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Workplace Relations (Restoring Family Work Balance) Amendment Bill 2007 Workplace Relations Amendment (A Stronger Safety Net) Bill 2007

CHAIR —Welcome. The committee prefers all evidence to be given in public. It will consider any request for all or part of your evidence to be given in camera. Thank you for your submission. Are there any changes or additions?

Ms Burrow —No.

CHAIR —I invite you to make a brief opening statement before we move to questions.

Ms Burrow —Thank you. I will deal with the amendments generally and Ms Bowtell will sum up in terms of what we suggest the committee might do with respect to amendments. These amendments are indeed a recognition that the Work Choices legislation is unfair. It is just disingenuous, we believe, for the government to say that they did not understand that there would be unintended consequences. If you go back to the committee hearings held before the legislation was passed, you see that submissions from the ACTU, 150 academics and many others to this committee actually demonstrated the legal consequences of providing unilateral power to the employers to impose AWAs that could extinguish award conditions and lower the floor of wages and conditions.

With more than 1,000 AWAs being signed every day, the majority of them removing one award condition and many of them removing all award conditions, the response of the fairness test, we believe, is also disingenuous. As a means of protecting award conditions, it has an enormous set of loopholes. It does not apply to all agreements. As to the lost tribe of those already on existing exploitative agreements and those who are excluded at the other end, we believe that, given the technicalities that will be raised in the bill—particularly about state employees—2.5 million workers is the minimum number of those who will be excluded.

The fairness test does not apply to all conditions. We are shocked—and I am particularly shocked, given my passionate commitment to paid maternity leave—to see that the bill does not pick up and protect paid maternity leave where it is in awards. Long service leave, an entitlement that workers who have given good service should be respected for, and retrenchment arrangements are things that are not picked up even as a base intention of this fairness test.

It does not guarantee full monetary compensation. Unless it does, we believe that any one, individual, first and final determination in a secret process as to non-monetary compensation and the value people would see of that is totally inappropriate. But what is even worse is that, if it is a genuine fairness test, people will still be worse off. Non-monetary compensation means people can still be worse off.

It does not recognise many workers. We are a bit horrified to see that some men, but in particular women, who work part-time and take home much less than $75,000, but who are in senior positions, will in fact have no access to this protection. We are talking about a range of occupations—senior nurses, finance workers, team leaders or supervisors in many industries—where women choose to work part-time to marry their work and family responsibilities. They deliberately choose those hours where they can share the care, weekend or nights, and they get additional recognition through penalty arrangements that enable them to pay their bills and invest in their own homes. They potentially take home $20,000, $30, 000 or $40,000 but are still excluded. They will lose that extra value that they have put on that choice to work unsocial or family unfriendly hours.

It introduces an abhorrent criterion. I would never have believed that any industrial relations system would have ‘personal circumstances’ as a loophole or an excuse by which, again, many men, but mostly women, can actually have their work devalued because they are primary caregivers. It is unbelievable that people, particularly women, in the parliament would vote for such a criterion in legislation. I could be working alongside another worker at night or on a weekend but, because I am not giving primary care at that time—because I have the support of my partner or indeed my family—I would be earning less than the person working alongside me. We have had equal pay provisions since ’69, ’71 and ’74, but universally since ’74. We have seen the gender pay gap emerge again under this legislation, which takes us back to the seventies. This, frankly, is direct discrimination. It is abhorrent.

I heard the question asked by the senator. I am sure he will ask me again and I would look forward to exploring why that should never appear in any legislation. You have two applicants for a weekend job, a Sunday job. When asked why they want this job, one says, ‘My mother can care for our baby today,’ and the other one says, ‘I need the extra money to pay the bills.’ You can see the discrimination straight away. If both of them are taken on, they would have different contracts if that personal circumstances test was applied. Or they would take the cheaper labour if there was only one position. It would be a parent, but most likely in this case a woman.

Then of course it broadens the exceptional circumstances—which we have always accepted in a short-term, reviewable frame that the commission might facilitate—beyond a company with an incapacity to pay over a short time, and able to be reviewed, to individuals. Again, I just find it appalling that, potentially, someone going to their first job, people who have been made redundant, people living in ‘locational’ areas—we do not even know what that means—or indeed people in other circumstances could have exceptional reasons why they would have a lesser AWA, an AWA that takes away those entitlements for up to five years.

Of course, the process is secret. It is not transparent; it has no review. We have already pointed out that it is just a very bad joke to suggest that, to get any kind of review, working people would have to go to the High Court. This issue is not only the cost but also the exceptional nature of such an appeal process—and then only probably on legal jurisdiction or process. It is just an appalling thing for any democratic parliament to impose on working people. The assessment is after and not before. It is incredibly complex. It will bog down proceedings. We believe it is probably unworkable.

Finally, I will go to technical issues. There are many state employees left out because if they have gone from an inferior agreement to a new agreement that will have expunged the award base. Again, you can probably see that the majority of these people would be more vulnerable workers in inferior circumstances by way of wages and conditions. We think it excludes hundreds of thousands of state workers, particularly women, if this is not just a technical error. If it is deliberate, it is pretty shocking. If it is a technical error, it ought to be fixed up immediately.

