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STANDING COMMITTEE ON ECONOMICS
28/08/2007
Offshore Petroleum Amendment (Miscellaneous Measures) Bill 2007 Tax Laws Amendment (2007 Measures No. 5) Bill 2007 Trade Practices Amendment (Small Business Protection) Bill 2007

CHAIR —Welcome. Ms Burrow, I believe that you have appeared before parliamentary committees previously.

Ms Burrow —I have, indeed.

CHAIR —You have heard chairs give a reminder to witnesses about parliamentary privilege and contempt and other bits and pieces.

Ms Bowtell —Yes, we have.

CHAIR —I will assume that you have that knowledge. Would you like to make an opening statement?

Ms Bowtell —Yes. As Ms Burrow has had to step outside for one moment, perhaps I can take you to the second paragraph of our submission just to make clear that the ACTU does not oppose representative action per se. Our fundamental opposition to this bill is not the idea that there could be representative action by the ACCC regarding the protection of consumers. Our opposition to this bill rests on our opposition to the underlying legislation that it seeks to extend, which is to section 45C through to section 45E of the Trade Practices Act. Given our opposition to those sections of the Trade Practices Act, we also oppose any extended avenue for enforcement of those provisions. That completes our opening statement.

CHAIR —Do you wish to make any further comments?

Ms Bowtell —No. We are happy now to answer questions.

Senator HURLEY —You list in your submission a number of provisions under the Workplace Relations Amendment Act that ensure industrial action that harms a third party will not continue. You say that the provisions in other acts of parliament are sufficient and there is no need to safeguard small business or deal with secondary boycotts in this way.

Ms Burrow —We think it is unnecessary exactly for those reasons. However, we also point out that it is a misnomer to say that this bill is about small business; nowhere does it refer to small business. So potentially, right across the business spectrum, you could have representative actions that are funded by the taxpayer.

Senator HURLEY —Are you aware of problems with secondary boycotts undertaken by trade unions? What kinds of incidents have there been in the last few years?

Ms Bowtell —In the last couple of weeks, a recent prosecution of the CEPU was upheld on appeal in the Federal Court; that case involved the engagement of contractors at a power station. However, the issue is not whether there are problems in relation to boycott activity; it is whether industrial action is best dealt with by industrial relations legislation regimes or through competition law. Our view is that industrial relations legislation is the appropriate way to deal with activity by workers and unions that is designed to protect their employment arrangements and, in particular, that the Australian Industrial Relations Commission is the regulator with the expertise to deal with actions by workers and their unions.

That is where we see, in particular, the expertise of the commission around dispute resolution and bringing parties together. Remember, in industrial relations the parties have an ongoing relationship. The commission is very cognisant of that when it deals with parties. That is quite different to perhaps commercial parties, who do not always have an ongoing relationship.

Senator HURLEY —Is there any particular problem that small businesses would have as opposed to larger businesses in accessing the industrial relations provisions that you describe?

Ms Bowtell —No. The industrial relations jurisdiction has been pretty user-friendly for participants. Usually it is a jurisdiction where there is no need to have lawyers. Unrepresented parties are welcome. Its staff act in an informal manner and it is designed to deal with matters in good conscience and on the merits of the arguments; it is not bound by the rules of evidence. It is a tribunal that historically has been accessible to unrepresented employees and employers.

Ms Burrow —It goes to a fundamental question: what evidence does the government have about detriment to small business—

CHAIR —Sorry to interrupt. The line is breaking up and the committee is finding it very hard to hear you, so could you please pick up the receiver and identify yourselves when you are speaking.

Ms Burrow —The question we are asking is: what evidence does the government have that would suggest that small business has been negatively impacted on by secondary boycott action that would require such a bill?

Senator HURLEY —Are you aware, from the trade union point of view, of any evidence that small businesses are being unduly impacted on by this sort of activity compared to large businesses?

Ms Burrow —We have no evidence, and we are curious to know what the government’s evidence is, because it has not been laid down in any parliamentary debate or report. So this bill appears to have just emerged out of the ether, and we are very concerned, as unnecessary as we believe it is, that it does not simply go to the question of small business: it would seem to cover the spectrum of business.

Senator HURLEY —Were you consulted at all in the drafting of this bill?

Ms Burrow —No.

Senator HURLEY —What about afterwards?

Ms Burrow —No.

Senator BERNARDI —The substance of your submission really goes to the fact that you think that this bill is unnecessary, based on existing legislation. Is that correct—that you oppose the existing legislation?

Ms Bowtell —Yes, the substance of our submission is that because we oppose sections 45D through to 45E of the Trade Practices Act we also oppose an extended mechanism for enforcement of those laws.

