Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Hansard source

(   I move:

That the Fair Entitlements Guarantee Amendment Regulation 2014 (No. 1), as contained in Select Legislative Instrument 2014 No. 147 and made under the Fair Entitlements Guarantee Act 2012, be disallowed.

This disallowance motion goes to the question of fairness, it goes to the question of the government's ideology and it goes to the continuing theme of austerity programs hitting ordinary Australians. In my view, this regulation epitomises the problems with this government. It is another example of its mean and tricky approach. This is a regulation that sets about trying to bypass the proper procedures of the Senate. The Fair Entitlements Guarantee Amendment Bill is still on the Senate Notice Paper, and yet what we have is this Fair Entitlements Guarantee Regulation being brought in to reduce the terms and conditions that apply to ordinary Australians who just happen to be in a position where their company is either bankrupt or closes down through no fault of the employee.

The Fair Entitlements Guarantee Act provides financial assistance, called an advance, to cover certain unpaid entitlements for eligible employees who lose their job due to the liquidation or bankruptcy of their employer. This includes assistance for up to 13 weeks of unpaid wages, unpaid annual and long service leave, up to five weeks payment in lieu of notice and redundancy pay which is currently capped at four weeks pay per full year of service. That is what existed under the previous Labor government. It was brought about to ensure that ordinary Australians who end up losing their jobs through no fault of their own, where a company goes into liquidation or bankruptcy, have some capacity to rebuild their lives.

The 2012 regulation was made under section 50 of the act to extend financial assistance to contract outworkers in the textile, clothing and footwear industry. Textile, clothing and footwear contract outworkers were not otherwise eligible to receive an advance under the act as they do not have an employment relationship with the person engaging them to perform the work. The 2012 regulation brought textile, clothing and footwear contract outworkers under the Fair Entitlements Guarantee scheme by modifying the application of certain sections of the act to reflect the contractual arrangements under which TCF contract outworkers are engaged.

As part of the 2014-15 budget—the budget that has been condemned on the basis of lack of fairness; the budget that has been condemned on the basis of the ideology of this government—it was announced that the maximum redundancy pay entitlement under the act would be aligned with the maximum set by the National Employment Standards in the Fair Work Act 2009. The new maximum redundancy pay entitlement will be the equivalent of 16 weeks pay—far less than workers would receive under Labor's standard. The Fair Entitlements Guarantee Amendment Bill 2014 gives effect to this budget measure, and Labor will oppose the bill. The bill has not been passed by the Senate and this regulation is an attempt to bypass that approach.

The amendment provides that the scheme created by the 2012 regulation continues to apply to TCF contract outworkers but will align with the 2014-15 budget measure reflected in the bill by providing that the new maximum redundancy pay entitlement that is payable to TCF contract outworkers will be the equivalent of 16 weeks pay, even if a contract outworker's actual entitlement exceeds that amount. The amending regulation also implements some technical amendments to reflect the changes that have been made by the bill. These technical amendments clarify that where a TCF contract outworker is eligible for an advance under the regulation, the claimant's initial entitlement will be calculated without reference to any amount required to be withheld by law, such as pay as you go tax withholding. It will clarify that the death of a TCF contract outworker does not prevent that person from being eligible for an advance to enable the next of kin or the estate to pursue a claim. It will clarify that, when a debt owed by a TCF contract outworker to the specified person is greater than the entitlement to which it relates, it can be offset proportionally against any of the claimant's other entitlements that form their advance. It will remove the eligibility requirement for a TCF contract outworker who was owed debts prior to the insolvency event to have taken reasonable steps to be paid those debts and, instead, allow the secretary of the department to reduce a TCF contract outworker's entitlement by the amount of any debts that he or she did not take reasonable steps to be paid.

Outworkers in the TCF industry are workers who perform work usually in their home and are widely acknowledged to be a class of workers who are particularly vulnerable to exploitation. Outworkers are entitled to most of the same benefits of employment as other workers in the TCF industry and should also have access to all of the benefits available to other workers in the TCF industry if their employer becomes insolvent or bankrupt. According to the 2014-15 budget papers, the government will achieve savings of $87.7 million over four years by aligning redundancy payments under the Fair Entitlements Guarantee scheme to the National Employment Standards contained in the Fair Work Act 2009. This will include savings from minimising payments to contract outworkers in the TCF industry.

The government will say that contract outworkers will still be able to pursue redundancy entitlements they are owed in excess of 16 weeks through the normal processes available to creditors in insolvencies. While this is true in a technical sense, it is highly unlikely to result in contract outworkers recovering anywhere near the entitlements owed to them due to the difficulties. This is because TCF outworkers are marginalised from traditional employment structures. There are language and cultural barriers. They have a lack of access to legal advice. They suffer financial constraints. Outworkers are contractors and are thus unsecured creditors with a lower priority than employees under insolvency law. The changes to the FEG originated from recommendation 47 of the infamous Commission of Audit report. The Commission of Audit recommended changes be made to the Fair Entitlements Guarantee Scheme to: (a) introduce a cap of a maximum redundancy payment equivalent to 16 weeks pay; and (b) limit the wage base for the scheme to the average weekly earnings.

In July last year, employment minister Eric Abetz had been assuring workers in a letter to workers. In that letter he said:

… you can be satisfied that there is no risk to your entitlements …

I would have to say this is one of the most disingenuous letters I have seen in this place. It would be worth just spending a few minutes on this letter. This letter was signed by Minister Abetz on 17 July 2013 and was to an employee and workers at Autodom in Monash Drive, Dandenong South. Obviously, these are workers who are very concerned that they would lose their jobs—as will many, many workers in the car component sector—as a result of this government's deliberate policy to chase the car industry out of this country. Senator Abetz, in this letter, goes on to say:

Dear Pierre

Thank you for your letter of 1th July, 2013.

