John Faulkner (NSW, Australian Labor Party, Cabinet Secretary) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

WORKPLACE RELATIONS AMENDMENT (TRANSITION TO FORWARD WITH FAIRNESS) BILL 2008

INTRODUCTION

Almost three months ago the Australian people voted for change.

They voted for a change of government.

And, in doing so, they voted for a change to our workplace relations laws.

Today the government begins the process of change by introducing the Workplace Relations Amendment (Transition to Forward with Fairness) Bill 2008 into this parliament.

With this bill, the government delivers on key election commitments it made to the Australian people; commitments the Australian people endorsed in November.

I want to take one moment to describe just how clear those commitments were.

When the Prime Minister became Leader of the Labor Party and I became Deputy Leader in December 2006, we promised to abolish Australian Workplace Agreements.

In April last year, we published our workplace relations policy, Forward with Fairness and confirmed that, if elected, we would abolish Australian Workplace Agreements.

In August we released our Forward with Fairness Policy Implementation Plan, which reiterated Labor’s commitment to abolish Australian Workplace Agreements while setting out the sensible transitional arrangements a Rudd Labor government would adopt for implementing this key commitment. This policy made it clear that, when Labor’s workplace relations system was fully operational, there would be no AWAs and no other statutory individual employment agreements.

All last year, every member now sitting on this side of the House campaigned in electorates all over this country on our commitment to abolish Australian Workplace Agreements and to introduce Labor’s new system.

When the Australian people read our policy documents, or heard the Prime Minister speak, including at our campaign launch, or listened to me debate the previous minister for workplace relations they were left without a doubt that central to our workplace relations policy was a commitment to rid Australia of all statutory individual agreements.

Labor’s policy commitments were not unknown to the Howard government and its members. Indeed, last year the Howard government misused over $60 million of taxpayers’ money campaigning against Labor on workplace relations and against this key commitment to abolish Australian Workplace Agreements. Every day ministers from the Howard government used to rail in this place about how foolhardy they believed Labor’s policy to be.

But, despite these attacks from the Howard government, Labor always maintained its belief this country should have a fairer, simpler and more balanced workplace relations system.

We believe all Australian employees are entitled to a safety net of 10 National Employment Standards. We believe employees earning less than $100,000 are also entitled an extra safety net provided by modern simple awards.

We believe that, in such a system, there is no need for AWAs or any statutory individual employment agreement. The essence of such agreements is they override the safety net. In Labor’s view, a modernised safety net means that there is no need for individual instruments which can override it. Rather the only individual agreements that would be necessary are common-law contracts which build on the safety net but can never override it or take it away.

We believe that such a system will be fairer because employees will always have the safety net to rely on. And we believe it will be simpler because employers will no longer have AWAs or statutory individual employment agreements of another nature stuck forever in processing queues. And let us remember that, as at 30 November last year, there were almost 150,000 agreements still awaiting final assessment by the Workplace Authority, creating uncertainty and pressure for employers and employees.

And we believe such a system will be better for productivity and therefore be better at fighting inflation.

Of course the Howard government, including the current Leader and Deputy Leader of the Opposition, argued furiously against Labor’s system. They argued that Work Choices was wonderful, that it was fair, even as the evidence of the rip-off of working families came to light and that it was a panacea for the economy, even as interest rates rose again and again.

But this debate had an end point. It was election day. The Australian people voted. The Australian people decided to endorse Labor’s policy including to abolish Australian Workplace Agreements.

Unbelievably, the opposition, and particularly the opposition spokesperson on workplace relations, are now trying to pretend none of this happened.

The opposition, or at least sections of it, is trying to pretend that Labor campaigned to roll back Work Choices and to have as its workplace relations policy an earlier version of the Howard government’s workplace relations laws. This charade is apparently being engaged in by the opposition, or at least sections of it, to try and justify the continuation of AWAs in the future.

But the unsolvable problem for the opposition is that everyone can see through its little game of make-believe.

The government did not campaign on the basis we were going back to anything.

The government campaigned on the promise we would take Australia forward with fairness without Australian Workplace Agreements.

This bill delivers on that promise.

If the Liberal Party opposes it in this House then their actions can only be read in one way. It is a deliberate decision to deny the Australian people what they voted for. It would be a deliberate decision by the Liberal Party to act with born-to-rule arrogance.

If the opposition uses its numbers in the Senate to unduly delay or reject this bill then that would be a deliberate choice by the Liberal Party to keep Work Choices alive. That would be a deliberate decision by the Liberal Party to treat the Australian people with contempt.

And of course the track record of the Liberal Party in the workplace relations debate is to treat the Australian people with contempt. That is what they did when they introduced Work Choices without a mandate. That is what they did when defending, day after day, a system that ripped basic working conditions away from hard working Australians. That is what they did when they misused tens of millions of dollars of taxpayers’ money defending Work Choices.

We all know their disgraceful track record. The only question we are waiting for the Liberal Party to answer is whether they have learnt anything from their election defeat or will today be another milestone in their disgraceful track record.

Part of the Liberal Party’s arrogant conduct on workplace relations was its refusal to consult or work cooperatively with those who most care about work place relations.

The approach of the Rudd Labor government is completely different.

TRANSITION TO FORWARD WITH FAIRNESS

The government understands that, to create our simple, fair, flexible and productive workplace relations system, we must talk with employers and employees and those who will play a role in our new workplace relations system.

We intend to avoid the uncertainty and complexity the previous government created for millions of employers and employees around the country through Work Choices.

To this day there are employers who do not know whether they fall within the federal workplace relations system; there are small businesses struggling to understand the complex rules in the hundreds of pages of workplace law bequeathed by the Liberals and there are employees who do not know why they must lose so many protections and do not know where to turn to for help.

The development and content of this bill reflects the government’s commitment to taking an open, measured and consultative approach to workplace relations reform to make sure the laws work for the people who use them.

In the three months since being sworn in, I have consulted with key stakeholders on the development and detail of this bill.

I have convened two meetings of the National Workplace Relations Consultative Council—a tripartite body which brings together peak employee and employer organisations representing a range of industries—and its specialist subcommittee, the Committee on Industrial Legislation, to discuss the government’s proposals for the transition bill, award modernisation and the National Employment Standards.

The enthusiastic and collaborative way in which all of these organisations have come together to assist the government on the development and detail of this bill has been extremely encouraging. I congratulate all employer and employee representatives for their valuable contributions towards shaping this bill.

I have also met with state and territory workplace relations ministers, through the Workplace Relations Ministers’ Council, on both the content of this bill and to commence discussions on, among other things, the development of a uniform workplace relations system for the private sector.

I am pleased to report that the states and territories have wholeheartedly endorsed the key principles outlined in the Government’s Forward with Fairness policy.

In the coming days I will also announce and chair the inaugural meetings of the government’s Business Advisory Group and the Small Business Working Group. The creation of these groups was another key part of the government’s election commitments and I look forward to listening to the practical feedback from business on the government’s proposed substantive workplace relations reforms.

I will be inviting members of the public to comment on the government’s exposure draft of the 10 legislated National Employment Standards which will be released tomorrow.

This open and consultative approach is in stark contrast to the approach of the previous government to workplace relations matters and it will continue as the government moves towards introducing its more substantial workplace relations legislation into parliament later this year.

DESCRIPTION OF THE BILL

As I have indicated, this bill deals with the following matters as set out in the Forward with Fairness Policy Implementation Plan:

Australian Workplace Agreements

This bill provides that, from its commencement date, no-one will be able to make a new Australian Workplace Agreement. AWAs that have already been made will continue until their nominal expiry date and beyond until the parties to the AWA make a decision about how best to manage their employment arrangement. AWAs made before the commencement date must be lodged within 14 days after the commencement date.

It is the intention of the Rudd Labor government to lead by example and today I announce that on and from this date there will be no new Australian Workplace Agreements entered into in the Australian Public Service.

Individual Transitional Employment Agreements (ITEAs)

To provide sensible transitional arrangements for employers who currently use AWAs, the bill will create a special instrument called an Individual Transitional Employment Agreement.

ITEAs will only be available to employers who employed an employee on an AWA as at 1 December 2007. These employers may use ITEAs to employ new employees or for existing employees who were employed on AWAs.

ITEAs will give these employers time to transition to the government’s new workplace relations system.

ITEAs will have a nominal expiry date of no later than 31 December 2009. On and from 1 January 2010, Labor’s new National Employment Standards and modern simple awards will be in operation and there will be no need for any individual statutory employment agreements.

New No-Disadvantage Test

The former government’s so-called fairness test, which was simply not fair because it provided no proper protection for some award conditions and no protection at all for others, will not apply to future workplace agreements.

The bill will introduce a new no-disadvantage test for all individual and collective workplace agreements that are made after the commencement of the legislation.

The bill will end the compliance nightmare created by the backlog of agreements that has piled up under the fairness test changes.

To pass the new no-disadvantage test, ITEAs must not disadvantage an employee against an applicable collective agreement or, where there is no such collective agreement, an applicable award, and the Australian Fair Pay and Conditions Standard. Collective agreements must not disadvantage employees in comparison with an applicable award and the standard.

The new no-disadvantage test will also apply to variations to both new and existing agreements.

New Commencement Dates for Agreements

Currently, workplace agreements take effect from the date that they are lodged with the Workplace Authority with the result that, where agreements fail the fairness test, employers are confronted with complex calculations for expensive compensation payments.

Under this bill, ITEAs for existing employees and new collective agreements will only commence operation after the Workplace Authority Director has approved them on the basis that they pass the no-disadvantage test.

However, to provide certainty for employers and new employees in the transition period, ITEAs for new employees, and employer greenfields or employer and union greenfields agreements, will commence operation when lodged with the Workplace Authority Director.

Of course, any agreement lodged after the commencement of this bill will cease to operate or will never operate if it fails the no-disadvantage test. For those agreements which have commenced upon lodgement and have subsequently failed the no-disadvantage test, compensation may be payable to employees.

Termination of Agreements

The previous government’s Work Choices laws included one-sided provisions that allowed employers to unilaterally terminate a collective workplace agreement which had passed its nominal expiry date and return their staff to only a limited number of minimum standards.

These provisions will be repealed.

To allow them to stand would enable an employer to manipulate the benchmark against which ITEAs must pass a no-disadvantage test.

Under the bill, a collective agreement will only be able to be terminated where the parties agree, or by the Australian Industrial Relations Commission in circumstances where termination would not be contrary to the public interest. In making its decision under this provision, the commission would be required to have regard to all the circumstances of the case, including:

• the views of each party bound by the agreement (including the employees subject to it) about whether it should be terminated; and
• the circumstances of each party bound by the agreement, including the likely effect on each party of the termination of the agreement.

When an agreement is terminated, employees will be entitled to whatever award or workplace agreement would have applied to them but for the terminated agreement.

For instance, when an AWA or ITEA is terminated, the employee will be covered by any relevant collective agreement operating in the workplace or the full award if there is no such agreement. This reverses the previous government’s unfair rules that resulted in employees being stripped of their workplace agreement and reverting to only a limited number of conditions.

The scope to unilaterally terminate a Work Choices AWA which has passed its nominal expiry date will be retained. This will allow employees to terminate an expired unfair Work Choices AWA where doing so may result in their being covered by a more beneficial instrument.

AWA/ITEA Employees – Participation in Collective Bargaining

The bill will also reinforce this change by making it clear that an employee on an AWA or ITEA that has passed its nominal expiry date can approve new collective agreements and variations to collective agreements.

This addresses an anomaly under the current act which allows these employees to take part in a secret ballot for protected industrial action but then prevents them from voting on the agreement itself without first terminating their existing arrangement and therefore risking a significant loss of pay and conditions.

Workplace Relations Fact Sheet

The bill will also repeal the requirement for employers to provide a copy of the Workplace Relations Fact Sheet to their employees. This was a desperate attempt by the previous government to co-opt businesses into their wasteful Work Choices advertising campaign and should stop immediately. This will be welcomed by business.

Pre-Work Choices Collective Agreements

The bill permits certain pre-Work Choices certified agreements to be extended and varied on application to the Australian Industrial Relations Commission.

The commission will grant the application only if satisfied that the parties genuinely agree and the employees covered by the agreement approve.

To take advantage of this option, the government will require parties to the agreement not to have organised or engaged in industrial action or applied for a protected action ballot in relation to proposed industrial action from tomorrow, the day after the bill has been introduced.

This will avoid the parties to these agreements having to make new workplace arrangements under a transitional framework only to make new agreements once the government’s new fair and flexible workplace reforms come into effect.

The mechanism for allowing parties to pre-reform certified agreements to avoid the ‘double transition’ was one sought by both employer and employee representatives during one of the consultations that occurred with the Committee on Industrial Legislation. It is an example of how timely consultation on workplace relations matters can give rise to practical solutions that work for all stakeholders.

Other matters

The following additional matters were also raised during the government’s consultation with the key employer and employee representative organisations through the National Workplace Relations Consultative Council and the COIL subcommittee.

The government has decided to adopt the following recommendations arising from the parties at these meetings:

• removal of the restriction on referencing other industrial instruments in agreements, which will simplify the drafting of agreements;
• requiring workplace agreements be lodged with signatures attached to protect employees and ensure the correct agreements are lodged for review and approval by the Workplace Authority;
• ensuring that most agreements will take effect from seven days from the date of the notice from the Workplace Authority Director advising an employer that the agreement has passed the no-disadvantage test;
• preventing the making of unilateral undertakings when agreements fail the no-disadvantage test. If agreements are to be genuine agreements, any variation should have the agreement of both parties. The government has included streamlined approval rules for variations to agreements in these circumstances;
• requiring the Workplace Authority Director to publish reasons where the Workplace Authority Director allows an agreement to pass the no-disadvantage test where satisfied that, due to exceptional circumstances, it is not contrary to the public interest to do so (for example to deal with a temporary business crisis);
• requiring the Workplace Authority to consult more widely when designating awards for the purposes of the no-disadvantage test; and
• ensuring that the transition period for a number of matters, including the automatic expiry of NAPSAs, old IR agreements, removal of superannuation as an allowable award matter and the transitional registration of organisations arrangements is extended to the end of the government’s transition period, 31 December 2009, to provide continuity and certainty during the transition period.

Lastly, the bill will amend the Skilling Australia’s Workforce Act to remove provisions which make funding to TAFE institutions conditional on offering AWAs. This amendment is consistent with the government’s intention to remove similar funding restrictions for universities under the previous government’s HEWRRs policy.

Award modernisation

Another key part of the government’s election commitments is the creation of new modern awards as an integral part of a fair minimum safety net for employees.

This bill provides the means for an award modernisation process to commence.

In addition to the amendments to the Workplace Relations Act to facilitate award modernisation, the explanatory memorandum to this bill contains the proposed award modernisation request I will make to the President of the Australian Industrial Relations Commission, Justice Geoffrey Giudice, upon the passage of this bill, requesting the AIRC create new modern awards during the transition period.

Modern awards will:

• protect 10 important entitlements like penalty rates and overtime;
• provide industry-specific detail on the 10 National Employment Standards;
• ensure a fair safety net for Australian employees, including outworkers;
• ensure minimum award entitlements are relevant to the Australian economy and modern work practices;
• not be overly prescriptive; and
• will allow for flexible work arrangements for employers and employees who rely on awards as well as provide an appropriate benchmark for collective agreement making.

As part of the award modernisation process the Australian Industrial Relations Commission will be required to develop an award flexibility clause for inclusion in all awards. This clause will, in combination with a simple, modern award, enable employers and individual employees to make arrangements to meet their genuine individual needs so long as the employee is not disadvantaged.

It is the government’s intention that employees earning above $100,000 per annum will be free to agree to their own pay and conditions without reference to awards. This will provide greater flexibility for common-law agreements which have previously been required to comply with all award provisions, no matter how highly paid the employees.

A simple, modern award system with opportunities for individual flexibilities will remove the need for any individual statutory agreements and the associated complexity and bureaucracy attached to those agreements.

To enable the award modernisation process to begin, the bill will insert a new part into the Workplace Relations Act. The bill sets out the award modernisation function of the Australian Industrial Relations Commission and specifies the objectives of award modernisation and requirements for modern awards.

The bill will prohibit certain terms being included in modern awards, including terms that would require or permit conduct contravening the freedom of association provisions or which authorise organisations to enter an employer’s premises.

National Employment Standards

Tomorrow I will release an exposure draft of the proposed National Employment Standards which will replace the current Australian Fair Pay and Conditions Standard when the new workplace relations system becomes fully operational in 2010. These standards include minimum entitlements such as hours of work, carer’s leave, public holidays and notice of termination. Modern awards may build on these standards with industry specific detail.

From 2010, the National Employment Standards and modern awards will together form the safety net for both employment and collective bargaining.

CONCLUSION

This bill represents the start of the government meeting a key commitment it made to the Australian people at the last election—to bring fairness and balance to Australia’s workplaces.

The next step, the next commitment to be fulfilled, is the development of our substantive workplace relations laws to create a new, simple, fair and flexible workplace relations system that works for all Australians.

A workplace relations system that works for all Australians should be fair and flexible, simple and productive. It will not jeopardise employment, will not allow for industry wide strikes or pattern bargaining and it must not place inflationary pressures on the economy. It specifically aims to drive productivity and cooperative workplace arrangements.

Our plan is based on employers and employees working out at the enterprise level what suits them best. Under our system wage outcomes in one business, or one sector of the economy, cannot automatically flow to another. Where employers and employees can work together to drive productivity increases there will be gains in the enterprise to share.

The Australian people in voting for our policy have emphatically said yes; they want to see fairness and flexibility in their workplaces. They want to see a workplace relations policy for the long term, not a political football.

It is now time for members in this place to respect and represent the clear message from the Australian people. No more Work Choices, no more Australian Workplace Agreements, no more unfairness, complexity and confusion.

And, from the Liberal Party, no more born-to-rule arrogance, no more contempt for the Australian people.

With this bill the government is delivering for the Australian people and has commenced the process of lasting workplace reform. (Quorum formed)

John Watson (Tasmania, Liberal Party) Share this | Link to this | Hansard source

The Workplace Relations Amendment (Transition to Forward with Fairness) Bill 2008 is really about the ALP delivering on its promise in the lead-up to the 2007 election which had the essential feature of abolishing AWAs. As Deputy Chairman of the Senate Standing Committee on Education, Employment and Workplace Relations, I take this opportunity to thank all those groups who prepared submissions in such a short time, and I wish to assure them that I have read each of their submissions. They were incredibly helpful in analysing the consequences of the legislation which is now before the parliament. There has been unnecessary haste in pushing this bill forward in the way the report had to be rushed in such a tight time frame. I would also like to thank the committee secretariat for the incredible job that they did, working throughout the weekend to meet the very unrealistic deadlines that were put on the committee members.