Senator BERNARDI —Given that sections 45D and 45E are already in existence, what is wrong with the fact that the ACCC are able to pursue damages on behalf of those people when you acknowledge that there is a role for represented actions? Why is it okay for the unions to pursue represented actions but not for the ACCC to get compensation on behalf of those people who have been disadvantaged?

Ms Bowtell —We say that there is a role for representative actions to pursue legitimate legal rights. If we think that the legal right that is being pursued is illegitimate then we also think that representative actions are illegitimate. I think that answers the question.

Senator BERNARDI —But do you take my point? We have an existing set of rules and laws in place. You may not support them, but this is merely extending the opportunity to redress an imbalance in the fact that someone is financially harmed through these illegal boycotts. You do not see that—

Ms Bowtell —I understand the logic of your argument. The logic of our argument is that if an action is made illegal that we think should not be illegal or should be dealt with not through the provisions of competition law but through the provisions of industrial law, we cannot support extending the enforcement of that law through alternative enforcement mechanisms.

Senator BERNARDI —Okay. I accept that, and that is on the record. But, apart from your opposition to 45D and 45E of the Trade Practices Act, if we took that away there would be no problem with this proposed legislation, would there?

Ms Bowtell —The penalty provisions of the Trade Practices Act are extremely onerous for organisations such as trade unions. To have both those extreme penalty provisions and common-law action for damages provides a double jeopardy for trade unions that might unwittingly get themselves involved in boycott activity.

Senator BERNARDI —I would suggest that secondary boycotts pose a great deal of inconvenience and do potential damage to businesses and to our economy. This is simply an area ensuring that there is some representative action taken by the government, if necessary, on behalf of those disadvantaged.

Ms Burrow —You have to look at this section of rights in context. We could throw it back to you and say, ‘What rights do people have to legitimate industrial action?’ Those rights are in fact prescribed, curtailed, constrained, managed—whatever adjectives you want to use—by another set of legislation. You can be acting within the framework of that legislation and be picked up by a third party representative right, through the Trade Practices Act. It does seem to us that that is a fairly curious thing for a government to want to do unless they are not at all concerned about illegitimate industrial activity.

Senator BERNARDI —I am not sure that anyone is trying to stop legitimate industrial activity. The purpose of this legislation and similar legislation is to stop it where it is not legitimate.

Ms Bowtell —I think the difference is that we have a different view about what is legitimate action by unions in terms of protecting the working arrangements of their members and what the Trade Practices Act currently provides. For example, it is a matter of authority of the courts that workers have a legitimate interest in the conditions upon which contract labour might be employed in the business that employs them. That is something that unions have long held that they have a legitimate interest in because it is the price upon which competitive labour is employed. That is the exact issue with—

Senator MURRAY —Ms Bowtell, I cannot hear you. Would you pick up the phone, please?

Ms Bowtell —Sorry, Senator Murray. I think we are getting into the realm of debating the merits of the Trade Practices Act, rather than the bill, which is not what we are here to do. The point I was trying to make is that there are areas where we would say unions are acting legitimately in the protection of their members’ interests and where the industrial relations system has held that it is legitimate. For example, I was talking about the terms and conditions upon which contractors might be employed, which has been held to be a matter pertaining to the employment relationship of employees and therefore something legitimately within the industrial realm but which within competition law might be seen to be illegitimate. Our view is that within industrial law it is quite appropriate for unions to have a view about the terms and conditions upon which contract labour might be employed by their employer, but it appears that that is not appropriate within trade practices law.

Senator BERNARDI —If we just accept that we have some philosophical differences about this, are you prepared to acknowledge the fact that, where someone has been seriously and economically disadvantaged via a secondary boycott, they should be entitled to some level of compensation either through their own actions or, in the instance of this legislation, under the auspices of the ACCC? In the interests of fairness, do you think that that is an equitable solution for the people who have been the most disadvantaged?

Ms Bowtell —If we put aside entirely our total opposition to these provisions and said, ‘If someone is harmed by someone else’s actions, should they be entitled to sue?’, we would say that in some cases it is quite common for governments not to allow that to happen—for example, in the personal injury area. I do not know that there is a right or wrong answer to that. You have to look at the other competing interests at all times.

Senator MURRAY —Ms Bowtell, you have mentioned both in your submission and in your evidence the definition of small business. Is it your view that if this bill were to proceed it should be explicit in the legislation that small businesses are the only ones entitled under this legislation? If your answer to that were yes, would the definition of a small business that you would choose be the ABS definition, which is 20 employees or under, except for manufacturing, which is 100 employees or under?

