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

I present the explanatory memorandum to this bill and move:

That this bill be now read a second time.

I am privileged to be introducing this legislation into the House of Representatives today.

In public debates here in Canberra, and elsewhere, we tend to hear and talk a lot about mining workers and construction workers, smelter workers or nurses and teachers, community workers, and that is a good thing. But rarely do we hear the stories of those who work in the textile, clothing and footwear sector.

They are amongst some of the most productive, hardworking and vulnerable Australians.

They are predominantly female. They perform insecure work, sometimes with poor English language skills and no great understanding of the laws and practices that should apply in Australian workplaces. Yet they raise their families and they are generating children who grow into adults and become marvellous Australians.

Often, however, they are not represented at work.

I believe firmly that governments should be focussed on helping those who need it the most.

It is hard to think of another group of workers who require the support of our national parliament more than our outworkers do.

In a previous occupation I worked proudly as a union representative in workplaces where the workers all came together in one place to perform their labour, with one employer, and even in those circumstances it can be difficult to ensure that there are proper terms and conditions and a safe workplace.

I cannot imagine how a textile, clothing and footwear outworker, with little grasp of their second language, English, and little awareness of their rights at work, can follow up on nonpayment for her work, given the multiple hands her work passes through. That is why this government has introduced this legislation.

The Fair Work Amendment (Textile, Clothing and Footwear Industry) Bill 2011 will provide overdue and enhanced workplace protection for Australia's most vulnerable and productive workers—in particular, outworkers.

Who is a TCF outworker?

When I talk about a TCF outworker, a textile, clothing, footwear outworker, I am talking about someone who works in the textile, clothing and footwear manufacturing industry—covering all stages of production of TCF products, from the processing of raw materials through to the production of the final goods that we wear.

Clothing and footwear manufacture, in particular, are labour intensive, with limited scope for mechanisation or automation of significant parts of these processes. That is why outworkers are used to perform so much of this work.

Existing protections

The government's Fair Work Act already contains a number of important protections for TCF outworkers—including scope for awards to include targeted 'outworker' terms, and enhanced right of entry arrangements.

Additional entitlements and protections for outworkers are contained in the modern award known as the Textile, Clothing, Footwear and Associated Industries Award.

Where outworkers are entitled to fair minimum conditions, they can have difficulty accessing them.

Even our Fair Work Ombudsman faces difficulties in identifying and assisting outworkers because outwork is, by definition, not performed in traditional workplaces and it can be difficult to identify for whom the work is being performed.

What is the issue the b ill is designed to address?

There have been any number of reviews over the past 15 years that have raised concerns about the situation of outworkers in the TCF industry.

Recently, a report by the Brotherhood of St Laurence found that outworkers experience poor working conditions and are frequently underpaid, sometimes as little as $2 or $3 an hour.

These reviews have found, and the government accepts, that outworkers in the TCF industry suffer from unique vulnerabilities as a result of their engagement or employment in non-business premises.

It is because of those vulnerabilities that the government recognises that the TCF outworkers require specific regulatory protection in order to control the proven exploitative conditions under which too many find themselves engaged.

I acknowledge that governments of all persuasions and at all levels have recognised the importance of this issue.

Most states have legislation that protects TCF outworkers; however, there are differences in the approaches that they take. For example:

Key features of this b ill

Although most jurisdictions have recognised that special measures for outworkers are required, there is no single uniform approach to regulation across our nation.

That means that outworkers have inconsistent levels of protection across Australia.

That is why our Gillard government is committed to developing arrangements to ensure all TCF outworkers are engaged under secure, safe and fair systems of work.

The government's intention is to achieve this by implementing nationally consistent rights to legal redress and protection.

This bill implements that commitment by:

In relation to the extension of the specific right of entry rules to premises in the TCF industry operating under 'sweatshop' conditions, there will be an exception for the principal place of business of a person with appropriate accreditation.

In such cases, the standard right of entry rules will continue to apply.

The existing power of Fair Work Australia to include outworker terms in awards will not be limited. Additional protection for outworker terms will be provided by ensuring that these important industry wide standards cannot be undercut by the use of flexibility terms in enterprise agreements.

These changes will promote fairness and ensure a consistent approach to the workplace entitlements and protections for a class of workers that are widely recognised as being uniquely vulnerable to exploitation.

Extending the operation of the Fair Work Act

This bill extends the operation of most aspects of the Fair Work Act to TCF contract outworkers.

This ensures that outworkers in the TCF industry have the same terms and conditions, as well as other rights and entitlements, as other workers regardless of their status as employees or contractors. This approach is consistent with the approach that has been taken in many states.

Under the changes proposed in this bill the person who directly engages a TCF contract outworker will be treated as their employer.

The objective of these amendments—clearly stated in the bill—is to ensure that contract outworkers are taken to have the same rights and responsibilities as employees in the same position.

The bill recognises that there may be instances where technical modifications or clarifications are required and allows regulations to be made to ensure the effective application of particular provisions to contract outworkers.

However, the bill makes clear that such regulations can only be made to ensure the effectiveness of, and not to undercut, the extension of the act to contract outworkers.

Recovery of unpaid amounts

The bill provides a mechanism to enable outworkers to recover unpaid amounts up the supply chain.

The Productivity Commission's Review of TCF Assistance (in 2003) reported the findings that outworkers are often not paid for the work they do and that, because the supply chain consists of numerous subcontractors, outworkers may often find it difficult to pursue any unpaid moneys or entitlements.

Provision for the recovery of unpaid amounts up the supply chain is a feature already of outworker protection legislation in Victoria, New South Wales, Queensland and South Australia, and recognises the fact that TCF outworkers are engaged at the end of a sometimes long and confusing supply chain.

Under the government's bill:

These arrangements are designed to supplement existing arrangements—these new provisions do not limit any action that an outworker might otherwise have in relation to unpaid money, including remedies available under state law.

I also want to make the point that this provision does not extend to include retailers who sell goods produced by, or of a kind often produced by, outworkers, where the retailer does not have a right to supervise or otherwise control the performance of the work.

Code of p ractice

This bill allows an outwork code of practice to be issued dealing with standards of conduct and practice in the TCF industry.

The code may impose reporting or other requirements on employers or other persons engaged in the TCF industry to enhance the transparency of supply chains that result in outwork being performed.

An outwork code will enable arrangements for the performance of TCF work through the supply chain to be monitored.

Provision for a code will assist in ensuring that no economic advantage can be gained by the avoidance of responsibility for a worker's entitlements.

Right of entry

The Fair Work Act already recognises the importance of right of entry to workplaces in securing fair working arrangements, and provides enhanced entry rights in relation to outworkers.

This bill seeks to ensure that protection applies not only to outworker arrangements, but also other exploitative practices in the industry, and in particular sweatshops.

At present, entry to such premises generally requires 24 hours notice of intention to enter. The nature of sweatshop operations, and the ease with which they can relocate, mean that the current requirements can be easily circumvented.

This bill will extend specific right of entry rules that apply to suspected breaches affecting outworkers (which allow entry without 24 hours notice) to the industry more generally, with an exception for the principal place of business of a person with appropriate ethical standards accreditation.

This proposal recognises that poor practices in the TCF industry are not confined to work conducted in people's homes but also take place in conventional workplaces operating under sweatshop conditions.

The Gillard government believes that strong action on this issue is required, as reports continue of people working in sweatshops in the TCF industry.

Members of the House may have seen reports following a film crew visiting a Melbourne TCF sweatshop in November 2011 and discovering squalid working conditions unimaginable to the ordinary person, unimaginable to exist in our nation.

Members of the House may have read reports in major newspapers last year about sweatshops and outworkers producing school uniforms for as little as $7 an hour (less than half the award rate).

Enhanced right of entry will assist in locating, identifying, remedying and stamping out these exploitative practices.

I note that this element of the bill does not apply to the principal place of business of a person with an appropriate accreditation. In such cases, the standard right of entry rules will continue to apply.

Linking right of entry to accreditation is smart. It is intended to increase the level of scrutiny given to supply chains and encourage improvement in standards in those corners of the TCF industry that do not currently operate appropriately, for the benefit of both workers and businesses in the industry.

Impact of the changes

These changes will go a long way to ensuring that vulnerable workers in the TCF industry receive fair and decent working conditions.

These changes will make it easier for the Fair Work Ombudsman to identify businesses that engage outworkers and investigate and enforce breaches of the Fair Work Act and the TCF award.

These changes will improve the ability of the union to identify sweatshops and assist workers working in unacceptable conditions to receive what is justly theirs.

The government recognises that some businesses in the TCF industry may be concerned about these changes, but if a business already complies with the outworker provisions in the TCF award and relevant state legislation then the bill will have a very limited impact on them.

It is only those that flout existing laws—by exploiting outworkers, by forcing them to work in sweatshop conditions, and by taking advantage of the vulnerable position of migrant workers—that should be concerned. It is those with something to hide that should be concerned.

This bill reflects the government's commitment to make life a little easier for some of Australia's most productive yet most vulnerable workers—to make it easier for outworkers to receive their minimum entitlements.

It is also clear that the demand for clothing and footwear that is made ethically and sustainably is growing all the time.

