James Paterson (Victoria, Liberal Party) Share this | Hansard source

It is a pleasure to be speaking in this debate today on the Fair Work Amendment (Protecting Take-Home Pay) Bill 2017, but I have to say that I wondered whether we would get here at all. I wondered whether we would get to this bill at all. I wondered whether the Labor Party were in fact at all sincere about debating this issue today because they chose to spend the first hour this morning attacking the Attorney-General yet again, attempting to smear the Attorney-General's reputation yet again and engaging in another fruitless personal attack against the Attorney-General without any evidence or support for their arguments. I wondered whether we would eventually turn to an issue that they tell us is so important, that they tell us is a top priority for them and their constituents, that they tell us they hear from the community so much about and that they tell us should be the focus of the Senate's and the parliament's work. But we have got here eventually, and isn't that a wonderful thing?

It is also always a pleasure to follow Senator Polley in a debate. I listened careful to her contribution. She made a very sincere case for her cause in this instance. She certainly talked a lot about what the consequences could be for people if they were to be paid thanks to the Fair Work Commission's decision less penalty rates than they are currently paid. I had to say that, unfortunately, there were a fewer omissions from Senator Polley's contribution to the debate. There were a few facts that she neglected to mention, which if you did not know you might have a different view of this debate. I think it would be helpful if I took this opportunity this morning to put those facts on the record so that people can judge for themselves how this decision came about, who is responsible for this decision and what the Labor Party are walking away from with their bill here today.

I think the most important thing for people to realise is that what we have seen here this morning is just a stunt from the Labor Party. It is not sincere, it is not genuine and it is not actually an attempt to resolve a policy issue; it is an attempt to take credit for concern that they and the union movement have whipped up in the community and it is an attempt to harvest political benefit from the anxiety that they themselves are responsible for stoking in the community. A very good example of that is Senator Polley's suggestion that this decision, which applies in fact very narrowly and to a very small number of occupations, will soon in fact apply much more widely and to other professions and other occupations. She did so without any evidence, without any support for her claims. She asserted it knowing that there will be some people out there in the community who will be fearful when they hear that, who fear that they will be affected. She asserted it knowing that the union movement will back her up in her claims and that they will peddle these mistruths in an attempt to scare people and gain political benefit from doing so.

If the Labor Party are genuinely serious about this issue, it marks a radical departure from their previous position on this issue and a radical change to industrial relations policy in this country. There are three different ways that wages could be set in this country. They could be set by the market, negotiated between employees and employers, and the best rate available would be negotiated and accepted. They could be set by the Fair Work Commission, carefully arbitrated and considered in a legal sense, with arguments for and against. Or they could be set by the parliament.

In recent years, they have not been set by the parliament. Those opposite are suggesting that we now do so because they are unhappy and unwilling to stand by the decision of the Fair Work Commission. It reveals a lot about their attitude. It reveals their lack of support for small business and their lack of understanding of how difficult it is to run a small business, particularly on the weekend. It reveals their lack of understanding of how difficult it is for small businesses to compete with large businesses that are able to secure sweetheart deals with large unions. And it reveals in many ways an attitude which is becoming more readily apparent, which is that the union movement and the Labor Party are only able to accept decisions of the independent umpire or of the parliament if they are decisions that they agree with.

The Labor Party's rejection of the Fair Work Commission's decision in this instance mirrors very closely the rejection of the rule of law by Sally McManus, the new head of the ACTU. She has said, and she repeated it only yesterday at the National Press Club, that she thinks it is completely fine for unionists to only abide by laws which they agree with, which they approve of, which they think are fair and just. But if they do not agree with them, if they do not approve of them, if they think they are unfair, if they think they are unjust then it is absolutely up to them to completely disregard, disobey and break those laws and that is a perfectly fine thing to do.

The Labor Party has adopted the same attitude here. It will abide by the Fair Work Commission's independent decisions on wages as long as it agrees with them, as long as they are favourable. The Fair Work Commission—which Labor appointed, whose legislation Labor wrote and passed through this place enabling them to make these decisions, whose review was begun only because the now Leader of the Opposition and then Minister for Workplace Relations required them to do so—made a decision Labor did not like. They made a decision under Labor's rules, by Labor's appointees, and the Labor Party is rejecting it because it is not a decision that it liked.

It was the then Minister for Workplace Relations, Bill Shorten, who amended the Fair Work Act in 2013 to specifically require the commission to consider penalty rates as part of the four-year review of modern awards. That was a four-year review of modern awards that was established under the Fair Work Commission when the act was passed. That was a Fair Work Commission that was established by the Labor Party. And the commissioners who made that decision were appointed by the previous Labor government. So the owners and the authors of the decision that we have seen in recent weeks are, in their entirety, the Labor Party and, in particular, Mr Shorten.