Overall, we think that these amendments fall far short of the standard of the old no disadvantage test. That is particularly unfortunate given that we still have the rest of the Work Choices legislation: unfair dismissal provisions which no longer protect the majority of working people, no collective bargaining rights and, particularly, no independent commission. When you have the newly named Workplace Authority and the Workplace Ombudsman still under the direction of a minister, with no right of appeal and no transparent process, it falls far short of the natural justice and transparency that people expect in legal arrangements. No company would stand for contractual arrangements where they had such a process and neither should any employee.

With regard to your bill, Senator Fielding, we appreciate the intention behind it. We suggest that your proposals regarding public holidays and meal breaks should be recognised in any piece of legislation with appropriate arrangements for people to agree on what that looks like, but we ask that you discontinue your view on ordinary hours of work as we believe that it would, again, affect family time and personal time in such a way that would deregulate the working day over time almost entirely. We certainly understand that your intention, to the extent that you were able, was to clean up a piece of legislation, Work Choices, that has worked against working Australians.

Ms Bowtell —I want to draw your attention to the technical amendments that the ACTU proposes to the legislation that we think would remedy deficiencies in the legislation that do not appear to be consistent with the stated policy position. While our submission includes a number of recommendations that would be new policy that we believe the committee should adopt, there are three areas that we would like to draw attention to in the legislation that we think are drafting deficiencies.

The first is in relation to employees who were traditionally covered by the state industrial relations system. Those employees are not usually regulated by an award because they are not usually regulated by a federal award and a federal award is defined in the legislation. Therefore, we look to the amendments to schedule 8 of the Workplace Relations Act which are found in clause 42 of the bill. When you look at clause 42 and the proposed introduction of clause 52AAA, what you see is that there are two significant loopholes in the legislation for those workers. The first is that the fairness test will only apply to people who were in the state systems at the time Work Choices was introduced and became covered by the federal system if on the day preceding the making of a workplace agreement they were covered by an old state instrument, a preferred state agreement or a NAPSA. There are a group of workers who were at that time covered by preferred state agreements and NAPSAs who have since made an agreement and may make another agreement. That group of workers is not picked up by this amendment. Any worker who was in the state system and has made an agreement in the last 18 months will not be picked up by this amendment. They will never be able to have the fairness test apply to them unless and until the industry or occupation within which they work becomes covered by a federal award. The act envisages that that would happen through the award rationalisation process, but, as you well know, that process has not commenced and is very unlikely to be concluded within the statutory time frame.

The second loophole that is found in this part of the legislation is the one that the SDA pointed out in their submission—that is, for these former state regulated employees to be covered by the fairness test, they have to be covered by a workplace agreement that contains notional protected conditions. It only contains notional protected conditions if they have been deemed to be included. But of course it is open to exclude them. If the agreement says, ‘This agreement excludes all the notional conditions,’ then it does not trigger the application of the fairness test. So those groups of workers miss out.

The third technical loophole that exists is in relation to workers who, again, have made agreements in the last 18 months which are deficient agreements. The bill provides that, if your agreement fails the fairness test, you fall back to and your compensation is calculated upon the instrument that would have applied but for the deficient agreement. But there are a group of workers who are on agreements which have taken away all their conditions. Envisage a worker who has signed an AWA, it has stripped them of all their conditions, the fairness test has come in and their employee offers them a new AWA, with an extra $50 a week in compensation for the loss of conditions. That agreement is found to fail the fairness test. The effect of the legislation is that that agreement becomes inoperative and the default position for that worker is the preceding AWA—the one that did not have the extra $50. So they fall back to worse conditions than what they were on under the deficient AWAs, and there is no compensation because there is no gap. We strongly recommend those three technical amendments to you.

Finally, for completeness, we refer in paragraph 63 of our submission to the Welfare to Work legislation. In shorthand, we are referring there to the activity test for the purposes of the Social Security Act, which provides: ‘A beneficiary—the recipient of payments—satisfies the activity test if they are prepared to take work that meets the statutory criteria.’ The statutory criteria refers only to the Fair Pay and Conditions Standard and does not include lost protected matters. A prospective employee could refuse an offer of employment that would not have met the fairness test but would be deemed to not satisfy the activity test, so they would fall between the loopholes there. We point out those matters to you, and we are happy to take questions on the remainder of the submission.

Senator BIRMINGHAM —I have a technical question to start with in relation to the point you raised. Thank you for the approach you have taken, which is perhaps a little more constructive than that of some others. Could you tell me how many employees you think may fall into the loophole around NAPSA?

Ms Bowtell —No, but if you consider that there are over one million workers who are covered by either an AWA or a collective agreement made in the last 18 months and then you say that about 40 per cent of those people were former state system workers then that is the potential group.

Senator BIRMINGHAM —But it is probably a lot smaller than that, assuming your interpretation is right. I am happy to—

Ms Bowtell —Some of those will be on agreements that provide them with terms and conditions well in excess of the award that they displaced. But there will be a group—which we know from data that was released from the OEA, which you were discussing earlier with Mr Barklamb—for whom there is insufficient—

Senator BIRMINGHAM —I am sure we can look at whether those assertions you have made are correct. Thank you for, at least, bringing them to our attention. With respect to broader policy issues—and I previously asked Mr de Bruyn similar questions—as a general principle, the ACTU stands opposed to AWAs and individual agreements, does it not?

Ms Burrow —Yes, because the way the legislation is written is about unilateral power. The employers hold all of the power: ‘Sign the contract or you don’t get the job,’ the threat of unfair dismissal and no collective bargaining rights. On any analysis, it is stacked against the working person.

Senator BIRMINGHAM —You also believe that unfair dismissal laws should apply to all workplaces?

