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Thursday, 12 December 2002
Page: 8025

Senator ALSTON (Minister for Communications, Information Technology and the Arts) (10:47 PM) —I seek leave to incorporate my closing remarks in Hansard.

Leave granted.

The speech read as follows—

I would like to thank Senators for their contribution to debate on this Bill.

The Bill is a key part of the Government's continuing drive to ensure that business costs do not push up prices and interest rates jeopardising employment growth. Under this Government inflation and interest rates are at or near historical lows and this is in large part attributable to the successful implementation of workplace relations reforms.

Recent independent research has again demonstrated that the costs to business of federal unfair termination laws are not inconsiderable and represent a significant drain on the economy.

It is a truism that laws designed to protect jobs can only be effective if they allow those jobs to be created in the first place.

In proposing these changes to the WR Act, the Government wants to address the wider implications of the decision in the Hamzy case (together with some less significant but nonetheless important matters) as they affect the well being of the workforce generally.

The changes proposed restore the status quo as it was widely understood as applying to short-term casual employees from 1996 until late 2001 without disturbing the rights of those who were involved directly in the Hamzy case. There is nothing new in such an approach. Governments for many years have followed a similar course when dealing with the fall-out of court decisions invalidating laws on technical grounds. As in those cases, the Government's approach here is to restore the law to what the Parliament had intended but without disadvantaging those who successfully argued a contrary view in the courts.

Exempting short-term casuals from unfair dismissal laws

Casual employment has grown significantly in the past two decades. In 1984 they represented 15.8% of employees. By 2001 the figure was 27.2% or just over 2.1 million employees.

The strong growth in casual employment is in large part a rejection of an inflexible, rule-driven, one size-fits-all culture.

Despite claims made during the debate, the majority of employees are happy to be casuals.

· AWIRS 95 found that casual employees were more likely to be satisfied with their job overall than permanent employees. ABS survey data also show that the majority of casual employees accepted this form of work for family and personal reasons rather than because they could not get permanent employment.

· According to the Job futures/Saulwick Employment Sentiment Survey of September 2002, almost 80 per cent of casual employees felt either quite secure or very secure in their job.

Casual employees have been excluded from federal unfair dismissal remedies since the current legislation was first introduced by the Keating Government in 1994. The main point of disagreement between the present Government and those opposite is not over the matters ruled on by the Federal Court in Hamzy—as the Court would also have invalidated the Keating law—but on whether the casual exemption should apply to employees of less than 6 month standing or those who have served their current employer for less than 12 months.

The Government has taken the view that 12 months represents an appropriate community standard, given that over half of Australia's casual workers have been with their current employer for 12 months or longer.

Following the Hamzy decision, the Government responded quickly by making a new regulation to exclude short-term casual employees from unfair dismissal laws to the extent permitted by the Court's decision. [see tab 6]

The Hamzy decision, if it had not been addressed immediately would have created a situation where most casuals would only be subject to the general 3 month exclusion that applies to all employees even though this is not what was intended at the time that they were first hired.

There IS evidence that unfair Dismissal laws affect employment

Through debate in the Parliament, the Hamzy decision has acquired some notoriety from suggestions by members of the Federal Court that the link between changes to unfair dismissal laws and the hiring decisions of employers had not been clearly established.

Empirical evidence about the link between unfair dismissal laws and employment has not been produced in Australia or overseas. Such evidence—the statistical equivalent of the smoking gun—is simply not obtainable. Nor is there any evidence to support a contrary position.

· In response to the Hamzy decision, my Department approached the ABS for advice on whether such empirical research was possible. The ABS advised that a survey of employers' attitudes to unfair dismissal legislation would be the best way to establish the impact of such legislation on employment.

Accordingly, the Government commissioned further independent research from Melbourne Institute academic, Mr Don Harding. The research analyses specific questions on unfair dismissal laws included in the July 2002 Yellow Pages Business Index Survey. The Yellow Pages is a telephone survey which asks attitudinal questions of about 1800 small to medium businesses.

Mr Harding's research results are pretty clear, concluding that: unfair dismissal laws—both State and Federal—cost small and medium businesses $1.3 billion each year. In addition, the research shows that the dismissal laws have had a significant impact on staffing decisions—with unfair dismissal laws contributing to the loss of about 77 000 jobs from businesses who used to employ staff and now no longer employ anyone.

The Melbourne University's Melbourne Institute of Applied Economic and Social Research has undertaken independent academic research into the employment effects of unfair dismissal legislation. Such research has been widely called for, including by the Opposition.

The Opposition decided to attack the credibility of this report during debate. For the record, I should observe that Mr Harding, as an Assistant Director of the Melbourne Institute, is very experienced in conducting research of this type.

The Melbourne Institute has an excellent reputation for undertaking high quality independent research.

· The research was conducted independently of the Government.

· There has been no serious academic criticism of the methodology used by Mr Harding.

Filing Fees

The Bill will introduce a permanent, indexed filing fee for the lodgement of termination of employment applications under the WR Act and repeal the existing regulations.

The filing fee will further discourage frivolous or malicious claims while ensuring that genuine termination of employment applications are dealt with efficiently.

The Senate's Regulations and Ordinances Committee has expressed concern at constantly extending the sunset period for the filing fee.

This proposal honours the Government's election commitment to make the filing fee a permanent requirement. Currently, as set out in the regulations, the fee will cease operating on 31 December 2003.

The fee which is presently $50 provides only for part recovery of the cost to the taxpayer of providing the means for resolving what, in essence, are disputes between private individuals.

Filing fees exist in a number of other jurisdictions, including New South Wales and Queensland.

Question agreed to.

Bill read a second time.