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Fair Work (Transitional Provisions and Consequential Amendments) Bill 2009

CHAIR —I welcome to the inquiry witnesses from the CFMEU. We have received your submission. Do you have any additions or alterations to make?

Mr Noonan —There are just a couple of comments we would like to make in addition. I will make a few opening remarks and then allow Mr Roberts to expand on those. First of all, I thank the committee for the opportunity to make these remarks here today. Our submission outlines two major areas of concern that we have over the bill. The third issue we seek to address arises from oral submissions given to the committee by the Master Builders Association at one of the preceding hearings. We would like to address the issue of the continued operation of Australian workplace agreements and ITEAs, where we believe the situation arises that many workers will be locked into what are substandard employment arrangements for years to come—the very arrangements which were rejected by the Australian people at the last election. In some cases this has and will continue to have the effect of resulting in inequality and injustice in one workplace where we see workers engaged under AWAs and/or ITEAs on substantially lesser wages and conditions than their colleagues. It is our submission that this perpetuates an unfair situation for those people in those workplaces. Our submission contains a number of confidential statements from employees who are in precisely that situation.

Senator ABETZ —For the record, they do not seem to have been included in the submission that we were provided by the secretariat. It is not your fault, but as a result as committee members we have not had the opportunity to go through them. Apologies for that, but hopefully they are being brought up.

Mr Noonan —We are at some disadvantage, then. They are not a large volume of material, and I think members of the committee would be able to familiarise themselves with those documents relatively quickly. It is unfortunate that that has occurred. The second issue that we would like to raise is concern over the provisions concerning representation orders. In addressing that we say that we believe that, subject to the union concerned having eligibility to enrol a classification or class of workers in question, those workers should have the right to be represented by the union of their choice, and this is fundamentally a matter for the workers concerned, not one of union shopping by employers, which is something that we are concerned about.

The other matter, which I just raise briefly in speaking to the third issue that I raised, is the oral evidence given by the Master Builders Association in a previous hearing. Essentially, MBA addressed the committee about concerns they had in respect of the redundancy provisions that exist in the building and construction industry. The comments either misunderstand or misrepresent this issue. The committee should really put little or no weight on that part of MBA submissions. If any member of the committee would like to have further discussion we are happy to expand on that but, in essence, the Master Builders Association appear to believe that a particular award provision existing in the building and construction industry and relating to severance and redundancy was extinguished by the operation of Work Choices.

In fact, the provision remained in the construction awards throughout the period of time that Work Choices existed. As we best understand it, the Master Builders’ position is that the provision became not allowable as a result of the operation of Work Choices. That is a matter of dispute, and it is a matter that I think, as MBA said, is in contention in the courts at the moment. There is a lower court decision which is on appeal to the full court of the Federal Court in relation to that. We just make this observation: if the Master Builders had the view that particular provision did not operate then they had the ability to make application to the commission during the period of the operation of Work Choices to have it removed from the award and therefore end all doubt about the issue. But they elected not to do so, rather seeking to argue a question of allowability after the event. We do not concede that argument. We simply make the point that at no stage did the Master Builders ever make application to have the award varied to reflect their particular view of the applicability or otherwise of that provision. I will hand over to Mr Roberts for any further comments.

Mr Roberts —I will pick up on the point that Mr Noonan last made and add to that. It seems to us that the MBA expressed concern about the interaction of the recent full bench decision in relation to award modernisation in the construction industry and the decision that the bench came to in respect of redundancy in the new modern award. The effect of the Work Choices amendments and some litigation in relation to those amendments are currently a matter reserved before a full bench of the Federal Court.

As we apprehend the MBA submission, their concern was that if the unions or the employees succeeded in their argument before the Federal Court the entitlement concerned could be properly characterised as an incentive based payment or a bonus, as opposed to a redundancy payment. If that argument succeeded then some double counting would be possible, because that payment might arise as an incentive based payment or bonus and as a redundancy payment under the new safety net arrangements.

If that is the MBA’s position, we say that the argument is misconceived because the Federal Court is considering exclusively the effect of the Work Choices amendments on the redundancy and severance provisions as they existed in the national construction award during the period of the Work Choices legislation. Once the present act is repealed and is replaced by the new safety net—which will be the NES and the new modern award—the question of the effect of the workplace amendments on the redundancy provisions in the award as it was simply will not arise. So, to the extent that the MBA expressed that concern about a possible double counting, we say it is simply a non-issue.