Ms Burrow —Yes, we do. We do not think that principles of rights should actually be divisible. That does not mean that we do not understand that we have to make it possible for small business not to incur unnecessary costs in having those things examined. But we do think that any son or daughter should have the same rights, no matter whether they work in small or large businesses.

Senator BIRMINGHAM —And you would lobby whoever was sitting at this table or whoever was in government, whether it is those of us here now or whether it includes Mr Combet, Mr Shorten, Mr Farrell or others, to abolish AWAs, abolish individual agreements and to bring back unfair dismissal laws?

Ms Burrow —Yes, indeed.

Senator BIRMINGHAM —And you would hope that, given their close affiliation with the ACTU, they would act on that?

Ms Burrow —I would actually hope all parliamentary people would understand that you have to have a fair go all round and that the system is not in balance. It does not actually represent the test of any sense of fairness when unilateral power is held by one person, in this case the employer.

Senator BIRMINGHAM —Are you aware whether unions affiliated with the ACTU have negotiated away penalty rates or other such conditions as part of certified agreements?

Ms Burrow —I can tell you, as Mr de Bruyn did, that of course many of us, including me, have negotiated such things but only on the basis that they met, in the previous legislation, the unfair dismissal test. Just recently I negotiated annualised salary with a major corporation but, because there is no disadvantage test, we actually appended all of those entitlements at the back of the agreement. We put in place an annual review process to see that the worker could not be worse off. If they in fact were better off, the company was happy to accommodate that but if they were worse off, their salary would be adjusted. Those entitlements would get the same sorts of increases in this agreement up to four per cent a year, as would the base salary. So wherever those conditions are preserved, we do not object to annualised salaries, we simply object to people losing those conditions, being worse off and not being able to access them under further arrangements when you renew an agreement or fall back to an award.

Senator BIRMINGHAM —Are you happy to give the same guarantee that Mr de Bruyn did that no individual case under those agreements that you have negotiated might be worse off than they would have been under the award?

Ms Burrow —Under the old legislation, indeed, because the no disadvantage test would have prevented it. This does not meet the standards that the no disadvantage test set. There are just so many loopholes that people can still fall through the cracks.

Senator BIRMINGHAM —I assume, unlike Mr de Bruyn, you recall that the old test did allow for some negotiation away of annual leave or sick leave provisions and so on?

Ms Bowtell —The no disadvantage test was a global test. It was not a line by line, condition by condition test. It was a test that was global so that it compared whether, in relation to all of the award and agreement conditions, the workers were disadvantaged or not. That was how the test was applied, so no condition was sacrosanct under the no disadvantage test. That is not actually something that the ACTU pursued. I recall us running quite hard in a case, under I think it must have been 1992 legislation, in relation to a company called Arrowcrest where there was cashing out of annual leave. We were unsuccessful in saying that there was a public interest in not allowing people to cash out annual leave and we lost that case. It has not been a policy position that people should go round cashing it out. The legislation permitted the cashing out of annual leave. No condition is sacrosanct under the no disadvantage test.

Senator BARNETT —In light of recent discussions—we are a committee looking at the IR arrangements—would you like to clarify for the record your position with respect to your lobbying for Australia replacing Colombia on the ILO list that has been referred to publicly?

Ms Burrow —I would like the minister and associated senators who have actually claimed that to tell the truth. The truth is that, as both the ACTU president and the international president, I would always support Colombia being top of the list. It is abhorrent. They actually shoot trade unionists in Colombia. The truth is that at no time would I ever have lobbied for Australia to replace Colombia. We did not. It did not happen like that. In fact—perhaps you should have addressed this to ACCI—the employers refused to address the issue of Colombia. It is such a scandal in the international arena that it sent shockwaves through the committee and will no doubt be the subject of a governance debate when we meet as an ILO governing body.

Senator BARNETT —But you stand by your actions?

Ms Burrow —I did not, would not and never have lobbied to not have Colombia as part of the list. In fact there is a special debate when the governing body meets about commissions to Colombia to see that in fact people have their human rights preserved. This is a serious international issue. To keep repeating that somehow I of all people would have actually lobbied not to have Colombia on the list is just dishonest, Senator.

Senator BARNETT —We heard from the SDA that they were not aware that prior to Work Choices you could trade away annual leave and sick leave. Are you aware of that situation?

Ms Burrow —Ms Bowtell just answered that. It is not a policy position of the ACTU. We happen to believe that annual leave and sick leave are in fact non-monetary entitlements—they go to health and wellbeing—that should underpin any workers’ lives. In the case of Mr de Bruyn, I think he said not only that was he not aware but also that he had never been involved in such a negotiation. I can assure you that I have not been either. We are aware of the case that Ms Bowtell talked about where we lost, and we know that it has happened on other occasions, but it is not an ACTU policy.

Senator BARNETT —You mentioned in your opening statement appeals and the need for appeals under the new safety net proposals. That is the way I understood your comments—that there should be an appeal process. What is your understanding of the appeal process under the no disadvantage test? Is that allowed or not? If so, to whom does one appeal?

Ms Bowtell —Under the former provisions of the Workplace Relations Act the no disadvantage test was conducted by a single commissioner but could be appealed, for a collective agreement, to a full bench. Under the AWAs, they were reviewed by the OEA. If the OEA had a concern about whether an agreement met the no disadvantage test, that was referred to the commission. I do not have a copy of the former legislation here; I cannot recall whether there was an appeal mechanism there. The proceedings were at least open and parties could put submissions, and written reasons for a decision were issued in relation to whether or not an agreement met that test.

