Katie Allen (Higgins, Liberal Party) Share this | Hansard source

By breaking down the barriers to job growth we can help get businesses the confidence and tools to work with employees in order to create the best possible post-COVID outcome for Australia and safeguard workplaces for future generations. The reforms in the Fair Work Amendment (Supporting Australia's Jobs and Economic Recovery) Bill 2020 are designed to support business and protect workers. All Australians should embrace this sensible, pragmatic set of reforms which will get the balance right for workplaces and to make sure that we have enough jobs for our future and that people are supported.

For a long time we have been led to believe that industrial relations is a zero-sum game, but this pandemic has taught us that we can achieve far more if we work together. This bill is centred around five pillars: casual employees, award flexibilities, enterprise bargaining, greenfields agreements, and compliance and enforcement. With regard, firstly, to casual employees, casual work is integral to our industrial relations system, making Labor's failure to define 'casual employee' when they first passed the Fair Work Act even more mystifying. As part of this package, a statutory definition of 'casual employee' that draws on common law principles in key court cases will be legislated. This will provide certainty about when a person is a casual employee and about both parties' rights and obligations. The government is also introducing a new statutory obligation for employers to offer regular casual employees the right to convert to full- or part-time employment unless there are reasonable grounds not to do so after 12 months of employment. These are the strongest casual conversion rights Australian workers have ever seen and significantly strengthen the unsatisfactory framework the former Labor government introduced.

Further, this bill seeks to address the unfairness of some employees' ability to double dip on entitlements through being paid both a casual loading and having a court award compensation for leave entitlements, a quirk that significantly undermines employers' confidence to employ others. This package will fix the double-dipping issue and prevent unfair outcomes in situations where employers could have had to effectively pay an employee twice for the same entitlement, which is estimated to be up to a $39 billion liability for employers across the economy. That is a significant amount of money. Overall, these reforms will provide greater certainty to employers to invest through employment and stronger rights for employees to convert to permanent employment if they wish to do so.

The key difference between us and Labor is we believe in giving workers choice. Labor and the union movement want to decide for workers. They don't want workers to choose whether to stay casual and hold onto the 25 per cent loading or to go permanent. I know many constituents in my seat of Higgins like the choice that casual work provides, if it has 25 per cent loading. What does Labor want instead? Under Labor's plan, regarding sick leave, annual leave and long service leave, the ACTU has confirmed that casual workers would face a massive upfront pay cut. In fact, Sally McManus told ABC TV's Insiders that casual workers would lose their 25 per cent casual loading in return for portable sick, annual and long service leave. That's going to be a direct hit to a casual employee's take-home pay. In fact, for an average casual worker, that would be $153 per week or $7,953 per year. That doesn't sound much like a way to support this part of the workforce.

Secondly, with regard to award flexibility: in our hardest-hit industries, the journey to grow jobs will be most difficult, and the inflexibility in the award system remains a barrier to getting Australians back to work. Rigid and complex rules disadvantage small businesses, in particular; they often lack the time and in fact the resources to work through in detail how all these myriad awards operate and how to navigate them. I've heard, over and over again, particularly from small businesses in my seat of Higgins, about how complex this award system is and how difficult it is to make sure they can do the right thing. And that's what employers, for the most part, want to do—they want to look after their workers; they want to make sure they have workers who have a good environment to work in, because happy workers make for productive workers, and every employer I've met in Higgins is doing their very best to make sure that that happens.

This has never been seen more than during the COVID-19 pandemic. The government has successfully introduced flexibilities to keep businesses afloat and employees in a job. It's that balance that we need to make sure that the ship of Australia is going forward in the right direction with the wind in our sails. Businesses in Higgins have told me that these changes have helped keep them in business.

This reform package will adapt the existing JobKeeper flexibilities in the Fair Work Act for two years so they're available for employers and employees across 12 modern awards in the retail and hospitality sectors. These new flexibilities will mean employers can offer additional hours of work to part-time employees at ordinary rates of pay, subject to important safeguards. This is a welcome development for businesses and employees alike.

Currently, ad hoc arrangements to work additional hours at overtime rates operate as a disincentive for employers to add additional work to part-time employees and contribute to underemployment. This is particularly if the employee themselves want to do this extra work. When businesses are on their knees, they are risk averse and not willing to take on more staff or provide more hours. The change proposed in this bill removes barriers to part-time work for recovering businesses, facilitates additional hours of work for employees who want them and increases the attractiveness of permanent secure roles with benefits.

By opposing these changes, Labor has decided it is against greater opportunity for more hours of work for the almost 30 per cent of part-time employees in the retail sector and around 40 per cent of part-time employees in the accommodation and food services industry. We want these people to have work available for them with more hours, but currently they're not getting them. Labor often decries the number of Australians who are underemployed. Well, here is the chance to help them.

