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Wednesday, 25 June 2003
Page: 17545

Mr ORGAN (6:27 PM) —The Workplace Relations Amendment (Transmission of Business) Bill 2002 is yet another attack by this government on workers' rights and conditions and the Greens oppose it. The bill amends the Workplace Relations Act to allow the Australian Industrial Relations Commission to order that a new employer is not bound by an existing certified agreement that specifies the terms of employment for the employees of the acquired business or that the new employer is to be bound to a certain extent and for a certain time. This order may be sought by the business seller—that is, the current employer—or by the purchaser.

This is the first time that the commission has been able to terminate a certified agreement without the specific agreement of the employees—that is, without the consent of the workers. That is the problem with this bill. This is the government's third attempt to introduce this measure. The provisions were contained within a 1999 bill, which the Senate rejected, and the second bill lapsed with the 2001 federal election.

Under the current Workplace Relations Act, when a business is transmitted or sold the new owner or operator is bound by the awards and various agreements that bound the former owner or operator. The Australian Industrial Relations Commission has the power to overturn this but there is, at the moment, no similar provision for certified agreements. Certified agreements are quite common, the best examples being enterprise bargaining agreements registered under federal jurisdiction. The Minister for Employment and Workplace Relations said in his second reading speech:

This bill will provide a mechanism for resolving complexities which may arise due to the existence of multiple or inappropriate certified agreements following a transmission of business. At best, these complexities can lengthen the transmission process. At worst, they can deter the parties from undertaking it. In other words, they cost jobs.

The Greens are concerned that this bill will inequitably benefit employers or potential employers and that employees may lose the security of their employment conditions when a transmission of business takes place. The Greens are not convinced that the government is introducing these changes out of concern for jobs and we are suspicious of the minister's attempt to argue the point in these terms. It appears that the government is introducing this measure primarily for the benefit of employers.

We have seen with previous legislation brought before this House that the government, and the minister for workplace relations in particular, cannot be relied upon to have the best interests of Australian workers at heart as they seek to change our whole industrial relations system. If passed, this bill will allow the Australian Industrial Relations Commission to decide whether to order that a certified agreement will not transmit to an incoming employer or will transmit to a specified extent or for a specified time.

The Greens have a number of concerns with this bill. The government acknowledges in the explanatory memorandum that the proposed legislation might affect the pay and conditions of employees of a business that is being acquired. Might? I would suggest that `more often than not' is more appropriate here. Unions have already expressed concerns at the government's proposed changes to the act, particularly with the potential for a seller of a business to offer a prospective employer a package of lower cost operations through the elimination of current terms of employment—that is, as contained in certified agreements. As the Australian Rail, Tram and Bus Industry Union put it:

If outgoing employers have entered into a lengthy binding agreement with their workforce they should not have the option to effectively dump that agreement in order to get a better price for the sale of their business.

In his second reading speech the minister for workplace relations said:

... the current bill includes measures specifically designed to ensure that all parties affected by a transmission are treated fairly and that all those who will work under the agreement if it transmits are able to have their views heard before an order is made.

Frankly, this is less than what the workers have at present. The Greens consider it cold comfort for those workers subject to the transmission of a business to have their hard earned wages and conditions as set out in a certified agreement put up for excision at the whim of the new owner, even though the commission will allow their case to be heard before the changes are made.

The process of developing a certified agreement or enterprise bargaining agreement is often long and stressful. It involves the workers and the employer, with the former usually assisted by unions and the latter by employer groups. The thought that the agreement can easily be thrown out the door if a business decides to enter into a transmission process is one which will cause many Australians concern. Australian workers are working hard to improve the productivity and efficiency of this nation. Workers expect government and business, in return, to support fair and equitable wages and conditions, and to provide long-term security of employment. The bill erodes that security and will lead to further erosion of wages and conditions.

The minister includes nothing in his second reading speech about protecting the entitlements of employees who are affected by a transmission, and that is because this is not a priority of the government. The minister has informed us that this bill will reduce the inconvenience to purchasers and sellers of businesses. That is to be expected. But he says nothing about the potential concerns of employees caught in the middle of these transactions, and that is because his concerns do not lie there—they do not lie with the workers of Australia.

