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Minister discusses industrial relations.

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Hon Kevin Andrews MP

Minister for Employment and Workplace Relations Minister Assisting the Prime Minister for the Public Service 19 April, 2006


Kevin Andrews, Minister for Workplace Relations + Callers with Matthew Abraham & David Bevan - ABC 891

New Industrial Relations Laws


Kevin Andrews, Workplace Relations Minister, welcome to the studio.


Thank you very much.


You might just be interested in listening to the views of some of the people that Tim Noonan has spoken to this

morning… our roving reporter…


… I must say the most salient point about talking to people about this issue… is the number of people that just do not

seem to care, they feel it doesn’t affect them at all or doesn’t affect those that are near and dear to them and then…

you come across somebody for whom the affects seem to be immediate and dramatic. We’ve got a fairly balanced set

of respondents here…


I think at some stage or other, Australia has become competitive on a worldwide basis with all the globalisation

that’s occurring… I tend to think that perhaps over the past 30 years the unions may have forced wages up which has

made us… a little bit uncompetitive on a world basis.


I think that the permanent positions are disappearing from the university system and they’re replaced by short-term

and casual positions mostly… and moreover people who work for a long time there are going and the university are

taking people who are not experienced who fall into the university environment.


I think the real sting in the tail is yet to come. I think they’ve only just seen the very, very start of it… it’s a very touch

legislation… it’s going to make it very difficult for employers in many ways as well as employees.


… the sting in the tale is for employers or employees who are in a weak bargaining position or depends how the

economy is going.


Employees who are in a weak bargaining position depends on how the economy goes but there’s no safeguards any

more. People are going to realise that as time goes on that they’re going to face a very difficult future.


Kevin Andrews… are we seeing the Govt on its best behaviour at the moment and even so we’re seeing some

employers on their worst behaviour.


There are good and bad employers and good and bad employees. There always has been, unfortunately there always

will be. The question for us is how do you design legislation that’s going to meet the challenges of Australia’s future

and that’s essentially what Work Choices is about, it’s about looking at the ageing of the population in this country

and the need to try and attract more people into the workforce. That’s looking at the competitive world in which we

live and the fact that no other country owes us a living. We have to be flexible and productive if we want to stay in

the lifestyle and the standard of living that Australians enjoy today.


There’s a pamphlet circulating in the western suburbs that’s put out by Steve Georganas, the Federal Member for

Hindmarsh and it raises a number of concerns about the IR bill so a lot of our listeners in the western suburbs would

be getting this material. Is it correct that under the new system any employee can be sacked for “operational

reasons” and what are operational reasons?


The concept of operational reasons is not new. It actually has its basis in an ILO, International Labour Organisation

convention. It’s been part of domestic law in Australia for some considerable period of time but let me take a

practical example that people of Adelaide would know. Mitsubishi went through a restructure. They closed some of

their plants - that was an operational reason. It wasn’t because they just had a whim that they were going to shut

down or wanted to sack people or anything like that, it was an operational reason. Now that sort of reason is being

well understood for a long time and it’s not knew in the law.


So there’s nothing new?


There’s a new definition in the way in which it is expressed in the legislation.


What does that mean?


Well, what it says is that operational reasons can include, for example, a technological change which occurs so again

taking the car industry as an example, if you look back over the last 20 or 30 years and the way in which cars are

produced today is vastly different to the way in which they were produced some 20 years ago. Now, over a period of

time you have introduction of changes, you have robots building cars in factories now which we didn’t have…


[intercepts] Would it mean that you wouldn’t have to give them a redundancy payment?


No, it doesn’t affect their redundancy pay. Redundancy arises from an agreement. The agreement is either in the

award, which is a broad generalised agreement which affects those parties who are subject to the award or the

redundancy arises most commonly these days from the actual agreement between the parties. Usually, a collective

agreement but can be an individual agreement as well. So, if you’re entitled to a redundancy you’re entitled to a

redundancy. When the Mitsubishi changes occurred those workers received all their redundancy entitlements from

Mitsubishi. Had that no happened and unfortunately sometimes a company does go broke, for example, and doesn’t

have the redundancy provisions there then the Govt has a scheme called Gears which picks up what we regard as a

community standard.


But previously if the boss hired a robot he couldn’t sack you?


No, no, I’m using that as an illustration of changes. If a boss put in a robot, if Holden or Toyota or Mitsubishi or

some other manufacturer, over time decided as they’ve done that robots are going to be able to do work which was

previously done in the past, you know, if you think back to T-Model Fords we’ve come a long way. Now, that’s an

example of where you get change over time. That’s the type of operational reason which arises from time to time but

redundancy should be paid.


