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

It is always a treat to be on the receiving end of a speech from Senator Cameron, late on a Monday night, about an industrial relations issue, and that speech was no exception. It didn't relate very much at all, though, to the Fair Work Amendment (Repeal of 4 Yearly Reviews and Other Measures) Bill 2017, which we have in front of us. In fact, apart from a very brief acknowledgement at the beginning that we were debating a government bill and the opposition would be supporting it, that was about all that was said on the bill. What we did get was a real treat: Senator Cameron's views on inequality—the catch-all complaint of the Labor Party for every social ill, perceived or real; Senator Cameron's views on the Deputy Prime Minister's citizenship and eligibility to sit in the House of Representative—perhaps somewhat premature before the High Court decision on the matter. We got treated to a lecture on trickle-down economics, an economic philosophy that exists only in the minds of Senator Cameron and other socialists, who like to invent a caricature of their opponents' views on the world rather than actually understanding them. Of course, we got to hear about Senator Cameron's proposed amendments on penalty rates, which I will come to in a moment.

Before I do, let me state for the record why we are here, which is to fix a problem identified in the industrial relations system put in place by the government that Senator Cameron was part of, the previous government, which is the four-yearly reviews of the award system. We are doing so at the urging of not just the business sector but also the union movement. I want to quote from a letter dated 17 November 2016. It is from the Ai Group, the Australian Chamber of Commerce and Industry and the ACTU. They are three logos you don't often see on the same letterhead, but nonetheless they came together over this issue to write to the Minister for Employment, Michaelia Cash. They wrote to her to raise their concerns about the four-yearly review, and they say:

In the consultation processes associated with the Productivity Commission's Review of the Workplace Relations Framework, a clear position was stated by employer associations and the union movement that four yearly reviews of modern awards ought not continue to be a feature of that framework.

The current review has been continuing for nearly three years and there are matters programmed to continue well into 2017. The next review is scheduled to commence in 2018. The cycle of almost continuous review sits uncomfortably with the stated objective in the act of a modern awards system that is 'simple, easy to understand, stable and sustainable'. In addition, the resource demands upon the Commission and the parties have been substantial.

It concludes, after making further points in favour of changing the laws that Labor put in place:

We commend our proposal to you and look forward to the opportunity to progress it as a priority in this term of Government.

But, instead of facilitating this joint employer-union priority, which they had come together to lobby the government to address, and which the government is responsibly acting upon, those opposite are seeking to frustrate, delay, politicise and make more difficult what should be an easy process—an easy fix.

This is one of the many reasons so many Australians are frustrated with the workings of parliament. What they have been seeing in this debate is bipartisan consensus—consensus not just within the parliament but outside the parliament, from bodies that are normally in conflict with each other and which normally have disagreement, but, on this, are unanimous. This is an issue and it needs to be fixed. It will be to the benefit of workers and employers and it will be to the benefit of employer associations and unions. Yet the government's attempt to fix it are being frustrated in a ridiculously politicised way by involving a non-related industrial relations issue.

As Senator Cameron himself mentioned, he has brought his own private member's bill to this chamber before to have it voted on, on this very issue. There's nothing stopping him from seeking to do that again, in many different ways, if he chooses. But why is it necessary to bring it into this debate? Why is it necessary to make this debate unnecessarily and needlessly complex and delay the passage of what should be non-controversial legislation?

Of course, we know on the issue of penalty rates that the Labor Party—and particularly the Leader of the Opposition, Mr Shorten—have displayed extraordinary hypocrisy. The government does not agree with the opposition's approach of regulating wages through legislation. We agree with their former position of allowing the Fair Work Commission to be the independent umpire that sets these rates. We know that they at least used to believe that position—when the Fair Work Commission was making decisions that they agreed with. They like umpires who make one particular type of decision, but, when the independent umpire, in its wisdom, after considering the evidence, made a different decision, those opposite decided that the idea of an independent umpire was not such a good one after all, and we should have an extraordinary change to our industrial relations system—the legislative setting of pay and conditions, which would be an extraordinarily cumbersome and complex thing to do. That is one of the reasons why the government does not support the amendments and did not support Senator Cameron's bill when it was here previously.