Ms Burrow —That is really a matter for senators to determine. We do not believe that this is necessary. It seems to us vexatious to claim that there is either significant damage or impact to small business. In addition to that, were that even to be true, there are in fact provisions already for small business to gain redress, along with all sorts of other businesses. If you must go down this route, it is up to you to define small business. We are simply pointing out that it would be astonishing for a government to use taxpayers’ money for businesses of all sizes—in some cases, multimillion dollar businesses—to seek redress from workers who might be engaged in legitimate industrial activity.

Senator MURRAY —Does that mean the answer to my first part was, yes, you do want it defined specifically for small business but that it is up to the government or senators to decide what that definition should be?

Ms Burrow —We do not want this bill to proceed at all, but we think there is irony in having the misleading title of ‘consumer protection law’ for something that purports to be about small business but does not stop anywhere on the spectrum between small business and big business and for which taxpayers would ultimately be footing the bill. It is not just ironic; it is a pretty shocking thought.

Senator MURRAY —I have a second question. I do not know if you are both aware, but we have had a lot of submissions from what I suppose you would loosely describe as consumer or issue activists. In other words, they are not involved with employment matters; they are involved with issues that matter to consumers. One of the questions we face, I suppose, is whether the legislation should be specific as to what it does not apply to as opposed to what it does apply to. Let me give you an example. If, for instance, right-to-lifers or people protesting against the fur trade were to be caught up in these representative actions, you would expect that they should be excluded on the grounds that that is normal citizen/consumer boycott activity which should be allowed under freedom of association and freedom of speech. My question to you is: do you think that this legislation, if it were to be passed, should include a specific statement as to what it does not apply to?

Ms Burrow —We think that is absolutely the responsibility of a parliament. This is a democracy. It would seem appalling that this would somehow take punitive action and perhaps even preclude, given the seriousness of the penalties, political opposition. We have a history in a range of these areas. The asbestos campaigns right up to and including the campaigns about James Hardie had a political campaign aspect that could well fit into this environment. The committee’s and the union’s FairWear campaign to pursue an end to sweat shops would be potentially caught up along with those other community activists you talk about. Increasingly, as we come into a new world where we are looking at climate change there will be a lot of protest about practices that are seen to be damaging our environment—inefficient energy use or whatever your imagination may stretch to. It is absolutely the role of lawmakers—the parliamentarians in our midst—to see that freedom of speech, political protest and the chance to generate a decent future for our kids, are not penalised by a government-funded—taxpayer-funded—legislative entitlement for anybody to pursue damages irrespective of their roles in otherwise harmful activities within our communities.

CHAIR —A cynic would say that your comment that you do not oppose representative action but do not believe in it in relation to 45D and 45E matters, is convenient. I presume that you would disagree with that?

Ms Burrow —Of course we would disagree with that. You have a whole range of issues that we would be very nervous about including what happens with regard to antidiscrimination provisions in a range of legislation. There are questions around the impact on business generally of the intersection of legislation and the issues we were just talking about with Senator Murray. I do not think it is a matter of whether you see our position as cynical; I think it is a matter of us challenging you to determine the genuine basis for putting forward this legislation. Where is the evidence and why would you put—

CHAIR —With the greatest respect, you are not challenging the committee.

Ms Burrow —We are challenging the committee.

CHAIR —You have no entitlement to do that; you do not ask questions of the committee.

Ms Burrow —I would have thought it was your responsibility to put forward—

CHAIR —Can I put a matter to you—it is something out of the second reading speech—and ask you for your comment? It says:

It is important that we provide a strong disincentive for those people who would target, intimidate and bully small business by applying a secondary boycott to that business.

What is your view on that section of the second reading speech?

Ms Burrow —I am sorry if it is challenging the committee; let me challenge the government: where is the evidence? Where is the evidence for this view? I do not think anyone sets out to bully or intimidate when they have a legitimate claim to either genuine industrial activity or genuine political protest. Surely you would look at some of our past practices now and thank those community activists for standing up in protest against such things as chemicals, unfair and discriminatory practices, or enslaving people in labour. Surely no parliament in a democracy would want to restrict the capacity to do that as we evolve into a better future.

Senator BERNARDI —You asked for some evidence. In 2003 the ACCC instituted legal proceedings in the Federal Court against the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union; the Australian Workers Union; and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union. It successfully alleged that the unions had contravened section 45D. If you are asking for evidence, there is some. So it does happen. Boycotts do have an impact on people by preventing or hindering supply and the acquisition of goods and services between that person and the target of the boycott. There is evidence. And surely the people who suffer from that should be entitled to appropriate compensation from the same person or entity which has brought this action, which is the ACCC. I do not expect you to agree with it but you asked for some evidence and there is some.

Ms Burrow —But the ACCC already prosecutes breaches.

Senator BERNARDI —That is right, and this is an extension of that to enable them to claim compensation on behalf of those who have been wronged.