As consumers we are increasingly made aware that the decision to buy is a decision that comes with responsibility.

This bill reflects the future of the Australian sector where consumers are confident that goods are produced ethically, with hardworking workers receiving fair and modest wages and decent conditions.

By improving compliance with the existing provisions across the board and by introducing consistent provisions for outworkers, large retailers and clothing brands will have additional assurance that the garments they sell have been manufactured in an ethical way and that the values of the brand they promote are being upheld throughout the whole supply chain.

Finally, let me make this one important commitment—the Gillard government will continue to work on ways to ensure all those who need the protections outlined in this legislation receive it.

I understand there are outworkers forced to incorporate in attempts to avoid these and other important protections. This is unacceptable. I understand there are supply chains so complex and long that even with the patience of Job no-one could be expected to easily undo it. That is unacceptable. There are a number of ways these challenges can be approached and the Gillard government will work through them. We will persevere to ensure that this the best possible protections for some of Australia's most hardworking, productive yet vulnerable workers are enshrined in law.

I thank the members who have indicated they will support this bill and I encourage all members who are concerned about some of Australia's most hardworking, productive and vulnerable workers to support this important legislation.

Leave granted for second reading debate to continue immediately.

Sussan Ley (Farrer, Liberal Party, Shadow Minister for Childcare and Early Childhood Learning) Share this | Link to this | Hansard source

I am pleased to speak on the Fair Work Amendment (Textile, Clothing and Footwear Industry) Bill 2012 and express the coalition's very real concerns. I must begin by picking up on the disingenuous remarks of the minister at the end of his speech where he indicated that if you are doing nothing wrong then you have nothing to fear. In fact, by extending the provisions of this bill to independent contractors, and I do not just mean people who work as outworkers but people who might have recently graduated from a fashion design course at university and be designing a new Australian label in their own home, they will be caught up and described as outworkers and forced to apply the principles of an employer-employee relationship to somebody that they may engage just to sew something that they have designed and bring it back to be considered or put it into a fashion show. The suggestion that if you are doing the right thing already you have nothing to fear is not a good one from the minister.

I want to make it very clear that nobody in this House, and that includes the coalition, supports any type of sweatshop labour in Australia. Nobody in this House approves of the exploitation of generally migrant women. Nobody in this House approves of the most vulnerable workers being taken advantage of. But that is not really what this bill is about, and that is not really why the minister is bringing this legislation to the table today. Just by way of background on the bill itself, it extends the operation of most provisions of the Fair Work Act to contract outworkers in the textile, clothing and footwear industry by deeming contract outworkers to be employees. It provides a mechanism to enable TCF outworkers to recover unpaid amounts, including from contractors, up and along the supply chain. It extends specific right-of-entry rules that apply to suspected breaches affecting outworkers which allow entry without 24 hours notice to the TCF industry and it enables a TCF outwork code to be issued.

The TCF industry, particularly the garment industry, has become dependent upon and structured around subcontracting, outsourcing and the prolific use of outworkers or home based workers, most often migrant women with limited English skills, forming supply chains of manufactured items with each other for final completion and distribution to retail outlets. That is a fact. The development of supply chain production systems through subcontracting methods has posed unique challenges to the traditional award based and state and territory based occupational health and safety systems and the worker compensation schemes as well. We accept that. However, we do not accept that the situation has not had considerable adjustments to it and that the conditions that once did exist for so-called sweatshop workers do not exist and are in fact against the current provisions of the Fair Work Act.

I only have to go to the minister's second reading speech in the Senate to see that he clearly makes the point that the Fair Work Act already contains a number of important protections for TCF outworkers, including scope for awards to include targeted outworker terms and enhanced right-of-entry arrangements. Additional entitlements and protections for outworkers are already contained in the Textile, Clothing, Footwear and Associated Industries Award. So it is not correct to suggest that if we do not move on this legislation this group of, yes, vulnerable workers are somehow unprotected. They are not.

When we are faced with evidence of endemic and inappropriate conduct in workplaces in a specific industry the coalition are always willing to consider industry-specific legislation that addresses that conduct. It was on this basis that we maintained protections for outworkers in the textile, clothing and footwear industry in various iterations of workplace relations legislation between 1996 and 2007. It was on this basis that the coalition implemented the workplace legislation specific to the building and construction industry so recently wound back by the government. So we do know there are specific provisions in the Fair Work act that protect outworkers and we know that there are equivalent provisions in state and territory legislation.

But the whole point of this is: why does the government feel it necessary to introduce additional amending legislation to the Fair Work Act when the Fair Work Act itself is already the subject of a post-implementation review—a long and exhaustive process? Perhaps it is because the government does not want to see what that review will finally come up with. The reality is that the modern award system is failing in many areas. When I say 'failing', I mean that it is not passing the government's own disadvantage test. It is in fact reducing the wages of a range of lower paid workers in society. So in the middle of a process where the government is reviewing its own Fair Work Act, and spruiking that review with every step it takes, it is inserting this specific piece of legislation about the textile, clothing and footwear industry into that act. We in the coalition say, 'Bring it on when you bring out the review of that act. If there are problems with this, introduce them at that stage.'

I then come back to the rationale for the legislation that we are seeing here today. The minister just now and the minister in the Senate have both mentioned that it relates to two reports. Its justification, as proposed by the minister at the time, Minister Evans, was based on a reference to a 2007 report by the Brotherhood of St Laurence and a 1996 Senate economics reference committee inquiry. Both these reports had been completed prior to the passage of the fair work bill. If these reports constituted such a strong case for this proposed bill then why has the government waited until now to act? Why did the government not address those concerns as soon as it had its first legislative opportunity, which was the introduction and subsequent passage of the Fair Work Act? I put it to you, Deputy Speaker, and members of the government that there was no problem to correct at that stage, that the protections that were already in place were sufficient.

I want to come now to the concerns that were expressed by those who made submissions to the Senate review of this legislation. The government does not like its legislation being referred to Senate committees because it does not like the truths and the realities that come forward from people who live and do business in the real world. It was reluctant but, yes, we got the Senate inquiry up. However, the inquiry's process was guillotined at the first opportunity and so the Council of Textile and Fashion Industries of Australia—that is, the industry body that represents textile, clothing and footwear—was not even allowed to appear at the Senate inquiry. The Textile, Clothing and Footwear Union of Australia was, and it was entirely appropriate that it was. I appreciate, as the shadow minister reflected in the Senate, that it made a professional and well-written submission and the briefing that it gave to the opposition was both those things as well. That is entirely as it should be. But why would a Senate committee prevent the industry body that looks after this industry coming to talk to senators from all sides of parliament about a piece of legislation that will make such a difference to that industry? What is the government running and hiding from? What are the deficiencies in the existing legal system?

The minister mentioned just now the Channel 9 story on a Melbourne TCF sweatshop. I am sure there were real difficulties to address, but I am sure they were in breach of the current legislation. Why is the minister relying on Channel 9 stories to move such complex legislation? The Sunday Herald Sun report on sweatshops and outworkers producing school uniforms is something else the minister just referred to. Where is the evidence base? Where is the rationale for bringing this legislation to the table if all you can come up with in your second reading speech to the House today is two media reports?

The Council of Textile and Fashion Industries of Australia, while they did not appear before the Senate committee, were nevertheless able to make a submission. They have said that the argument for introducing the legislation is based on research conducted nearly five years ago, not current evidence, and fails to acknowledge the gains made in 10 years of existing legislation and four years of investment by the federal government in Ethical Clothing Australia.

If there was such a strong case for change, why did the now Prime Minister when she introduced the Fair Work Act as minister for education and employment say:

I believe the Fair Work system is right …

We worked hard to get the balance right and I believe the Fair Work Act is right.

These amendments were not imagined for this particular industry at that time. So we are led to the inescapable conclusion that the government's motivation for this amendment is more about appeasing the trade union movement in the lead-up to the next federal election. As I said, the review of the Fair Work Act is currently underway and will pick up any deficiencies that had not been identified when the act was introduced.

I will turn to some of the submissions made by people who work closely with small businesses. They are people who took time to make submissions to the inquiry. They are people who understand the realities of life in a small business environment. I remind the House and those listening to the broadcast today that we are talking about the fashion industry, in large part, and the clothing industry in Australia. Many women, like me, really do look at the labels of the clothes they buy. We seek out labels whose clothing is made in Australia. We love the fact that we have bright young designers here in Australia, but they are threatened by this legislation. Australia has a fabulous fashion industry; we have great home-grown designers: Carla Zampatti, Sass and Bide, Dion Lee, Alannah Hill and Lisa Ho to name a few. The next generation of design superstars is threatened by this legislation.