Apart from concerns over the fundamental direction of this government in the workplace relations area and the ongoing and concerted efforts to erode workers' rights and conditions, there are also issues with regard to the detail of this bill which the Greens take exception to. Foremost, it is not clear within the bill what constitutes a transmission of business. For example, does contracting out a portion of a business's operations constitute a transmission of business? If so, then this bill could encourage the contracting out of jobs at lower pay and conditions than apply to in-house positions, especially as an outgoing employer, looking for a sale, may seek an order from the commission for the certified agreement to be disallowed—an order which would most likely not be supported by the employees who are party to the agreement, especially if they see the outcome as a clear erosion of their pay and conditions and a step backwards. The Greens are concerned by the lack of clarity within the bill on the point of the definition of transmission.

With contracting out and corporate restructuring now commonplace, it is likely that the ambiguity will lead to abuses and misinterpretations within the amended Workplace Relations Act, and these will most likely be to the detriment of workers rather than employers. The ACTU has previously commented on this issue, stating:

The problems of transmission of business, including in relation to contractors and related corporations, as well as the ability of the transmittee to require employees to sign AWAs in order to retain their jobs, do not need to be exacerbated.

Weakening an already inadequate transmission of business provision will further encourage the types of contracting out and corporate restructuring which we have seen can have such an unfair effect on employees ...

During this debate, we have been presented with numerous examples of employees suffering as a result of contracting out and the sale or transmission of a business. Let me give you an illustration from my own electorate of Cunningham of the very real concerns raised by the ACTU and of the negative impact the transmission of a business can have on workers.

In 1998, Telstra and US call centre specialists Excell Global formed a joint venture called Stellar Call Centres, to which Telstra outsourced some of its directory assistance functions. In February 2001, the full bench of the Federal Court ruled against a union application which would have seen the workers take their Telstra award conditions over to their new employer—an employer half owned by their previous employer. The court supported the Australian Industrial Relations Commission's decision and found that, in handling calls on behalf of Telstra, Stellar was performing a support function and was not part of Telstra's business. The court found the making of those call responses:

... is not a distinct “part” of Telstra's business ... any more than, for example, cleaning undertaken as a necessary aspect of the conduct of a restaurant is a “part” of the business of the restaurateur.

The decision was greeted with glee by Stellar management. The company's Director of Employee Relations, one John Zisis, said in a media statement at the time:

This judgement delivers much greater certainty and clarity to our business.

In a practical sense it would have been impossible to be bound by old, inefficient Telstra awards when employees can perform services for a range of clients across industries including energy, transport, finance, logistics and E-commerce.

You can understand why the judgment delivered much greater certainty to Stellar's business when I tell you that, as a result of the Federal Court's finding, workers at Stellar earned $28,000 per annum for a 40-hour week, compared to Telstra staff doing the exact same job in house and receiving $35,000 per annum for a 38-hour week—that is, $7,000 per annum extra for the same job and fewer hours. No wonder this form of `outsourcing' has struck a chord with employers eager to drive down the bottom line! This is an example of strategic industrial relations manoeuvring by Telstra to increase shareholder return at the expense of the wages and conditions of Australian workers. Those savings went straight into the pockets of Stellar and Telstra shareholders and government, rather than into the pockets of workers already struggling on low wages.

But that is only the tip of the iceberg as far as the Stellar example is concerned. The company now employs around 2,000 people in eight call centres across Australia. One of those call centres is located in Wollongong, in my electorate of Cunningham. Another is located in Hornsby, in Berowra, the electorate of the Minister for Immigration, Multicultural and Indigenous Affairs. One is in North Sydney, the seat of the Minister for Small Business and Tourism; another is in Adelaide, the electorate of the Parliamentary Secretary to the Minister for Health and Ageing. Others are in Robina, Brisbane, Melbourne, and Joondalup, in Western Australia.