In relation to how that process worked in the commission, often the commission would require undertakings from parties to make sure that the agreement in its operation met that test. To pick up on some of the earlier questions about individual circumstances within a collective agreement, if the commission was uncertain whether an agreement met the no disadvantage test for all employees then the routine practice was for the commission to require a formal undertaking from the employer that in its operation it would not disadvantage individual employees. That was the way that was routinely dealt with in the former system.

Senator BARNETT —I have just referred to a different view that has been expressed. There has been some debate this week by legal experts about the fairness test and the right to appeal. I think most people say an appeal to the High Court is the only appeal process. I note that a Sydney lawyer from Fisher Cartwright Berriman, partner Benjamin Gee, indicated this week that the government has exactly the same arrangements under the proposed safety net arrangements compared to the no disadvantage test and that it is exactly the same position as the no disadvantage test. That is a legal matter—

Senator MARSHALL —Can that opinion be tabled?

CHAIR —I will get the piece of paper tabled.

Senator BARNETT —I would be happy to.

Ms Bowtell —That would have been the case if the Office of the Employment Advocate did not express a concern about whether an agreement met the no disadvantage test. That is true. There was no automatic referral to the Industrial Relations Commission. So that would have been the case under the previous legislation for AWAs but not for collective agreements, which were certified by the Industrial Relations Commission.

Ms Burrow —And you may recall, Senator, we oppose AWAs—and have since 1996.

Senator BARNETT —Yes, I am actually aware of that.

Ms Bowtell —It was also a requirement under the previous legislation that the president of the commission provide, in conjunction with the Office of the Employment Advocate, protocols and advice about how the OEA should go about assessing the agreement. So, while there not a review process, there was some more transparency.

Senator BARNETT —But you would agree that, under the fairness test, undertakings between parties can be agreed and accepted?

Ms Bowtell —Yes.

Senator BARNETT —I want to ask you about your views on the ALP’s policy, Forward with Fairness, with respect to unfair dismissal cases and whether you support the approach put by the ALP. They have put forward the fair dismissal code and, as far as I am aware, they have not provided details on it. I am wondering about your views on that arrangement, on who is going to decide what is in the code, on what will be in it and on the genuine compliance arrangements under the code.

Senator MARSHALL —That is not a question on the legislation.

Senator BARNETT —It is not directly related to it, but we are talking about the safety net arrangements and the unfair dismissal arrangements.

Senator MARSHALL —But if you have finished your questioning on the legislation—

CHAIR —Order, Senator Marshall! I suspect that what Senator Barnett is asking about is not on the legislation and therefore is outside what we are discussing today.

Senator BARNETT —I will move on to my final question. Ms Burrow, you talked about the family friendly provisions in your opening statement. Are you aware of and do you agree with the ABS statistics that say that those on AWAs are earning 94 per cent more on average than those on an award and, on average, nine per cent more than those on collective agreements?

Ms Burrow —No. I would have to see the data disaggregated. Ms Bowtell might be able to help me out. We know that, when you disaggregate the figures, women in particular, but also everybody else, earn more on a collective agreement than on an AWA. In that context—

Senator BARNETT —You disagree with the ABS; is that what you are saying?

Ms Bowtell —No, I do not disagree with the ABS data. You have to look at—

Ms Burrow —The disaggregated—

Senator BARNETT —Does Ms Burrow?

Ms Burrow —No, I said that I would want to see the disaggregated data because if you are including managerial then you might well be right, but I can tell you that when you look at disaggregated data of an AWA income versus a collective agreement income you will see that people on AWAs are worse off.

Ms Bowtell —When you are comparing rates of pay you have to make sure that, as far as is practical, you take out things that are not related to the work that is done. The most direct comparison is the non-managerial hourly rate of pay. That is the rate that the ABS uses, for example, when it is looking at the gender pay gap. It is true that both collective agreements and AWAs are higher than the award rate of pay, except for casual women. Casual women on AWAs actually earn a lower hourly rate than award dependent women. From that, I interpret that it is a compositional thing. You have a composition of low-paid women on AWAs who bring that down.

Senator BARNETT —Do you agree with the ABS saying that it is 94 per cent higher on average—

Ms Bowtell —I cannot tell you whether it is 94 per cent or not. I can tell you that AWAs and collective agreements across most classifications, but not all, pay higher than award, but across most classifications collective agreements pay higher than AWAs when you use the correct data, which is the non-managerial hourly rate of pay.

CHAIR —Senator Siewert, you have approximately six minutes.

Senator SIEWERT —Thank you. I want to go to the loopholes that you have identified. I will start with the last one you mentioned, which is Welfare to Work, because that is an area that I have been particularly concerned about. If I understand what you are saying correctly, somebody could say that they think their AWA is unfair and have it evaluated as unfair yet, because they had said that they did not want to take the job because it is unfair, they could then get pinged—that is the technical term!—for not meeting the activity requirement and hence be in breach.

Ms Burrow —The activity requirement is to be prepared to take work that meets the statutory guidelines, and the statutory guidelines say that the job has to offer at least the Australian Fair Pay and Conditions Standard. It does not say that it has to comply with the fairness test. I think there would be a consequential amendment to the Social Security Act required to pick up this test if it were to become law.

