Paul Scarr (Queensland, Liberal Party) Share this | Hansard source

Before I start my remarks, through you, Mr Acting Deputy President: I understand Frank Black is in the gallery. I had occasion—it might have been one or two years ago—to support Senator Sheldon in relation to the fact that the ACCC had been targeting Mr Black, as I understood. I read some of the correspondence in relation to what at the time I referred to as his exhortation or plea for truck owner-drivers to make sure that they didn't undercut each other to death with their rates in the middle of the COVID-19 pandemic. I was very pleased to do that, and I was very pleased to support Senator Sheldon in his efforts in that regard. I pay my compliments to all those who've advocated for the rights of truck owner-drivers and other Australian workers, especially vulnerable workers. I do that at the commencement of my contribution in this debate.

I admire Senator Smith's passion, her integrity and her commitment with respect to this matter. However, there are deep concerns we have in relation to this legislation, the Fair Work Legislation Amendment (Closing Loopholes No. 2) Bill 2023. As is so often the case when there are things that need to be addressed in society and issues of legitimate concern to anyone of good faith and good heart, there's concern that, when the regulatory pendulum swings too far and too hard, good people who are doing the right thing are damaged. A lot of those good people aren't the cross-border multinationals with billions and billions of dollars of capital; they're small businesses. The over two million small businesses in this country, which employ more than 40 per cent of employed Australians, are the ones who are going to be left to grapple with this legislation. They're the ones I'm concerned about—the small businesses who don't have an internal legal department with hordes and hordes of lawyers ready to support them and don't have multiple billions of dollars of capital but who are just hanging on by their fingernails. I have advocated for a number of these small businesses to the Australian Taxation Office and to other people in relation to what they're going through. My concern is for those small businesses and what this legislation is going to impose upon those small businesses.

I want to give you just one example of how I think this legislation is going far too far. I think the issues that are being identified could have been addressed without going this far. I want to give you one example of that, and that is the definition of 'casual employee' under the legislation. This is what we are imposing on small businesses across Australia—including the ACT, I say to Senator David Pocock, through you, Mr Acting Deputy President. This is the definition we are imposing upon small businesses. It takes 25 steps. I counted them. I've been a practising lawyer for over 25 years. I read this legislation word for word—25 steps of mental gymnastics for a small-business person who's hanging on by their fingernails to try to determine whether or not one of their employees is a casual employee. I will walk through them for you, because this is what we're imposing. There is all the lovely rhetoric, all the wonderful words, but, at the end of the day, over two million small businesses—I'm not talking about the BHPs or Rio Tintos—hanging on by their fingernails are going to be left to try to work out what the hell this means. If I as a lawyer who has practised in Australia, Papua New Guinea, Chile and Laos—I've navigated all sorts of employment situations—have trouble working it out, what hope have they got? This is what you are imposing on them—25 steps.

Step 1 is in section 15A on the meaning of 'casual employee'. The general rule is:

(a) the employment relationship is characterised by an absence of a firm advance commitment to continuing and indefinite work …

There are 18 words we've identified in step 1. What do they mean? Now we've got to go from the first limb of the general rule to the indicia, the indications that apply to the purposes of the general rule under 15A(2). There, in the first paragraph, we've got to consider:

… the basis of the real substance, practical reality and true nature of the employment relationship …

That is a bit of tautology, isn't it—the 'real substance'? I'm not sure why we are saying 'real substance' instead of 'substance'. I would have thought something is either a substance or not. It's a bit like a round circle. Then we are saying 'the practical reality'. How that is that different from 'real substance'? Then we have to consider the 'true nature' of the employment relationship. I'm not sure what that's intended to add. That's our second step. We have another 23 to go. This is for someone hanging on by their fingernails as a small-business person in this country. So in step 2 we've got to consider real substance, practical reality and true nature and:

(b) on the basis that a firm advance commitment can be in the form of the contract of employment …

So I can look in my contract of employment. That's easy. That's step No. 3.

