Bill Shorten (Maribyrnong, Australian Labor Party, Minister for Financial Services and Superannuation) Share this | Hansard source

I want to acknowledge the contributions of members in this debate on the Fair Work Amendment (Transfer of Business) Bill 2012—in particular, the contributions of members who are supporting the government legislation, including that of the member for Kennedy. He did say something about railway people no longer supporting Labor. My family worked on the railways, and I can guarantee that they are still supporting Labor, if that is of any consolation to him, which it may or may not be.

Turning to the summing-up: on Friday, 21 September, I announced that the government would introduce an amendment to the Fair Work Act. The amendment would protect the entitlements of state public servants threatened by job cuts announced by state governments. This bill delivers on that commitment. The Gillard government does not accept that employees should be worse off, or that they should have their entitlements put at risk simply because their jobs are outsourced.

I want to be clear, for the assistance of the House, about what this bill does and what it does not do. First: this bill does not create a new concept. There are already transfer-of-business provisions in part 2-8 of the Fair Work Act. I repeat: this bill does not create a new concept. What we are trying to do is to extend a nationally consistent set of transfer-of-business protections. It is simple: we do not believe that employees who are being employed by private sector employers covered by the fair work system should receive lower protections for the sole reason that their jobs were outsourced by certain state governments.

Second: this bill, if passed, would not provide the first transfer-of-business protections to public servants moving into the national workplace relations system. I repeat: it would not provide the first transfer-of-business protections to public servants moving into the national workplace relations system. In fact, for the information of the House, the provisions currently already apply to transfers of business between the Commonwealth government and the private sector, between the Victorian government and the private sector, between the Australian Capital Territory government and the private sector, and between the Northern Territory public sector employers and another national system employer. So all these employees already generally retain the benefit of their existing terms and conditions of employment when they transfer to a new employer as result of a transfer of business. This bill in fact simply remedies a loophole which would see Public Service employees in other jurisdictions no longer being second class, but joining the appropriate protections already enjoyed by a range of public servants throughout Australia. And this is very fair.

I would also reiterate, for the benefit of the House, what the transfer-of-business protections provide. In broad terms, the transfer-of-business rules will apply where: (1) an employee transfers to a new employer within three months of their employment terminating with their old employer, and (2) when the employee performs the same or similar work for the new employer as they did for their old employer, and (3) where the old employer transfers assets or outsources work to the new employer, or undertakes certain corporate restructuring activities such as movements to associated entities. So, wherever these conditions exist—three months, the same work, a transfer, as I have outlined—the default rule is that the transferring employee's existing workplace instrument, the essential terms and conditions of employment, will transfer with them to their new employer.

Importantly, Fair Work Australia has broad powers to ensure that these rules operate fairly to both the transferring employee and to the new employer. The reforms in this bill simply mean that the Commonwealth will establish, for the first time, a nationally consistent set of transfer-of-business protections for public sector employees when they transfer to a national system employer. The Commonwealth does not have power to regulate transfer of business within state public sectors and within state industrial systems. However, we can regulate, and we should regulate, national system employers and employees, and this bill will ensure that, for employees from some of the states who currently do not enjoy the same protections as other states, those employees transitioning into the national system from a state government, as a result of a transfer of business, retain the benefit of their existing terms and conditions in awards and agreements.

This bill does this by the following: providing for the transfer of employees' terms and conditions of employment from the old public sector employer to a national system employer where there is a connection between the two employers. This bill does this by preserving the transferring employee's existing terms and conditions of employment, whether those terms are reflected in the relevant state award or agreement, by the creation of a federal instrument containing those terms and conditions and recognising service and certain accrued entitlements such as annual leave. This bill will do so by providing for the interaction between the transferring terms and conditions of employment and the Fair Work Act, including the National Employment Standards, and other necessary transitional and technical provisions to make life simpler for employers and employees. Also, it will enable Fair Work Australia to resolve issues that might arise as a result of terms and conditions transferring.