Ms Bowtell —You are asking us to agree with a proposition that we cannot agree to. You have put it to us a couple of times and we do not agree with it. You would like us to agree with it—

Senator BERNARDI —You have also asked for some evidence and there is clearly evidence, and I think we need to get that on the record.

Ms Bowtell —There have been prosecutions of unions just as there have been prosecutions of companies under the Trade Practices Act. Some have been successful, some have not. You only have to go to the Federal Court to find out what there has and has not been.

Senator BERNARDI —The evidence is now on the record.

CHAIR —Ms Bowtell, I want to take up that very point that Senator Bernardi has raised, where action has been taken against big business. Why would you be opposed to small business obtaining access to protection from big business through the ACCC, as indicated to the committee by COSBOA, the peak organisation for small business?

Ms Bowtell —I have not had the opportunity to read the COSBOA submission. It was not available on the website when I recently looked. I did notice there was one.

CHAIR —COSBOA put to the committee that there are two issues: protection against inappropriate activity of the trade union movement or individual trade unions, and protection for small business against the behaviour of big business. On that basis, why would the ACTU be protecting big business as opposed to protecting the interests of small business by opposing this legislation?

Ms Bowtell —Our submission is made on behalf of our affiliates; it is not made on behalf of big business. So if big business have chosen not to make a submission, that is—

CHAIR —That was not my question. COSBOA have put to the committee that they are supportive of the bill for two reasons. The first one is that it provides them with protection against big business and the second one is that it provides them with protection against trade union activity. Why would you be supporting big business over small business by opposing this legislation?

Ms Bowtell —Our submission does not support big business over small business. As Ms Burrow has pointed out, the bill itself says nothing about the size of the business on behalf of whom the ACCC might take representative action. Presumably it could be used the other way. It could be used by big business against small business. So I do not think that the bill does anything one way or another. Our submission goes to our view, which I think I have expressed a couple of times, that the underpinning legislation inappropriately regulates behaviour of workers and their unions. We also cannot support its extension of extending the enforcement regime available.

CHAIR —But COSBOA have put it clearly that they believe this legislation will protect small business against the actions of big business.

Ms Bowtell —Without having read the COSBOA submission, it is clear that the bill itself does not support small business against big business. It says nothing about the size of—

CHAIR —It does.

Ms Bowtell —The explanatory memorandum and the speeches on the second reading talk a lot about small business, but the bill itself says nothing about the size of the business of either the perpetrator of the boycott or the victim of the boycott.

CHAIR —I will put it to you this way: this bill seeks to provide some assistance through the ACCC, both in a knowledge sense and in a financial sense, for those who do not have the financial resources or the knowledge resources to take action themselves. Clearly, that would be small business, and big business will always have those financial resources and, in the main, that knowledge. So of course this bill is directed to protecting the interests of small business. I put to you that you only have a representative action when the parties you represent do not have either the financial resources or the knowledge base. So it is implicit in this bill that it is about protecting small business. You are hardly likely to have a representative action on behalf of small business when they have both the resources and the knowledge base to take proceedings themselves. That is the very reason for the bill.

Ms Bowtell —They are certainly the stated reasons for the bill, but I think it is also quite clear, as we have said before, that there is nothing in the bill that limits the size of the business on whose behalf the ACCC could take representative action. This point was made in the Senate in 2003, and I think in 2002, and it has been made a number of other times when a similar form to this bill has been put forward. There is nothing in the bill that would prevent the ACCC taking action on behalf of a large business.

CHAIR —You put it to the committee that the penalties under 45D and 45E are very significant.

Ms Bowtell —Yes.

CHAIR —If the damage is significant, why shouldn’t the penalties be equally so? I will give you an example. If a small business operator loses their business I assume you would view that as being significant damage?

Ms Bowtell —Without knowing the circumstances, I am happy to go along with that.

CHAIR —I think it speaks for itself. If the damage is significant, why shouldn’t the penalties be equally so?

Ms Bowtell —We have not said anything at all about the appropriateness of the penalties. What we have said is that they are significant and they act as a deterrent. If the aim of the bill is to change behaviour, our submission says that we think that the penalties themselves are a significant deterrent and that extending the enforcement regime is not necessary to change behaviour because the penalties themselves are a significant deterrent. That is the reason we make that point in our submission. If that is not clear, I hope I have clarified that.

CHAIR —I think you made the comment that this has come out of the ether.

Ms Bowtell —It was Ms Burrow who made that comment. Some of the submissions assume that the bill has been revived because of the proposed consumer boycott in relation to sheep exports. I am not sure whether that is it but, other than that, we can see no reason why this bill has been revived at this time.