If this has already always been there, it’s an international law, it’s covered by existing law, why do you need to put it

in your Work Choices legislation? Why do we need legislation? What’s the agenda there? Why do you have to

specify that?


There’s no particular agenda, Matt. What it’s doing is simply picking up provisions that have been in the law. When

you redraft a piece of legislation like this what we’ve tried to do is to pick up existing provisions that existed in the

Workplace Relations Act from 1996 which in turn picked up things which it existed prior to that as well as bringing

in new changes we want to make but the whole concept of an operational reason is not something novel to the law.


What if the boss doesn’t like you? If the boss doesn’t like you… that is a reason is it now… in the Act and I’m sure

you don’t use that language but for them to sack you?


Well, let me explain what the legislation provides. It provides two ways in which people can bring an action if they’re

then terminated in circumstances which they don’t agree. One is an unlawful termination. That is, if you’re sacked

because of the colour of your skin or the…


[intercepts] Your religion or…


… [unclear] or their religion or because you’ve got a family responsibility that requires you to go and pick up the kids

from school or because you’re a pregnant woman - those sorts of things are discriminatory. If someone says we

want you to go onto an individual agreement and uses some duress to do that - that’s unlawful. It’s always been

unlawful, it remains unlawful, nothing’s changed in that regard. What we have changed though is in relation to

unfair dismissals. This is where somebody says the circumstances of the dismissal was unfair and the change we’ve

made is to say that if you’re a business of employees less than 100 people the unfair dismissal provisions no longer apply but if you’re a business that employs more than 100 people you can still bring an unfair dismissal action and

it’s up to the Industrial Relations Tribunal to determine whether that’s an appropriate action or not.


But is it now fair to dismiss somebody because you don’t like them?


Well, there are circumstances where people simply don’t get on together, they don’t get on with workmates…


[intercepts] ... yeah, so if you’re a pain in the bum to the boss, that boss can sack you?


If it’s a business of less than 100 people then there is no unfair dismissal provision, you can’t do it on unlawful

grounds but if something simply doesn’t work out, which it does from time to time…


[intercepts] I think the answer to Matthews question is yes.


That’s true. There are occasions on which personalities don’t match. There are occasions on which people don’t get

on well with their workmates. I think we all commonly know that.

[ad break]


… Darryl from Windsor Gardens…


… I was disappointed that the Minister was so coy in response to your query about powers available to employers

especially those with under 100 employees to sack them without giving a reason. That is absolutely true. They can

sack them if they don’t like the colour of their hair, they simply don’t give a reason and the legislation doesn’t oblige

them to give them a reason.


Before we go to your question because that’s a statement, Kevin Andrews is that…


Well, let’s look at why we’ve done this, Darryl. You know the situation’s arisen that people could bring unfair

dismissal claims, the reality for business was that they would be paying on average 10 or $15,000 just to get rid of

the problem because of the cost of fighting the claim even if you won the claim, you could still be out of pocket for

thousands of dollars and we simply don’t believe that that’s a good system. There are studies around that show that

those sorts of laws actually cost people jobs, that is that employers won’t employ people because they’re fearful of the

effect of these laws so that’s why we made the change. The 100 was obviously a judgement as to where you draw the

line. We believe that this will help to generate more employment.


Can an employee be fined for suggesting that their agreement should contain an unfair dismissal clause?


In order for a fine to be imposed of that nature there would have to be some degree of knowledge of and recklessness

about what they were doing. If somebody just says to employer, what about having that in the agreement, then

they’re not going to be fined in those circumstances but if a union…


[intercepts] What does the law say because…


… Well, I’m trying to explain in lay terms. If a union goes forward and says, well as part of this negotiation and

knowing full well that the law says this is a prohibited content in an agreement puts it on the table and is arguing for

that, quite contrary to what they know the law is, in those circumstances there are penalties that could apply but just

any ordinary employee says, oh what about this and has no idea of what should or shouldn’t be in it - well, no.


But if I’m negotiating something with my employer, it doesn’t cover people in the ABC because we’re a very large

organisation but say I’m Joe Blow, I’m sitting down with my boss and we’re talking about my next contract, and I say

to him, well actually I wouldn’t mind an unfair dismissal clause?


And he says to you, look, I’m sorry but you can’t have that in agreements it’s prohibited content that’s the end of it.


But what if I say to him, well, look hang on, you know, we’ve known each other for years - we can negotiate about all

these other things.