Can I also briefly raise a second issue alluded to by Mr Noonan and supplement our written submission, again, on the redundancy issue and prompted in part by the submissions that the Master Builders made on this point. I refer the committee to item 5 of schedule 4 of the bill, which deals with the question of whether previous service counts for NES entitlements. As it is currently framed, the bill provides that the general rule is that previous service with an employer does count for NES purposes provided there is no double counting involved in claiming NES type entitlements. However, there is a special rule in relation to redundancy entitlements, which is set out at clause 5(4), and that provision says that, in the case of redundancy entitlements, if the instrument which covers the employment of a person did not provide for a redundancy entitlement as at the Fair Work safety net provision’s commencement day—that is, 1 January next year—then previous service with that employer does not count for the purposes of determining redundancy entitlements.

This is an issue that is dealt with in the ACTU’s submission but on a slightly different point. The ACTU submission, however, notes that the rationale for that particular treatment of service for redundancy pay purposes appears to be that if an instrument, in particular an AWA or ITEA, has covered the issue of redundancy by cashing up other benefits and removing a specific redundancy benefit then of course their national employment redundancy standard should not apply in that situation. However, if the Master Builders Association are found to be correct in the Federal Court about the effect of the Work Choices amendments on the severance and redundancy provisions in the National Building and Construction Industry Award then the effect of this part of the bill will be that lengthy periods of service both pre Work Choices and during the currency of the Work Choices provisions will not count at all for redundancy purposes in the construction industry. That will have the effect of potentially denying someone with lengthy periods of service—say, 10 years of service—who, come 1 January next year, will be entitled to the redundancy provisions as they have stood since 1989 from receiving a redundancy benefit based on any of that pre Forward with Fairness period of service.

In our view, there is a serious deficiency in the bill involved in that blanket exclusion set out at clause 5(4) and we would ask that the committee give some serious consideration to rectifying that potential problem so that people are not disadvantaged, particularly given that the full bench of the Australian Industrial Relations Commission have now determined the shape of redundancy provisions in the new safety net in the new modern construction industry award. Thank you.

CHAIR —The committee now have the worker statements, though we probably have not had much time to read them.

Senator JACINTA COLLINS —The document we have is stamped ‘confidential’—is that the situation?

Mr Noonan —Yes, it has been provided on that basis.

Senator JACINTA COLLINS —That is why it has not been circulated in the book.

Mr Noonan —Okay.

Senator ABETZ —Are these worker statements the ones that Sharan Burrow referred to in an interview?

Mr Noonan —They may be.

Senator ABETZ —Or has there been discussion between you guys and the ACTU? What I am referring to is this. I have received a letter suggesting that, on Sunday, 26 April, in an article entitled ‘Workers unable to escape AWAs’ published in the Sunday Age, ACTU President Ms Sharan Burrow was reported as saying that she may give evidence in relation to two employees of Austral Bricks. I understand that these two employees were actually named in the article. I do not think their names actually appear on the statements that we have been provided with. But they are from the same employer—namely, Austral Bricks.

Mr Noonan —Yes, I think that is probably correct. I have not discussed the issue with Ms Burrow, but I understand that our branch secretary may have and I think Mr Roberts may have had discussions with the ACTU.

Senator ABETZ —We just have to be careful that, if there is an issue of confidentiality, we do not provide too much identification, other than to say, just for the record, that this letter that I received says that the two employees mentioned are paid a higher hourly rate under the AWA than they would have been paid under the collective agreement and would not have earned more for the hours they have worked had they been engaged under the EBA, despite any claims to the contrary. As with so many of these things, there seem to be two sides to the argument. But thank you for that.

Mr Noonan —If it is of assistance, considerable work has been done by our branch on the very question of that relative disadvantage, and we would be able to provide further information on that if necessary.

Senator ABETZ —The difficulty is that we are dealing with assertions made in confidence. It is somewhat strange that we are given these assertions in confidence but Ms Burrow seems to have been able to talk about two examples publicly in the Sunday Age, which means that one side of the argument can be aired quite easily but those of us who might want to hear both sides of the argument are somewhat constrained. But, at the end of the day, I think the issue is that we, as a Senate, need to be careful to ensure that people are not disadvantaged in the way that is being asserted, and then whether that is a real disadvantage or not is a matter that can remain on the sideline.

Mr Roberts —To respond to that, I think that the material that was sent with the submission that you have now received was sent in confidence in the sense that the employees concerned did not want to be identified. I do not think there is any confidentiality attached to the assertions that they make about whether they are or are not disadvantaged. And, if that is the case, as Mr Noonan said we are happy to provide the committee with a more comprehensive and detailed analysis to deal with the issue of whether there is disadvantage in substance.

