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Thursday, 21 February 2002
Page: 699

Mr HUNT (11:29 AM) —I rise to speak on the Workplace Relations Amendment (Fair Dismissal) Bill 2002. The essence of this bill revolves around two words: job creation. The reason that this bill exists is to help promote job creation in the small business sector within Australia. What occurs in that sector at present is that there is a disincentive to employment. Although the member for Blaxland rightly points out that there was jobs growth in this sector throughout the 1990s, he fails to recognise the key notion of correlation. Was the job growth all that it could have been or was it less than it could have been? That is the key point. It is about job creation in my electorate of Flinders in the state of Victoria and in Australia more generally.

Let me start by making what I think is an important distinction. On the one hand, honourable members on the government side of the House are pursuing an approach which they believe will encourage employment.

Mr Vaile —It will.

Mr HUNT —Absolutely. On the other hand, honourable members of the opposition are viewing it from the perspective of workers' rights and the belief that this is some sort of derogation of workers' rights, but it is a false dichotomy. It is false because what is being proposed is neither a threat to workers nor a threat to basic rights. The single most important thing that we can do for workers or would-be workers is to provide employment, and not just to provide employment but to provide a system which encourages the best employees, which rewards them and which does not protect those who would exploit or abuse the system.

I wish to deal with this bill in three stages: firstly, what is proposed; secondly, why it is necessary; and, thirdly, how it will operate. The essence of what is proposed is that the Workplace Relations Amendment (Fair Dismissal) Bill 2002 seeks to amend the Workplace Relations Act of 1996 so as to exempt small business from unfair dismissal claims.

The bill essentially does two things: first, it will prevent new small business employees, and I emphasise `new', other than apprentices and trainees—this is a very important distinction—from applying under the Workplace Relations Act for a remedy in respect of unfair dismissal. In essence, it exempts them from the capacity to claim unfair dismissal. What it does not do is exempt them from unlawful dismissal provisions. That is a critical element. The second thing the bill does is require the Australian Industrial Relations Commission to dismiss unfair dismissal applications that are made against small businesses. The definition of a small business is a business which employs fewer than 20 employees, including the employee in question.

This is the fourth time since 1996 that a bill seeking this essential end has been introduced by the government and the reason is that the problem which was present in 1996 is with us to this day. That essential problem comes down to the question of whether or not those who seek to employ, who seek to generate employment, are inhibited in their work from so doing.

This leads to the second part of my address, and that is the question: why is the bill necessary? During his presentation, the member for Melbourne raised the notion of the role of the contract of employment in Australian history. He said that there had been a century-long battle between employees and employers. I would dispute that, with the greatest respect to the honourable member. A century ago, that essential paradigm of conflict was correct. There was an important role which the union movement played in helping to bring forth greater fairness and bargaining power between the two parties.

A number of things have transpired since then. First and foremost, the core basic protections are in place, both in law and in culture. Secondly, to now maintain what is essentially a discourse of power, to set it up between labour and capital, is to adopt an old paradigm, which is destructive in the workplace and destructive in the social dialogue. Let me illustrate that with a personal example. In 1985-86, I worked as a summer employee and was a member of the Storemen and Packers Union—and I was happy to have been a member—at Consolidated Holdings' liquor warehouse in Huntingdale.

An interesting thing occurred during that time. All employees who were employed on a casual basis were picked up by the shop steward who said, `Look, we don't want you working too hard and we don't want you working too fast, for a couple of reasons. One is that you run a risk of personal injury'—and it was said with a certain implication attached—`and, secondly, you also run a risk of making the other employees look bad.' There was a culture afoot, which I experienced myself, which militated against active work within the workplace environment.

There are twin threats to the effective operation of the economy. One is an excessive power to an old style of unionism—and I respect the history of the unions within Australia—but this is an example of the way in which it can be used destructively. The second key threat to small business employment—because, as I note, the member for Greenway said in his speech that the presence of unionised labour within small business has been significantly diminished, and that is true—is the threat of litigation for unfair dismissal. We find that there is a disjunction between what was intended or proposed and what has become the reality. There was a high motive in the proposition behind the original unfair dismissal laws— and I respect that—to provide protection against arbitrary dismissal, but the reality is that it has become a weapon to be used against any form of dismissal. There is no such thing now as legitimate dismissal; every dismissal comes with the implication that you may be threatened.

Two core impacts have occurred. Firstly, employers are afraid to dismiss. They are afraid to dismiss because of the cost of litigation, because of the embarrassment of litigation and because, in a frequent practice within the advisory bodies, those law firms, lawyers and barristers that advise employers say, `Just settle. We think you have the case, we think you're likely to win; but the cost of defending the case simply means that it is not worth pursuing.' So there is a reluctance to dismiss employees, despite having genuine grounds, and that has a destructive impact within the firm; it strikes away at the heart of it.

Secondly—and perhaps even more so— employers are afraid to employ. The previous speaker, the member for Blaxland, asked where the evidence was that employers are afraid to employ. There is a multitude of evidence. In 1996 a Morgan and Banks survey indicated that 16½ per cent of businesses with fewer than 30 employees had been adversely affected in their intentions to hire people by the federal unfair dismissal laws. In 1997 a survey by Recruitment Solutions indicated that almost nine per cent of businesses had employed fewer permanent staff as a direct consequence of fear of the application of unfair dismissal laws. Then the New South Wales State Chamber of Commerce in 1997 conducted a survey which showed that 56 per cent of businesses—an extraordinary figure—said that the prospect of unfair dismissal claims had discouraged them from recruiting additional staff to their businesses. That is a consistent pattern of clear evidence.

This then leads to the third part of my question—that is, how does the law operate? How does it lead to a fairer outcome and increased employment? Firstly, it exempts all small businesses with under 20 people from the Workplace Relations Act. It does so with two important caveats: it excludes apprentices and it excludes trainees, so they have a guaranteed period of service. Secondly, it commences from the date of approval of this legislation. That means that it applies to new employees only, so there is an existing protection for all those currently employed—a protection which we believe is unnecessary but which in any event remains the case. Thirdly, whilst the unfair dismissal provisions would no longer apply, all employees remain subject to unlawful dismissal laws, which means that they cannot be dismissed on grounds of prejudice alone.

The final question, then, is: what is the rationale? Why is it that small businesses do not employ? Firstly, they are afraid of litigation; secondly, they usually have no dedicated, specialist human resource staff; thirdly, the management of employee relations is usually handled by the owner; fourthly, small businesses often have to engage external representation, which is an additional cost to the business, if they are going to comply with what are excessive regulations in an ordinary human environment; and, fifthly, there is a strong precedent for exempting firms under a certain size. That precedent begins in New South Wales with the Employment Protection Act 1982, which has an exclusion for employers with fewer than 15 employees. The Affirmative Action (Equal Employment Opportunity for Women) Act 1986, introduced by the Hawke government, excludes firms with fewer than 100 employees. So there are very clear precedents. The same occurs overseas in Austria, Germany, in the Republic of South Korea and in Italy, where all firms with under 60 employees are excluded. I put clearly to the House that I support the provisions within this bill for the reasons outlined. As I said when I began, it is simply about job creation.