It is not a surprise then that on Melbourne radio not that long ago, when asked whether he would abide by a decision made by a system that he set up and by people that he appointed and under rules that he wrote, Mr Shorten said yes. He was on Neil Mitchell's program on 3AW. Neil Mitchell asked:

MITCHELL: The Fair Work Commission will report soon on Sunday penalty rates. They're an independent body, in fact you had a lot to do with the way they operate now when you were Minister. Will you accept their findings given this is an independent body assessing penalty rates for Sunday, if you're Prime Minister?

SHORTEN: Yes.

MITCHELL: You'll accept them?

SHORTEN: Yes.

MITCHELL: Even if they reduce Sunday penalty rates?

SHORTEN: Well, I said I'd accept the independent tribunal …

That was an interview on Neil Mitchell's program on 21 April 2016. That was not so long ago, and it is not clear what has changed in that time. There are a couple of things that could be true given that. It could be the case that Bill Shorten was not being clear and straightforward with Neil Mitchell when he was asked these questions or it could be that Bill Shorten has changed his mind since then. If he has changed his mind, it is not clear why he has done so. He knew then, as Neil Mitchell warned him, that there was a risk that the decision of the independent umpire would be to reduce Sunday penalty rates. And, knowing that, Bill Shorten said he would accept the decision. As we know, he has now not accepted that decision.

Of course, Bill Shorten does not always have a problem with accepting the reduction of penalty rates. In fact, he presided over the reduction of penalty rates as union leader at the Australian Workers Union. Workers at Clean Event were stripped of all penalty rates, with no compensation, under a 2006 agreement for which he was responsible. At the Melbourne and Olympic Park trusts, agreements were approved by Bill Shorten in 2001 and again in 2003 which stripped workers of all penalty rates and overtime except for one 125 per cent penalty rate for work performed between 1 am and 6 am. I did not hear Bill Shorten running to the parliament then saying we needed to abolish the role of the independent umpire and have wages set by law and by politicians voting on them. I did not hear him objecting to those changes. In fact, he could not have objected to those changes, because he signed off on them as a union leader.

Bill Shorten wants to make a radical change to our industrial relations policy. The private member's bill that we have before us today is a bad idea for many reasons, one of which is that it is fundamentally unworkable. The bill would require the Fair Work Commission to act inconsistently. On the one hand the commission is required to ensure awards are fair and relevant, taking into account the impact on business employment costs and employment growth, which means more jobs. On the other hand it could never reduce take-home pay, no matter how small or sensible that change might be or what might be traded off.

Bill Shorten is proposing that the Fair Work Commission not be able to make decisions that he himself made as a union leader. If this bill were passed, it would not even be possible for the Fair Work Commission to, for example, agree that Sunday penalty rates should be reduced and other rates of pay should be increased in compensation. That is something that the Fair Work Act allows a union and a business to do when they agree. They are the sorts of deals that Bill Shorten presided over many times as a union leader, and, I suspect, many of the former union leaders who are in this place and the other place would have presided over such deals, but the Fair Work Commission would be prevented from doing so by this bill.

Secondly, the bill would prevent the reduction of take-home pay for any employee covered by the award, with no consideration given to the magnitude of the reduction or why the reduction was taking place. Even a variation of an allowance in an award by a few cents—for example, in exchange for more annual leave—would be prevented by this bill. This cumbersome law would make the industrial relations system massively more rigid, reduce flexibility and reduce employees' ability to access benefits that they sought and were happy to receive.

Finally, the bill would, extraordinarily, also prevent variations from being made due to errors or inconsistencies. It would prevent variations to remove payments or allowances that are no longer relevant to the award. For example, one of the issues that the Fair Work Commission recently considered was the potential doubling up where annual leave loading and shift loadings are paid while a worker is on annual leave, based on the wording in the Electrical, Electronic and Communications Contracting Award 2010. So, if this bill were to pass, an error in an award could not be corrected by the Fair Work Commission and would be forced to persist. The bill is an extremely unworkable, inflexible proposal to change the award system.