Senator SIEWERT —Yes, absolutely. Earlier you talked about the other loophole and people covered under the state system. How many people do think would be included in that cohort?

Ms Bowtell —The first loophole is the group who were in the state system who have made an agreement and then made a subsequent agreement. I tried to answer that question earlier and I am not sure that I can, but it is a subset of the million people. It is the state group, probably about 40 per cent of the million people, and a group within it has made agreements that do not meet the fairness test. For the second loophole it is a much broader group. As the SDA pointed out, it would probably mean the entire retail sector outside Victoria could potentially not be covered by the agreement. Other industries and occupations that have been traditionally covered by state awards include most clerical workers, potentially nurses, depending on how you do the numbers, and teachers—although most teachers are outside the scope of this legislation anyway—in the private sector, and so on. It would be many workers—millions.

Senator SIEWERT —I want to clarify something. Ms Burrow, you raised at the very beginning of your evidence the figure of 2.5 million workers not picked up. This cohort of workers under these three—

Ms Burrow —Are additional.

Senator SIEWERT —are additional, aren’t they?

Ms Burrow —There could be some double counting.

Ms Bowtell —The first group is a subset of the one million who are currently covered by Work Choices agreements. The second group is additional.

Senator SIEWERT —So we could be talking about a substantial number of workers that are currently not covered. I also want to go to the issue of transparency and clarify it a little bit more. The evidence we heard this morning, which I think you came in at the end of, said that the director does not have to give reasons for the decision. How would somebody be able to appeal it or take adequate action if the director is not required to give reasons?

Ms Bowtell —I think that the prospect of a High Court appeal is practically impossible.

Ms Burrow —Yes.

Ms Bowtell —In the absence of decisions, it is practically impossible. I note—picking this up from Senator Barnett’s questions as well—that the ACTU is not the only submitter to be concerned about the lack of reviewability of the decision. I think AMMA raised it in their submission as well and I may be wrong but I think ACCI did as well, so I think it is a generally held concern that a fairly junior bureaucrat could make that decision and there would be no avenue for review.

Senator SIEWERT —I will ask you the same question as I asked the shoppies. On the figure of 400,000 AWAs: do you agree that that is the figure that is likely to be dealt with in a year? I asked the department and they said about 400,000.

Ms Burrow —We do not know. We know that more than 1,000 a day are being signed at the moment. You can do your calculations, and the department probably has a better guesstimate then we would have, but we do think the whole process is probably unworkable in any kind of time frame that you would deem efficient. With regard to your last question, Senator Siewert, the other thing that worries us is the fact that the analysis that counts is done after someone has been forced to sign the individual contract, so there is no real choice for the individual, if it is deemed to be fair and they believe it is not.

Senator SIEWERT —They have to sign.

Ms Burrow —Yes. Our recommendation is that it is done first, and then people have genuine choices.

Senator SIEWERT —A prelodgement assessment can be carried out, but they do not have to do a prelodgement assessment.

Ms Burrow —I find it impossible to believe that you can get prelodgement advice in a timely fashion when you are being offered a job, given the statistics you just raised, which are pretty unbelievable with regard to the process post lodgement being able to be dealt with—and of course, in addition to that, collective agreements as well.

Ms Bowtell —We have some experience of this in relation to prohibited content where the Office of Employment Advocate can provide prelodgement advice to employers and, although it cannot formally provide it to anyone other than employers, it does so informally—it is not advice—to unions as well. We are aware of cases where about 10 weeks has been taken. We are told that the turnaround time that you can expect is 30 working days—around six weeks—for advice. The advice is regularly hedged in terms of: ‘We cannot say. You will have to provide more information.’ We are also, as I think we say in our submission, aware of a number of examples where the advice changes often with the same person or between people.

We have an example that I was given by one of our affiliates of a company that has done six collective agreements since Work Choices. The first three were assessed as containing no prohibited content. The fourth was assessed as containing prohibited content. Amendments were made. The fifth mirrored the fourth and was assessed as containing new prohibited content, and amendments were made. And the sixth was assessed as containing new prohibited content, and amendments were made. So we have very little confidence in the capacity of the Office of the Employment Advocate to do it in a timely fashion.

Senator FIELDING —We have heard earlier today that there are a number of people who are not covered by awards, and you have raised the notional issues as well, and the SDA made that clear. It is certainly in the hundreds of thousands of Australians, and I would say it is close to a million Australians, who are going to be not covered by an award in one way or the other. The fairness test is really applying the fairness to an award. The concern that Family First had before the government put in the fairness test was that basically there were a number of things that really should be guaranteed for all Australians. That was the attempt of the Family First bill: to put it through the legislation in such a way that it covered everybody, whether on an award or not, to make sure that that was there and could not be traded away.

I do not know whether you have had a chance to look at Paul Keating’s comments last night and at some of the discussions he had, but I think that was very similar to some of the thinking of Family First in putting it in the legislation centrally to make sure that every Australian was covered, not just by trying to cover it with a couple of bandaids through a fairness test and a few other bits and pieces. Do you have any comments on that?

Ms Bowtell —I think the approach that we would take is that there are conditions that should not be tradeable, and that is something that we would support. But we also think that there are a lot of things where the flexibility to bargain is the best way to go, and we have supported that for a long time. People do not often believe that the ACTU support that, but we do. Things like the hours of work, the arrangement of hours and so on are things where we think the safety net is best set at an industry or even an enterprise level, and then people can bargain flexibility around that. So our preferred approach is to say that it is the award system that sets the safety net around hours of work. We are quite happy with legislation setting the safety net around the things that we do think no-one should trade, like annual leave, sick leave, redundancy pay and so on.