Senator ABETZ —The first statement I have got is from a person who asserts, for example, that, ‘The terms of my AWA are inferior to the benefits provided to other workers on a particular site’—and I will not even name the site because that may identify him. Unless we are able to actually get to see the AWA—and of course there are confidentiality requirements—and able to name that person and put the allegations to Austral Bricks then we cannot get the full story. That is one of the difficulties that we as a committee face. That is the only point I suppose I am making.

Mr Noonan —It is also the case that, based on the article—and I have not discussed this with Ms Burrow or with our branch secretary—there are other individuals who have identified themselves who are not subject to confidentiality; hence the Sunday Age article.

Senator ABETZ —But the two in the Sunday Age—who have been named, unless I am mistaken—have not supplied a statement to the committee. And the only evidence that we can really deal with as a committee is that which is placed before us. For the people who were mentioned in the article—and I will not name them—we could pick up the phone to Austral Bricks and say, ‘What is your side of the story?’ But these people want to remain confidential—and we respect that—so we cannot pick up the phone to Austral Bricks and say, ‘This is what they are asserting; what is your answer?’ If they cannot explain it then I think you guys have an argument; if they can explain it then the argument may not be as strong. So that is all I am saying: that we are unable to really dig deeper to verify the assertions contained in those statements because of their understandable request for confidentiality and the fact that AWAs have confidentiality attached to them.

I would like to quickly ask you about representation orders. Do you agree with the proposition that there is a culture of enmity between some unions?

Mr Noonan —No, I do not agree with that proposition. People may characterise it that way. But I have heard characterisations of enmity between members of various political parties—in caucus and so on—and I do not know if there is enmity between those people.

Senator ABETZ —It is just that it is raised as a genuine issue in Ms Gillard’s explanatory memorandum to the parliament in relation to the issue of representation orders.

Mr Noonan —This was in relation to—

Senator ABETZ —Spokey Dokes.

Mr Noonan —I cannot claim any particular knowledge about Spokey Dokes.

Senator ABETZ —Ms Gillard, with her excellent union credentials, having provided us with this explanatory memorandum, I would have thought would have been full bottle on this when she said that, aware that there is a longstanding enmity between two particular unions, an employer might seek an order. So I doubt that Ms Gillard would have just pulled something out of thin air as a non-live real possible example. But you are telling us that that is possibly what she has done. Do you agree with the proposition that an employer should be entitled to go to Fair Work Australia and say, ‘There is potential for a dispute and we would like it resolved before it blows up’?

Mr Noonan —We think there may well be a role for Fair Work Australia in assisting with the resolution of any such disputes that might arise from time to time.

Senator ABETZ —By way of actual orders?

Mr Noonan —If I could just finish—I also think there is a very real role for the peak body of the trade union movement to play in assisting the resolution of those disputes. Our particular concern—

Senator ABETZ —And they will be allowed to make submissions?

Mr Noonan —Yes. Our particular concern would go to a situation where employers, for instance, were able to, if you like, union shop and pre-emptively try and make decisions which would then be imposed on employees who are eligible to be members and are members and wish to be represented by a union other than the one the employer chooses. It seems to us that the primary question of union representation ought to be one for the employees, subject to the eligibility rules of the organisation.

In relation to your question about the desirability of Fair Work Australia making orders, I might just defer to my colleague Mr Roberts and ask him to address a couple of those issues.

Mr Roberts —The act already provides for the commission to have the capacity to make orders in circumstances where those types of issues arise. The act has provided for that capacity for many years.

Senator ABETZ —Can I interrupt you there. The suggestion has been put to us that, for many years, the capacity in the legislation has said not only ‘where there is a dispute’ but also ‘where there is a threatened, pending or probable dispute’ and that that should be imported into this legislation is well. That was a proposition put to us by, I think, Professor Stewart. So I am just trying to sound out the CFMEU in relation to their approach to this.

Mr Roberts —What you have said is correct. The act does currently provide the capacity for the commission to make orders in circumstances where there is an impending damage to the operations of the employer.

Senator ABETZ —And you are happy for that to continue, or you would be agreeable to that continuing?

Mr Roberts —As I understand, that is not part of the debate that we are having about this bill. The existing provisions in the act, which are currently in schedule 1, will remain, but the proposition is that there will be this additional capacity for representation orders to be made in accordance with 137Aa of the bill.

Senator ABETZ —What has been put to us is that as the bill stands the new power can only be exercised in relation to a dispute, and the suggestion is that that should be broadened out to include that phrase ‘threatened, in pending or probable dispute’.

