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

Again, it bemuses me that Senator Abetz suggests it is less than disingenuous, because the amendments that he is proposing go beyond what was recommended by the independent panel which reviewed the Fair Work Act. Similarly, any justification for those amendments would be as disingenuous if you are interested in withdrawing them.

This bill seeks to apply as far as possible the current provisions of the Fair Work Act. Let me go to the existing transfer-of-business rules and the suggestion that they do not work. The government completely rejects any suggestion that current transfer-of-business rules operate unfairly or act as a disincentive to hiring transferring employees. The recent review of the act looked at transfer of business in detail and found that the evidence shows that the existing business arrangements deliver a balanced framework that provides both fairness and flexibility to both employees and employers. What finer statement could you find in terms of the standing of those existing provisions which we are seeking to progress here?

Specifically, the review panel said:

… there is a clear need to protect employees in transfer of business situations. The alternative is to allow employees to be exploited by the structuring of businesses and contracting arrangements. On the basis of stakeholder submissions, academic advice … analysis of cases under the provisions and an examination of the provisions themselves, the broader legislative definition succeeds in providing better protections for employees than the previous arrangements did.

Finally, it said:

… the scope for employers to determine the appropriate outcome for their business on application to FWA provides significant flexibility.

The government is committed to protecting the rights of Australian workers and takes very seriously any attempt by an employer to restructure its business operations in a way that would undermine employees' or future employees' entitlements.

There are some who might say that this bill is unnecessary because employers can already agree in the course of contractual negotiations for transferring employees to maintain their existing terms and conditions of employment with the new employer. However, that approach does not provide certainty for employees and it does not provide guaranteed protection for their hard-earned and negotiated entitlements.

The transfer-of-business rules in part 2-8 of the Fair Work Act only apply where both the old and new employers are covered by the national workplace relations system. This includes transfers of business that affect employees in the Commonwealth, Victorian, Northern Territory and ACT public sectors but not in the other jurisdictions. Without these reforms, public sector employees in other jurisdictions are at risk of losing their existing terms and conditions of employment, negotiated in good faith, because of a decision by a state government employer to sell assets or outsource work. That is why this bill is necessary and a priority. I stress the time limits issue here; it is a priority for the government, given decisions by some state governments.

In broader policy discussions about the current transfer-of-business provisions in the Fair Work Act the minister continues to discuss the review panel's report and recommendations with stakeholders and he has publicly confirmed that none of the remaining recommendations are ruled in or ruled out.

Finally I want to touch on the point Senator Abetz made about any potential discouragement for new employers from employing former state employees. This claim is often bandied about, that the transfer-of-business provisions are some kind of barrier to new employers hiring transferring employees. This issue was considered in some detail in the recent review of the Fair Work Act. It was argued that the transfer-of-business provisions reduced the employment prospects of workers. However, after all of the evidence put to the Fair Work review panel, they were not convinced that the provisions have had the negative effect that Senator Abetz proposes. To the contrary, the panel concluded that the scope for employers to determine the appropriate outcome for their businesses on application to Fair Work Australia provided significant flexibility.

The government's policy in relation to the transfer-of-business provisions in the Fair Work Act has been consistently clear—that is, employees should be able to retain the benefit of their terms and conditions of employment and their entitlements if their employer changes but the work they perform stays the same. This bill maintains that policy and extends it to certain former state public sector employees to also ensure that their terms and conditions of employment are protected where a transfer of business occurs between a state public sector employer and a national system employer.

On any measure, there is a clear need to protect employees' transfer-of-business situations. The alternative is to allow employees to be exploited by the structuring of businesses and contracting arrangements. If the opposition does not support the current transfer-of-business provisions, what is their alternative? The alternative is to go back to the old and complex transmission-of-business rules which sometimes resulted in employees losing the benefit of their industrial instruments even though they were performing exactly the same work for the new employer. The government does not support a return to those rules.

As under existing transfer-of-business provisions, where employers have concerns about transferring workplace instruments they can apply to Fair Work Australia for orders to ensure that the transferring workplace instruments better align with their business operations. The Fair Work Act report noted that of the 142 applications made to Fair Work Australia under the Fair Work Act transfer-of-business provisions up until March 2012:

… generally settled quickly, with hearings generally less than an hour long, and regularly less than half an hour. Almost all applications were granted, with a small proportion adjourned for various reasons and a smaller proportion dismissed on their merits.

The report makes clear that the application process is working efficiently and did not recommend any changes to these provisions.