Ms Burrow —Public holidays—

Ms Bowtell —Public holidays.

Ms Burrow —and meal breaks.

Senator FIELDING —How does the fairness test affect things like the example—which I think is absolutely un-Australian—of the Tristar situation with redundancy? Family First has tried to cover that issue, and I understand your comments. But I am just asking generally: do you think the fairness test is going to address that issue of redundancy such as in the Tristar situation, which all Australians, I think, were appalled by when they saw and heard about it? Does the fairness test cover that at all?

Ms Bowtell —The Tristar example only protects redundancy provisions that are in a workplace agreement or in an award. If you make a workplace agreement with no redundancy provisions, there is nothing to protect, and the fairness bill does not protect redundancy provisions. So it will be perfectly lawful—it is now, if this bill goes through—from 7 May to continue making agreements that contain no redundancy provisions and therefore there is nothing to protect.

Senator FIELDING —So the situation of Tristar is waiting to happen again, basically?

Ms Burrow —Absolutely.

Senator FIELDING —We know that most employers do the right thing and most workers do the right thing, but obviously we do need to cover situations that have already happened once, and we should not allow people to fall through cracks again.

Ms Burrow —We agree.

Senator GEORGE CAMPBELL —I preface my first question by saying that ACCI in their submission this morning argued fairly strongly that this legislation was not necessary, that in the contact they had with their 35 or 36 member organisations they were not aware of any instances where award conditions were not being underwritten by AWAs in the workplace and that the ACTU scare campaign in fact had created a deterioration in workplace relations out in the workplace and created uncertainty in many workers’ minds as to whether or not their conditions in fact were being protected. So my first question to you is: in terms of this legislation, and given the deficiencies which you have raised and have sought to have amended, is the ACTU supportive of this legislation to the extent that it is actually an improvement on what currently exists?

Ms Burrow —We think that is a decision for the senators. It is certainly not equivalent to the old no disadvantage test. For the opposite reasons to those given by ACCI in opposing this, we still believe that employers—and we agree with Senator Fielding that there are many good employers out there—who seriously want to take away award conditions will still be able to do so. Not only is it the case that people who fall outside of the fairness test will continue to be able to be exploited with imposed AWAs, but it is even the case for those who might come within its parameters. If the employer seriously wants to take away conditions or to reduce equal pay and discriminate directly against those with personal circumstances, including family responsibilities, then it will happen. We think that it has as many holes as a basketball net, so it is not a model piece of legislation. But we certainly understand that the current arrangements are even worse, so we will leave it to you to decide, Senators, whether you will vote for this. What we would urge you to do is to close the loopholes, to put it back to a standard that equals the no disadvantage test, and then we might seriously believe that there is some concern. We still do not support AWAs where the employer can simply say, ‘Sign the contract.’ There is no right to bargain collectively and there is no change to the unfair dismissal law—which is the huge baseball bat that employers can hold over workers. But we ask you to amend it to bring it up to the standards of the no disadvantage test, and we hope that the government, if it is serious, will agree with such amendments.

Senator GEORGE CAMPBELL —I have not read the legislation in detail as it was only available last week and we have had other things to do as well as this. But from my cursory reading of it it seems to me that there is a potential for people on collective agreements to be treated differently to, or to be worse off than, those on AWAs in terms of meeting this fairness test. It seems that you can negotiate things under collective agreements which may disadvantage some employees, but provided that it does not disadvantage the substantial bulk of the employees under the collective agreement it is capable of being registered. Whereas I presume that if an AWA does not meet the fairness test—the five criteria or whatever they are—then it will not be capable of being registered, but that may not be the case with respect to collective agreements. Is that your understanding of the legislation, or am I reading it incorrectly?

Ms Burrow —Its potentially more restrictive, but I know that you are asking about a particular technical issue about being able to negotiate the inclusion of award conditions in a collective agreement. That intersects with the current rules about prohibitive content, so I might Ms Bowtell to deal with that.

Ms Bowtell —I think that the issue is that the proposed legislation would simply require the Workplace Authority director to be satisfied on balance in relation to a collective agreement, and there is no clarity given as to what that means. Whereas under the no disadvantage test there was a built-up case law, or jurisprudence, which guided people as to what that meant, and what that meant was that it was not possible to trade some workers off for others—to say that we will give the shift workers more but the day workers will get less and overall it meets the global no disadvantage test because there is a requirement that it be applied in a way that no-one is worse off. So we would like to see it strengthened. I think the SDA picks that up quite well on page 8 of its submission.

Senator GEORGE CAMPBELL —But that, you think, is a deficiency and it needs to be addressed.

Ms Bowtell —It is, and it is not something that we draw attention to in our submission but the SDA covers that reasonably well. I think Andrew Stewart’s submission picks that up as well.

Senator GEORGE CAMPBELL —I drew your attention earlier on to the proposal by the AiG that came in yesterday. It is essentially seeking the repeal of, I think, section 355, which would allow award provisions to be referred to in an agreement without being spelt out in specific terms. What is your view about that sort of proposal?

