Harry Jenkins (Scullin, Australian Labor Party) Share this | Link to this | Hansard source

The original question was that this bill be now read a second time. To this the Deputy Leader of the Opposition has moved as an amendment that all words after ‘That’ be omitted with a view to substituting other words. The question now is that the words proposed to be omitted stand part of the question. I call the member for Bendigo in continuation.

Steve Gibbons (Bendigo, Australian Labor Party) Share this | Link to this | Hansard source

Many industrialists and governments in the Western world now recognise and acknowledge that it is people who are the new engine of success—but not the Howard government, who are doing the exact opposite to what this nation needs. I now refer to a new source of competitive advantage. Most people equate successful companies with increasing profits, improvements in productivity, product quality, excellent services, access to low-cost finance, being in the right industry at the right time and being able to respond quickly to changes in consumer and market demand.

But, as Burud and Tumolo highlight in their excellent book Leveraging the New Human Capital: Adaptive Strategies, Results Achieved, and Stories of Transformation:

Like it or not, people are the only way to achieve these outcomes through their creativity and knowledge, their relationships with customers and co-workers and their professional networks.

This therefore raises these questions. If the creativity, knowledge and performance of people are the key to our future prosperity, what do we need to do at the business level—be it in high technology, manufacturing or service provision, public or private—to enhance their performance and productivity? And what are the national policy settings we need to support and enhance good management and leadership at business level?

These have long been critical questions for leaders and managers of organisations. Many of the answers have been and continue to be dismissed as ‘soft’ or ‘intangible’ by the majority of business leaders. The quality of the information available today, backed up by many years of solid and sophisticated research from around the world, cannot be ignored, particularly given the fact that intangible assets, such as people and their skills, product brands and technology represent approximately 70 per cent of the market value of most publicly listed companies.

Before I proceed to talk about what the research evidence tells us contributes to employee motivation, engagement, creativity and productivity, I would like to list some of the factors that we know have exactly the opposite effect. Most are embedded either in this government’s Work Choices legislation or in these new so-called safety net amendments, with many solutions deemed as being either prohibited or non-allowable matters.

As I said earlier, whoever dreamt up this legislation and these changes has done Australia and its economy a major disservice. It is the typical Liberal, born-to-rule and lazy way of implementing conservative, misguided ideology. Just some of the factors enshrined in the original bill and in these amendments that do not help include issues of trust, being treated and rewarded fairly and having good workplace relationships and open two-way communication. These factors are consistently mentioned in most, if not all, research and management literature as being critical-to-success factors.

So how does Work Choices help create these success factors? The short answer is: it doesn’t. In fact, it does the exact opposite. It actually legislates unfairness. It allows unfair dismissal with no reason needed, and that affects over four million Australians. It allows dismissal of the rest of the workforce for any so-called operational reason. So much for trying to balance fairness with the need for flexibility!

It sanctions employers locking out their staff without notice. So much for open two-way communication! It does not trust workers to have a ballot of their own choosing. It is designed to prosecute trade unions and their officials, who are elected representatives, for carrying out their legitimate role. It allows for the removal of a range of pay and conditions and for a reduction in real take-home pay.

It says, ‘You don’t need or deserve a meal break.’ It removes independent vetting of agreements. So much for fairness! What it says to Australia’s working men and women is: ‘Your government and your employer don’t trust you or your paid and elected union officials.’ It says: ‘We don’t care if you are dismissed or paid unfairly. In fact, we’ve actually made it legal to do so.’ It says: ‘We expect employees to give their mind, body and spirit—but don’t expect fairness in return. You’ve had it too good for too long and it’s back to the master-servant relationship for you.’ This is precisely the wrong recipe. It is a recipe for economic stagnation, a recipe driven by misguided ideology, not by the considerable evidence available regarding what is required to achieve productive workplaces and therefore gain the much needed productivity increases that we as a nation so desperately need.

There are numerous acknowledged researchers and authors I could quote regarding the evidence about what is needed. One in particular is Professor Jeffrey Pfeffer, who is professor of organisational behaviour at Stanford University Graduate School of Business as well as visiting professor at Harvard Business School and visiting professor at the London Business School and the Singapore Management University. He has studied business and organisational behaviour for 30 years, is the author of 11 books on the subject and has taught at executive seminars in 28 countries, including Australia.

Professor Pfeffer cites evidence from a five-year detailed study of companies from a diverse range of industries which indicates consistent productivity gains in the order of 40 per cent by implementing what are known as high performance or high commitment management practices. Evidence indicates that these outcomes are achieved because of the ‘set of practices that are grounded in sound social science principles and have been shown to be effective by a great deal of evidence.’ The research shows that increased involvement, and control and trust through self-directed work teams, encourage people to work harder. The building of skills and, just as importantly, facilitating the efforts of people in applying their wisdom and energy results in people working smarter. Information sharing and empowerment leads to a reduced need for the costly overheads associated with supervision and an alienated workforce in an adversarial relationship with management. Such research and its implications cannot be ignored—they are too significant and important for Australia’s workplaces and our prosperity. As a society and an economy, we must shift our view of workplace relations away from the adversarial focus of Work Choices to an approach based on comprehensive research and the evidence it provides which encourages engagement, motivation, innovation and excellence—in other words, high-performance workplaces.

There are many examples of research that identify the key elements that contribute to excellent workplaces, including research based in Australia from both the private and public sector. The results of one such study published in 2003 directed by Dr Daryl Hull of the University of New South Wales sought, with support and funding from the Business Council of Australia, to identify the factors which differentiated ‘excellent’ from ‘very good’ workplaces in Australia; note: not the good workplaces from the bad but the excellent from the very good workplaces. The criteria for excellence were based on previous research by the Business Council and include: being world-class; high-performance, including outstanding business performance; competitiveness; innovation; flexibility and adaptability; fair and equitable pay and conditions; an open management style; ethical behaviour; and where training and learning were promoted.

A wide range of workplaces were studied across various industries and locations. The research concluded that quality working relationships were the ‘central pivot’ underpinned by a total of 15 key drivers that the authors believe were identifiable, quantifiable and manageable. Some of the key drivers appear to be significantly at odds with the Work Choices legislation and the ideology espoused by the Howard government and certain representations of the Business Council. They include fair pay and conditions; being safe, both physically and psychologically; clear values, including information sharing and an understanding of the individual behaviours expected; and high-quality working relationships where managers and team leaders acted as captains and coaches. The authors also emphasised the importance of trust and how the issue of trust was constantly raised.

The finding of this research and its report are most enlightening, given that it was a study of what the key drivers of excellence in Australian workplaces are. The report also identified some of the factors that were not impediments to achieving excellence—and one of those was trade unions. The report clearly highlights that unionised workplaces could achieve excellence. Given that the Howard government, its Work Choices legislation and some of the government’s key supporters attempt to demonise unions on a daily basis, I would like to again quote Professor Jeffrey Pfeffer from his book Management 2.0, which is due to be published later this year. Professor Pfeffer has kindly given permission to quote his work. His observations about trade unions include the following:

If there’s one word that never fails to raise the blood pressure of my friends in business, particularly in the United States but actually all over the world, that word is ‘unions’.

