Don Farrell (SA, Australian Labor Party, Parliamentary Secretary for Sustainability and Urban Water) Share this | Hansard source

I also thank Senators Wright, Bilyk, Urquhart and Thistlethwaite, who also contributed to this debate on the Fair Entitlements Guarantee Bill 2012.

Let me say, though, that the government opposes the opposition amendments. In 2010 we made a commitment to strengthen protections for employee entitlements, and we fully intend to honour that commitment. This government recognises fully the importance of protecting the entitlements of Australian employees who suffer the effects of the insolvency or bankruptcy of their employer. This bill implements the Fair Entitlements Guarantee, one of the key elements of the government's 2010 election commitments: the Protecting Workers' Entitlements package, a package that ensures the strongest protection ever for working Australians whose employers become insolvent and cannot meet their obligations to pay employee entitlements.

Importantly, ensuring the Fair Entitlements Guarantee in legislation means employees can now rest assured that this protection for their entitlements cannot be scrapped on a whim. It provides certainty and some comfort for employees at a time when they are down on their luck and vulnerable through no fault of their own. The bill replaces the existing General Employee Entitlements and Redundancy Scheme and strengthens protection of unpaid entitlements, including redundancy, annual leave, long service leave, wages and payment in lieu of notice.

The bill represents a significant strengthening of the protection of Australian employees—and their entitlements—who are victims of employer insolvency or bankruptcy. Contrary to the views of the opposition, the bill does not create a new community standard for redundancy entitlements nor does it favour unionised workplaces. The bill simply ensures that where an employee's industrial instrument says that they are entitled to redundancy and to four weeks' pay for each year of service, and where their employer becomes insolvent, they will retain that redundancy entitlement. It does not set a new standard and say that every employee should get that level of redundancy pay; it just says that the employees who have that level of entitlement should not be short-changed, thus protecting a working Australian's entitlements. The opposition would like longstanding employees to go without any recognition of their loyalty, and to cap their entitlement at 16 weeks. This government does not treat longstanding employees with that contempt, and it certainly appreciates their loyalty—and I am sure the employers did over many years of employment.

Contrary to other criticisms, the bill does not represent a moral hazard risk. There are strong safeguards within the bill to ensure that people do not take advantage of this scheme of assistance by bumping up entitlements that would otherwise not be sustainable work costs to the employer if they continued in business. There is no more of a financial risk to the government than there is with any other scheme of financial assistance for Australians. It sets reasonable entitlements in place and imposes reasonable caps, such as the maximum wage threshold for payment of entitlements to ensure that the costs incurred under the scheme remain at a reasonable level.

I am pleased to honour the government's election commitment through this bill and to deliver on our promise for a clear and fair legislative framework to provide certainty and protection for all Australian workers. I commend the bill to the Senate.

Question agreed to.

Bill read a second time.