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

I rise to speak on the Fair Work Amendment Bill 2012. It absolutely astounds the coalition that this legislation, which was introduced at I think 4.30 yesterday afternoon, has now appeared on the Notice Paper for debate at the second reading stage. We have had less than 24 hours to consider the ramifications of this bill. It is a bill that will affect each and every employee, independent contractor and employer in Australia, yet this parliament has had so little time to consider it. The minister would have us believe that the process which brings this amendment bill before the House has integrity. I say that it does not. The minister explained it this way in his own second reading speech. He promised a review of the Fair Work Act. He then appointed an independent panel to conduct the review. The independent panel had wide-ranging terms of reference approved by a regulatory office within the Department of Finance and Deregulation. It came up with 53 recommendations and today we are discussing the first tranche of 17 of those recommendations.

That is what the minister said, but the reality is quite different—and I note that, along the way, the minister has been mugged by reality. Having promised this review, which the government could not back away from, the minister hand-picked the three members of the independent panel. I do not want to name those individuals or cast aspersions on them, but anyone can look at their remarks on the public record over a long period of time and make up their own mind as to whether they are independent or not. The minister's office then skewed the terms of reference originally drafted by the department, which probably were quite wide ranging. Freedom of information documents prove that beyond a doubt. The terms of reference having been skewed and, in the process, narrowed—so that they did not include productivity, red tape, flexibility or the effect of union militancy—these narrow terms of reference were then used by this not independent panel to come up with, unsurprisingly, a statement that said the Fair Work Act is working well, meeting its objectives and economic outcomes and is all quite favourable.

But, as I said, the minister was mugged by reality, because among these 53 recommendations that the minister has to take note of are some that he is not taking note of in this legislation today, which he is rushing before the parliament even though we could have a serious and sensible Senate investigation in the three weeks before the parliament rises at the end of the year. Yes, it would be good to get it through in the spring sitting—and we have got four weeks to go—but what we see now is a 24-hour process. I condemn that utterly because it is not reasonable, it is not sensible and it is not in good faith.

The minister was presented with a review into the Fair Work Act back in June. Having strung out the time line lends even more incredibility to the sudden introduction of the legislation into the parliament. The minister was presented with a review in June. It was publicly released in late July or early August. The minister then took until October to deliver his response. He had what he described as genuine consultation. To say it was a sham consultation would probably be a little bit unfair, but a lot of people were not consulted—and have not been consulted on this bill either. The coalition certainly were not consulted, even though we have made ourselves available in good faith as oppositions do from time to time when it comes to important pieces of legislation.

So the response was delivered in October and now we have to consider this legislation within a matter of hours. Rushing it through the parliament does nothing for the integrity of the parliament and it does show disrespect for members.

The first tranche of reforms that the minister brings to the parliament today has some major omissions. In fact, I think what the minister has done is pick the least contentious ones—creating an atmosphere of activity and an agenda that is happening but really picking the least contentious. We think, as a priority, these initial reforms should address the strike first, talk later mentality that has pervaded the more militant unions and has been demonstrated in the JJ Richards case. I want to remind the House of that case because it demonstrated a major inconsistency between the stated Labor government policy on workplace bargaining and the written legislation. The waste disposal provider JJ Richards was unsuccessful in its attempts to overturn a Fair Work Australia decision, a decision that sets the precedent of allowing unions to take strike action without the support of a majority of workers. We would contend that that inconsistency between the government's stated legislative intention and reality, as proved in the Federal Court, is something that—if the minister really does want to address something in a hurry—should be addressed in a hurry. In fact, the justices of the Federal Court said:

… the ability to take protected industrial action 'is to be seen as part and parcel of the statutory regime for bargaining in pursuit of, or in resistance to, the making of such agreements'.

However, they said the drafting of the Fair Work Act (s.443) meant it was simply not possible to construe the Act's requirements in that way.

I am not a lawyer, but I would say that that is a clear indication from the Federal Court that there is a need to change the law to properly meet, and bring legislative clarity to, this area. The hypocrisy of this government is that the legislation does not reflect its previously stated position on the issue of unions taking strike action in circumstances where they cannot muster the support of the majority of workers for such action.

In the first instance, the Federal Court's judgement accepted that the argument advanced was understandable and reasonable but for the specific wording in the Fair Work Act which entitles unions to obtain protected action ballots in circumstances where reasonable people would argue that that should not be allowed. The fact that the minister has refused to even comment on the review recommendation that would fix this up is alarming and could be seen as an indication that this was their original intent—appeasing their union comrades. This is despite the then government leader, Kevin Rudd, promising that the Fair Work Act would not allow the return of strike first, talk later.

Furthermore, there is nothing in these initial reforms to address concerns raised by the High Court in a unanimous judgement in the Barclay v The Board of Bendigo Regional Institute of TAFE case, where it was found that union bosses should not be an untouchable class in the workplace—something also recommended by the Fair Work Act review. Yet the minister himself intervened in this case, on the side of the union boss, Mr Barclay, arguing that it was actually the intention of the Fair Work Act to make union bosses untouchable, even if they did the wrong thing. Regarding this intervention, Justice Heydon said:

… the Minister’s stance before and during the oral hearing was not that of an intervener, but that of a partisan. For example, some of the Minister’s oral submissions were directed to factual material. This is hardly the province of an intervener.

This intervention, by the way, came at a cost of $160,000 to the Australian taxpayer—that is, arguing that it actually was the intention of the Fair Work Act to make union bosses untouchable even if they did the wrong thing. This is a minister who could not leave the judicial process to run its course and reach its conclusions without that demonstratively partisan intervention.

It is important to briefly consider the Fair Work Act review itself. I have touched on a couple of the recommendations that have not been listened to by the minister in this initial round of reforms, but I think we also need to contemplate the terms of reference for the review of the Fair Work Act. There were a number of key omissions, as I said earlier, because the terms of reference did not mention productivity, flexibility, concerns around union boss militancy and red tape. A freedom of information request has proved beyond reasonable doubt that the initial terms of reference submitted by the department to the minister's office underwent significant changes at the hands of the minister's staff. Clearly, they are skewed in a particular direction, and I suspect that considerable union consideration was given to the draft terms. In addition to the terms of reference, we should acknowledge the make-up of the panel, which I alluded to earlier. While the panel claimed to be independent, I consider that their left-leaning credentials coupled with those skewed terms of reference that they were asked to consider demonstrate a blatant attempt by the government to influence the findings.

In total, as I said, the Fair Work Act review proposed 53 reforms to the act. The government has put forward 17 recommendations in this initial tranche. However, these 17 reforms are not much more than tinkering at the edges. For the most part, they are not actually overly contentious. So, in this first wave of reforms, we have seen little real indication of a serious attempt on the part of this government to introduce meaningful, necessary reforms. It must be said that this is a somewhat haphazard attempt at reform, not only dealing with the reform of the act but also including changes to superannuation, plus to Fair Work Australia itself.