I would like to point out that it was the opposition that believed it was absolutely essential that the far-reaching consequences of this bill and its submissions and all those sorts of things be looked at very, very thoroughly, including the bad drafting. I must say that we are not opposing the passage of this bill—there are certain features that have merit—but, unfortunately, some of the features that have merit are, in terms of their implementation, going to cause some difficulty. Generally senators do approve this bill, particularly those measures which strengthen the no disadvantage provisions to ensure fair bargaining between employers and employees, because we accept that there are a lot of workers and employers for whom the award is a necessary benchmark to ensure fairness, and in any negotiations between employers and employees it is absolutely essential that it is underwritten by a very strong no disadvantage test. I believe that industrial relations in this country can be fundamentally altered and can impose a check on what has been unparallel growth in this country, which we have enjoyed over the past 12 years. This is most important.

The central theme, I suppose, of the legislation has to be the elimination of AWAs. I must say that individual statutory agreements have been around since 1993 in Western Australia and they will be out under this bill. But there is nothing inherently wrong with such an agreement, as it provides the sort of flexibility that suits both employers and employees. I think that even in my own party, the Liberal Party, we acknowledge that there is merit in individual ability and personal decision making, and individual statutory agreements reflect that tradition. There is strong evidence that individual ISAs that are subject to a safety net—and that is the important feature—are an essential part of a modern industrial regime. I believe that the Labor Party’s dogged insistence that AWAs must be banned is a serious failure to recognise that, with appropriate safety nets, these agreements have an important part to play in the overall mix which is available to Australian workers and to Australian businesses. There is much that is good and positive that will be lost as a result of this short-sighted move.

At a time of increasing uncertainty in world markets, with the recession in the USA, with Arab, Chinese and Singaporean interests—even the Federal Reserve have had to move in to bail out some high profile US investment institutions, and there has been almost record mortgage defaults in that country—and given the impact if some of this spread across to Australia, the question of maintaining confidence in the system is very important. Therefore, in their minority report, members of the coalition were very concerned that no attempt had been made by the government—in fact, it was impossible for the employer groups to carry out an economic analysis of the consequences of these changes in terms of the impact on society and on social life.

The government have said that they are going to seek to have that degree of flexibility incorporated into a collective agreement, often known as a CA, but my colleagues were sceptical of the extent to which such flexibility clauses could really be usefully included in the modern award or under a CA arrangement. We remain doubtful as to whether these could deliver employers and employees the same sort of flexibility that they currently have under an individual statutory agreement. In fact, we found support from the Chamber of Commerce and Industry Western Australia, which said:

There are some means of individual agreement making we would be very satisfied with. It appears that the government is relying on award flexibility clauses that will be introduced as part of the government’s new system. These flexibility clauses are supposedly designed to enable the employer and the employee to negotiate a set of arrangements that might suit them—

and here is the crunch line—

but we don’t know what they look like.

That is where the uncertainty is, and I think Master Builders Australia and similar groups submitted similar ideas.

There was concern generally amongst the employer groups about the demise of individual agreements, particularly in Western Australia. They felt that it had served the industries over there particularly well; after all, they were introduced there in 1993 because of the considerable industrial unrest. The Australian Industry Group argued that employers and employees should have the right to pursue a form of agreement that best suits their needs, whether a collective agreement, an individual agreement, an agreement with a union or one directly with employees. Then we had the Australian Chamber of Commerce and Industry arguing that providing flexibility only within a collective agreement might reduce the options to some individuals, including flexibility to balance their work and family life.

The Rio Tinto group have 22 per cent of their workforce using AWAs. They say they have been using such agreements since the 1990s, that the agreements have met the needs of both the organisation and the employees and pay very well under those sorts of arrangements. We also found the National Farmers Federation supported the maintenance of AWAs as a legitimate alternative to awards, common-law agreements or collective agreements. So did local government associations, which were particularly significant. The Electrical and Communications Association from Queensland expressed their preference for the flexibility of the current system and being able to move away from a one-size-fits-all type of approach of a collective agreement. The Chamber of Commerce and Industry of Western Australia doubted the new legislation’s ability to provide flexibility within the government’s new award system. So there is a lot of hope and expectation. It is really a question of how and when it is going to be delivered. This is the problem that we are facing.

I mentioned earlier that there are certain omissions—areas that have been overlooked. From our side of politics, we have found some sympathy for a submission from the Telstra people through their body, the Communications, Electrical and Plumbing Union. They were concerned about the provisions of this bill which would have the effect of extinguishing certain of their redundancy provisions and, as a consequence of that, would diminish payout of redundancies. This is one of the many potential unintended consequences that could come out of this bill. And—surprise, surprise!—the low-paid workers’ plight was highlighted by the Textile, Clothing and Footwear Union. Fortunately, EEWR has indicated that they might like to introduce an amendment to pick up this concern. It has been worth while conducting this inquiry, because there are a lot of issues that have been put on the table that were not identified at that particular time.

A central feature of the bill is transitional arrangements. These are not going to be without problems, because they have a very limited lifetime. Some groups would like to see them extended; others feel that the delay in moving to a collective agreement will only give unions power to negotiate at a time when they may be more vulnerable. So the whole situation is fraught with challenges for industry. Industry is generally accepting the fact that this has been forced upon them and that there is no point in going against the tide. But we hope that in this report we can ensure that some greater degree of flexibility than is apparent at the present can come through. It is a challenging time for all.

Perhaps the biggest problem is going to be faced by some of the small businesses and small independent contractors. We had people such as the Master Plumbers’ Association of Queensland coming before the committee, who told the committee that individual statutory agreements had brought many small businesses into the industrial relations system for the first time. And that is very important. Ms Marcia Kuhne, from the Western Australian Chamber of Commerce and Industry, said:

The result is that both employers and employees will be affected because many employees also elect to be employed under individual arrangements under their own agreements. It suits many employees.

So we have a situation where a one-size-fits-all is going to cause enormous challenges for people. As I said, there is going to be a lot of confusion associated with these ITEAs, these transitional arrangements, because they can be entered into until 31 December 2009. Representatives appear to believe that there are various ways in which they may be continued indefinitely. I think that remains to be seen. Others were concerned that the two-year life would be inadequate. Perhaps the majority of people suggested that there was no uniformity—no unanimous view—in terms of that particular approach.

In relation to the interim transitional arrangements, the other big problem was that employees who had left were unable to come back under an AWA and had to go onto an ITEA and, of course, that may be somewhat different to the AWA under which they had been working. The big question everybody asked was: ‘Why are you discriminating against these sorts of people?’ This is particularly so in the construction industry, where people are employed to build a dam, a factory or something and, when that ends, they probably move to another project, sometimes with another employer, and then within six months they are back again. That was a particular problem. Very few people were able to understand the rationale for excluding previous employers from the ITEA system, and I think that was indeed unfortunate.

The question of commencement dates—whether it is going to be on lodgement or when the AIRC has approved the new arrangement—created a lot of difficulties, because industry has to plan. The big difficulty, of course, is that the no disadvantage test has to be approved within these new ITEA arrangements, the record of approvals has not been good and there is substantial delay.

Award modernisation was an essential feature of this. While everybody supported the concept, we were rather sceptical that the tight time frames could be met. The big objection to awards was the inherent inflexibility, the cost of restoring awards. Awards are going to take an increasingly important role in the future and this is part of what I indicated about turning back the clock. Strangely enough, Professor Andrew Stewart—not always a friend of the Liberal Party—was a little bit scathing. He acknowledged that the request that it must not disadvantage either the employees or increase costs of employers is very difficult to achieve. In terms of modernisation, we had concerns from the unions about the ability for it to be done quickly or expeditiously. Paul Howes drew attention to the fact there are some 380 such federal awards and then there are state awards that have now been brought into the federal system. He complained of the complexity all round. Similar concerns were expressed by the Industry Group, the ECA et cetera.

State differentials create their own problems. That is a matter that obviously the government has got to come to grips with. It is a challenge that both parties recognise. It should be met in one way or another, but we must not underestimate the problems. When you are changing something as fundamental as the bill before us does, the coalition is concerned that there is the possibility that there is going to be some friction as a result of this because new negotiations will have to be entered into between employers and employees. We have had this long period of industrial harmony and industrial peace, and so there is a degree of trepidation which many employers are feeling as they enter into this new arrangement. That was certainly stated very clearly by Mr John Rothwell from Austal Ships who, prior to the AWAs in the 1990s, experienced a lot of disruption, concern and dislocation to his business. He is one who believes that he will have to move very quickly to the new arrangements to try to settle things down, but he is very wary about how this process could end up lifting the level of disputation.

Perhaps one of the best examples of the problems of one-size-fits-all came from local government. We received excellent evidence from the Local Government Association of Queensland. They gave us numerous examples of how this policy is not acceptable. The concept of an AWA—an individual workplace agreement—fitted very nicely into how they work in areas such as operating swimming pools and employing dog catchers or people who are called out late at night because cattle are on the road and so on. As they pointed out, local government is a 24/7 operation. They believed that individual agreements had to be an essential feature of their operation. (Time expired)

Rachel Siewert (WA, Australian Greens) Share this | Link to this | Hansard source

The Australian Greens have remained steadfastly opposed to all aspects of the changes to Australian workplaces brought in by Work Choices. We opposed the legislation at the time it was rushed through the parliament and we are well aware of the hardship it has caused many people in our community. The Greens believe passionately in a fair and just workplace and in fair and just workplace laws. We believe we need to respect the rights of workers and we are strong supporters of the Your Rights at Work campaign. Work Choices signalled a major shift in industrial relations with the abandonment of our conciliation and arbitration system. While we recognise the need for an industrial relations system to remain responsive to changes in our economy and workforce, we do not believe the changes brought about by Work Choices were necessary or constructive. Work Choices remains profoundly unjust. While the Workplace Relations Amendment (Transition to Forward with Fairness) Bill 2008 goes some of the way towards addressing this injustice, there is still a long way to go.

We passionately believe that we can create a sustainable future where we can provide fair workplaces and sustainable communities and ensure a healthy economy. We believe that all Australians have the right to live their lives in conditions of freedom and dignity, economic security and equal opportunity. We believe our IR system should protect the dignity of the workplace. All Australians—be they people who are cleaners, clerical staff, those working on the factory floor or managers—should expect to be treated with respect, recognised and valued for the work they perform, provided with opportunities for skills enhancement and career progression and protected from harassment. We believe working people have the right to be involved in decisions about their work. We believe free, independent and democratic unions are an essential pillar of a civil society, and we place a value on community and collective action. An overly individualised society can lose sight of the common good and the common need.

Our primary concern with efforts to reform our industrial relations system is to ensure a framework of laws which support and protect the interests of the most vulnerable in our workplaces. The Work Choices changes hit hardest those who are least advantaged in our society—young people, women, migrants, those in low-paid so-called vulnerable work, casual and temporary workers. The Australian Greens therefore support this bill as a first step towards creating a fair industrial relations system after the failed, disastrous experiment of Work Choices.

However, we continue to have reservations about the government approach to industrial relations reform, believing that they do not go far enough. We also believe there are a number of amendments that should be made to this bill to improve the protections of employees. This bill has two long-term impacts: the eventual end—I stress eventual—of statutory individual agreements, and award modernisation. Statutory individual agreements have never been supported by the Australian Greens. Those include pre- and post-Work Choices AWAs. There is incontestable evidence from a number of academic reports, as well as personal stories of those affected, that AWAs have been used to lower wages and lower conditions of employees. The Senate inquiry heard numerous stories, including those of the tragic circumstances associated with the Qantas valet parking debacle. AWAs have been used as a de-unionisation strategy.

In contrast, there has been little evidence of AWAs being used to extend genuine flexibilities to employees. In fact, the DEEWR departmental submission on flexibility and productivity indicated that there is evidence of increased productivity with collective agreements. They also said there was qualitative research showing in particular that a climate of apprehension associated with the elimination of protected award conditions and the secrecy and pressure surrounding AWAs contributed to unproductive workplaces through reduction of trust between employees and employers. So in fact, contrary to supporting and increasing productivity, AWAs have been associated with a decrease in productivity. The national accounts show that productivity decreased by 0.5 per cent over the past year.

Our objection to statutory individual agreements is not merely that they could be used to exploit employees but also because they restrict freedom of association and undermine collective bargaining. Employees cannot exercise genuine choice to collectively bargain when statutory individual agreements exist. Michelle O’Neill from the Textile, Clothing and Footwear Union made this point forcefully in the hearings on this bill. She described workers in her industry being effectively shut out of collective bargaining through the use of AWAs and made a convincing case why the use of individual transitional employment agreements, ITEAs, will continue to create unfairness.

We remain unconvinced in fact about the need for ITEAs and their overly long transition period. We have some concerns about what the government proposes for ITEAs and we will be tabling amendments to address some issues that we have with them. I feel it is important to express the profound disappointment we have heard from many of those workers in vulnerable industries who are stuck with unfair wages and conditions under existing AWAs. Many of them will have to wait five years before they can get the fairness, justice and decency in the workplace that they voted for.

If there was one issue that dominated last year’s election it was Work Choices. Unfortunately, some of the people who voted out Howard and voted out Work Choices hoping to get rid of AWAs, believing that they were getting rid of AWAs, may still be stuck on unfair AWAs for another considerable period of time. We believe this is why there should be an opportunity within the bill for workers who are stuck on an unfair AWA to ask the Workplace Authority Director to assess it against the government’s new fairness test and no disadvantage test. If it fails the new test, they should be able to choose to unilaterally terminate that agreement. That would make it fairer for them in their workplace.

The right to collectively bargain is a fundamental right that is recognised internationally. Collective bargaining is about addressing the underlying imbalance in the bargaining power between employers and employees. Statutory individual agreements shift that balance of power firmly into the hands of the employers and, we believe, have no place in Australia’s industrial relations system. We welcome the government’s policy commitment to introduce a system of collective bargaining that requires employers to engage if employees want to bargain collectively.

One of the key concerns about the changes to industrial relations laws in the last few years has not just been the existence of AWAs and the reduced safety net but the intersection of AWAs with removal of unfair dismissal protections, restrictions of right of entry and restrictions on industrial action. Again I quote Michelle O’Neill on the combined effects of these measures:

What I mean by that is that it is the intersection of these provisions that really has the most dramatic effect on workers in our industry. The provisions have the combined effect of reducing workers’ bargaining power and reducing workers’ capacity to be effectively represented by a union, the removal consequently of choice out of the system for these workers and the resulting loss of rights and conditions as well as, in fact, in many cases, a green light to exploitation.

The impact of the intersection of statutory individual agreements, restrictions on bargaining through issues such as prohibited content rules, restrictions on the right of entry and removal of unfair dismissal protections is not limited, unfortunately, to the textile and clothing industry. To ensure a truly just bargaining system, these matters must be reformed.

The Australian Greens see no reason why the government cannot use this bill to restore unfair dismissal protections for workers. Furthermore, we believe there is a compelling argument for ensuring that unfair dismissal provisions are fixed at the very start of this reform process so that the lack of protection from unfair dismissal does not undermine this reform process and we can truly move forward with fairness. It is the government’s policy to restore unfair dismissal provisions. It can be quickly and easily achieved through a simple amendment, as the Greens will be proposing, yet the Rudd government seems content to leave vulnerable workers in fear for their jobs.

I find it particularly strange that elsewhere the Prime Minister is charging ahead to deliver on his election promises—even the dumb ones like the tax cuts—but on this particular issue, which was one of the main pillars of the Your Rights at Work campaign and the ALP’s election campaign, the government seems to be dragging its feet. We do not believe there is justification for allowing some workers access to unfair dismissal provisions and denying such protection for other workers. It is wrong to pass up this opportunity to fix the situation now. Similarly, if it is the ALP’s policy to remove restrictions on what matters can form part of workplace agreements, why then can they not repeal the prohibited content provisions now? We will be moving amendments on both of these issues, on restoring unfair dismissal protections and repealing the prohibited content rules now.

The return of awards as part of the safety net is very welcome, as they are an essential part of the safety net in Australia. There remains a significant section of the workforce that is award reliant. These workers are mostly women and the low paid. A strong award system is vital to ensuring these workers are treated fairly. There can be no question that awards today need to be updated. Many awards do not reflect contemporary work practices or standards. However, the Australian Greens are concerned that the process outlined in this bill and the government’s Forward with Fairness policy will result in static awards which are hostage to the government of the day and are unable to be effectively varied in response to changes in the nature of the workforce without specific government direction.

We are concerned with the limited number of matters to be considered, with the limited process for variations and with the underlying change in the nature of the award system. The government is accepting in large part the fundamental shift made by the Howard government in abandoning conciliation and arbitration and the changing role of workers and employee representatives in that system. Justice Kirby in his dissenting judgement on the decision on the constitutionality of Work Choices discussed the move from the conciliation and arbitration power to the corporations power. In a comment we agree with, he said:

The applicable grant of power imported a safeguard, restriction or qualification protective of all those involved in collective industrial bargaining: employer and worker alike. It provided an ultimate constitutional guarantee of fairness and reasonableness in the operation of any federal law with respect to industrial disputes, including for the economically weak and vulnerable. It afforded machinery that was specific to the concerns of the parties, relatively decentralised in operation and focused on the public interest in a way that laws with respect to constitutional corporations made in the Federal Parliament need not be. These values profoundly influenced the nature and aspirations of Australian society, deriving as they did from a deep-seated constitutional prescription.

The Greens believe we are losing something very important if we turn away from these ideals. A criticism made of the Work Choices legislation was that it removed the capacity of the Australian Industrial Relations Commission to hear test cases on contemporary community standards in workplaces. These test cases, together with the award system, in the past gave Australian workers conditions such as hours of work provisions; the principle of equal pay for equal work; the regulation of excessive overtime; the introduction of leave such as bereavement and compassionate leave; redundancy provisions; and unfair dismissal provisions.

We are concerned that the new modernised award system is removing the ability of stakeholders in the industrial relations system to bring such matters before an independent tribunal. Our society and our workplaces will not remain static and we need to ensure that there is sufficient ability in the new system to respond to changing circumstances. In light of these concerns, we believe awards must be reviewed regularly and contain appropriate mechanisms to allow the involvement of relevant stakeholders.