One submission to the committee came from a young woman who describes herself—I draw directly from her submission—as an emerging Australian fashion designer who is: 'starting a label from home. The textile, clothing and footwear modern award regime and this associated amendment defines me as an outworker, despite my four-year degree in fashion from Ultimo TAFE. The catch-all modern award has a catch-all definition where anyone working from home in the fashion industry is an outworker. Yes, I can be considered an outworker if I sell to a boutique or a department store.' With this bill we are stifling the young, innovative and entrepreneurial in this country. This young woman continues:

… as a fashion student/designer, if I hand out work to a 'maker/outworker' to sample a design I am obligated by law to employ them with full benefits and entitlements, and that is against the law for me to employ them casually. Further I am aware that in the final form—

of this bill, the parliament will deem—

all outworkers to be employees for most purposes of the Fair Work Act 2009 … including the National Employment Standards, Superannuation and unfair dismissal laws. As a start-up business, in the beginning it will be challenging to pay myself, never mind employ a ‘maker/ outworker' …

who is knocking up a design on a casual basis so you can put it on the catwalk next weekend. Suddenly, the outworker becomes an employee and the designer becomes subject to all of the draconian—they are not always draconian—aspects of the legislation. It is absolutely unworkable. In trading in such an environment this woman, as she says, faces prosecution in breach of the modern award. She finally states: 'The risks are too great.'

For ladies—and it is generally ladies—who like to buy fashion labels in Australia, I want to place on the record that it is that activity that is under threat from this legislation. It was not mentioned by the Minister for Employment and Workplace Relations when he gave his second reading speech earlier, and it was not mentioned when this bill was introduced in the Senate, but it is clearly something that would be scooped up by the catch-all provisions of this legislation.

Making a submission to the Senate inquiry was Apl Financial Pty Ltd. They are chartered accountants who deal with small businesses on a day-to-day basis, unlike this government. They have a unique insight into the difficulty of applying some of the fair work legislation to the real world. They state:

The Fairwork outworker legislation is so restrictive and draconian that it is no longer viable and administrative possible to engage outworkers.

Why? They state:

The amendment deems outworkers to be employees …

If the amendment is passed then outworkers and the contractors supplying the work will be required to choose between complying with the Income Tax Act and the Fair Work Act.

That is quite a neat point. There are no amendments to the Income Tax Act to take away from the real world situation where you are either an employee or an independent contractor. That is decided under the Income Tax Act. It is a matter of fact, not a matter of interpretation. Their submission is right: it is not possible to comply with both. They state:

The amendment will cause the direct costs of using outworkers to increase … Businesses engaging outworkers will now be liable for unfair dismissal claims.

There is no research to indicate that the exploitation of workers in the clothing industry is greater than other industries.

There is no research which defines the number of outworkers in Australia.

Apl Financial's submission continues:

How can such a situation arise; an industry in crisis, no definite knowledge of whether a problem exists, no definite knowledge of the size of the problem, introduction of draconian legislation which will place further costs on production to be carried by small business which cannot be complied with and will not fix the issue.

Because people who operate outside the law, as I am sure we saw in those media reports that the minister quoted, will continue to operate outside the law. The submission continues:

The major proponent of the legislation is the TCFU(Victoria).

A review of the audited financial statements of the union for the years ended 30 June 2004 to 30 June 2010 shows a 48% fall in membership to 2,617 members.

On current trends by 2015 membership of the TCFU will be nil.

It appears that the reduction in membership income is being replaced by government funding.

For the year ended 30 June 2010 the union received $1.15 million of funding.

The TCFU is fighting for its survival.

Is the exploitation of outworkers issue a ruse run by the union so the government has a reason to keep funding the union?

This is a question that has been raised in submissions to the committee. It is a question that I am not necessarily taking a position on, but is one that needs to be put on the table so that the House can understand all aspects of the situation in relation to this legislation. As Apl Financial said in its submission:

Special provisions in the Act are not required protect outworkers. The general provisions of the Act together with the Contractors Act and the Income Tax Act are adequate to prosecute and shut any business exploiting outworkers

There are many reasons this legislation will not improve the conditions of outworkers. That is what we should come back to. As I said at the outset, nobody in the coalition supports sweatshops or the exploitation of vulnerable workers, but we do want to make sure that we do not shut down an industry altogether. Perhaps it will become too difficult—too expensive, too overburdened with paperwork, too unrealistic. The minister mentioned a code of conduct. It sounds good, but my goodness: imagine the paperwork associated with that code of conduct. Some regulations will probably come in later on that will require an enormous amount of bureaucratic compliance to be done by those who work in this industry. Regarding the supply chain recovery of money aspects of this bill, you might be performing quite well in your position in the supply chain of clothing manufacture, but now all of a sudden you can be caught up as a notional employer and be required to fix one of the wrongs that has been done by somebody further down the supply chain whose activities you have no knowledge of. That is really quite ridiculous.

The clothing industry has lost 13,000 jobs in the last 12 months, according to the Textile, Clothing and Footwear Union of Australia. With the high Australian dollar and the global financial crisis, designers and Australian manufacturers cannot afford a further impost on their production costs. As one manufacturer advised, 'We will stop manufacturing in Australia and just import all our garments from Asia.' Anyone involved in the clothing industry and the designer fashion industry has seen that trend inescapably over the last 10 to 15 years.

Manufacturers who remain in Australia and who endeavour to comply with the additional red tape will of course pass part of the cost of compliance on to the outworkers, thus reducing their income. How counterproductive is that? As designers and manufacturers move work to Asia there will be less work for the outworkers. These changes are dramatic and will increase production costs substantially, which will cause businesses to fail, reducing the work available to outworkers. The Fair Work Act will create a situation whereby the cost of preparing and monitoring the paperwork on small, low-volume production runs will be greater than the price the designer will be prepared to pay to have the garments manufactured.

Unethical, unprofessional and disreputable businesses that exploit outworkers are not concerned with government legislation, because, as I said, such businesses will always find a way around legislative changes. When such businesses are prosecuted, as we see all too often, the assets are dissipated.

According to the Textile, Clothing and Footwear Union of Australia there are now sections in the act covering instances where an outworker is exploited, the contractor is prosecuted and all funds have disappeared. Then the organisation or individual providing the contract to the contractor is liable. Liability continues up the supply chain until funds are available to meet the underpayment and penalties of up to $30,000. If you are a person of high integrity and ethical standards with a good reputation you would have to consider your position now in that supply chain, as well as what you might be liable for from those further down the supply chain and what that might then do to your reputation in this somewhat precarious industry.

This legislation is nonsense; it is unworkable. It will be impossible to determine which entity or individual in the production chain should pay the underpayment and penalties. Why penalise companies and individuals further up the supply chain when in fact they have complied with all of the legislation?

We want to demonstrate our faith in the protection that the parliament, its legislation in the Fair Work Act and the albeit flawed modern award process should offer to Australia's most vulnerable workers. Therefore, I foreshadow that I will be moving amendments to this legislation that focus on quite reasonable things. One of these things is the time line within which this is introduced. In other words, it should actually wait until the post-implementation review of the Fair Work Act is completed. As I said, anything that arises from a situation in the textile, clothing and footwear industry as it now exists should be dovetailed and fed back into that review and brought to the parliament in legislation that brings other aspects of the review to the parliament. So that is one modest amendment that we will be moving.

The other amendment concerns the fact that we actually want to make sure that no-one is worse off after this legislation is passed. We are not interested in contractors being turned into employees to boost union numbers and memberships. We know that is an agenda. What we are really concerned about is the reality for these vulnerable workers. So we will be moving an amendment that focuses on the fact that they actually should not be worse off after this passes through the parliament, if in fact it does. I thank the House.

Laura Smyth (La Trobe, Australian Labor Party) Share this | Link to this | Hansard source

Really I should not be surprised at this point. In the same week that we saw the Tories in this place oppose safe rates and safe working conditions for truck drivers in our country, we now see them exposing vulnerable workers—largely a female workforce—to unfair work practices and working conditions. I am afraid I do not take particularly seriously the somewhat disingenuous concerns that have been expressed by the member for Farrer for some of those vulnerable workers, because at every stage of the development of workplace legislation the opposition have revealed themselves to be completely unconcerned with the rights of working people. Each time we present legislation in this place which aims to make work rights fairer for some of our most vulnerable people across the most vulnerable industries in this country, they stand in this place and indicate their disdain for those working people and for those who represent them.

It is extraordinary that, in addition to opposing safe rates and opposing this legislation, the opposition are trying to claim that they represent small business interests in this place. So much of the rhetoric of the member for Farrer went to the opposition's apparent concerns about the interests of small business and the opportunities presented to small business. I am afraid you really cannot have it both ways. You cannot come into this place and say that you are going to be opposing tax cuts for small business, you cannot come into this place and say that you are going to be opposing the change in the company tax rate to assist business generally in this country, and then pretend to be representing small business. On every count those opposite fail the test of a responsible opposition, fail the test of compassion towards workers and fail the test of reasonableness for industry.

It is extraordinary that the third point the member for Farrer raised—indeed, I am sure members of the opposition generally will raise this in the course of this debate—is that there has not been sufficient opportunity for consultation in relation to the legislation before us, that there is not sufficient opportunity for industry input. Well, one only has to look back at the development of the Fair Work legislation in this country and compare it to the development of Work Choices legislation in this country to see the very stark difference between the approach taken by those of us on this side of the chamber and the opposition. The Work Choices legislation was brought to this place by stealth, with rather limited consultation, and certainly very limited consultation for working people in this country. However, this government, after what was effectively a referendum on workplace rights at the 2007 election—when the Australian people resoundingly rejected the approach taken by the Tories in relation to fair workplaces and workplace rights—undertook a rigorous process of review and consultation and developed its legislation appropriately to reflect a fair balance, a balance which ensures that the rights of working people across industries, including the TCF industry, are supported and to ensure fairness for all.