It is also interesting to see that the review panel's clear recommendation that Fair Work Australia be renamed and include the word 'commission' and not 'fair work' has been partially rejected. Labor could not bring themselves to get rid of the 'fair work' name. They have stuck to their Orwellian and borderline obsession with the 'fair work' mantra. It is interesting that, along with the panel, the President of Fair Work Australia himself has suggested that the name be changed.

Why? I think members opposite have to acknowledge that the entire 'fair work' brand has been well and truly damaged by the HSU saga, by that tawdry series of events that has not yet played out. If you ask people in the community what issues they might associate with Fair Work Australia, they will bring up the HSU scandal. We do not want that. We do not want the independent, quasi-judicial body Fair Work Australia to have its brand trashed or damaged.

We do not want people not to have confidence and faith in the independent umpire. We have always stated that we have confidence and faith in the independent umpire. We do not have any confidence or faith in the minister, and we make that clear. But why wouldn’t you change the name? I think the reason is that this whole Fair Work mantra belongs to the Prime Minister. It was well and truly her baby, and for that reason it stays. Comments made in the Fair Work review espoused the views of the new President of Fair Work Australia, Justice Iain Ross. It states:

He is also a strong advocate for changing the name of the tribunal, arguing that the current title undermines its independence and creates confusion. He proposed that as a minimum the tribunal be changed to ‘Fair Work Commission’, but said it would be preferable to separate it from the ‘Fair Work’ brand altogether, and rename it the ‘Australian Employment Commission’ or the ‘Australian Workplace Commission’.

That has not happened.

Another concern held by the coalition surrounds the extension of powers to the president of Fair Work Australia. The coalition believes the powers of the president should not be further widened and that it would be better to maintain the current arrangements, by which failures to comply with sections of the Fair Work Act are grounds for termination. Currently there are two vice-presidents, nine senior deputy presidents and five deputy presidents, and there is a line-up of commissioners and panel members that can be called on for particular inquiries and investigations. So the architecture of Fair Work Australia is quite substantial.

There are some elements of the bill which the coalition applauds. For example, on the issue of costs, consideration 'on the papers' and vexatious applicants, the coalition has long advocated for change, with Senator Abetz on the record calling for this. These calls have seen him attacked by Labor and its union bosses, but, when they are stated in a $1 million review, they are praised and adopted by the government. So we do appreciate the adoption of the position that we have been putting for some time on costs and vexatious applicants, but we note that there are other serious inconsistencies.

The bill makes some important steps in the right direction. The coalition strongly supports the alignment of the time limit for unfair dismissal and general protections claims at 21 days. In fact, I believe that brings the situation back to where it was under the previous Workplace Relations Act. It was the coalition that amended the Fair Work Act, with the support of the Independents, to extend the unfair dismissal time limit from seven to 14 days.

Regarding the changes being made to Fair Work Australia, I do not believe that the minister has made suitable justification for the appointment of an additional two vice-presidents. I mentioned the substantial architecture of the membership of Fair Work Australia and the fact that further concentration of power seems to now rest with the president. We do not think that is reasonable. Why couldn't the system operate as it does now, with the vice-presidents effectively managing the workload that the president cannot? The concentration of power at the top of the organisation has to be questioned and then responded to by this government. Two more vice-presidents are to be appointed even though power is going to be concentrated in the president. The scuttlebutt is that the minister wants to appoint a couple of his friends to these positions and that that appointment needs to happen sooner rather than later—evidence, we would say, of further intervention in the operations of an independent Fair Work body.

In addition, the government has made no genuine attempt to address the current closed-shop, anti-competitive arrangements for the selection of default superannuation funds under modern awards through Fair Work Australia. The minister has taken the opportunity to use the Productivity Commission review—which he finally got around to initiating—of superannuation and the default superannuation funds that appear in modern awards to respond to that. But he has not done so satisfactorily.

The current process for the selection of default funds under modern awards, initiated by this government and run by Fair Work Australia, lacks transparency, is littered with inherent conflicts and inappropriately favours union dominated industry super funds. If this bill is passed by parliament, it will see the continuation of a process where conflicted parties within Fair Work Australia continue to select default super funds under modern awards. There will not be genuine competition. There will be an additional layer of government intervention, because, in appearing to address this very real problem—this very real unfairness—the minister has announced that an expert panel will be appointed, that the expert panel will create a shortlist, that the shortlist will go back to the President of Fair Work Australia and that then the president will decide what funds will be inserted into modern awards.

Why can't the employer choose the default funds? Why can't the employer choose from the list of funds that would be ticked off under MySuper so that their governance and their accountability is fine, so that they are good funds and so that those who put their money in them would not be putting their money at risk? They might, of course, be retail funds—that is the problem with the minister's approach. Why can't the employer select them? Instead, we have to go through another expensive, convoluted process: a panel, a shortlist and a decision by the President of Fair Work Australia. What is the decision based on? It is based not on working conditions but on what default super funds sit in modern awards. This smacks of intervention in this area by the government, which we oppose.

The government is also seeking to limit the number of MySuper products in modern awards to just 10, contrary to the clear recommendation of the Productivity Commission which was that there should be an unlimited list of default funds. Given that the government is currently in the process of imposing additional consumer protection requirements to all default superannuation funds, there is no rhyme or reason in restricting the MySuper products in the modern awards to 10. All compliant superannuation funds should be made eligible.

There are further recommendations made by the review that the government has also failed to heed. The Productivity Commission's proposed default superannuation panel will not be created as recommended; it will be subsumed into the existing Minimum Wage Panel.

The new panel is not the final decision maker under this bill, as recommended. The full bench of Fair Work Australia will approve default funds in each award after a recommendation. The process of including funds in awards will only occur every four years, starting in 2014, when modern awards are due for review, as opposed to an ongoing application process. All awards must have default funds; currently there are 13 awards that do not list default funds.

The coalition thinks it is regrettable that the review's recommendations on the name change from Fair Work Australia to Australian Workplace Relations Commission has not been accepted. Despite the Labor's rushing this bill through with such haste and sitting on the review for four months, there has been no excuse from those opposite as to why it is suddenly so urgent. I suspect that there is a sense of urgency to appoint these additional two mates to the vice-presidency roles. I cannot think of any other reason that Labor would take this position. So I ask the minister to rule out those rumours that are flying around in the IR community that people have been promised vice-presidential positions from February next year.

Whilst there a number of elements within this bill that we do support, having had less than 24 hours to consider this bill we make a very strong statement that this is shabby treatment of the parliamentary process and of an opposition that would act, in this instance, in good faith. Had time permitted we would have sought to have drafted a number of substantive amendments. To give some sense to people of the undue haste I can say that the officers involved in the drafting process within the parliament could not have drafted the amendments by the time I rose to my feet today to speak on this bill. So it is not just the opposition that has been treated shabbily; it is the whole process, including the people who would draft the amendments that we would have brought here. Given these time constraints, there has not been time to do the requisite work. We will seek to refer this bill to a Senate committee when it gets to the other place. At this stage we will not be opposing the bill.

