Kate Chaney (Curtin, Independent) Share this | Hansard source

I've been in parliament for just over a year, and this is the third major set of changes that's been proposed to the Fair Work Act 2009. As a first-term MP, it's been pretty eye-opening. Industrial relations seems to be the issue that absolutely polarises the major parties on a fundamental, philosophical level. You're either pro-business and horrified by union activity, or you're pro-union and you dislike and distrust business. As a community Independent, I'm not beholden to business or unions and my comments are less political or philosophical—they're pragmatic. I'm just trying to assess whether the bill in front of us is fit for purpose.

I'm 100 per cent supportive of workers' rights, and I believe every worker has the right to be in a safe workplace that provides fair remuneration and support, but I'm also supportive of economic competition and the need for business to have the flexibility to innovate and grow and make hiring decisions that enable this. I'm genuinely worried about the increase in complexity of IR laws and how that affects business. IR laws should be simplified as much as possible to help employers do the right thing. So my comments today will not be about capitalism versus socialism or the rights of the worker versus the rights of the employer. My comments will be about whether this bill is necessary, balanced, fair and if it solves the problems that need solving.

At the outset, I'd like to acknowledge the minister for his comprehensive briefing around the introduction of this bill. He and his office have offered extensive background information and have made themselves available for many conversations with the crossbench. I really appreciate the way this suite of reforms has been approached and discussed.

I also commend the government on the aspirations outlined in the employment white paper released on 23 September. According to the white paper, the government wants full employment where everyone who wants a job is able to find one. It notes that productivity growth must be the key driver of improvements in living standards over the long term.

In this bill, this 284-page document accompanied by a 521-page explanatory memorandum, the minister says he is fixing loopholes that are used by business to undercut Australia's best employers in a race to the bottom. The loopholes identified in the minister's introduction speech were: workers not being paid properly through wage theft, casuals not having a pathway to secure work, EBAs not determining the rates of pay at a workplace, and gig workers and road transport workers not having minimum work standards.

To solve these four loopholes I've just mentioned, the following solutions are legislated in this bill. Wage theft is solved by giving unions greater right of entry to workplaces. The need to give casuals a pathway to secure work is solved by changing the common law definition of 'casual employee' and giving the Fair Work Commission the ability to resolve any disputes. Making sure EBAs determine the rate of pay in a workforce is solved by giving the Fair Work Commission the ability to make a ruling about labour-hire workers if they're being paid less than the minimum rates in a host business enterprise agreement. Finally, ensuring gig workers and road transport workers have minimum work standards is solved by giving the Fair Work Commission the power to make minimum standard orders for workers on digital platforms.

Is this bill actually solving the identified problems? On wage theft, this bill introduces a new criminal offence for intentional wage underpayments, and I have no problem with this. If a business operates by intentionally underpaying its employees, then it should be prosecuted. But I remain concerned that the complexity of the IR system means that employers struggle to understand the correct rates of pay. It's essential that employers that underpay purely by accident because of the confusing and complex IR framework have the opportunity to fix their mistakes rather than being charged.

As well as this new offence, this bill expands the circumstances in which unions can come onto worksites without prior notice. This doesn't seem necessary or appropriate to address wage theft. Currently, any union wanting to enter a workplace to represent a member or attract members already has a straightforward mechanism to do so. Entry without prior notice is already possible, where necessary, to prevent employers from destroying evidence. The Fair Work Commission's data on entry disputes doesn't reveal any problems or overuse of the entry rights, so I can't see any reason we need to expand this entry right. It seems to be an excuse to give more power to unions.

On the definition of casual, the government has said this bill will close the loophole that stops casual workers from having a pathway to permanency. It uses the example of casual workers who've been working 30 or 40 hours a week and whose requests to convert to being a permanent employee have been refused. I'm not convinced this bill addresses this concern. As many speakers before me have said, the Fair Work Act already defines a casual employee in a clear and well-understood way. The act already has a casual conversion entitlement which requires businesses to offer employees an opportunity to convert to a permanent position after 12 months. The government's proposed changes remove this certainty and clarity of definition, and instead propose a new test based on the conduct of the parties. The WA Hotels and Hospitality Association, which is the peak industrial employer body for hotel and hospitality businesses in WA, said the change in this bill makes the definition of a casual 'unclear, problematic and subjective to the person or institutions assessing the relationship.'