The contortions of the opposition, as they come into this place pretending that they are concerned about vulnerable workers and pretending that they are concerned about small business, are extraordinary. Frankly, like most contortionists, they deserve to be in a sideshow—and indeed they are a sideshow. We know that this government stands for ensuring that vulnerable people have appropriate rights in their workplaces, and this legislation is absolutely about that. It is as a result of an ongoing effort by those in the TCF workforce and by those who represent people in the TCF workforce that we are ensuring there is justice in the workplace. So I am very pleased to speak on this legislation today.

The Australian textile, clothing and footwear industry is a major sector of our economy, with industry estimates of over $9 billion in annual sales. It accounts for 10 per cent of manufacturing establishments. Business analysts report that 50 per cent of clothes sold in Australia are manufactured domestically. Manufacturing employment in the industry is characterised by outworkers, and the legislation before us is concerned with them. The Productivity Commission estimates that outworkers comprise 40 per cent of the workforce. While the nature of the industry makes it difficult to be specific, the number of Australians working in the TCF industry is by any measure significant. The Senate Economics Reference Committee's inquiry into outworkers in the garment industry reported in 1996 that at that time the number of outworkers in Australia ranged from 50,000 to over 300,000, with over 140,000 in my state of Victoria.

Despite the size and contribution of this major sector of the economy, the poor working conditions of its outsourced workforce have been of major concern. Many reviews over the past 15 years have identified these issues, so it is appropriate and timely for this legislation to come before the House today. The Senate inquiry found problems with payments and hours of work as well as confusion and misinformation about rights and responsibilities in workplaces. It found that noncompliance with award wages and conditions was so widespread that it was considered normal.

The Industry Commission in 1997 and the Productivity Commission in 2003 found that outworkers received payment and conditions significantly lower than their award or statutory entitlements. A study in 2007 by the Brotherhood of St Laurence reported that outworkers themselves were stating that conditions had worsened over the past 10 years, with continuing poor working conditions and underpayments, sometimes as low as $2 or $3 per hour. One of the outworkers interviewed for this study stated:

If we work eight hours a day, five days a week, we would only earn $100 so it is not enough. It's impossible to work less hours and clear the same as workers in the factory.

Another outworker stated:

We do the sewing: the factory then gives it to (company name) and they say it is all wrong and they don't pay the money. Then the factory does not pay me.

This study also reported the continuing lack of awareness throughout the industry of the need to comply with relevant workplace laws and award conditions for outworkers. The Council of Textile and Fashion Industries of Australia reported to the Senate inquiry that they were 'extremely concerned' about exploitative employment practices in the industry. So it is appropriate, timely and critical for this legislation to come before us today. These reviews have found—and the government certainly accepts—that outworkers in the TCF industry suffer from unique vulnerabilities as a result of their engagement or employment in non-business premises. These vulnerabilities are made worse by the fact that these workers are often migrants, with poor English language skills and a lack of knowledge of Australia's legal system and employment arrangements.

Since our election in 2007 and the referendum on fair work in Australia, Labor has acted to improve the situation of these workers. The government's Fair Work Act includes a number of important specific protections for outworkers, with additional entitlements and protections contained in the industry award. While a number of states have legislation providing special protections for TCF outworkers, this is far from uniform. Even where these protections have been enacted, outworkers still have difficulty using or enforcing them. The difficulty of identifying employers and work locations throughout the supply chain has also limited the ability of the union representing outworkers—the Textile, Clothing and Footwear Union of Australia—to gain right of entry to explain workplace rights to outworkers and to represent its members. This problem has been highlighted by the Fair Work Ombudsman, who has reported difficulty in identifying and assisting outworkers due to the fact that they do not work in traditional workplaces and that there is inherent difficulty in identifying employers.

For all these reasons, this government is acting. This bill responds to the concerns I have outlined by providing enhanced workplace protection for outworkers. It represents a major step forward for Australia's outworkers, most of whom are women. It extends the operation of most provisions of the Fair Work Act to contract outworkers in this industry, and it provides a mechanism to enable them to recover unpaid amounts up the TCF industry supply chain. It enables a TCF outwork code to be issued. Most importantly, the bill addresses limitations on right of entry provisions to assist in ensuring that workplaces comply with Australian law and award conditions. It will extend outworker-specific right of entry rules to all premises in the TCF industry operating under sweatshop conditions. So it is appropriate and timely that this bill has come before the House today.

I would like to acknowledge the work of two organisations which have long advocated on behalf of Australian outworkers—FairWear, which has brought together a network of community organisations and for many years has advocated the elimination of exploitation of sweatshop workers and home-based outworkers in the Australian clothing industry, and the Textile, Clothing and Footwear Union of Australia, which has been at the forefront of representing the industrial interests of outworkers and raising awareness of their legitimate rights and entitlements.

I finish with the words of Mr John Ryan from the Australian Catholic Commission for Employment Relations, who said in 2006:

A measure of our humanity is how we assist the vulnerable. Outworkers need fair pay and conditions to support their families and to live with dignity. The safety nets for outworkers, and other industrially weak workers, need to be maintained.

These are vulnerable Australians who deserve the support of this parliament and they certainly have the support of those on this side of the parliament. I commend the bill to the House.

Karen Andrews (McPherson, Liberal Party) Share this | Link to this | Hansard source

I rise today to speak on the Fair Work Amendment (Textile, Clothing and Footwear Industry) Bill 2011. The bill is set to extend more provisions of the Fair Work Act to outworkers in the textile, clothing and footwear industry by deeming them employees. The bill will also extend right of entry provisions to circumstances in which suspected breaches affect TCF outworkers so that the provisions may apply to the industry broadly, with an exception for normal right of entry rules to apply for the principal place of business of a person who possesses appropriate accreditation. Other changes will allow TCF outworkers to recover unpaid amounts up the supply chain, a restriction of the flexibility clauses in enterprise agreements that deal with TCF provisions, and the ability for a TCF outworker code to be issued.

Currently, the Fair Work Act describes an outworker in the textile, clothing and footwear industry as an individual who performs work in the textile, clothing and footwear industry for the purposes of a contract for the provision of services but does so at a residential premise or another premise that would not conventionally be regarded as being a business premise. The bill, however, will amend the act to allow for contracted TCF outworkers to be considered as employees if they directly or indirectly perform work for an employer considered to be a Commonwealth outworker entity, which includes corporations and the Commonwealth itself.

Here we see Labor again trying to define more independent contractors as employees in its fair work regime, as this bill has the potential to cover many independent contractors in the TCF industry, to their disadvantage. Only a couple of weeks ago, I spoke in this place on the Road Safety Remuneration Bill, in which the government is trying to cover independent contractors and owner-drivers under new provisions that bear the mark of the fair work regime. I think it might actually have been last week. The bill being debated today will extend the scope of the provisions in the current act. It means that upcoming designers with university degrees who do not want to be bound by an employee-employer relationship will nonetheless be treated as employees. Further, the changes will act as a disincentive for businesses, who will not want to hire outworkers because they will have to adhere to the same conditions as they have to for normal employees.

The Council of Textile and Fashion Industries of Australia noted in its submission that, due to the definitions of what an outworker is and what TCF work is in this bill, many outworkers who do not display the characteristics of vulnerability due to their possession of qualifications, knowledge and skills will be treated in the same manner as those who do bear those characteristics. This bill assumes that all outworkers do not want to be outworkers, and that is simply not the case.

The current Fair Work Act allows for employees and their employer to create an individual flexibility arrangement based on the genuine needs of both parties. This can be done via the modern award or through an enterprise agreement. Even though this bill will classify outworkers as employees in many cases, the bill points out that, if the enterprise agreements include terms that would be considered outworker terms in the modern award, the flexibility term of that enterprise agreement 'must not allow the effect of those outworker terms to be varied'. Yet this provision may deny outworkers, whether they be TCF outworkers or not, the ability to attain an IFA, despite the better overall test, which ensures that outworker terms are not able to be undercut by IFAs or other enterprise agreement terms. As the Council of Textile and Fashion Industries of Australia put it:

If this proves to be the case, the intention to provide nationally consistent rights for those outworkers, regardless of whether they are employees or contractors, may not be achieved.

In the majority report from the Senate Standing Committee on Education, Employment and Workplace Relations, the Labor members stated:

… the committee was struck by the words of Deputy President Riordan of the Australian Conciliation and Arbitration Commission, who presided over a case in 1987 …

The comments expressed by the then deputy president that the committee referred to were in relation to the plight of outdoor workers, or outworkers, who he considered were an unorganised section of the workforce. It was true that, at that time, outworkers were largely an unorganised section of the workforce. There was little union organisation of that sector at the workplace, and that situation continues to a large extent today.