CHAIR —You say ‘out of the ether.’ What this bill seeks to address has actually been in the mix for quite a number of years.

Ms Bowtell —As we noted in our submission, the recommendation that the ACCC have extended powers for representative action came out of a Law Reform Commission report in the nineties, and that report does not consider the implications for the industrial relations framework. I went back and looked at that report in preparing our submission and I found the section on representative action is quite short and does not consider what we think is the complex matter of the parallel regulatory regime in the industrial relations arena. It is a very broad recommendation that goes to a whole range of consumer protection issues without looking specifically at 45D through to E of the act.

CHAIR —I want to take you to page 3 of your submission. Are you seriously suggesting to the committee that a small business operator, or anyone else for that matter, will have sufficient knowledge of sections 496, 436, 438 and 433 to take appropriate action through the AIRC?

Ms Bowtell —We think that the current workplace relations regime is incredibly complex and difficult and we have said so on a number of occasions. However, as I said before, it is true that the procedures in the commission are informal and are certainly much simpler, I think, for a small business to negotiate than trade practices legislation. That is certainly an avenue that would be open; it would be more cost effective and it would provide a quicker remedy for a small business—to use the industrial relations regime—if they thought that they were a third party harmed by trade union activities. They would have a remedy very quickly—within 48 hours in most cases. They would be able to get on with running their business without having expended very much money.

CHAIR —If they had a union backing them or they had a big business corporate affairs division backing them, that may well be right. I put it to you that a small business operator is most certainly not going to have the ability to do so.

Ms Bowtell —I do not know whether they would have the ability to do so or not. We agree that the industrial relations regime is very complicated for businesses to comply with because it is now incredibly complex, not so much in the industrial action area but in the system of wage setting. There is no certainty as to what wages people must pay. There is no certainty as to what conditions people should pay—to what is and is not in awards. These things have all become very confused since 2005. But in relation to the capacity to find a quick, cheap and effective remedy to industrial action, the industrial relations regime is a much more effective avenue for anybody than corporations or consumer protection legislation.

CHAIR —So on the one hand you are saying it is incredibly complex and on the other hand you are saying it is easier to access.

Ms Bowtell —I am saying that it is easier than the consumer protection legislation. I am saying that it is a regime that is designed to be accessed by parties without lawyers and in a quick and cost-effective manner. You are not exposed to orders for costs in the industrial relations tribunal. You can represent yourself if you so wish. Most hearings are conducted very informally. The emphasis is on conciliation and discussions rather than formal hearings. That environment is a much more appropriate one for dealing with these matters.

CHAIR —How often are people representing themselves?

Ms Bowtell —In the industrial relations commission?

CHAIR —Yes.

Ms Bowtell —There are a lot of unrepresented actions for unfair dismissal. There would be fewer for bargaining and bargaining disputes, although employers of certainly medium-sized businesses will represent themselves in those matters.

CHAIR —The individual representation is limited to the unfair dismissal part.

Ms Bowtell —No; in bargaining and bargaining type disputes, certainly medium-sized businesses will represent themselves.

CHAIR —What about small business?

Ms Bowtell —It depends on your definition. If you use the government’s industrial relations definition—under 100—a large number of them would represent themselves. For those under 20 or under 15, I think there would be fewer who would represent themselves. I do not have the commission statistics on representation before me but that would be my guess. For those under 20 you would get a few—they might be represented by an accountant or a local solicitor. For those over 20 and up to 100, an internal staff member would regularly represent employers in the commission.

CHAIR —I notice that you believe that sections 45D and 45E should be repealed.

Ms Bowtell —Yes.

CHAIR —Have you put that position to the government?

Ms Bowtell —Not, I think, since 1996, when we opposed the transfer of those boycott provisions out of the Workplace Relations Act and into the Trade Practices Act. That would probably be the last time that we have had the opportunity to put that position to government. That is my guess.

CHAIR —Have you put that position to the opposition?

Ms Bowtell —It is in the ACTU policy that was passed by our congress again in October last year. I am not aware that it has been specifically put to the opposition, though I note that the opposition today has announced that it will retain the secondary boycott provisions of the Trade Practices Act.

CHAIR —Have you put it specifically to them that you want it removed?

Ms Bowtell —I am not aware that the matter of our wanting it removed has been discussed directly with them. The ACTU have had consultations with the opposition about its industrial relations policy and we have advanced all of the positions in our policy—some more vigorously than others—but I am not aware of any recent representations to them to remove those provisions from the Trade Practices Act. They have today announced that that is not what they intend to do anyway.

Ms Burrow —And we have made it clear today, Senator, that we do not support everything in Labor’s IR statement. That would be one of the elements we will continue to campaign against, whoever is in government.

