may not be ambiguous at all. It might be crystal clear, it just might be wrong. Alternatively, we have not put a classification in where it should have been in. They are matters that will not be resolved through fixing ambiguities or mistakes.

CHAIR —And you say there is no other mechanism to deal with these issues.

Mr Platt —There is no other mechanism that I am aware of. I do not have a problem with the interim two-year review, but what I am suggesting is that there ought to be a mechanism to come back to Fair Work Australia where there is a provision in a modern award that is detrimental and it is an unintended consequence.

CHAIR —So it is both. I do not think we want to open up a system where people simply do not like what has happened, because there are going to be the swings and roundabouts of that across the board and what you may like someone else may not like.

Mr Platt —That is right.

CHAIR —But if it is clearly unintended or there is clearly an omission, I would have thought there are other normal processes of the commission.

Mr Platt —I do not think they are in the bill.

CHAIR —So it is clearly about unintended consequences, not people just coming back for a second bite of the cherry in submissions.

Mr Platt —That is correct. It is about unintended consequences, and we try to be clear about that.

Senator ABETZ —Chair, for what it is worth, I have scrawled down a note that I think that is a good question for the department tomorrow. They might be able to show us a clause in the legislation that overcomes Mr Platt’s concerns.

Senator JACINTA COLLINS —This is partly my concern too, because my understanding of the ambiguity provision, as we are calling it now, in the act is that it is broader than simply ambiguity. I wonder if Mr Platt has looked at that and is absolutely convinced that it does not pick up the sorts of things such as an oversight in terms of an extra classification. My impression from the previous inquiry is that it would.

Mr Platt —My concern is that something might not be ambiguous at all; it might be crystal clear but has been written in a way that it has not foreseen something and there is an unintended consequence. I am concerned that the provision to address ambiguities may not be sufficient.

Senator JACINTA COLLINS —I understand that aspect of the problem, but my understanding of what we are calling the ambiguity provision is that it covered more than just ambiguity. Have you looked at it to be clear in your own mind that it definitely does not cover the sorts of circumstances that you are referring to?

Mr Platt —I had that provision in mind at the time that we wrote the submission and so my concern went to things that could not be addressed using those provisions.

CHAIR —Senator Abetz, are you close to winding up?

Senator ABETZ —No, I could go on for the same time, so just wind me up when you think I have had my fair share of time.

CHAIR —I am just wondering whether Senator Humphries and Senator Back have questions.

Senator BACK —I have one but I can defer to others.

CHAIR —Go ahead.

Senator BACK —I want to draw attention to paragraph 2.4 in your submission where you give us a very quick overview of the number of projects that are out there. My concern of course—as I am sure everybody else’s is—is in relation to jobs and job security into the future. The figures you present are very impressive but written on 9 April they do not include the potential now that has been opened up in the Browse Basin as a result of the decision of Aboriginal elders and others in relation to James Price Point. Can you give us a quick summary of where you think the real point is going to be where companies will either downsize or not or embrace new projects as a result of concerns with the legislation going forward? Is there one area that you believe is likely to be an area you should draw to our attention?

Mr Platt —Our members are very concerned about the increased level of union powers in the Fair Work Act. Obviously, that act is not for debate here. They are very concerned about the impact of the ETS. The information that I have is that the ETS could have as big an impact on jobs as the global financial crisis has. People are calling it potentially the double whammy. In relation to future expansion every mining operation that I know is running the ruler over every cost. Most of the expansions have been delayed. Everyone is looking to see what is happening in the future. I am no more informed than you or the government about what is going to happen in terms of Australia’s economic future and when it is going to turn around. We are concerned to try and ensure that the Fair Work Act, these transitional provisions and the regulations that will follow do not hinder our capacity to employ people and to operate in the same productive manner that we have done. At the managerial and executive salary levels there is basically an unofficial freeze on across our industry. They are the things that we are doing, but I cannot give you any definite answer as to when it is going to end.

Senator JACINTA COLLINS —On the issue you covered in relation to take-home pay orders and employer equivalents, so to speak, I went back to page 38 of your submission. You indicate there that AMMA thinks the 12-month time limit is appropriate and thinks the limits on take-home pay orders are appropriate, but you do not canvass limits on the proposed employer’s capacity to deal with an increase in costs. I am curious as to whether any thought has been given as to how you might build fences around an employer’s proposed capacity to argue before the commission that they have had an increase in their employment costs.

Mr Platt —Insofar as there would be any time limits in relation to employee take-home orders in my view the same time limits would apply to employers in relation to application of increased costs. What we were trying to say in our submission is that it is not as if there has not been a balancing exercise here. If the commission were considering making a take-home pay order, one of the things that it ought to consider is also the impact of additional costs on the employer’s business. There are two competing influences in the award modernisation process. The similar influences were in the previous legislation’s process and, in our view, the legislation of take-home pay orders only covers half the equation.

Senator JACINTA COLLINS —I understand that, but if anything I am trying to get one level beyond what you were just talking about here and what you have covered in the submission which is the design of issues around take-home pay orders has quite deliberately limited the disadvantage that an employee may suffer to issues around whether it affects their take-home pay. For instance, some of the organisations who have submitted to us have suggested that there is a range of other detriments that employees may suffer that are not captured in that definition of take-home pay.

On the employer side, you have simply suggested increasing costs. You have talked to us today and in your submission about increased costs associated with, for instance, the global financial crisis and other issues. But I take your comments here to mean increases in employment costs.