In the minds of many people, organized labor is the arch enemy of the basic prerequisites for economic success—flexibility, efficiency, and a relentless emphasis on business results. Even presumably progressive and liberal people, and even executives in countries with a strong union tradition, see unions as anachronisms in the modern world. Of course, people will sometimes admit that organized labor may have been important and useful in earlier, less enlightened times and acknowledge the role of labor organizations in promoting workplace safety, outlawing child labor, and limiting working hours. However, with these reforms now thoroughly institutionalized in both law and custom, the advocacy role of unions seems less valuable.

Professor Pfeffer continues:

Like much conventional wisdom, however, the prevailing views about unions are often inaccurate or incomplete. So, it’s useful to set the record straight so that organizations and their leaders can make better and more profitable decisions.

Consider first the effect of unions on wages. Yes, there is evidence that unions raise wages—that is, after all, their primary reason for existence. But higher wages do not necessarily translate into either lower profits or diminished competitiveness ... in competitive market positions, there is essentially little or no union effect on company profitability.

There is currently a lot of discussion about the implementation of a ‘high road’ competitive strategy in which advanced industrialized countries stop trying to compete on the basis of labor costs—a battle they can never win—but instead compete on the basis of innovation, productivity, and brainpower. In this effort, the evidence suggests that the implementation of high performance work practices is useful. So, another issue is how unionization affects the implementation of the best human resource management approaches.

Contrary to what many people seem to believe, having a unionized workforce is not antithetical to the implementation of so-called high commitment or high performance work practices—things such as investment in training, working in self-managed teams, longer term time horizons for the employment relationship and more job security, information sharing, and so forth. Rather, the empirical evidence suggests that unionization is positively associated with the implementation of high performance work practices and makes changing to a ‘high road’ management approach more likely and easier. At worst, unions have no effect on the implementation of these practices, but there is almost no evidence that suggests they have a negative effect.

There is a range of issues that Professor Pfeffer continues with. But, clearly, the internationally renowned experts have proven that driving down workers’ wages and conditions actually has a negative effect on productivity, yet the Howard government persists in implementing its misguided ideology and born-to-rule syndrome by introducing the most draconian workplace relations system the nation has ever witnessed. The Howard government way is the lazy way. There was not the slightest attempt from this government to research and implement modern human resource management techniques—techniques that have a proven track record of lifting productivity resulting in higher profits for businesses and higher wages and better conditions for Australian employees.

With the Work Choices bill and these amendments, the Howard government has again proven that it is trapped in a time warp. It is locked into the lazy, miserable, mean-spirited conservative philosophy of the born-to-rule elite, and this has the potential to severely restrict our growth as a nation. If anyone needs any further proof of this government’s misguided and distorted view of the world they need look no further than its attitude to Australian trade unions. (Time expired)

Kerry Bartlett (Macquarie, Liberal Party) Share this | Link to this | Hansard source

I rise to support the Workplace Relations Amendment (A Stronger Safety Net) Bill 2007. It enhances and strengthens the safety net for Australian workers. The central feature of this legislation is the fairness test, which guarantees that when workers enter into a workplace agreement it will be a fair one. It will guarantee that any protective conditions traded off will have been fully and fairly compensated, as they usually are, in higher wages. This will be examined by and will need to be approved by an independent statutory authority, the Workplace Authority. Further, the Workplace Authority will ensure compensation in any case where an AWA is not deemed to be fair and will require changes to agreements to ensure that they are. The work of the Workplace Authority will be backed up by the Workplace Ombudsman—if you like, a workers’ watchdog—also appointed by the Governor-General. This is in contrast with Labor’s proposed Fair Work Australia, which would be manned by the unions, run by the unions and operated for the unions.

This legislation will ensure the best of both worlds. Firstly, it will ensure strong protection for workers to ensure a fair deal, to ensure that they are no worse off under any agreement; and, secondly, it will ensure a continuation of the flexibility of Australian workplace agreements, which have delivered productivity increases and pay rises and which have allowed workers and employers to negotiate mutually agreeable arrangements that suit their own family needs, study needs et cetera.

It is worth pointing out—and these are not my statistics but the statistics of the Australian Bureau of Statistics—that people on AWAs are earning, on average, nine per cent more than people on collective agreements, and a massive 94 per cent more than people on awards. This legislation provides protection but still allows the flexibility that has increased productivity, will continue to increase productivity and will ensure those ongoing pay rises.

It is also worth pointing out the record and comparing it with the claims and the scaremongering that we heard from the Labor Party and the union movement 18 months ago when this legislation was introduced. First of all, they said that, by ending the unfair dismissal laws, we would see mass dismissals, that there would be rising unemployment and that workers would be put off just at the whim of employers. The member for Rankin might not agree, but that was clearly the message from the opposition and from the trade union movement.

What have been the results in the past 15 months? The results are an absolute denial of the claims that we heard from those opposite. Since March last year, 326,000 new jobs have been created. Ninety per cent of those are full-time jobs, thus ending the casualisation of the workforce that had been going on for some time. Unemployment is down to its lowest level in 33 years, down to 4.4 per cent, building on the improvements that we have already seen over the past 10 years following the first round of workplace relations changes introduced by this government in 1997—changes that have reduced unemployment, dramatically reduced youth unemployment and lowered the ranks of the long-term unemployed. So much for the scare campaign from those opposite that we would see rising unemployment. We have welcome low levels of unemployment not seen for at least 33 years in this country.

The second nonsense we heard from the other side was that wages would be driven down; that, supposedly, the aim of this legislation was to drive down wages. What has happened? Again, the very opposite. In the last year, wages have risen by 4.1 per cent on average and real wages are up by 1.5 per cent. Compare the record of the Howard government with the record of the Labor Party that is supposed to be the workers’ friend. In the last 11 years under the Howard government, we have had real average wages rise by 19.8 per cent. What did we have under Labor? We actually had a fall in real wages in the 13 years of Labor—and Labor proudly boasted that they would drive down wages. It could not be a clearer contrast: Labor drove wages down; this government has lifted wages in real terms by 19.8 per cent, faster than inflation.

The other aspect of the scaremongering we heard was that the Fair Pay Commission would somehow erode the wages of workers. What was the first decision by the Fair Pay Commission late last year? A rise in the minimum wage of $27 a week, a rise that stunned even the Labor Party and the ACTU because of its magnitude.

Arch Bevis (Brisbane, Australian Labor Party, Shadow Minister for Homeland Security) Share this | Link to this | Hansard source

To cover 18 months, not 12. Why don’t you tell the truth?

Kerry Bartlett (Macquarie, Liberal Party) Share this | Link to this | Hansard source

It was a substantial rise that embarrasses the member for Brisbane—which is why he feels compelled to interject—a wage rise far greater than under Labor. Labor actually eroded minimum wages in real terms in the 13 years they were in office.

The third assertion that we heard from the other side was that there would be widespread industrial unrest, that there would be chaos in the workplace. What have we had instead? We have had the lowest level of industrial disputation since records were kept, since 1913. I see the Chief Opposition Whip coming into the chamber, I dare say, to instruct his colleagues to call a quorum here. So what have we seen? We have experienced the lowest level of industrial disputation since records were kept, in almost 100 years.

The point is this: the government’s workplace policies have been delivering for the Australian people. They have been delivering more jobs, higher wages and industrial harmony. Yet Labor want to roll back these reforms. They want to reverse the changes that are generating more jobs. They want to reverse the changes that are generating higher wages and building industrial harmony. The question has to be asked: why? Why do they want to do this? The answer has to be obvious: they are at the beck and call of their union masters. He who pays the piper calls the tune and that is obviously what is happening.

