Eric Abetz (Tasmania, Liberal Party, Minister for Fisheries, Forestry and Conservation) Share this | Hansard source

I understand that amendments will be moved to this effect. I note Senator Sterle’s interjection of ‘Yep’ in support of that assertion; I think he might be a bit embarrassed later on. I can advise that these amendments will be opposed by the government. The government has already indicated that it does not consider it appropriate to apply the fairness test to agreements that were made in good faith under the law in force at the time not to interfere with accrued rights under such agreements. This would cause parties a great deal of confusion. In some cases the agreements would no longer be operative; employees may have changed jobs; the employer may not even exist anymore. While Senator Wong argued that hundreds of thousands of employees who made agreements before 7 May 2007 would get nothing from this bill, during the House of Representatives debate on this bill the Deputy Leader of the Opposition actually agreed with the government—Senator Sterle might like to listen to this—and stated that Labor:

... do not believe it is appropriate to try and retrospectively apply this test ...

No interjections, I am pleased to say; so hopefully that has registered. The government recognises that thousands of workers and their bosses are able to agree amongst themselves about the terms and conditions of employment that suit them best. The Labor Party cannot accept that workers and their bosses can make agreements without union involvement. The fairness test will apply to workplace agreements made before 7 May 2007 if they are varied after this date and the variation modifies or excludes one or more protected award condition.

In relation to the salary cap, the government considers that the $75,000 cap strikes an appropriate balance between ensuring fairness on the one hand and sensible administration on the other. I can inform the Senate that the $75,000 cap was chosen for a number of reasons. Firstly, nearly 90 per cent of adult non-managerial employees earn less than $75,000. The fairness test will therefore cover most Australian workers. Secondly, $75,000 is approximately 1½ times average annual ordinary earnings of $55,057. Finally, those earning $75,000 or more are generally not reliant on awards.

Additionally, while on the issue of coverage of the fairness test, I note that the government intends to move an amendment to the bill that would confirm that a workplace agreement covering an employee who is employed in an industry or occupation that was, immediately before commencement of the workplace relations reforms on 27 March 2006, usually regulated by a state award is subject to the fairness test. This addresses a concern raised in submissions to the Senate committee inquiring into the bill that such employees would be inadvertently excluded. This was never the intention, and the proposed amendment will put this beyond doubt.

Much of the debate has focused on the fact that the fairness test assesses agreements against protected award conditions rather than the award as a whole. Others have suggested that other award conditions such as redundancy pay and notice of roster changes should be singled out under the test and that the bill should prevent employees from trading one award entitlement for another. Firstly, these arguments are narrowly focused and neglect the overall intended effect of the bill, which is that Australian workers be able to access fair arrangements in a way that does not destroy the flexibility required for continued economic prosperity and further jobs growth. This bill finds the correct balance by protecting those award conditions that have the greatest impact on take-home pay, such as allowances and penalty rates, while retaining necessary flexibility for employers and employees to reach agreements that meet their needs. As I have already outlined, the bill clearly states that whatever the trade-off is it must be fair and, in determining what is fair, the primary consideration be the monetary value of that compensation.

Both Senators Wong and Marshall also claimed that decisions of the Workplace Authority will be secretive and non-reviewable. The Workplace Authority is not a tribunal. It will not have legalistic judicial processes with endless hearings and appeals; rather, it will have a simple administrative arrangement. Prior to the 2006 changes, the former Office of the Employment Advocate had a policy that allowed for internal review of decisions where errors of law or fact were drawn to its attention. I am advised that the authority intends to put in place a similar policy in the context of the fairness test. Additionally, both parties to agreements will have access to plenty of information about how their agreements stack up against the fairness test. For example, the Workplace Authority will publish guidance material on the operation of the test. Advice and pre-lodgement assessments will also be available. This will enable parties to have their agreements checked in advance and will help them to develop fair agreements and to have more certainty once they have lodged. Once lodged, both parties will be notified at various stages of the process. This is explicitly set out in the bill.

There have been other claims that employees and employers will not get a chance to provide, verify or refute information provided to the Workplace Authority. In fact, in assessing an agreement, the Workplace Authority may contact both parties to discuss aspects of that agreement or obtain further information. If an agreement does not pass the fairness test, parties are notified and given advice about how to make it fair.

Parties will know exactly what the problem will be, without the time and expense of presenting their case to a tribunal. Moreover, the government rejects the assertion that employees and employers will be left in the wilderness because the Workplace Authority will conduct the fairness test in its own time and without any limits. It will administer the fairness test efficiently and will make decisions as soon as reasonably practicable—anticipated to be within seven to 10 days. Also, pre-lodgement assessments are available so that parties can have agreements checked in advance. This gives them more certainty once they have lodged, and approval will be fast-tracked.

The ACTU criticism, as parroted continually by Labor senators opposite, loses sight of the fact that the fairness test is a beneficial scheme that operates after parties have reached an agreement between themselves and is capable of providing additional employee benefits over and above those contained in the agreement itself. The fairness test is not a return to the one-size-fits-all arrangements. While it is mostly expected that a higher rate of pay would be provided, if an employee wants family-friendly working hours instead then they can do that. Trading award entitlements occurred under the old no disadvantage test. Employers did it, employees did it and unions did it. The sky did not fall in then, it has not fallen in since, and it will not fall in in the future. This government is about ensuring that choice and flexibility remain the fundamental building blocks of workplace agreement making.

In the past, we have had outrageous assertions made by those opposite as to what would happen with this government’s reforms. Indeed, I remember the quite bizarre comments made by the now Leader of the Opposition on 30 June—I think it was—1999 in relation to the new tax system: that that would go down in Australian history as the worst day, the greatest injustice, in Australian history this century. Well, hello! Does anybody believe that anymore? Absolutely not.

They made the same claims about waterfront reform. They made those claims about our first tranche of industrial reform. They made those claims about our social welfare reform. Every single reform has been opposed by those opposite, and we have continued to put in reforms, including those of March 2006, when people such as Senator Marshall used to come into this place before they were implemented trying to humour me with the suggestion that if the unfair dismissal law provision were removed we might get a growth of 75,000 in the number of those in employment. Very interesting, isn’t it? In the few months that have passed since March 2006, those gibes across the chamber have evaporated, because today we celebrate over 350,000 new jobs since that change was made to the legislation—another gross and stark example of the ACTU and the Labor Party misrepresenting our reforms. What I say to our fellow Australians is simply this: look at the evidence, not at what the ACTU says. With that I commend the bill to the Senate.