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

With all the confected outrage that one might expect in a cheap pantomime performance, the member for Farrer has posed the question: why can't the employer choose where their workers' superannuation goes? She may as well ask: why can't the employer choose which bank their employees put their savings into? Why can't the employer choose what sort of car their employees drive? Why can't the employer choose what school they send their kids to? These questions demonstrate one thing, and one thing alone: those opposite have learnt absolutely nothing from the Work Choices debacle. That demonstrates in a nutshell their views about the relationship between the employees and the employers of this world, because they believe that it is entirely appropriate for an employer to be the one who chooses where their employees put their life savings. I say, and all those on this side of the House say, that that is entirely inappropriate.

Continuing the confected outrage, the member for Farrer stood here and at one moment claimed that she is a defender of the independence of Fair Work Australia—defending the right of that quasi-judicial institution to independence and defending it from slings and shots—and at the next moment she said that there are somehow conflicted parties within Fair Work Australia who could not make an independent determination about where an employee's superannuation goes. It shows that, when it comes to industrial relations, members of the opposition have not learnt a thing and that they speak out of both sides of their mouths.

This is a good piece of legislation that we have before the House, and I commend the minister for bringing it before the House and responding in such a prompt way to the outcomes of the review by the expert panel. Of course, it stands in line with all the other reforms that our government has introduced since it was elected in 2007—starting with the scrapping of Work Choices, then more recently the support for equal pay for community workers and ensuring that those who drive trucks on our roads are paid safe rates so that they go home safe and that everybody who shares the road with them can do so in a safe manner. Then, of course, we increased superannuation from nine per cent to 12 per cent. These were all landmark Labor reforms to workplace relations arrangements in this country.

But the matters that I would like to concentrate my attention on are the matters which are referred to as the 'transmission of business' provisions. 'Transmission of business' is shorthand for the arrangements that are put in place when a business is transferred from one legal owner to another legal owner, through whatever means, and the conduct of the industrial relations arrangements—that is, the transfer of employees and their rights and entitlements—throughout that transfer of ownership arrangements.

The provisions have existed in Australian federal law since at least 1914 and been mirrored in similar state legislation since around about the same time. The reasons for the existence of these laws were well summed up in the High Court decision of George Hudson Limited and the Australian Timber Workers Union—a decision of the High Court of Australia in 1923—where Justice Higgins said:

But nothing would be so likely as to prevent agreement as the knowledge, on the part of the unions, that the employer could get rid of at any time of his obligations under it by assigning his business—even by assigning it to a new company having the same shareholders holding shares in the same proportion as in the former company.

The provisions that we are debating today have their history in those 1914 amendments and that 1923 decision, where Justice Higgins stated quite clearly that what we are trying to do with these sorts of provisions is maintain industrial harmony and ensure that for employees, once an agreement is made or an award is struck, the settlement of that dispute and the outcome of those negotiations—the reaching of that agreement—is maintained and assists any transfer of that business or undertaking from one ownership to another or the restructuring of that business from one ownership to another.

As Justice Higgins would say, nothing is more likely to prolong a dispute or drag out negotiations than the apprehension on one side of the negotiations that, as soon as that agreement is reached, those on the other side of those negotiations might be able to avoid that agreement by corporate rearrangement.

Australia is not the only jurisdiction to have these sorts of provisions. A number of countries regard the maintenance of wages and conditions, in the event of a transmission of an enterprise, as an important part of corporations and industrial relations law. In the European Union, the European directive 77187EEC protects an employee's entitlements where a transmission of business occurs. Many European countries have subsidiary arrangements in place to give effect to that directive. In the United Kingdom, Transfer of Undertakings (Protection of Employment) Regulations 1981 were designed to comply with the European Union's directive and preserve an employee's wages and conditions in the event of a transfer. In Canada, the Canada Labour Code applies a collective agreement to a new employer upon transmission, and even in the United States the National Labour Relations Act protects, to some extent, wages and conditions in a collective agreement when a transmission constitutes a substantial continuity of the company.

This is evidence that what we have in our Australian law is consistent with history and consistent with international practice. The problem is simply this: when an award or agreement exists and binds the employment arrangements within a workplace and the corporate identity of that workplace changes, we need orderly and secure arrangements to ensure that the employees are not left worse off in those arrangements. For most of the last century this problem was dealt with by other means: the existence in the state jurisdiction of common rule awards. These applied across an industry or a calling, so it did not matter if a business was transferred or if the identity of a business changed; the award continued to bind by force of the common rule. In the federal jurisdiction it occurred through the practice of roping-in awards or, more commonly, through constructive industrial relations practices, where employees and their representatives would simply reach agreement to flow the old conditions across to the new employer.

When collective agreements gained primacy in the 1990s the framers of the industrial relations legislation simply transported the old award provisions over to the new collective agreement arrangements. This occurred through the 1993-94 amendments to the industrial relations legislation. Indeed, it even occurred when the Howard government introduced its Workplace Relations Act 1996 reforms and again, with some significant modifications, in the 2007 legislation by this government.

Throughout the greater period of the last century the problem of a transmission of business was dealt with by other means. Dispute and conflict over this issue was re-enlivened by the late 1990s and early part of this century.

Paul Fletcher (Bradfield, Liberal Party) Share this | Link to this | Hansard source

Mr Deputy Speaker, on a point of order on relevance: Would the member for Throsby inform the House whether he is speaking about the Fair Work Amendment Bill or the Fair Work Amendment (Transfer of Business) Bill?

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

There is no point of order. The member for Throsby is to continue.

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

The importance of this is that—

Paul Fletcher (Bradfield, Liberal Party) Share this | Link to this | Hansard source

Mr Deputy Speaker—

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

Are you calling another point of order?

Paul Fletcher (Bradfield, Liberal Party) Share this | Link to this | Hansard source

On a point of order on relevance: the question is whether he is speaking about the bill that is presently before the House.

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

I am sure that if you listened, as I was listening, you would have heard that he is speaking about the bill before the House. It has been wide ranging. There have been other speakers who have drifted away from the bill on your side whom we have allowed to go through, so you should show the member for Throsby the same respect that you would expect to be shown to you and others.

Paul Fletcher (Bradfield, Liberal Party) Share this | Link to this | Hansard source

With due deference, Mr Deputy Speaker, the simple point I make is that there is a bill—two bills later on—that deals with transfer of business and, as I have listened to the member, the issues he has been talking about have been about transfer of business.

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

As I said, there is no point of order. The member for Throsby will continue.

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

As I was saying, these matters were re-enlivened throughout the 1990s and the earlier part of the last decade as awards were replaced by collective agreements, as the gaps between wages contained in collective agreements and awards grew, as restructuring and corporatisation ensued, as fragmentation around traditional understandings of industries occurred and through the opening up of our economy and the public sector to competition and contestability.

These provisions have a long history. The reforms that we find ourselves debating before the House today have a long history. This legislation is important because it applies and extends the legislation to current state system employees. It matters a lot because there is currently a lot of action in this space. We see state governments—currently, state conservative governments—who are taking very aggressive action. In your state, Mr Deputy Speaker, we see the Baillieu government sacking state public servants and corporatising state public entities and ensuring that the long-settled wages and conditions of state system employees are now under threat.