When Labor’s industrial relations policy started to unravel, we heard the astonishing revelation by the Leader of the Opposition that he had left the details of the policy to the Deputy Leader of the Opposition, the member for Lalor, who had built up this confected policy with the help of Greg Combet. The Leader of the Opposition had left Labor’s IR policy to the Deputy Leader of the Opposition who had left it in turn to Greg Combet of the ACTU.

Why do Labor want to roll back these changes? Because their union bosses are telling them to. They want to roll back AWAs and replace them with common-law contracts. Currently, 747,000 Australians, some 8.4 per cent of the workforce, are on Australian workplace agreements and, as I said, they are earning far more than people on awards and earning significantly more even than people on other agreements. Yet Labor want to roll these back, cut these out, therefore reducing wages and in the process creating havoc in the workplace. They would thereby dramatically reduce productivity, especially in the mining industry. We have seen the Australian Mines and Metals Association estimate a reduction of $6 billion in the income of the minerals sector in Australia if AWAs are removed. So we will see lower productivity, lower exports, lower wages and fewer jobs.

This is probably why the Western Australian Premier, Mr Carpenter, said that in the resources sector we need to understand that flexibility, balance and fairness are critical and are being offered to people currently. He was told not to endorse AWAs and obviously therefore did not, but he said that the current flexibility—that is, the flexibility currently being delivered by Australian workplace agreements—ought to be retained because it is delivering productivity, jobs and higher wages in the mineral industry. Labor know this and therefore the only conclusion could be that their attempt to substitute AWAs with common-law contracts is somehow an attempt to try to walk both sides of the street, pretend that they are interested in labour market flexibility, pretend that they want to generate some sort of productivity, but still keep their union masters on side. The two differences, clearly, between AWAs and common-law contracts are that common-law contracts are really a Clayton’s AWA that will not provide the flexibility and the productivity increases that are needed not only in the mineral industry but throughout industry generally. Secondly, and it is a point that ought to be noted, common-law contracts that Labor want to introduce in place of AWAs are not subject to the fairness test to which we would be subjecting AWAs. So what they are proposing is a nonsense.

In the remaining time I want to outline some of my other concerns with the Labor Party’s supposed industrial relations policy, although it is a bit hard to get a handle on it because it changes every second day. Their Forward with fairness publication says on page 14:

Under Labor’s system, bargaining participants will be free to reach agreement on whatever matters suit them.

One wonders what that includes. It clearly was intended initially at least to include bargaining fees for non-union members—admitted by the Deputy Leader of the Opposition in her interview with Neil Mitchell of 3AW on 1 May, later retracted under pressure just to keep things looking good. No doubt it will be reintroduced should Labor win the election. They would re-introduce bargaining fees for non-union members—that is, if you are not a member of a union and union members somehow secure a pay rise, you will be forced to pay the bargaining fee, which from past practice seems to be higher than union membership, therefore coercing or enticing people into joining a union. So we will have bargaining fees, de facto compulsory unionism and we will have ‘no ticket, no start’ again. We will have the right of unions to write whatever matter suits them into a workplace agreement, including things like paid leave to attend union meetings and training sessions and unlimited right of entry by union officials.

It will be open slather for union officials to come into the workplace and, what is more, not only to come into the workplace but under the supposed good-faith bargaining introduce ambit claims and therefore access to the books of small businesses to see if those ambit claims are reasonable. You could have a union delegate coming into a workplace and putting up a claim for a wage rise for their employees. The small businessman might say, ‘We cannot afford this.’ The union official could insist and have the right, under Labor’s proposal, to open the books of the small business to see what their accounts say. This would be an outrageous intrusion into the legitimate operations of a small business, yet Labor wants to allow union bosses to walk into a small business unannounced and open up their books to see what the state of their finances is and whether they can push harder for wage rises. This is outrageous.

The third feature that really worries me about Labor’s proposal is the proposed return to pattern bargaining. That will allow pay rises in one industry that might be experiencing productivity gains to be replicated throughout the country, even in businesses that cannot afford it. A recipe, as the member for Rankin would definitely know, that would put upward pressure on prices, add to inflationary pressures in this country and therefore add to pressure on interest rates.

This point needs to be clearly understood: a return to pattern bargaining, which Labor wants, will put upward pressure on inflation and therefore upward pressure on interest rates. One of the very clear reasons that we have been able to run this economy for the last 10 years at near full employment, with low inflationary pressures and therefore low interest rates, is the flexibility in the labour market. Labor will remove that flexibility, put upward pressure on prices and, therefore, put upward pressure on interest rates. This is precisely why the coalition can say that interest rates will always be lower under a coalition government than under a Labor government: Labor’s return to an inflexible, less productive labour market will put upward pressure on prices and upward pressure on interest rates.

The fourth thing about Labor’s policy that worries me is their desire to restore the unfair dismissal laws—to return to that regime of job-destroying unfair dismissal laws which cost jobs, which discouraged job generation and which, even when jobs were generated, led to a casualisation of the labour force. I could give example after example of this, as could most of my colleagues—of small businesses being forced to make extortion payments to unions, to pay go-away money simply to stop themselves being dragged through the courts. I could give the example of a small business person who said, once the unfair dismissal laws were removed, ‘I will now go out and give a young person an apprenticeship because I’m no longer afraid of being dragged through the courts by the trade union movement.’ I can tell the story of a small business man I spoke to a couple of weeks ago who said, ‘Since the IR laws have changed, I’m now moving my employees off casual rates and into permanent employment.’ Casual employment was the safeguard that many small businesses built in to protect themselves against Labor’s unfair dismissal laws. This employer said, ‘I’m now willing to give my workers permanent jobs instead of casual jobs.’ And yet, inexplicably, Labor want to restore these unfair dismissal laws. They want to restore the discouragement, the disincentive, for young people to get jobs.

The last point I would make is that Labor’s policy is clearly a return to union control of the workplace. We had the charade today of Dean Mighell, the secretary of the ETU, being supposedly sacked from the Labor Party. But that has happened in the past, and he rejoined. In the same way, should Labor be elected to government, he will rejoin and be welcomed with open arms again. Nothing was said by the Labor Party when Dean Mighell said: ‘I’m looking forward to having fun when Labor repeals these laws and Labor’s in office. I’m looking forward to having fun putting pressure on employers and exploiting employers.’ We heard nothing from the Leader of the Opposition then. And we heard nothing from the Leader of the Opposition when Kevin Reynolds, the CFMEU boss, said he was looking forward to the day when the Australian Building and Construction Commission would be abolished and it would again be open slather in the building industry.

And we heard nothing from the Leader of the Opposition when Greg Combet said, ‘I remember the days when the unions used to control this country and I’m looking forward to a return to those days.’ It is little wonder when 70 per cent of the Labor frontbench are ex union officials. It will be easier for them now: they will not even have to get on the phone to Greg Combet to get instructions from him. Now that—in a typical exercise of Labor’s abolition of democracy in their preselection processes—he has rolled one of their own sitting members, they will not even have to phone Greg Combet to get instructions from him; he will be sitting in here with them from the next parliament. They will just ask in their morning caucus meeting or over a cup of coffee in the morning, ‘Greg, what does the ACTU want us to do with our policies now?’ It will be very easy. They will not even need to get on the phone to him.