The issue of pay equity provides an example of the need for awards to be varied by a broader process. We all know that the average pay rates for women in Australia are well behind the average pay rates for men—and that it has been made worse under the AWA process. All the research conducted in Australia over the last 10 years points to awards playing an important role in addressing gender pay inequity. For example, most states now have pay equity principles which allow awards to be varied to ensure equal pay for equal work for work of equal value. We are concerned that, without the Industrial Relations Commission being required to consider pay equity when modernising awards, the award modernisation process will merely consolidate the pay inequities that already exist in awards. At the very least we urge the government to include an effective pay equity mechanism in the substantive bill.

We also have concerns around the new flexibility clauses to be included in all modern awards as well as collective awards. The devil, of course, is in the detail and we will not see the actual clauses until they are drafted by the AIRC. However, as a matter of principle, it is of concern that employees could essentially bargain away on an individual basis award conditions through these flexibility clauses. While we recognise that it is the government’s intention that no employee be worse off and that these side individual agreements are subject to a no disadvantage test, the experience of AWAs would suggest safeguards will be needed to ensure that particularly vulnerable workers are not exploited.

While we recognise the bill deals primarily with the first phase of modernising awards, we are concerned about how awards remain relevant into the future. We urge the government to ensure a fair, robust and relevant award system without throwing away the strength of the award system under conciliation and arbitration. Our vision for the award system is a comprehensive safety net for workers on an industry or occupational level that is flexible enough to allow for industry-specific conditions but secure enough to provide appropriate protections. Awards must be living documents that can adapt to the changes in community standards. We fear the move away from a tripartite system, with active involvement of employers and employees overseen by an independent tribunal, to a system where the government of the day has a more direct say in the labour standards of Australian workers. We look forward to the end of the worst excesses of Work Choices and working with the government into the future on establishing an industrial relations system that is fair and respects the rights of workers.

The Greens will be tabling a series of amendments to the transition bill, because we believe there are some important issues that were highlighted during the Senate committee hearings. When I heard some members of the coalition talk about some of the evidence we heard at the hearings I thought I might have been at different hearings, because people in general were supportive of the legislation, although there were some important issues that were raised. For example, I was particularly taken by the arguments raised by Professor Andrew Stewart around the possibility of loopholes where people could be dismissed if their ITEA failed the no disadvantage test.

There were also significant issues brought up around prohibited content, which is why we are tabling amendments around the issue. I see no reason at all why a government who says they do not agree with the prohibited content element of the workplace laws as it stands and as it was introduced under Work Choices cannot remove that restriction now so that ITEAs, when they come in, will not be disadvantaged by not being able to deal with those issues. It is also important for Australia to note that individual statutory agreements and AWAs will be with us for some time to come. Those people who have entered into agreements before this legislation comes into being will be stuck on those agreements, which is why we believe that they need to be able to test those agreements against the new conditions and, if they are seen to be unfair, they should be able to be terminated.

We also believe that AWAs that are in place now should expire when their nominal expiry date is reached, rather than continuing. We also believe that it is important that our industrial relations system should still deal with the issues and still support the freedom of association. We are concerned, and we have expressed our concerns on a number of occasions, about issues to do with the right of entry provisions, which the government does not intend addressing in its industrial relations reforms. We believe that should also be addressed, although we will be addressing those issues during the discussions over the substantive bill.

The Greens will be tabling a series of amendments to this transition bill. We think it is a good start in the industrial reform process. We believe that the bill, through the committee process, did receive overall support from the people who attended the hearings—from both unions and employers. I would like to add that I feel that some of the people representing employers were not across the transition bill provisions and were raising issues that in fact were not in the bill and issues that the federal government, much to my concern, has decided will not be dealt with, including the right of entry. The issues of concern that were raised during the hearing in some cases had little to do with the transition bill. It showed a lack of understanding of the government’s intention. I say that with difficulty because I believe the government should be addressing those issues.

The Greens would like to see this legislation go further and that is why we are proposing amendments to address some of the loopholes in it. Specifically, for example, the very strong case was put that we needed to address the issue of outworkers. If the government does not move amendments to deal with outworkers, the Greens will. In general, I believe that there is cross-party support for addressing these issues. They were dealt with in a very rough way when we were addressing Work Choices. Commitments were made on the floor of the Senate about protections for outworkers. We very strongly believe that those commitments now need to be written into the legislation at the earliest possible opportunity, which is why we will be moving amendments to address those issues.

Andrew Murray (WA, Australian Democrats) Share this | Link to this | Hansard source

There has been a clear message from voters for the abandonment of Work Choices, especially those provisions that have seen a large number of workers have their wages and conditions reduced. The Australian Democrats support the Workplace Relations Amendment (Transition to Forward with Fairness) Bill 2008 as improving the Workplace Relations Act, not least from a fairness perspective. I said on 2 December 2005 in my speech on the third reading that, in passing Work Choices, the coalition were making:

... not just an economic mistake, not just a social mistake, but a political mistake.

I said:

This bill assaults the cultural, economic, social, institutional, legal, political and constitutional underpinnings of work arrangements in Australia. It aims to radically alter our work systems and values.

I also said:

This change would not have happened if the Australian Democrats still held the balance of power in this chamber.

This bill amends the Workplace Relations Act by: terminating the making of new Australian workplace agreements and replacing these with interim transitional employment agreements to run to 31 December 2009; replacing the fairness test with a no disadvantage test to approve both ITEAs and collective agreements; and allowing the modernisation of federal and former state industrial awards.

Some issues that arose for business organisations from the inquiry are: the award modernisation process may not enhance productivity to the extent—or in the medium term—as expected; the ending of AWAs and a poorer substitute will diminish productivity; the abolition of AWAs and the increase in collective bargaining and the greater licence to unions will increase levels of industrial disputation; there must be in place an alternative to AWAs and individual workplace agreements before the complete phasing out of the AWA system—an alternative that would incorporate a proper global no disadvantage test provided by a safety net of awards and employment standards—and a process of acceleration should be delivered to address the significant backlog of individual agreements still waiting to be approved, which is a problem that will frustrate the context in which the bill’s amendments will commence.

The ACTU, in contrast, identified areas where improvements could be made to the bill—for instance, that the bill does not immediately abolish AWAs or provide a mechanism for existing AWAs to be terminated prior to their nominal expiry date where they are found to disadvantage employees. The ACTU is not convinced of the need for a new form of statutory individual contract in the form of ITEAs, preferring instead the individual agreement option provided by over-award common-law agreements. The ACTU is also disappointed that the bill does nothing to improve the transparency of the ability to review the decisions of the Workplace Authority—a dedicated unit needs to be established within this authority to ensure that collective agreements are processed swiftly—and that there are a number of uncertainties concerning award modernisation in the drafting of the bill.

Uncertainties do derive from the draft award modernisation request, which currently expresses the mutually contradictory intention for the Australian Industrial Relations Commission to neither disadvantage employees nor increase costs for employers. On award modernisation, academic Dr Buchanan said that there is a need to see award modernisation as an ongoing process. He stressed the importance of providing appropriate resources to the Australian Industrial Relations Commission. He felt there was a need to be realistic about how much can be achieved by the end of 2009 and he advocated the desirability of recognising the need for a coherent set of categories for grouping together like classes of work to help ensure consistency in defining employment rights and obligations and to help provide a framework for defining common-skill requirements.

Professor Andrew Stewart asked how the minister’s draft award modernisation request might be amended to address the inherent problems with it standardising conditions in any award-reliant industry or occupation without disadvantaging somebody; how the government’s proposals concerning the nonapplication of awards to workers earning over $100,000 annually needs clarifying by way of clear instructions from the Australian Industrial Relations Commission in their determinations; and how appropriate protection might be given to the over 30 per cent of employees governed not by awards or registered workplace agreements but by common law contracts.

The Democrats support the abolition of Work Choices AWAs and we support award modernisation. Academic union and employer witnesses to the inquiry made a case for amendments that would improve the bill and, in some instances, have provided draft wording for the legislative changes suggested. When I saw the majority recommendation that the bill be passed without any other formal recommendation for specific amendments, I recalled the epigram, ‘The more things change, the more they stay the same.’

It beggars belief that, when a range of witnesses make a case for amendments that would improve the bill—including recommendations from such reputable and experienced witnesses as the Australian Industry Group, the Australian Council of Trade Unions, and Professors Buchanan and Stewart—the majority could not find even one change to formally recommend. Admittedly the majority have indicated areas of concern, both technical and substantive, but those do not constitute recommendations. It may not be the case with respect to the members of this committee, but I would make a general point that it is a matter of long regret in our Senate that senators from the government—any government—often seem to feel themselves sufficiently constrained by their party being in government, and a belief that the executives should have passage of their legislation, that they cannot bring themselves to carry through the logic of a Senate review process and that is to formally recommend evidence based changes to a bill.

The failings of Work Choices are generally, and rightly, sheeted home to the former Prime Minister, John Howard, and his government, but coalition senators who knew how slim the government’s senate majority was had the power of numbers. Just a couple of coalition senators holding out for substantive changes could have altered the course of that bill. Those that heard the evidence and did not act therefore share the blame. If the coalition senators participating in the truncated charade of the Work Choices Senate inquiry had responded to the widespread criticism of so many witnesses and exercised their conscience vote based on the evidence before them, then perhaps Work Choices would never have been quite the failure it became.

An appalling feature of the Work Choices inquiry and debate was that the very essence of academic freedom was threatened at times by McCarthyist attitudes from some coalition senators towards academics critical of that bill. I protested at the time that such attacks were a discredit to the Senate. The memory of those days obviously still rankles. In this inquiry, Professor Buchanan opened with these remarks:

... before talking about the key issues that I want to get to, I just want to note that academic participation in forums such as these has become a bit of an occupational hazard.

I was pleased that in this new parliament this committee saw a return to the normal courtesy to witnesses and the return to better, more considered and considerate Senate committee processes and practices that were sometimes absent during the term of the last parliament.

My party remains concerned at the continuing exemption of millions of employees that fall under federal law from the unfair dismissal—UFD—protections that are available to employees of large organisations with more than 100 employees. I intend to try to amend this bill so that unfair dismissal provisions for all employees be restored to the act; failing that, at least for employees and organisations with more than 15 employees; and, failing that, in the alternative, at least for employees and organisations with more than 20 employees.

The Democrats do accept that complex, loosely-drafted and costly UFD provisions are highly undesirable. Such negativities are regarded as having particular effects on small business. Both small business and their employees do have a need for rapid, low-cost dispute resolution and for minimising vexatious claims. Recognising that need, the Democrats negotiated changes to UFD law that saw the number of federal UFD applications fall by over 60 per cent from 1996, 50 per cent after our successful 1996 negotiations and a further 12 per cent after our successful 2001 negotiations.

The extent of the UFD problems under federal law was wildly exaggerated. I use Western Australia as an example. There were less than 100 UFD applications for WA small business a year under federal law. The vast majority of UFD applications were actually under state law. In 2003, WA’s total UFD applications under federal law were 316, of which small business constituted just 79, while under state law, in 2003, UFD applications totalled 1,314. While there were 6,954 applications nationally for federal UFD in 2003, only 34 per cent, or 2,153, of those were for small business nationally. I am quoting 2003 figures because the government refused to provide any figures after that, I suspect as the figures were showing how minor the problem was.

The Democrats and Labor never accepted the claim that exempting small business from UFD creates tens of thousands of new jobs. On the job creation front, comprehensive research undertaken by senior lecturer Paul Oslington and PhD student Benoit Freyens at the University of New South Wales School of Business found that ending UFD laws for employers with fewer than 100 employees could create 6,000 jobs, not the 77,000 claimed by the Howard government. UFD is germane to this bill, which intends to introduce greater fairness into the workplace. Curtin University’s Professor Alison Preston was among a number of witnesses who made it clear that a provision for dealing with UFD was an essential element of a fair regime for employees.

I want to turn to individual statutory agreements, ISAs. The Australian Democrats believe a mix of agreement making between employers and employees—collective industry awards, collective enterprise bargains and individual agreements, in all their various forms—provide the necessary flexibility and choice for employment contracts in a modern economy. The overriding proviso is that all agreements must be fair to both employers and employees. A modern liberal democracy should always enshrine fair minimum standards of wages and conditions for workers. A modern workplace relations system must also make a material contribution to Australia’s efficiency, wealth and job creation, productivity and internal and external competitiveness. The Democrats opposed Work Choices AWAs and will be glad to see the back of them.

In her submission, Professor Alison Preston provided a table that indicated that Australian employees are covered by the following broad categories of agreements: federal or state awards, 21 per cent, or 2.1 million persons roughly speaking; collective agreements, registered and unregistered, union and non-union, 44.5 per cent, or 4.7 million persons; individual agreements, statutory and common law, 34½ per cent, or 3.7 million Australians. Of the 3.7 million Australians on individual statutory and common-law agreements, I have seen estimates of ISAs being five to seven per cent of all individual agreements. Whatever, ISAs do not cover more than one in 15 employees at best and, likely, not more than one in 20. Still, at the least, that is more than half a million people on ISAs.

To end the contractual rights of half a million Australians would be a significant step, especially if—and it is sometimes a big ‘if’—the chosen instrument is genuinely a matter of free choice. The assumption is that all Australians on Work Choices AWAs will be happy to see the end of them. That may be so for many, but it is a long jump from there to decide that that means that half a million Australians were also opposed to the very different pre-Work Choices AWAs or that they are all now opposed to ISAs as a distinct class of industrial instrument.

The easy demonisation of the many possible versions of ISAs by the very evident failings of just one version of them—Work Choices AWAs—is indefensible from a policy perspective, despite its political success. Common-law agreements put employees far more at the mercy of employers than do fair ISAs that are fairly and properly regulated. With respect to employment matters, Australian common-law precedents are often rooted historically in English master-servant concepts, often with a bias towards master, which is the very criticism levelled against Work Choices AWAs.

Unions often portray themselves as champions of human rights. They do have a long and proud history of standing against tyranny of one sort or another, and yet campaigning against ISAs as a class of industrial instrument in favour of individual common-law agreements represents a diminution of human rights. My eye was caught by an article on a charter of rights recently. The President of the New South Wales Bar Association said on page 34 of the Australian on Friday, 14 March 2008:

It is abundantly clear that human rights are not adequately protected under the common law ...

The common law is unwritten law based on custom or court decisions. Statute law is the law laid down in acts of parliament. Statutes provide certainty. So why regulate industrial relations by statute at all? Why not just let the common law apply to the whole industrial relations process, including collective agreements? The answer is that the common law is inadequate. Common law is not precise, as it comprises accumulated and varying judgements and judicial principles established only on a case-by-case basis. Statute is much more precise. Statute is easier for the parties to an agreement to administer and comprehend but, if a dispute gets serious, statute does make a difference when courts have to adjudicate. Precise statute leads to precise judgements; imprecise common law leads to imprecise judgements. Statute also allows contract disputes to be resolved in fast, low-cost, easy access tribunals—as in the case of industrial relations—instead of the slow, costly courts. Furthermore, statute can ensure easy enforcement and penalties for transgressions. In industrial relations, statute provides much greater protection, flexibility and easier usage than the common law. Statute is able to add protections and precision denied by common law. This is why workers compensation laws for protection in case of work injuries are now almost completely regulated by statute law and not by common law.

There are three basic types of individual employment agreement in Australia: individual agreements based solely on statute; individual agreements based on common law but with awards applying to them, which are hybrid statute-common law agreements; and individual agreements based solely on common law. Labor are proposing the hybrid type of individual agreement. They are proposing two classes of individual agreement, arbitrarily divided, on what basis no-one knows: one for those with above $100,000 earnings, where supposedly completely flexible common-law agreements apply but are subject to statute through the yet to be finalised national employment standards; and one for those with below $100,000 earnings, with stronger statutory protections and a reference back to the applicable award. It is important to understand that employees under pure common-law individual agreements are the most exposed to employer prerogative.

The policy lines are clearly drawn. Of the political parties, only the Democrats had believed that properly enforced and regulated ISAs must be underpinned by the applicable award—with awards restricted to allowable matters and not open ended—subject to a global no disadvantage test. After the 2007 federal election, I am discovering that our position seems to be becoming a mainstream position. Intriguingly, this bill, as some witnesses to the inquiry pointed out, does seem to offer a permanent and fairer ISA regime going forward—at least until the substantive bill due later this year is introduced—so perhaps Labor’s position is less antagonistic to ISAs than was previously thought. Time will tell.

There is one basic point to decide on: do you need ISAs to provide protections and choice to employees that the common law does not provide—in which case, Labor would be wrong? Of course, always recognise that the coalition’s model of Work Choices AWAs was a disgusting travesty of that fairness principle. A great weakness of Labor and others is to argue that collective agreements are the alternatives to individual common-law agreements. That assumes that the choice between the group and the individual is always present. That is not so. Where individual agreements are likely to pertain, or are the preferred choice, the only alternative to the common-law agreement would be an ISA. Otherwise, the only choice left is a Hobson’s one—an individual common-law agreement or nothing: take it or leave it. Labor and the unions must surely understand that, along with certain strong provisos—statutory provisions are fair; fairness provisions are oversighted and enforced by an active regulator; ISAs are underpinned by a credible safety net of wages and conditions; and ISAs are subject to a global no disadvantage test referenced back to the applicable award—ISAs will provide much greater certainty and protection than individual common-law agreements.

There remains the question of disputation. If one part of employment contracts is the process of agreement making, the other half is the resolution of disputes. The great insight of the Australian industrial relations system was to find a mechanism for the resolution of disputes. This has been a great contribution to this country’s advancement. How much cheaper, quicker and more satisfactory is having a statutory instrument in dispute referred to an industrial relations tribunal than to the courts—which is not the case with common-law agreements? The Democrats recommend that Labor design an individual statutory employment agreement system as an alternative to individual common-law contracts, because good statute will be better in all cases than the common law.

Sue Boyce (Queensland, Liberal Party) Share this | Link to this | Hansard source

I was a member of the Senate Standing Committee on Education, Employment and Workplace Relations which enquired into this bill. I would like to say I am very pleased to hear Senator Andrew Murray’s comments in regard to the need to keep individual statutory agreements within our workplace relations system. The coalition has made it very clear that we have no problem with the intentions of much of this bill—the intentions of the bill relating to award modernisation and relating to the introduction of an easy-to-administer no disadvantage test. I repeat: the intentions of this bill. I do have very serious concerns, which I know are shared by many of my colleagues in this place, about the bill’s intention to end the use of individual statutory agreements within the Australian workplace relations system.

