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Monday, 11 August 2003
Page: 13030

Senator MURRAY (5:12 PM) —The Workplace Relations Amendment (Termination of Employment) Bill 2002 represents something of a crossroads in the development of industrial relations law in this country, because it seeks to cover the field in a manner which has not before been attempted in industrial relations law at the Commonwealth level. The provisions covering termination of employment in the Workplace Relations Act do include provisions concerning unfair dismissals, as do the state regimes, and these have been the subject of intense political and policy debate for the past decade. This bill attracts the Australian Democrats qualified support—I say `qualified' because we are circulating amendments to the bill shortly—because it advances the Australian Democrats philosophy and policy with respect to a unitary industrial relations system. It also revisits a few areas we have previously rejected—and will continue to reject in principle and practice—and it does advance a few process improvements on unfair dismissal.

Schedule 1 of the bill before us is the second major move towards a unitary, or uniform, system. The first was the referral of Victoria's state industrial relations powers to the Commonwealth by former Premier Jeff Kennett and his government. That act of referral will be one of his greatest policy legacies. It is a policy decision that no government in Victoria, whatever the colour, would be keen to reverse. I am sure that every night members of the Labor government in Victoria and countless others in the Victorian community kneel and thank the various gods that industrial relations in Victoria is under one system and not two systems, as it also is in the ACT and the Northern Territory.

For New South Wales, Queensland, South Australia, Tasmania and Western Australia it is still the Dark Ages of industrial relations, each with a state system overlapping and conflicting with our Commonwealth system. As I have argued before, we need one industrial relations system, not the six we presently have. We have a small population of just 20 million people; we have nine governments, 15 houses of parliament and a ridiculous overlap of laws and regulations. There are areas of economy that genuinely require a single national approach, like finance, the Corporations Law, trade practices law or tax law. Labour law is one of those areas too.

Globalisation and the information revolution have created competitive pressures that require us as a nation to be as nimble as possible in adapting to changing circumstances. Whatever the colour of the Commonwealth government, we still require just one set of laws for the country. There are areas of policy and jurisdiction the states no longer have sensible involvement in. It took 30-odd years for tax law to become far more national than had been conceived at the commencement of Federation. After 70-plus years we finally got a unitary system of trade practices law. After 100 years states' rights and vested interests finally gave way to one unitary financial system for Australia and although the process was messy in the execution we do finally, after 100 years, have a unitary system in Corporations Law.

The Australian Democrats have never supported states' rights and, by extension, states' laws therefore, or even the Federation as originally conceived. That long Australian Democrats tradition is repeated in the Democrats' constitutional reform policy balloted in July 2001, which says:

We strongly hold that the current three tiers of Government in Australia should be replaced by a more representative framework, where the States are replaced by Regional Governments ...

As an automatic consequence of such a policy position long held by the Democrats, there is therefore explicit backing for national laws on, for example, trade practices, finance, corporations, tax and industrial relations. Regional governments would have no part in such law. Obviously there is absolutely no chance whatsoever, given both the views of the Australian community as a whole and the views of the major parties, that our federal system is likely to be revisited. Nevertheless, the central concept that there are laws which are appropriate to be national and laws which are appropriate to be regional or state is entirely accurate.

It is time we moved towards a national system of industrial regulation that will do away with unnecessary replications, conflicts and complexity. Referenda aimed at extending the Commonwealth's industrial relations powers failed in 1911, 1913, 1926, 1944 and 1946. It seems unlikely that anyone will attempt a unitary system by referendum again, or at least in the near future. Does that mean it is a policy we should not pursue? No, it does not.

The referral of the Victorian system to the Commonwealth from 1997 has been a remarkable success with remarkably little aggravation within the community. That is despite the fact that, under section 1A, thousands of Victorian employees still, regrettably, remain under inferior employment conditions. I was very pleased to see that the federal minister had finally agreed with the Victorian minister to end that circumstance. Victoria is much better off, despite the criticisms one might have with parts of the federal legislation, with one system and not two.