It is not just the government saying this. It is not just business saying this. Many independent commentators are pointing clearly to the dangers of Labor’s industrial relations policy. I could go back through article after article by independent commentators—as recent as yesterday’s editorial in the Australian headed ‘Conflict continues on the work front’ or an article by Steve Lewis, again in yesterday’s Australian, ‘Back to IR past in name of “fairness”’, which I might read a bit from. He writes:

LABOR will take an industrial relations policy to the election even more antiquated and antibusiness than the policies dreamed up by Mark Latham.

Even more antiquated and antibusiness. He goes on:

And guess what? Kevin Rudd and Julia Gillard don’t give a damn. It is now demonstrably clear the Labor leadership has locked in behind an alternative industrial relations agenda that will take Australia backwards, reduce workplace flexibility and re-empower the unions all in the name of “fairness”.

For all the flowery Labor rhetoric about kicking out a tired and jaded Coalition government, a Rudd government would dramatically reshape the industrial landscape. And not for the better.

Further on, he writes:

Rudd has been doing a lot of schmoozing with business, attempting to reassure it he is listening to its concerns and working on ways to “soften” the impact of Labor’s alternative IR pact. But this is a facade, a display of false pretence.

That is the same facade and display of false pretence we see on so many issues from those opposite. They should be ashamed of themselves. They should be supporting this government’s legislation, which is delivering higher productivity, delivering workplace flexibility and delivering more jobs—and delivering more jobs at higher wages.

Craig Emerson (Rankin, Australian Labor Party, Shadow Minister for Service Economy, Small Business and Independent Contractors) Share this | Link to this | Hansard source

I indicate at the outset that I will use only half of the time allocated to me for this debate on the Workplace Relations Amendment (A Stronger Safety Net) Bill 2007, because I want to create some extra space for Labor MPs to be able to make a contribution before the guillotine falls. If the government is so proud of its legislation, if it is so proud of Work Choices, why not have a proper debate instead of stopping Labor MPs from making a contribution to it? Indeed, around 90 per cent of coalition MPs have declined the opportunity to speak in this debate, yet the whip on our side of the chamber has had to say to numerous Labor MPs that he is very sorry but he cannot fit them into the small amount of time that has been allocated.

My colleague the member for Melbourne said famously, some time ago, that in politics everyone exaggerates. Well, Mr Deputy Speaker, we saw some of the greatest exaggeration in the speech by the member for Macquarie just then. I would put this proposition to the parliament: if Labor’s policy would create so much difficulty for the business community, why exaggerate it? Why misrepresent it? Why not just describe it as it is?

Kerry Bartlett (Macquarie, Liberal Party) Share this | Link to this | Hansard source

That is exactly what I did.

Craig Emerson (Rankin, Australian Labor Party, Shadow Minister for Service Economy, Small Business and Independent Contractors) Share this | Link to this | Hansard source

The member for Macquarie interjects. I am not going to speak for my entire allocated time, but I will respond to the member for Macquarie. He asserted in his contribution that under a Labor government it will be ‘no ticket, no start’—that is, a closed shop, that everyone would be obliged to join a union. This is absolutely untrue. It is outrageously untrue. If our industrial relations policy were to present such difficulties, why would you have to make that up? Why would you have to make up a claim that unions will have unlimited right of entry into any small business in this country and demand their books? Why would a government MP, a Government Whip, create that complete fantasy in order to make the case? The Australian people deserve better than the quality of debate and the sort of misrepresentation that occurs day after day as the Minister for Employment and Workplace Relations and government backbenchers make the most ridiculous, absurd claims about Labor’s policy.

This morning in the debate over the guillotine being applied, the Minister for Immigration and Citizenship, one of the two architects of Work Choices—and we do use the words ‘Work Choices’, whereas government MPs and ministers nowadays find it very hard for those words to roll off their tongues because they are so odious in the community—said that the purpose of this legislation is to deal with unintended consequences. He used the phrase ‘unintended consequences’. He is arguing that it was never intended that any Australian would be worse off under the government’s Work Choices legislation. That is completely untrue, and I will establish that by reference to several statements that the Prime Minister has made outside and inside the parliament. In an interview with John Laws on 10 August 2005, the Prime Minister obviously was saying that it is possible that people will be worse off under this legislation. In that interview, this is what was said:

LAWS: Can you guarantee that no worker will be worse off?

PRIME MINISTER: John, I have been asked that before.

LAWS: I asked years ago.

PRIME MINISTER: And I cannot do that. I can’t do that. I am not going to try.

So much for unintended consequences. The Prime Minister of Australia was saying that he cannot and will not guarantee that no worker will be worse off. In parliament later that day in question time, in response to a question from the Leader of the Opposition, he said:

As I have said before, my best guarantee is my record.

In other words, he would not guarantee that no-one would be worse off. Again—and I will not go on with a full litany of the Prime Minister’s statements—on 8 December 2005 in the parliament, the Prime Minister said:

I have said before and I will say it again: my guarantee is my record.

He would not guarantee it. Then, on 14 June 2006, the Prime Minister again said:

Let me use the phrase that one or two of you have heard before: my guarantee is my record.

On numerous occasions the Prime Minister refused to guarantee that no-one would be worse off because he knew that many Australians would be worse off under the legislation. One of the key reasons for that is an absolutely conscious decision made under Work Choices to remove the so-called no disadvantage test. That test was put in place in the 1996 industrial relations legislation not because the incoming Howard government wanted to do it but because the incoming Howard government did not control the Senate and the minor parties and Labor combined to ensure that at least there was a no disadvantage test. But the first opportunity that the Prime Minister of Australia got to withdraw the no disadvantage test he took. Upon re-election in 2004, he took the opportunity through the implementation of the Work Choices legislation.

I might add that the Prime Minister gave the Australian people no inkling about this legislation—none at all. I was the shadow industrial relations minister at the time, and I used to say to journalists: ‘It’s fair enough that, if you’re asking a lot of detailed questions about Labor’s industrial relations policy, you should go and ask the Prime Minister and the minister what their industrial relations policy is.’ Was there any indication of Work Choices? None at all. He says he has a mandate for all this, that he has a mandate for a policy that he was clever enough never to take to the Australian people for judgement. It was only after it won the election and after it gained control of the Senate that the Howard government unveiled its true intentions, including the abolition of the no disadvantage test.

Now we have a piece of legislation which is going to cost another $370 million. Add that to pre-existing financial commitments and the total is $1.8 billion, and there will be 600 extra staff for organisations such as the Workplace Authority. As shadow small business minister, I would point out that this will be a new red-tape burden for small business because we are going to have 600 staff sifting through agreements but, importantly, they will be making subjective judgements on those agreements—and I will come to that point in a moment.

The protected award conditions include penalty rates, shift and overtime loadings, monetary allowances, annual leave loadings, public holidays, rest breaks and incentive based payments and bonuses. Under this legislation there is supposed to be fair compensation if any of those are traded away. Despite the announced changes, an employee may still be worse off under a workplace agreement than under an award because there are a number of other award conditions such as additional leave for particular industries, redundancy pay and rostering protections that are not subject to this so-called fairness test.