I have used the term ‘intention’ in relation to what I see as both the positive and the negative aspects of this bill advisedly, because no-one has a clue what the reality of this mishmash of legislation will be. It was very clear from the evidence that was given to the committee that the bill was poorly drafted and that many of the witnesses considered it was very likely to have unintended consequences—consequences which at the moment we can only guess. I suppose the most concerning part of all this is that even the government does not appear to have a clear idea of the consequences of aspects of this legislation. I believe that the passage of this bill will be a sad day for Australia. It will be a sad day for the peaceful and profitable future of our businesses, large and small, and for the workers of Australia.

I note that Deputy Prime Minister Julia Gillard, in her second reading speech, said:

A workplace relations system that works for all Australians should be fair and flexible, simple and productive.

That is possibly one of the few statements that the Deputy Prime Minister and I would agree on. In fact, all employers and their staff—particularly the ones who have been leaving the unions in droves over the past few years—all over Australia would agree that a workplace relations system that works for all Australians should be fair and flexible, simple and productive. Australian businesses want to retain flexibility and they want that flexibility offered by individual statutory agreements, subject to a safety net, just as much as by award modernisation and by the provision of a simpler way of going about collective agreements. The only problem, of course, with this particular bill is that it has absolutely nothing to do with flexibility; it has very much to do with the Labor Party paying its dues to the unions. The bill is actually called ‘forward with fairness’. I would suggest that it should be more accurately titled ‘forward to the unknown’, or even ‘when first we practise to deceive’ would do the job.

As I said, employers and employees do want flexibility in Australia’s IR system and they are very dismayed by the inflexible confusion of the system that the government is intending to bring in. They are very dismayed by the inflexible confusion of this legislation as it has been presented to the parliament. I am not sure that senior union executives would appreciate true flexibility within our workplace relations system, but that is probably where we get to the real reasons for the haste, the extraordinary flaws and the pig-headedness of this legislation. This bill is about what the Labor Party perceives to be good politics; it has nothing at all to do with good policy.

Let’s have a look at this brave new world in relation to award modernisation. The only problem is that no-one appears to believe that the Australian Industrial Relations Commission has a hope in hell of getting the process done within the time frame set by the government. Witnesses to the Senate Standing Committee on Education, Employment and Workplace Relations inquiry repeatedly expressed their scepticism about meeting the 2009 timetable. Even the government’s own Department of Education, Employment and Workplace Relations could only manage to assert that they believe the timetable for the award modernisation process was ‘not impossible’. I think we all know what a bureaucrat means when he says his minister’s time frame is ‘not impossible’.

Like the bill itself, the minister’s timetable is not about good policy; it is about politics and meeting time frames set by others, particularly union demands that were brought to the fore during the last election campaign. This bill and its raison d’etre get murkier and murkier. Deputy Prime Minister Gillard would have you believe that this bill kills AWAs—a very irresponsible and empty-headed aim in itself, in my view. Individual statutory agreements, as Senator Andrew Murray said, have a much needed position within our workplace relations system. Despite the Deputy Prime Minister’s ambition to kill AWAs, she appears to have not even got that quite right. Evidence from the Senate committee inquiry suggests that AWAs that are currently in place, and probably ITEAs, may just have the ability to go on and on and on, as long as the parties want them to.

Once again, this legislation has done nothing to assist the people who are trying to run businesses in this country; it has only set out to confuse them. The people who should be the real masters of the Deputy Prime Minister of Australia, Julia Gillard—the businesses and the workers of Australia—are confused by this aspect of the legislation. They are not assisted. The confusion will push some employers and others towards quickly going into collective agreements, and that, of course, means that the Deputy Prime Minister can then satisfy her real masters, the dogma-driven unions of Australia.

We heard within the Senate inquiry evidence that collective agreements will not work in many sectors and even that many mum-and-dad businesses will rethink employing extra staff. It was pointed out by the Electrical and Communications Association of Queensland that:

It is the small mum and dad companies—which have been the engine room of the economic drive in the last 10 years—that are employing these people, that are now starting to reconsider: ‘Do I really want to go through the hurdles of possibly having to deal with the union to negotiate an agreement?’ Not all of them will want to, not all of them will need to. But that is now the possibility that they are looking at, and they are the ones who will start saying, ‘I do need another person, but I don’t need them that desperately,’ or, ‘I might take them on as a subcontractor and just pay them 50 bucks an hour and that’s that.’ No other conditions, no protection, and that is the end of it. I do not believe that that is where we want our industry to go either.

These are people who are trying to earn a living and employ staff in Australia right now. They are frightened by, confused by and feeling coerced by this particular attempt at legislation.

Senators at the inquiry were also told that the rigidity of Labor’s proposed system could destroy many council community services in regional Australia, and Senator John Watson referred to this earlier. Amongst the programs that were spoken about were local pools, programs for disadvantaged children and dog- and stock-catching services, just as examples. One person who gave evidence to the inquiry said:

If I might just give one example: in one of our regional centres, the only swimming pool in the town was leased out to a person prior to the HIH collapse. That person ran the swimming pool, they ran the shop and they ran swimming classes, and their income came from that. They leased it out for a minimal cost to the council and council was happy because there was a service being provided. The bottom line is that the cost of public liability became too expensive for that particular lessor to continue with the arrangement, so they are going to close the pool. The cost of council taking it on and having to pay that person for the normal hours that they would work to run the swimming program, which were generally outside of what we would call normal working hours—because the nature of a swimming pool is that it is mainly for children and it is used after school and before school and on Saturdays and Sundays—was triple costs for overtime, working on weekends. There is the cost of that under the ordinary award, plus then you bring in the plethora of allowances for running shops and for expert swimming tutors et cetera et cetera, and it would just become too expensive for the council to continue to run it. We arranged an AWA in that case, and that allowed the person to continue to work as an employee. The council took on the cost of the public liability. The person’s wages were supplemented. They had part of their income under the AWA from the gate takings and from running lessons, so it continued the old lease arrangement but allowed the council to take on the public liability. In that particular instance, that pool probably would have closed or, at best, it would have cost the council an enormous amount of extra dollars which would have had to be taken off some other services that council would have provided.

This was, in the view of the coalition senators, an example of just the sort of flexibility that should be in the system and that must be in the system if it is going to do anything towards the intention of creating a modern industrial relations system. We can argue however we like about where you might fit that sort of thing otherwise, but why are we trying to create a new system of complexity and inflexibility when we have—with some adjustments and some changes—the sort of flexibility that suits the modern Australian industrial relations scene?

The coalition, in the House of Representatives, has asked the minister to look at recasting this bill in its entirety because of the many flaws, and many of these are covered in the dissenting report which, I understand, has been tabled just now in the Senate. I must admit that I am, personally, bitterly disappointed that the bill will destroy the ability for employers and employees to negotiate an individual statutory agreement subject to a no disadvantage test. I am bitterly disappointed by this because of the effect that I know it will have in certain segments of Australian business and industry. Australian businesses themselves are, of course, at bottom a realistic and pragmatic lot, and they will keep on keeping on. They will work with whatever the system is that the government gives them. They would, however, very much appreciate understanding what the intentions of the system that they are about to get are. Master Builders Australia Inc, for instance, commented in its submission:

ITEAs will not be a component of the new industrial relations system that will come into effect in January 2010. Master Builders advocates that the underlying safety net is the important consideration when assessing whether or not an industrial instrument is fair. There is nothing per se unfair in the use of individual statutory agreements and, for this reason, the Master Builders’ policy position is that employees and employers from January 2010 should continue to be permitted—

to use them on a case-by-case basis. The Electrical and Communications Association submission said that the new system will not ‘allow contractors to adequately or appropriately reward employees for individual productivity gains’.

The Labor government seem to take the view—which is somewhat naive in my view—that telling us that they intend to have the capacity for flexibility within modern awards will somehow do the trick and will create flexibility. That certainly was not the view of a number of the witnesses at the Senate inquiry. We heard evidence that in fact people were concerned that there is already allegedly the provision for flexibility within awards but it is not used. To think that by using the term ‘flexibility’ in an award you are creating something that might have even the slightest chance of replacing the flexibility available with an individual statutory agreement subject to a fairness or no-disadvantage test is naive in the extreme.

I am very concerned about what will happen to smaller businesses. My background and experience lies in manufacturing. I understand trades and how they operate and work. There is an assumption underpinning this bill that all employers are out to harm all employees. Within Australia there are millions of family businesses, large and small, where this would be anything but the truth—where people work together productively for what they perceive to be their joint benefit. There were examples given during the inquiry about this sort of thing. Employees would want to make arrangements outside of the award and the concern of some employer organisations was that employers who agreed to this were putting themselves in technical breach of an award if there was no other way of coming to an agreement with their employee. I note the comment from the witness from the Master Plumbers Association of Queensland who said:

One of the biggest concerns I had had as an individual trying to assist small plumbing contractors was that quite often they would have an arrangement with their employees or their workers which suited both parties but they did not formalise it by way of some form of registered agreement and, in not doing so, they had a technical breach of the award. We saw the ability for them to register those agreements as being a way of providing some guarantee to the employee as to what the arrangements were, and some protection to the employer should there be a technical breach of the award identified.

It was unutterably sad to me to listen to people suggest that because a small number of people use individual statutory agreements—the best guess seems to be that it is between five and 10 per cent—we should just throw the whole lot out: we should throw that flexibility completely out of the system. I do not think we are acknowledging in any meaningful way the ability for Australia’s family businesses and many other small businesses to relate to their employees and what their employees want. We are destroying a level of trust that has grown in some areas because of the ability to do this. I acknowledge that I have no personal experience of the hospitality and retail industries. It would appear that, yes, there certainly were some serious issues with that, but the basic point is that most Australian employers want to have employees who want to come to work and who are there because they share the goal of creating a better, bigger, more profitable, more interesting or more innovative business. There is very little point in having employees who are simply there because there will be a penalty for not being there. That is not the way to go forward as a productive nation; it was something that, certainly in some sectors of industry, the individual statutory agreements were helping to overcome so that people were actually working together with both parties having the opportunity to say, ‘This is what would help me to do my job better.’

Labor seems to be very concerned about flexibility or the lack of flexibility, but I think this is perhaps more designed to assist the Deputy Prime Minister to tell the unions that she has gotten rid of flexibility so that they will be pleased. The Deputy Prime Minister earlier today said that she thought she was dancing on the grave of AWAs. She might well be, but she is also dancing on the graves of many Australian small businesses and she is dancing on the graves of council services in the bush. Ultimately I believe she is potentially dancing on the grave of the Australian economy.

Mary Fisher (SA, Liberal Party) Share this | Link to this | Hansard source

I rise as a member of the Senate committee inquiring into the Workplace Relations Amendment (Transition to Forward with Fairness) Bill 2008, and in that context I rise, with misgivings like my Senate colleague Senator Boyce, to speak about the bill—a bill which is flawed in its policy intent; a bill which is flawed in its drafting; a bill which does not even do what the government has promised it will do. I come to the failed government promises. Does the bill keep the government’s promise to deliver simplicity? No. Does the bill—

Government Senators:

Government senators interjecting—

Mary Fisher (SA, Liberal Party) Share this | Link to this | Hansard source

My Senate colleagues can laugh, but I do not find this bit amusing.

George Campbell (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Explain yourself.

Mary Fisher (SA, Liberal Party) Share this | Link to this | Hansard source

I will explain myself. Does the bill keep Labor’s promise to deliver certainty?

Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

Yes.

Mary Fisher (SA, Liberal Party) Share this | Link to this | Hansard source

No, Senator Sherry. Does the bill keep Labor’s promise to remove the place for individual statutory agreements in Labor’s new system—a foolhardy promise, but nonetheless one that was made? No. Parties can choose for existing Australian workplace agreements and new individual transitional employment arrangements to continue to apply indefinitely beyond their nominal term with no end date. Does the bill leave every Australian worker better off? No; expert witness evidence is to the contrary. The operation of the new no disadvantage test for certified agreements means an individual employee can effectively have their take-home pay reduced, says Professor Andrew Stewart from Adelaide University—and the bill’s award modernisation process cannot be undertaken with nobody being worse off, says Professor Andrew Stewart from Adelaide University.

Does the bill keep Labor’s promise to exempt employees earning more than $100,000 a year from awards by January 2010? No, confirms Professor Andrew Stewart from Adelaide University. So what has the recent and very quick Senate committee inquiry into this bill heard?

What has the recent Senate committee inquiry heard about this bill, which is flawed in its policy intent, flawed in its drafting and fails to do what the government promised it would do? Does the bill keep Labor’s promise to deliver simplicity and deliver certainty? Professor Andrew Stewart from Adelaide University says no. As an academic expert, Professor Stewart told the committee in his submission:

The Transition Bill was plainly drafted in a hurry ... many of the new provisions remain unduly complicated and difficult to understand, even for experts.

Does the bill keep Labor’s albeit foolhardy promise to remove the place for individual statutory agreements in Labor’s new system? No. Workplace parties can continue to use existing individual statutory agreements after their nominal term, with no end date. The Department of Education, Employment and Workplace Relations told the committee that Australian workplace agreements and individual transitional employment agreements in this situation could continue to apply in workplaces, subject to the parties exercising their legal rights to terminate them—in other words, if the parties chose to allow them to continue, then they could do so—and in this scenario they could continue to apply well beyond 2012. The bill does not provide an end date for this continued application of individual statutory agreements, so confirmed the department.

The fact that parties may not be able to amend or vary these individual transitional employment agreements or Australian workplace agreements operating beyond their nominal term does not prevent the parties from choosing to continue to apply these agreements in workplaces on an ongoing and indefinite basis. Does the new no-disadvantage test for certified agreements leave all employees better off? No. Professor Andrew Stewart confirmed that the operation of the new no-disadvantage test for certified agreements, worded as it currently is in the bill, means that an individual employee can effectively have their take-home pay reduced.

Does award modernisation under the bill mean that every employee will be better off? No. I am disappointed that Senator George Campbell is not here to confirm his recent realisation of that fact. Indeed, during the Senate committee inquiry, Senator George Campbell realised that the award modernisation process means that some employees who currently have a safety net could, under Labor’s new system, end up without one. Professor Andrew Stewart, again, says in his submission:

... it is highly unlikely that such a balancing exercise as the bill’s award modernisation could ever be undertaken with such precision that nobody was worse off. Any process of standardisation must inevitably result in some levelling up or down of entitlements.

Perhaps this explains some of the reasoning behind why Senator Gavin Marshall was concerned that the government’s department was apparently not answering my questioning on the consistent application of dual award modernisation objectives of not increasing costs for employers and of not disadvantaging employees.

Rod Kemp (Victoria, Liberal Party) Share this | Link to this | Hansard source

I am very disappointed by Senator Marshall.

Mary Fisher (SA, Liberal Party) Share this | Link to this | Hansard source

Very good, Senator Kemp. Senator Marshall has realised that these two goals are somewhat contradictory and, in his words, ‘an impossible task’. Does the bill keep Labor’s promise to exempt employees earning more than $100,000 from award coverage? No. Yet Labor promised in its policy implementation plan:

In Labor’s new industrial system, employees earning above $100,000 will be free to agree their own pay and conditions without reference to awards.

It goes on to say:

Labor in Government will legislate to confine the application of Labor’s new award system to employees who earn less than $100,000 per year when the new award system commences on 1 January 2010.

Professor Andrew Stewart confirmed his view that there is nothing in this bill that achieves this objective. How can and when will the government realise its promise to exempt these workers from awards by January 2010, particularly when this is a bill that deals with many things that are proposed to have operation from January 2010?

How and why has all this come about? How and why do we have a bill that is flawed in its policy intent? How and why do we have a bill that is flawed in its drafting and sees the government failing to keep some of its promises? We have a bill for which there has been no economic modelling done. None of the witnesses that appeared before the Senate committee had conducted economic modelling of the impact of the bill and, more particularly, the government’s department has not performed economic modelling of the impact of the bill. The government has not confessed to having done any economic modelling of the impact of the bill.

Back to the department: its submission as to each term of reference is curiously thin, focusing more on the government’s assessment of the past than on the impact of the bill on the future. Where is the robust and empirical assessment of the future under the bill? The tone of the submission suggests that the impacts of the bill will be minor and will not risk major economic indicators, yet economic modelling showing significant positive effects of the bill are conspicuous in their absence. This has not stopped the Deputy Prime Minister from sallying forth in her second reading speech on the bill to promise that it will not jeopardise employment.

But let us look at the Rudd government on economic management. The Prime Minister rushed to implement a pay freeze for members of parliament. ‘There are no modellings of the savings to be realised from that pay freeze,’ the Senate estimates committee was told. Government comments were effectively that we members of parliament should lead by example, as should, they say—particularly the Deputy Prime Minister—CEOs in the private sector and senior management. The ACTU says that corporate high flyers should lead by example as well. So what of senior management in trade union ranks—what of high flyers in trade union ranks? When that question was put to Sharan Burrow under Senate committee questioning, she admitted that, when it comes to wage restraint, she and her colleagues in the upper echelons of the union movement have not even been asked to play their part. What sort of example is that? So, colleagues, there is no economic modelling and no direction to unions for appropriate high flyers in the union movement to join in wage restraint. Where has the Rudd government’s leadership gone? Faced with a choice between showing leadership on inflation or taking on the unions, the Rudd government has backed down in the face of union pressure and shown no leadership at all. It is not a good start.

But let us go back to the time frame of the Senate inquiry into this bill and the impact on the inquiry itself and on witnesses. The inquiry time frame was so short that at least one organisation—the Shop, Distributive and Allied Employees Association—simply chose to reuse much of the submission they provided to the original Work Choices inquiry back in 2005. Let us look at some of the things that happened here with the SDA submission. For example, in 2005, they said, ‘There will be no requirement to compensate the employee for any benefits that are missing.’ In 2008 that became, ‘There was no requirement to compensate the employee for any benefits which were missing.’ In 2005 they said, ‘They are in fact the result of 100 years of continuous painstaking work by trade unions, usually in negotiations with employees seeking decent entitlements for work in a variety of industries.’ In 2008 that became, ‘They were in fact the result of 100 years of continuous painstaking work by trade unions, usually in negotiations with employers in seeking decent entitlements for work in a variety of issues’—indeed in identical terms, it would appear.

