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

I rise to speak on the Fair Work Legislation Amendment (Protecting Worker Entitlements) Bill 2023.

The coalition largely supports the bill and its intent of protecting workers' entitlements, although we will identify a number of areas of serious concern. This bill deals with issues that both employer and employee groups have had with the operation of the Fair Work Act. It also includes the government's election commitment to introduce a right to superannuation in the National Employment Standards. The bill is broadly supported by both employer and employee organisations. However, employer groups do have some specific concerns with certain draftings of the relevant schedules.

To address these concerns, I foreshadow that the coalition will be moving a number of amendments to improve the operation of the bill. Schedules 1 and 4 propose what are termed as 'technical' amendments, and the coalition does not raise any issue with them. Schedule 1 proposes to introduce a new provision into the Fair Work Act which clarifies that migrant workers in Australia are entitled to the benefit of the Fair Work Act, regardless of their migration status. This means that migrant workers, and that includes temporary migrant workers, would be entitled to wages and entitlements under the Fair Work Act, a modern award or an enterprise agreement for work that has been performed as an employee.

Schedule 4 proposes a minor technical amendment that would confirm the common understanding of how workplace determinations and enterprise agreements interact. This proposed change is consistent with the Fair Work Commission's approach in relation to this matter. However, it is not currently stated in the Fair Work Act.

Schedule 2 deals with unpaid parental leave. This makes changes to the taking of flexible unpaid parental leave. The coalition supports parental leave, both paid and unpaid, as a means of ensuring that Australians are able to balance their work and family responsibilities. We believe that parental leave greatly assists women, in particular, to remain connected to the workforce. Businesses of all sizes work closely with their employees to plan for periods of paid and unpaid parental leave, which will often last for a significant period of time. Different businesses, of course, will have differing needs when it comes to planning for when an employee takes parental leave. We believe that employers and employees working together to plan for these periods is actually in the best interests of both the employer and the relevant employee. Flexible unpaid parental leave can be taken as a single continuous period of one day or longer, or separate periods of one day or longer each. The bill proposes to increase the number of days that can be taken as flexible unpaid parental leave from 30 days to 100 days. This equates to an increase from a six-week absence from work to 20 weeks, which can be taken as flexible, unpaid parental leave from the employee's entitlement of 12 months, or 52 weeks.

We, as the coalition, believe there is merit in employees being able to take the parental leave more flexibly. But such increased flexibility will pose practical challenges for employers. That is why we will be moving some amendments to address what these practical challenges are for both the employers and their employees, working together to ensure that it works for both of them. The coalition amendments will see the increase in days that can be accessed flexibly balanced by insertion of a reasonable requirement to provide employees with greater details at an earlier point as to when the employee intends to take the flexible leave. This is so that employees can make arrangements to cover for the absence.

Our proposal is a relatively modest expansion of the current notice provisions to assist employers to manage the implementation of what is a significantly expanded employee entitlement. A greater period of notice of a proposed absence will obviously help mitigate some of the associated practical challenges that employers have raised with us in discussions that we've had with them, but also in the submissions that they made in relation to this bill.

In schedule 3, the bill implements the government's election commitment to introduce the right to superannuation into the National Employment Standards. Currently the only way for many employees to pursue unpaid superannuation is through the Australian Taxation Office. This bill means an employee with an entitlement to superannuation contributions pursuant to a modern award or an enterprise agreement can pursue unpaid superannuation guarantee contributions through the Fair Work regime, and a failure to make adequate contributions constitutes a breach of the Fair Work Act.

Some employer groups, again in their submissions on this bill but also in discussions that we've had with them, have identified concerns with the way in which this particular proposal itself is drafted. For example, AI Group have identified a number of issues relating to, in the first instance, the unfairness to employers of being subject to multiple and potentially inconsistent enforcement efforts in different jurisdictions in relation to the same obligation, and the likelihood that the proposed approach will undermine the efficacy and utility of the constructive role that the Australian Taxation Office currently plays in providing guidance to individual employers or industry related to complex superannuation obligations.

We agree that greater clarity is needed, so our amendments will deal with four items in this schedule specifically. Firstly, they will ensure employers are not exposed to competing enforcement activity from two different regulators over the same matter. Secondly, they will protect employers that rely on an ATO binding guidance. Thirdly, they will limit the capacity of the ATO to pursue matters ventilated in the workplace relations system. Fourthly, they will limit the capacity of the Fair Work Commission to deal with disputes over the operation of superannuation legislation.