Stellar's employee relations record makes interesting reading. For example, Sydney's Daily Telegraph reported earlier this month, on 3 June, that a heavily pregnant worker employed at the Wollongong centre had been docked $100 for taking too many toilet breaks. That penalty was imposed despite the fact that Diana Ivanovski had produced a letter from her gynaecologist advising that she needed to go to the toilet regularly because her baby was down low and pressing on her bladder. Mrs Ivanovski said that Stellar management made her feel guilty for being pregnant. She got the money back after her union intervened—thank God—and a company spokesman admitted that, while the company provided for toilet breaks, it had made a mistake in failing to adjust for Mrs Ivanovski's extra needs. A spokesman is quoted in the Daily Telegraph report as saying:

It's fallen down because Diana had requested flexibility.

That was none other than John Zisis, the director of employee relations, who had greeted the Federal Court decision of February 2001 with such glee. In an astounding turn of events, he told the Daily Telegraph:

The human resource people said it was an error and an apology was made.

Don't the human resource people come under the control and direction of the director of employee relations? I assume they do. The impact upon the Stellar employees of losing their Telstra award conditions as a result of the so-called transmission of the business is severe. Their wages are now referred to as `poverty level'. Stellar employees give examples of having lost bonuses worth up to $5,000 a year for using sick leave entitlements. This has prompted Workers Online, the official Internet journal of LaborNet, to list Stellar—which, we must remember, is 50 per cent owned by Telstra, and whose chief executive officer is a paid Telstra employee—as the debut nomination for this year's Tony award. Members of this House may know that the Tony, named in honour of the Minister for Employment and Workplace Relations, is regarded as Australia's definitive bad boss award.

Stellar gives us an interesting case study of the sort of employer behaviour which could occur under the transmission of business arrangements reinforced by this bill. It is therefore not surprising that, as the ACTU has pointed out:

Legal controversies have centred around whether or not a transmission of industrial instruments occurs in cases where part of a business, whether government or privately owned, is transferred through sale, assignment or contract to another entity, such as through privatisation, or outsourcing and contracting out.

This bill is not the solution. The solution lies with the parties to the agreement. The ACTU further stated:

In the event that a transmitted certified agreement is not appropriate to the needs of the workplace, or is in conflict with an already existing agreement, it is open to the parties to agree to vary the agreement or apply to the Commission for it to be terminated.

Workers must have a say, an equal role, in this process. Unlike the provisions for awards, this bill will allow an outgoing employer to seek an order from the Australian Industrial Relations Commission that an existing certified agreement not transmit to the new owner or operator. The Australian Greens are extremely concerned this could promote the erosion of workers' rights and conditions. An incoming employer may seek an order that a certified agreement does not apply to a purchased business, even if the incoming employer is not bound by any existing formal or registered industrial instrument.

What kind of protection of employees' wages and conditions would there be in such a case? As we have heard in this debate, currently, under the Workplace Relations Act, certified agreements can be terminated only when the employees and/or the relevant union have agreed to the instrument terminating, and the termination of the certified agreement can then be approved by the Australian Industrial Relations Commission. Thus the present prerequisite for a certified agreement to terminate hinges on the consent of the parties, and for employees this may mean a ballot. No such provision for this kind of consultative and democratic process is allowed for under the provisions of this bill, for an incoming employer may seek an order that a certified agreement does not apply to a purchased business even if the incoming employer is not bound by any existing formal or registered industrial agreement. In his second reading speech, the minister for workplace relations told us:

This bill is a sensible technical measure which will improve the operation of the workplace relations system. The amendments will continue to give workers and employers more opportunities to manage their relationships at their workplace and give the commission an important specific power to enable them to do so.

The Australian Greens reject these statements. We do not trust the minister's agenda for workplace relations in this country. We do not believe that the government has a balanced perspective in its management of this portfolio. It clearly does not have the best interests of workers at heart. We see that this bill attacks enterprise and certified agreements reached in negotiation between employers and employees. We therefore cannot support the bill.