This bill does advance unfair dismissal 85 per cent of the way to a unitary system for unfair dismissal. A nearly unitary system for unfair dismissal would have three prime benefits. Firstly, it would achieve for the majority of Australian workers common human rights across Australia, which differ at present. The second motivation is economic. Common, easily administered rules and laws make for more efficient, competitive and productive enterprises, and this bill moves towards that objective. Thirdly, the bill facilitates more comprehensive coverage for workers. There have been estimates of up to 800,000 employees not covered by federal or state awards or agreements, for example the former employees of OneTel, that would now be covered.

Unfortunately, the bill cannot go as far as it needs to. Constitutional limitations prevent complete coverage. As we have stated earlier, the Democrats are concerned that relying on the corporations power alone will still leave large chunks of employees working for non-incorporated businesses, many of these in small business with still no protection from state or federal laws. The Democrats also recognise that the federal unfair dismissals law is more complex than in a number of the states and that is because of the competing considerations that exist. A simple system allows far too generous an access; a complex system produces its own costs and difficulties.

A number of state governments have raised these issues as a concern but have noted that the federal government has yet to make any genuine efforts to attempt to get a uniform system going. Various state governments have expressed a willingness to be involved in discussions about a harmonised national approach so long as it is done in a consultative and cooperative manner, but attempts to do so have met with little satisfaction. My own experience from my reading of the history of attempting harmonisation is that it is inevitably full of rhetoric and very difficult to achieve. Nevertheless, the Democrats certainly would prefer a cooperative, harmonised national approach to a single IR system.

I must say I find a contradiction in seeking to extend the coverage of federal law on unfair dismissals while simultaneously proposing to exempt small business from unfair dismissal law through the—again Senate rejected—Workplace Relations Amendment (Fair Dismissal) Bill 2002 [No. 2]. Such an inconsistent approach is easily understood when we remember that the sole purpose of the fair dismissal bill, as it is ironically called, is political: to provide an easy double dissolution trigger. We will not support schedule 1 of the Workplace Relations Amendment (Termination of Employment) Bill 2002 because, if there were to be a double dissolution election and the fair dismissal bill were to pass a joint sitting, effectively we would have facilitated the exclusion of a much greater number of small business employees from unfair dismissal remedies as a large number of small businesses would be brought in under the expansion of the federal regime. So, consequently, we have produced an amendment to prevent this bill coming into operation until 11 August 2004, which is after the final double dissolution date.

Concerns have been raised by states, unions, some advocacy groups and some academics that some employees such as short-term casuals, those on fixed-term or task contracts and `high earning' non-award workers, trainees and managers who in some states are able to challenge their dismissal would not be covered by the federal system. Since the early 1990s employers have increased their use of casuals, contractors and labour hire forms of employment, often on a long-term basis. Between 1998-99 and 2001-02 we have seen a 29 per cent rise in the number of job placement agencies, many of which specialise in temporary placements. The total number of placements from these agencies comprised 424,400 permanent jobs and a massive 3,314,500 temporary or contract placements.

The growth in precarious and atypical employment has meant that, increasingly, legitimate workers are being excluded from recourse in the unfair dismissal system. While many state unfair dismissal legislation regimes make an effort to cover legitimate employees in precarious employment, the federal unfair dismissal regime does not. One noted academic, Professor Andrew Stewart, who has been quoted here today, has proposed that many of the problems created by the growth in precarious and atypical employment can be dealt with by a redefinition of the term `employment'. Professor Stewart's definition has been picked up as a key recommendation by the recent Stevens report, which recently reviewed the industrial relations system in South Australia.

In an attempt to address the changing employee landscape as affected by unfair dismissal, the Democrats propose to expand the definition of employee—and we have put that in our amendments—based on Professor Stewart's recommended definition, to cover contractors and other workers who, under the Workplace Relations Act, might not presently be considered employees. One would assume that the federal government would support such an amendment as the federal system has always supported access to genuine employees, so the government should have no objection to provisions that ensure genuine employees—and I stress `genuine' employees—are captured by the unfair dismissal system. To further make the point: you cannot at one level deem an employee for tax purposes and then for workplace relations purposes exclude them. We have made it quite explicit in our suggested amendments that any person who is categorised as an employee for tax purposes will also fall under this act for unfair dismissal purposes.