This legislation is important because it provides some security to those public sector employees and others. They know that, if there is some change to the ownership or legal entity of their employer, they have some security of their wages and conditions and the comfort of knowing that these will be protected by federal law in the event of such a transfer.

With those brief comments, I commend the package of legislation to the House.

I think it is good legislation. It is legislation in keeping with those reforms I outlined before: the riddance of the dreaded Work Choices legislation, the introduction of equal pay for community sector workers, the introduction of safe rates for transport industry workers and the improvement in superannuation arrangements—all of which, I might say, were hotly contested by those opposite. Further to that, there is a willingness to ensure that, when issues do arise and we do need to refine the law—when we consult with business, when we consult with unions and when we talk to employees—we are ready, willing and able to make the appropriate modifications to ensure that they are continuously fit for purpose. I commend the legislation to the House.

Paul Fletcher (Bradfield, Liberal Party) Share this | Link to this | Hansard source

It is a pleasure to rise to speak on the Fair Work Amendment Bill and to follow the member for Throsby. As it happens, I find myself following a former union official—but that is not a statistically unlikely thing to happen when one stands up to speak following a Labor member of this place. However, it is somewhat unlikely to find oneself following a member who was actually speaking about the wrong bill and who spent some 13 minutes telling us about the transfer of business provisions, which are not dealt with in this bill at all. They are dealt with in a bill which is to be debated two bills later on. But I suppose he would argue that it is 'the vibe'.

I do want to speak about the bill that is before the House this afternoon. In particular, I want to focus on the provisions in this bill which supposedly reform the arrangements under which modern awards specify default superannuation funds. The provisions in this bill dealing with those matters are a classic example of this government looking after its mates in the union sector—union officials who run superannuation funds at the expense of the broader community and going in completely the opposite direction to that which sensible procompetitive economic reform would dictate.

In the time that is available to me I want to make three points. Firstly, the current default arrangements for default superannuation funds are a cosy and anti-competitive racket. Secondly, the present introduction of the low-cost, generic MySuper product is a perfect opportunity to introduce more competition by saying that any MySuper product can be a default fund. Thirdly, the Minister for Financial Services and Superannuation has in this bill squibbed the chance to introduce increased competition. In fact, he has made the process less competitive. He has handed even greater power to the cosy club of retired union officials who run Fair Work Australia.

Let me turn firstly to the proposition that the current arrangements for default superannuation funds are a cosy and anti-competitive racket which serves the interests of a cabal of union officials. The superannuation system has grown enormously. There are now some $1.4 trillion under management in that system. In 2011-12 some $90 billion of funds flowed into the sector largely because of the compulsory superannuation arrangements. Of this, nearly two-thirds went into two classes of funds: industry funds and public sector funds. These two classes of funds generally use the so-called equal representation model, with half of the directors appointed by a union and half by an employer association. If you look at the statistics put out by APRA, the industry regulator, you find that in February 2012 there were 76 funds listed as industry or public sector for the 2010-11 financial year. If you analyse the annual reports of all of those funds, what you find is there was a total of 575 directors on the boards of whom 180 were appointed by unions.

The Labor Party over many years has consistently used the compulsory superannuation system to increase the power, influence and financial position of the union movement and its key personnel. Indeed, the current Minister for Financial Services and Superannuation and Minister for Employment and Workplace Relations is a former secretary of one of the largest unions in the country, the Australian Workers Union, and a former director of the largest industry superannuation fund, AustralianSuper. The default fund arrangements—or, I should say, the union involvement in superannuation—were specifically designed into the superannuation fund system when it was set up by the Hawke and Keating governments in the early 90s. Today the boards of industry super funds are stuffed with union bosses including: AWU boss, Paul Howes; Queensland ALP heavyweight and AWU strongman, Bill Ludwig, who is the father of the present minister for agriculture; TWU secretary Tony Sheldon and; until recently, Health Services Union officials Kathy Jackson and Michael Williamson.

Under the Fair Work Act, the so-called modern awards must contain a clause specifying the superannuation fund into which the employer must pay the employee's superannuation contributions. To be nominated as a default fund under a modern award is very valuable because it guarantees a stream of contributions. The current process for the selection of default funds lacks transparency, is littered with inherent conflicts and quite inappropriately favours union-dominated industry superannuation funds. Analysis conducted by the Institute of Public Affairs in 2010 found that across 166 modern awards approved by Fair Work Australia, there were a total of 566 superannuation funds specified. Of these, 513 were industry funds or public sector funds. AustralianSuper was specified as a default fund in over 70 awards.

Why is it that Fair Work Australia so readily signs off on modern awards which entrench the flow of contributions to union-friendly superannuation funds? It might be that Fair Work Australia is stacked with ex-union officials. Between December 2009 and December 2011, 10 people were appointed as Fair Work Australia commissioners by the Rudd-Gillard government and, of these people, eight had union backgrounds. These arrangements give the unions a degree of control of superannuation which goes much further than the small and shrinking share of the workforce who are union members. Union membership is now down to about 18 per cent of the workforce and around 12 per cent of the private sector workforce. But these arrangements serve the interests of unions very well because, amongst other things, it means a large number of well-paid directorships to be allocated amongst the union mates. The annual report of one industry fund, Cbus, revealed that two directors—presumably one was the chair—received over $90,000 a year and that several other directors received more than $50,000 a year.

In some cases these fees are pocketed by the individual union nominated directors; in other cases the fees are paid to the union. But in either case the arrangements suit the union movement very nicely.

The Cooper review into superannuation recommended that the current equal representation model should be comprehensively reformed. Curiously, former union official Bill Shorten has ignored that particular recommendation.

Opposition Members:

Opposition members interjecting—

Paul Fletcher (Bradfield, Liberal Party) Share this | Link to this | Hansard source

That is an extraordinary surprise, as my colleague points out. Let me turn, therefore, to the opportunity which the introduction of MySuper products offered to introduce more competition. MySuper was recommended by the Cooper review, and the notion is to have low-cost, default superannuation products designed to meet the needs of those Australians who are not actively engaged with their own superannuation and do not make an active choice.

The government is currently in the process of legislating the consumer protection requirements, which it considers important in a default fund product, through the various pieces of MySuper legislation. These products are going to be very widely offered, including by retail superannuation funds. There is no reason at all that every product which qualifies as a MySuper product should not be able to compete freely in the default fund market. After all, if the policy objective is to ensure that somebody who defaults into a fund—that is, somebody who does not make an active choice but simply ends up in the fund specified by the modern award which covers his or her industry—ends up in a fund which is low-cost and tailored to his or her needs as a customer with low engagement, then by definition any MySuper product should fit the bill nicely. But the minister has a very different policy objective. His objective is to ensure that the current cosy arrangements stay in place so that the industry and public sector funds continue to get the lion's share of contributions—and they are doing so, of course, at the expense of people whose money is taken by force of legislation. That money is being used to contribute to the size and scale of economic entities largely controlled by union officials.