CHAIR —So if there were a change of government at the next election, do I take it you would be pursuing your views in relation to sections 45D and 45E?

Ms Burrow —This will remain our policy whoever is in government. Just as the Howard government has not seen fit to accept our views, Labor have made it clear today that they do not support removal of these provisions either. But we will continue to retain that principled view.

CHAIR —So you would continue to pursue that with the alternative government, were it to be elected?

Ms Burrow —We have not made it a priority in our campaign, but it is clearly a view we hold, and to the extent that we do not shift our principles, irrespective of who is in government, it will remain there.

CHAIR —If it is not a priority then why are you opposing this legislation which will protect small business?

Ms Burrow —We are saying that this legislation is unnecessary and could be used to constrain legitimate industrial and political rights. You have got to balance the democratic rights in our society against the interests of all parties—that is what being a law-maker entails. I do not envy you that position. But we cannot see that future generations will forgive you if some of the issues raised by Senator Murray, some of the issues we have raised, mean that people cannot operate to protect their legitimate rights or to protect society from damaging environmental or other practices.

CHAIR —Just so we are absolutely clear on this: if there is a change of government you will be pursuing the repeal of sections 45D and 45E with the incoming government?

Ms Burrow —We will always retain a principled position that this does not belong in the Trade Practices Act. We believe that there is a balance in terms of rights and it is better dealt with in the industrial relations system. That is our view. You have seen today that the Labor Party have a different view. I have no reason to think they will necessarily change their mind on that subject, just as the current government has not. But if you are asking whether we will retain a principled position about this, given practices around the world, the answer is yes, we will.

CHAIR —So you say they will not necessarily change their mind but you think they may.

Ms Burrow —I am not saying that at all. You are saying that, Senator.

CHAIR —No, you said they will not necessarily change their mind, so, obviously, the extension of that is that they may.

Ms Burrow —This is ridiculous. Senator, you would have to ask the Labor Party. We are not the Labor Party. We are the trade union movement. We will always stand up for the rights of working Australians.

CHAIR —I think we are running out of time to debate that.

Senator WEBBER —If I may ask a question, Chair—

CHAIR —I think I am finished but I think Senator Murray had a quick question.

Senator MURRAY —No.

CHAIR —All right. Senator Webber.

Senator WEBBER —Thank you, Chair—and as the sole representative in the room of the Labor Party, perhaps you could ask me that rather than asking Ms Burrow. She has got her constituency. I am elected to represent mine. Sometimes they come into conflict.

CHAIR —I am just trying to think when.

Senator MURRAY —Now.

Senator WEBBER —Yes, right now, it would seem. Today, I would hazard a guess, there has been a little bit of conflict.

Senator BERNARDI —So are you supporting this?

Senator WEBBER —Senator Bernardi, I have been incredibly patient this afternoon and I would like to ask one question.

CHAIR —Please go ahead, Senator Webber.

Senator WEBBER —Thank you. Earlier, there was a proposition put to us that one of the reasons this bill is such a good bill is that it allows the ACCC to take action, because otherwise any action that needs to be taken is through the courts and that is prohibitively expensive, particularly for small business. I was wondering whether the ACTU had a general comment about that policy, about the need for us to find cheaper ways for people to get legal remedies.

Ms Bowtell —Yes, and I think that was why our submission started with the statement—which seems to have caused some problem—that we believe there is a role for representative actions. The ACTU have campaigned for the capacity for representative actions in, for example, the areas of equal opportunity and antidiscrimination, where the risk of costs often prevents parties who have been discriminated against or sexually harassed from taking claims. So of course we think that access to justice is a very important public policy, and it is one that the ACTU are happy to contribute to in a positive way.

Our priorities for representative actions are perhaps not the same ones as some other people may have. Ours tend to be around where workers feel that they are unable to get access to remedies because of the cost of prosecution of cases. In particular, for example, we pointed out that the termination-of-employment provisions, which are supposedly an alternative to unfair dismissal, are in fact cost prohibitive for most employees because initiating a claim would expose the worker to around $30,000 worth of costs, which, when compensation is capped at six months salary, is not a viable proposition for most workers.

CHAIR —If there are no further questions, Ms Bowtell and Ms Burrow, we thank you very much for your time with the committee this afternoon. You are excused.

We will now return to Treasury. Mr Rogers, you heard the evidence from COSBOA and the ACTU. Do you wish to make an opening statement or comment on the evidence that you have heard today or do you just wish to take questions?

Mr Rogers —I will make a brief opening statement. The Trade Practices Amendment (Small Business Protection) Bill 2007 was introduced into parliament on 15 August 2007. It amends section 87 of the Trade Practices Act 1974 to enable the Australian Competition and Consumer Commission to bring representative actions on behalf of persons who have suffered or are likely to suffer loss or damage as a result of breaches of the secondary boycott provisions of the act.