While our proposed amendments will address some of the concerns raised in the states, given that the states' regimes are so varied it would be difficult to satisfy everyone. There are good arguments to rationalise state laws. When we first revised the unfair dismissal regime in 1996, casuals were an entirely different proposition from what they are today. Today the estimates are that there are about 2½ million Australians under casual employment, and most of those fall under the state jurisdictions. In Western Australia and in Tasmania there is a very strange provision in that there is no probationary period for casuals, which seems remarkable to me. In the other four jurisdictions, casuals on probation are excluded from accessing unfair dismissal—rightly, I think. In the Commonwealth, Queensland, Victoria, the ACT and the Northern Territory the exclusion period is 12 months. In New South Wales and South Australia it is six months. So the question, in my mind, is not whether there should be a probationary period for casuals but what the length of that period should be. In that respect, if we are going to minimise the angst of the states about those who can presently access their regimes and who should be entitled to have access to the federal regime, we think it is appropriate to produce a compromise. Consequently, we are recommending that the standardised casual probationary period be six months.

Concerns have also been raised that the federal unfair dismissal system would lead to reductions in the resourcing of state industrial tribunals and hence their ability to perform their other roles and that workers in regional and rural areas who currently can attend local courts visited by state commissioners would incur increased costs to attend the federal commission, which some expect will be based solely in capital cities. While parts of the industrial relations system will remain with the states, the Democrats are sympathetic to the states' concerns and propose that federal unfair dismissal cases should also be able to be heard through state commissioners by having dual state and federal appointments.

In schedule 2 this bill again attempts to differentiate unfair dismissal laws for small business as opposed to large business, provisions that in this case in effect reduce the rights of employees in small business. The coalition has repeatedly sought to justify its attempts to exempt small business from unfair dismissal laws by arguing that they deter small business from recruiting employees and place a greater burden and cost on small business. There continues to be little hard evidence to support the view that fair unfair dismissal laws have an adverse effect on overall employment levels, although there is evidence to show that unfair dismissal laws that are unfair or that allow process abuse do affect business attitudes to employment. Economics aside, fundamentally the Democrats have consistently said that, on both human rights and equity grounds, we will not accept reducing the rights of employees just because they are employed by small business.

One of the amendments in schedule 2 relates to giving the commissioner the ability to dismiss vexatious and frivolous applications on the papers. There are genuine concerns at the cost to employers and the commission of dealing with claims that are frivolous and vexatious. We feel that these concerns are valid for all sizes of business, not just small business, and therefore if enacted should apply to all business, and that is our amendment. Labor have previously expressed willingness to support such an amendment—I refer to the former shadow minister Robert McClelland in Hansard on 5 May 2003—and they have said that they are willing to look at amendments that curb frivolous and vexatious behaviour. The provision provides for employees and employers to give any additional information before a decision is made. Some groups have raised concerns that the provision takes away employees' rights to be heard. We have drafted in consultation an amendment that will enable the employee to be heard by either the commission or registrar without the employer being present. The Democrats have consistently supported process improvements to unfair dismissal laws that will increase efficiencies and reduce costs, and have consistently opposed changes that materially impact on the basic rights of employees, especially if one group of employees have rights and another, such as small business employees, do not.

Schedule 3 tightens unfair dismissal processes, sharpens relevant considerations and confirms that reinstatement should be the primary remedy. We agree with reinstatement being the primary remedy.

In summary, where do I get to on this bill? The Democrats are prepared to support the central proposition that the field should be covered. In return, we believe that there has to be an adjustment to ensure that genuine employees are covered and to ensure that standard provisions for casuals reflect the reality of the market as a whole. That is the broad thrust of our approach.