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Wednesday, 24 October 2018
Page: 10919

Ms CHESTERS (Bendigo) (12:39): I am actually going to congratulate the government on the Corporations Amendment (Strengthening Protections for Employee Entitlements) Bill 2018. There's some really good stuff in this bill. It's rare for me, particularly in the area of workplace relations, to say that the government has put forward a bill that has some real merit. But I am quite surprised that, given it's also a billthat will help recover taxpayer funds and save the taxpayer dollars, there are not more government speakers on this bill. Usually there's a long list of speakers every time they go after getting back Australian taxpayers' dollars. They talk about how they're going tocrack down on all these dodgy behaviours so they don't waste taxpayers'moneyparticularly if it's somebody that's on a Newstart payment; they're very quick to champion the fact that it is taxpayers' money. But I note that this bill actually talks about stopping companies from ripping off the taxpayer, and stopping individuals in business from ripping off the taxpayer, so maybe that's the reason why more government members aren't speaking on this bill, or maybe they just don't understand the importance of FEG, the Fair Entitlements Guarantee.

Before entering this place, as many people know, I had the great honour and privilege of working for United Voice , representing cleaners and security guards. Far too often, I would sit with cleaners or guards whose contract cleaning company or security company had gone ' broke ' , gone into receivership, force d the m to fight to keep their jobs and forced the m to apply for a Fair Entitlement s Guarantee , only for the company to reappear the next day , or a week after, under a different name.

One of the last major cases that I worked on was the Bendigo Marketplace cleaners. That was actually a day of high drama in this place , be cause, unfortunately, we changed prime ministers that day although I did miss most of the commentary because I was working so hard with the cleaners to get their forms completed. The company that the Bendigo Marketplace cleaners had worked for was Swan Cleaning. Swan Cleaning were a national cleaning company, one of the largest cleaning companies in Australia. They had gone into receivership , and the biggest creditor was actually Judy Swan, who was the wife and partner of the business owner. I understand that case is still working its way through the system. But the taxpayer had to pick up the bill in that particular case because the cleaners had lost their entitlements, yet again—because it ' s not just once or twice that it happens to cleaners in the contract cleaning industry.

Far too often, the companies that many of our cleaners work for—where 80 per cent of the cost or , in some cases , 90 per cent of the cost is labour go into receivership , expecting the Commonwealth government and the Australian people to pick up the tab for what ' s owed to employees in entitlements. I do want to acknowledge the work the former La bor government did to change GEE RS to the Fair Entitlements Guarantee. Under GE E RS, there was a cap that didn ' t adequately reflect what people were owed. The FEG also means a quicker processing time. In the case of the Bendigo Marketplace cleaners, it took some of them six months and some of them 12 months, but they did get what they were entitled to.

F or a lot of those cleaners, though, it has happened far too many times. Robbie had worked at the Bendigo Marketplace since it opened . She had been one of their core , stable cleaner s there, the day supervisor, since it had opened . She has what she calls ' changed her shirt ' at least five times. Now, that might not be a lot if you ' ve worked in the same place for 50 years, b ut that ' s five times in just over a decade. The cleaning company had lost the contract, a new contractor had come in and you had to fight for your job or a cleaning company had gone into receivership , as in this situation, and then into liquidation, where the cleaners lost everything and had to fight to get their jobs and entitlements back.

We know that it is occurring everywhere. Unfortunately, more bad corporate behaviour means that it is occurring more and more. Since being in parliament, other workers who have come to see me who are navigating the Fair Entitlements Guarantee process include people working in construction and people working in transport. They might say to you: ' Well, I was working for Bill . H e has shut the business , but told me to come back and apply for a job with him in three weeks time. I have to apply for the Fair Entitlements Guarantee to get my annual leave and my entitlements that are ow ed to me. He says not to worry: " Take a short holiday and come back to work in four to six weeks time. " ' That ' s just not fair. What is wrong with corporate Australia that we have businesses who deliberately and knowingly force their business into receivership and into liquidation, shafting their employees, and rely upon the taxpayer to pick up the bill?

I believe that's the government's real motivation behind this bill. Yes, it should have been brought on sooner. Yes, it should have been before us quite some time ago. But I believe the real motivation behind this government is not really to help these vulnerable employees—these people who've worked hard but have not been paid, who have not had access to their entitlements—it's more about trying to save money from the Commonwealth. But, whatever the motivation, we'll support it and accept the bill that is before us because it is good reform. It does start to say to businesses, to bosses, to corporate Australia: 'This rogue behaviour is unacceptable. It's bad for the government, it's bad for workers and, quite frankly, it's also bad for local economies.'

This bill strengthens the Corporations Act to better deter and reduce the incidence of dodgy companies, and their associates, restructuring their arrangements to avoid paying employees their entitlements. These companies, in some cases, deliberately shift liability for their unpaid employees to the Commonwealth via the Fair Entitlements Guarantee scheme. This bill amends the Corporation Act to make it easier to prove criminal offence in entering into an arrangement to avoid paying employees' entitlements. It significantly increases the maximum fine for offences. It introduces a new civil penalty for people who try to avoid paying entitlements, with an objective 'reasonable person' test. It gives the Fair Work Ombudsman, the ATO and the Department of Jobs and Small Business the standing to commence proceedings to recoup money that has been paid out. So if someone has been paid out—but then the company reappears or they've all of a sudden got assets under another name—it gives the ability for departments to come back together. It extends the liability of unpaid entitlements to related corporate entities—so critical, as others on this side of the House have raised, in relation to the Queensland Nickel situation. And it is not just Queensland Nickel but so many other situations where companies link up—not just cleaning or transport companies but mining companies—and splinter their employees through a number of entities just to avoid paying entitlements. The bill extends the powers of ASIC to disqualify directors and other officers.