Mr Platt —As a result of the award modernisation process.

Senator JACINTA COLLINS —Okay, that is one fence. But I am asking whether you have given any thought to any other appropriate fences in much the same light as has obviously been applied in relation to increases in disadvantage that employees may suffer through the award modernisation process. We are obviously not saying any disadvantage is something that an employee—

Mr Platt —I would be happy to come back to the committee with a method of putting into practice the protection in relation to increased costs for employers. If the committee is minded to consider that, I am happy to come back with another couple of pages with a bit more detail on how we would see orders operating in relation to increased costs for employers. I am happy to do that for you.

Senator JACINTA COLLINS —I obviously cannot speak for other senators here. But what I am saying—which I think is fairly obvious when you are suggesting such things here—is that, as were discussing in relation to some of the other provisions a moment ago, the scope is so wide as to be unmanageable by the commission as it is currently framed.

Mr Platt —The modern award system does impose some increased costs. In our sector, the casual loading has gone from 20 per cent to 25 per cent. Access to 12-hour shifts as a right in ordinary time has been removed, which imposes an additional cost on employers. The ability to incorporate annual leave on the roster is still a bit of a moot point, because of the changes in the award modernisation request. That is an area that may well result in increased costs. I still see a mechanism where the employer would go to Fair Work Australia and say, ‘The modern award that you have made has the effect of increasing costs in our business, and we seek some relief.’

Senator JACINTA COLLINS —So you are imagining that the commission would ‘balance the gains’, so to speak, for a particular employer to? You cite, for instance, the casual loading. In some areas there have been enormous gains for employers in adjustments to the casual loading. Are you suggesting that the commission’s role would be to balance where there have been gains to their overall employment costs, as opposed to where they have been given more flexibility, and do some balancing exercise?

Mr Platt —I would not oppose such a view. Obviously we are operating without one piece of the jigsaw in the sense that the commission has not yet dealt with the transitional provisions. I think DEEWR has put in a submission on behalf of the government saying that everything should have a five-year transitional period before it is introduced. So, in that sense, we do not know what the transitional provisions are. But certainly in respect of our industry we do not have a problem with treating this as a global exercise—in the same way we would say that, if the NES is introduced into agreements predating Forward with fairness, that also ought to be a global exercise, not a line-by-line test.

Senator JACINTA COLLINS —The difficulty, though, with the comparison you are making to take-home pay orders are fairly quick assessments that the commission is able to do far more easily than a global assessment of an employer’s gains and losses in terms of their employment costs. On the face of it, it looks like, ‘Yes, we want a comparable balance,’ but once you start exploring how this might even be applied it becomes very different for the reason you have just mentioned—that is, we are looking at a five-year phase-in period. It is easy to look at an individual employee and whether they have had a loss of take-home pay, but it is a far more difficult and complex exercise to look at whether an employer has had a gain in their overall employment costs.

Mr Platt —I do not say that the exercise will be easy. It is certainly something that will not be able to reduced to an Excel spreadsheet, and we have a lot of experienced members in the commission who are used to putting square pegs in round holes. But you need a mechanism. There may well be an employer who has some employees who are saying, ‘I have suffered a loss in take-home pay’, and they are saying: ‘You may have, but I am now paying all my casuals 25 per cent instead of 20 per cent. I cannot average my hours over a year anymore because I am in the agricultural sector. I have got to average them over a week, and that means that I cannot use the quiet times to overcome the peak times’. There are a lot of different circumstances, but I think that there ought to be a mechanism for the employer to be able to argue their case in relation to their half of the commitment that was given in the award modernisation request. At the moment, that does not exist.

Senator JACINTA COLLINS —No, for some of the reasons we have just been discussing. So I would be interested to hear how you could imagine such a mechanism might be applied, because I think this is the closest we have come to any discussion even about how that could occur, and I see some serious problems as to how it could.

CHAIR —We are happy to receive any further information you might wish to provide. But we are reporting on 7 May and will of course start drafting the report tomorrow afternoon, so the sooner the better.

Senator HUMPHRIES —Following up on Senator Abetz’s question about plain English union rules, what exactly is the harm that you want to remedy by making those rules easier to understand? I assume they are not things that most people would read unless they had a purpose to do so. Are you suggesting that there is a problem that needs to be fixed?

Mr Platt —Employers will be having to make decisions as to whether or not to allow unions on the site. Their positions in relation to a union application will become covered by an agreement, a majority support order or a scope order. These are all based on a union’s eligibility rules. People just do not know. HR people do not know, never mind a security guard on a gate who has a union official there who says they are entitled to enter the site. All you need to do is go and have a look at the union rules—take, for example, the CFMEU rules—and I suggest that will make my case out for me. People do not know that the CFMEU’s access to sites in the mining industry is based on the old FEDFA coverage, which covers winder drivers and excavators. They do not know that. So there ought to be a mechanism available to do it. Surely, if we are about making a fair system, part of that is making a system that can be understood by the people who this is written for. It is not me; it is workers and employers, not all of whom have IR professionals and lawyers at their fingertips.

Senator HUMPHRIES —There is a benefit for union members of that particular union as well?

Mr Platt —I think there would be. If someone is being approached by a union, surely they ought to be able to work out whether that union can validly cover them—and it would not be the first time that the unions have gone in and enrolled people that they could never cover. That is a bit like paying money and you are not entitled to anything.

CHAIR —Thank you for your submission and your presentation to the committee today.

Mr Platt —Thank you.

[9.48 am]