Schedule 5, in relation to employee authorised deductions, is probably the most concerning of the bill. It is the most concerning change in this bill and will see an actual impact to workers' take-home pay, and that is what we are concerned about, in particular given the current state of the economy and the cost-of-living crisis that Australians are currently feeling—those on the cliff because of the mortgage payments they have to make every month, the food inflation and the cost of energy. People are having to pay more. This change, the employee authorised deduction schedule, will actually have an impact on their take-home pay. This is of significant concern to us.

In a bill that purports to protect workers entitlements, this schedule may actually encourage a reduction in a worker's take-home pay, and that is why we need to explore this in more detail. The coalition believes that Australians should be able to keep more of the money that they earn and it is important that any deduction from their take-home pay by an employer should be closely scrutinised. Currently under section 324 of the Fair Work Act, there are various types of permitted deductions that may be made from an employee's pay by an employer where the deduction is (1) authorised in writing by the employee, (2) principally for their benefit and (3) the same amount as specified in the authorisation. What does the bill seek to do, though? This is where the issue arises. As currently drafted, this bill will allow for amounts to 'vary from time to time' without additional approval by the employee for the increase. That is the issue that we have. This could actually lead to deductions being made from salaries that greatly exceed an employee's own expectations.

I had a discussion the other night with a woman, a single mother. She has a full-time job. She has now taken on a second job at night because she is one of those Australians on the cliff. When she reaches that cliff shortly, she will have to find an additional $1,000 per month. She is a single mother working a full-time job—and it is a good full-time job—but, because of the cost-of-living crisis and the interest rate that she will soon be paying, she has now taken on a second job at night to put away money to find that $1,000 extra a month. Can you imagine if she opens her pay packet and suddenly there is a deduction that is higher than what she thought it was going to be and if that is actually a tipping point for her that month? We say: sorry, that should not be allowed.

This proposal put forward by the government does not outline a clear problem which it is seeking to address. Given the lack of impetus for this change, employer groups and the coalition are rightly concerned that this is simply an attempt to facilitate—let's call it for what it is—unions increasing their fees without obtaining explicit agreement from their members. You need your members' explicit agreement if you're going to increase their fees and then take the money out of their bank account. This is from the government's playbook, unfortunately. Requiring an employee to provide a new written authorisation when the amount of an authorised deduction from their pay changes—that provides certainty not just for the employer but also for the employee, who can say: 'I know what is coming out of my bank account. It's my bank account and it's my money. I should be the one approving any deduction.' This is necessary for employees to understand and authorise the impact of the relevant deduction on their take-home pay and for employers to ensure that they do not breach the Fair Work Act and find themselves liable for the significant and increasing penalties that can be imposed for employee underpayments.

Further, while an employee might agree in general terms to a percentage or capped amount increase to their authorised deductions over time, this may not be indicative of their consent to any particular increase in a particular time period. For example, while an employee may authorise a 10 per cent increase to their union fees over a five-year period—anticipating an increase of around two per cent per year—if the union fee suddenly increases by eight per cent in year 1 of that authorisation, the employee may not be agreeable to that; they actually may not be able to afford that increase, notwithstanding that the amount is within their pre-authorisation provided to their employer.

The coalition considers it unreasonable to place the burden of communicating increases in fees or premium amounts on employers, rather than on the service providers who benefit from those deductions, such as health insurers or trade unions. The proposed amendments will not reduce purported difficulties for employers processing deductions; rather, what we consider they will do is create new difficulties and reduce the protections for employees that section 324(3) of the Fair Work Act is intended to provide without discernible benefit for either party. Making changes to deductions is a time consuming and costly task for employers, and we would want assurance that any change imposes no further cost on business. When an electricity provider, a health insurer, a bank or a streaming service such as Netflix increases their price, it is only appropriate for consumers to be notified of that increase and then have the opportunity to reconsider whether they are actually receiving value for money. Employees should have similar protections for their take-home pay deductions. Unfortunately, on the current drafting of this schedule, it does not provide that assurance. My worry is that the government is merely making this change to ensure that the unions are able to increase their membership and that the employees, ultimately, are not notified. As I said, with the current cost-of-living crisis, that is just unacceptable. The employee should be able to authorise in writing the exact amount on a monthly basis.

In relation to schedule 6, we will propose some amendments to that to ensure that 'eligible wages' includes casual loading, to address the confusion that the schedule currently has and to ensure casuals are treated fairly under the scheme.

As I said, the coalition has a long history of protecting workers entitlements while balancing the need for businesses to work as efficiently as possible. We are largely supportive of this bill, but we have had a number of operational concerns raised with us. As I said, we'll be moving amendments to actually improve the efficiency and operation of the bill.