Those changes are all welcomed. I acknowledge that the government, in this bill, has adopted a number of the sensible propositions that have been put forward by Labor in this space. It's a bit humbling—and I guess it's a sign that we're on the right path—when the government starts to adopt the work of the opposition. The measures in this bill will be welcomed by good employers in the sector, employers who are doing the right thing, particularly in those contract exposed industries that do complain about the fact that they know a company who has gone into receivership, or only into liquidation, and is ripping off workers. They're in direct competition with the firms that do the wrong thing, the dodgy firms—it is part of their business plan, it is part of their building model; you see the same companies doing it over and over again.

And I strongly urge the government not to finish the work here but to adopt Labor's other proposals in the space of phoenixing. Phoenixing is a massive problem in Australia among a number of industries, and the government should now proceed to adopting Labor's proposal on phoenixing—the private member's bill that has been put forward, the reforms that have been suggested. The FEG was always designed to be there as a safety net, but it's not in itself a solution to the broader problem of dodgy companies deliberately using the FEG as part of their business structure and part of their model.

We should also remember that this is just a new acceptance by the government about how important the FEG is. Back in 2014—I remember that budget night and some of the reading of the papers after that—the government actually tried to cut the FEG. They tried to go back to the old GEERS, making it very hard for workers who may have worked a long time for a company to get the full entitlements that they were owed. I think this is why people in our community are so protective of the FEG and outraged. These aren't people looking for a handout. These are people who have worked hard and earned this entitlement. It's a bit like wage theft—the company hasn't paid them out. They've done the work. They've done the hours. They've worked hard. Yet they haven't received their reward and payment for that.

Wage theft is a problem more broadly in our community. Every day in the papers there's another case of wage theft, where an employee has done the work but not been paid by their employer. The extent and endemic nature of it in our industries is such that we now have the Labor government in Victoria committing to making wage theft a crime. A lot of people thought, 'Wow, that is a very big step for a government to take: to introduce a criminal offence for employers who deliberately—knowingly—underpay their staff, ripping them off when it is built into their business model.' This is something that may be adopted by other states. So, in many ways, the dodgy bosses and companies of corporate Australia are on notice. They have to clean up their act.

I know that there are some employers who say compliance is now their biggest worry, and they want to work proactively with people in this place on how they can improve compliance. There are also the employers who constantly get undercut by companies who don't put enough away to ensure that they can pay employees their fair entitlements. Again using the security industry as a model, take the example where a company enters a government contract, say it's with the National Gallery of Victoria. The contract is for five years. If the company doesn't put enough aside for any component of annual leave that hasn't been taken or any long service leave that a worker may be entitled to—and, in some cases in security, a worker is also able to have their sick pay paid out on termination. If the company doesn't put that aside and they lose the contract, it then has to pay the worker what is owing. But what happens far too often in the security industry, like the cleaning industry, is that the company will go into receivership, not pay that entitlement, and leave it to the Commonwealth to pick up the tab. That worker is out of pocket for a significant period of time, and then the company will re-establish itself a few months, weeks, or, sometimes, days later—under a different name. There is more work to do to break the back of this issue and to crack this model. Far too often, workers are missing out. Far too often, other employers are being made to compete against these dodgy employers. And far too often, the Commonwealth is stepping in to pick up the tab.

If only the government showed this kind of understanding and compassion for all workers. We have slow wages growth in this country, and the government is doing very little about it. We have a minister for this area who constantly belittles and criticises unions—who only stand up every day to make sure workers get paid. If we didn't have union organisers, officials and other people assisting workers to fill in and complete their paperwork and supporting people where English may not be their first language, then the government's workload in processing these FEG forms would be more complicated. I remember, back on that day, I spent about 10 hours at the Bendigo Marketplace supporting our cleaners to secure their jobs, to get the paperwork ready, and to know what to do to apply for their Fair Entitlements Guarantee. We worked very hard to make sure that all of them would get every dollar that they were owed. It's just what you do when you're someone who represents low-paid workers and others who work in a number of these industries where they're exposed.

Under this government, wages are stagnant, unemployment is stubbornly high—particularly for young workers—and exploitation is rife. There's an increasing level of insecurity at work, meaning that more and more workers, unfortunately, will be turning to the government for FEGs to get their due entitlements—as more and more workers are made redundant and lose their jobs because of unscrupulous, bad behaviour by employers. I urge the government to do more in this space, and to pick up Labor's proposals to make sure we combat illegal phoenixing behaviour. We announced our plans in May last year, and it's about time that the government got on board. I urge the government to support the amendment that is before us and take real action by cracking down on phoenixing behaviour. Don't just look at FEGs. Look at the problem across the board.