Mr Noonan —And I think our understanding is that the new power in respect of representation orders would be in addition to, not in replacement of, the existing provision, nor would it be used to read it down, as I would understand it. Perhaps that addresses your concern.

Senator ABETZ —All right. In your submission you tell us in the middle of the third page that it is fundamentally contrary to the freedom of association principles. Just so I can get an understanding of the CFMEU’s understanding of freedom of association principles, does that mean that the CFMEU itself acknowledges the absolute right of somebody to decide to join and indeed not join a particular union?

Mr Noonan —The CFMEU strongly supports the International Labour Organisation’s definition of freedom of association, which deals with the rights of employees in respect of union membership and representation.

Senator ABETZ —What does that mean? Does it mean that an employee has the absolute right to decide not to join a union?

Mr Noonan —The ILO provisions talk about, in my understanding, and Mr Roberts is more of an expert in this than me, the right to join and be represented by a union. They are the fundamental provisions of the ILO convention, which has been ratified by this nation and we say should be observed.

Senator ABETZ —That is right. And part of that history is where regimes have disallowed trade unions, and it is appropriate that in this modern world we say people ought be entitled and have a right to join a union. What I am exploring with you, in a country where people do have a right to join a union such as in Australia, should they also have a right not to join a union?

Mr Noonan —Could I just comment that we welcome the fact that you endorse that, because the ILO has in fact found that the legislation enacted by the previous government contravenes that provision and has found so on six occasions. If there is now a recognition that we need to come into conformity with that ILO convention, we would be very happy about that. As a matter of law in this country, people cannot be forced to join a union. We accept the law of this country in relation to that.

Senator ABETZ —Do you accept that that is a good law?

Mr Noonan —Whether I accept it is a good law or not, I do not accept that the laws as they are currently framed in respect of the Work Choices regime and the building industry legislation are good laws at all. I think it is notable that the committees on freedom of association and the committee of experts at the International Labour Organisation, who are charged with interpreting and advising governments on the implementation of ILO conventions, have said on I think now six occasions that the Work Choices provisions and the Building and Construction Industry Improvement Act ARE flagrantly in breach of ILO conventions. This points to the fact that domestic law as it stands is deficient and is contrary to Australia’s international obligations. We are forced to accept that the domestic law applies and applies to us as it applies to everyone in society. As to the desirability of that law, we think it is very clear that on six occasions now the domestic laws of Australia have been found by the relevant body to be in conflict with the ILO convention. If you are saying, as I think I heard you say, that it is now accepted by your party that we should be complying with ILO conventions, then we welcome it.

Senator ABETZ —I note that you said ‘forced to accept’ the law, which would indicate a degree of reluctance. Those that might have more than enough time to read Hansard will note that that long explanation and referral back to Work Choices et cetera was all started by a fairly fundamental proposition as to whether or not the CFMEU accepted the right of workers not to join a union. Methinks that the answer indicates what the real stance is and that might explain certain activities on worksites by the CFMEU.

Mr Noonan —Perhaps it will be of assistance if I can clear the matter up. We accept that the law cannot require us to have an individual join the union. We accept that is the law. We accept that we are subject to that law. What I went on to say at some length, as you indicated, in my reply is that that law in itself has been found to be fundamentally contrary to international law and to the International Labour Organisation conventions which Australia has freely ratified.

Senator ABETZ —And which Ms Gillard herself has accepted, has she not, that Australian workers should be free not to join a union should they so choose.

Mr Noonan —I think that is absolutely correct in terms of Ms Gillard’s position.

Senator ABETZ —Ms Gillard and the Labor Party.

Mr Noonan —Yes.

Senator ABETZ —I notice with great interest on page 2 the CFMEU’s concern that these provisions will generate disagreement and litigation rather than reduce or resolve it. Can I welcome this newfound concerned by elements in the CFMEU to try to lessen disagreements and litigation and matters of that nature. I would encourage you, Mr Noonan, to use whatever powers you have to undertake that at the Westgate Bridge. That would be very helpful, I think, for a lot of people.

Mr Noonan —Can I say to you, Senator, that the Westgate Bridge dispute, which I also read was the subject of some discussion the other day, was characterised by the Master Builders Association as a demarcation dispute. Firstly, it is very clear that it is not a demarcation dispute. That has been stated not only by my union but also by the secretary of the Australian Workers Union, which is supposedly the other part of a demarcation dispute. That is a very difficult and intractable dispute with senior officers of my union are trying very hard to resolve today. It results from the dismissal of over 30 workers for refusing to accept the unilateral imposition of conditions by their employer. That is the subject there and that has led to that dispute, and the intractability and difficulty of that dispute is notable because it has occurred under the existing laws. And I think that the Master Builders—

Senator ABETZ —And you know nothing about the community protest in relation to the picket nor anything about the brick that went through the window of the home of the VicRoads supervisor.

