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Monday, 5 March 2001
Page: 24930


Mrs CROSIO (3:28 PM) —I rise to introduce my private member's bill, the Employee Protection (Employee Entitlements Guarantee) Bill 2001, a bill which I have introduced into this parliament in various amended forms each year for the past four years. Each time I have introduced this bill, to my disappointment and to the detriment of thousands of Australian workers, it has been ignored and been allowed to lapse by this government. However, every year that this government chooses to ignore and not legislate this bill, thousands of Australian workers are being robbed of their legally accrued entitlements.

This bill will secure the full payment of employee entitlements such as unpaid wages, annual leave, long service leave and redundancy pay in the case of corporate insolvency. Corporate insolvency and the loss of workers' entitlements have received significant media attention over the last few years. However, it has been an issue which I have raised in this parliament time and time again since I first raised it in 1996 after an electronics firm in my electorate went belly up and its workers lost not only their jobs but also all their entitlements, which totalled millions of dollars. Back then there was not a lot of interest in this issue from the government, but it is funny how things have changed over the last few years. Recently a great deal of public concern was generated over the payment of the entitlements of employees of mines such as the Oakdale colliery, the Woodlawn mine and the Cobar copper and zinc mine. In these cases the employees of the mines were faced with the situation of losing all or most of their entitlements due to the company becoming insolvent.

More recently, closures in the textiles industry refocused national attention on the issue, particularly National Textiles, a firm in the Hunter Valley, New South Wales, which went belly up owing its employees a reported $3.5 million in entitlements. While these closures were occurring in the workplace, this bill, if it had been legislated and become law, would have secured 100 per cent of these workers' entitlements. The workers would have been paid out in full had this bill been legislated.

All the government had to do was to adopt this bill but, year after year, they have refused. In 1998, they said they had legal advice that this bill was not workable, and it was obvious that they were plainly uninterested in the issue. I reintroduced the bill in 1999. The government said the bill was not viable, because it did not even cover redundancies and was too much of a burden for small business owners. So, in 2000, I amended the bill to include redundancies and to exempt small businesses. Again, the government ignored the bill. They ignored this bill even after I said to them that this bill could be amended or changed and that the government could even take the credit for the bill, as long as the end result would be that Australian workers would have 100 per cent of their entitlements secured. It is now obvious for all to see that, if this is going to happen in Australia, it will take the election of a Beazley Labor government to do it.

Here, I introduce the bill for the fourth time and hopefully this time the federal government will have the decency to work with this bill and come up with some viable plan to secure 100 per cent of workers' entitlements. I will not rest, whether I am in opposition or in government, until Australian workers have 100 per cent of their entitlements secured. Despite all of the commotion and attention this issue of employee entitlements has received over the years, thousands of Australian workers are still being forced out of work, with many losing all or most of their accrued entitlements.

Last year, after four successive years of the Labor opposition proposing employee entitlements schemes, the government's hand was forced to create the employee entitlements safety net scheme. It did so only after the entire nation's attention was focused around the National Textiles factory in the Hunter Valley where 342 employees were left without a job and were owed more than $3.5 million in entitlements.

Members of parliament will recall the workers at National Textiles losing their jobs and going for some time without any compensation. Of course, the workers at National Textiles are the only workers in Australia that this government decided it would endeavour to look after. They are the only workers in Australia who got their full entitlements. The main factor which prompted this government to act on workers' entitlements in the National Textiles case, I believe, was the fact that the Chairman of National Textiles was the Prime Minister's brother. They are the only workers in this country that this government has gone out of its way to do anything for, and I find that absolutely outrageous!

Over the years, this government has sat back with its arms folded and watched 160 workers at the Woodlawn copper and zinc mine lose their jobs and almost $6 million in entitlements; 270 workers at the Cobar mine lose their entitlements and have to fight tooth and nail to get only a shadow of it back; 250 meatworkers at Grafton lose around $3 million in entitlements; and 150 nurses from Yeppoon, near Rockhampton, lose $1.4 million.

The government saw the debacles at the Oakdale colliery—and only through a certain industry fund structure were they able to get some of their entitlements back—Braybrook textiles and many other places across the country. The list goes on. Each case reminds us of those workers and their families who, through no fault of their own, were dudded out of their right to access their legally accrued entitlements. Every time one of these cases came up, the government said, `Oh, dear, we're going to do something about it and we're going to get an entitlement scheme up and running'

In the meantime, the Labor opposition has introduced two separate bills in the parliament—this one and one from my colleague the member for Brisbane. Both have been introduced in this parliament several times. Altogether this government has squandered seven opportunities to protect workers' entitlements—three from the member for Brisbane and now four with this bill. The fact that it took a family member of the Prime Minister to become embroiled in a corporate insolvency for this government to act on this issue is clearly not good enough.

I quote from the Minister for Employment, Workplace Relations and Small Business himself:

Australia's workers should no longer be left high and dry when businesses collapse.

It is time that we had a complete entitlements scheme which guarantees payment of 100 per cent of workers' entitlements in the case of insolvency.

But what does the new minister for workplace relations say to those workers who have built up thousands of dollars in entitlements? He was quoted in the Sydney Morning Herald on 23 January 2001 as saying:

What we expect people to do is to take their holidays as they fall due and not delay too long in terms of taking any long service leave that's owing to them.

In other words, the minister is saying that workers should cash out their entitlements—take holidays or cash out their annual leave and all their entitlements—because this government cannot secure them. The minister is saying that this government will never act to guarantee the payment of legally accrued entitlements, so you might as well get them cashed out as they accrue—that is, if you can.

