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Monday, 22 October 2018
Page: 10620


Mr BANDT (Melbourne) (18:18): I think most people who were around at the time will remember where they were when the planes flew into the World Trade Centre back in September 2001. I certainly remember it and remember watching it, because at that time there was another matter that was unfolding that I was up to my eyeballs in as a young lawyer. That matter was the collapse of Ansett. People will remember that Ansett, at the time, was one of Australia's big airlines, employing tens of thousands of people. Nobody thought anything could go wrong, and then it did. They grounded the fleet because they had run out of money and a deal with Air New Zealand wasn't working out quite as hoped. All of a sudden, tens of thousands of people, who had been working for a company that people had thought was safe as houses, found themselves out of a job. Grounding the airline was, I still think, a very poor decision by the administrators at that stage, because coming in the context, as it did, of the attacks on the World Trade Centre made it very, very difficult for it to ever get off the ground again. People lost their jobs. Thousands of people lost their job that day.

What also became apparent, perhaps for the first time—it was certainly brought to the attention of people for the first time on a very large scale, with one exception, which I'll come back to in a moment—was that people thought that all of their entitlements were secure and, all of a sudden, they weren't. They found out that, when the deal fell through and when the company went belly-up, all their long service leave, their redundancy pay and the annual leave that they'd earnt and was theirs was not available to them. The money had not been put aside in the bank and there was no law requiring the company to put the money aside. When people found that out, naturally it came as a shock, as it would, and people asked, 'What can we do about it?' It turned out that the only recourse at that stage was to line up, under company law, with all the other creditors and put yourself on the same footing as a big company, such as an airline company that might have had a contract with Ansett and was able to bring in lawyers to litigate. You had to line up with them. We spent a long time with the union. The union organised the ASU. The union organised all of their members who were about to be out of a job to get together and work around the clock to take the steps they could under the Corporations Law to try to get their money. Some people waited years and years and years to get their full payout and some people didn't see their full payout.

I note as an aside that the bill that the government are introducing is about strengthening protections available to workers. It's notable that they can't even let a speech go by without kicking unions, as the previous speaker did. Can I say that, if it weren't for the union involved at that stage, the ASU, those workers would never have seen their entitlements, because they had to front up just like every other creditor, push and go to court to get them. What that Ansett case opened the lid on is that this was happening right around Australia. There were many, many other companies that were engaging in shark practices as well—not putting money aside for people's entitlements and leaving them in the lurch when their company went belly-up, through no fault of the workers; the company went belly-up and, all of a sudden, they found the money wasn't there.

One other case that we were involved in was for textile workers—very low-paid workers. It turned out when their company went belly-up that the employer had transferred their employment a few years earlier, from the company that they signed their employment contract with to another one that, just coincidentally, had absolutely no assets at all. So, when the employees said, 'Where's our money? Hang on, you're a very profitable company,' they said, 'No, you're not actually employed by company A, which you signed up with; you're employed by company B.' We had to go to court to get that undone. If it weren't for the union taking the company to court, those low-paid textile workers would never have seen their money. They were only able to get some kind of partial redress because of their union. Those scandals paved the way for the entitlements scheme to come in. It was called by a different acronym then, but it paved the way for legislation to come in to say, 'No; the Commonwealth government had better step in.' Until that point—I stand to be corrected on this—the only workers in Australia who had been beneficiaries of federal government support when a company had gone belly-up were the workers who were employed by former Prime Minister John Howard's brother's textile company. When they went belly-up, they got a Commonwealth bailout, but everyone else had to go to court and wait years and years for their final payments.

When the federal government took the steps to say, 'No federal government has a role here,' that was certainly something that we supported. It's been disappointing to see that the scheme that is there to say, 'You may find out, when your company goes belly-up, that no money has been put aside for your annual leave, redundancy, long service leave or other entitlements,' is a scheme that the Liberal government previously tried to cut, saying, 'We'll only cover part of it.' I have to say, as someone who has spent a lot of time with workers who had been left in the lurch, that that cut hurt. That cut was very, very significant.

When you have an agreement, it might give you more generous provisions for annual leave or long service leave, for example, than others in the community but you're often trading that off—you're saying, 'I'll accept lower wages in return for getting more benefits.' But the federal government said, 'Well, no, we're only going to pay you up to a certain amount.' Some people found themselves in enormous strife, because they had been counting on this annual leave and redundancy pay and it turned out the government wasn't going to step in and support them when the company went belly-up—through absolutely no fault of the employees. So we know the government's motivation historically has been to cut the amount of support available and the amount of money going towards the scheme.