One of the real worries with this legislation is that these public servants in the Workplace Authority have to make the decision whether, in their personal view, the deal is reasonable—not that there is no disadvantage but that it is reasonable. This is a safety net that is full of holes and is meant to create the impression with the Australian people that all is now well, that no-one will be disadvantaged as a result of the government’s Work Choices legislation. Nothing could be further from the truth. This does not provide any guarantee. It fulfils the Prime Minister’s commitment that he would never provide a guarantee that no-one would be worse off under his legislation. I talk to people in the business community and they say that they do believe in no disadvantage, they do believe in a safety net. Who does not believe in a safety net in this parliament? The Prime Minister of Australia.

This Prime Minister is a clever politician—we know that—and this is a clever manoeuvre to create the false impression that a proper safety net has been established. A proper safety net has not been established. Let us remember the words of the Treasurer when he was asked about this. He said words to the effect of: everything can change after the election. There are no commitments beyond the election, so as we go into this election campaign, according to the Treasurer we will not know what the government would do if it were re-elected. But on its form, on the 30-year history of the Prime Minister of Australia, we have a pretty good inkling, because he does not believe in a no disadvantage test or a safety net. Remember the words of Senator Minchin, a close confidant of the Prime Minister, when he was telling the HR Nicholls Society—and he did not realise that there was a tape on—that: ‘We’re going to do a lot more reforms’—so-called reforms—‘after the election.’ This is just a cynical, clever pre-election ploy. It is a safety net full of holes. People should see it for what it is. It is just an act of political expedience to get the government up to and through the election campaign whereupon, if it were re-elected, it would return the Work Choices legislation back to where it was, perfectly capable of disadvantaging any worker in this country.

Dennis Jensen (Tangney, Liberal Party) Share this | Link to this | Hansard source

Wow! I have heard quite a bit of rhetoric in my time, but that was right out there. ‘Clever politician’—let us think about that a bit. This is said by members opposite as a derogatory statement. What is the opposite of it? A stupid politician? Is that what your leader is? Clearly, being a clever politician is something bad. Then we have the member for Rankin saying that we are misrepresenting Labor policy. Maybe representation or misrepresentation of policy is in the eye of the beholder. But there can be no misrepresentation of the results that the Labor Party had last time they were in government. Have a look at what we had with their IR policy: a huge number of people unemployed, high interest rates and a large amount of industrial disputation. The problem is that the member for Rankin does not seem to realise that in life, in reality, there are no such things as absolute, cast-iron guarantees. He said, ‘The Prime Minister didn’t guarantee no-one would be worse off.’ I guess, by implication, he is saying that the Labor Party guarantees that no-one will be worse off. The Labor Party had the sorts of policies where they made those sorts of guarantees back in the early nineties, including the introduction of things like unfair dismissal and so on. But what do you say to the person who loses a job? Suddenly they become a lot worse off. How do you define and categorise that person in terms of your ‘not worse off’ policy?

Quite frankly, the Labor Party would do very well to follow the industrial relations legislation that this government has introduced, because what you have seen is that the further you deregulate the workplace market the better off the results will be. It has been clear right through our liberalisation of the industrial relations market. Indeed, if you look around the world you see that the level of economic performance of a nation is pretty much proportional to how deregulated their industrial relations market is. Labor’s position: let’s re-regulate the market. You can see in old Europe the results that would flow from that. I think that old Europe is starting to realise the problems with a highly regulated labour market.

Having said that, clearly there has been a problem as far as the Work Choices act is concerned, as far as some of the fairness provisions are concerned. The Workplace Relations Amendment (A Stronger Safety Net) Bill 2007 recognises those issues and seeks to address them by establishing a Workplace Ombudsman and a Workplace Authority Director as statutory officeholders appointed by the Governor-General, creating an office of the Workplace Ombudsman and the Workplace Authority as statutory agencies, requiring the Workplace Authority Director to be satisfied that specified workplace agreements provide fair compensation in lieu of modification or exclusion of protected award conditions that apply to an employer or employee and establishing a compliance framework to ensure effective operation of the fairness test.

What has Labor offered? So-called policy that will take Australia back to an antiquated system that belongs to the last century. Let us look back once again at the antiquated system that Labor want us to have. Think back once again to when they were last in government. Go back to 6 May 1993 when this exchange took place with Kim Beazley on the 7.30 Report. The interviewer said:

So this group are being told, in their twenties, by society, effectively: You’re the losers; go to the scrap heap.

Mr Beazley said:

Well, those who haven’t made it into work and who are among the long-term unemployed, that’s a reasonable statement.

What an absolute disgrace. Labor’s policy—(Quorum formed) Labor clearly cannot take the truth. Indeed, have a look at the last time they were in government. They had such a bad performance on unemployment that they tried to redefine unemployment so that the numbers did not look so bad. Let us have a look at it. Back on 30 May 1993, Kim Beazley—

Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

Order! The member for Tangney will refer to members by their seat or their title.

Dennis Jensen (Tangney, Liberal Party) Share this | Link to this | Hansard source

The Sydney Morning Herald quoted the member for Brand as predicting that a new definition of full employment would involve a fundamental reassessment of the make-up of the workforce, including deciding whether some people then counted as unemployed should be excluded from the definition, and that unemployed people over the age of 55, with virtually no prospect of being re-employed, formed one such group. What an absolute disgrace. With unemployed people at the lower end of the scale, it was a case of: ‘Stiff, if you’ve been unemployed for a little while and you’re in your 20s, you’re on the scrap heap. You’ll never work again. And, by the way, if you’re over age 55, we’ll take you right off the unemployment list, because that’s not convenient to our data, either.’ That is Labor’s heritage, which they want to reimpose on Australia.

Labor plan to scrap Australian workplace agreements, which have delivered large wage increases and flexibility to Australian workers. The fact is the Labor Party find it very difficult to cope with any form of flexibility. There is rigid thinking right throughout their structure. You can see it in the way they go about preselections, you can see it with respect to solidarity, where anyone who dares to disagree with any of the dictates from on high are thrown out of the party. The simple fact is that flexibility is critical in the modern workforce and, quite frankly, people like the option of having flexibility in the workforce. But it is something that Labor do not want to have. According to most recent statistics, workers on AWAs earn nine per cent per week more than those on collective agreements. This shows the strength of flexible work arrangements and individual workplace agreements. Significantly, these workers earn 94 per cent more than employees on awards. So why would Labor then decide to scrap AWAs?

The Leader of the Opposition is captive to union ideology. He has let the Deputy Leader of the Opposition and the ACTU boss, Greg Combet, create a policy that would reimpose the rigidity of pre-1996 reforms to workplace relations. Why would you do that? Why would you move back to a system where you had high unemployment rates and a large amount of industrial disputation? It just staggers belief. The problem is that it would actually be worse now than it was back then because the rest of the world has moved on from those days, so we would not be competing on the same playing field we were competing on then. We would be competing on a playing field that is vastly more competitive than it was then, so our relative position would be that much worse. Quite frankly, Labor policy spells chaos for small business—the backbone of the nation—and, if implemented, would ultimately destroy many jobs.

The fairness test ensures that employees receive fair compensation when a workplace agreement removes or modifies protected award conditions, such as penalty rates or overtime loadings. In most cases, this will mean a high rate of pay in lieu of protected award conditions. The Workplace Authority will conduct the fairness test. In exceptional circumstances, and where it is not contrary to the public interest to do so, consideration may also be given to the industry, location and economic circumstances of the employer and to the employment circumstances of the employee. For example, the Workplace Authority may decide it is appropriate to consider the economic circumstances of an employer when a workplace agreement is part of a reasonable strategy to deal with a short-term crisis. The issue of a short-term crisis is a reasonable one.