The Labor Party promised in 2010 that it was going to do something about this. It paid lip service to the principle of allowing greater competition and the choice of funds. Its 2010 policy contained a promise to introduce an open, transparent and competitive system with a process to select default funds under modern awards. Bill Shorten dragged his heels for as long as he could before reluctantly proceeding with this. Since that time—

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

Order! The member knows to use people's correct titles.

Paul Fletcher (Bradfield, Liberal Party) Share this | Link to this | Hansard source

Thank you, Mr Deputy Speaker. The minister has taken every opportunity to white ant, undermine and ignore the recommendations of the Productivity Commission. When the draft report was released earlier this year suggesting as one possibility the establishment of a new body independent of Fair Work Australia with the sole purpose of selecting and assessing the funds to be listed in modern awards, the minister promptly rushed out a press release on 22 August 2012 stating that the Gillard government would preserve the role of Fair Work Australia in selecting default funds.

With the final report now released and the legislation now before us, it is clear that this government has ignored much of what the Productivity Commission has recommended in framing the provisions of this bill. For example, this bill will impose a limit on the number of MySuper products in modern awards of just 10, contrary to the clear recommendation of the Productivity Commission that there should be an unlimited list of default funds. The Productivity Commission proposed a default superannuation panel. That will now not be created as recommended; instead it will be subsumed into the existing minimum wage panel. The new panel is not the final decision maker under this bill, as was recommended by the Productivity Commission; rather, the full bench of Fair Work Australia will approve default funds in each award after a recommendation from the expert panel.

The process of including funds in awards will only occur every four years, starting in 2014 when modern awards are due for review as opposed to an ongoing application process. The bill will now require that all awards have default funds, whereas currently there are 13 awards that do not list default funds and are therefore open to competition. That is clearly a serious oversight, and the minister has not wasted any time in fixing that up to make sure the interests of his mates are looked after. Instead of ensuring genuine competition, this bill will impose an additional layer of government intervention into the default fund market. There is absolutely no justification for doing this and for imposing the additional cost, complexity and delay which comes with that additional intervention.

Let us be absolutely clear in the House this afternoon. This bill, despite the rhetoric, has absolutely nothing to do with delivering a more competitive process for choosing default superannuation funds. On the contrary, it makes the process less competitive and hands even greater power to the retired union officials who run Fair Work Australia. This is nothing short of a grubby stitch-up by Minister Shorten and the Gillard Labor government to look after their mates in the union movement and put a distant second the interests of the millions of Australians who are compulsory investing in super.

If this bill is passed it will see the continuation of a process under which conflicted parties within Fair Work Australia continue to select default super funds under modern awards. The minister has been so desperate to protect the vested interests of his friends in the union movement that he has lost sight of his responsibility as a minister of the Crown to act in the public interest. What we are reminded of by these developments is the very close relationship between the industry superannuation sector and the parliamentary Labor Party. Let me just remind the parliament that there are four former directors of Australian Super who have become federal Labor parliamentarians or candidates—the minister, Greg Combet, Doug Cameron and Cath Bowtell.

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

Order! Again, the member for Bradfield will once again be reminded to refer to members by their correct title as is required under standing order 64.

Paul Fletcher (Bradfield, Liberal Party) Share this | Link to this | Hansard source

Thank you, Mr Deputy Speaker. You are doing a sage job of trying to defend these current arrangements. This government is clearly not doing what needs to be done when it comes to ensuring that employers and employees in default superannuation can benefit from genuine competition in that market.

It is deeply disappointing that the coalition has been given no time to consider this legislation in detail or to have detailed consultations with stakeholders on this bill. It is clear that the arrangements for this bill coming into the House—the process—do nothing to improve the confidence that the House might have in the merits of the policy that we are considering today. The coalition is therefore gravely concerned about the provisions in this bill. We are certainly reserving our right to move amendments in the Senate. I also make the point that if it is clear that the government is not going to do what needs to be done to improve competition in the field of default superannuation then, if the coalition is elected to government at the next election, we will take the actions that need to be taken to improve competition in this area.

Shayne Neumann (Blair, Australian Labor Party) Share this | Link to this | Hansard source

I speak in support of the Fair Work Amendment Bill 2012. The member for Bradfield overnight has not had a road to Damascus conversion experience, because he, along with his colleagues and comrades opposite, opposed protecting worker entitlements last night and here he goes again, railing against the representatives of millions of Australians in the workplace. There is no doubt about it: the coalition instinctively votes against or opposes every bill with the word 'fair' in it. Last night, we had the situation in which we passed legislation to protect the entitlements of workers who were at risk due to the liquidation or bankruptcy of their employers. The coalition opposed that.

Here today, in response to the independent review panel and the Productivity Commission, they are still responding in a negative way, recklessly opposing this legislation—or that is what people listening to the member for Bradfield would believe. If you listened to the member for Farrar before, she was saying that they will pass it through the House. So you have to wonder what their position is. But their position has been a negative one since the electorate had a look at them in 2007 and voted down their position on Work Choices. We on this side are in favour of Fair Work; those on that side are in favour of Work Choices. It is clear from listening to speeches like that one by the member for Bradfield that that is what they are all about.

The background to this particular legislation is that we have been crystal clear about workplace reform, our policies and our plans. What about the coalition? The Leader of the Opposition is currently in witness protection on that particular policy, because he does not want to talk about it at all. What we are talking about here is making changes recommended to us by the Fair Work review panel following consultations with unions, small business, large business and a range of other stakeholders. Many of these changes in this first tranche of amendments are technical, structural, procedural or clarifying changes to the unfair dismissal framework. For example, these changes give Fair Work Australia the power to strike out award variation applications not made in accordance with the act if they are frivolous or vexatious. Any tribunal, court or quasi-judicial body should have that power. They are also given the power to make amendments to applications made by parties to vary or revoke a modern award to make sure that, if there are ambiguities or uncertainty in those applications, they can be changed by Fair Work Australia.

These changes also better align Fair Work legislation with other laws relating to unfair dismissal, extending the time period to 21 days, another sensible provision. They will give the president of Fair Work Australia the power to require applicants to provide more information about the circumstances of dismissal—further and better particulars. That is an important change also. These changes will also make sure that, if a lawyer or a paid agent misbehaves or does the wrong thing after they have been given leave by Fair Work Australia to represent a party, costs can be ordered against them. This bill also changes the name of Fair Work Australia to the Fair Work Commission. That is important as well.

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

That's a big one!

Shayne Neumann (Blair, Australian Labor Party) Share this | Link to this | Hansard source

There are a lot of amendments here that are important and that those opposite belittle. But industry in fact supports these changes. On many occasions, representatives from industry have been party to consultation undertaken by the minister. They have been at the table when these amendments have been discussed and have made submissions to the panel that have been adopted in whole or in part. There are also amendments putting in place the recommendation to appoint acting deputy presidents and acting commissioners for specified periods. There are many changes that provide pathways for judicial complaint, similar to what we see in courts such as the Federal Magistrates Court or the Family Court. This bill makes many sensible changes that will have a big impact.