There are a range of things that Fair Work Australia can do to help the new employer. In consulting on this bill, I have been asked, 'What happens to the employer who takes on the former public sector staff?' Just like they can do now, Fair Work Australia can make a range of orders to modify the general effect of the transfer-of-business rules, where appropriate—for example, varying transferring terms and conditions instruments to enable them to operate in a way that is better aligned to the working arrangements of the new employer's enterprise.

They can modify the general effect of the transfer-of-business rules to remove terms that are not capable of meaningful operation, such as in the new employer's business. Fair Work Australia can remove terms that are ambiguous or uncertain and change the coverage and application of transferring terms and conditions, if that is required.

When exercising these powers, the independent umpire, Fair Work Australia, is required and will be required under this bill to take into account factors including impacts on productivity for the new employer, and business synergy, as well as the impact on relevant employees, in the public interest. Now, of course, employers and transferring employees are also encouraged to bargain for new enterprise agreements that are appropriate to their enterprise. Where an enterprise agreement is made, it will permanently replace any transfer instruments at the employer's enterprise.

The transfer-of-business provisions that already exist are merely being extended to an extra group of Australian employees who are entering the national system. The evidence from the existing system we seek to extend is that the transfer-of-business provisions deliver a balanced framework that provides both fairness and flexibility to employees and employers. The recent post-implementation review into the operation of the Fair Work Act, which the government publicly released on 2 August this year, had the following things to say about the transfer-of-business rules:

The Panel considers there is a clear need to protect employees in a transfer of business situations. The alternative is to allow employees to be exploited by the structuring of businesses and contracting arrangements. On the basis of stakeholder submissions, academic advice at face-to-face consultations, analysis of cases under the provisions and an examination of the provisions themselves, the broader legislative definition succeeds in providing better protections for employees than the previous arrangements did.

The review further stated that the scope within the transfer-of-business framework 'for employers to determine the appropriate outcome for their business on application to Fair Work Australia provides significant flexibility'.

One claim that has been made is that the bill will discourage new employers from employing former state employees. This claim was bandied around, but with little evidence to support it. The claim is that the transfer-of-business provisions are some kind of barrier for new employers to hire transferring employees. As I said earlier, this issue was considered in some detail in the recent review of the Fair Work Act. It was argued that the transfer-of-business provisions reduced the employment prospects of workers. Indeed, the member for Kennedy raised this in discussions with me. However, let me assure him and others who are concerned about this that, after reviewing all of the evidence put forward, the Fair Work Act review panel was not convinced that the provisions have had that negative impact. In other words, the panel tasked with examining the functioning of the existing rules, which we are now extending to a new group, said that they were not convinced that the provisions would have that negative impact. To the contrary, the panel concluded that the evidence suggested that the existing transfer-of-business arrangements deliver a balanced framework that delivers flexibility and fairness to both employees and employers.

The government's policy in relation to the transfer-of-business provisions in the Fair Work Act has been consistently clear—that is, employees should be able to retain the benefit of their terms and conditions of employment and their entitlements where their employer changes but the work they perform stays the same. This bill maintains that policy and extends it to certain former state public sector employees to ensure that their terms and conditions of employment are protected where a transfer of business occurs between a state public sector employer and a national system employer.

In conclusion, this bill reflects existing concepts and protections in existing workplace relations legislation that already apply to national state system employees, including a large number of public servants. It is based on a policy of ensuring nationally consistent workplace relations laws in the area of the transfer of business, which in turn is based on ensuring protections for employees whose jobs are outsourced where they end up doing the same job for a different employer.

State governments criticise the bill because they want to take the low road to budget cuts by sacking hardworking public servants and taking the low road on cutting workers conditions. This Gillard government respects the work of Australia's public servants, regardless of the jurisdiction in which they work. We know how important our public sector workers are to the sort of society this nation aspires to be. The simple proposition with this bill is that we do not consider that public servants in some states should have less protection, when they come into the national system as a result of the transfer of business, than those from other jurisdictions.

I commend the bill to the House.

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