I have a lot of respect for Deputy President Riordan, who went on to be Senior Deputy President Riordan, whom I appeared before on numerous occasions. But I believe the comments he made in relation to outworkers, which the Senate committee has put so much weight on, must be viewed in the context of what was happening in the TCF industries at that time. We are talking about the late 1980s through until the early 1990s. The TCF industries in Australia were undergoing unprecedented change. The industry had been receiving high levels of assistance though tariffs and quotas, but this was being reduced. I do not intend to discuss the merits or otherwise of tariffs and quotas right now—I may well do so at a later date—but it is important to recognise that these issues had a significant impact on TCF industries from the late 1980s and that this continues today. In the late 1980s and early 1990s in particular, many textile, clothing and footwear manufacturers found themselves under huge cost pressure and found themselves competing with countries such as China which had, and continue to have, much lower labour costs. There were three main areas that employers focused on at that time. First was implementing total quality management principles to increase the quality of their products and also to maximise output from their production processes. Second was downsizing their production capacity or closing altogether. Third was reducing labour costs through reductions in overtime and casual work in the first instance but later through reducing the working week from five to four days. There were many enterprise agreements entered into and certified by the commission that provided for a four-day working week in order to secure as much employment as was possible.

This was especially the case in the footwear industry. Ultimately, and very sadly, this was a relatively short-term solution as factory after factory closed. Many workers in the industry were migrants, and it was fairly common for the male in the household to work in the textiles or footwear industries and for the female in the household to work in the clothing industry as an outworker from home, where she would also care for children or older family members. It was absolutely devastating for those families when one lost work and it was often the female outworker who had the responsibility for earning the income for her family. For many of those women, working in a factory environment would not have been an acceptable option. They needed and wanted to continue to work as outworkers.

Were their conditions poor in the 1980s? For some that was undoubtedly the case. Have circumstances and provisions for outworkers improved since the time of Senior Deputy President Riordan's statement? Most certainly they have. Should there be an opportunity for people to continue as outworkers? Absolutely. Outwork provides many opportunities for increased workforce participation, and we have a responsibility to take appropriate action to ensure that workforce participation is maximised, particularly for women, who are already underrepresented.

I listened to the member for La Trobe speak on this bill and I was disappointed with her level of negativity, particularly in her opening remarks. If, as the member for La Trobe said, the government are all about workers and fairness then why will they not vote for an amendment that no worker or contractor be worse off as a result of this bill? I question the motives behind the government introducing these bills now.

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

That's because you don't care about workers!

Karen Andrews (McPherson, Liberal Party) Share this | Link to this | Hansard source

I do care about the workers and I have had a lot more to do with them then you have.

Why did the government not seek to make these changes when it brought in the Fair Work Act 2009? Further, why has the government waited—

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

How many years did you spend in the TCF industry?

John Murphy (Reid, Australian Labor Party) Share this | Link to this | Hansard source

Order! The member will be heard in silence.

Karen Andrews (McPherson, Liberal Party) Share this | Link to this | Hansard source

Further, why have the government waited all this time to bring this legislation forward if they knew the issues were not thoroughly dealt with when the Fair Work Act was first passed? The Council of Textile and Fashion Industries of Australia and the Australian Chamber of Commerce and Industry both expressed concerns over the references used to justify the bill and the fact that there is a failure here to acknowledge the gains made in recent years.

I believe that this casts doubts over the judgment of the Prime Minister, who said back when she was the Minister for Education, Employment and Workplace Relations in the Rudd government:

I believe the Fair Work system is right.

…   …   …

We worked hard to get the balance right and I believe that the Fair Work act is right.

If the Fair Work Act is right, as the Prime Minister claimed, then why is it necessary to make these amendments today?

The coalition recognised when it was in government that there was a need to provide the TCF industry with additional protections, which were granted. At about the same time, the coalition government established the Office of the Australian Building and Construction Commissioner, recognising that the building and construction industry required additional protections as well. The Office of the Australian Building and Construction Commissioner worked. In 2010-11, the ABCC found 900 contraventions of Commonwealth workplace relations law. It conducted 401 investigations and successfully prosecuted 74 cases. It saw a drop in the number of working days lost per thousand employees and saw a 10 per cent increase in productivity in the building and construction industry. Yet the Prime Minister—the same person who claimed that the Fair Work Act was right, the same person who claims to want a robust industrial relations framework—is taking the sledgehammer to the ABCC and all the headway it has made in making the building and construction industry stable again.

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

What's this got to do with the TCF?

Karen Andrews (McPherson, Liberal Party) Share this | Link to this | Hansard source

If you had actually been here at the beginning of the speech, you might have understood.

John Murphy (Reid, Australian Labor Party) Share this | Link to this | Hansard source

Order! The member will fail to respond to interjections. The member will be heard in silence.

Karen Andrews (McPherson, Liberal Party) Share this | Link to this | Hansard source

The government claims to be removing the ABCC because it discriminates against certain workers, and because industrial relations in this country should be determined by a one-size-fits-all approach. However, the government comes to this place today with this bill that will affect only the TCF industry and outworkers. In short, this bill clearly contradicts Labor's view with regard to the ABCC and workplace relations as a whole.

It is no surprise that this government is of two minds about workplace relations. The Prime Minister herself was of two minds when it came to the carbon tax: one month she did not want it; the next month it was back on the agenda. Australians have certainly come to expect this two sided approach to policy from Labor and we are, quite frankly, sick of it. I note that at the present time the government is conducting a review into the Fair Work Act. I think the Prime Minister and the Minister for Employment and Workplace Relations need to explain why this bill and its provisions have not been made a part of that review as they should have been in the first place.

The most disturbing part of this bill is the effect it will have on businesses. With a harder export market due to the higher Australian dollar, rising operating costs and higher labour costs compared to other countries such as China, TCF businesses across the country would struggle under these changes, especially considering the latest industry figures show that there are only 1,701 clothing businesses in Australia that earn more than $200,000.

This bill should have been part of the Fair Work Act review being conducted rather than brought before the House. This would have allowed for a thorough review of this country's workplace relations scheme and what it is currently lacking. By bringing the bill before the House today, the government is running away from scrutiny and kicking the union movement a free goal. Further, many up-and-coming designers will be disadvantaged by these changes, and that is not good enough. Rather than providing a disincentive for this, we need to provide encouragement to those people. We need to maximise workforce participation, and the government should not be putting obstacles in the way of achieving this.

Patterns of work have changed over the years and need to continue to do so. Manufacturing industries are critical to the future of Australia, and we need to be proactive and forward thinking to make sure that we maintain at least as broad a base of manufacturing as we have now. The government has failed to provide evidence that its changes are in the best interests of the industry and those who work in it, whatever their capacity. This bill should not be passed.

Chris Hayes (Fowler, Australian Labor Party) Share this | Link to this | Hansard source

I rise in strong support of the Fair Work Amendment (Textile, Clothing and Footwear Industry) Bill. This bill seeks to amend the Fair Work Act to ensure appropriate protection and rights for contract outworkers in the textile, clothing and footwear industry. The three major areas of change include: recognising TCF contract outworkers as employees under the Fair Work Act; creating a system that would allow outworkers to go up the supply chain to recover any overdue payments; and adjusting the rules of entry to allow inspection of sweatshops and other potentially suspicious places of employment with little notice or without notice.

Because outworkers are employed in non-business enterprises they often suffer unique challenges. These challenges are exacerbated by poor language skills and a lack of knowledge of their rights under the Australian legal system, as most outworkers are recent arrivals to this country. There is a general lack of knowledge of workplace relations.

I get to see firsthand the good work that people such as Hung Nguyen, an organiser with the TCFUA, do to address the issues of outworkers in my electorate of Fowler. Given that 30 per cent of my electorate is made up of Asians, many of whom are refugees, particularly from Vietnam and Cambodia, there is certainly a market for exploiting those who are most vulnerable, particularly women outworkers. So I personally praise the efforts of Hung and the TCFUA in advocating for the protection of outworkers and for the application of industry-wide standards that will not be undercut by exploiting outworkers.

Earlier this week I had the opportunity to attend an event organised by the union, led by the National Secretary, Michele O'Neil, who is in the gallery here today. This was a joint effort by the TCFUA and FairWear, with their spokesperson Shelley Marshall, and a number of women from Asian Women at Work, including the organisation coordinator, Lina Cabaero. FairWear is a coalition of organisations, including Asian Women at Work and the union as well as a number of churches and other organisations that are committed to fighting exploitation of workers, particularly women, in the clothing industry. So when those opposite want to bang on about unions, I wonder whether they take the same stick to those churches and other organisations also working against exploitation—

Jamie Briggs (Mayo, Liberal Party, Chairman of the Scrutiny of Government Waste Committee) Share this | Link to this | Hansard source

We bang on about union bosses, mate, not unions.

Chris Hayes (Fowler, Australian Labor Party) Share this | Link to this | Hansard source

Well, the member for Mayo will have an opportunity to add to that.