But, if it isn't in my contract of employment, I've got to go to step 4, which is these words:

… irrespective of the terms of that contract, in the form of a mutual understanding or expectation between the employer and employee not rising to the level of a term of that contract (or to a variation of any such term) …

So it's something nebulous. It's an understanding or it's an expectation. I'm not sure what the understanding or expectation is. Senator Pocock might be able to go down to his local cafe and explain to the owner of the business how to interpret this clause.

Then, once we've worked out whether or not we've got something that is maybe an understanding or an expectation, in step 5 we then have to go to the explanatory notes. We've gone through the first limb of the general rule. We then went onto the second indicator clause. Now there is an explanatory clause in 15A(3). It says:

(a) for the purposes of paragraph (2)(b)—

and (2)(b) is the clause that talks about the mutual understanding or expectation—

a mutual understanding or expectation may be inferred from conduct of the employer and employee after entering into the contract of employment or from how the contract is performed …

I'm not really sure what that means. We're only up to step 5. We've got another 20 steps to go. This is what your local cafe owner is going to have to go through.

Step 6, we're now returning to the indicia of the general rule, the first limb of the general rule:

(c) having regard to, but not limited to, the following considerations (which indicate the presence, rather than an absence, of such a commitment)—

what a word salad that is!

Step 7:

(i) whether there is an inability of the employer to elect to offer work or an inability of the employee to elect to accept or reject work (and whether this occurs in practice);

Step 8:

(ii) whether, having regard to the nature of the employer's enterprise, it is reasonably likely—

I always love that term, 'reasonably likely'—

that there will be future availability of continuing work—

well, I've got to tell you, the small businesses I talk to are hanging on. They're not sure if they're going to survive—

in that enterprise of the kind usually performed by the employee;

So there are about six or so elements in that step, and that's only step 8.

Step 9:

(iii) whether there are full-time employees or part-time employees performing the same kind of work in the employer's enterprise that is usually performed by the employee;

Step 10, we have to consider:

(iv) whether there is a regular pattern of work for the employee.

Step 10 is one of my favourites, actually, because 'whether there is a regular pattern of work for the employee' actually has an explanatory note under it that says:

A regular pattern of work does not of itself indicate a firm advance commitment to continuing and indefinite work. An employee who has a regular pattern of work may still be a casual employee if there is no firm advance commitment to continuing and indefinite work.

I'm not really sure what that adds—but, hang on, my next customer has come. I have to try and deal with my customer as well as finish step 11.

But, hang on, I've got to now go to step 12 because this is the third limb of the test that's telling me what a regular pattern of work is. We've got section 15A(2)(c)(iv) and then the explanatory note, but then I've got to go to section 15A(3)(c). Senator Pocock, you can explain to the small businesses in Canberra what this means:

(c) a pattern of work is regular for the purposes of subparagraph (2)(c)(iv) even if it is not absolutely uniform—

If it's not 'absolutely uniform'. If it's a little bit uniform—I don't know what that means—

and includes some fluctuation or variation over time (including for reasonable absences such as for illness, injury or recreation).

Okay. That's step 12.

I've then got to go to step 13, which tells me that, when I'm considering all those factors which I considered under steps 6 to 11, I can't consider any of them to be determinative. They don't all have to be met. And, in fact, there could be others as well, so it's open-ended. That's step 13.

I'm now up to step 14. I have to go back to the general rules. So we've gone on a journey from the general rule, to the indicia, through to the explanatory clause dealing with the indicia, but I've only dealt with the first limb of the general rule, and that's taken me 13 steps. So now I'm up to step 14. Small businesses in Canberra, ring Senator Pocock. He'll explain it to you. Step 14:

(b) the employee would be entitled to a casual loading—

Would be entitled if they were a casual. It's a bit circular. I'll call it a round circle in the spirit of the tautologist nature of the legislation—

or a specific rate of pay for casual employees under the terms of a fair work instrument if the employee were a casual employee—

that's step 15.

Step 16:

… or the employee is entitled to such a loading or rate of pay under the contract of employment.

Then we have another one of these useful notes, step 17:

An employee who commences employment as a casual employee remains a casual employee until the occurrence of a specified event (see subsection (5)).

That takes us to a new subsection—subsection (5)—which has four elements to it, which are step 18, step 19, step 20 and step 21. Then we're up to—