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Thursday, 24 June 2004
Page: 31637


Mr ANDREN (11:30 AM) —The Workplace Relations Amendment (Protecting Small Business Employment) Bill 2004 is another example of the undermining of the Australian Industrial Relations Commission to oversee the fair working of federal awards and workplace relations. Either we have an umpire in our industrial relations system or we do not. Back in 1996-97, during the debate on the workplace relations legislation, compromises were made regarding the legislation to retain what I believe most Australians would regard as the necessity of there being a strong, continuing and independent role for the AIRC in workplace relations legislation in this country.

This bill seeks to overturn the redundancy test case decision of the full bench of the AIRC handed down on 26 March this year. This decision put in place a new scale of redundancy payments for employees covered by nine different federal awards. Briefly, the new scale states that there will be no severance payment to those who have been employed for less than one year; for those employed between one and 10 years, the scale of redundancy slides up from four weeks pay to 16 weeks pay; and for those employed for more than 10 years, their redundancy payout is 12 weeks wages, taking into account long service benefits that this group may have already received. The new scale is also to be applied to employees of small businesses under the still current definition of a business with 15 or fewer employees. But redundancy payments made to small business employees will slide up from four weeks pay to eight weeks for those with service of between one and five years and are capped at eight weeks pay for any employee with five or more years service—that is, eight weeks pay for 5½, 10, 15 or 20 years of working for the same organisation.

The redundancy payments have not been extended to casual employees of any sized business. In an economy where casualisation is steadily increasing, for those who want the flexibility, as well as for those who find themselves with no other choice, the impact of this test case decision may not be as great as the government anticipates. But, then again, increasing casualisation of the work force may be a symptom of increasing redundancies. This AIRC decision has, in effect, put in place a safety net for redundancy payments. The minister argued that overturning the AIRC's redundancy test case decision will encourage employers and employees to negotiate between themselves to come to an agreement on redundancy payments. This can still happen. The AIRC has done no more than provide a minimum benchmark for this process.

I believe redundancy to be quite a different scenario to dismissal in the workplace. I have consistently supported the government's proposals that small businesses with 15 and now 20 or fewer employees should be exempt from unfair dismissal laws but certainly not from unlawful dismissal. That is the compromise I am prepared to make to ensure that small businesses can operate without the threat of protracted litigation when the proper processes have been followed to counsel, warn and remove underperforming or disruptive staff. There is never a case for diluting unlawful dismissal provisions that relate to issues such as gender, race or religion. Small businesses in country and regional areas do need that protection and, no doubt, they need it elsewhere.

However, I do not support a bill that will remove redundancy payments for small business employees. Redundancy is not about dismissal for nonperformance, misconduct or criminal behaviour. As I understand it, redundancy is a result of organisational change. It is about business restructuring to better meet challenges in the marketplace, and to improve profitability, no doubt. The other side of the House continues to push the ogre of the union bogeyman, when statistics show that union membership is falling away dramatically and workers are rejecting unionism. They are more and more left to their own devices when seeking and, indeed, when holding on to and losing employment.

Recent statistics that I obtained from a Parliamentary Library research paper that found its way into the press a month or so ago showed the extent to which the workplace is being casualised and the uncertainty that now pervades the workplace. That is why many people are not relaxed and comfortable with what is close to what the economists call a full employment economy, because five per cent unemployment does not mean that 95 per cent of people have as much work as they want. It did mean that perhaps 25, 20 or 15 years ago but it certainly does not mean that these days. Indeed, it statistically means that a person has to work for only an hour a week to not appear in the statistics. Underlying those figures is a great uncertainty and insecurity in the community about whether or not they will have a job in some cases next week or next month and in many cases certainly by the end of any particular six-month or 12-month period.

It is fair enough that a business, regardless of its size, makes some contribution to those employees who find their services are no longer needed as a result of restructuring. These workers are forced to make transitions of their own, as a result of being made redundant, either by finding new employment or, as often is the case for older workers in shrinking industries like manufacturing, by facing long-term unemployment. In my electorate this has been an all too regular occurrence in recent years, especially around Lithgow. This region was once renowned for a strong manufacturing base, but the number of jobs in that sector has been steadily shrinking. In the case of Berlei and others, jobs have been lost to overseas, and unemployment in midlife is becoming more and more a fact of life. Those left out of work for the most part are middle-aged, male and unskilled, without the skills and education to make a transition to the few available opportunities in the new technology and service based economy.

