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Thursday, 7 May 1987
Page: 2805

Mr ROCHER —My question is directed to the Minister for Employment and Industrial Relations. I refer the honourable gentleman to the agreement reached between the building unions and employers for a $52 a week pay increase for more than 200,000 building industry employees. Is this sweetheart deal, or at least the $20 severance pay component of it, totally outside the Government's wage fixing principles? Is it anticipated that under our centralised system there will be a flow-on of this agreement to employees in related industries? In view of the Treasurer's announced rejection of sweetheart deals and his threatened determination to intervene against them, will the honourable gentleman, as the Minister responsible, now intervene to oppose this deal?

Mr WILLIS —The matter raised by the honourable member is an important issue. The Government, of course, has been concerned about the building industry negotiations and the prospect that they might lead to some breach of the wage principles and guidelines. I understand that the agreement reached between the parties, which has led to the lifting of bans and limitations on work at various sites around the country, provides for consideration of three elements-first tier and second tier wage increases and also the severance pay issue. In relation to the first tier, I understand that the agreement is that there will be support for the $10 increase which will apply to everyone who gives his commitment to the principles. I also understand that the employers have said that they would support an application to vary the building industry awards in accordance with any second first tier increase that might come later in the year.

In regard to the second tier, the parties have agreed that they should establish an analysis of work practices which could be eliminated or improved to increase efficiency in the industry on a State by State basis. A long list of such work practices has been set out in their agreement. They agree that there will be no second tier increases prior to offsetting trade-offs being established and endorsed by the Commission. The Government has no problem with any of that as long as it is carried out as the words would seem to indicate. But, of course, there might be a gap between delivery and what is actually on a piece of paper. But as long as it is carrying through what has actually been agreed we have no problems in that regard.

As I understand it-I do not have the details in front of me-the employers have agreed to the establishment of a working party to consider the issue of severance pay. The outcome of the working party will then go to the Commission for acceptance if it comes out in support of a severance pay agreement in the industry. The Government has a number of positions in relation to that. Firstly, I note that there has been no agreement by employers to any amount and the employers have not said in relation to that agreement that they support any amount. As I understand it the $20 figure, which was the union's claim, has not been agreed to by employers. Secondly, we support the establishment of the working party to examine the issues; I think that is a sensible thing to do. I also note that the application of redundancy pay in the building industry is a complicated matter. It has been looked at twice in passing by the Commission in respect of the original termination change and redundancy case and also the recent national wage case. In neither case has the Commission said that a redundancy pay scheme in the building industry is necessarily inappropriate. The Commission said that it was a matter that should be considered on its merits. We agree that the issue should go to the Commission for determination and I understand that that is also a key element in that agreement.

The position the Commonwealth will adopt when the matter comes before the Commission depends on what comes out of the working party report. I say quite clearly, though, that we will not support anything other than a genuine redundancy scheme. We would not support anything which would be a general wage increase dressed up as a redundancy scheme. That is our clear position made known to the parties and that is the position we would adopt in the case. Whether we would support the actual proposal that goes to the Commission would depend on what that proposal is. If it is a genuine redundancy scheme and it suits, and is appropriate to, that industry, we will support it but only on the basis that it is a genuine redundancy scheme and not a general wage rise.