Michaelia Cash (WA, Liberal Party, Shadow Minister for Employment and Workplace Relations) Share this | Hansard source

I am in continuation. They may have been unable to access such entitlement unless it is provided in their agreement. Cognisant of this, in December 2018, the former coalition government passed historic legislation enshrining five days unpaid family and domestic violence leave in the National Employment Standards. The former coalition government's reforms matched the decision of the Fair Work Commission for award reliant employees. Reducing this complexity was welcomed by and has been beneficial for businesses, as it reduced the time that businesses spend having to ensure the appropriate allocation of leave.

In May 2022, the Fair Work Commission handed down its decision, recommending 10 days paid family and domestic violence leave for award employees. The Fair Work Commission's decision was reached after consideration of evidence, and was based on the input and advocacy of a range of unions and employer representative bodies. In its decision, the Fair Work Commission recommended inter alia (1) full-time employees and, on a pro rata basis, part-time employees, should be entitled to 10 days paid family and domestic violence leave per year but that this should not extend to casual employees; (2) the entitlement should accrue progressively across the year in the same way as personal or carer's leave accrues under the National Employment Standards, not up-front; and (3) the entitlement should operate on the basis that it is paid at the employee's base rate of pay as defined in section 16 of the Fair Work Act, not at the full rate of pay. Consistent with the decision of the former coalition government, the Fair Work Commission's entitlement should be enshrined in the National Employment Standards to ensure, as far as possible, consistency in entitlements for employees in the national system and to reduce complexity for business.

The bill before us goes beyond the model recommended by the independent Fair Work Commission and implements much of the claims made by the ACTU during the hearing into the matter. There is a need to recognise that many business stakeholders, while supporting the Fair Work Commission's decision and the enshrining of that model in the National Employment Standards have raised concerns in relation to the areas that differ in the government's bill from the Fair Work Commission model. The government's legislation goes further than the Fair Work Commission's model in the proposed way: (1) it provides 10 days of paid family and domestic violence leave in a 12-month period for casual employees; (2) in relation to the accrual, employees would gain 10 days of paid family and domestic violence leave from the commencement date of 1 February 2023, rather than having it accrue like other leave entitlements; and (3) it provides for employees to access paid family and domestic violence leave at their full rate of pay for the hours they would have worked had they not taken the leave, as opposed to their base rate of pay.

In relation to these issues, the Fair Work Commission considered all the issues proposed in this bill. Many, as I said, were put forward by the ACTU. In reaching its decision, the Fair Work Commission clearly did not support the breadth of the ACTU proposal; in fact, in its decision found against them. The full bench stated:

Compared to the ACTU claim, the provisional model term provides better alignment with existing NES entitlements and will have less impact on business in terms of employment costs and the regulatory burden.

I will now turn to where this bill differs from the proposed model put forward by the Fair Work Commission. In relation to the accrual of leave, the Fair Work Commission said that the entitlement of 10 days paid family and domestic violence leave per year should accrue progressively during a year of service in the same way as for personal or carer's leave under the National Employment Standards.

In relation to the extension to casual employees of the 10 days of paid family and domestic violence leave in a 12-month period, the Fair Work Commission did not recommend this as the National Employment Standards do not extend paid leave to casuals. The Fair Work Commission also said that the Fair Work Act provides no precedent, nor a model, for a workable scheme for the provision of paid leave of any type to casual employees. There are significant operational difficulties in extending paid family and domestic violence leave to casuals, as noted by the independent Fair Work Commission and even acknowledged by the ACTU during the hearings. In fact, the ACTU said this:

The ACTU accepts that there are some operational challenges associated with extending paid FDV leave to casuals, including in relation to those casual employees whose hours of work are genuinely uncertain.

What the Fair Work Commission said in relation to casuals is extremely important to note. This is because the Labor government is fundamentally changing the way the Fair Work Act deals with paid leave and casual employees. As the Fair Work Commission said, the Fair Work Act provides no precedent, nor a model, for a workable scheme for the provision of paid leave of any type to casual employees.

Casual workers are often paid a casual loading to compensate them for the lack of entitlements they receive, such as holiday pay and sick leave. Casual loading is extra money paid to casual workers over and above the normal hourly rate that full-timers or part-timers get paid in the same job. Even the ACTU acknowledged that there are significant operational difficulties in extending paid family and domestic violence leave to casuals, as noted by the Fair Work Commission decision.