If you listened to speakers opposite, you might come to the belief that there are a very small number of people associated with this system. But we are talking about Fair Work Australia having approved 16,000 enterprise agreements covering 2.2 million employees. About seven million Australians are currently protected from unfair dismissal. Those provisions were brought forward by this side of politics and were steadfastly opposed by the Liberal Party, because it is in their blood and bones to oppose these sorts of things. More than 810,000 jobs have been created under this government's watch.

We have brought forward reform after reform in workplace relations to protect the entitlements of workers and to assist them. These include reforms to protect those working in the textile and clothing industry and reforms to the road safety remuneration system. We have acted to particularly protect the 120,000 women who work in the social and community sector, who will now get wage award increases of between 23 per cent and 45 per cent in the next decade. But those opposite have consistently opposed every reform that I have talked about. We are lifting up Australian low- and middle-income workers.

We said that we would undertake a review into the Fair Work Act. Guess what the panel decided? I bet that you will not hear this from those opposite, but the panel, which extensively approached industry and small and large businesses, found that the Fair Work Act is working well and meeting its objectives. The economic outcomes under the Fair Work Act have been favourable to Australia's continuing prosperity. There has been no dramatic wages blowout and no drastic increase in industrial disputes. The IR armageddon predicted by those opposite has not occurred.

Notwithstanding that, the panel recommended 53 changes, and the government has taken up the response to that, and this is what the legislation before the House is.

We have also picked up the Productivity Commission's inquiry into the superannuation industry. The Productivity Commission found that existing default fund arrangements resulted in net returns generally exceeding those for non-default funds. Over the eight years to 2011, default funds in modern awards have on average an after-tax return of 6.4 per cent, compared with 5.5 per cent on non-default funds. So, what we are doing here is making some changes.

Mr Fletcher interjecting—

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

The member for Bradfield will stay quiet and is warned.

Shayne Neumann (Blair, Australian Labor Party) Share this | Link to this | Hansard source

But those opposite leap, moan, carp and whine and undertake some sort of anti-union, anti-worker tirade, like you heard from the member for Bradfield.

Under the changes in this bill all funds under a generic MySuper product will be able to apply for selection as a default fund, on an equal basis. Those opposite seem to take the view, constantly, that workers should be dictated to by bosses, that workers' superannuation should be dictated to and that their wages and conditions should be entirely set without negotiation. The expert panel looked into this—an expert panel within the Productivity Commission. I wonder why those opposite say they support the Productivity Commission sometimes and they oppose it on other occasions?

An expert panel within the Fair Work Commission will assess funds on the basis of the legislative criteria, which are based on those proposed by the Productivity Commission. The Productivity Commission is not a bunch of bleeding-heart, left-wing, socialist ideologues. The Productivity Commission is full of people who those opposite would probably think were on their side of politics when it comes to economic issues. A full bench of the Fair Work Commission will then determine what particular funds from the default superannuation list are best suited for inclusion in each modern award, with the best interests of those employees covered by that particular award as their overarching consideration.

This process will occur every four years to align with four-year reviews of modern awards. What we are going to do in relation to this particular legislation is respond in a positive way, not like those opposite. We have heard the member for Bradfield go on and on in a typical Work Choices tirade against unions—they are naming people and constantly going on like this. That is one of many speeches we have heard in the last few years and will continue to hear from those opposite in relation to this.

This is good legislation. It responds to inquiries. It responds to the Productivity Commission. It responds to the expert review panel. It takes up the reforms and it makes a difference. It is legislation that should be supported, and I note that those opposite, despite what they say today in this debate, will actually pass this legislation. I look forward to seeing whether or not they will call a division on it, because the member for Farrer forecast the fact that they would support it.

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

I rise to speak on the Fair Work Amendment Bill 2012. I note that the member for Blair managed to get through about nine minutes of his contribution on this bill, so important was this bill, which was tabled with urgency last evening by the minister for industrial relations. The procedures of the House had to be overturned—the normal procedure of the bill sitting on the table had to be overturned—because these matters were so urgent that they needed to be spoken on today.

For most of his nine minutes, the member for Blair did not actually address anything to do with the substance of the bill, which at least is better than the member for Throsby, who, in the rush to get into the House, was given the wrong talking points. You would expect a little bit better from a bunch of former union officials who are in this place to represent their vested interests. The member for Throsby came in and gave a speech on the wrong bill. But this bill is so urgent that we have to debate it today ahead of all other business on this government's so-called agenda.

I have a suspicion as to why we are debating this bill in such a rush. I will not cover the ground that the member for Bradfield so carefully and thoroughly covered in his contribution in respect of the default superannuation issues, because he did it so well. I will focus on the Fair Work Australia provisions in this bill, because I think there are very serious charges against this minister in relation to the provisions in this bill. He has some significant issues to address in his summing-up remarks other than the bit of political fluffery in his second reading speech, which does not answer and explain why it is that this parliament is urgently debating this bill.

The reason, I understand, for the urgency is that the minister says these are the most urgent matters out of the Fair Work Australia report he had done. It is a skewed report based on skewed terms of reference and skewed panel members. Mr Deputy Speaker Mitchell, you well know that one of those panel members in particular, Professor Ron McCallum, is one of the most partisan actors in Australian industrial relations. Professor McCallum is out and proud about his support of the Australian Labor Party, so much so that in August this year he was on the record supporting the Labor opposition leader in Victoria and predicting the end of the Baillieu government in two years time. We should note that. Professor McCallum is entitled to his political views, but people should be aware that he is a partisan actor. That is why we have great suspicion of a skewed report based on skewed terms of reference by skewed panellists.

But, if you are to believe the minister that these are the most urgent matters we should be dealing with out of that report, let us work through why that would be the case. The first issue is the default superannuation provisions, which, as the member for Bradfield so rightly pointed out, are more to do with favouring vested interests, yet again, in the industry super funds area. It is not about actual reform. There is not a significant provision at all in the report, and it is contrary to the Productivity Commission report.

Then we get to the provisions relating to the changes in the structure of and powers of Fair Work Australia, which has been subjected to some quite serious debate in recent months, as you, Mr Deputy Speaker, would be aware. One issue that has not been subjected to debate is the appointment of two new vice-presidents.

That is not an area in which I have heard there has been criticism of Fair Work Australia. In fact, if you look through the report—it is reasonably substantive, albeit skewed, and the member for Melbourne will be pleased that I have printed it on both sides—there is not a mention of appointment of two new vice-presidents. What would that cost the taxpayer? There is nothing in the bill about costs at all. It says the impact is nil. Well, let us work though that. A vice-president appointed by Fair Work Australia is paid at least $350,000 a year, putting aside on-costs—higher superannuation, cars. They have a special office arrangement within Fair Work Australia, as I understand. Sources within Fair Work Australia have given me a heads-up that there are special office arrangements. They get two appointed assistants, counsels, who are paid around $90,000 a year—again, without their super and without other conditions.