I was particularly touched by some of the guest speakers from Asian Women at Work. This organisation works to inform and empower migrant women who work in disadvantaged working conditions in places such as sweatshops. The main speaker on behalf of the outworkers came from the suburb of Cabramatta, right smack bang in the middle of my electorate. Nguyet Vu brought her autistic daughter, Anna, with her to Canberra, where she spoke of her experiences and the challenges of being an outworker working in poor conditions. Ms Vu had many challenges in her life. She was dealt a very hard hand and is raising a daughter with autism. Nevertheless, she worked, and worked hard, for her family. She drew attention to the unique circumstances that often limit choice and the balance of power when it comes to predominantly migrant based employment conditions.

Another Vietnamese lady from Cabramatta, Kim Thanh, in front of us all sewed a picnic blanket on which she embroidered the words 'Justice for outworkers in 2012'. That was very powerful imagery of the work that many of these people do in conditions that we would certainly not want for our families. The main message from this event, titled 'A Fair Deal for Outworkers and their Families', was that it is time for our nation to take steps to ensure fairness and equality for all its citizens, especially those in disadvantaged living and working conditions.

A number of reviews and investigations have taken place in recent years, including the Senate Economics References Committee inquiry in 1996. A Brotherhood of St Laurence investigation in 2007 found that outworkers had appalling working conditions. The investigation made findings on a number of issues connected to working hours and extremely low, delayed or missing payments. Not even the opposition would want to criticise the Brotherhood of St Laurence for its charitable works. It found that outworkers were being paid as little as $3 or $4 an hour. These people pay the same amount for their groceries and household necessities as we do. Indeed, they pay the same rate of GST on the goods and services they need to support their families. Such extreme breaches of workers' rights should not happen in Australia in this day and age. We have come so far in the area of workers' rights and we cannot leave a large number of fellow Australians behind.

In fact, 40 per cent of all factory based employment in the TCF sector consists of outworkers. Numerically, that means about 20,000 workers in total. The review I mentioned also found widespread lack of knowledge regarding the rights and responsibilities of workers in this country. The majority of outworkers are migrants with poor language skills. Long working hours and exhaustion as well as domestic commitments often prevent these workers, many of them women, from gaining an education and acquiring and developing greater language skills. This in itself creates a vicious cycle of a lack of knowledge and a need to remain in less than satisfactory working conditions without the prospect of advancement to better-paid work.

I previously mentioned Asian Women at Work, a wonderful organisation advocating on behalf of migrant working women. This organisation has a significant presence in my electorate. As members here know, 50 per cent of my electorate was born overseas. Another interesting statistic is that 30 per cent of my electorate is Asian. Many individuals find themselves in poor working conditions with poor knowledge of their rights and their ability to get out. Asian Women at Work has been empowering migrant women in these conditions since 1993. The organisation offers a wide range of programs designed to inform, empower and support migrant women in low-paid employment. Asian Women at Work works hard to increase the confidence levels of migrant working women, who are generally isolated from information and support services due to long hours, as well as being forced to work in what many of us would refer to as conditions of exploitation.

The current system of monitoring the recovery of payments in the TCF outworker sector is very difficult. It is hard for individual outworkers to work their way up the supply chain in order to identify the source of the payments, let alone recover those payments. This is why this bill is critical. It is doing the right thing for people who are at risk of being left behind. This bill will encourage fairness and ensure consistency in the protection of the types of workers who can clearly be seen to have unique challenges and disadvantage throughout their workplaces. I commend this bill to the House. This is a bill which all Labor members should be proud of.

Jamie Briggs (Mayo, Liberal Party, Chairman of the Scrutiny of Government Waste Committee) Share this | Link to this | Hansard source

I also rise to speak on the Fair Work Amendment (Textile, Clothing and Footwear Industry) Bill 2012. It is a bill which is basically a long note to the parliament to admit failure, because this bill says that the much heralded so-called Fair Work Act has failed. It has completely failed this group of workers, presumably, because if the so-called Fair Work Act is so good and works so well why are we back here adding additional protections for another group of workers? I think the Prime Minister is on the record as saying:

I believe the Fair Work system is right.

…   …   …

We worked hard to get the balance right and I believe the Fair Work Act is right.

If the Fair Work Act was drafted well by the current Prime Minister and by members opposite, what are we doing today before this House adding additional protections? Why are we here?

We are here because they failed. They failed completely. They have misled the country. We are seeing it day in and day out. We are seeing strikes shut down coalmining in Queensland. We see strikes shut down wharves. We see strikes shut down airlines. We are seeing small businesses dragged through the good old days of 'go-away money' with adverse action claims and unfair dismissal claims. And now we are seeing this group of workers apparently being ripped off under the very system that members opposite claim is protecting the country so well and protecting the working people so well.

We know that to be true because those members opposite are not about protecting workers; they are about protecting their mates. They are about protecting their vested interests. They are about ensuring that their privileged position in the bargaining process continues, that they are legislated in, because they know most workers want to be out, and the stats tell you that story every day of the week. We know why workers are walking away from the trade union bosses in droves. Why wouldn't they, when people who are members of unions such as the HSU see their money, from their hard work, used up against the wall for the personal benefit of certain members—

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

Mr Deputy Speaker, on a point of order—

Dick Adams (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

Order!

Jamie Briggs (Mayo, Liberal Party, Chairman of the Scrutiny of Government Waste Committee) Share this | Link to this | Hansard source

and certain senior members of the union leadership.

Dick Adams (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

Order!

Jamie Briggs (Mayo, Liberal Party, Chairman of the Scrutiny of Government Waste Committee) Share this | Link to this | Hansard source

You should be ashamed, Rob. You should be ashamed of the treatment of these workers.

Dick Adams (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

Order! I ask the honourable member for Mayo to resume his seat. I think I understand the honourable member for McEwen's point of order, so I ask him to resume his seat. I ask the member for Mayo to come back to the bill and to address the matters before the parliament. Thank you.

Jamie Briggs (Mayo, Liberal Party, Chairman of the Scrutiny of Government Waste Committee) Share this | Link to this | Hansard source

I will indeed continue to talk about the failure of the Fair Work Act and the reason that we are here. The reason we are here is the workers at the bottom end who genuinely need the protection of a union movement that is focused on protecting their rights and obligations under the system, because if people are being ripped off they should have recourse, they should have legal protection and they should have people who are willing to represent them. And there are many good unionists out there who work very hard to ensure that people have their rights pursued in an appropriate way.

In fact, the coalition, when in government, had specific provisions in this area because this area is obviously one which has had, in the past, difficulties. Therefore we believed that, like the building industry, this needed industry-specific legislation. I note the difference in approach by this government, which says you do not need industry-specific legislation for one group of workers when it comes to the building industry but you do when it comes to this industry and you do when it comes to their TWU mates. You need it in two industries, but not in the building industry. I ask you, Mr Deputy Speaker, why is it that Labor members, the proud union officials that they are, have not spoken up about the disgraceful misuse of HSU credit cards? The Health Services Union represents the lowest-paid workers in our society. I ask you that question.

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

Mr Deputy Speaker, direct relevance is one point of order, but I certainly think that the imputation that he is making against members of this House—and I would suggest that you listen very carefully to the accusation that he is making—is wrong. Of course, he is cowardly in doing so in here because he would not have the guts to do it outside.

Dick Adams (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

The honourable member's point of order is taken. I ask the honourable member for Mayo to come back to the bill before the House and to address his remarks that way.

Jamie Briggs (Mayo, Liberal Party, Chairman of the Scrutiny of Government Waste Committee) Share this | Link to this | Hansard source

We know that the member for McEwen has been so strong in his outrage about the treatment of those poor workers and their hard-earned money by people whose behaviour is undoubtedly the most questionable in the history of the trade union movement—and there is a fair bit more to come on this one. Ultimately, what we see with this legislation is an admission of failure by a government that does not know what it is doing. The commander at the table, the Parliamentary Secretary to the Treasurer, knows it. He has been brought in to try and add some heavyweight gravitas to the ministry. I do not think the commander at the table actually comes from a union official background. I think he was a Labor mayor. So I am not sure that he will be 'bucketed up' with those who should be defending the HSU workers. In any event, what we see here is a bill that will ultimately put this industry at risk. That is the problem with this bill, and it is not just us but people in the industry who are saying that.

I draw the attention of the House to some concerns that have been expressed by people who work in this industry, who run these small businesses and who are trying to make their way. I will quote, with the indulgence of the House, from a letter by one of these people:

I am an emerging Australian Fashion Designer starting a label from home.

And good on her for being an entrepreneur. She continues:

I would like to draw to your attention the Fair Work Act and the Textile, Clothing, Footwear and Associated Industries 2010 (the TCFAI Award), Modern Award regime which defines me as an outworker, despite my 4 year degree in fashion from Ultimo TAFE. The current TCFAI Modern Award definition has a "catch all" definition where anyone working from home in the fashion industry is an OUTWORKER … yes, I can be considered an OUTWORKER if I sell to a boutique or a department store, because of the deeming provisions of the award.