The same employees used as examples of why AWAs should not be extended in 2005 had their cases reported again to support the complete removal of AWAs in 2008. Couldn’t the SDA find anyone else in the intervening years? Such was the cut and paste job that the authors forgot to cut from their submission about the bill some of the paragraphs that they had in their submission about Work Choices in 2005. Nonetheless, they bravely corrected the record when they gave evidence in Melbourne, asking for a number of paragraphs to be deleted. They blamed time constraints for the mistake but, ironically, all references to short time frames that appeared in their submission to the 2005 inquiry seemed to go missing from mark 2 in 2008.

Maybe this apparent oversight raises some undercurrents. How could a submission about a government bill which parades as anti Work Choices be on foot for at least a while criticising the government’s bill as if it were Work Choices? How does this come about? There are undercurrents, perhaps, that the union movement sees this bill as too much like Work Choices and is struggling to toe the government line—undercurrents, perhaps, that the union movement will be on the hunt for payback in the next government round with the substantive bill. On the other hand, how many other submissions were in part cut and paste jobs from previous inquiries due to the significant time constraints given for the committee to inquire into this bill? If organisations did not have enough time to properly look at the bill and its implications, then how could the Senate?

I have mentioned Professor Andrew Stewart from Adelaide university a couple of times tonight. Today the Deputy Prime Minister indicated bemusement with coalition references to Professor Stewart. She suggested that, if the Deputy Leader of the Opposition were to ring him about the bill and ask, ‘What did you think of Work Choices and do you think this is better?’ he would say, ‘This is better for Australian working people because’—said the Deputy Prime Minister—’it so clearly is.’ If that be the case, then why won’t the Deputy Prime Minister guarantee that no individual Australian worker will be worse off under the bill? Why doesn’t the Deputy Prime Minister pick up the phone herself? Why doesn’t she pick up the phone to Professor Andrew Stewart and ask him? Why doesn’t she ask him whether the bill delivers a simpler, more certain system? Because she knows he will say that it does not. Why doesn’t she pick up the phone and ask him whether the bill delivers a system which means that individual workers will not have their individual pay packets reduced? Because he will say that the bill means they can. Why doesn’t she pick up the phone and ask Professor Stewart whether the bill means that award modernisation will leave every Australian worker better off? She will not pick up the phone and she will not ask the question, because she knows he will say the bill means it will not and cannot.

In terms of these transitional shortcomings, it is interesting to note that in the majority report the best that government senators can recommend is that problematic issues with this bill be dealt with in the substantive bill, which is to come later and is yet to be developed. Of what point is a transitional bill? Is not a transitional bill supposed to transition you to something else? What is the point of having it if you are not going to make it do the transition to that to which it is intended to transition? Why leave it all for the next step—that is, the substantive bill? Because the government wants to bury its union payback in round 2—that is why. And, the more it can heap into that bill whilst playing the charade of getting rid of individual statutory agreements, the more chance it stands of hiding its union payback next time around.

In the context of a bill which otherwise progressively limits and then ends the rights of parties to make new individual statutory agreements, the ongoing availability to parties who so wish that a mechanism to continue to apply to a stream of individual statutory agreements, subject to a safety net, is critically important. To that end, that is an important measure in the bill and an important measure, in respect of which the government must keep its election promise.

Rod Kemp (Victoria, Liberal Party) Share this | Link to this | Hansard source

As my colleague Senator Fisher has said, the coalition will not be seeking to oppose the passage of the Workplace Relations Amendment (Transition to Forward with Fairness) Bill 2008. I commend my colleague on her speech and the remarks that she made. The coalition’s policy on this matter has been well stated on several occasions by the shadow minister for employment, Julie Bishop. Of course we have concerns with this bill, and so do many business groups, but the coalition recognises the political realities we now find ourselves in.

I congratulate the coalition senators on their report, which was tabled today, from the hearings conducted by the Senate Standing Committee on Education, Employment and Workplace Relations on this bill, chaired by Senator Gavin Marshall. As my colleague mentioned, Senator Marshall got himself into some serious trouble with his colleagues through one of his remarks. When he speaks, undoubtedly we will have the greatest backflip since Federation. We understand that, Senator Marshall, and that is the way the Labor Party operates—as I will say a bit later on in my remarks about the pipers and tunes.

My colleagues, in their report, describe this bill as fundamentally flawed, unduly complicated and, in many areas, difficult to understand. In my view they are absolutely right. The concerns of employers are extensively summarised in the coalition senators’ report. Many Australian business groups argued there were significant problems with this bill. For those who are worried about the challenges facing the Australian economy, this bill does not make happy reading. Let us not mince words. This bill is the first instalment of the Rudd government’s dividend to the unions for their unprecedented $30 million investment in the ALP’s election campaign. Let us not pretend, despite the title, that this bill has much to do with fairness or sound management of the economy; it has everything to do with the Labor Party dancing to the union tune. For all its claims of consultation and working with business, when the choice comes between business interests and union interests, there is no surprise who wins when the umpire is a Labor government. The outcome is always certain. The unions pay the piper and, therefore, they call the tune.

In a period where the Rudd government ministers speak incessantly about the threats of inflation to the Australian economy, is it not a little surprising that the first major bill they present to the parliament will undoubtedly increase inflation? Some Labor senators seem to constantly refer to the so-called ‘dark days’ of the Howard-Costello government. These were not dark days; they were a golden age—not only compared with the Hawke-Keating government but compared with governments in the post-war period.

Let me have a look at a couple of statistics. There was unprecedented growth in the economy during the Howard years and, by every measure, as I said, it was a golden age for Australian workers, Australian families and Australian businesses. Real wages—this is a very important statistic—increased by a remarkable 21.5 per cent over the 11 years of the Howard government. Contrast this real 21.5 per cent increase in real wages with a negative growth in real wages of 1.8 per cent, which occurred under the Hawke-Keating years. Under the Howard government, industrial disputes fell to their lowest level for a century. Unemployment is currently the lowest for 33 years. Inflation, interest rates, government debt—all of these figures illustrate why the years from 1996 to 2007 can be considered to be a golden age. Of course, this is quite contrary to the message which is now being marketed by Mr Rudd and his ministers.

One of the most flawed areas in the bill—and this was extensively covered by my colleague Senator Fisher—is the model award modernisation request that has come under attack from a number of areas, including from Professor Andrew Stewart at the University of Adelaide. On the one hand the ALP say they want to oversee the eventual demise of individual statutory agreements and yet, on the other hand, they are not prepared to ensure the modernisation of Australia’s some 4,200 awards takes place prior to pushing their legislation through the Senate. This will leave many businesses in an unsatisfactory workplace relations abyss of confusion and old-fashioned practices. The problem—and I will not go over this in detail because it was so well covered by Senator Fisher—that Professor Stewart identified is that the model award modernisation request, which was included in the explanatory memorandum to the bill, contains statements to the effect that the government instruct the industrial relations commission to neither disadvantaged any workers nor increase the cost to any business. Of course, Professor Stewart has said that, while it may be possible to modernise awards while minimising the damage done to employees and employees, it is not possible to standardise instruments without someone being worse off than under the previous system. Professor Stewart has described the ALP’s bill as trying to ‘make an omelette without breaking any eggs’.

It is ludicrous for the ALP to think that the removal of adequate statutory agreements within the existing time frame is achievable. It is impossible for Labor to implement its new laws without workers or employers being worse off—someone simply has to lose. It will certainly be the employers who will meet the additional costs and we all know what that means. Higher costs mean less demand for labour, which, in the end, means higher unemployment. And not only will the Rudd government boost inflation; it will boost unemployment as well. Growth will fall, unemployment will rise: are we heading back to a period of stagflation?

As I said, this is the first instalment demanded by the unions. Not too far down the road the unions will demand further dividends from this government. The Australian Building and Construction Commission will be abolished in 2010 under Labor’s policy, which, of course, is opposed by businesses in the sector. The ABCC has been extraordinarily successful at ending the endemic corruption and lawlessness which has plagued the construction industry and brought about, in this sector, a new era of industrial peace. How long will it be before Anthony Albanese’s infrastructure plans effectively dump the building codes which have further underpinned the building industry’s success?

Then we come to the fact that there will be a rollback of unfair dismissal laws, which will have a huge effect on small business. How long before the right of entry laws, which I note Labor promises to maintain, will be overridden by the manipulations of occupational health and safety laws, as state Labor governments have done in Tasmania and Queensland? The alleged modernisation and simplification of awards will only further burden business by ratcheting up rates of pay and inspiring further wage blow-outs. Who, for a moment, can take Labor’s promises to modernise and simplify the awards when the so-called 10 award matters are really closer to 30—or so I am advised? How does this amount to modernisation and simplification? How is the award modernisation process meant to simplify and remove red tape from business when all it will achieve is to expand coverage and provide greater prescription on how businesses should run themselves? How long will it be before the union wish list is implemented? And what is this union wish list? Compulsory union dues, paid time off to perform union work, compulsory union training, compulsory bargaining fees for non-union members, restrictions on the use of contractors or labour hire arrangements and the threat of an influx of non-working union delegates to the workplace. We are already hearing stories of the MUA seeking the pay rates of engineers working on the North West Shelf for those who are labouring in the dredging ships of Port Phillip Bay. This is what we were told simply would not happen, but I am advised this is one of the current demands of the MUA. The truth is that the rollback of industrial reform will continue until employer groups say, ‘Thus far and no further.’

During the election campaign there were a number of employer groups that recognised the immense danger that Labor presented. Credit should go to the Australian Chamber of Commerce and Industry, the Business Council of Australia and the Australian Mines and Metals Association and a number of other groups. However, there were other business groups that thought, to be quite frank, this was a fight they could avoid. They were, in a sense, apolitical. Of course the leader of this particular group was the Australian Industry Group. During the election the union movement was firing on all guns, but the firepower of the employer groups was diminished by disunity and, in some cases, absenteeism. There is, I believe, a need for some heavy thinking amongst employer groups about the onward march of Rudd Labor and their union mates. Already the unions are collecting dues for the next campaign. Why would they be doing this? Why would the unions be collecting, having achieved what we were told were their goals? Why would they be collecting dues for the next campaign? The fact of the matter is we have a situation now where union power is triumphant. It is my view that it is time the employer groups started to recognise this. They can demonstrate their seriousness by establishing, for example, a fighting fund. This was done by the National Farmers Federation in the 1980s to deal with union excesses. There are some business groups that are settling for scraps from the ALP’s government table. If business groups are serious about halting the rollback of Labor’s actions then it is time for them to get real on what is to be done to stop the union paymasters from calling the shots.

Let us go back to the election. There has never before been an example, I believe, where more money has been spent by an interest group, namely trade unions, on an election than either of the two major political parties. The unions’ $30 million-plus certainly outweighed the amount spent by the Liberal and National parties and outweighed the amount spent by the Labor Party. The business community contributed, I understand, a relatively paltry $8 million to fight this campaign. As I said, some business groups, and I have instanced publicly the AiG, seem to be more interested in negotiating the terms of surrender than fighting the battle to ensure that major labour market reform was not rolled back. Time will tell if business groups are serious about labour market reform. If they wait too long, it will take a generation to restore the gains that had been made under the Howard government.

Australian businesses now face nine Labor governments—one for every state, one for every territory and of course the national government—and each and every one of them is beholden to their union mates through the massive amounts of money they provide. How interesting it was to read information in the newspapers on the TWU and the union slush fund and the extortion from business. Mr Joe Ludwig recently was explaining to the Senate how they can conduct a political investigation of a former Liberal minister, but how loath they are to call for an investigation into this TWU slush fund. I just wonder, if the next election turns out the way I hope, whether some minister will follow the Senator Ludwig precedent and have an investigation into the actions of a former minister. It was a very unwise step, Senator, and the Labor Party and some ministers should be careful, in my view.

The former Prime Minister, John Howard, said before last year’s election that if Rudd Labor won the election the concept of lasting industrial relations reform in this country will be gone forever. To be quite frank, I hope that Mr Howard is wrong. But unfortunately too few business organisations have come to realise this. They still think that the ALP legislation is balanced and workable. It is not balanced and it is not workable. It is regressive in its effect, I believe, on the Australian economy and ultimately on the living standards of Australian employees. As I said, this is the first major instalment that has been paid back to the unions for the unprecedented amount of money which they spent on the last campaign to elect a Labor government. We can complain about developers and the Wollongong council, we can complain about their money that was being spent to have an influence on local governments and maybe even a state government. That is bad and disgraceful. But it is nothing compared with the amount of money that the unions have paid to win an election and to get a seat at the table of government. We on this side will be monitoring what happens very carefully.

Ruth Webber (WA, Australian Labor Party) Share this | Link to this | Hansard source

I seek leave to incorporate Senator Kirk’s speech.

Leave granted.

Linda Kirk (SA, Australian Labor Party) Share this | Link to this | Hansard source

The incorporated speech read as follows

WORKPLACE RELATIONS AMENDMENT (TRANSITION TO FORWARD WITH FAIRNESS) BILL 2008

Introduction

I rise today to speak on the Workplace Relations Amendment (Transition to Forward with Fairness) Bill 2008 Workplace Relations Amendment (Transition to Forward with Fairness) Bill 2008 ... the death-knell of the former Government’s Work Choices legislation.

For too long now, Australian working families have suffered under Work Choices. Stripped of protections for penalty rates, overtime, shift allowance and redundancy entitlements, just to name a few of the benefits taken away by Work Choices, the Australian public have made their choice abundantly clear. In electing a Labor government, they have chosen a government to deliver on its promise to end the assault of Work Choices on working Families.

So, for whom, or should I say, for what, does this bell toll? It tolls loudly for the former Howard Government, that’s a given. It tolls for the end of AWAs, the so called fairness test (which was in fact never fair), the Work Choices fact sheet, the abuse of taxpayer funded advertising campaigns about workplace relations as well as the complicated and dated awards system and, most importantly, for the end of the deep and inherent imbalance in current workplace negotiations.

If ever a new government had a mandate for change, this was it—this government will abolish the damaging legacy of Work Choices and overhaul Australia’s industrial relations system for good.

Today the Rudd Labor Government delivers. Today, we go forward with fairness and flexibility in the workplace and say to the working families of Australia—we are listening to you.

Work Choices and the Opposition

Work Choices was a slippery, sneaky shift in workplace relations by the Howard Government to individualise employment and to stifle third party interventions from trade unions or industrial tribunals—the kinds of organisations that help keep the workplace fair.

The size and complexity of the Work Choices legislation was enormous. In fact, it totalled 762 pages and was recently described by Philip Adams in the Australian as “the longest suicide note in Australian history”.

There is no question that Work Choices also sucked money out of the public purse. It was “sold” to the Australian pubic under the guise of ensuring “freedom, choice and flexibility” in the workplace by using an outrageous multimillion dollar taxpayer funded advertising campaign.

The Howard government’s politically palatable proposal was a farce; it was presented as a scheme that was all about employers and employees sitting down to reach an agreement that suited both their needs where in actual practice it was quite different and manifestly unfair, placing employees in a “take it or leave it” situation with the pay and conditions of the jobs they applied for.

The Coalition has an appalling record when it comes to industrial relations. Its Work Choices reforms were a sneaky shift towards a national system of workplace relations which would ensure that the majority of employers would be exclusively subject to federal rather than state regulation. In Opposition, the Coalition has allowed the hardship on working families to continue with their indecision and dilly-dallying over whether or not they would support this legislation.

Labor’s Promise

Labor promised at the last election to provide a fairer and more flexible industrial relations system. We have consulted with those who will be affected by and have a role in the new workplace relations system and now, with this legislation, we deliver.

Fairer because ...

The first step this legislation takes towards making a fairer system for Australian workers is to abolish AWAs. Under the transitional legislation no new AWAs will be made and existing AWAs will be put out to pasture. No longer will individual agreements that undermine award conditions haunt Australian workers. This government supports working families and this government wants to ensure that employees are caught by the safety net. Therefore, Australian Workplace Agreements will not be a part of Australia’s industrial relations system’s future..

For too long, AWAs have tipped the balance of workplace relations in the wrong direction. We have heard time and time again how working families have been hurt by having to accept employment conditions below the award standard. There was evidence of this in the May 2006 Senate estimates which revealed alarming statistics about workers employed under AWAs:

• 100% of AWAs cut at least one protected award
• 64% cut annual leave loading
• 63% cut penalty rates
• 52% cut shift work loadings, and
• 51% cut overtime loadings.

The transitional period will feature the use of Individual Transitional Employment Agreements (ITEAs). These will cater for those already employed under an AWA as at December 2007 who may switch to an ITEA and to new employees or existing employees whose terms and conditions are governed by an AWA.

In creating these transitional individualised agreements this government will ensure that no one is disadvantaged, as against those on a certified agreement or applicable award, and so therefore introduces the no-disadvantage test.

The Howard government’s so called fairness test failed to ensure fairness in the workplace despite its politically palatable name. It failed to actually protect award conditions at all and it also failed to ensure that employees received full compensation for the loss of the limited number of so-called “protected award conditions”. Therefore, it will no longer apply to new individualised or certified agreements and it will be replaced by the no-disadvantage test. The Rudd government supports a safety net for Australian workers and that is what the no-disadvantage test will provide.

The threshold test for the no-disadvantage test requires the industrial instrument, for example an ITEA, to not disadvantage an employee as against an applicable collective agreement or applicable award or standard. This is another of this government’s initiatives to ensure fairness in the workplace.

Collective agreements will continue to operate in the industrial relations system in accordance with the current rules, apart from the fact they will now be subject to the no-disadvantage test against the full applicable award. Further, they may no longer be terminated unilaterally following the expiry date unless there is an application before the Australian Industrial Relations Commission which satisfies the Commission that the termination is not contrary to the public interest.

This government recognises that business and industry will need time to adjust to the changes in employment arrangements and has therefore legislated for the transitional period by introducing these individual agreements. The industrial relations system is scheduled to be in full force by January 2010 and as such ITEAs have a nominal expiry date of 31 December 2009.

The government also recognises that such major workplace reform will impact on the economy. By legislating for a transitional period, rather than introducing a “big bang” change, the government has acted cautiously and responsibly. The transitional phase will soften the economic effects of the industrial reforms.

The transitional legislation will also modernise and simplify the award system, a further measure to ensure a fairer industrial relations system. Penalty rates and overtime will be fiercely guarded under the modernised award system.

