Joe Ludwig (Queensland, Australian Labor Party, Manager of Government Business in the Senate) Share this | Hansard source

I was going to address all of the matters in one go. Quite frankly, I think they are all in the same area. Let me start from the beginning of this debate. One of the defining issues in the lead-up to the 2007 federal election was workplace relations. The Rudd government, when in opposition, took a particular position on workplace relations and argued it daily across the country—from every opposition frontbencher, from every backbencher, from the Leader of the Opposition and from the Deputy Leader of the Opposition. We released our Forward with Fairness policy in April 2007 and the policy implementation plan in August 2007. It was not something we put under the carpet. It was not something we did not tell the electorate we were going to do. We made it central to our election platform for the November 2007 election—central; it was a key part of Forward with Fairness. The key part: the unfair dismissal provisions contained within it. It was a chapter of its own. The Howard government took away most from Australian workers any right to challenge a dismissal that was harsh, unjust or unfair.

I think it is important at this point to clearly expand on another key element of the government’s unfair dismissal provisions, which were also taken to the Australian people in November 2007 and which are contained in this bill: small businesses with fewer than 15 employees will have a 12-month period of grace free from an unfair dismissal claim to determine whether an employee fits in their business. For businesses with 15 or more employees, that period is six months. I think by any measure that is enough time to judge whether an employee is going to work out or not. However, just to ensure that the process remains simple, fair and flexible for employers and employees, we said we would develop a streamlined small business fair dismissal code. If employers need to get rid of an employee because they are not doing their job properly, once again, the Fair Work Bill fulfils this election commitment.

It is about ensuring that there are simple, fair and flexible rules. Again, it passes what I would call the common-sense test. For all the users of a system—large and small employers and their employees, and for all of those that Senator Boyce would sentence to ignorance—we promised a better process in Fair Work Australia to ensure that employers and employees were brought together quickly and professionally to deal with these claims in a non-legalistic manner. The Deputy Prime Minister repeatedly pointed this out. On page 18 of Forward with Fairness: policy implementation plan, it clearly states that the special small-business arrangements that I have outlined above will apply to small businesses with fewer than 15 employees. During 2007, the definition of ‘small business’ as ‘fewer than 15 employees’ was a significant counterpoint to the former Howard government’s unfair dismissal provisions contained in Work Choices, which stated that any business with 100 or fewer employees could sack any worker at any time and give no reason whatsoever. It was emphasised repeatedly in debates. On 24 November, the Australian people voted for the Australian Labor Party and voted in favour of the definition of ‘small business’ being ‘fewer than 15 employees’ as the benchmark between the two processes.

At this point in the debate, I think it is important to remind the Senate why this definition of ‘small business’ was chosen. It was chosen as a definition based on a headcount, counting full-time, part-time, and regular and systematic casual employees. There are sensible and logical reasons as to why this number and method of counting was chosen. The formulation of fewer than 15 full-time, part-time, and regular and systematic casual employees reflects a long-standing definition of ‘small business’ in the workplace relations arena. It was adopted by the full bench of the Australian Industrial Relations Commission in 1984 in the TCR—termination, change and redundancy—test case. It has been part of industrial relations practices for over 20 years.

We chose the same benchmark for the application of the small business unfair dismissal procedures so that small businesses would have a simple and easy to understand scheme. They can look at a roster, count their staff by name and know whether they are in the unfair dismissal process or whether they are not. This definition remained for redundancy pay eligibility even under the coalition. They kept that provision until 2005, when the former Howard government, without reference to the Australian people, introduced Work Choices, which, bizarrely, changed it to any small business with fewer than 100 employees.

The opposition, Senator Xenophon and Senator Fielding have all put this evening their own changes to the definition of small business in regard to unfair dismissal. They may forgive me for saying this, but there is no logic or rationale to any of the proposals they put forward. They are complex, unwieldy, uncertain and quite frankly unworkable. The opposition wants a small business to be defined as having fewer than 25 full-time equivalent employees for the purposes of unfair dismissal and fewer than 15 employees based on a head count for redundancy. The logic escapes me. Senator Xenophon wants a definition of fewer than 20 full-time equivalent employees for the purposes of unfair dismissal and a head count of fewer than 15 employees for redundancy. Senator Fielding wants a definition of fewer than 20 full-time equivalent employees for the purposes of unfair dismissal and fewer than 15 full-time equivalent employees for redundancy.