It is a matter of regret that you have been somehow led to believe that the Coalition would abolish the 'entitlements guarantee' if elected.

You may recall that it was in fact the Coalition that introduced the GEER Scheme or a General Employees Entitlement Redundancy Scheme.

That was a scheme that was introduced when the brother of the past Prime Minister John Howard ran into some problems with his textile company in the Maitland area. Senator Abetz goes on to say:

This was the first time in Australian history that such a Scheme was developed to protect workers in a position such as your own, and that of your fellow workers.

It then goes on to say:

Given the pedigree and heritage, you can be assured that the Coalition would not seek to do anything that would water down these important protections for Australian workers.

That goes completely against what this government has done in this regulation. Let me just say that again:

Given that pedigree and heritage, you can be assured that the Coalition would not seek to do anything that would water down these important protections for Australian workers.

Some seven or so weeks ago, I released the Coalition's Workplace Relations policy with the Coalition leader, Mr Tony Abbott.

We were explicit in the policy that but for the changes proposed in that document we would not make any other changes. We have not flagged any changes to the slightly modified entitlements guarantee that currently exists.

Accordingly, you can be satisfied that there is no risk to your entitlements and I would invite you to pass a copy of this letter to all your fellow workers with a reminder that it was in fact the Coalition that introduced this Scheme. It is noteworthy that not even the Hawke or Keating Governments considered such a Scheme and it was left for the Coalition to develop and implement.

It is always helpful when it is the Prime Minister's brother that runs into trouble and the scheme is introduced then! And it is signed: 'Yours sincerely, Eric Abetz, Leader of the Opposition in the Senate.'

I asked Senator Abetz questions in relation to this on Wednesday, 24 September in this place. Senator Abetz used the lawyer's trick of trying to redefine the question. When I quoted the position that the coalition 'have not flagged any changes to the slightly modified entitlements guarantee that currently exists and you can be satisfied there is no risk to your entitlements' and asked if this undertaking was true, Senator Abetz, on 24 September, replied: 'Yes.' But here we are now with a position where there are significant changes. The workers in Autodom were under the illusion—and it was certainly an illusion—that the coalition would protect their entitlements. If they are still there and this regulation is in place then they will be worse off. This letter means nothing. The only thing that the letter means is that that complete lack of honesty with the Australian public continues with the coalition government. They even put it in writing—they put it in writing to workers, and those workers will be worse off. When I asked Senator Abetz:

Why has the minister broken this personal promise to Mr Rault by reducing workers' entitlements under the fair entitlements guarantee?

Senator Abetz said:

There are two separate questions there.

This is the trickiness—you know, the nasty, tricky approach.

The first question was whether or not there would be changes to the entitlements of the person with whom I corresponded. The simple fact is that in the event this parliament makes any changes, they will not be retrospective. As a result, that person's entitlements were at all times protected. That is why I was able to very clearly answer yes to Senator Cameron's ill-thought-out first question.

Well, it was not an ill-thought-out first question. It was simply trying to protect workers and understand what had happened to workers. Workers cannot trust the coalition government, they cannot trust the Prime Minister and they cannot trust Senator Abetz because it is clear that this mean, tricky, nasty approach from this coalition is based on ideology. Some austerity approach from this government is what dominates its thinking. It does not matter if you write to a worker and say, 'Tell all your workmates everything's going to be okay; we won't be reducing the entitlements'—because what happens? The entitlements are reduced. I do not know how you would describe that in any way but as a continuation of the coalition's lies to the Australian public. That is what it is.

This is a very serious issue. It is simply a cost-cutting measure. It is not about worrying whether workers get some financial support at a time when they lose their jobs—it is not about that. It is about an ideology that says individuals can be left on their own, and diminishing this entitlement is the first step to leaving them on their own. I am of the view that workers around the country should be very worried. When the coalition starts diminishing entitlements for workers, it is only the start. What we have to look at is what will be left behind. What will be the wreckage of protection for workers after a term of this government? My view is that it will say, 'We won't be making any of these changes; we will not be reintroducing Work Choices.' I have to say to you: nobody can trust this government and nobody can trust this minister on anything they say.

This piece of correspondence just says it all. When faced with this correspondence, we get this tricky approach, with the government trying to use weasel words to get around the implications for the workers. The view of the workers at Autodom was, 'This government won't be taking my entitlements away.' Yet what happens? Senator Abetz comes in here, will not take the issue up for debate within the Senate but passes regulations to do exactly what he said he would not do in this correspondence. Workers cannot be reassured by this government.

We see at the moment that the mining industry is shedding jobs. The car industry is closing down. The components sector is under huge pressure and not being given any support to try to recalibrate its approach in manufacturing. You will see more and more jobs being lost, and those workers will be, in the first instance, left with entitlements that are lesser than the entitlements provided by the previous government. It is simply about an austerity approach, underpinned by ideology, to say: 'We will not support workers to give them a fair go when they lose their jobs.' It will not simply be this one step; there will be other steps, in my view, down the track.

There is absolutely no plan for jobs from this government. The member for Eden-Monaro, Mr Hendy, said that we need to create a desperately needed job plan. Even the coalition's own members are saying they need a job plan. While jobs are going, they are diminishing the entitlements that workers had under the previous government. They have deliberately set policy that means more jobs are going. This is a pincer approach by this mob. They are taking entitlements away from workers, and there will be some legal argument—some spin—that we will hear later tonight, but I have to say to you: this is not acceptable. (Time expired)