Ms Bowtell —There has been some debate internally about whether that is a good or bad way of making agreements. Some unions prefer to do it that way; others say that it is easier for everybody at the workplace to understand their rights and obligations if the agreement does spell out what is required. So it is an issue around clarity in agreement making. We did not see any reason for a prohibition on including, by incorporation, the terms of an award. In practice, where parties have tried to do that, the Employment Advocate has regularly written to them and said, ‘I am uncertain as to whether this then contains prohibited content and, until I review the actual award that you are referring to, I cannot tell you whether it contains prohibited content,’ and then over time has developed a series of advices in relation to particular awards. The national building and construction industry award, the metal industry award and others have been the subject of a series of advices. I know you are hearing from the Ai Group after us and I am sure they have had the same experience as us where, just when you think that an award has been cleared of prohibited content, the Office of the Employment Advocate come back and tell you there is another section of it that they now think is prohibited. So it is difficult to incorporate those in the agreement. There is a practical barrier as well as the section 355 barrier.

Senator GEORGE CAMPBELL —I will ask them, obviously, what their thinking is behind the amendments, but I thought I would take the opportunity to—

Ms Bowtell —Certainly, there are unions affiliated with us who would prefer to do their agreement making in that way, and there are employers who would be happy to do it in that way—to incorporate the terms of the award in the agreement. They have difficulty doing that at the moment.

Senator GEORGE CAMPBELL —That is if the parties are in agreement about—

Ms Bowtell —It seems unusual that the legislation would prohibit that.

Senator GEORGE CAMPBELL —On the exceptional circumstances issue, we know that there are case histories in the past of companies that have been allowed to vary conditions of employment because of their particular circumstances, but they have usually been accompanied by a time limitation upon how long it can operate before a review et cetera. It was argued by the department this morning that one of the factors that the Workplace Authority director would have to take into account is the time that these exceptional circumstances agreements were being sought to cover. But I am not able to find anything in the draft legislation where it in fact says that.

Ms Burrow —No. Our understanding is that it is simply a blanket time frame that equals the life of the individual contract or AWA itself unless the parties have agreed otherwise. So we are really concerned about this. We are concerned for two reasons. The example used in the government’s material goes to that well-known case at SPC, but of course that was an agreement between the parties—and I have already pointed out the imbalance of power when an employer can simply determine an individual contract—and it had a limited life. Now, that is the very point you raised, Senator. I might add that we are also very concerned, beyond that issue, about the broadening of ‘exceptional circumstances’ from a company’s circumstances or capacity to pay, to individual circumstances, which should never appear because that absolutely goes again to direct discrimination, just as the provision for a person’s personal circumstances does.

Senator GEORGE CAMPBELL —The issue that I raised with the department this morning, Ms Burrow, in respect of that was whether or not that provision for a person’s personal circumstances to be taken into account was in fact in conflict with the Privacy Act. The department said no, because the Workplace Authority director had no power to insist on their providing the information to him. In those circumstances, if the individual did not provide that information then there would be no basis for exceptional circumstances to be granted because the director would not have all the information before him to make a decision. I found that a very convoluted proposal from the department, but that is what they said.

Ms Bowtell —The Workplace Authority can gather information from the employer or the employee. So whether we are talking about the personal circumstances factor or the exceptional circumstances factor, which includes an individual’s employment opportunities—so, the two issues in the legislation—in either case there is no obligation to go to the worker. All that information could be gathered from the employer, and the Workplace Authority director can take that information from the employer into account without verifying it with the employee.

There is no obligation to go back to anybody for information but, if they do go back, they need not go back to the employee. They may go back and say, ‘This seems no good. It doesn’t seem to meet the test. Why do you think you can get away with this?’ The employer might say, ‘Because they’ve been long-term unemployed and they wouldn’t get a job anywhere else. That’s why.’ Or they might say ‘Because she’s a single mum, she’s got no-one to look after the kids except on weekends. It suits her to work weekends so that’s why I don’t have to pay the 200 per cent loading on Sunday.’ The employer can say that and there is no requirement to verify it.

Ms Burrow —You have two elements: direct discrimination and employer verification as potentially the only basis for decision making in secret.

Senator GEORGE CAMPBELL —Wouldn’t that potentially put the employer in breach of the Privacy Act?

Ms Bowtell —It is not information that they have collected and stored on a database. I do not have encyclopaedic knowledge of the Privacy Act, but I do not think that they are using information that they have collected and stored in a record for a purpose that they would not be allowed to use it for. It would be a lawful purpose that they were using it for. I do not have a copy of the legislation. We could take that on notice and give you some information about that.

Senator GEORGE CAMPBELL —I would appreciate that because I am really concerned that there are personal aspects of people’s lives that they may not want disclosed.

Ms Burrow —Exactly. But it is abhorrent, anyway. This should never be the case because it leads not just to potential breaches of privacy but to direct discrimination—which should have been eliminated once and for all based on all of the old areas of dispute—and therefore legal outcomes around equal pay, equal rights et cetera. I also want to pick up finally in this context on Senator Fielding’s earlier question. We have seen what the term ‘operational reasons’ means. It means very little. Whether or not it is morally right, the commission has determined that, legally, operational reasons are very broad. So, too, are exceptional reasons. Economic circumstances, from our point of view, are the same thing—if you just have to assert it, if you do not have to open your books or show capacity to pay, if it is secret and not transparent, and then of course it even goes beyond that to the individual. These things are shocking. They are terrible pieces of legislation. They simply open people to exploitation.

