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Monday, 12 October 2015
Page: 7364


Senator CASH (Western AustraliaMinister Assisting the Prime Minister for the Public Service, Minister for Employment and Minister for Women) (19:34): I think it is a colloquial use of the term 'agreement', and I think that is where the misunderstanding has come from. What I might do—because clearly there is some confusion in relation to what the government is actually putting before the Senate—is take this opportunity to take you through exactly what these changes will do.

In the first instance, because of some issues that were raised previously by you, we need to confirm that we are dealing with greenfields agreements. You made the comment that people would be losing their rights to take industrial action. As you know—well, I hope you know—given that there are no employees when you negotiate a greenfields agreement, that assertion is patently wrong. With a greenfields agreement there are no employees: you have an employer and you have a union or unions and you have a whole lot of people here who would like to work on this project, but until we can get the greenfields agreement up they are not going to be able to. If we can finalise the greenfields agreement, then those people are able to commence employment. I hope that you would also be aware that greenfields agreements can only ever be made with a union—that is the nature of the agreement. There is no concept of an employer-only agreement; the union, or unions as the case may be, must be involved in any greenfields agreements.

What do greenfields agreements do? They provide all participants in this process with certainty at that first crucial stage of a major project. I hope that we would all agree that in this country we need more major projects so that we can increase our productivity. What a greenfields agreement will do is: it will give employers certainty, it will give those prospective employees certainty, it will give the clients certainty, it will give the financiers who are backing the agreement certainty that the project is going to go ahead. Where a process takes too long, as the case has been, it puts these vital jobs at risk. That is what we are looking at mitigating throughout this process. What then occurs is that the employer and the union, or unions, will enter into negotiations.

Senator Cameron, one of the fundamental differences between the process we are putting forward and the process currently in place under the legislation which your government brought in is that at this time the good faith bargaining provisions do not apply. That is a very important consideration. They currently do not apply because your government did not extend the good .faith bargaining provisions to greenfield agreements. So what we are going to do with the provision currently before the Senate is to extend the good faith bargaining provisions to greenfield agreements. Obviously, that will improve accountability in the negotiation process. Then, of course, bargaining can continue and if you reach an agreement you will obviously go through the normal processes. I would certainly anticipate that in the majority of cases the employer and the relevant union or unions will be able to reach an agreement.

To cater for those circumstances in which an agreement is not able to be reached, an employer then has the optional process of commencing the six-month period by notifying the union. Then obviously the bargaining continues and I think we would all hope that during that six-month period an agreement can be reached between the employer and the union or the unions. If it is not reached at the end of that six-month period or if you have managed to reach agreement on 95 out of 100 provisions, then the employer has a safety valve release. The employer is able to go to the independent umpire—I think we all acknowledge in this place that the Fair Work Commission is the independent umpire—to ask the Fair Work Commission, as the independent umpire, to resolve the impasse. The employer does not have to do that. They can continue to negotiate ad infinitum if they want to, but if they do want the release valve they are then able to go to the Fair Work Commission.

In terms of the comments you made previously on the agreement that the employer is able to put to the Fair Work Commission, the proposed agreement that the employer provided to the union is the document that is able to be put to the commission for approval. In other words, the union must have been given the reasonable opportunity to consider agreeing to the document that is filed with the Fair Work Commission.

If an employer files a different document, as you alluded to previously, from the document which was shown to the union, as you would know Senator Cameron—obviously you have been doing this for a very long time—while the commission is considering the document which has been filed with it, they will upload it to their website as a proposed agreement. So clearly at that time if there is a difference between the document the unions had the opportunity to comment on and the document that the Fair Work Commission is now looking at, I would assume the unions would immediately put on application into the commission in terms of that particular greenfield agreement.

It also needs to be remembered that the Fair Work Commission itself does not have to approve an application. There is no onus on the Fair Work Commission to approve an application. If the Fair Work Commission is not satisfied that the agreement meets all of their approval requirements, it does not have to approve that particular agreement. You would be aware that those approval requirements are set out in part 2-4 of the act and include a number of requirements, including that the commission must check that the agreement does not contravene the National Employment Standards, that employees will be better off overall, that it must not include any unlawful terms, that it must include a dispute resolution clause and that it must have a flexibility clause et cetera. In addition, with this amendment the government is adding in some additional requirements for greenfield agreements. So greenfield agreements approved under this particular mechanism must provide pay and conditions consistent with the prevailing standards within the relevant industry for equivalent work and you take into account the geographical location.

Senator Cameron, you obviously do not like this, but it is a fundamental difference between what your government provided for in the current process, which is a comparison with the relevant award, versus what we are saying, which is the prevailing industry standards, which are much higher than the award. This is actually a good thing. We are increasing the standards against which the agreement is going to be judged. On top of that, we have added in another layer to ensure that the agreement is in the interests of everybody and that is that under this particular clause—and it is not currently under your legislation—it must be in the public interest to approve the agreement and that is a decision for the very well-qualified Fair Work Commission who, again, based on your own admissions in your evidence, deals with hundreds upon hundreds of agreements and it does this day in and day out.

There is another safeguard which we are putting in place that is not currently in place and that is, of course, the union with which the employer makes the greenfield agreement must cover the majority of the workers. Again, if there is a difference between the document put up for approval and the document given to unions for their consideration, the Fair Work Commission is not going to approve that document.