There are currently 4,300 awards in operation in Australia. Pursuant to this legislation, upon request of the Minister, the President of the Australian Industrial Relations Commission will have the power to create awards which will:

• Protect 10 important entitlements including penalty rates and overtime.
• Provide industry specific detail on the 10 National Employment Standards.
• Ensure a faire safety net for Australian employees.
• Ensure minimum award entitlements are relevant to the Australian economy and workplace.
• Not be overly prescriptive, and
• Allow for flexible work arrangements for employers and employees who rely on awards as well as provide for an appropriate benchmark for making collective agreements.

I wish to make special mention of the National Employment Standards which will be introduced in accordance with this legislation. The NES will replace the current Australian Fair Pay and Conditions Standard when the new workplace relations system becomes fully operational in 2010. The standards will include minimum entitlements to guarantee basic working conditions, including hours of work, flexible working arrangements, parental leave, annual leave, personal, carers and compassionate leave, as well as long service leave, public holidays and information in the workplace regarding notice of termination, redundancy.

This legislation will now prevent the Australian Fair Pay Commission from conducting wage reviews other than to increase minimum wages which are paid under collective agreements or ITEAs during the transition period. The reason the Australian Fair Pay Commission will perform only this annual review of minimum wages is because any other decisions regarding pay scales and minimum wages has the potential to interfere with the AIRC’s award modernisation process. The AFPC will continue to set the minimum wage until Fair Work Australia is established, when it will then be incorporated into the umbrella body.

This legislation also stands to protect the right of Australians to join together and bargain for fair pay and conditions.

Flexible because ...

Labor has also promised greater flexibility in the workplace; as such, there will be more flexible common law agreements for people earning over $100,000 per annum. This is because the award system will not apply to employees who have salaries which exceed this amount.

There will also be greater flexibility in the award system through a model flexibility clause—but with a strong safety net to ensure award conditions are not stripped away.

There will also be greater flexibility in enterprise agreements.

These are the measures that this government will put in place through this legislation to ensure flexibility in the workplace.

How the Transition will work

The full implementation of Australia’s new industrial system is on track to occur by 2010. In the meantime, the measures I have outlined today will be put in place to ensure a sensible and responsible transition.

Consultation with business, employer groups, the union movement and wider community has been an important aspect of ensuring that we get the transition right.

The Deputy Prime Minister and Minister for Workplace Relations, Julia Gillard, has convened two meetings of the National Workplace Relations Consultative Council, a body which encompasses peak employee and employer organisations from a range of industries. There has also been consultation with State and Territory workplace relations ministers.

This legislation was NEVER about ramming reform through the Parliament. It is about giving Australians the industrial reforms they voted for on November 24 and that is why such consultation has taken place.

Many businesses are currently using AWAs which have been entered into in good faith by employers, so to immediately repeal these laws could leave employees with uncertainty and cause unnecessary disruption to business. This is why this government will sensibly phase out the use of AWAs over time.

Conclusion

This government delivers on its promises; we have now commenced lasting workplace reforms which will ensure fairness and flexibility.

There will be no more Work Choices, no more AWAs, no more unfairness, complexity and confusion in the workplace.

I urge Senators to support this legislation.

Barnaby Joyce (Queensland, National Party) Share this | Link to this | Hansard source

It is interesting to talk here on the Workplace Relations Amendment (Transition to Forward with Fairness) Bill 2008 tonight because things have changed over time. I remember that when this legislation initially came in I was very hesitant—I would say reticent—and so was Queensland, about the adoption of this bill. The issues at the time spoke to an economy that was robust, where opportunities were abundant, where the horizon had what a nation should have levelled out before it for its citizens.

That was some time ago in politics now. Economically the world has changed dramatically since then and it seems almost foolish, almost lemming-like, that the discussions politically around this chamber and other chambers tonight ignore the realities of exactly where the world is. The IR changes came before the US pumped $200 billion to try and refloat the American economy, to no avail. Even if we look today at the headlines in the papers, we see that the worsening credit crisis has heightened concerns about the liquidity of major investment banks after the US Federal Reserve was forced on Friday to bail out one of Wall Street’s top five firms, using powers not exercised since the Great Depression.

We have to acknowledge in this chamber and in this parliament where the world is heading. We have to have a reality check about exactly what is in front of us. We have to confirm that the US, with 26 per cent of the world economy, and by default Australia, with about 1.5 per cent, are heading for a recession. I looked at this before I came in here and googled some words. This is four minutes ago. ‘Shares plunge.’ ‘US bank crisis spooks investors.’ Basically Asian markets have gone down four per cent, Europe has gone down two. ‘Big Apple softening.’ ‘European investment bank shares dive as credit crisis fears spread.’ Vancouver, with stories of people losing their homes in impending recession in the United States. This is the reality of where the world is now, so what on earth are we talking about? What on earth are we talking about in how we are going to deal with this problem, the major problem that is coming before our nation now, and calling for those with a bit of steel about them to deal with it? This problem is way beyond any of the minor nefarious imbroglio that surrounds this bill. This problem is the big deal of the day.

My position is entirely different to my position when, with hesitancy, I first voted for this bill. I think, to be honest, that my position now in supporting this bill is probably stronger than ever. We have an impending train wreck. It has been preceded by the subprime mortgage meltdown; it has been preceded by the $200 billion injection; and it has been preceded by the fact that the Australian market has gone down by, I think, 21 per cent since October last year. First and foremost, the thing that we need to do for people is to keep them in a job.

The Prime Minister, the Deputy Prime Minister and the Treasurer of this country today have an immense responsibility in front of them. I know they cannot stop it, but they need to try and mitigate the effects on the Australian people of what will happen—to soften the blow. Let us look at what levers they have before them. They have monetary policy, which they have exercised by basically saying nothing—by taking the rudder off the ship, putting it in full sail and seeing were it blows. And now Australian working families are at tipping point in what they can afford in their mortgage repayments. That is not an emotive statement; that is a statement of fact. Last weekend in Brisbane, in my home state, the clearance rate on the sale of houses was 26 per cent. That is astronomically low. In the major market of Sydney, it is less than 50 per cent. There have been a record number of listings in Melbourne, yet we sit back and pretend that there is nothing happening. We sit back and pretend that the world is just going on as per normal. We have reached tipping point for Australian working families. We are tipping them out of their houses and we are tipping them out on the streets. We need to take hold of some of the levers to try to mitigate the effects of this fall for our nation.

We have had statements by the Prime Minister and the Treasurer about fiscal restraints. But they are not quantifiable. We cannot pin them down. There is nothing you can actually get to. We cannot even at this point in time quantify exactly where the so-called two per cent efficiency dividend is.

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

Mr Acting Deputy President, I am reluctant to rise on a point of order—that of relevance—but Senator Joyce has been going now for just over five minutes. He has made one reference to the bill, but did not actually talk about it. There is nothing in the substance of his speech so far that goes even remotely close to the bill before us. I would ask you if you would draw his attention to the question before the chair.

Mark Bishop (WA, Australian Labor Party) Share this | Link to this | Hansard source

Thank you, Senator Marshall. I am sure Senator Joyce is aware of the bill before the chair, and I would ask him to direct his remarks to that bill.

Barnaby Joyce (Queensland, National Party) Share this | Link to this | Hansard source

I know that we are arriving at the soft underbelly of exactly what the intrinsic issues are in this nation at this point in time. This is what the Workplace Relations Amendment (Transition to Forward with Fairness) Bill 2008 is all about: it is about taking away another lever to the control of our nation so as to mitigate that fall, so as to save Australia from the effects of an uncontrolled, unreasoned collapse.

I know the rhetoric that has been played around this place, but we must be strong and we must maintain some position. Although it may be unpopular, it is essential if we want to take hold of this nation. Our first job, even before guarding our own political skins, is to be a patriot to this nation. If this bill were not required, I would say, ‘So be it,’ but the original bill, now more than ever, is required. It will not be the panacea, but now, more than ever, we must start looking at an extensive and holistic view of the problems that are before this nation right now.

I believe, to be quite honest, Mr Swan is not up to the job. I am not making any personal assertions against his character but, for the job that is in front of our nation now, he is out of his depth. We have some major problems that are coming before us.

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

Mr Acting Deputy President, I rise on a point of order. Mr Swan is not even the minister that has carriage of this bill. I really think the senator needs to be talking about the bill. He is on some meandering rampage about economic policy that has got no link to this particular bill. You should bring him to the question before the chair.

Cory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary for Families and Community Services) Share this | Link to this | Hansard source

On the point of order, Mr Acting Deputy President Bishop: Senator Joyce has every right to fully expand upon the implications of this bill across the Australian economy. He is well within the brief and the subject matter. I do not think there is any point of order.

The Acting Deputy President:

Thank you, Senator Bernardi. On the point of order: it seems to me that Senator Joyce has been taking a very broad view in his contribution to the debate on the bill, but I am sure he is coming now to more pertinent comments as to the content of the bill.

Barnaby Joyce (Queensland, National Party) Share this | Link to this | Hansard source

I return to exactly why it is pertinent: what we are going to see now is a wage-interest-inflation spiral. That is what is coming before us now. To take you back to the crux of what happens next, what happens next is wage-interest-inflation. We have that because of the centralised control that will permeate back into the direction of wages—and obviously unions must reflect the aspirations of their members. They will say that their interest rates have gone up because the government has failed to talk down interest rates, because the government did not have the courage to go out and publicly state that monetary policy is a blunt instrument and because the Prime Minister and the Treasurer refused to go into bat for the working families of Australia and put downward pressure on interest rates. Because they refused to do that, we now have the advent of what will be wage-interest-inflation. It will work quite simply. The workers will meet with their union rep, as they are entitled to do, and they will apply for a wage increase. The wage increase will come about and then people will lose their jobs, because you cannot get blood out of a stone. This is what is going to happen. There is only a limited amount of money to go around.

We are heading for an economic squeeze like we have not had in the history of this nation and it has got absolutely nothing to do with our domestic economy, which has been left in entirely good shape. We could never be so conceited to think that we are the drivers of world economic policy. The drivers of world economic policy are nations that are far stronger than us, and that is what is driving the agenda of this nation. All you can do in this nation is mitigate the effects of it, because that is all you have the power to do. When you open our economy from the inside to wage and interest inflation, you do not mitigate the effects, you exacerbate them. You exacerbate the effects of the hurt and the pain that will come from what is already before us.

That is why, with a completely carte blanche ‘we are going to throw this out’ approach to politics, you may win a political point, you may be popular or a whole range of other things, but you are not a patriot and you are not doing the right thing by our nation. There has to be an ability to mitigate by having an extra lever in some way, shape or form—some control mechanism that is not determined from a centralised point, as this will be.

This government will be judged on its capacity to manage under a position of stress. And I will be honest, it did not bring about this position of stress; it was going to come regardless. If it does not have the capacity to manage it, the judgement will be for all to see, because there will be ramifications for every working family in the mortgage belts of Sydney, Melbourne and Brisbane, which this week had a 26 per cent clearance rate. Those people are under stress and under pressure. They cannot even pay back to the banks what they owe them. As those pressures come on board, this government will be judged on whether it has the capacity and the ability to steel itself to walk up to the line and deal with the issues.

Going back to the bill, the Deputy Prime Minister said that it will not jeopardise employment. Quite obviously, that is a statement that will not stand the test of fact. Anyone who has been in business will tell you that, when times become precarious, you will not take someone on full time if you do not have the capacity to disengage from that employment. Without a shadow of a doubt, in the real world if I am worried and I am under the pump because my nation is under the pump I will not take employees on. The only avenue I have is if I have the flexibility of negotiating with them in the best terms I possibly can so as to keep them in a job and to keep myself in business. But my business is my house mortgage. It also supports my family. I will not let it all go down the tubes by making a stupid decision. So, in small business, my decision is: if in doubt, rule out. I will not employ people; they will stay as casuals. More to the point, if I think that there is going to be some caveat placed on it by the government or some intrusion by the government, I will not employ them at all. I will do without. That is an impediment to the aspiration of the Australian people to go into the workplace.

You might say, ‘We’re at full employment now.’ We are, but as a resource nation, we lag behind the effects in the rest of the world. We have heard some ridiculous arguments in the past by a number of commentators about so-called ‘decoupling’. As I stated earlier, Asia today went down four per cent; so much for decoupling. The US is the nose of the plane and no matter where you are on that plane you will follow where the nose of the plane goes.

The only thing that we can do to try to keep people in the workforce is to create some sort of flexibility of engagement. It is a fool’s errand to think anything else. You are talking not only to the employer but you are talking to a wife with a mortgage and she will not put the house at risk for the sake of taking on an extra employee. This is the reality of where we are now.

The Prime Minister and the Treasurer have the run of this nation for another two and a half years and God bless them and good luck to them, because they need it. But I look forward to a substantial statement of policy direction on how this nation is going to manage the impending threat that is absolutely apparent to anybody who has the capacity to google. As to why this nation is not dealing with it, I have no idea. I have no idea where this political debate has wandered to.

In summary, I believe there is more reason now for legislation to support the working families of Australia and to keep people in jobs, to deal with the reality of the position we are in now. Industrial relations laws change all the time, and six months ago it was a completely different situation to where we are now, and surely Labor must acknowledge that. We need to manifestly express that reality in the policies we put before the Australian people. The Australian people will understand that it is a hard statement but that the alternative is unemployment. The alternative is mortgage repossessions on their houses, loss of the payments on their cars and having them taken away, and kids not being able to go to the school of their parents’ choosing. They are the things that will come screaming in the door. If economic pundits in the United States are correct when they say that this is the biggest economic crisis since 1928, then what page are we reading from? Why hasn’t there been a statement that says that we are going to start to deal with this issue?

My belief is that this bill is now more pertinent to the security of our nation and the security of jobs and to mitigating the effects of the impending recession than has ever been the case before. Our nation has before it now a crisis that has not been seen by our government—and not by any government—for a long period of time. The strength, structure, policy development and courage of the government that is able to deliver those policies to see the Australian people through that period will be held in high esteem by the history books for a long period after all of us have left this chamber. But, if you take the rudders off the ship and you allow the Australian nation to venture forth in full sail at the behest of the storm, we will be crushed by the waves and you will be held responsible.

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

I thank Senator Joyce for his incredibly passionate support for the Workplace Relations Amendment (Transition to Forward with Fairness) Bill 2008, which is before the Senate today. While I do not regularly look a gift horse in the mouth, when Senator Joyce claimed that this bill will save Australia from the impending disaster of collapse, I am not sure that I would have even gone that far myself. While this bill clearly will deliver productivity outcomes to this country, I am not sure that I actually agree with Senator Joyce’s assessment on just how good it is, but it is certainly a step in the right direction.

Barnaby Joyce (Queensland, National Party) Share this | Link to this | Hansard source

Mr Deputy President, on a point of order: going to the direction of the statement, I did not say this bill would save the nation. In fact, I said completely the contrary. Senator Marshall may be moving towards a position of misleading.

Mark Bishop (WA, Australian Labor Party) Share this | Link to this | Hansard source

There is no point of order. If you want to make a personal explanation, you can do it at the appropriate time.

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

I am sorry, Senator Joyce. I did not mean to misrepresent you, but I was listening quite carefully. I will enjoy reading your speech and I hope you do not try to change it too much before the rest of us get to have a look at it. I will leave your contribution to one side. I think that is probably the safest thing for all of us.

As chair of the committee that inquired into the impacts of this bill, I want to make some comments. Normally, as chair, I would probably have been a little bit higher up the list, but as the opposition and the minority party’s reports were only tabled not so long ago I wanted to have an opportunity to flick through at least those reports so I could have some constructive response to them. I have had the opportunity now to listen to a number of senators’ contributions. If I have time, I will try to wade through some of the issues that they have raised, to put some of their concerns to rest.

First, let me simply go to the conduct of the inquiry. I know it was said by Senator Fisher and some others that this was a rushed inquiry. I do not know by what standard they are actually judging this. If it is the way they acted while they were in government, it was a very leisurely inquiry. You could even imagine us as having put our feet up. We did not get that opportunity, but it was a very thorough inquiry. We had public hearings in Perth, Sydney, Melbourne, Brisbane and Canberra. This is for a roughly 100-page transitional bill, which had some very specific objectives and achieves them. Make the comparison to Work Choices itself, which was around 900 pages of incredibly complex legislation with an explanatory memorandum that went over 1,000 pages, as I understand it, and then on the very day we went into the committee stages, 30 pages or so of technical and substantive amendments were put on the table after we had gone through our inquiry. For the inquiry into Work Choices, for the extent and length of that bill and the issues that it went to, we were allowed two days in Canberra. Two days in Canberra! It never went anywhere else. If the opposition are actually making a claim that this inquiry was rushed compared to what they did while they were in government, I say they ought to hang their heads in shame and apologise for the way they abused the Senate processes. And it was not just Work Choices. There was bill after bill after bill, as I am sure everyone on this side of the chamber remembers only too well.

This was a comprehensive inquiry where we took 55 submissions from organisations and 268 individual submissions. While you will always get people who say they would like more time, it was important for this government to move quickly to remove some of the potential abuse that may be happening in the workplace at the moment. I will get to that a bit later if I have the time. The purpose of this transitional bill is to give effect to a major election commitment of the government to establish a new fair and flexible workplace relations system and to have sensible transitional arrangements to that system. This is a transitional bill. The short title of the bill is derived from the workplace relations policies released in Forward with Fairness and the 2007 Forward with Fairness policy implementation plan. I make that point because this bill, more than any other, has been subject to detailed consultation with employers, unions and other interested bodies through the consultative mechanisms that the new government has set in place. It was also detailed to minute levels in the policy platform that this government went to the election with. There are no surprises in this bill. There is nothing new in this bill. This was in the public domain as policy before the election. It was not in the detail or the form of the bill itself, but every policy issue was canvassed and was put before the Australian people before the election.

I think, after Senator Kemp’s contribution today about the golden years of the Howard-Costello government, one has to remind the new opposition that they actually lost the election. After hearing Senator Kemp’s contribution, I wonder how that could have been. Maybe these were not the golden years as he would like us to believe and, clearly, the Australian people did not think so.

Cory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary for Families and Community Services) Share this | Link to this | Hansard source

Leave it to the Australian people. Leave it to posterity.