The bill contains three items, and all the items of the bill commence on the day on which the bill receives royal assent. The first item amends paragraph 87(1A)(b) to remove the limitation in that paragraph on the Federal Court making orders in relation to contraventions of sections 45D and 45E of the TPA. The effect of this change is to enable the ACCC to seek orders from the Federal Court on behalf of persons who have suffered or are likely to suffer loss or damage as I outlined.

The second item of the bill deals with paragraph 87(1B)(a) of the act, which sets out the conditions that the ACCC must satisfy in order to take a representative action. In particular, that paragraph of the Trade Practices Act currently provides that the ACCC may make an application on behalf of persons who have suffered loss or damage or are likely to do so as a result of a contravention of any provisions of part IV and others of the Trade Practices Act other than the secondary boycott provisions in sections 45D and 45E. Item 2 of the bill amends this paragraph to remove the limitation in relation to sections 45D and 45E. This amendment is necessary to enable the ACCC to bring representative actions to enable the Federal Court to make the orders under item 1.

The final item of the bill deals with the application of the act to make it clear that the ACCC may only bring representative actions for contraventions of 45D and 45E in relation to conduct that occurred on or after the commencement of the bill. It is a simple provision dealing with retrospectivity. I am happy to take any questions that the committee may have.

Senator MURRAY —Section 45D prohibits two or more persons from acting in concert to hinder or prevent the supply or acquisition of goods or services by a person or company. We have had a number of submissions from people whom I would broadly describe as consumer or citizen activists. They are concerned that this legislation will affect their freedom of association, freedom of democratic process, freedom of protest and freedom of speech. I want to give you a specific example and see how you react to it. Imagine an abortion clinic, which is a small business, with right to lifers protesting outside and acting in concert to hinder or prevent the supply or acquisition of services by that small business. Let me put my prejudices on the record. I think they should have the right to protest—in the same way as I think people who are for abortion should have the right to protest. That is their right. That is a specific example where, in theory, they could fall into this legislation already, because section 45D already exists, but, in theory, the ACCC could take representative action in that case. What comment do you have with respect to that scenario?

Mr Rogers —To an extent, you have already outlined the answer by saying that 45D already exists. So the substantive offence or right of action is already part of the Trade Practices Act. This bill makes no change to section 45D at all. The elements of that provision are as set out in the TPA and will continue to be so. To the extent that there is any right of action rising in relation to enforcement action by the ACCC—or, indeed, a representative action should the bill proceed—the bill essentially makes no difference to whether that right of action has accrued or not.

Senator MURRAY —Because there is obviously some fear and concern among that sector of the community whom I would broadly describe as citizen activists, would it be a useful legislative device to put a note to the bill—and you know what I mean by a note; it does not have legislative effect but it is a common device to express a strong legislative view—to say that it does not cover areas of association or speech in the context that we are discussing? Or would that raise too many problems?

Mr Rogers —I assume that you mean a note to section 45D.

Senator MURRAY —Yes.

CHAIR —This is probably a policy matter, Senator Murray.

Senator MURRAY —It is a policy matter. What I am really saying is that if there is no evidence so far that section 45D has ever been used against citizen activists, and there is simply that fear out there, you would not wish to apply black-letter law, so the next device that legislators use is a note. But that is something we can consider, isn’t it?

Mr Rogers —Amending the substantive provision under section 45D or, in fact, any of the other secondary boycott provisions from 45D through to 45E would be a matter for the government to consider.

Senator MURRAY —Without getting into the policy mechanism—because it is really an issue for the committee—what I am really after is to establish, from you, whether a note of that sort would do any damage to the intent of 45D, which is more in the commercial area than in the citizen activist area.

Mr Rogers —I think 45D would cover any situation where the target is damaged by the result of the boycott. Again, it would be a matter for the government if they wanted to circumscribe the circumstances in which 45D apply. As you are well aware, that has been done under 45DD in relation to, I think, consumer protection and environmental matters. It is a matter for the government to decide to what extent particular matters are exempt from the substantive provisions and to what extent they are not exempt.

Senator BERNARDI —Following up on what Senator Murray said, there is a very significant difference between protesting and expressing some disquiet if we go to protesters outside an abortion clinic—or outside any business that they do not like—actually physically preventing people or a third party from doing business with that business itself. There is nothing to prevent protests and there is nothing to prevent people expressing their personal viewpoint, is there?

Mr Rogers —I think it would be stretching it to say that a protest reached a level of conduct required to actually amount to a boycott.

Senator BERNARDI —But if they prevent people from accessing a particular business then that could be called a boycott. Is that right?