The other very fundamental reason we don't support it is that we know that those opposite are very happy to see penalty rate cuts occur; it's just that they don't want to see them occur via the Fair Work Commission in the awards system, which primarily benefits small business. They would rather see them happen through the enterprise bargaining agreement system, where big businesses and big unions get together and collude and do cosy deals that slash penalty rates, including for the vulnerable workers Senator Cameron says he is concerned about and including for workers on weekends and Sundays. Yet we don't hear any concern from Senator Cameron about this. We don't see a bill from Senator Cameron to prevent this. We don't see any proposed intervention to the EBA system. All we see is the proposed radical intervention into the Fair Work Commission system—which, as I said, primarily benefits small business. I think it is telling that the modern Labor Party is happy to have these cosy deals between unions, like the SDA, and major retailers which reduce penalty rates—which they are supposedly concerned about—but they are uncomfortable with allowing an independent umpire to make the same decision for workers in other industries and other businesses.

I just want to go through a few examples of this hypocrisy, because it is not just a theoretical hypocrisy; it is a hypocrisy that they have demonstrated time and time again—particularly in the career of the Leader of the Opposition as a union leader prior to entering parliament, where he himself oversaw, signed off and ticked off agreement after agreement after agreement which reduced penalty rates for workers in cosy deals with big business. Of course, it wasn't just his union, but his union was one of the repeat offenders.

When he ran the AWU, his union did deals with not only Big W but also Target and Just Jeans, which cut penalty rates for workers in Queensland from 200 per cent to 150 per cent—the same rate that the Fair Work Commission is modifying the award rate to over a number of years. Workers at Rydges Tradewinds in Cairns got no penalty rates. At a company called Cleanevent, which has been mentioned in this place from time to time, Mr Shorten and his union stripped penalty rates for low-paid cleaners with no compensation. At the same time, his union accepted payments from the company. We can only but wonder what role those payments might have played in ensuring that that deal was achieved. For years, big businesses and big unions have been making these agreements to cut Sunday penalty rates, particularly in the retail and hospitality industries, and we've heard not a peep out of those opposite about it. Mr Shorten is fine with lower penalty rates when he does it and when his union mates do it for big businesses. He only opposes it when it happens through the independent umpire for small business.

What the Fair Work Commission's decision actually does is levels the playing field. Small business have been paying an extraordinarily higher rate of pay for their workers on Sundays than big businesses, and this is a fundamental inequity in our economy that the Fair Work Commission goes part of the way to addressing, because big businesses can use their power with their cosy deals with big unions to cut these rates and effectively have an unfair competitive advantage over small businesses. A small-business retailer does not have the resources to reach these cosy EBA deals, and they don't have the same opportunity to pay their workers a competitive rate on a Sunday. As a result, a lot of them are either going out of business or not opening on Sundays at all and denying their employees the opportunity to work. Many of those employees may, in fact, have to choose to walk across the road and work for Big W, Target or Just Jeans where they'll get less than they did working for a small business.

Here are some concrete examples of this. A bed and breakfast, for example, must pay $10 more per hour than a five-star hotel. A family chicken shop must pay $8 an hour more than KFC. A family-owned takeaway must pay $8 an hour more than McDonald's. A family greengrocer must pay $5 more an hour than Woolworths. A family pizza takeaway joint 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 an hour more than Officeworks. A family bottle shop must pay $7 an hour more than Dan Murphy's. And a family hardware store must pay $5 an hour more than Bunnings Warehouse.

