Eric Abetz (Tasmania, Liberal Party, Shadow Minister for Employment and Workplace Relations) Share this | Hansard source

Of course, it is very obvious that Fair Work Australia accepts that it has to absorb the costs. What else can it do? What else can it do in the face of the government changing legislation and foisting these things on Fair Work Australia without giving it extra money? The parliamentary secretary says, 'Oh, they realise that they have to absorb it.' Everybody knows that they have to absorb it, but that is not, with respect, a justification for what has occurred, especially in circumstances where we do not know where those cost-cutting measures will occur within Fair Work Australia. I have a funny feeling that those cuts may well occur in the area of monitoring registered organisations, and that in the event that we have another Craig Thomson-Health Services Union debacle we will once again see Fair Work Australia underresourced and incapable of dealing with the issues as it should have done. But let us move on.

I seek leave of the Senate to move opposition amendments (2), (3) and (5) on sheet 7305 together and opposition amendments (6) and (14) on sheet 7305.

Leave granted.

I move:

(2) Schedule 2, item 43, page 22 (line 10), omit "Vice President or".

(3) Schedule 8, item 1, page 43 (line 7), omit paragraph 606(2)(c).

(5) Schedule 8, item 16, page 49 (line 7), omit "a Vice President,".

The opposition also opposes schedules 8 and 11 in the following terms:

(6) Schedule 8, items 17 to 56, page 49 (line 9) to page 53 (line 16), TO BE OPPOSED.

(14) Schedule 11, item 21, page 184 (lines 13 to 16), TO BE OPPOSED.

I thank the Senate. This raft of opposition amendments deals with the creation of two new vice-presidential positions on the body known as Fair Work Australia. These two new positions were not canvassed in the Fair Work Act review panel's report. In the 250 submissions made to the review there was no such suggestion. As a result, not surprisingly, the review panel saw no need to make such a recommendation.

It is therefore appropriate to ask from whence did this recommendation come. We now know that this recommendation came as a result of one ex-trade union boss talking to another ex-trade union boss—the former Assistant Secretary of the ACTU, who just happens to be the president of Fair Work Australia, talking to Mr Shorten, the former AWU boss, who now happens to be the Minister for Employment and Workplace Relations—and it was determined that it would be a good idea to have these two new vice-presidential positions.

This is a very important issue. The reason it is important has been highlighted by no lesser authority than the Law Council of Australia. The Law Council of Australia have set out, in a very articulate manner, a very well-reasoned manner and a very robust manner, how these two new appointments will be a diminution of judicial independence within Australia. It is a bad precedent, and they have said so. The government's response is like Ms Gillard's response in relation to the AWU scandal—basically a lot of words without any meaning and without any proper defence of the matters put to them.

This bill creates two additional vice-presidential positions and they will be the second and third highest positions within Fair Work Australia. The minister has completely failed to explain why these positions are required, let alone justified, apart from the department's submission that the president of Fair Work Australia—a former assistant ACTU secretary—sought the additional roles. These two positions would slot in as the second and third most senior officers of the tribunal.

Since the announcement of these two additional positions, there has been widespread community concern, including from within Fair Work Australia itself. Clearly, with this new appointment in Fair Work Australia of a new president, there is a power struggle occurring within Fair Work Australia. And what better way for the government to get complete domination than simply creating two new positions and appointing two new people into them? The Australian Financial Review recently reported:

In an email obtained by the Weekend Financial Review, Senior deputy president Les Kaufman wrote to Fair Work president Iain Ross on Wednesday questioning the need for two positions, which reintroduces a level of seniority at the tribunal that was removed under the Fair Work Act in 2009.

Mr Kaufman, the senior deputy president, said the appointments would 'further erode the standing' of the tribunal and 'gives rise to the perception it is being stacked'. It is no longer a perception that it is being stacked; it is absolutely proven that it has been stacked. But allow me to continue to quote. The article went on to report that senior deputy president Les Kaufman said in his letter:

Although I have no direct interest in the creation of the two new vice-president positions because, as you know my commission expires on December 1—

so only a few more days to go, and nothing in it for this senior deputy president, Mr Kaufman; he is just expressing his concern. He goes on to say:

… I wish to express my dismay at what appears to be a retrograde step.

You might think senior vice-president Les Kaufman was having a whack on the way out and might be a lone voice, but it is not so. The article goes on to say:

Deputy presidents Graeme Watson and Peter Richards have also written to Justice Ross over concerns the federal government will use the opportunity to install government-friendly appointees.

Here we have a senior deputy president and two deputy presidents writing to the president of Fair Work Australia and disagreeing with his suggestion—which he seems to have cobbled together with the minister—to create these two new positions.