This legislation is about ensuring that entrepreneurs do not exist, that independent contractors do not exist. They are all workers. They are all employees as defined by the law so they can, of course, be targeted by and brought into the union movement. That is what this legislation is about. We saw the same with the TWU bill that was debated in the House last week. This legislation is being brought in under the guise of safety and protection but it is really about getting rid of the definition of 'independent contractor', because the Labor Party has always hated it. They have always hated the independent contractor. They voted against the specific legislation in 2005. They have moved bill after bill in this place to continue to get rid of the definition of independent contractor in this place and in our country. We know that because this bill, putting aside that it is admitting that there is failure in the Fair Work Act, is designed to do exactly that.

I will continue with the letter from this hardworking entrepreneur, who is working from home trying to make her way in this industry. She says—

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

Name them.

Jamie Briggs (Mayo, Liberal Party, Chairman of the Scrutiny of Government Waste Committee) Share this | Link to this | Hansard source

I will name them. If you want me to name them, I will name them when you name all those workers who have to pay Craig Thomson's bills. I will name them then. In the letter she says she is aware that the final form of the legislation deems all outworkers to be employees, 'including the National Employment Standards, superannuation and unfair dismissal laws'. She says:

As a start-up business, in the beginning it will be challenging to pay myself, never mind employ a 'maker/outworker' on a regular basis, and pay all these entitlements. Again this is unworkable and in trading in such an environment, I face prosecution in breach of the TCFAI Modern Award 2010. The risks are too great.

She continues:

I would like you and your government to consider this letter and make the necessary changes to allow me and other graduating & emerging Australian Fashion Designers making samples and small orders (with business turning over less than $100,000 per year) to apply for exemption to this onerous and impractical regime, as part of the Modern Awards Review 2012.

This is the problem. It all sounds great in theory to add additional protections, drag all these people in, get rid of the independent contractor label and make them all employees, but in doing so you will destroy the industry. You will destroy opportunities for these people to make their own way and to create their own opportunities in our economy. These people—the entrepreneurs and the small business people, people who are wanting to employ other Australians—should be encouraged to make the best of their opportunities. But the Labor Party will not hear of it, because that runs against how they want society to be, which is that you are all employees, you are all members of the union, even though people are walking away from it. Why wouldn't they walk away when they see the behaviour of senior union officials in this country, when they see the utter and absolute abuse of their money by senior leaders in this country? This bill should be opposed—

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

Mr Deputy Speaker, I rise on a point of order. I distinctly heard you on a number of occasions attempt to draw the member for Mayo back to the legislation which we are debating. The point of order is relevance. He is debating legislation from somewhere else, I am sure, but not the matters that are before the House. So I would ask you, if you could, to draw the member back to the legislation before the House.

Dick Adams (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

The honourable member for Mayo will come back to the bill and address the matters before the House.

Jamie Briggs (Mayo, Liberal Party, Chairman of the Scrutiny of Government Waste Committee) Share this | Link to this | Hansard source

I have been. Indeed, I am very surprised that the member for Throsby has now entered the chamber, not knowing what has gone on in here for the last 15 minutes of a genuine contribution to this bill. We say to you, Mr Deputy Speaker, to the House and to the Australian people: this bill is just another admission of failure by a government who likes to talk a lot but who has not delivered anywhere near its rhetoric. The Prime Minister said: 'I believe the fair work system is right. We worked hard to get the balance right and I believe the Fair Work Act is right.' If we had a fair work system operating as the Prime Minister said, we would not be debating this bill in this place today. We would be debating more substantial legislation dealing with genuine problems, such as Labor's deficit and Labor's mistreatment of our economy. This is a bad bill. It will add to the record of this government. They pretend to represent workers when all they do is represent the filthy trade union officials who are ripping off workers in our economy.

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

I once called the member for Mayo 'the Barbara Cartland of Australian politics' because of his romantic novel writing on the subject, but today we could call him 'the trash mag writer', because he basically spent 15 minutes growing his nose and telling stories that were not true. Remember, this is the member who complained that the TWU was soiling his clothes when he was writing the Work Choices act. That is where he goes back to. Going back to Work Choices is all he considers.

I have to confess that I know a little bit about outworkers. My mother was one. I was also a member of the footwear industry, very proudly, for five years. Those opposite have absolutely no idea about that industry and no idea about the working conditions of outworkers, because, I am tipping, they have never, ever seen one, let alone seen the work of making shoes and understood what has to be done and the hours that people get put on.

I am sure the member for Mayo is going back to have another glass of champagne, but I hope that the speaker is on in his office and that he can listen to the truth. The only time in the history of this country that those opposite ever stood up for workers was at National Textiles. 'What's National Textiles?' you might say. 'Who owned National Textiles?' Of course, it was the brother of John Howard, Stan Howard. That was the only time, when a company went out the door, that the coalition stood up for the workers of that company. Every other time, they wiped their hands. They have absolutely no interest in what happens to workers when companies go broke, unless of course it is the company of the brother of the former Prime Minister John Howard.

As I was listening today, there were two different emotions going through my head. There was laughter at the stories that were being told by the opposition and there was anger at the inability of the opposition to understand what they were talking about. We heard the member for McPherson. The biggest point she made was about the effect on businesses—not one concern for the people who are actually working in them.

Ms O'Dwyer interjecting—

I'm sure you've never worked a day in your life either!

They admit that they look for labels and they do this and they do that, but they never show concern about how the items are made. They are never concerned about the people sitting at home working on them. The member for Higgins is over there yapping away. It is mainly women working in these industries, mainly those with English as a second language, with poor English skills—

Kelly O'Dwyer (Higgins, Liberal Party) Share this | Link to this | Hansard source

That's you!

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

Oh please, Mr Ed, please!

Dick Adams (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

Order! The honourable member for McEwen will not respond to interjections. I will deal with the interjections.

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

I will do my best, but it is sometimes awkward.

The opposition do not understand that most of the outworkers in the TCF industry are women with English as a second language and they work extremely hard. When I worked at Koala Shoes—it is getting to be a bit long ago now, when I think back to it—there were a large number of people who worked there who had just arrived in Australia. That was back in the days when we welcomed people to come to Australia. That would have been their first job. Quite often such people were treated very shabbily in those sorts of workplaces. I think back to when I was a kid and my mum was an outworker and she was packing shoes and a whole range of other things. She worked for a large automotive component manufacturer and her job was to put needles on speedos—and, let me tell you, that was the most boring thing you could ever do in your life. But that is the kind of thing people do, and they do it for very minimal pay and they work extremely hard.

This legislation is about protecting them, so they know that when they go to work they will get what we would consider a fair and reasonable value—a fair day's pay for a fair day's work. It is not something that we should be mucking around with. We should be ensuring that people get paid properly for the work they do and the contribution they make to the Australian economy. This legislation protects some of our most vulnerable workers. It applies special provisions for TCF workers which ensure that outworkers employed are engaged under a secure, safe and fair system of work. Those words should be on everyone's lips. Our main goal should be to make sure that people have safe workplaces. The member for Mayo was rabbiting on about attacks on truck drivers, because he does not believe that they and their families should be entitled to a fair day's work in a safe and secure workplace. It is absolutely amazing, when the opposition put their silver spoons to the side of their mouths, what they start spouting about. They have never actually experienced these conditions.

There is a large textile and clothing place in Wangaratta. A quick discussion today revealed that the local member had never actually been there. Four hundred people are employed there and she has never walked in the door. Probably for them that is a great thing because they do not get to know her, but it is a sad thing that, while the members opposite spout how much they care and how much they worry about things, they do not go to places and see the people that make things. They are quite happy to sit there in their labels and spout off about their lovely shirts and shoes, but none of them have ever looked at how these things are made, the people that put them together and the conditions they work in. That is why we are very thankful to have people like the TCFU out there protecting people and making sure that their workplaces are safe and making sure that they get a fair day's pay for a fair day's work.

This is an important bill that we should pass very speedily. We should not be mucking around with this. We should get this through and ensure that people who earn as little as $3 to $5 get protected so that, when they do the work and the goods get picked up by a supply chain of subcontractors, they can be assured that they will get paid. That is another big issue that seems to escape those opposite: the people who are doing the work are getting ripped off by not being paid. Usually, if they have got low English skills and they are working from home, it is very difficult to chase that up. They should be given the opportunity to ensure that when they do the work they get paid. That is one of the most important things out there. I am not by any stretch of the imagination saying that all employers are bad. There are many, many good companies that pay their workers fairly and should reap the benefits, but we have always got to make sure that those that do the wrong thing are followed up and workers are protected from them. As we know, with the Liberal government not everyone is a Stan Howard. That is a rare one—National Textiles. That is one of the most important things to remember: when it comes to protection of workers these guys opposite have absolutely no care, no idea and no plan to help them apart from bringing back their Work Choices, the great fabled god they look at when they think about stripping away the wages and conditions of people and trying to make us compete with China. Well, it is not going to happen, because our living standards are higher—and they should be higher. We should ensure that people are paid properly and that they have a safe workplace. With those few comments, I wish this bill a speedy passage.

Kelly O'Dwyer (Higgins, Liberal Party) Share this | Link to this | Hansard source

Unfortunately, I had to listen to the contribution by the member for McEwen. I would encourage him to stay in the chamber and listen to my contribution. He mentioned just before that he wanted to understand what impact this legislation would have on individual workers. I will outline the circumstances and the impact that it will have. As somebody who is very concerned about jobs and about having a productive economy, I believe it is incumbent upon us in this place to argue for good policy.

