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Thursday, 12 December 2002
Page: 8018

Senator MACKAY (10:38 PM) —At the request of Senator Hutchins, I seek leave to incorporate his second reading debate speech on the Workplace Relations Amendment (Fair Termination) Bill 2002.

Leave granted.

The speech read as follows

This Bill is another attempt by the Government to undermine the job security and workplace rights of a large portion of the Australian workforce.

Earlier this year, the Senate was once again required to dispose of the Government's plans to scrap unfair dismissal laws for small business employees. And now we're being asked to support a Bill that will put into the Workplace Relations Act express provisions for a further series of exemptions from unfair dismissal laws.

One of these proposed exemptions is to permanently exclude casual workers who have been employed by a single employer for less than twelve months.

As it is currently structured, the Workplace Relations Act already makes provision for this exemption.

Under section 170CC of the Act, a casual employee engaged for a short-term period is not protected from unfair dismissal. The phrase `casual employee engaged for a short-term period' is taken from the International Labour Organisation Convention No. 158 (Termination of Employment at the Initiative of the Employer) from which federal unfair dismissal laws owe their origin as an act of parliament under the external affairs power of the Constitution.

Regulation 30B(3) gives effect to section 170CC by defining `short-term' as a period of casual employment less than twelve months.

Regulation 30B(3) has a curious history. The Keating Labor Government first introduced it in 1994 to define a short-term period of casual employment as being less than six months. In 1996, the current Government altered that definition to increase from six to twelve months the required period of engagement. It was able to make this change by doing a deal with the Democrats in which the Government promised to review the change after twelve months. Not surprisingly, the Government has failed to follow through with this commitment to review the operation of the exemption.

Late last year, the Government was forced to reword Regulation 30B(3) to overcome disallowance of the regulation by the Federal Court in Hamzy's Case.

This revised Regulation remains in force and thus operates to already exclude casual employees employed for less than 12 months from accessing federal unfair dismissal laws.

The Government's aim then is to overcome the problems encountered in Hamzy's Case and to set in stone in the workplace Relations Act the provisions of Regulation 30B(3).

This Bill then will give unscrupulous employers a no-questions-asked, free ticket to sack casual employees who have been engaged for less than a year.

This is an exceptionally lengthy period of time for a casual employer to be without any real sort of job security. Labor's long-standing position on this issue is that a short-term period, for the purposes of the International Labour Organisation Convention No. 158 (Termination of Employment at the Initiative of the Employer) from which federal unfair dismissal laws owe their origin, should be no more than six months.

This was the state of play when Labor left office federally in 1996, and is currently the state of play under the Industrial Relations Act in my home state of New South Wales.

The extension of this period to twelve months, in my view, has not only put Australia in breach of its international obligations under International Labour Organisation Convention No. 158 (Termination of Employment at the Initiative of the Employer), but has operated to further accelerate the rapid casualisation of the Australian workforce taking place.

From 1984 to 1999, casual employment levels more than doubled from 848 300 casual employees to 1931700—an increase of 117%. Over the same period, permanent employment increased by just 19%. As at August 2000, casual employees represented around 27% of the workforce. Between 1990 and 1999, 71.4% of total employment growth was casual. Since 1996, the year the Coalition was elected to Federal office, an extra 276,400 Australians joined the casual workforce.

The growing casualisation of the Australian workforce has seriously undermined the rights of many working Australians. The 27% of working Australians who are employed as casuals do not have automatic access to rights like sick and annual leave and employer contributions to superannuation. They suffer extremely low levels of job security with employment able to be cancelled with just one hour's notice.

Casual employees also have less access to employer-sponsored training courses. The tenuous nature of their employment also makes it difficult for casuals to establish a place in society as they are generally unable to gain finance for assets like houses and cars.

Generally speaking, casual employees receive lower remuneration for their hard work and are over-represented in the lower echelons of the labour market, working predominantly in low-paid and low-skilled jobs. The basic contention that demand for casual employment is linked to a reduction in workers' rights was recently supported by the Full Bench of the Australian Industrial Relations Commission in the Metals Casual Award Case.

Early next year, the Senate Community Affairs References Committee, of which I am chair, will be conducting an inquiry into poverty and the working poor. Two of the terms of reference for the inquiry are:

· An examination of the social and economic impact of changes in the distribution of work, the level of remuneration from work and the impact of under-employment and unemployment.

· The impact of changing industrial conditions on the availability, quality and reward for work.

The committee will be visiting various parts of the country to speak to hard-working Australians about how hard it is to make ends meet under this Government. I'm expecting that we will hear from many Australians employed in casual work who struggle by with poor pay, low levels of job security, and no leave entitlements. I'm looking forward to finding out first hand the effects that Bills like this have on the lives of working Australians.

There has been a great deal written on what has driven the trend towards casualisation in Australia over the last twenty years.

At the most basic level, casualisation is driven by labour market supply and demand.

On the one hand, there are a number of Australians who want casual work as they may be balancing work with other commitments like family or study. At the other end of the scale, there will always be demand for casual workers to perform work that may only be short-term.