I am reminded of the case of a certain canning company back in the early nineties—that of SPC. SPC had got into some difficulties with their business and wanted to change the awards and conditions of the employees to ride out the crisis. What was the reaction of the union movement and Labor? They wanted to have a situation where SPC was forced to continue those award conditions, which quite frankly the unions knew were going to break the company. Their argument was: ‘There are other companies that are profitable. Why can’t SPC be profitable? If they can’t afford the pay and conditions that the other companies have to pay then they should be out of business.’ Thank God there was some sense shown in that dispute and there was a restructuring of the awards and conditions. SPC managed to ride it out. Those workers, particularly in that period of high unemployment, managed to keep their jobs and indeed reaped the benefits when the company regained profitability. The Labor view is that, in that case, the business should just go bust. That is why Labor has such a dismal record when it comes to unemployment. We have talked about workplace guarantees. The only guarantee seems to be that under Labor there would be a higher rate of unemployment.

Under Labor employees will have a union application form stuck under their nose every single time they start a new job. Under Labor there will be no limit to what the union bosses can demand in agreements. Labor’s policy document Forward with fairness states at page 14:

Under Labor’s system, bargaining participants will be free to reach agreement on whatever matters suit them.

Therefore, unions will be able to force employers into having the following requirements in workplace arrangements: deductions from an employee’s pay or wages for trade union membership subscriptions; paid leave to attend trade union training or meetings; and—and this is the one that really bites—bargaining fees to trade unions. Labor argue that people should have the right to democratic process and freedom of choice in the workplace, but the reality is that, when it comes to the trade union movement, they want no choice whatsoever. You can belong to the union or, if you choose not to belong to the union, you can belong to the union in another form—and that form we will call ‘bargaining fees’ and it will cost more than union dues. This is the way in which the Labor Party want to fund their re-election campaigns in the future. They will also look at providing unions with information about employees bound by the agreement and at mandating that any future agreement must be a union collective agreement and mandating union involvement in dispute resolution.

Under Labor employers will be compelled to invite union bosses to be a party to every agreement they make with their employees. The amount of compulsion from the union movement under Labor’s policy is absolutely staggering. The union bosses will have the right to be a party to an agreement where just one employee in a business is a union member. Workers will be bound by union agreements even where they have chosen not to be a member of unions claiming coverage of a site. ‘Fair Work Australia’—once again big inverted commas are required here—will tell the parties what they must put in their agreement before it is approved. Fair Work Australia will decide whether or not employees genuinely agreed to their own agreement. Labor policy will also withhold approval unless it believes the employees are better off overall, even if economic circumstances dictate otherwise or new flexibilities are required. It is all there in Labor’s Forward with fairness policy document.

The Howard government’s fairness test would not apply to Australian workplace agreements covering employees with full-time or full-time equivalent base salaries of $75,000 or more—in other words, the fairness test covers employees with a base salary of $75,000 on an Australian workplace agreement and all collective agreements. It will be applied to these agreements when there are changes to protected award conditions. It covers agreements lodged on or after 7 May 2007.

Under Labor’s policy, however, what will we have? We will have ‘no ticket, no start’ again. Unions will be able to demand that only union members be employed at a business. How are we supposed to have a productive workforce with this sort of compulsion from the unions? The unions are sitting like a heavy Damocles sword over every business in Australia. It is unconscionable behaviour. Labor has said that it will support the government’s proposed amendments to outlaw union bargaining fees that give unions the power to collect fees from workers who have chosen not to be union members. But how can Labor be trusted when its policy Forward with fairness once again effectively says exactly the opposite? Dean Mighell, the Victorian branch secretary of the Electrical Trades Union, was quoted in the Australian Financial Review on 30April as saying:

“I welcome particularly the policy that lets us put anything back in agreements that we can coerce our friendly employers to put back in,” he said. “That’s going to be fun.”

We have seen how much fun he has with some of this union compulsive behaviour of threatening employers. We have seen that the Labor Party have run away from the statements he made last year that were made public yesterday. (Time expired)

Peter Andren (Calare, Independent) Share this | Link to this | Hansard source

Mr Deputy Speaker, because of the time I seek leave to have my speech in the second reading debate incorporated in Hansard.

Leave granted.

The speech read as follows—

The truncation of this debate is a disgrace. This latest workplace relations amendment is an excellent example of policy on the run. According to government, the Work Choices legislation that it forced through this place less than eighteen months ago courtesy of its majority control of both houses of parliament, was perfect legislation for Australian workplaces – until that is the polls began to turn against them.

Perhaps the lesson in this for the government is don’t interfere with proper parliamentary debate, and yourself from the abuse of the majority power. The Prime Minister said his government would respect this unexpected power after July 1st 2005, but in the end did quite the opposite.

No government should have, let alone exploit so ruthlessly, 100% of the power with 46% or thereabouts of the primary vote.

I am sure that comprehensive debate on the Work Choices bills back in 2005 – had it been allowed, and had the government been of a mood to listen – would have pointed out the weaknesses in the so-called reforms that this Stronger Safety Net bill is now attempting to resolve. This is what democracy is all about: debate, amendment and improvement of legislation for the benefit of all Australians.

The Workplace Relations Amendment (A Stronger Safety Net) Bill 2007 is some improvement on the laws formerly known as Work Choices, and for that reason it has my support in principle, but with reservations. The bill improves Work Choices because it reinstates some of the protections of the pre-Work Choices system, but falls short of going the whole way.

It is worth noting the fairer pre-Work Choices system was delivered when the government had to negotiate its legislation through a Senate where the balance of responsibility was held by the cross bench minor party and independent senators. Gone are those days, but I’m hopeful of helping their return whichever side forms government in this place.

I said in the Work Choices debate that the removal of the no-disadvantage test removed an important safeguard for workers in the push for a greater take up of Australian Workplace Agreements and the inevitable undermining of protected award conditions under the Work Choices regime.

The no-disadvantage test determined that the Employment Advocate, in relation to AWAs and the Australian Industrial Relations Commission in relation to certified agreements, were to ensure such agreements did not disadvantage employees in relation to their terms and conditions of employment. The agreements were assessed against the relevant award, or designated award in the absence of a specific relevant award, and “any law of the Commonwealth, or of a State or Territory” the Advocate or the AIRC considered relevant.

One of the difficulties of the no-disadvantage test was that it relied upon the subjective judgement of officers of the Employment Advocate or the AIRC, but there was little that could practically be done to avoid this due to widely differing conditions and needs from workplace to workplace. The Fairness Test will face the same difficulties, but perhaps more so with the fact that the Workplace Authority must determine the value of conditions that are to be traded away.

This compensation can be monetary or non-monetary, but must be of significant value. Again this will necessarily be a subjective process, but it is better than no process at all.

The introduction of the new Fairness Test will restore this protection to a degree. Again the test will rely on the assessment of agreements against the conditions provided for under the relevant awards. In the public debate around Work Choices two years ago, the then Minister for Employment and Workplace Relations said that any AWA that illegally removed allowable conditions would default to the relevant award as a safety net – while-ever there are awards that is!

What he did not explain then was that as awards expired and were replaced by AWAs or collective agreements that only have to contain up to 16 allowable matters rather than the 20 basic award conditions, the safety net was greatly reduced and indeed would swing on the negotiation skills of the employees like the 15 year old girl on $8 an hour in a Sydney coffee shop denied access to this protection because her AWA is 12 months old.

