Mr ABBOTT (Minister for Employment and Workplace Relations and Minister Assisting the Prime Minister for the Public Service) (9:31 AM) —I move:

This bill amends the Workplace Relations Act 1996 to prevent the unfair dismissal provisions from applying to small businesses with fewer than 20 employees.

If passed it will improve the employment prospects of people, particularly unemployed people, seeking jobs in the small business sector. It will protect small businesses from the costs and administrative burden of unfair dismissal claims in the federal system.

The bill will require the Australian Industrial Relations Commission to order that an unfair dismissal application is not valid if it involves a small business employer. This provision will only apply to the new employees of a small business, not to existing ones.

However, it will not exempt small businesses from the unlawful termination provisions of the act, which, amongst other things, prohibit employees from being dismissed for discriminatory reasons such as their age, gender or religion.

Members will be very familiar with the content and intent of this bill. It is the same bill that was laid aside on 28 June 2002 after members of this House rejected Senate amend-ments that would have destroyed the employment creating potential of the bill.

The government is reintroducing this bill to honour a commitment it has made to the people of Australia to free up the large number of small business jobs that are being lost because of the unfair dismissal laws.

Australian Bureau of Statistics labour force figures show that more than one million jobs have now been created since the government came to office in March 1996. The government has produced an environment which fosters sustained jobs growth through sound economic policies, good fiscal management, and workplace relations reforms to help small business.

These businesses account for 96 per cent of all businesses and our workplace relations system must be responsive to the needs of Australia's hardworking small business men and women.

The unfair dismissal laws currently place a disproportionate burden on small businesses. Attending a commission hearing alone can require a small business owner to close for the day. The time and cost of defending a claim can be substantial.

In giving evidence before the Senate committee inquiring into this bill, the restaurant and catering industry indicated that it costs, on average, $3,600 and around 63 hours of management time to defend an unfair dismissal claim.

Many small business owners are not confident that they know how to comply with the dismissal laws. For instance, a recent survey by CPA Australia found that 27 per cent of small business owners thought they were unable to dismiss an employee even if the employee was stealing from them, and 30 per cent of small business owners thought that employers always lost unfair dismissal cases. These small business concerns will persist unless the law is changed.

Research has found that many small businesses are reacting to the complexity and cost of unfair dismissal laws by not taking on additional employees. The Senate committee inquiring into this bill looked at the many surveys and projects on the impact of the unfair dismissal laws and concluded that the arguments in favour of exempting small business were compelling.

For almost a decade federal unfair dismissal laws have created a serious obstacle to employment growth in Australia. A report by the Centre for Independent Studies indicates that, if only five per cent of small businesses employed just one extra person, 50,000 jobs would be created. The report concluded that `employment in small business would rise significantly in the absence of the unfair dismissal laws'.

In reintroducing this bill, the government is continuing its commitment to address the needs and circumstances of the small business sector and to create jobs. This sector has tremendous growth potential and is vital to the Australian economy.

I commend the bill to the House and present the explanatory memorandum.

Debate (on motion by Mr McClelland) adjourned.