Many submissions to the Senate committee in relation to this expressed deep reservations about the inclusion of these two positions. Some of the comments included:

From our perspective the need for the creation of these additional positions and the requirement that they be statutory positions is unclear. Neither the Fair Work Act Review Panel nor submissions to the review have identified the absence of these statutory positions as inhibiting the performance of Fair Work Australia.

Possibly, we might get an explanation from the government as to how the lack of these positions is inhibiting the performance of Fair Work Australia. Clearly, three deputy presidents of Fair Work Australia do not think it is. They have very real concerns and, of course, we know about the Law Council's concerns. Another submission said:

This was not recommended by the Panel. It is unclear why these amendments are necessary or required and are opposed without amendments.

Another comment from the submission reads:

It is unclear why the existing Vice Presidents would not be suitable for re-appointment to the new statutory Vice Presidential roles.

To this end, there was wide stakeholder support for the appointment of the two members of Fair Work Australia to the new positions titled as vice-president. Steve Knott of AMMA told the committee :'The legislation previously recognised the two existing vice presidents, Vice President Lawler and Vice President Watson, but the current legislation does not.' Clearly what we have, with the move to the Fair Work Act, is the government deliberately cutting these two people out of vice-presidential positions to move them to the side. The government is now moving to create two new positions and, as a result, is sidelining these two vice-presidential office holders of Fair Work Australia.

The proposal to have the legislation recognise these two roles once again, and put two new people into them, is unacceptable. It is real pea-and-thimble trick. For those with long memories in industrial relations, we will go back to the eighties when there was new legislation and everybody got appointed except one member of the tribunal—a fellow by the name of Justice Staples. I think this gives the opportunity—and again, we have commented on this publicly—to really damage the independence, or the perceived independence and impartiality, of the tribunal. We have senior appointments made to the tribunal through the political cycle. There are people who are appointed by one side who may not be appointed by another side, but that is the way it goes over the fullness of time in the political cycle.

The coalition is deeply concerned that the appointment of pro-Labor vice-presidents would bring into question the tribunal's integrity, which has already suffered considerable damage courtesy of the Health Services Union scandal. But, if I may say so, the most significant submission comes from the Law Council of Australia, which said in part:

Members of FWA are appointed to a quasi-judicial position. The status of FWA depends upon the independence and impartiality of its Members being maintained and being seen to be maintained.

As a general principle, once a person has been appointed to sit on a Court or independent Tribunal with designated powers and privileges, any change that would have the effect of removing or reducing that particular person’s powers or privileges while not affecting the powers and privileges of other Members of that Tribunal, has a tendency to undermine the independence of the Court or Tribunal.

…   …   …

Should the Government appoint the two individuals currently designated Vice President to the two statutory Vice President positions, then their status will not be reduced. However, if the two Deputy Presidents designated Vice Presidents are not so appointed, the effect of the Bill will be to reduce their status. Henceforth responsibilities that would have been capable of being delegated or given to them by nature of their senior status would instead be given to the new statutory Vice Presidents.

This would have the tendency to reduce the independence of the Tribunal in that it will reduce the role and privileges associated with particular individuals.

So says the Law Council of Australia.

The government's argument in response to that to date has been shallow, has been hollow and has been completely absent of any rationale, any robust rejoinder. The only rationale is that this is a government that thinks it might be in its death throes and wants to future-proof Fair Work Australia from any future appointments by another government and therefore has rushed through this legislation, created two new positions and further stacked Fair Work Australia.

I remind the parliamentary secretary of Mr Rudd's promise before the 2007 election:

I give you this as an absolute guarantee here on your program. I will not be prime minister of this country and appoint some endless tribe of trade union officials to staff or ex trade union officials to staff the key positions in this body. That's not my intention. That's not the way in which it's going to work.

Well, we now know that that is exactly the way it has worked under both the Rudd and Gillard governments. It is like their carbon tax promise: hollow, shallow, with no intention of delivering on it—simply words before the election to get them over the line and then do the exact opposite afterwards.

I ask of the parliamentary secretary: what are the entitlements of the two new vice-presidents? We do not know that as yet, I understand, because the Remuneration Tribunal still has to make the determination. This is very unhelpful in circumstances where we are supposed to vote on this without knowing what their entitlements will be. The Greens might like being treated as mushrooms, but we, the coalition, do not.

The other answer that I have is about the current people on Fair Work Australia who have judges pension entitlements. If they apply for one of these two new positions on Fair Work Australia, would they lose their judicial pension entitlements? It is understood that the new appointments will not have these judicial pension entitlements so, apart from their remuneration, there is also the question of what their pension entitlements might be.