Stephen Jones (Throsby, Australian Labor Party) Share this | Hansard source

With all the confected outrage that one might expect in a cheap pantomime performance, the member for Farrer has posed the question: why can't the employer choose where their workers' superannuation goes? She may as well ask: why can't the employer choose which bank their employees put their savings into? Why can't the employer choose what sort of car their employees drive? Why can't the employer choose what school they send their kids to? These questions demonstrate one thing, and one thing alone: those opposite have learnt absolutely nothing from the Work Choices debacle. That demonstrates in a nutshell their views about the relationship between the employees and the employers of this world, because they believe that it is entirely appropriate for an employer to be the one who chooses where their employees put their life savings. I say, and all those on this side of the House say, that that is entirely inappropriate.

Continuing the confected outrage, the member for Farrer stood here and at one moment claimed that she is a defender of the independence of Fair Work Australia—defending the right of that quasi-judicial institution to independence and defending it from slings and shots—and at the next moment she said that there are somehow conflicted parties within Fair Work Australia who could not make an independent determination about where an employee's superannuation goes. It shows that, when it comes to industrial relations, members of the opposition have not learnt a thing and that they speak out of both sides of their mouths.

This is a good piece of legislation that we have before the House, and I commend the minister for bringing it before the House and responding in such a prompt way to the outcomes of the review by the expert panel. Of course, it stands in line with all the other reforms that our government has introduced since it was elected in 2007—starting with the scrapping of Work Choices, then more recently the support for equal pay for community workers and ensuring that those who drive trucks on our roads are paid safe rates so that they go home safe and that everybody who shares the road with them can do so in a safe manner. Then, of course, we increased superannuation from nine per cent to 12 per cent. These were all landmark Labor reforms to workplace relations arrangements in this country.

But the matters that I would like to concentrate my attention on are the matters which are referred to as the 'transmission of business' provisions. 'Transmission of business' is shorthand for the arrangements that are put in place when a business is transferred from one legal owner to another legal owner, through whatever means, and the conduct of the industrial relations arrangements—that is, the transfer of employees and their rights and entitlements—throughout that transfer of ownership arrangements.

The provisions have existed in Australian federal law since at least 1914 and been mirrored in similar state legislation since around about the same time. The reasons for the existence of these laws were well summed up in the High Court decision of George Hudson Limited and the Australian Timber Workers Union—a decision of the High Court of Australia in 1923—where Justice Higgins said:

But nothing would be so likely as to prevent agreement as the knowledge, on the part of the unions, that the employer could get rid of at any time of his obligations under it by assigning his business—even by assigning it to a new company having the same shareholders holding shares in the same proportion as in the former company.

The provisions that we are debating today have their history in those 1914 amendments and that 1923 decision, where Justice Higgins stated quite clearly that what we are trying to do with these sorts of provisions is maintain industrial harmony and ensure that for employees, once an agreement is made or an award is struck, the settlement of that dispute and the outcome of those negotiations—the reaching of that agreement—is maintained and assists any transfer of that business or undertaking from one ownership to another or the restructuring of that business from one ownership to another.

As Justice Higgins would say, nothing is more likely to prolong a dispute or drag out negotiations than the apprehension on one side of the negotiations that, as soon as that agreement is reached, those on the other side of those negotiations might be able to avoid that agreement by corporate rearrangement.

Australia is not the only jurisdiction to have these sorts of provisions. A number of countries regard the maintenance of wages and conditions, in the event of a transmission of an enterprise, as an important part of corporations and industrial relations law. In the European Union, the European directive 77187EEC protects an employee's entitlements where a transmission of business occurs. Many European countries have subsidiary arrangements in place to give effect to that directive. In the United Kingdom, Transfer of Undertakings (Protection of Employment) Regulations 1981 were designed to comply with the European Union's directive and preserve an employee's wages and conditions in the event of a transfer. In Canada, the Canada Labour Code applies a collective agreement to a new employer upon transmission, and even in the United States the National Labour Relations Act protects, to some extent, wages and conditions in a collective agreement when a transmission constitutes a substantial continuity of the company.

This is evidence that what we have in our Australian law is consistent with history and consistent with international practice. The problem is simply this: when an award or agreement exists and binds the employment arrangements within a workplace and the corporate identity of that workplace changes, we need orderly and secure arrangements to ensure that the employees are not left worse off in those arrangements. For most of the last century this problem was dealt with by other means: the existence in the state jurisdiction of common rule awards. These applied across an industry or a calling, so it did not matter if a business was transferred or if the identity of a business changed; the award continued to bind by force of the common rule. In the federal jurisdiction it occurred through the practice of roping-in awards or, more commonly, through constructive industrial relations practices, where employees and their representatives would simply reach agreement to flow the old conditions across to the new employer.

When collective agreements gained primacy in the 1990s the framers of the industrial relations legislation simply transported the old award provisions over to the new collective agreement arrangements. This occurred through the 1993-94 amendments to the industrial relations legislation. Indeed, it even occurred when the Howard government introduced its Workplace Relations Act 1996 reforms and again, with some significant modifications, in the 2007 legislation by this government.

Throughout the greater period of the last century the problem of a transmission of business was dealt with by other means. Dispute and conflict over this issue was re-enlivened by the late 1990s and early part of this century.

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