I strongly suspect that that this is a state of affairs which, in his heart of hearts, Senator Cameron is uncomfortable with and does not support. I am sure, in his record as a union leader, he would not have agreed to deals like this, but the reality is he has to support his leader. He is part of the front bench of Bill Shorten, and he is saddled with Bill Shorten's record as a union leader for years prior to entering parliament. He ran a union that was willing to do these sorts of deals. I'm sure Senator Cameron wouldn't have done those deals, but Mr Shorten did. Yet, what we have here today is Senator Cameron in here defending these practices, justifying these practices and trying to put in place, in our Fair Work Commission system, a workaround that will allow these practices to continue and will come at the expense of workers and employers in the small-business sector who rely on the award system.

To quote the former ACTU president and Labor minister Martin Ferguson:

In my opinion, the campaign of the Labor Party, in association with the union movement, is based on hypocrisy and dishonesty when you look at the nature of agreements that have existed for many, many years. But they now condemn the Fair Work Commission for having the decency to give small business the same benefits.

The Fair Work Commission has cited many examples of owners who work Sundays for free but would rather hire staff or pharmacies, for example, that provide health care on Sundays. Levelling the playing field will help thousands of small businesses open their doors, serve customers and create jobs on Sundays. Labor wants small business, as we know, to pay higher taxes and higher electricity bills, and now they're also trying to ensure that they pay higher penalty rates. Only the coalition can be relied upon to consistently stand up for small business, because we know how important they are to a strong economy and more jobs.

There are so many more examples of the hypocrisy. Another which I think is worth mentioning and putting on the record is, of course, that this decision by the Fair Work Commission to cut penalty rates is not the first decision of the Fair Work Commission to cut penalty rates. In fact, the previous decision of the Fair Work Commission to cut penalty rates occurred under the previous government. That is right—it was under the previous Labor government of which Senator Cameron was a part. Yet, when in 2010 penalty rates were cut in some awards, including for some hotel, cafe and restaurant workers, under Labor's award modernisation process, not only did those opposite not do anything about it and not only did they not seek to pass an amendment or a bill like the one before us today but they didn't even speak up about it or complain about it. This is supposedly a new outrage they have suddenly discovered, but when it happened on their watch it wasn't one to be worried about.

I think it is important to just finally put on the table a few facts on this issue of penalty rates. The Fair Work Commission is independent. It is not a body that was established by this government. It was established under legislation passed not by this government but by the previous government. It was set up to be independent for a reason, and its independent decision in this case does not actually affect all workers; it affects approximately three to four per cent of Australia's workforce. Penalty rates for Sundays are being modified in four awards only and for public holidays in five awards out of 122. It does not affect people on enterprise agreements, as I have mentioned. The Fair Work Commission specifically ruled out modifying penalty rates in other industries, and so the claim that has sometimes been made in this debate, for example, that nurses may be affected is a blatant lie. Workers on awards in retail and hospitality will still get Sunday penalty rates; they are just now more in line with Saturday rates. So, for example, instead of getting double time on Sundays, casuals on a retail award eventually, after this has transitioned through, will get time and three-quarters and permanent staff will get time and a half. It is interesting, as a side point, to hear those opposite defending the sanctity of a Sunday compared to a Saturday when that is based on a principle that Sunday is a day for worship. In a modern secular country with people from diverse faiths and no faiths at all, is it really appropriate for the law to privilege the religious faith and observance of some on a Sunday when many people do not share those religious views and faiths?

As I mentioned, there will be transition arrangements. They will be phased in over a number of years, including over three annual instalments from 1 July 2017 for workers on the fast-food and hospitality awards and casual workers under the retail award and over four annual instalments for workers under the pharmacy award and full-time and part-time workers under the retail award.

I want to turn back now to the actual bill which is before us, which I was referring to at the beginning of my contribution. I think it's important that we get to some of the motivations of the government and what it has sought to put into effect by legislating this bill. It's a very sensible measure to fix very clear issues in the operation of the Fair Work Act 2009. It repeals the requirement for four-yearly reviews of modern awards from 1 January 2018. It enables the Fair Work Commission to overlook minor procedural or technical errors when approving an enterprise agreement. We have all heard ludicrous stories about how pages were not stapled together and other minor technical issues and typos that caused an EBA to be struck down. That is now going to be addressed. That is something that you would think that every member and senator would agree should be addressed expeditiously. It will apply the Judicial Misbehaviour and Incapacity (Parliamentary Commissions) Act in relation to FWC members.