We are talking about a million bucks a year—conservatively—for each of these appointments. That is $2 million a year and $8 million over the estimates, for those who cannot keep up. That is an $8 million decision made on the basis of no evidence at all. Can you imagine what the parliamentary secretary for regional services could do with $8 million out in regional Australia? I certainly can, and I know the member for Farrer knows what she would do with eight million bucks. There is nothing in this report at all, yet the second main reason we are urgently debating this bill is the appointment of two new vice-presidents. Is it because the current two are too busy? The member for Melbourne will be interested to know that one of the current two is Mr Michael Lawler—who, we know, the Labor Party has some issues with, and the President of Fair Work Australia has some issues with. Mr Michael Lawler's partner is Kathy Jackson. Kathy Jackson, of course, revealed so much information about the $20 million of rorting that occurred in the HSU, found by a report—ironically—from Fair Work Australia.

So we have Mr Michael Lawler, who has been sidelined in Fair Work Australia, based on information I have received—completely sidelined. He is far from busy, as I understand. And then we have Mr Graeme Watson. Mr Graeme Watson has two sins. The first is that he comes from Freehills, a legal organisation that largely represents employer organisations. I know the member for Melbourne knows Mr Watson and would not agree with many of Mr Watson's views. But what the member for Melbourne would not do is discriminate against him on that basis. That is the first of Mr Watson's sins that the President of Fair Work Australia is not pleased with. The second is that Mr Watson had the temerity to suggest that after all the scandal relating to HSU, after all the failure in relation to the investigation by Fair Work Australia, after all the scandal and muck that came out about the failure of that organisation to do its job, it should change its name. And the President of Fair Work Australia was not very happy. Mr Ross was not very happy at all. Mr Watson, since that time, has regretted giving that speech, because professionally he is underutilised at this point in time.

So we have two vice-presidents who are there, not particularly busy. Sure, they are not flavour of the month for the current president. But then a piece of legislation pops up into this parliament, out of nowhere—no recommendations in this review, not a single line in well over 300 pages—recommending that $8 million of taxpayers' money, at least, be spent on two new vice-presidents for no good reason. You have to wonder why. Then you look at the bill, and the bill empowers the two new vice-presidents to be more powerful than the current two sitting vice-presidents. It empowers them to be more senior. And you, Mr Deputy Speaker Mitchell, know very well that the way Fair Work Australia—the old Industrial Relations Commission—works is that seniority is very important when handing out full-bench cases. When handing out full-bench cases, seniority rules the day. In this bill, the two yet unnamed—and that is a very important point here—new vice-presidents, which will cost taxpayers at least $8 million over the forward estimates, will be more powerful than the two out-of-favour current vice-presidents in Fair Work Australia. Two are out of favour, so appoint two new ones and give more power to the president to give them more work—because they may just have similar views, dare I say, to those of the current president and the current government.

We know that the current president, Mr Ross, and the minister have been close for a very long time. There is nothing wrong with that; Australian industrial relations is quite a small gene pool, as we know. They have been so close, in fact, that in 2006 the two of them appeared on the stage at a protest against—you guessed it—the former Howard government. The minister, at that point in time a candidate—I am not sure if he was still the AWU secretary—and on a superannuation industry board, along with Mr Ross, an ACTU official, were at a protest together against the Howard government, trying to overturn the laws. They are now working together to empower Mr Ross to be more powerful in respect of—and here is another provision in the bill, which I am sure you are also aware of, Mr Deputy Speaker—decisions for applicants to appeal when a member of Fair Work Australia has been allocated to a case and an applicant, let us say the CFMEU, is not happy with the commissioner who has been allocated. They will be able to appeal to the president to have a full-bench case. Whacko! Guess what you have just done? You have given two new vice-presidents, who just might come from a similar background to what you want, with new powers for the president to allocate cases to them. Are you following me yet? This is what this is about. This has been debated urgently because this minister is trying to future-proof Fair Work Australia.

These are not the two most urgent matters relating to Fair Work Australia—not at all. Having a look at why it took them years and years to investigate what happened with the HSU might be a matter that is urgent; that might be a matter that needs some reform. Do we need two new vice-presidents for Fair Work Australia, when the report does not say a word about it, when the current two incumbents are hardly busy and are capable of doing far more than they are? But what we see, what we know and what we hear on the industrial relations grapevine is that these two positions are being created for none other than Mr Josh Bornstein, a long-time union lawyer, famously depicted in the ABC's balanced take on the waterfront dispute in 1998, a recent op-ed writer, who also represented a member of parliament in a recent dispute, as we are aware.

The second one is Mr Jeff Lawrence. We understand Mr Lawrence has finished up as President of the ACTU. He has a bit of time on his hands, is looking around for new opportunities—and guess what pops up? There we are: vice-president of Fair Work Australia. It pays pretty well—$350,000 to $360,000 a year with a car, superannuation, a nice office, two associates. A million bucks from the taxpayer? That's not much. It is a disgrace. This minister does not mention a word of it in a second reading speech on an urgent bill, where we have changed the procedures of this House to introduce it, and I say to this minister that I charge him with a very serious contempt of this place. This is using legislative power—

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

Order! The member will withdraw the word 'contempt' of the parliament.

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

I will withdraw the word and change it to 'abuse' of this place, Mr Deputy Speaker—abuse of legislative instruments to give curry to the minister's vested interests in the Australian industrial relations environment, to the union movement. That is what this bill is about: creating two new taxpayer funded positions, to the extent of at least $8 million over the forward estimates, to allow this government to future-proof Fair Work Australia and its operations.

The minister should come in, in the summing up of this debate, before this parliament gives consideration and before this bill passes, and explain: what is the urgent need? There is capacity with the two current vice-presidents to pick up the load. The report itself, the bill upon which we are debating—even though he has had this since June, in the dying days of this year we are debating this bill in an urgent manner, overriding the normal procedures, Mr Deputy Speaker, as you well know. This bill has not been sitting on the table for the required length of time, giving the opposition just hours to consider its position. Thankfully, with the assistance of outside parties, we have been made aware of some of these issues, and the parliament should give consideration to them.

This minister should explain himself. He should explain where this recommendation comes from, what he is trying to achieve, why he is creating $8 million of taxpayer funded positions over the next eight years for an organisation whose biggest issues are not its staffing capacity. By far and away its biggest issues are not its staffing capacity. We know that from what we have seen from the HSU scandal. We know that from what people are telling us within Fair Work Australia. This is a disgrace; it is a scandal. And the minister should explain himself. They are trying to force this through prior to the potential government changing early next year, so they have future-proofed Fair Work Australia, and the minister should answer it. He should answer why he is using $8 million worth of taxpayers' money, and the parliament should not pass this bill until the minister has given a reasonable explanation about why this is being used to assist not the Australian public or its economy but the Labor Party and its friends.

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

It is with a wry smile that I listen to members of the coalition complain about appointments to Fair Work Australia. During the period of the Howard government, when it was the Industrial Relations Commission—

Mr Briggs interjecting—

I am sure that the member for Mayo will interject if I have the numbers wrong, but there were something in the order of 20 new appointments made during that time, of which about two came from a union background. So I think those who live in glass houses should not throw stones about this question of appointment. I think there has been a fair bit of traducing from both sides of the tradition that had existed previously in Australian industrial relations of an even balance between employers, employees and people who had come from other backgrounds, including government. I note that the member for Mayo leaves without correcting my figures, and I think they are about right: of the 20-odd new appointments under the Howard government, about 18 came from employer backgrounds.