Unfortunately, however, the Fair Work Amendment (Textile, Clothing and Footwear Industry) Bill 2012 is not such a case. This bill is simply an expression by this government that the Fair Work Act that it brought into place has failed. By their own admission, in bringing forward this bill they have said that the Fair Work Act has failed, that it is deficient, that they are required to bring forward this bill. They do so because they have been waging a war against independent contractors. This is something that is deep within the marrow of the bones of those who sit opposite. They do not support independent contractors and they are progressively trying to legislate them away.

We have already seen in this place that the government has brought forward legislation which was passed recently with respect to independent contractors in the transport industry. This was, again, an expression of how the Fair Work Act is not working. They brought this forward and it was designed to bring independent contractors under the purview of the union movement by classing them as employees. That is what this bill will do as well to so many people in the textile, clothing and footwear industry.

What will this bill do? It will extend the operation of most provisions of the Fair Work Act to contract outworkers in the textile, clothing and footwear industry, deeming all outworkers to be employees. Why is it a problem to deem independent contractors as employees? The government says that this in some miraculous way is going to eliminate sweatshops and safeguard those who are supposedly vulnerable. Yet the evidence does not bear this out. A person in the industry who will be affected by this bill, Rita Tu Lan Ly, recently submitted a letter to the Senate Standing Committee on Education, Employment and Workplace Relations. She said:

I am a very capable, professional machinist who is running a successful, flexible, profitable business from my own home, which allows me to be with my children and meet my family commitments as well as do the work in my own time and to be paid well. I see myself very much as a contractor not an outworker. I feel I have the support and capability to run my own business just as IT specialists, hairdressers, bookkeepers and all tradespeople along with many consultants such as psychologists, accountants, business and educational advisers do. I am feeling there is an issue of discrimination in this particular case as my profession—

and that is what it is; it is a profession—

as a machinist isolates my role away from all others who are allowed to work from home. I believe the amendments to the Fair Work Act currently under discussion are unbalanced, inconsistent and extremely unfair.

She goes on to say:

I am currently paid above the award and work for ethical companies and like my current conditions. I do not wish to be an employee. I want to remain an independent contractor just as many other professionals are allowed under the same act. Why is it that only the people working in the textile, clothing and footwear industry are discriminated against? I have serious concerns that these new amendments will harm me greatly. It will restrict my ability to operate as an independent and autonomous business. I will not be able to claim business expenses for my phone, electricity, depreciation of machinery etc—it's unfair. I have my own ABN and pay my taxes. I negotiate my own hours and have built professional and ethical relationships with companies I feel happy to work with and for.

If the amendments as suggested by Fair Work Australia in relation to our industry are passed, I would be unemployed and this would then be a further burden on the government as I would have no choice but to apply for assistance through Centrelink.

For the member for McEwen, those are the words of somebody who works in this industry, who currently has a job and who is making a contribution to our country, paying their taxes and going about their business lawfully. In her own words, she says that this bill will discriminate against her and her business and put her out of business. Why is it that this government is so determined to talk the talk of jobs and yet discriminate against independent contractors?

These people want to protect vulnerable people from those who would exploit them. Make no mistake: we on this side of the chamber do not condone abuse of power or exploitation of vulnerable working people. On this we can all agree: that is not what is being brought before the House today. The government says that the bill will have a fairly limited impact, that it is really just going to affect and attack those people who are doing the wrong thing, but this is not the case. I quote from another submission to the Senate committee by Richard Thomas, who said:

Limited impact is a massive understatement. Concern stems from the fact that a complete and unworkable company restructure is required to treat independent contractors as employees, failure to do so will result in legal action instigated by the TCFUA. The only viable option that remains is to close down. This will leave many, whom are not vulnerable and happy with their chosen arrangements, without work. In order to protect vulnerable outworkers, the legislation will destroy the lives of all the outworkers, vulnerable or not.

Even if factories can somehow comply with the laws in treating outworks as employees—sweatshops will hence be unaffected. In instances where people are exploited nothing will change. The 'middleman' outworker will be paid as an employee rather than a company and then continue to exploit the vulnerable as before.

The people who choose to do the wrong thing will continue to do the wrong thing. We know that. This legislation will do nothing to fix that but it will penalise a number of people who are lawfully and correctly going about their business in their small businesses and making a contribution to this country.

The government recently made a lot of arguments in this place about how they did not want to see special treatment for particular industries. That is why they said the Australian building and construction commission needed to be abolished. They demanded that everyone be treated the same and that the ABCC be abolished. They said there should be a one-size-fits-all approach on the issue of industrial relations. They said that those in the construction industry were discriminated against. Yet they have brought forward legislation in this place that will discriminate against people in the clothing, footwear and textile industries. The hypocrisy of this government knows no bounds.

This legislation also fails to understand the seasonal and fashion nature of the industry. It does not understand that there needs to be flexibility in the industry and that so many in this industry rely on a pool of very specialised contractors. By classifying them all as employees, flexibility will be removed, flexibility that is so critical to this industry. Another submission to the Senate inquiry from a company which employs a number of people in this industry said:

Due to the wide variety of Fabrics many different machines and machinists are required to complete the sewing of a garment. One contractor will specialize in certain garments and using certain machines only. Therefore a pool of many contractors is required to complete various orders. Many contractors will work for a number of factories to generate their required turnover. One factory alone will not be able to provide consistent work.

Further to this the fashion industry is highly seasonal, within a year there can be many quiet and busy times, determined by the clients, not the factories. A factory has no guaranteed work, therefore to provide minimum hours to contractors on a weekly basis or up to 5 weeks notice of termination … is not possible.

There is a fundamental lack of understanding of the nature of this industry but that does not concern this government. They are too busy waging an ideological battle against independent contractors so that they may bring them within the reach of the union movement in order that the contractors, too, can pay their union dues which can then contribute to the expense accounts and credit card payments made by those officials, some of whom currently sit in this place.

Andrew Leigh (Fraser, Australian Labor Party) Share this | Link to this | Hansard source

Mr Speaker, on a point of order: the honourable member is straying far from the bill and casting unwarranted imputations on other members of the chamber. If she wants to do that there are substantive motions through which she is able to do so.

Dick Adams (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

The honourable member for Higgins will address the matters before the House.

Kelly O'Dwyer (Higgins, Liberal Party) Share this | Link to this | Hansard source

I was addressing the matters before the House, Mr Deputy Speaker. I know it is very uncomfortable for those opposite to be reminded that union leaders have a responsibility to their members. It is a responsibility they should take seriously.

If you want to talk about the abuse of individuals who are vulnerable and who pay their dues you need look no further than the HSU. Yet we have heard nothing from the government stating that they have any problem whatsoever with how this has occurred. I simply restate in the remaining time available to me on this bill that this is yet another expression by the government to show that their Fair Work Act has failed. This is an expression by this government that they are going to continue to wage a war against independent contractors. This is a government that is not concerned about jobs unless they are the jobs of their union mates. It is very unfortunate that we have a government so concerned with their own vested interests that they would put those before the national interest.

We believe that it is important for people to be paid properly for the work that they do. We believe that it is important for people, in whatever industry they are involved in, to have a safe, secure and fair working environment. But this bill certainly does not achieve that. It will enforce a discrimination against those who are independent contractors, people who are making a significant contribution to our country. It is yet again a demonstration of the multiple failures of the Labor government.

Adam Bandt (Melbourne, Australian Greens) Share this | Link to this | Hansard source

It is with a great deal of pleasure that I rise to support the Fair Work Amendment (Textile, Clothing and Footwear Industry) Bill. The government is to be commended for introducing this legislation. I have a great deal of personal experience with this sector, having brought actions on behalf of the Textile Workers Union and many underpaid outworkers before the Federal Court over many years. After doing that for over a decade I can say with some certainty that pretty much every supposed factual comment made in the contributions from those on the opposition benches was wrong.

It is all well and good to talk about independent contractors but I have lost count of the number of times that I have encountered a worker who has been told that they will not get any work unless they get an NBN and pass themselves as an independent contractor. They can talk about people working up at the high end, but it is not at all uncommon to see a shirt that cost $200 selling in Burke Street and find that the person who made it was paid $2. With all that context, what is the worker going to do? The worker often finds themselves at the mercy of a middleman. If they stand up for their rights they simply do not get work in the future. I must say that in all my time working in this sector I never once saw a Howard government inspector ever set foot inside an outworker's home where they were doing work to ensure that that worker was getting super, work cover and annual leave.

We heard some outstanding comments about how this is going to destroy not only the industry but also outworkers. I will hold the member for Higgins and the member for Mayo to that. I think that we will find that it will not destroy the sector. But we will see ethical clothing made in this country. I will let the remarks that I have made many times before, both here and elsewhere, speak for my strong support for this bill. I commend the union, the church groups, the ethical clothing groups and the brave home workers who have had the courage to campaign for many years to bring this bill into being. With that, I commend the bill to the House.

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

I would like to thank all the members for their contributions in this debate.

Question agreed to.

Bill read a second time.