In relation to the rate of pay, the independent Fair Work Commission—and this is important because, again, this is the independent Fair Work Commission that conducted hearings into this matter and have made their own comments in relation to the model that they have put forward—have stated it should be based upon the employee's base rate of pay, not their full rate of pay, in the same fashion that the National Employment Standards paid leave entitlement operates. Again, the independent Fair Work Commission itself contended it would be overly disruptive to the integrity of the safety net if it were to depart from the way all other paid leave entitlements operate which the National Employment Standards provide. The Fair Work Commission also noted that the Fair Work Act applies this rationale even to needs based leave entitlements, such as personal or carer's leave.

In that respect, concerns have been raised by businesses and employers. Businesses and employer stakeholders, in the main, limited their support to the terms set out by the independent Fair Work Commission in their model for paid domestic and family violence leave. In other words, they agree to the enshrining of 10 days of paid family and domestic violence leave in the National Employment Standards to ensure a consistency of entitlements for employees. They have, however—and this was articulated through the committee process but also at the hearings undertaken by the independent Fair Work Commission—raised significant concerns about the Labor government's departure from the independent Fair Work Commission's proposed model, which, as I have indicated, goes much further than the independent Fair Work Commission's model and, in effect, picks up the claims put forward, albeit dismissed by the independent Fair Work Commission, by the ACTU.

The Ai Group states:

The proposed legislation departs from the carefully considered approach proposed by the Commission in various ways that undermine its workability and reasonableness. It instead adopts elements similar to the ACTU proposal that the Commission had rejected.

The Bill should be amended to reflect the sensible and considered views of the Commission.

Unlike the approach adopted in the proposed legislation, the Commission envisaged that the new 10-day entitlement should apply to permanent employees rather than casuals; be calculated on a pro-rata basis for part-time workers; and should accrue progressively during an employee's first year of employment unless an employer agreed to grant it in advance.

The Commission also proposed that employees should be paid their base rate of pay when accessing the leave. This is the approach taken when an employee accesses personal / carer's leave. The Bill would instead require employers to pay employees amounts including penalty rates, overtime rates and various allowances when they access the leave.

In summation, the Ai Group says this:

This Bill will be much more costly for employers than the approach proposed by the Commission and there are significant questions about how the rate of pay that must be provided to an employee could even be calculated in practice.

The Australian Chamber of Commerce and Industry, which represent, in particular, small and family businesses throughout Australia, raised similar concerns to the Ai Group. Again, they are more than happy to adopt the model put in place by the Fair Work Commission. They, in particular, noted that family and domestic violence leave should accrue progressively but not accumulate from year to year. They said that providing paid leave upfront will have practical consequences, in particular for small and medium-size businesses with limited cash flow and cash reserves.

Then we have the Council of Small Business Organisations Australia, which, in particular, wanted the needs of all micro and small businesses considered by the government. They said that many small businesses do not possess the requisite knowledge, resources and expertise to provide support to their workers at the very time when they are reaching out for help. We need to be mindful of how small business owners will work through compliance in these situations and provide them with the appropriate information and support where and if required.

As we know, the bill was canvassed in detail at a Senate inquiry. In terms of the outcome of that Senate inquiry, coalition senators did provide additional comments. Those additional comments very much went to the areas of the bill where the Labor government has accepted the ACTU's claims and has gone beyond the decision of the Fair Work Commission. Obviously, we will explore this in further detail during the committee stage.

What I therefore propose to do, and what I do foreshadow, is that the coalition will move a second reading amendment. Again, the coalition notes the rationale provided by the independent Fair Work Commission in handing down its model for 10 days paid family and domestic violence leave. But, at the same time, we also acknowledge the concerns raised by businesses and employers, and, in particular, by small and family businesses around the country in relation to the provisions of the bill that go beyond the Fair Work Commission's recommended model. These issues must be worked through with employers, in particular small business employers, prior to the commencement of this new entitlement. I move the second reading amendment on sheet 1646:

At the end of the motion, add ", but the Senate:

(a) notes that employers may become aware that an employee is experiencing family and domestic violence when accessing paid family and domestic violence leave; and

(b) calls on the Government to:

(i) publish clear and comprehensive guidance to assist employers in understanding any obligations that they may have to inform authorities that an employee is experiencing family and domestic violence,

(ii) clarify its intent regarding whether perpetrators are able to access paid family and domestic violence leave,

(iii) provide greater details about the impact of the introduction of paid family and domestic violence leave on small and family businesses, particularly those that employ casual workers, and

(iv) provide resources to ensure that small and family businesses are not:

(A) adversely affected by the administration of the scheme, or

(B) worse off financially".