But the law’s not about dealing with, you know, that degree of triviality if I can put it that way…


[intercepts] Well it’s not trivial to me. I’m sitting there and we’re sorting out an agreement and, and…


I use trivial in the legal sense in that regard I don’t mean it may not be important to the person concerned, I’m

simply saying that in those circumstances there would not be a prosecution. In fact one of the guidelines issued by



[intercepts] But if I push it there would be.


No, one of the guidelines issued by myself to the Office of Workplace Services specifically says that those sorts of

circumstances you can’t prosecute someone.


We come back to though, is the Govt on its best behaviour at the moment? You've got new legislation, you know its

unpopular initially because there's been a scare campaign run against it as well very prominently by the unions,

spending a lot of money on TV ads, very emotional ads, so we know that, in the initial stages you're treading on egg

shells so you're issuing little guidelines here, guidelines there but five years down the track, this will be bedded in,

employers will be comfortable with their powers about what they can and can't do?


Well, there's a range of obligations on employers, I mean we had the well publicised case of the meatworkers at

Cowra in New South Wales, now that was clearly a case in my view where the employer had been misadvised or

misadvised himself about what they range of obligations were under the legislation, one of those obligations is what's

called the freedom of association principles which again to put in simple language, means that if you seek to sack

someone with the purpose of re-employing them on lesser wages and conditions, that offends provisions in the Act, and you can't do it. Now, it was quite clear it seemed to me that when that was pointed out to the employer there he

realised that there were obligations that didn't exist, so the Govt's role I suppose is to be a model party in this, to say

this is the legislation and that parties shouldn't simply believe, some cases I think some of the union propaganda that

says that this is a totally deregulated system, it's far from that.


Is it the obligation of the employer who's laid off or retrenched my daughter a couple of days before Easter to issue

her with a notice that she's been retrenched so that she can at least go down to Centrelink or somewhere like that…


Ah yes, there are provisions in the Act which is about in fact we seek to put a code in the Act in relation to

termination of employment and there are obligations in relation to issuing a notice, and if an employer hasn't done

that, then you ought too go back to that employer, but if they still haven't done it, then I'd advise you to go the Office

of Workplace Services.


I'm puzzled at the relevance of this figure of 100 in respect to unfair dismissal, apart from having two zeros on the

end, if a company of 99 can sack people willy-nilly and a company of 101 must go through the unfair dismissal legislation, what's the reluctance of 100?


John, it's a figure that we chose, it doesn’t have any particular science to it if I can put it that way, it was a judgement

we made about what is small to medium sized business compared to what is a large business, and if you think about

it, a fast-food outlet in a major regional area of South Australia or within suburban Adelaide, quite easily employs

these days - 60,70, 80 people, so we made a judgement that 100 was appropriate mark between the small to

medium business on one hand and a large business on the other, large businesses can employ human resources

managers and have a lot of facilities and resources that small business doesn't have.


They can sack you nicely.


Let's put this in the context of the reality we're in today Matthew, and that is we're facing a workforce shortage in

Australia, we've got an ageing population, one of the consequences of that is that we've got this massive exodus of

the baby-boomers, we baby boomers from the workforce over the next 15 or 20 years, everywhere I go around

Australia, employers say to me - we're trying to hang on to every good employee we've got and we're trying to find

ones that we haven't got at the present time, and that's the reality, and that more than anything will guarantee wages

and conditions for Australians.


I've been an industrial lawyer for 25 odd years, and when I first started in practice the unfair dismissal laws had just

come into place, I'd just ask the Minister whether it's not the case that it’s the young and the vulnerable that are most

exposed by these changes, and I would illustrate that quickly by three examples, again going back to those early days,

all in the retail industry.


Just one would be good.


Young, inexperienced retail staff, one poured half a cup of Coke from the dispenser for herself 'cos it was a hot day,

didn't pay for it, another sold some soggy chips towards the end of the shift to a co-workers for half price - those

sorts of examples, each of those people won their cases and got reinstated - where's the protection for them now?


Well, look at the abuses that occurred in the system Tim, and that's why we I've made changes, you know if

somebody why engages in sexual harassment of a fellow employee is reinstated, somebody repeatedly stealing from

workers reinstated, somebody who is violent towards fellow employees has clearly been reinstated.


Yeah, but they're not the examples that Tim's given you... under your system could somebody be sacked for pouring

out half a cup of Coke from a dispenser at the end of a shift?


It's possible that people could be sacked for a variety of reasons…


… including that?