It is also worth noting that there are alternative ways of trying to skin this particular cat. Some have argued very, very strongly that we should have industry trust funds, where employers contribute a small amount across employers, but if you've done the wrong thing you have to contribute more, and it goes into a pool—effectively some sort of self-funding scheme—and that's then available to people when the company goes belly-up. So there might be a way of doing it off the government's books. The government hasn't wanted to explore that, so we've got this scheme—and this scheme, in the absence of anything better, should definitely stay and should definitely be strengthened.

One thing that the government are doing in this bill, though, which I applaud, is they are finally saying, 'If you want to reduce the amount of money that government has to pay because company directors have engaged in dodgy practices and have tried to do over their workers, maybe we should go after those company directors a bit harder.' That's something that many of us have been saying for some time. It's good to see that, in this instance—even though it is motivated by a desire to save money—they are at least listening. The government are now saying that we need to have a go at some of those company directors who might be engaged in some of the practices that I have spoken about—perhaps trying to transfer employees from one shell company to another to limit their liability; perhaps saying, 'It's not our fault; it's the parent company.' It is good that now, as a result of this bill, if it passes, the penalties they're going to be exposed to might be strengthened. That is a good thing. At the end of the day, a company is an amorphous thing, but it is run by directors who are human beings. If they sit down and say, 'How can we structure it in a way that we don't have to pay out people's entitlements, because we know the government is going to foot the bill?' they should be chased down. They should be chased down and they should be stopped. That is the right approach.

But where the rubber is going to hit the road on this is whether or not any of this bill gets enforced and whether any directors have to pay the penalty. As someone who worked in this field for 13 years, not once did I see the federal government chase a rogue employer for underpayments or non-payments when they'd gone belly-up. It was left to the workers and their unions to use their union dues to chase an employer to do nothing more than to pay them money that was legally theirs in the first place. This wasn't seeking a pay rise or that some grand penalty be imposed; it was just saying, 'We just want the money that we're legally entitled to. You've stolen it from us, and we're now going to have to dip into our own pockets through our union dues to get it back.' Not once did I ever see a federal government come to the table and say, 'Well, actually, it's probably our responsibility to chase some of these companies.' So I would hope that, if we're going to change the law, it comes with a change in law enforcement.

Perhaps there are better things to do to get our workplace regulators working on than chasing down unions, because they happened to give a donation to a group a while ago, and raiding their offices in the full view of the TV cameras. Perhaps there are better things to do than coming in here with bill after bill that's designed to do nothing more than restrict people's legitimate and internationally recognised rights to organise. Perhaps it might be better to put some resources into chasing down rogue employers, given that this bill is an admission that they are there and that they're costing the public money. Well, if they're there and they're costing the public money, I hope it is only a matter of months before the first prosecution happens. But I fear that this is one of those instances where the government does something good on paper and then doesn't back it up.

A good provision in this bill is saying to those directors who have done the wrong thing, 'This is potentially going to follow you.' We have seen it often in the construction industry that a company goes belly-up just before Christmas—and, all of a sudden, everyone is left without pay—and then pops up in another guise after the Christmas holidays and starts hiring workers again when everyone has gone without their Christmas pay or leave entitlements. That is phoenixing. It's good there is a provision that says, 'If you try and do that, or if you try and do versions of sharp practice, it's going to follow you as an individual and you're going to be restricted from being able to set up those businesses again in the future.'

But what concerns me—and I think this will be a test for our regulator—is that, when it comes to policing the banks, ASIC hasn't exactly covered itself in glory. We are seeing those practices exposed in the royal commission that we led the charge for in the teeth of opposition from the old parties—finally one came on board and then the other one did. I hope that we don't have to have a further inquiry or investigation into why it is that, despite passing these bills, we are still finding people going without their legitimate entitlements getting paid. We are putting ASIC on notice that it should pay more attention to this bill than it did with the banks. We will be expecting a much higher level of vigilance to go after directors who do the wrong thing by their workers than ASIC has shown with bank CEOs who have done the wrong thing by customers.

As this bill passes through the parliament, if there are suggestions for improvements, hopefully the government will consider those if opportunities arise. But I do hope that, perhaps in the summing-up speech, the minister could come in and tell us how the bill will be enforced, how we can have confidence that these provisions are going to result in rogue employers actually facing the full force of the law. In the absence of that, it might look good, and you might book a budget saving, but it won't be realised unless the laws are enforced. It's certainly been my experience that directors have been more than willing to steal from employees and take the money that is lawfully the employees' money and then make them jump through hoops just to get it back. And that is fundamentally what we're talking about here. Money that people have earned and is theirs is not being made available to them and directors are holding it back, using legal fictions to do it. It's time that we closed the ability for them to do that. If some of them have to go to jail in order to learn that lesson, then that's what should happen because it is nothing short of theft.