Jacinta Collins (Victoria, Australian Labor Party, Parliamentary Secretary for School Education and Workplace Relations) Share this | Hansard source

I can assure Senator Abetz that indeed it is not the government's intention to establish a new minimum standard. Perhaps I can use this as an opportunity to correct some of the errors that occurred in the debate on the second reading of this bill.

Whilst Senator Abetz refers to the provisions in the Fair Work Act he is referring solely to the provisions in relation to the standard for redundancy.

As Senator Abetz well knows, they are the minimum standard and the Fair Work Act provides for enhanced entitlements through other industrial instruments that these measures seek to address. I also noted that in his second reading contribution Senator Abetz referred to the forerunners of GEERS and the Ansett arrangements, but I would like to take this opportunity to remind the Senate that perhaps the first forerunner was the arrangements for Stan Howard and his business and the redundancies involved there. I would also like to take this opportunity to remind the Senate that in the Stan Howard arrangements 100 per cent of entitlements—not minimum entitlements but 100 per cent of full entitlements—were paid out. So these arrangements certainly do have an interesting history, but perhaps the most significant point is that the enhanced arrangements—the removal of the 16-week cap—have been in place for almost two years now, and the fears that have been raised and the issues that have been canvassed have not come to the fore during that period.

I will move specifically to Senator Abetz's question—which is, I suppose, canvassed in a range of different ways. Perhaps I will deal with one that had been raised earlier in discussions in relation to this bill and that, similarly, the Australian Industry Group had canvassed as a concern: won't the generous redundancy entitlements create a greater propensity for moral hazard risks in the scheme? The bill addresses concerns related to moral hazard by including a provision that allows changes to improve the terms and conditions of employment in the six months prior to insolvency to be disregarded where, at the time the change was made, it was not reasonable to expect that the employer could continue to employ the person on those more favourable terms. In the event this provision is used, the Fair Entitlements Guarantee claims would be determined on the terms and conditions that applied before the improvements were made. An equivalent provision has been a feature of the General Employee Entitlements and Redundancy Scheme since 2006, and in that time it has been used only a handful of times. The government intends to strengthen this provision through government amendments in the House that made it clear that the provision also applies to improvement in redundancy and payment in lieu of entitlements.