If it's unlawful… it would depend on the circumstances…


They are the circumstances, Tim says - well, young worker at the end of the shift, hot day, poured out half a cup of

Coke from a dispenser, drank it, got the sack.


Well, I'd be very surprised if any employer would do that, particularly in the circumstances where we're trying to find

employees. If an employer is silly enough to do that…


… somebody did do it.


They're going to find themselves…


… according to Tim, somebody did do it.


They're going to find themselves with a reputation and without a workforce, that's the reality we're facing.


But, according to Tim, somebody did do it and the law at the time said - no , you've got to give that person back their

job. Under this new set of circumstances, that would not be the case.


If the employer employed less than 100 people, it's possible for that to happen, that's true, but let's remember why

we changed this because of a system which was widely abused and cost not only money for employers but effectively

cost jobs.


You're on 891 Mornings, we're talking to the man responsible for bedding down and introducing the Work Choices

legislation, Kevin Andrews.


You mentioned redundancies in terms of operational reasons previously. If a company less than 100 was to sack

someone, would they still receive a redundancy in that situation?


Yes, they would, whatever redundancy provisions operate under an award or an agreement continues to operate.


Let's go to an employer…


Seems to me the Minister's very surprise that if employers did that, seems to be constantly surprised since he

introduced the legislation of what employers will do and my experience is that employers who need the laws that

have been introduced are really people who don't know how to recruit people properly, find out and select the right

person , and performance counsel when there is an issue rather than just sack them willy-nilly and try and hire

another person who often goes through the same process, so I wonder if the Minister's ever hired anybody and really

it's about education employers on how to deal with people in a good human resource manner, 99 time out of 100, the

employee will do what the employer wants.


John , I agree with you, I mean , what we're trying to bring about is a situation where employers and employees

working together, part of these changes are about removing someone the adversarial aspects of the law that existed

in the past, and in saying in the environment we're working in, if we want businesses to thrive and we want jobs to

continue to be available in Australia like we do, then we have to have a harmonious relationship within our

workplaces and that people who adopt adversarial approaches or people who do things at whim, are not the ones

that are going to have a workforce in the future.


Do you agree that if you don't get it right, it could cost you the next election?


Look, I don't believe this is going to be a major factor in the next election, David, I think, you know, the sky hasn't

fallen in since the 27 March, people are getting on with their jobs, they're employed under their arrangements which

continue in place. This about bringing about some further flexibility and therefore productivity increases over time,

so that we can continue to grow the economy and that's not going to have immediate nor is it going to have

disastrous consequences on ordinary Australians like it's been painted by the unions.


What was you job before you became a politician?


I was a barrister, Matt.


You were a lawyer, a barrister - and what were your real jobs before - have you had a real job? (laughs)


I started calling races in country Victoria, so…




… so if you need a race caller, I can do your next Adelaide Cup for you? (laughs)


And do you have children?


Yes, have five…


Are you comfortable with the world they're in because…


In fact, they are more comfortable with this world than I think people of our age are. One of my daughters recently

said to me, I'm leaving the part-time job, she does like most kids of her age whilst studying. I said that's interesting -

why? And she said I don't like the shifts I've got. And they won't give me the shifts I want to fit in with all the other

things I'm doing, and I said - have you got another job? And she said - no, but that's not a problem, I'll get another

job. I think younger people seem to have a different attitude than perhaps people of our age about these things and I

find that talking to her friends as well.


Perhaps that's because lot of these protections were built in during the depression, and a lot of our audience who

ring up are very senior people and they are worried about the IR laws because they see these changes as dismantling

things that were put in place following the depression and the immediate post-war years and they worry about this.


Well, we're talking about unfair dismissals, that was put in place back in the early 1990's by the Keating Govt in a

deal it did with the unions in order to bring about collective bargaining.


But, you accept that we get a lot of calls from very senior people worried abort IR laws.


Look, I think it's natural that the older we get, perhaps the more conservative in a sense we become, we worry

probably not so much about ourselves but we worry about our kids and grandkids, I think that's a natural human

reaction, but what I'm saying to people is that just let this work- scare stories, yes, they'll go around, the unions will

try and trawl up somebody who they say is mean and unfairly done by. The reality is that this is not going to have a

disastrous impact. I mean, no Govt in their right mind is going to put in a major and significant piece of legislation

with the view of making the lifestyle and the well-being of Australians worse-off.


Kevin Andrews thanks for talking to us.


Thank you.


For further information contact:

Kate Walshe 0411 472 299