The same will apply to the Fairness Test. As the take-up of AWAs and collective agreements increases, the measuring stick against which the fairness test can be applied shrinks.

If a condition of employment – overtime, penalty rates, allowances and the like – are worth enough for workers to be compensated, they are worth being included wholly within a workplace agreement.

For example, in my electorate, one of the major employers is Electrolux in Orange. As an electrical and white goods manufacturer, demand for their product is highest in summer and the lead up to Christmas, and commensurately more overtime is on offer and relied on by many workers to meet the extra expenses that go hand in hand with this time of year.

Where does this well-earned income boost go if it is averaged over the year? – Probably to meet the rising un-affordability of housing, with mortgage repayments absorbing up to 40% of household incomes.

Trading off penalty rates means that an hour of work is an hour of work regardless of when it is done, but this is just not the case in the real world. For example, weekends are time that can be spent with children because they are not at school – giving this time over for work is at a greater opportunity cost to workers with families. It is at a greater opportunity costs for those active in community organisations or sporting clubs or any other activity that takes place on a weekend and that are essential to achieving the more and more elusive work-life balance.

Where the government talks about greater flexibility in the workplace, it seems to mean the flexibility to work more outside regular hours – a 7 day week and 24 hour day.

Trading penalty rates for a higher hourly rate – which the government has said will be the most likely form of compensation under the fairness test – makes it harder for workers to see the value of the extra hours they put in; it becomes lost in the mix. For many, it could be impossible for them to assess whether they are being adequately compensated, and I will take advice from the Minister as to whether or not the Workplace Authority will be providing a concise and understandable evaluation of agreements to both employees clearly explaining how the compensation on offer by the employers balances the value of the conditions that have been traded away.

My reservations about the Fairness Test, as provided in this bill, are in relation to the income limit of $75,000, and the fact that it applies only to agreements made on or after 7 May 2007.

The fairness test will only apply to agreements where the gross annual income of the employee is below $75,000. This will supposedly mean that the vast majority of AWAs are subject to the test, however to arbitrarily impose such a limit where principles of fairness are concerned, is going to be unfair to some.

It essentially creates a double standard where someone earning $75,000 receives compensation for trading off terms and conditions, but someone earning $75,100 does not. If it is true that the majority of employees on AWAs will fall within the limit then it stands that the limit is not actually required. I will move an amendment in the detail to stage to remove this income limit.

Similarly I will move a series of amendments to remove the 7 May 2007 starting date for the test, and will replace it with the date on which the Work Choices legislation removing the no-disadvantage test commenced. If the government is to employ an additional 600 people to assess AWAs against he fairness test it is only appropriate that all agreements made since Work Choices came into affect be assessed.

Without these two amendments, the fairness test operates under an unacceptable double standard where some workers receive benefit yet others do not due to their income level or the simple fact of when they were able to find a job. It is only fair that the Fairness Test is fairly applied to all.

Joe Hockey (North Sydney, Liberal Party, Minister Assisting the Prime Minister for the Public Service) Share this | Link to this | Hansard source

I thank members for their contributions to this debate. Whilst opposition members in this place have sought to condemn the fairness test, they are going to vote for it. They are going to vote for it because they do not want to create, in their view, a political battle about the fairness test and its application. In fact, the Deputy Leader of the Opposition says that this makes a one per cent difference, but they are going to vote for it. That one per cent difference is costing $370 million, but still they are prepared to pretend to be against it while voting for it.

I remind the House that the Workplace Relations Amendment (A Stronger Safety Net) Bill 2007 establishes a fairness test which will strengthen the existing safety net provided to workers, provides greater employee protection to ensure the legitimacy of the fairness test and establishes a Workplace Authority and a Workplace Ombudsman as independent statutory agencies. And with a funding package of $370 million the bill gives significantly increased resources to the organisations that are going to provide protection for Australian workers. Let us be perfectly clear: under this system—for Australian workplace agreements and collective agreements that satisfy the requirements for the test to be applied—there will be a third, independent party that will verify that employees are getting fair compensation for traded protected conditions.

Under the Labor Party policy there is no independent third-party analysis of a common-law contract and the adjoining award. Under the Labor Party policy there is a lesser protection for individuals signing work contracts than under the coalition government’s policy of Australian workplace agreements. Under our policy, workers will be guaranteed a protection that ensures that they will have a third-party analysis of the contract. If it is deemed that an AWA or a collective agreement fails the fairness test, the Workplace Authority will go back to the employer and the employee with suggestions on how the contract can be changed to make it fairer and to satisfy the requirements of the fairness test. They will have 14 days in which to make sure that the contract is fair and that fair compensation is paid for traded protected conditions. If it is not amended within 14 days then the contract will cease to exist and the employee will go back to the applicable employment arrangements.

We undertake this initiative given that the Labor Party cannot accept the fact that workers and their bosses make agreements without union involvement. Labor struggles to appreciate and fails to accept that AWAs and collective agreements will be checked by an independent authority. We have heard a number of misleading claims from the Labor Party during this debate, particularly from the Leader of the Opposition. The first claim was that it is unfair for protected award conditions to be exchanged for things that are not protected, such as redundancy or long service leave. At the end of the day the agreement must be determined by the Workplace Authority director to provide fair compensation, with the primary consideration being the monetary value of the compensation. There will be a capacity to consider the employee’s personal circumstances, including the likelihood of the entitlement being accessed by the employee. Labor attacks the fairness test for not including redundancy as a protected award condition and yet the Labor Party will provide no redundancy entitlements for any employees in businesses of fewer than 15 employees. It is spelt out on page 9 of their policy document Forward with fairness. Redundancy remains an award entitlement and able to form the subject of agreements. Redundancy entitlements are preserved for 12 months after the termination of an agreement unless a new agreement is reached in the meantime. As to the criticisms regarding long service leave, statutory long service leave entitlements under state or territory legislation are not excluded from operating under the Workplace Relations Act. State or territory long service leave legislation continues to operate.

Claim No. 2: the Workplace Authority will not be able to make informed decisions about the fairness of an agreement, because it cannot talk to employees. This is just deadset wrong. This bill clearly states:

... the Workplace Authority Director may inform himself or herself in any way he or she considers appropriate including (but not limited to) contacting the employer and the employee, or some or all of the employees, whose employment is subject to the workplace agreement.

This could be done in writing or through other means such as by telephone. This is much clearer than the Australian Labor Party’s policy under which Fair Work Australia would approve agreements ‘on the papers’, they say—whatever that means—with no requirement for consultation or a hearing.

Claim No. 3: an employee’s personal circumstances will be subject to undue scrutiny by the Workplace Authority. An employee’s personal circumstances may be taken into account by the Workplace Authority in deciding whether fair compensation has been provided—and for no other reason. The test is deliberately drafted so that it is the value of the entitlements to the employee that counts. The Workplace Authority has no power to demand information. It is up to the employee—who, in the first place, willingly agreed to the contract—to provide such information if they wish to satisfy the authority. Of course, it will only be in cases where the employee has sought an agreement that has terms such that he or she has sought to take into account his or her personal circumstances.