Thirdly, on enterprise bargaining: the enterprise bargaining system has strayed a long way from its original purpose—enhancing productivity and sharing the benefits at the enterprise level—because of red tape and significant costs. Ultimately, this results in employers and employees losing faith in the bargaining framework that is meant to work for them. It also means employees miss out on the significant benefits of enterprise bargaining, including around 40 per cent higher levels of pay compared with the relevant award. Back in May last year, the opposition industrial relations spokesman, the member for Watson, said:

Bargaining is much harder at the moment and taking much longer than it should. Policies that get bargaining moving again are going to be really important …

It is not just the member for Watson who recognises this. This is something that is recognised across Australia. Well, now it's Labor saying: 'Let's block everything and change nothing.'

We have an opportunity to make modest, sensible, reasonable and practical changes to our industrial relations, to have reforms that work for people. Our reforms aim to reduce the level of prescription imposed by the Fair Work Act by building in flexibility and tailoring to account for the workplace challenges revealed by the pandemic and requiring timely approval by the Fair Work Commission within 21 working days. This will be welcomed by workers and businesses alike. Additionally, the enterprise bargaining reforms in the bill will seek to end zombie agreements made prior to the commencement of the modern award, putting an end to employees receiving lower rates than the modern award on these outdated agreements. Importantly, the government is investing $4.6 million to enable the Fair Work Commission to implement an online guidance and application tool for parties involved in bargaining. This online tool will provide more tailored support, educational material and guidance to parties navigating what can be a complex process. This helps equip everyone with the knowledge to negotiate fairly and it reduces the room for error. In total, this group of changes will speed up the approval process so that employees receive pay rises faster. It will reduce complexity and focus on cooperation between the parties.

Fourthly, greenfield agreements: the construction of major projects, particularly in the resources and mining sector, has the capacity to generate thousands of high-paying jobs over the life of the projects, in some cases lasting almost a decade. However, these projects can be susceptible to Australia's combative industrial relations framework, which drives international investment from our shores and jobs from our economy. The risk of greenfield agreements nominally expiring during the construction of a major project creates uncertainty for investors. This has a negative impact on the economic viability of a project, and it is something that needs to be built in when any investor looks to a project here in Australia. It works against growth and opportunity at a time when we need to embrace growth and opportunity for Australia.

Currently, the maximum nominal expiry date for greenfield agreements is four years. That is in the context of large projects that can last five to 10 years—projects that are likely to be nation building and projects that are likely to lead to strength in our post-COVID economy in recovery. In addition, there is currently no requirement for greenfield agreements to provide annual pay increases to employees. We plan to ensure that these are built into reforms, guaranteeing an annual pay increase and allowing agreements for major projects over $500 million to go for eight years—not four years, as they do currently—to ensure that there are built-in guaranteed annual pay increases. I repeat: any longer-term greenfield agreement must be able to guarantee annual pay increases for the life of the agreement. This is a very important safeguard for those workers who are receptive to these greenfield agreements.

Fifthly, compliance and enforcement: as a government, we understand that navigating Australia's industrial relations system can be complicated and confronting, especially for new and small businesses. As we continue to deal with the uncertain operating environment resulting from COVID-19 and the associated intermittent lockdowns that are occurring state by state, we need to work to recover from the economic downturn. It's vital we give employers the opportunity to grow and create jobs. We need to ensure non-compliant businesses do not gain any unfair competitive advantage or undermine confidence. This bill will require the Fair Work Ombudsman and the Australian Building and Construction Commissioner to disclose any litigation proceedings. Confidence that doing the right thing is the norm in Australian workplaces and that improper behaviour will be detected and dealt with quickly is a key pillar of Australia's industrial relations system. It's important for the workers. It's important for business.

The government will invest an additional $47.3 million over four years in new funding for the Fair Work Ombudsman: $11.3 million to improve awareness through education; $12.9 million to establish an advisory service for free advice to small businesses; and $22.3 million to establish a team to identify and respond to noncompliance by large corporations. This investment will help businesses comply with their workplace obligations by ensuring employee entitlements and the role of the Fair Work Ombudsman are better understood. Importantly, the reforms will introduce stronger protections for employee entitlements by instituting a suite of tougher penalties: new criminal offences for dishonest and systemic underpayments, with automatic direct disqualification for five years or a $1.1 million fine; increased civil penalties for underpayments, sham contracting and failure to comply; a new benefit-obtained maximum penalty for medium and large businesses, where the maximum penalty would be two to three times the benefit obtained through underpayment; and, finally, a $13.2 million investment to support the enforcement role of the Fair Work Commission and the Federal Circuit Court.

The pandemic has exposed many challenges facing the industrial relations system in our modern economy and uncertain climate, but it also presents the perfect opportunity to press the reset button and position our country for recovery, growth and the future. This bill provides a reasonable, sensible and practical set of reforms that will help employers build their businesses and will help improve the rights of workers. I commend this bill to the House.

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