Mr Rogers —That is right. Under the wording of the provision, one of the elements is that the supply or acquisition of goods be hindered or prevented, as in case law in relation to those words.

Senator MURRAY —So a protester against the mulesing of sheep will be as safe as a protester outside an abortion clinic?

CHAIR —There is an element of the hypothetical in this.

Senator MURRAY —This announcement was made at the Pastoralists and Graziers Association’s annual general meeting in WA, which I attended. It was remarked on that its specific purpose was to address protests against mulesing. So I am drawing the analogy that if it does not apply to right-to-lifers outside an abortion clinic how can it apply to people who protest against mulesing outside a sheep business?

Mr Rogers —It is a matter for the ACCC to enforce 45D as it is drafted at present. I am unwilling to comment on particular hypothetical circumstances. Certainly the provisions have been enforced in the past by the ACCC on a number of occasions, as to the substantive 45D and 45E and other secondary boycott provisions. The commission’s record on that is reasonably clear.

Senator BERNARDI —The focus of this is this. We have received a number of submissions from people who—and I will not be as generous as Senator Murray—are animal rights activists. There is the claim that this bill stifles free speech, prevents consumers from making informed choices, insults the intelligence of the average consumer and provides protection to industries that are unethical. That is from one submission. That is not the intention of this bill, am I right?

Mr Rogers —The bill makes no change to the underlying offences or the rights of action.

Senator WEBBER —I want to pursue not that specific issue but this. My general concern is about what we assume is often in the Trade Practices Act but for which we discover, when things get to places like the High Court, the intent is not quite so. We can have the best EM and second reading speech in the world but then we get knocked over by black-letter law because it is not actually in the bill. I particularly want to relate those comments to the fact that has been raised, that the definition of a small business is not actually in the bill, yet we are told this is going to protect small business. Is there a reason why it is not in the bill? For instance, it was everyone’s view that section 46 did a certain thing until the Boral case came along and we discovered it did not. The intent of the EM and the intent of the second reading speech, when that section was introduced, was overridden by the High Court.

Mr Rogers —And you are asking for a comment?

Senator WEBBER —I am asking: was any consideration given to putting a definition of small business into the bill, given the history of interpretation of the Trade Practices Act by the High Court?

Mr Rogers —You are correct in that there is no mention of that in the bill at the moment nor is there any mention of small business in relation to the ACCC’s act as to how to bring representative actions at present. But I think it is as previous evidence alluded.

The nature of representative actions—I cannot speak for the ACCC here—is that they are brought on behalf of disparate or underresourced litigants where there are efficiencies or other reasons for the action being brought by one person or, in this case, one regulator. It will vary from case to case, given the particular circumstances of each case, as to whether a representative action is appropriate. But the common thread would be efficiencies because of the number and nature of the parties involved.

Senator WEBBER —I have two further issues that I want to raise quickly, which go to chapter 1, regulation impact statement, of the EM. Section 1.2, which is about the ACCC, states:

On average, the ACCC received around 12 complaints ...

which is a pretty vague concept. Can you either advise me or take on notice whether any of those complaints were acted on?

Mr Rogers —I could probably take on notice the number of complaints.

Senator WEBBER —‘Around 12’ is very odd to put in an EM.

Mr Rogers —I think that is an average figure over the period of a year, which is outlined there. But certainly the ACCC, to our knowledge and to its own knowledge, has taken 12 actions since 1996. I should hasten to add that this is in relation to 45D and 45E and not in relation to 87 representative actions generally. In relation to 45D, 45E and the other secondary boycott provisions, the ACCC has brought 12 actions since 1996, since they formed part of the Trade Practices Act. Most of those I think have been completed, although perhaps one or two are still on foot.

Senator WEBBER —My only other question, which will probably have to be taken on notice, continues from that point in the EM. It states:

There may be more businesses, affected by unlawful secondary boycotts, who do not lodge their complaints with the ACCC.

I am looking for some evidence for that statement.

Mr Rogers —I am not sure that we can provide evidence on that. If the nature of the complaint is that it was something that would be brought up as a representative action, which currently is excluded, the point being made there is that those complaints would not have been brought forward to the ACCC. With any breach of the law, there will be people who are not aware of their rights or who themselves do not consider that their case is of sufficient merit for them to bring an action. That is not a question I can answer.

CHAIR —Indeed, evidence given by the chair of COSBOA is that many businesses would not do so because they lack both the knowledge and the financial resources to take action.

Senator WEBBER —We could make statements like that about any legislative reform.

Mr Rogers —Yes.

CHAIR —Thank you for making yourself available today; you are excused. That ends the committee’s inquiry into the provisions of the Bills.

[4.59 pm]