Claim No. 4 from the Labor Party: the Workplace Authority will conduct the fairness test in its own time and without any limits. In fact, the authority will be subject to operational time limits in conducting the fairness test. It will administer the fairness test efficiently, and will make decisions as soon as reasonably practicable, most likely within seven to 10 days. In the event that an agreement fails the fairness test, as I said, compensation is payable from the date of lodgement—so it gets back-paid. Also prelodgement assessments are available so that parties can have agreements checked in advance. This gives them more certainty when they come to lodge the agreement. In these cases, approval will be fast-tracked.

Moreover, as I outlined in the second reading speech, the Workplace Authority will receive funding of over $300 million over the next four years. However, the Deputy Leader of the Opposition complains that too much funding is going towards the bureaucracy. The Deputy Leader of the Opposition is actually criticising the government for funding extra positions to help administer a stronger safety net for Australian workers. She is criticising the Australian government for helping the workers of Australia, and criticising the Australian government for taking some of that burdensome involvement in detailed contracts off small business and doing it itself, so that small businesses do not have to go through some of the administrative nightmares that are part and parcel of the Labor Party’s common-law contract process.

Claim No. 5: employees will be in a ‘dark wilderness’ because they will not know whether their workplace agreement passes the fairness test. That is just dead wrong. It will be a requirement that parties be notified at various stages of the process, including about how their agreement can be changed if it does not pass the fairness test.

Claim No. 6: the decisions in relation to the fairness test are not subject to external review. I can inform the Deputy Leader of the Opposition that the Workplace Authority will have simple administrative processes, not lengthy legalistic ones. And this reflects the processes of the Employment Advocate in administering the old no disadvantage test. If an agreement does not initially pass the fairness test, the Workplace Authority will provide guidance to the parties about how the agreement can be amended so that it does pass the test. This effectively ensures that parties are aware of the problem and have the flexibility to fix it themselves without unnecessary tribunal interference.

The opposition’s criticisms lose sight of the fact that the fairness test is a beneficial scheme, capable of providing additional employee benefits over and above those contained in the agreement itself. Decisions made under the fairness test cannot disadvantage employees. Compare this with Labor’s plan for unfair dismissal cases, which involves placing officials from Fair Work Australia in sole control. They will be able to ask the parties questions and seek their views about issues raised, but there will be no written submissions, no cross-examination and no hearing. And the Labor Party’s policy has no appeals. So Labor’s unfair dismissal cases will be judged against a fair dismissal code. But Labor has given no details about what will be in this code, who will decide what is in it, what Labor’s so-called ‘genuine compliance’ will be, how this will be decided, or what right to appeal there will be. These criticisms demonstrate that the Labor Party cannot comprehend how to create a system that provides both fairness and flexibility. They are captive to the ideology of the union bosses—and, gee, we’ve heard that over the last few days, haven’t we? They say they are all for flexibility—but only as long as it is based on awards set by a central body. In contrast, we believe we ensure that choice of flexibility starts at the workplace and remains the fundamental building block of workplace agreement making.

The fairness test is not a return to one-size-fits-all arrangements. While it is mostly expected that a higher rate of pay will be provided in lieu of penalty rates, if an employee wants family-friendly working hours instead, they can do that. And, secondly, let us not forget, trading entitlements for non-monetary compensation occurred under the old no disadvantage test. The sky did not fall in then and it is not going to fall in now.

Claim No. 7 from the Labor Party: the member for Hotham—who is a former president of the ACTU—suggested that there is no safety net under the government’s laws. In this claim he continues the deception of the Labor Party. It took a coalition government to enshrine a minimum wage—the minimum wage being the 11th commandment that was forgotten by the Deputy Leader of the Opposition: ‘Ten minimum standards—oops! We forgot the minimum wage, No. 11!’ I am still living with this picture in my mind, of poor old Moses coming down from Mount Sinai carrying the tablets with the 10 minimum standards on them. He gets down there and finds the Deputy Leader of the Opposition with a chisel and a hammer, trying to get the minimum wage in as No. 11. And Dean Mighell picks up the tablets and smashes them! And poor old Moses has to go up to the top of Mount Sinai again and try to find the 11th commandment—another set of tablets!

It took a coalition government to enshrine such things as annual leave, personal carer’s leave, unpaid maternity leave and ordinary hours of work in the legislation. Unpaid maternity leave—that is interesting to reflect on. Remember the Labor Party policy on unpaid maternity leave? They guaranteed in their policy that it would be two years. And then the member for Rankin lets the cat out of the bag and we find out that they only guarantee it for 12 months. And if the employer says no, well, that is the end of it. That doesn’t sound like a guarantee. It is a Labor Party guarantee—it is not real.

This legislation represents a stronger safety net for more than 7½ million Australian workers, and they are going to earn more under this arrangement, not less. And the Labor Party have said they support the bill on the basis that it might make a difference for one employee. While the opposition might try in vain to understate the scope and significance of the amendments, can I remind the House of the evidence I presented during my second reading speech. Nearly 90 per cent of adult non-managerial employees earn less than $75,000, so the overwhelming majority of non-managerial employees covered by the federal system will have the benefit of this test. Members of the opposition have criticised the bill for not protecting enough employees, and they claim the fairness test will be conducted under a cloak of secrecy. Gosh, the Labor Party talking to us about a cloak of secrecy! Talking of cloaks, that comes from ‘Batman’! Yet Labor want to build a workplace relations system around common-law contracts which, as we on this side of the House know, are not subject to any independent third party scrutiny—common-law contracts where someone can trade away all their penalties and leave loadings for 45c an hour. Oops, an honest mistake! The fairness test applies to agreements lodged on or after 7 May, the first business day after the announcement by the Prime Minister and me.

This bill indicates why this government is the people’s preferred economic manager. We know where to draw the line in the balance between fairness and flexibility. We listen, we adjust. We are not like the Labor Party—which does not consult with business but instead tells its senior business adviser that he is just another voice—or the Deputy Leader of the Opposition, who told business to keep out of the political debate or they would get ‘injured’.

Only where they are exceptional circumstances and it is not contrary to the public interest will the Workplace Authority look at the industry, location or economic circumstances of the employer and the employment circumstances of the employee. This is a more difficult test to meet the equivalent public interest test under the no disadvantage test that applied for a decade before the 2006 amendments. These provisions recognise real-life problems—sometimes compromises are reached to help businesses deal with short-term crises. But the Labor Party again reveals the extent of its hypocrisy. It claims that this bill does not protect workers. Rather than compromise its devotion to the centralised wage fixing system, Labor would prefer that businesses go to the wall. Labor has completely ignored the solid protections for employees in the bill. Employees cannot be dismissed if the agreement fails the fairness test, and they cannot be coerced to give up protected award conditions.

In conclusion, in the motion to suspend standing orders, the Deputy Leader of the Opposition said that this government will be ‘judged’. I accept that. While the ALP flounders in a sea of confusion and backflips, the government will be judged on a record that has produced 4.4 per cent unemployment, more than 10½ million Australians in jobs, an increase in real wages of more than 20 per cent since 1996 and the lowest level of strikes since records were first kept in 1913.

Harry Quick (Franklin, Independent) Share this | Link to this | Hansard source

The original question was that this bill be now read a second time. To this the honourable member for Lalor has moved as an amendment that all words after ‘That’ be omitted with a view to substituting other words. The question now is that the words proposed to be omitted stand part of the question.

Question agreed to.

Original question agreed to.

Bill read a second time.