We are here debating the Fair Work Amendment Bill 2012, a bill to amend the Fair Work Act to give effect to a review that was conducted and some changes that are said to be necessary to the act. There are indeed a number of changes that need to be made to the act, and I will come to those in a moment. But perhaps I could just come back and finish on one point about the question of members of Fair Work Australia. Whatever the merits of the member for Mayo's charge regarding the vice-president positions, which I note the coalition is going to support through the passage of this bill, we can put those to one side—that is a potentially a legitimate claim that is being raised there. But I do take issue with the statements that were made just then by the member for Mayo about the President of Fair Work Australia, Justice Iain Ross. I think it ought to be recalled that Justice Ross's pedigree is one of previously being a Supreme Court judge and the head of VCAT in Victoria. As well as his having worked for the ACTU I know that he also ended up working for a law firm that represents employers more often than not. I know that because, in my previous capacity, I appeared opposite him. I think we should be careful in this place, especially when people outside have the status of a judge of the Federal Court of Australia, of not overstepping the mark and suggesting, as one could interpret the previous member's comments, that somehow the current head of Fair Work Australia would not act appropriately. I think that is a more serious charge than the one that the member sought to level and one that should not be made using privileges that attach to debate that goes on in this chamber. That would be a misuse of those privileges.

With regard to the changes that do need to be made to the Fair Work Act, there are many. One would have hoped that, in a bill that has been brought in quickly and that presumably the government identifies as being the most urgent changes that need to be made—and ones that need to be made before the end of the year—we would have seen changes addressing a number of very important areas. The Fair Work Act needs to be amended to give people better work-life balance. At the moment under the Fair Work Act, you have the right to go and ask your employer, in certain circumstances, for flexible working arrangements to go and look after your kid or certain others in your family, but it is an unenforceable right.

The employer can say no and, if they say no, there is no way that you can appeal it. That matter urgently needs to be amended. The Greens have said this, the ACTU has said this and various other groups concerned about making sure people have a proper work-life balance have said this. Unfortunately, there is nothing in this bill that gives people a better work-life balance and, surely, we should be using this parliament to see reform in this area.

Secondly, in some very concrete ways state public sector workers—and I have had firsthand experience of this in Victoria—face some pretty big difficulties in bargaining under the Fair Work Act. Nurses, for example, saw their dispute prolonged for months and months—and we know this from leaked cabinet documents in Victoria—because the employer's strategy was to string out the negotiations, to force the nurses out of sheer frustration to then start taking industrial action and to use that to get to Fair Work Australia where their claim would be arbitrated. The reason the employer wanted to do that is that it knew that for constitutional, technical and legal reasons one of the key claims of the nurses—namely, nurse-patient ratios—would not find its way into the final decision. In other words, if it could get to Fair Work Australia through this subterfuge, then the government would win on the question of nurse-patient ratios and there would not be any. So the nurses were forced for months and months to bargain in good faith. They met stonewalling from the government, because that was part of their industrial legal tactic.

We saw a repeat of this behaviour in some version with teachers in Victoria, where you have a government that knows how to use the Fair Work Act and how to exploit the holes that exist in it.

When Qantas grounded its entire fleet and essentially held a gun to the nation's head, it did so, again, for technical and legal advancement under the Fair Work Act. Qantas knew that, if it could provoke a storm and provoke industrial action to be terminated, it would get to arbitration. It also knew that if it got to arbitration it would win on the job security clauses that the employees were attempting to negotiate, similar to what we saw with the nurses.

We have seen very powerful employers under the watch of this government work out the holes in the Fair Work Act and how to use them to stop employees legitimately bargaining for things that really matter, such as job security and nurse-patient ratios. That could be fixed. The Greens have got bills in parliament that would fix those loopholes, but we do not see that in this government's bill. Apparently, this matter is not urgent enough that it needs to be fixed by the end of the year. Everyone who is working in the state public sector should continue to suffer under an unfair act that tilts bargaining away from being a level playing field to, very clearly, being in the employer's favour.

Hearing some of the government members speak, you would think that Work Choices was dead and buried. Anyone who works in this area would know that almost all of the provisions relating to bargaining and industrial action that were instituted in Work Choices have been kept in the Fair Work Act. Indeed, one union I spoke to said they did a comparison between the Fair Work Act and Peter Reith's Workplace Relations Act and felt they would have been better under Peter Reith's Workplace Relations Act because it more closely complied with international standards on how one should bargain.

So there is some unfinished business of repealing those last bits of Work Choices that hang over in the Fair Work Act, and that should be considered as urgent. This government should use this parliament to fix that. There are many important reforms to the Fair Work Act that we could get through now that would protect people's rights at work and that would insulate the Australian public from a potential change of government. So many areas of the Fair Work Act need to be tidied up. Unfortunately, what we have here is a rather tepid bill that contains a mixed bag of proposals, but in our view the case for reform of some of those proposals has not been made out. For example, on the question of costs, if you read the review there is, I would suggest, pretty thin evidence that suggests that somehow a lack of stronger costs provisions in the unfair dismissal jurisdiction is causing any real problem. In fact, there is very little evidence.

From my experience, having worked in that jurisdiction, it was always the case that you would advise applicants very carefully about prosecuting or not taking settlement offers in unfair dismissals because they would find themselves potentially at risk of a costs order. The most recent authorities on this point make it very clear that, in fact, if you act unreasonably in unfair dismissals you can get costs ordered against you. So I do not see the need—and it is not made out in the report—for imposing additional disincentives on people to exercise their rights, and that is what this bill will do.

I am also concerned about the potential adverse consequences of—again without any proper evidentiary basis—putting additional obligations on lawyers who practise in the jurisdiction by potentially making them personally liable. The reason for that is not that there is no room for lawyers to improve; of course there is. But when you say to a lawyer, 'You are now personally at risk of costs, unless you do X,' you introduce conflicting interests for that lawyer. Are their obligations to best represent the person whom they are representing? Or—and this is my concern—will they find themselves more often in this area representing someone who might have been unfairly dismissed because they were pregnant or just because the employer did not like them, and is a lawyer now going to turn around and say to them, 'Actually, you really should accept this offer that is on the table because I myself am concerned about being proceeded against for costs'? In other words, is the lawyer going to put their own interests of potentially not being liable for a costs order ahead of their client, and will that affect the advice that is given to people who are pursuing their legitimate rights? It also does not appear from the review that the 60-day time limit and general protections are being abused, either.

There are also some questions that need to be asked regarding superannuation and the changes regarding industrial action. For the purposes of allowing passage through the House the Greens will be supporting the bill, but that is without prejudice to our position in the Senate and our right to move amendments in the Senate, especially in respect of those areas that I have identified.

I would urge the government not to be too middle-of-the road about this but instead make a clear choice about what reforms it wants to see to the Fair Work Act during the life of this parliament. There is an opportunity to insulate against a return to Work Choices, and instead of being timid we should be bold and make those reforms that are very definitely needed.

Debate interrupted.