Mr Noonan —I know this: I know that I have read of that reported in the newspaper and I absolutely condemn that sort of behaviour, whoever has undertaken that behaviour. I understand that the Victoria Police are investigating that incident and I would encourage them to do so and I would hope that they bring to justice whoever committed that act, whoever it may be.

Senator ABETZ —What about urinating around the work offices of John Holland at the worksite? You know nothing about that by union officials?

Mr Noonan —No, I tend to use the facilities that are available, Senator.

Senator ABETZ —I am not talking about you personally but officials that carry—you are not aware of that? It was reported in the media.

Mr Noonan —It was reported in the media that someone urinated—

Senator ABETZ —That is where I got to hear about it. Do not pretend that you do not know about it, please.

Mr Noonan —Of course I read it.

CHAIR —The role this committee is not to be examining a dispute that I understand is before the commission. It was raised by the Master Builders and I think you have put an alternate point of view, and I think Senator Abetz has made the point earlier that often matters of this are disputed when one party puts things together. It is not our role to examine this dispute, so I think we should leave that matter alone.

Senator ABETZ —Their desire to limit disagreement, litigation and unhappiness at the workplace, as indicated in the submission, is a welcome invitation; I just wish it could find expression at work sites around Australia.

CHAIR —Inevitably, it takes two, at least, to have a dispute.

Senator ABETZ —Well, the CFMEU always seems to be at the forefront. That is my only observation.

Senator FISHER —We could have three if I opened my mouth.

CHAIR —Thank you for that invitation, Senator Fisher, which I will not take up.

Senator JACINTA COLLINS —I just want to revisit this Austral Bricks case and take up your offer to provide us with further information. On the face of it, in the press reports that I have seen, it appears to me that there must be some fairly straightforward, verifiable way of demonstrating the case. Is there an individual who is prepared to furnish details that do not need to remain confidential and that will demonstrate the AWA, as opposed to the pertinent instrument, as opposed to what their roster is, so that you can do a straightforward calculation? If you could provide us with that type of information I think it would be helpful in resolving what is being aired as claim and counterclaim, because at this point we do not have the material to satisfy us.

Mr Roberts —We will take that on notice. I think it is likely that there will be an individual or individuals who would be prepared to provide the details of their AWA and the details of their working arrangements. We can supplement that with an analysis and we can take the matter from there.

Senator ABETZ —That would be of interest to me as well—if you could provide somebody that might be willing to identify themselves and who we could potentially talk to, and then we could get Austral Bricks’s view as well. The allegation is that they have inferior terms. The claim is, ‘I don’t receive overtime penalty rates.’ The assertion of Austral Bricks is, ‘Yes, that’s right, because they get paid a substantially higher hourly rate for all work undertaken.’ From the information that is before us, from both the workers and Austral Bricks, we cannot tell how that pans out at the end of the day in the take-home amount. So it would be very helpful if you could provide that information.

Mr Noonan —We are optimistic that we can provide that on notice.

CHAIR —I am just wondering why workers would seek to have these agreements terminated if in fact they were better than the overall instrument. One would naturally assume that, if you are seeking to be covered by the instrument that applies at the workplace, you would only want to do so if it was in fact better not if it was worse. But that is just an observation.

Mr Noonan —My understanding is that the position of the company was that they had the power to hold the workers to those contracts regardless of the workers’ wishes—

CHAIR —And that is the whole purpose of raising this in your submission.

Mr Noonan —and that they propose to do exactly that.

CHAIR —Indeed.

Senator FISHER —The ministerial directive talks about the award modernisation process not disadvantaging employees, and the bill contains the take-home pay provisions. Are there any ways an employee could be disadvantaged in your industry by the award modernisation process that will not be addressed by the take-home pay provisions if they become law?

Mr Noonan —It is a very difficult question. I might ask Mr Roberts.

Mr Roberts —I cannot think of any circumstances off the top of my head. I can take that on notice as well and come back to you on that.

Senator FISHER —Thank you. So, if your answer comes back essentially as ‘no’, as you have said, then the subsidiary question is: does that mean that, if the take-home pay provisions become law, in your industry no employee will be disadvantaged by the award modernisation process?

Mr Noonan —We would certainly hope that that is the case. We will do some further work and try and get a proper analysis of the question you ask. Mr Roberts will take it on notice and respond.

Senator FISHER —Thank you.

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

Proceedings suspended from 10.35 am to 10.54 am