Eight weeks pay is not too much to ask for workers who have performed to their employers' expectations for more than five years and yet are made redundant as a result of restructuring. At paragraph 272 of the test case decision, the AIRC concluded that `the nature and extent of losses suffered by small business employees upon being made redundant is broadly the same as those employed by medium and larger businesses'. Those in support of this bill may say that this does not account for the capacity of small business to pay. At paragraph 273, the AIRC counters that, based on data from 1997-98—which is the most recent data available—some 70 per cent of small businesses are indeed profitable. There has to be a trade-off, somewhere, between the realistic expectations of small business—and the fact that they generate work—and the fact that the employees generate the revenue and indeed the profits. There must be some trade-off in which those people, particularly those who are middle aged and do not have much expectation of further employment, can have some sense of security. As little as eight weeks pay strikes me as a fair compromise.

Paragraph 273 of the AIRC's conclusions provides an avenue of relief for those businesses that are unable to meet their redundancy payment obligations under an `incapacity to pay' provision. The AIRC's test case decision therefore already provides adequate protection for businesses that may be adversely affected by their obligations. The AIRC also made a supplementary decision which took into account some of the issues raised by the employer groups that made submissions to the test case. It determined not only that small businesses will only be obliged to pay a maximum of eight weeks wages in redundancy payments but also that length of service will only be counted from the date of the decision. This effectively defers any maximum eight-week redundancy payouts to mid-2008 or later. That certainly gives small businesses the opportunity to provide for the eight-week payout that we are talking about.

The government contends that it is running a strong economy. In respect of the national accounts for the March quarter this year, the Treasurer stated that business and consumer confidence are at high levels—that is, notwithstanding that so much spending is through credit cards—employment growth is robust, and again, I counter that the unemployment figures hide massive underemployment in our economy; and price and wage pressures remain contained. We now have such flexibility in the work force that you can bring in and get rid of labour at the drop of a hat. We now regard employees as units of cost. On that point, I make an exception of most small businesses in my electorate. But, in the modern economy more broadly, employees have more and more become a unit of cost that can be injected into an enterprise when needed and taken out of that enterprise when needed. That is the tension we have in the brave new world of employment, where casualisation offers the flexibility that business demands in a globalised economy.

We heard yesterday in the debate on the free trade agreement that we will soon be obliged to take in North American fruit in far greater quantities. Fruit picked by whom? Good luck to the Mexican people who can go up to the US and get those jobs on special dispensation from President Bush and send money home to their poor families; I certainly have no objection to that. But I have an objection to the fact that it forces down the cost of that product, which is then landed here under the guise of free trade, while our orchardists are battling to provide that product at a similar price, notwithstanding the considerable difficulties in the marketplace, as it stands, through the marketing chain.

We are faced with a situation where there is more pressure on local small businesses, orchardists and so on to seek every avenue to cut costs. Of course, they would say that they cannot afford redundancy payments. But I think we have to look at the fairness of the whole process and of suggesting in this bill that we dramatically reduce the surety that people can have after having worked for an extended period for an employer. This is symptomatic of a slant towards the workplace that is so flexible that it tends to forget the victims, the one-third of the work force that are casual—and many of them are not there by choice. Surely, under such conditions, a basic standard of redundancy can be determined for employees of small business by the AIRC, the body charged to determine such things, without the interference of the government?

Since my first day in this place, I have strongly defended the need for the AIRC's role in the industrial process. Legislation such as this strengthens my belief that that should be the case, particularly with the increasing casualisation of a work force that is more and more vulnerable and deserves at least the surety of secure redundancy outcomes. I cannot support the government's intention in this bill to overturn the work and decisions of the AIRC, especially when such decisions have been made with due consideration and attention to the realities of the modern economy and the operation of our system of workplace relations within it.