As I said earlier, it is unfortunate this has become politicised in the way it has. The first amendment that the bill seeks to achieve is repealing the current requirement for the four-yearly review of modern awards by the Fair Work Commission. The regulatory burden of the current review has already been enormous. The current review began in January 2014 and is still going, more than three years later. The Productivity Commission has found the current system is hugely resource-intensive for all involved. It is resource-intensive for the Fair Work Commission, unions and employers, and I think the resources in all three cases could be better spent elsewhere. The government is pleased to be removing these costs for these groups and to be streamlining the operation of the Fair Work Act. As I said earlier in my speech, having the ACCI, the AiG and the ACTU on the same page is not a common occurrence and yet that is what we have seen in this debate and that is what the government is trying to give effect to.

To ensure that there's an appropriate transition period, the bill will allow the current four-yearly review to conclude under the existing framework. Importantly, it will remove the requirement for the new review which is set to commence next year. That is something that all stakeholders have broadly supported. As I mentioned, it's really important that in the future the commission will be able to overlook minor errors. It is a commonsense change to the Fair Work Act. It will mean that the Fair Work Commission can still approve enterprise agreements if a minor procedural or technical error has been made.

This has been a significant issue in relation to the Notice of Employee Representational Rights, the statutory notice required to be provided by an employer to employees at the commencement of bargaining. For example, agreements have been knocked back, as I mentioned earlier, by the commission because an employer has stapled the Notice of Employee Representational Rights to other documents. It is ridiculous that this should mean the bargaining process must start again. Similarly, a typo in the notice should not be grounds for the agreement failing to be approved. This makes bargaining more expensive and protracted than it reasonably needs to be, denying pay rises to employees and denying productivity gains for Australian businesses and the economy. In some circumstances it means that bargaining must begin again from an early stage, and that is clearly ludicrous.

The Productivity Commission recommended that the Fair Work Commission be given the ability to overlook these errors as long as employees are not likely to have been disadvantaged. The government agrees with this commonsense recommendation. The government is committed to providing Australia with a balanced framework for enterprise bargaining and these sensible targeted amendments will move us closer to that goal. There have been some inaccurate criticisms of the bill, that it somehow removes safeguards or equates them with technicalities. To be clear, the bill does not undermine the existing safeguards in the Fair Work Act that are designed to protect workers or equate these safeguards with mere technicalities. These safeguards remain and the government expects they will continue to be strongly enforced.

Finally, I mention the introduction of a complaints-handling regime for commission members. This is the implementation of a sensible reform suggested by former Federal Court judge the Hon. Peter Heerey AM, QC in his report of the inquiry into matters concerning former vice-president Michael Lawler of the Fair Work Commission. The report found that there is currently no formal mechanism to inform the parliament's consideration of allegations of misbehaviour or incapacity against Fair Work Commission members. Like Commonwealth judges, the tenure of FWC members can only be ended, because of proved misbehaviour or incapacity, by the Governor-General at the request of both houses of parliament. However, the Judicial Misbehaviour and Incapacity (Parliamentary Commissions) Act 2012 presently only operates in relation to Commonwealth judicial officers, so there is no formal mechanism to inform the parliament's consideration of allegations of misbehaviour or incapacity against Fair Work Commission members. The judicial misbehaviour and incapacity act enables the parliamentary commission of inquiry to investigate allegations of misbehaviour or incapacity with powers to hold hearings, take evidence on oath and require the production of documents, and obligations to observe natural justice requirements. I hope their powers never need to be used but it is certainly comforting to know they will be there should the passage of this bill be secured.