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

I present a supplementary explanatory memorandum to the bill and seek leave to move government amendments (1) and (2) as circulated together.

Leave granted.

I move government amendments (1) and (2):

(1) Clause 12, page 13 (lines 14 to 16), omit "employ the person on the terms and conditions of that employment beyond the time that employment actually ended", substitute "meet the employer's obligations under the terms and conditions of that employment for the actual duration and end of that employment".

(2) Clause 25, page 21 (lines 3 to 5), omit "continue to employ the person on those more favourable terms and conditions beyond the time of the actual end of the person's employment", substitute "meet the employer's obligations under those more favourable terms and conditions for the actual duration and end of the person's employment".

Two minor amendments have been drafted to clauses 12 and 25 of the Fair Entitlements Guarantee Bill 2012. Clauses 12 and 25 of the bill refer to exclusions for changes in terms and conditions made in the six months before the insolvency event. The intent of these clauses is to enable favourable changes in conditions made within six months, such as a significant pay increase or improvement in redundancy entitlements or change from contractor to employee, to be disregarded where, having regard to the financial position of the employer, it was not reasonable to expect the employer could have adequately provided for those conditions. The amendments will clarify that, as intended, the rules in clauses 12 and 25 may be applied if the delegate is satisfied it was reasonable to expect that the employer could not meets its obligations at the end of employment as well as during the employment.

These proposed changes continue the existing arrangements under the General Employee Entitlements and Redundancy Scheme, known as GEERS, and provide increased assurance that employers will not seek to take advantage of the scheme of assistance by making favourable changes to boost entitlements, in the full knowledge that they are about to make the staff redundant.

Question agreed to.

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

by leave—I move opposition amendments (1) and (2):

(1) Clause 23, page 20 (line 8), after 'that employment', insert ', up to a maximum of 16 weeks' pay'.

(2) Clause 23, page 20 (line 11), after 'employer', insert 'and the 16 weeks' maximum in subparagraph (i) has not been reached'.

In speaking very briefly, I would like to refer the House to my remarks made during the second reading stage of the bill. I note that the coalition is now moving an amendment to include a cap on the redundancy payout captured in this bill at 16 weeks, which I note is in line with Labor's Fair Work Act. Ultimately, we believe that, as the taxpayer has to bear the cost of these payments, it is most important that we keep these at a limit that is in line with community expectation. As noted by the minister, the bill actually enshrines in legislation a redundancy package, calculated at four weeks per year of service, which would, we believe, set a new high bar that union bosses could use as a new high bar in enterprise bargaining. The coalition maintains its fiscal prudence—its cautious approach—and we will keep the redundancy package as it is under GEERS now, in line with community expectations and capped at 16 weeks.

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

We can advise the House that the government will be opposing the opposition amendments. Taking the member for Farrer's encouragement to be brief, we will try to do that. The reason we are opposing the amendments is that we had a policy on workers' entitlements before the last election, and we are implementing them. We do not believe that we should adhere to opposition amendments which were not flagged at the last election and are not part, as far as we can tell, of any appreciable opposition policy. It is policy on the run, which we have learnt about today.

Our proposition is that, subject to eligibility requirements, employees will be eligible for unpaid entitlements, including wages, redundancy pay, payment in lieu of notice, annual leave and long service leave. Under our bill, redundancy pay is capped at a maximum of four weeks per year of service, but this is not setting a new community standard. What this is doing is saying: 'If you already have a pre-existing industrial instrument which says that you are eligible for four weeks each year in the case of redundancy, we think that if a company becomes insolvent, you should not be short-changed.' This is not saying that everyone in Australia has a new standard, and it is fallacious to link the minimum standard of redundancy in the Fair Work Act, which is a minimum, and start saying that that is therefore the community standard.

The other reason we stand so strongly in favour of the four-week proposition is that, if these matters had been negotiated between employees and employers, we believe that the people most likely to benefit from this proposition are longstanding employees. Under the opposition's proposal, once you have basically done four years in a company, you get nothing more. What the opposition will be doing with their amendments is enshrining a short-term view of people's loyalty, saying that, at four years, that's it. If you have worked as a machinist in an automotive components company for 20 years, they are saying, 'You might as well have only worked there for four years, because that is all we are giving you.'

The other reason to oppose the opposition amendments, in essence, is this: workers do not rank first ahead of banks, so what this means in the corporations law system in terms of priority of entitlement when companies go broke is that, on one hand, if the opposition was saying they did not want any impost upon the taxpayer, then they would be moving a proposition to say workers should rank ahead of banks' secured interests, which they are not doing. What they want is the best of both worlds. They still want the banks to rank ahead of the workers— that is their choice; it is in their DNA—but what they are also saying is, 'We are going to short-change long-serving workers anyway.' You can't have it both ways. You can't deny the workers the right to have priority and still deny them the opportunity to get some recognition for their service under industrial instruments that they had already entered into. That is why we will oppose these amendments.

We certainly hope also that, in the event that the opposition is unsuccessful in getting its amendments up, it will still vote to protect workers' entitlements; after all, what we are by and large doing is implementing in statute an administrative scheme whose antecedents were formed in the Howard years. So what we see with these amendments is a short-changing of long-term loyal staff—no interest in ranking workers ahead of the banks' fixed secured interests. What we also see is a repudiation, in fact, of one of the few safety nets that the opposition put in place for workers when they were in government, imperfect though it was. So we would strongly urge the opposition not to vote against statutory protection for workers' entitlements in the event that their amendments are defeated.

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

The question is that the amendments be agreed to. There being more than one voice calling for a division, in accordance with standing order 133 the division is deferred until after 8 pm.

Debate adjourned.