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

We did leave it to the Australian people, Senator Bernardi, and the Australian people spoke. The workplace relations amendment bill would amend the principal act, the Workplace Relations Act 1996, to make a number of changes to the framework for workplace agreements and to enable the process of award modernisation to commence. The bill begins the implementation process and is the first step of a larger industrial relations agenda, which will involve further legislation. Again, I think we need to keep that in mind. If Senator Fisher actually understood the purpose of a transition bill, she would not be raising all sorts of issues that are not actually included in the transitional bill and be leaving those questions open. Many of the issues about the new industrial relations framework that is going to set this country up for the next two decades at a minimum will be contained in the substantive bill that will hopefully be before this parliament in the second half of the year.

It was actually the opposition that referred this bill for the Senate inquiry before the government had the opportunity to do it. The main reason they did that was that they wanted to specifically put their mark or stamp on the terms of reference. Within the opposition’s terms of reference there is an implication that the opposition persist in regarding industrial relations on the basis of an understanding of economic growth which completely overlooks the relationship between productivity and fairness. It is possible to achieve both, and this transition bill sets up the process for us to achieve both. You do not have to have fairness excluded, as Work Choices did, to achieve productivity outcomes. This bill and the substantive bill to come later in the year will be the productivity drivers for this economy. You can do it with fairness, and this legislation will ensure that fairness is enshrined.

An exploited workforce is not a productive workforce, and yet the insistence of the former government in regarding industrial relations solely for the purpose of driving down wages to increase productivity was ultimately damaging to economic progress. It also resulted in the most complex and highly regulated industrial system of any OECD country. When Senator Fisher gets up and says the transition bill and the substantive bill that is to come are not going to simplify workplace relations in this country, what is that compared to? The coalition government put in place the most regulated, cumbersome and complex industrial relations system of any OECD country. We, the government senators who did the report, regard the bill as a measure which takes the regulatory burden from both employers and employees and sets up a new system for agreement-making arrangements to drive productivity. That is what we are doing, and we are determined to see that through in a fair way.

When I was thinking about my contribution to the debate on this bill, I thought about how the coalition senators found it very difficult during the inquiry to give up on AWAs. Given the flip-flop-flapping around—the Leader of the Opposition says one thing; the shadow industrial relations minister says another thing; one minute Work Choices is dead and then it is dead, less some other things—I thought it might be difficult to get the opposition senators, the previous government senators, to tell us what they really believe. But I did not have to wait very long; it is here in this debate. Senator Watson started off by saying there is nothing inherently wrong with AWAs; they allow for flexibility in the workplace. The conclusion to the coalition senators’ report says:

However, the bill reflects the regressive policy of the government in attempting to abolishing individual statutory agreements. This is a step too far ...

Abolishing individual statutory agreements is a step too far. In case anyone is confused, you will see the language change from the coalition. They no longer talk about AWAs. They do not mention AWAs anymore; AWAs are bad. They talk about ‘individual statutory agreements’, but that is exactly the same thing. No-one should be conned by the change in terminology from the opposition. Why don’t you be honest and call them AWAs? You named them, you are stuck with them and, if you want to defend them, why don’t you actually be honest and say that is what you are going to defend?

Senator Boyce told us that this bill will end AWAs and that that will be a ‘sad day for Australians workers’. I have news for Senator Boyce: it ain’t a sad day for Australian workers at all. Maybe Senator Boyce and some of the other senators were listening too closely to Senator Kemp’s speech about the ‘golden years of the Howard-Costello government’. Something has happened between then and now; that is why you are on that side of the chamber. The quicker you come to that realisation and abandon that policy, the better off you will be.

At least, to give the opposition senators credit, they are going to hang on to AWAs and they are going to say so. I am happy to help them publicise that position. I think Senator Boyce went on to say that ‘killing’ AWAs is an ‘empty headed’ aim and that AWAs are ‘much needed’ in our system. She said she was ‘bitterly disappointed’ with the end of AWAs and then went on to tell us there is nothing unfair with the use of individual statutory agreements, which is AWAs. That is in direct contravention of all the evidence that was presented to the committee. No-one said that they were fair. All the individual submissions that came to us said that they were absolutely unfair.

Senator Fisher said the bill is flawed in its policy intent because it removes AWAs. She went on with a very interesting contribution and she said that ‘all these people are saying you could be worse off’. I say to Senator Fisher: if she wants to take evidence given on Senate committees out of context—pull out a sentence here and pull out a sentence there—and rely on that as the bulk of her argument before the Senate, she will not last very long in this place. It was very disingenuous to use some of that evidence completely out of context, picking individual sentences and putting words in people’s mouths. I do not mind when people do it to other senators, and she has done it to me as well, but I suggest that—

Andrew Murray (WA, Australian Democrats) Share this | Link to this | Hansard source

Senator Marshall, please direct your remarks through the chair.

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

I apologise, Mr Acting Deputy President.

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary Assisting the Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

She’ll be here longer than you will be.

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

Good luck to her if she is. You will be over there longer than I will be here, too, I suggest.

Senator Fisher then went on and thought there was a problem with government senators actually challenging the position put by witnesses and the department, in terms of the policy. It is actually the role of the Senate committee process to not automatically accept the assumptions made by anyone. This is the purpose. We are actually there to challenge and scrutinise legislation before us. If something is not clear, government senators should do that. I suggest that if the now opposition had done that properly when they were in government they would not be in the position they are in now. I think everyone over there accepts that they should never have removed the no disadvantage test. Maybe they should have challenged their government’s legislation during that process—they should have. If they had, things may be quite different. Nonetheless, that was not done. It is not as if the then government coalition senators did not know. Everyone told them. The reports in the committee process told them that removing the no disadvantage test at the time would result in a spiral to the bottom, a race to the bottom, which is exactly what happened. I think Senator Murray in his contribution earlier today said that he told them. I know I certainly told them and I know nearly every senator now on this side of the chamber told them as well.

It was interesting that Senator Fisher, in her 20-minute contribution, talked for 10 minutes about the bill and the inquiry and then went on to the wage freeze for politicians. I am not quite sure about the link to complaining about a wage freeze for politicians. I know that those in the opposition are very bitter and twisted about that wage freeze. I heard a number of senators through the estimates process complaining about it.

Sue Boyce (Queensland, Liberal Party) Share this | Link to this | Hansard source

Senator Boyce interjecting—

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

You say that, Senator Boyce, but I certainly have not heard anyone on our side complain about it.

Sue Boyce (Queensland, Liberal Party) Share this | Link to this | Hansard source

They’re not game.

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

The opposition say they have heard people on our side complain about it, but then they say they are not game to complain about it. They really cannot have it both ways. This really shows the shallowness of the debate that they are having here tonight. The problem is—

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary Assisting the Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Your salary’s gone up. You’re getting more now than you were three months ago.

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

There we go. See—

Andrew Murray (WA, Australian Democrats) Share this | Link to this | Hansard source

Senator Marshall, the senators on my left know that interjections are disorderly, and it is made worse if you respond to them. I suggest you continue your remarks through the chair.

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

Yes. I will just finish by saying that I guess the interjections show the obsession that the opposition senators have with politicians actually leading by example and showing some wage restraint. Then again, I think that is something that they have to work out with their own consciences, but they will struggle with that.

Then we had Senator Kemp making a bizarre attack. I do not think he used the word ‘treacherous’, but he talked about employer organisations that I think wanted to ‘get into bed with the ALP’ or ‘get the crumbs’ or words to that effect. The problem was he commended a lot of the employer organisations and then went on to describe the one that he does not like, the AiG, as apolitical. I think that is probably a fair description of them. If the AiG is apolitical and all the others are not, but they were the ones who were supporting the coalition in the election, I suggest he probably has not really argued that properly. It was fairly obvious, through the submissions, that many of the employer organisations that had invested so heavily politically in Work Choices were still very supportive of the coalition and would rather not have AWAs removed. But, on the whole, the evidence to the committee was that the transition bill and the substantive bill will be very workable—the policy has been accepted, people are working towards that, and there were no serious concerns raised with moving forward with fairness through this particular policy.

I understand that it is very difficult for the coalition after investing so heavily, politically and financially, in Work Choices. The introduction of Work Choices cost many hundreds of millions of dollars to implement. They also invested nearly $200 million in advertising to promote it. So they had an enormous commitment, politically and financially, to Work Choices, and I know it is incredibly difficult for them to give that away. One thing we can be absolutely assured of—given the coalition senators’ report and the contribution made by coalition senators to this debate—is that, if they are ever returned to government, there will be Work Choices mark 2, and that will include AWAs. They will have a new name for them by then—we have already seen the start of that today. They have not let go of that failed policy. They do not care that it hurt working people, that it stripped them of wages and conditions and left them much worse off. They do not care that there was rarely any—if any—individual bargaining taking place, which is something I want to spend a couple of moments on. (Time expired)

Barnaby Joyce (Queensland, National Party) Share this | Link to this | Hansard source

Mr Acting Deputy President, I rise on a point of order. I want to make an explanation under standing order 191: explanation of speeches.

The Acting Deputy President:

I will remind the senator of the context. These are rarely raised in the Senate, so this is just for other senators who are here:

A senator who has spoken to a question may again be heard, to explain some material part of the senator’s speech which has been misquoted or misunderstood, but shall not introduce any new matter, or interrupt any senator speaking, and no debatable matter shall be brought forward or debate arise on such an explanation.

Please proceed.

Barnaby Joyce (Queensland, National Party) Share this | Link to this | Hansard source

I want to lay to rest any conjecture about the bill I was referring to when I said it is more relevant than it was at its implementation. That is obviously the initial Workplace Relations Amendment (Work Choices) Bill, which I feel is more relevant now than it was in initial implementation. My hesitancy is obviously cast against the current Workplace Relations Amendment (Transition to Forward with Fairness) Bill. To make a correction, the Australian share market has not gone down by 21 per cent since October—it has gone down by 24 per cent.

Mathias Cormann (WA, Liberal Party) Share this | Link to this | Hansard source

I rise to put forward both a Western Australian Liberal perspective on this bill and the perspective of a participating member of the Senate inquiry into the Workplace Relations Amendment (Transition to Forward with Fairness) Bill 2008. The government has been very vocal in its argument that it has a mandate to rush this flawed legislation through the parliament. Never mind, incidentally, that it never respected the successive mandates of the previous government when it came to key economic reforms. But, as mandates go, the people of Western Australia have given a very clear mandate to those of us representing them and the Liberal cause in this parliament. We were faced with the most aggressive and well-funded scare campaign on our workplace relations reforms ever by Labor and the union movement, and yet the Liberal Party and Liberal candidates in Western Australia received enough popular support to increase our representation in this parliament. Liberal members of parliament now represent 11 out of 15 lower house electorates in Western Australia, and we continue to be represented by six Liberal senators out of 12.

Representing the people of Western Australia, we have a clear mandate to speak up for Liberal values and principles, to speak up for freedom of choice, to speak up for choice and flexibility in the workplace and for the right of an employee to directly negotiate their employment contract with their employer without third-party involvement if that is what they choose—and, yes, subject to a no disadvantage test, which we support. We have a clear mandate to speak up for a workplace relations system that has helped lay the foundations for the unprecedented economic growth we have been experiencing over the past 15 years—in fact since, yes, the Keating reforms we supported in 1993 and since individual workplace agreements were first introduced into Western Australia by the Court government in 1993. In short, I would argue that we have a clear mandate to speak up for the economic prosperity and wellbeing of the people of Western Australia and that Labor most definitely does not have a mandate to destroy jobs and to damage the economy.

While we will not be opposing the government’s bill, we have a responsibility to point the finger at the many flaws that have been revealed during our inquiry into this bill. This bill is the first step in implementing Labor’s pre-election policy aimed at taking our workplace relations system back into the last century. Make no mistake: this bill will start the process which, over time, will put our prosperity and, in particular, our currently strong Western Australian economy at risk. It will not happen straightaway. The economy Labor inherited on taking office was too strong for that—so strong, in fact, that the CCI in Western Australia told us:

There is almost nothing that can be done to improve the economy further.

But conversely, of course, there are things that can be done to do damage to our economy. There is no doubt in my mind that over time the impact of the government’s approach to workplace relations will, regrettably, become increasingly clear. As we get closer to where the government and its leaders in the union movement actually want to take us over time, Australians will start to see the impact on employment—that is, down; on levels of industrial disputation—that is, up; on productivity—down; and on inflation—up. The impact on our capacity to keep developing our economic prosperity and wellbeing will, indeed, become progressively clear.

The Western Australian economy—as you would know, Mr Acting Deputy President Murray—is the heartbeat of our nation, with a forecast economic growth rate of seven per cent this financial year, an unemployment rate of 2.8 per cent and a resource sector driving investment, jobs and wages growth and delivering to both state and federal governments a stack of cash in royalties. Labor would have you believe—and said so again during our inquiry into this bill—that it is all simply due to the mining and resources boom. All we need to do in Western Australia is dig it up, ship it out and sell it to the highest bidder—pretty simple really, isn’t it! The reality is much more complex. The reality is that we would not be in a position today to take advantage of increasing world demand and world prices for our resources if we had not done the hard yards and done what needed to be done to improve our productivity, to reduce levels of industrial disputation, to develop a better relationship between employers and employees and to become a more reliable supplier and exporter of our resources. There is no doubt that a more harmonious workplace relations system has been instrumental in attracting investment and helping get projects in Western Australia off the ground.

The thing about economic reform is that the impact becomes clear only over time. Yes, the workplace relations reforms at a state level in Western Australia in 1993 and federally by the Keating government in 1993—which I have already said we supported—and the Howard government in 1996 and beyond were the foundations of the economic growth we have experienced over the past 15 years. What we are passing here today—and the bills that will follow on from this one, going down the same path—will have an impact over the next decade, and the future will, no doubt, tell the story.

Western Australians have done well with an industrial relations system which offers flexibility and choice to employers and employees. Western Australians want to continue to benefit from such a system, and they said so loud and clear at the last election. In the majority report from the inquiry into this bill, government senators downplay the importance of a flexible industrial relations system to the economy in my home state of Western Australia. They say, essentially, that it does not really matter:

The committee noted an almost alarmist reaction from some quarters in Western Australia at the prospect of the demise of AWAs in that state. The committee went to Perth to find out more about this, but was under-whelmed by the import of what it heard.

The reality of course is very different. Business in Western Australia is worried about the impact of this legislation and business in Western Australia has clearly expressed its preference to keep a form of individual employment agreement making. Political leaders in Western Australia are worried. Even the Premier of Western Australia, Alan Carpenter, was worried when Labor released its Forward with Fairness policy in April 2007. In a very courageous moment of disarming honesty—a moment which was, sadly, much too short once the Labor Party machine managed to shut him down—he told the media that Labor’s plan to rip up AWAs could hurt WA’s mining industry and the Australian economy. That was the Labor Premier in my home state of Western Australia on reading the release of Labor’s industrial relations policy in April 2007. In fact, what Alan Carpenter said was that Labor:

had to be “sensitive” to the fact that, in some parts of the economy, particularly in Western Australia, individual employment agreements had become “almost the norm” and were an integral part of industry.

Businesses in Western Australia are worried because they know that this bill is only the start of what will be a series of bills aimed at putting unions back at the heart of workplace relations arrangements across Australia.

Businesses in Western Australia are very disappointed that, under Labor’s reforms, they will eventually lose the option to enter into new individual statutory employment agreements. They know that it will reduce their options and flexibility to structure their workplace arrangements. But the reality is that business knows that they have to be pragmatic. They know that this legislation will pass and that this is what will happen. They know that they now have to deal with a government which told them before the election that they would get injured if they stood in their way. So of course what else is there for them to do but focus on the practical inadequacies in this legislation—not one of which has been taken up by government senators in their majority report, incidentally, despite soothing noises being made by the chair of the inquiry in particular in relation to an issue for the construction industry. I am talking about the issue that, due to the transient nature of the workforce and the project nature of the work, some employees, in particular pre-existing employees, will not be able to access ITEAs, Labor’s form of AWAs.

Senator Marshall commented on his perspective of how the inquiry in Perth was conducted. As an aside, quite frankly in my view as a senator for Western Australia the committee’s Perth visit was an absolute farce. Despite the importance of the WA economy to the strength of our national economy; despite well-documented concerns from business and political leaders in Western Australia prior to the election, including not only Premier Alan Carpenter but also the mining and resources sector in particular; and despite Western Australia being the only state where the government cannot claim a mandate for its workplace relations reforms, just over three hours were allocated to hear from various witnesses. An hour and a half of that was taken up by Unions WA and a Labor-friendly academic.

The major employer organisation was scheduled for only 45 minutes of testimony. Only 45 minutes! There were eight senators present and this organisation was only given 45 minutes. After a five-minute opening statement, the chair Senator Marshall proceeded to ask questions for over 30 minutes. This was only interrupted by follow-up questions from Labor Senator Sterle. It was only after several protestations, including a gentle inquiry from Senator Murray, that we got an extension of time to ask at least some questions of the major employer peak body in Western Australia. In answer to one of my questions asking the CCI to expand on the proposition in their submission that AWAs had contributed to improved levels of productivity across Western Australia, Ms Kuhne of CCI said:

It is certainly the case that the opportunity for business to offer the full range of choice of agreements to their workforce has meant stability in industrial relations. There is actually a graph that shows that industrial disputation in WA has been reduced to almost nothing.

Later on the witness continues:

It coincides with the commencement of state workplace agreements back in 1993.

We argue that there is a correlation between the offering of individual agreements and stability in the workplace in terms of industrial disputation. We have had that stability, which has in itself, we would argue, assisted productivity because there have been so few working days lost.

A bit later I asked:

In an ideal world, moving forward, would there be a place for individual employment agreements from your point of view as part of the suite of options available?

Ms Kuhne on behalf of the CCI said:

If there was some means of individual agreement making, we would be satisfied.

How can the chair of the inquiry come into the Senate today and say that there was no significant concern expressed and that essentially business organisations were quite happy? How can government senators say in their majority report that business in Western Australia really is not as concerned as they would have thought they were?

As soon as we started to develop a line of inquiry at our committee hearings in Perth, the chairman shut the opposition questioning down. This was the case particularly in Western Australia. I have to concede that things improved greatly in subsequent hearings. It was really as if the chairman was worried about what business in Western Australia might have to say. Our request to hear from the CCI again in the afternoon was denied by the chairman even though a number of senators and the committee secretariat had gone to the effort of travelling all the way to Perth and had in fact planned initially to be available for a full day of hearings. There is no way that the evidence at the inquiry in Perth can be seen as proving a case one way or the other. We did not have the time to get to the bottom of things. It was an absolute farce. From my point of view, the last thing government senators were interested in was finding out the truth; they were focused on protecting the Labor Holy Grail in what, they were worried, could be unfriendly territory for them.