As I have said, the penalty rates decision was independent of government. It was made by the Fair Work Commission. It was not made by people that we appointed. It was not made under a law that we wrote. It was not made under a law that we even voted for. It was made by a law pushed through this place by those opposite. Let's get some facts on the table about what has happened with this decision. Public holiday rates are being reduced from 250 per cent to 225 per cent for permanent staff and from 275 per cent to 250 per cent for casual staff in five industries: retail, hospitality, fast food, pharmacy and restaurants. This is a decision which reflects the reality of modern shopping trends. It may be the case that, when these awards were originally designed and agreed to, Sunday shopping was not a common thing, but many consumers want to shop and many people want to work on Sundays, and this just reflects the reality of that. Workers in these industries who are covered by enterprise agreements—for example, those in a major supermarket or a fast-food chain—are not directly affected by this change. That is something which the Labor Party recently discovered after putting up at a press conference a worker from a major supermarket who claimed to be affected by this change but in fact was not affected by this change, in addition to being a Labor Party branch member and volunteer. No other industries are affected. This is important. The commission specifically said in its decision that it sets no precedent for other workers who work on weekends, such as nurses or emergency service workers. You may be forgiven, having listened to Senator Polley's contribution earlier, for not realising that that is the case, but Senator Polley did not truthfully reflect the statement made by the commission. Affected workers will still get weekend penalty rates, but Sunday rates will be brought closer into line with Saturday rates, which remain unchanged.

I have said before in a contribution to this debate that I find it very amusing to see the Labor Party defending Sunday penalty rates given that the historical reason for why people are paid more on a Sunday compared to a Saturday is that it was the Sabbath and it was deemed to be immoral to work on the Sabbath and we should discourage and, in fact, penalise people who wished to open their businesses and work on the Sabbath. I wonder, in 21st century Australia, in the multicultural, multiethnic, multireligious society that we are, where not everybody views Sunday as sacrosanct, as some Australians once did, whether it is still relevant and appropriate to pay much more on a Sunday than a Saturday. I look forward to hearing, in further contributions to this debate by senators who think that this decision was unjustified, why we need to protect the Sabbath, why religious doctrine should influence rates of pay and why Sunday is more special than Saturday.

One important aspect of this change, though, is that it gives small businesses a better chance to compete on a more even footing with large businesses. We discovered recently just how unfairly the deck is stacked against small business, and that is because big unions and big businesses have been doing deals for a long time which have eroded Sunday rates of pay and allow them to pay far less per hour to their workers on Sundays, which makes it much more affordable for them to open on Sundays but makes it very difficult for small businesses to open on Sundays and still be profitable, let alone compete with these major businesses and chains. For example, a bed and breakfast must pay $10 an hour more than a five-star hotel; a family chicken shop must pay $8 more per hour than KFC; a family owned takeaway must pay $8 more per hour than McDonald's; a family greengrocer must pay $5 more per hour than Woolworths; a family pizza takeaway must pay $8 more an hour than Pizza Hut; a boutique clothes shop must pay $7 more an hour than David Jones; a family bookshop must pay $8 more an hour than Target; a family newsagent must pay $7 more an hour than Officeworks; a family bottle shop must pay $7 an hour more then Dan Murphy's; and a family hardware store must pay $5 more per hour than Bunnings. Is there anybody in this place who seriously thinks it is justified that small business should be bound and forced to pay significantly more—in some cases, 20, 30 or 40 per cent more—to hire and provide employment opportunities for their workers and provide services to their customers on Sunday than big businesses pay?

Do we wonder why it is that a union would be willing to trade away the pay rates of their workers on a Sunday with a big business? What is the reason that a union would do that? Well, the modern union movement is a bit different from the union movement of old and the primary motivation of many union leaders today is very different to the motivation of union leaders in times past. They are primarily motivated today by the fact that the more members they have, the more votes they have in internal Labor Party forums. The more members they have, the more money they have to spend on running political campaigns to elect their mates. The more influence they have with the Labor Party, the better chance they and their mates have of finding their way up in this place after their careers as union officials. If they really cared about the workers they represent, and if they valued that more than they value a cosy working relationship with big business, which facilitates their ability to sign up workers and charge workers their union dues, they would instead never accept a cut to Sunday penalty rates and never accept trading off Sunday penalty rates for a cosy relationship with business. And, as we have discovered, occasionally, payments from those businesses to those unions in the midst of EBA negotiations, which, until the parliament hopefully deals with this matter, have been a matter which could be completely secret, concealed form union members and done as a deal behind closed doors by a union leader and a business and completely unbeknownst to workers.

It is worrying in the extreme that the union movement is willing to make these trade-offs and that many of those former union officials, who are now Labor MPs, are now hypocritically saying that the Fair Work Commission should not be able to set up the kinds of arrangements that they themselves have entered into when they were union leaders. Bill Shorten is the best example of that.

This decision has been welcomed by small businesses, because—