For these reasons, there has been a long history in Australia of provisions in industrial awards making allowance for various kinds of casual work to be performed. When the federal Commission introduced casual work in 1920 in Australian Timber Workers' Union v John Sharp & Sons, it was determined that some work, such as ship repair, was urgent and could not be attended to adequately by permanent employees.

Although there is a large number of Australians who prefer casual work, unsurprisingly most Australians employed as casual workers would prefer to have more secure and stable employment. An ACTU survey in 1999 found that 59% of casuals would prefer permanent employment.

Demand has well and truly outstripped willing supply.

This has occurred in part due to the fact that the institutional arrangements in place governing casual employment provide a strong incentive for employers to employ casual instead of permanent or full time staff.

Changes introduced by this Government in the Workplace Relations Act in 1996 have made it easier for employers to employ casuals instead of permanent staff, by removing determinations concerning levels of casual staff as an allowable matter to be included in an award.

In addition, the state of the law in relation to casual employment provides an incentive for employers to take on casuals instead of permanent staff. Many employers find that the twenty percent loading paid to most casual employees is much cheaper than having to employ extra staff to cover leave periods, having to make superannuation contribution, or pay overtime.

In relation to this Bill before us, laws governing the termination of casual employees also drive demand. As I mentioned earlier, many unscrupulous employers will see this Bill as giving them a blank cheque to sack casual staff willy-nilly.

Many employers will see this Bill as another incentive to employ casual staff. Not only do you not have to pay casual staff leave entitlements, superannuation contributions, overtime or provide training, but if they've been employed for less than a year, they can be sacked at will.

This Bill, if passed, will contribute significantly to the ongoing trend towards the increased casualisation of the Australian labour force. It provides an extra incentive not to employ full time permanent staff, but to put on casuals.

This, as I have mentioned earlier, ultimately leads to an overall decline in the employment conditions of Australian workers. It means that potentially, this Bill reaches much farther than merely affecting those in the workforce already employed as casuals. It indirectly threatens the job stability of those employed on a permanent basis, and in the long run, will make it difficult for future job seekers to attain permanent work.

As well as accelerating the rate of a casualisation, this Bill will also further undermine the already limited rights of casual workers. This outcome would be contrary to the growing trend in the courts and in industrial tribunals that have in recent years begun to afford greater rights to casual workers.

In 1996, it was determined in the decision in Reed v Blue Line Cruises that casual workers can be characterised as either `true' casuals, those whose employment conditions are typified by ` informality, uncertainty and irregularity,' or `long-term' casuals. `Long-term' casuals are those who may be employed as casuals, yet in fact have quite stable and regular employment.

There are a large number of casual workers who may be defined as `long-term' casuals. AWIRS data from 1995 found that the average job tenure of a casual is over three years. This suggests that most casuals have a relationship with their employer that is almost identical to that of a permanent employee.

There is a growing recognition of the fact that a large number of casuals are merely employed as such to save costs to their employer, whereas in fact the nature of their employment relationship is one that is permanent and long-term. Accordingly, courts and tribunals alike are becoming increasingly prepared to afford these long-term casuals rights akin to those of permanent employees.

For example, in the Metals Casuals Award Case, the Full Bench of the AIRC approved an award provision giving casual workers employed on a regular and systematic basis for six months the right to have their employment contract converted to permanent full-time or part-time employment.

The AIRC in its Parental Leave (Casuals) Test Case also decided to extend parental leave entitlements to casual workers who have been employed for more than 12 months.

This Bill then is contrary to the growing movement towards recognising wider rights and protections for casual workers.

The provisions of this Bill will also have an indirect effect on this growing area of casual rights. In the Parental Leave (Casuals) Test Case, the reason why the AIRC decided only to extend parental leave rights to casual workers after they have worked for twelve months was to conform with the standard set down in Regulation 30B of the workplace Relations Act.

Thus, this ridiculous prohibition on casual workers having access to unfair dismissal laws until they have worked for an employer for a year is having a ripple effect in terms of affecting other casual worker rights that are being developed.

Casualisation has fundamentally altered the nature of the Australian labour market. It has created a growing underclass of employees who are denied the basic rights, conditions and levels of remuneration that have principally developed in this country over the last century.

This Bill, in addition to further eroding the rights of casual workers, will have the effect of accelerating this already rapid rate of casualisation. It will create an institutional incentive for employers to choose to employ casual staff rather than permanent employees.

This directly threatens the viability of permanent, full time and secure jobs in Australia.

In addition, by defining a long-term casual employee as one who has had been engaged continuously by a single employer for a year, other developing rights being afforded to casual workers will be undermined.

Twelve months should not be the standard against which a casual worker is determined to have the same basic rights as permanent employees. Labor supports a standard of six months. Not only is six months fairer, but it also more accurately reflects the reality of a labour market.

Hundreds of thousands of working men and women across Australia are employed as casual workers, but in effect have an arrangement with their employer which is more akin to that of a permanent employer. That relationship is well and truly entrenched after six months.

The Government should recognise this reality, afford long-term casual workers proper rights, and in doing so, ensure that a large majority of working Australians continue to have access to permanent, full time and secure jobs.