The main problem I see with the government's proposal is that this adds ambiguity in an already confusing regulatory space. When talking about the definition of casuals, the explanatory memorandum says, 'A firm advance commitment of permanent work could be identified on the basis of ongoing work performed on a regular systemic, stable or predictable basis.' This increases ambiguity around rostering, with an employer seemingly at risk of representing a role as casual if they roster an employee, for example, on regular weekend work shifts or on the same morning every week. I don't subscribe to the hysteria that this change will mean employers won't offer casual work ever again or that every employer will be at risk of prosecution if they have a regular pattern of rostering, but I don't support this amendment as an effective way to achieve the government's goal. More ambiguity does not lead to greater certainty.

The government says it's closing a loophole that allows business to engage labour hire providers in order to save costs, by paying those contractors less than employees being paid to do the same job. I agree that this is bad practice. Throughout all of our briefings and discussions, it seems clear that this change is aimed at certain businesses and labour hire companies. But these amendments are not limited to labour hire companies and have a much wider impact than the problem articulated. As it's currently drafted it could also include service contracting. If this is not the intention, the drafting needs to be changed.

With the current provisions, unions and others will be able to seek orders obliging employers that supply workers, directly or indirectly, to a host to ignore the rates of pay already agreed in their contracts. The obligation will be to apply the full rate of pay, which includes bonuses and incentives. This could be a real problem for labour hire and service-contracting providers. In a recurring theme with this bill, these changes are confusing and will add complexity to an already complex framework. The additional admin burden for labour hire and host employers, as they try to wade through EBAs and previous agreements to find the correct rate of pay, adds yet another degree of difficulty. Companies will have little time to prepare for this drastic change.

The government has stated repeatedly that workers in the rideshare and food delivery sectors are at risk of exploitation because they're independent contractors and therefore don't have minimum pay and conditions. I want to make it clear that workers should absolutely not be exploited nor exposed to dangerous working conditions, but I'm not sure this bill solves the issue it purports to address. This bill gives the Fair Work Commission the ability to set standards for non-employed workers in the gig economy and for those whose work is facilitated through platforms and websites. The current drafting specifies that an individual must fulfil one of the three criteria to be defined as employee-like. This is too broad. I'll be supporting amendments that require an individual to fulfil at least two of the specified criteria instead of just one. A number of online businesses have noted that this provision undermines the digital platform business model by imposing strict requirements on workers. I believe that we should be supporting innovation and flexibility in new businesses and allowing workers to elect to work as it suits them and get the benefits that flexible work entails.

What else is this bill doing beyond allegedly closing these loopholes? There are a number of provisions in this bill that don't seem to address any loopholes at all. Some provisions seem straightforward and noncontroversial, like schedule 2, which aims to eliminate silica-related diseases, and schedule 3, which relates to PTSD suffered by first responders. As we discussed at length on Monday, I believe these provisions should really pass before the end of the year.

I'm not sure why this bill includes an increase in the rights of union delegates which doesn't seem to address an identified problem, including uncapped paid time off for union training, and making employers engage with union stewards on any issue they may wish to raise. Also, how is any of this helping to address productivity?

But maybe the most important question to ask about this bill goes beyond the detail and wonders: 'Why is this bill needed to ensure that Australians can all be gainfully employed and productivity increases?' The Australian Chamber of Commerce and Industry has come out bluntly and said that this legislation will be bad for productivity. Master Builders Australia has pointed out that the word 'productivity' appears only twice in the whole bill, and only in the context of proposed new powers needed to be exercised in a way to avoid unreasonable impacts on productivity and business viability.

Last month, RBA Governor Michele Bullock said that, with wage growth so strong, productivity will need to improve for inflation to return to target. I'm not sure how adding complexity to an already-complex IR framework will contribute to this aim.

I appreciate that there are some issues that need to be addressed, but I'm unconvinced that there are systemic loopholes that require this sort of drastic and complicated legislative response. I'd be more supportive if this bill was more targeted, if the response to wage theft was limited to increasing penalties, if the response to increasing casuals' pathway to permanence was addressed by reducing the conversion time in the already-clear definition, and if the response to exploiting labour hire workers was focused on the industries of concern. But, to me, it seems like the government is introducing far-reaching changes that go way beyond their claims.

This bill seems to expand the powers of the Fair Work Commission and unions and to reduce the flexibility for workers, while adding complexity for business. If we assume that the majority of business owners are doing the right thing, then these changes will only make life harder and more confusing for them. For those few businesses that are trying to undermine workers' rights, they should absolutely be addressed specifically.

In its current form, this bill is less about closing loops than creating hoops for businesses and workers to jump through.

Debate adjourned.

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