This is essentially an admission from the minister that what we have been saying all along is correct: the current government's employee entitlements safety net scheme does not go far enough. The safety net protects employees' entitlements only to a maximum of 29 weeks pay, capped at $20,000 per claim. The scheme is only 50 per cent funded by the federal government and relies on the states to make up the other 50 per cent of the payments.

What happens if employees have accrued up to $60,000 or even $70,000 over their 20 or 30 years of hard work and then one day they turn up to work to learn that their boss has gone under and that the money that they should be getting will be used to pay his creditors? I ask government members whether they themselves would be satisfied with a payout of $20,000 dollars or less if they had worked for most of their lives and had been entitled to something like $50, 000 or more.

The Labor opposition has come up with many viable, feasible and affordable alternatives to the current employee entitlements safety net scheme. However, characteristically, because someone else thought of it first, this government still refuses to act to protect Australian employees' entitlements. This bill proposes that, through the establishment of a scheme similar to the way in which superannuation funds are operated, 100 per cent of all employee entitlements would be locked away and would be able to be accessed by employees in the case of insolvency. The problem of insolvency and employee entitlements is becoming an Australia-wide problem. However, one of the main problems with lost entitlements is the keeping and recording of the statistics on employee entitlements and corporate insolvency.

The Melbourne Age on 4 September 1999 reported that it was difficult to calculate the extent of damage caused by the problem of employer insolvency and lost employee entitlements in Australia. The Age also stated:

It is hard to quantify the problem accurately, neither the Australian Bureau of Statistics nor the Australian Securities and Investment Commission monitor Employee Entitlements squandered through companies that go belly up, but estimates suggest that it could be as high as $181 million a year.

The ACTU, in its submission to the Joint Parliamentary Committee on Corporations and Securities in 1998, calculated that at least 7,000 businesses fail each year and they estimate that at least half of these cause their employees to go without their legally accrued entitlements. The ACTU further estimated that annual losses in employee entitlements in Australia total close to $140 million per year. While the Howard government's Employee Entitlements Support Scheme is a start in the right direction to solving the problem, a viable solution to the Australia-wide problem of loss of entitlements is yet to be found. This government's employee entitlements safety net scheme is just like trying to cover a king size bed with a very small handkerchief.

Recent figures which have been released by the government show the inadequacy of the current employee entitlements scheme. These figures show that, in the first 12 months of the Employee Entitlements Support Scheme, only $3.1 million has been paid through the scheme, despite there being $55 million allocated for the scheme in the 2000-01 budget. The government's figures show that 1,650 employees of 104 insolvent companies had been paid a total of $3.1 million in the 12 months to 31 December 2000. The figures also show that 127 claims from employees regarding 42 businesses had been refused because they had not met the criteria. The current scheme simply does not cover the extent of the problem in Australia—even on the government's own estimates, the scheme falls short. The government contracted a leading insurance broker to estimate the average level of lost entitlements each year. The insurance firm reported that the figure is expected to be around $110 million per annum, affecting up to 19,000 employees, each owed an average of $5,700. This is much bigger than the measly $3.1 million that was paid out to only 1,650 employees through the EESS in the first 12 months to 31 December 2000.

This government must act to provide the payment of full entitlements of employees, that is, 100 per cent of entitlements in the case of insolvency—not just at the capped figure of $20,000, and not just 50 per cent funded by the federal government and 50 per cent funded by the states. Employee entitlements should not be a liability of the Australian taxpayer. They should be secured and guaranteed so that the costs to businesses are kept at a minimum and the cost to the taxpayers is kept at a minimum. The excuses this government has given for not considering this bill or any other bill which aims to secure 100 per cent entitlements are not adequate. Last time I introduced this bill, there was a lot of talk about a bipartisan approach to this issue and I am bitterly disappointed that this government has allowed the wheels to fall off the bipartisan train.

The Minister for Employment, Workplace Relations and Small Business recently issued a statement of rebuttal against the alternatives to the Employee Entitlements Support Scheme, where he lists all his reasons why the government cannot legislate to protect 100 per cent of employee entitlements. One reason the minister claims this cannot be done is that no other country in the world secures 100 per cent of employee entitlements or has an employee entitlements scheme similar to the one I am proposing. I say to the minister and to his government benches: where would this country and, indeed, the developed world be if every time someone came up with a policy which was a `world first' it was not legislated because no other country had done it before? Who is going to begin? It is time for Australia to take a leading role on the issue of employee entitlements. If the ABS or the Australian Securities Commission do not collect figures on the amount of employee entitlements squandered by bosses in cases of insolvency, then let us commission them to do so. This would be the first step towards accurately calculating the extent of the problem in Australia.

We must do whatever it takes in research or in policy experimentation to find an alternative which secures 100 per cent of legally accrued entitlements to all employees at the lowest possible cost to business and to the taxpayer. I am not saying that this bill is the be-all and end-all on this issue—I never have—but I am saying that this bill is a damn sight better than this government's half-cocked Employee Entitlements Support Scheme because this bill, at least, guarantees 100 per cent of workers' entitlements.

The protection of employees' entitlements is more important and more complex and deserves closer consideration than the superficial approach that the government has made to it. Australian employees, in an era of widespread concern over the security of their jobs, their incomes and their families, deserve nothing less than to have 100 per cent of the entitlements for which they have worked protected under law. I introduce this bill again and I will keep reintroducing this bill each year until we have 100 per cent entitlements guaranteed in this country. I commend the bill to the House, and ask the government to act.

Bill read a first time.


Mr DEPUTY SPEAKER (Mr Nehl)—In accordance with sessional order 104A, the second reading will be made an order of the day for the next sitting.