Each of these versions of these amendments propose that the number be calculated in terms of full-time equivalent positions, not in terms of the count of individual employees. But in the debate no-one has attempted to explain how full-time equivalent positions will be worked out. They have said in part that it will be left to regulation—‘Let someone else work it out; let someone else figure out how we’re going to do this.’ In other words, they will put it into the hands of a writer of regulations to sort out how this will actually work.

It could be too hard, especially for hardworking businesses. We hear the argument from the other side that small businesses are under the pump. We accept that. We hear that they have little time, because they are too busy running their business. We accept that. We hear that they will have little time to address some of these matters. We accept that. So what does the Labor Party propose? We propose fair and simple ways for them to deal with unfair dismissal. They can use the small business code to dismiss employees. It is simple to work out whether you are subject to this in the first six months or 12 months by counting your employees. In a small business, you know them by name; you know each and every one of them by name. That is a very simple process. You can see them, you can count them and you can easily write down on a sheet how many you have.

A definition based on full-time equivalent employees would require a complex regulation to begin with. But just think about what the regulation would have to deal with. What are ordinary full-time hours? How will overtime hours be treated? What about a business with a seasonal work force or a business with fluctuating hours from week to week? Over what period will the hours be averaged—a week, a month or a year? And so it goes on. I do not have to use just those examples. I am sure that all around here can think up many more that show why it would (a) be difficult, (b) be complex and (c) not always provide the right answer. It might change and vary, and that leaves it open for debate as to whether or not you have those employees there or not.

If any of these proposals were adopted, an employer could never say with any certainty whether they were in or out of the small business scheme at any given time. These amendments make it more complicated, not simpler. We want to be able to provide a special guide for small businesses on all the laws related to termination of employment on redundancy and unfair dismissal.

One of the reasons why the opposition and, it appears, Senator Xenophon and Senator Fielding say that they want to make these amendments is because of the economic climate. On this side of the Senate, we think that in good economic times and difficult economic times employees are entitled to job security. They need some protections. Small business owners need to be able to walk into their staffrooms, count the people in there and know what their legal obligations are without spending hours of their time on a computer with pay records to work out what their full-time equivalents are or could be.

The opposition says that they will judge this legislation on a number of tests. We have heard them iterate those tests this evening. Does it extend union power? Clearly, no. This is about small business and about ensuring that there is a small business code. It is about ensuring that small business has certainty. So, tick, it meets that; it does not fall under that wheel. Does it provide a disincentive for employment? No; clearly, it does not. Every business has a minimum of six months to test a new employee to make sure that they fit in with their business. All the evidence set out in the explanatory memorandum makes it clear that employment security law has no significant effect on employment decisions. Another test that the opposition use is: does it go beyond what the Labor Party took to the last election? No. It meets our policy commitments to the letter.

But we know that this is not about the tests that the opposition have set in this debate. I listened closely to Senator Boyce’s contribution. Curiously, it reminded me of what Senator Joyce said this morning at the Senate doors. He said that opposition policy was about providing that small businesses with fewer than 25 employees should be exempt from unfair dismissal laws and so the definition of ‘small business’ must be changed. Senator Boyce harked to the same argument, using the term ‘exempt’. The opposition want to exempt small business from the operation. Examples from across the globe were given using the phrase ‘exempting small business’. There were arguments about whether it should be 50, and a range of other proposals were put forward.

I have news for both Senator Boyce and Senator Joyce. They are not exempt. It is simply a modified scheme that applies to employees of small business. The opposition, as demonstrated by both Senator Joyce and Senator Boyce, argue and completely expose their inability to grasp the basic element of the unfair dismissal scheme we put forward, which shows that this debate is not about good public policy from the opposition and it is not about principle from the opposition; it is in their very heart that they cannot let Work Choices go. They want to argue and argue about maintaining unfair dismissal in the way that they have reflected it by exempting small business, and they continue to make that point even this evening.