Senator GEORGE CAMPBELL —Finally, are you aware that the Office of Workplace Services, as it is now known—the old OEA—will have something like an additional 600 employees engaged for the purpose of administering the fairness test? They told us at estimates hearings a week ago that it would be around 200. The minister upped the ante to 600. We understand that the bulk of those people will be engaged from labour hire firms, such as Skilled Engineering, and that the maximum training that they will receive is in the region of two weeks before they are engaged in the process of scrutinising these agreements for certification. I think the Employment Advocate told us that something like 20,000 agreements had been registered since 7 May. I am told independently that there is likely to a backlog of about 80,000 requiring assessment at any given point in time. In those circumstances, how likely is it that the strict interpretation of this new legislation will be applied to every agreement that is put forward for registration with that office? How confident could you be that in fact it has at least met the test that will now be put in place?

Ms Burrow —I do not think you can be confident of any of that. I think a system, even going forward from day one, with that many workers is probably not workable. But, in terms of dealing with the backlog and then going forward from a clean start, you have said it all, Senator. What I find somewhat unbelievable in what you have just told me is that I was not aware that the intention of the department or the authority was to hire people from a labour hire company rather than by direct employment.

I was certainly not aware that they would get only two weeks training. I can assure you that I have had more years than I would want to count of industrial experience, and I take a lawyer with me. If I were actually going to assess against any code—but in this case the complexity of awards—I would not do it. So I cannot believe that you can find 600 or 800 people, give them two weeks training and they will be able to do this with any accuracy. If I am appalled at the loopholes in this legislation, I am even more appalled that, with no transparency, working Australians are simply going to be conned again. This cannot possibly provide justice.

CHAIR —Senator McEwen, you may ask one question. That is all we have time for.

Senator McEWEN —Ms Bowtell, earlier you referred to groups excluded. I am talking about the group excluded by virtue of their state award coverage. You mentioned retail workers, clerks and nurses. Are there any other categories of employees that you think come in under that state award? And please give us your opinion of the gender breakdown.

Ms Bowtell —It would be the areas that have traditionally been covered by the state systems that have now moved into the federal system—leaving aside perhaps the public sector and some of the unincorporated areas. You would also include some but not all of the community and public sector, depending on whether they are constitutional corporations. So that would be SACS type workers and so on. It would be retail and clerical, certainly. Health workers in aged-care facilities would probably be covered, again depending on whether it is a corporation. By and large they are female dominated occupations.

CHAIR —Senator Fielding has one more question.

Senator FIELDING —I have asked this before today. There was a report in the Australian on 2 June. The words here are ‘operational reasons’. You picked that up before. The concern is the fairness test. The issue that Family First raised was about redundancy in the Tristar matter, but just recently there has been another issue here. The Australian Industrial Relations Commission has ruled that a company that has decided to restructure—the word ‘redundancy’ is not used—is legally allowed to sack people, under Work Choices, because of the restructure. Has that been brought to your attention before?

Ms Bowtell —I am not surprised. I have not read the decision, so I am commenting only on the newspaper report, but I was not surprised by the decision of the commission in the Carter and Village Cinemas case. Nor was I surprised by the Priceline decision. It has always been my view that the ‘operational reasons’ ground was very broad, and I would not be surprised if it has been cast that way. At the time that the Work Choices bill was going through the parliament, it was said that the only reason for that was to stop people double dipping and getting a redundancy payment and an unfair dismissal payment. It clearly goes much further than that, and I think it gives carte blanche to employers, if they just decide they do not want someone, to dismiss them, regardless of the size of the business.

Senator FIELDING —Given that—

CHAIR —That is it. That is two questions.

Senator FIELDING —It is not a question.

CHAIR —I said one.

Senator FIELDING —It is not a question. Just in response to that: I think most Australians would be shocked to know that ‘operational reasons’ would include restructuring.

CHAIR —That is a comment, not a question, and it is out of order.

Senator FIELDING —I do not think it is at all.

CHAIR —It is.

Ms Burrow —We agree, Senator Fielding.

CHAIR —There is also one more question from Senator Birmingham.

Senator FIELDING —It is not out of order. That is a joke!

CHAIR —It is out of order.

Ms Burrow —It is not at all.

Senator BIRMINGHAM —Ms Burrow, you have made a very passionate argument today against what seems to be any consideration of the inclusion of personal circumstances in the trading away of any conditions. Are there any areas at all where you think that a parent should have the flexibility to trade away some conditions to gain extra convenience in the care and looking after of their children?

Ms Burrow —Go for it; I have made my point.

Ms Bowtell —The issue is not about trading away; the issue is whether it is essential to have people forgo the safety net, the floor below which you are not meant to fall, because they have caring responsibilities.

Senator BIRMINGHAM —What about penalty rates?

Ms Bowtell —Let me just explain to you. I do not know how long it is since you have read an award, but awards currently contain time-off-in-lieu provisions, make-up-time provisions and individual facilitation clauses which allow you to start earlier and finish later, to change the time of the meal break or to shorten the meal break. The system contains the flexibility that parents and carers need now, without them forgoing entitlements.

Ms Burrow —The short answer is: no trading away and certainly flexibility above the safety net; no-one should fall below it. This is just direct discrimination. It takes us back three decades, particularly for women, but increasingly for men, who are taking up caring responsibilities.

Senator BIRMINGHAM —The short answer is: no flexibility. Thank you.

Ms Bowtell —No. The short answer is: there is sufficient flexibility, Senator.

Proceedings suspended from 12.54 pm to 1.30 pm