This bill is only the start of Labor’s workplace relations reforms. I am very concerned about where these so-called reforms will lead us. I am particularly concerned about the impact on our economy and on jobs. I put it to the Senate, as I put to the inquiry in Perth, that unemployment is at an all-time low; industrial disputations are at a record low; productivity is higher; and wages increased at a faster rate than under the previous Labor government based on productivity gains and in the context of a low inflation environment. It sounds pretty good to me. So what is the problem the government is trying to fix? They say that they want to make the system fairer. Well, I say that that is fair enough. We agree that making things fairer is a good thing. If individual statutory agreements are available as one of the options with a no disadvantage test which makes them fair then what is the main objection to keeping them as an option long-term, if that is something that business tells us it is good for the economy, good for jobs and good for our prosperity moving forward?

I asked a series of unions giving evidence at the inquiry what their main objection was to making Labor’s AWAs, which they call ITEAs, a permanent feature of our workplace relations system now that the government has made them fair again by making them subject—quite appropriately, I believe—to the new no-disadvantage test. There were a range of answers, but principally the unions considered them unfair because of the capacity to negotiate away award conditions. But what about the no disadvantage test? Once you have the no disadvantage test, surely that is adequate protection. Some unions conceded that there were also union negotiated collective agreements which in fact negotiated away award conditions. ‘Yes, but the worker will be compensated,’ they say. ‘So what you are saying is that they will not be disadvantaged.’ ‘Yes, that is right,’ they say.

We had evidence to the inquiry from Professor Stewart that Labor’s new no disadvantage test, as it applies to individual statutory employment agreements, is actually stronger than that which applies to collective agreements. What is the main objection then? What is the problem? If business tells us that it is good for the economy, that it is good for jobs and that an individual statutory employment agreement is now at least as fair as a collective agreement, why wouldn’t we keep it available as one of the options? The bottom line that I heard from the unions was the ideological support for collective agreement-making ahead of individual agreement-making as well as the view that the unions should be involved in the process. The reality is that this is what this is all about: there is no doubt in my mind that the abolition of individual employment agreements is aimed at bringing back union dominance to the workplace over time. While I acknowledge that unions are not a bad thing, unions have an important role to play, and collective agreement making is an important part of the range of options available by way of industrial instruments, but so are individual statutory employment agreements used in the right way and, yes, subject to a no disadvantage test. I do not believe that what is emerging is good for the economy. It is not good for jobs.

I know that this bill will not change union right of entry. When I was asking some questions on the main objections to individual statutory employment agreements and we came down the path that unions thought that unions ought to be involved, one of the government senators interrupted me, saying, ‘This is not going to change union right of entry.’ I know that. But the abolition of individual statutory employment agreements will help to force the union movement back to the table in businesses where they have not had a role in recent years. The economy will once again be exposed to the risk of more strikes and increased levels of industrial disputation—perhaps not straight away, because that would be too damaging to the Labor cause, having only just been returned to government after 12 years of opposition, but over time that is highly likely. There is no doubt in my mind that over time we will see excessive wage demands from unions, which will put pressure on inflation. To that extent, this bill and the bills that will follow in its footsteps will clearly undermine the Prime Minister’s declared war on inflation. It provides further ammunition to the declared enemy of inflation.

This is a transitional bill that aims to transition towards a further bill which will abolish all forms of new individual statutory employment agreements. The key feature of Labor’s reforms—the foundation without which the whole thing would fall apart—is the declared objective to achieve award modernisation. Award modernisation is a very laudable objective, and one everybody would support. But what is clear is that everybody—unions, employers and academics—who gave evidence at the Senate inquiry expressed different levels of concern about the ambitious time frame and the complexity of the task at hand. I ask the government: what happens if you do not meet your timeframe? What if you are not able to achieve award modernisation to the extent that you set out to? What if you are not able to come up with a system of award modernisation that will not disadvantage employers and not disadvantage employees? What happens to your substantive reforms down the track if you do not achieve that? I have not heard a satisfactory answer to those questions.

In summing up, all Australians, business and the Australian economy deserve, in my view, to keep access to a form of individual statutory employment agreements. They have served Australia well as one of the options in our industrial relations system, subject to a fairer no disadvantage test properly monitored and efficiently enforced. Reducing flexibility in the workplace is bad for our economy, particularly in my home state of Western Australia. It is bad for jobs and it is bad for Australia. Thank you.

Dana Wortley (SA, Australian Labor Party) Share this | Link to this | Hansard source

I rise to add my support to the government’s Workplace Relations Amendment (Transition to Forward with Fairness) Bill 2008. Every person present in the chamber today is more than familiar with the events leading up to the introduction of this bill. Since 24 November last year there has not been a moment’s hesitation, a moment’s ambivalence, in the government’s determination to fulfil its commitment to an electorate that voiced its opposition against Work Choices so strongly at the ballot box, that was so unashamedly for fairness and balance in the work force. However, those opposite through their words and actions before, during and after the election have revealed the true nature of the scheme inflicted on the working families of this country without consultation and without mandate. Even after the former Howard government railroaded its labour reforms through the parliament, the coalition ignored its own research, hurled more taxpayers’ money at a series of advertising campaigns and eventually backed down to the extent of introducing its so-called fairness test. In reality, this was an acknowledgment of the unfair nature of its regime and the damage its terms had caused the coalition.

When the Howard government introduced the fairness test I spoke about Work Choices in this place on 18 June 2007. I highlighted that the introduction of Work Choices had already seen the removal of pay and conditions standards for tens of thousands of Australian workers that included penalty rates, holiday loading, redundancy pay, 38 hours per week of ordinary time and unfair dismissal protection for workers employed by an organisation with 100 or fewer employees. I outlined how Work Choices would facilitate and pave the way for industrial relations changes which would actively disadvantage Australian workers, not only the workers but also their families. And so it proved to be true. The Howard government crossed the line with its Work Choices, and the Australian people recognised it for what it really was: extreme, ideological, harsh and punitive legislation. Anti-worker and anti-family, Work Choices reduced people to factors in an equation based on the politics of fear and division. Now those opposite apply a different spin. Let’s look quickly at some of those twists and turns.

Honourable Senators:

Honourable senators interjecting—

Andrew Murray (WA, Australian Democrats) Share this | Link to this | Hansard source

Order! Senator Cormann was heard in silence. I think you should give the same courtesy to Senator Wortley.

Dana Wortley (SA, Australian Labor Party) Share this | Link to this | Hansard source

Only recently, on the Four Corners expose of the former government’s last days, the present Manager of Opposition Business in the other place revealed that many ministers in cabinet were unaware that you could be worse off under Work Choices and that you could actually have certain conditions taken away without compensation. If further evidence of their disarray were needed, then the shadow minister for industrial relations informed us on the Insiders on 9 March that the opposition did not support the government’s bill but that it did not oppose it.

As a member of the Senate Standing Committee on Education, Employment and Workplace Relations, I was part of the Senate inquiry held into this bill in recent weeks. The hearings traversed the country, taking submissions from stakeholders. The report which stems from those hearings pulls no punches. Among its salient points is one I have spoken on in this place previously—that AWAs have given rise to a larger gender pay gap. The report highlights that individual workplace agreements, or AWAs, are less likely than collectively bargained agreements to appropriately address issues of employee training, occupational health and safety, and consultative mechanisms. Submission after submission uncovered cases of unfavourable working hours which led to negative effects on family and community life. Committee members heard that health complaints such as stress, depression and feelings of powerlessness and helplessness resulted from workplace changes imposed under AWAs. As the inquiry’s majority report states, the committee believes that the abolition of AWAs will go a long way to addressing the social effects for those vulnerable employees who have lost pay and conditions under the AWAs imposed upon them.

The Rudd government’s plan, which was arrived at after exhaustive consultations with all stakeholders, will restore fairness and balance in the Australian workplace—held as a basic tenet for 100 years, since the Harvester decision in 1907. On commencement, the bill before us—the Workplace Relations Amendment (Transition to Forward with Fairness) Bill 2008—puts Australia on the path to restoring fairness in the workplace. It prevents the drafting of any new Australian workplace agreements.

The Senate inquiry heard that many AWAs were designed by management for application to all employees at a particular site without consultation and without any input from the employees. Their only involvement in the AWA was to add their signature. Well this legislation draws a line in the sand when it comes to these Australian workplace agreements, thousands of which stripped pay and conditions from employees under the previous government. It honours an election commitment and it recognises the will of the Australian people. Indeed, the purpose of the government’s bill is to realise a major election commitment to establish the basis for a new, fair and flexible workplace relations system.

This bill is also designed to deliver sensible, manageable transitional arrangements as we move toward and look forward to that system. Certainly there is plenty of evidence that the Australian people are looking forward to regaining a sense of balance and fairness in their working lives. The Workplace Relations Amendment (Transition to Forward with Fairness) Bill 2008 also provides the framework necessary to start the process of award modernisation. The bill starts things off as the first element, with additional substantial legislation to be introduced later this year to ensure that this government’s fair, equitable and productive workplace relations systems will be ready to roll by 1 January 2010.

I have argued previously that Work Choices was not Labor’s idea of a fair go, and its scheme epitomised the arrogant disregard with which the former government perceived and, in reality, continues to perceive the men and women, and their families, who keep the wheels of industry and commerce turning in this country. It epitomised the arrogant disregard with which the former government viewed and continues to view vulnerable employees, including those just starting out in their working lives and those workers who may come from non-English-speaking backgrounds and their families too.

The proposals we are discussing represent a fully articulated and strategic plan, revealed at the earliest possible juncture, discussed constantly and openly, and unequivocally endorsed by a majority of the voters. I look forward to the progression of the Workplace Relations Amendment (Transition to Forward with Fairness) Bill 2008 through this place and endorse and commend its terms.

David Bushby (Tasmania, Liberal Party) Share this | Link to this | Hansard source

In any consideration of the Workplace Relations Amendment (Transition to Forward with Fairness) Bill 2008 I believe that regard must be had for how we arrived at where the national industrial relations law is today. The post-1983 approach by the Hawke government was based on an accord it had negotiated with the ACTU. The accord was designed to solve early 1980s economic problems and championed consensus between employers and employee organisations. Underlying the accord was the belief that the health of the economy could be restored by a centralised system of industrial relations regulation linking wage rises to inflation and administered by the Australian Industrial Relations Commission. Over the course of the 1980s it became apparent that this approach had failed miserably, leading to increasing unemployment, failure to achieve productivity gains, poor wage growth and contributing to the worst recession since the Depression, with over a million unemployed in 1990.

The concept of agreements negotiated between employers and employees outside the orbit of industrial relations tribunals gained favour throughout this period, particularly in business circles, and was adopted by the coalition as policy in the late 1980s and refined throughout the early 1990s. The coalition took clearly articulated policies advocating individual workplace agreements to the 1996 election under the Better Pay for Better Work banner. That year the Workplace Relations and Other Legislation Amendment Act 1996 was passed, following compromises with the Democrats and despite it being opposed by the then Labor opposition. One of its objectives was to ensure that the primary responsibility for determining matters affecting the relationship between employers and employees rests with the employer and the employee at the workplace level. It took the prescriptive award system and gave businesses and workers greater choice in negotiating working conditions. For the first time ever employees were able to have their own individual agreements—Australian workplace agreements. Since then, over 1,300,000 Australian workplace agreements have been entered into.

The legislation also introduced freedom of association laws, guaranteeing workers the right to voluntary union membership. Unfortunately, this was too late for me; I had no hope of getting back the fees that I was forced to pay to the BLF, the Federated Clerks Union and the Storemen and Packers Union whilst I was at uni—and for absolutely no benefit whatsoever. But workers voted with their feet, leaving barely 15 per cent of the Australian workforce deeming the benefits received worth the membership fee. The Howard government then went on to seek to build on the success of the 1996 changes. Over the ensuing 10 years, it repeatedly attempted to pass into legislation further IR changes—over 40 attempts, relating to a number of matters intended to make a fairer, more flexible system such as exemptions to unfair dismissal laws for small business.

Following the 2004 election, the people granted the coalition a majority in the Senate. Using the mandate given by this majority, it sought to build on the success of the previous IR reforms, with major changes which replaced the system designed a century earlier, introduced a national system replacing over 4,000 awards and 130 pieces of legislation in six different outdated systems around Australia; vastly improved cooperation, lowering the average of working days lost through industrial unrest from an average of 193 days per 1,000 in 1996 to 15 in 2006; being much fairer, with small business finally given the confidence to employ people following the removal of Labor’s job-destroying and anti-employment unfair dismissal laws; and delivered both more jobs and higher wages due to the increased productivity the more flexible laws introduced and enabled.

The results of the Howard government changes were rapidly very readily apparent. As at late last year, the following could be said: working families were clearly doing better under this system, whether they were on enterprise or individual contracts. Real wages increased by 21.5 per cent between 1996 and 2007. Three per cent of this rise occurred after the introduction of the new workplace relations system. More than 430,000 jobs were created in the 18 months following the introduction of that system—nearly 80 per cent of them full-time jobs.

A key benefit of the changes made to the IR system since 1996, particularly including the most recent changes, is the improvement they made to adding to the economy’s supply-side capacity. Shortly after their win last year, the government came up with the plan to rewrite history on the economy, in an attempt to try to win some of the economic moral high ground. The tool they have been using to do this is the fact that underlying inflation has exceeded three per cent in recent months. They have said that, because this figure is outside the target band agreed between the RBA and the Treasurer, the economy is in terrible shape. This is, of course, a total overdramatisation and nothing but an attempt to unnecessarily and cruelly scare the Australian population into believing we are facing disaster. The fact remains that the index for the target range for inflation is the headline rate of CPI, not the underlying rate, and that this remains within the target range of between two and three per cent, albeit trending towards the upper level of that band. As such, although action may be required to maintain the rate within that band, we do not currently face extraordinarily concerning levels of inflation—and certainly not in the sense that we have seen under Labor as recently as the 1980s, when it was well into double digits.

Be that as it may, the main criticism that has been levelled at us for failing to address this ‘inflation problem’ was that we failed to address supply constraints—particularly in respect of labour shortages. But, as confirmed by Treasury in the recent additional Senate estimates, the introduction of increased flexibility in the labour market is a key tool in addressing shortages in skilled labour. One of the primary reasons for the introduction of the new workplace changes was to deliver just that: increased flexibility that would allow more people to negotiate employment conditions that would suit them and allow them back into the workforce, while at the same time improving productivity through employers being able to hire employees on conditions that best suited their specific needs and thereby helping to alleviate the supply-side constraints in the economy.

Chris Evans (WA, Australian Labor Party, Leader of the Government in the Senate) Share this | Link to this | Hansard source

We’ve done well in Tasmania.

David Bushby (Tasmania, Liberal Party) Share this | Link to this | Hansard source

We will get to that. Together we created a situation where everyone was a winner, including the economy—

Chris Evans (WA, Australian Labor Party, Leader of the Government in the Senate) Share this | Link to this | Hansard source

It is called five million.

David Bushby (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Actually, if you look—

Andrew Murray (WA, Australian Democrats) Share this | Link to this | Hansard source

Order! Senator Bushby, do not respond to interjections; it is disorderly. Continue your remarks.

David Bushby (Tasmania, Liberal Party) Share this | Link to this | Hansard source

I would like to make one small point, and that is that the swing against the then government in Tasmania was the smallest of any state in the country; we just had very small margins. Of course, the unprecedented campaign against the new workplace changes by both unions and the Labor Party contributed significantly to the coalition’s loss last year. Never before have we seen anything like the third-party spend of $30 million on TV advertising alone. It is creating a huge precedent that I think is particularly concerning for the future of democracy in this country.

But the reality was that most—no, all—of that campaign constituted a scare campaign, leading to voters building a totally distorted and incorrect view of the reality of the effects of the new workplace system. The facts are that the system as it currently stands as enacted is actually more regulated and provides more protections than similar countries, such as the UK and New Zealand. At the same time, our system is giving people the option of having more flexible working arrangements which suit the modern workplace and help Australians balance work and family life. For the first time, in law, all employees have the following entitlements: a national minimum wage and minimum rates of pay according to award classifications; four weeks annual leave per annum; 10 days personal carers leave, including sick leave, per annum—locked in, in law; up to 52 weeks unpaid parental leave, including maternity leave; maximum ordinary hours of work of 38 hours per week, which can be averaged; and a fairness test that ensures employees receive fair compensation—in most cases a higher rate of pay—if they agree to change protected award conditions, including penalty rates, shift and overtime loadings, monetary allowances, annual leave loadings, public holidays, rest breaks and incentives based payments and bonuses. All employees have the right to have a bargaining agent to assist them in negotiating a workplace agreement. A ‘bargaining agent’ can be a friend, a relative, a union representative or a lawyer. Employees cannot be forced to sign an agreement or change their existing agreements. It is against the law to force an employee to sign an AWA. What is more, employees under 18 years of age must have the written consent of a parent or guardian before signing an AWA.

All employees, regardless of business size, are protected against unlawful termination. You cannot be sacked for a temporary absence from work because of illness or injury or because of your trade union membership or participation in trade union activities. You cannot be sacked for nonmembership of a trade union. You cannot be sacked for seeking office as a representative of employees or for filing a complaint against an employer. You cannot be sacked because of your race, colour, sex, sexual preference, age, physical or mental disability, marital status, family responsibilities, pregnancy, religion, political opinion, national extraction or social origin. All of those are protected, and sacking for those would be unlawful termination. Similarly, you cannot be sacked for refusing to negotiate, sign, extend, vary or terminate an AWA, even if, as Senator Wortley was saying before, an employer chooses to draft one that is the same for every employee in the place. If an employee refuses to sign it, they cannot be sacked. You cannot be sacked for an absence from work during maternity leave or other parental leave. You cannot be sacked for temporary absence due to voluntary emergency management activity.

In terms of unfair dismissal, as opposed to unlawful termination, employees who have worked for at least six months for a business with over 100 employees have the right to bring an unfair dismissal case. Employees have the right to join—or, more importantly, not to join—a union. Equally, employees have the right to take lawful industrial action when negotiating an agreement. Employees cannot be sacked, demoted or be denied shifts because they have a certain type of agreement or have made an inquiry or a complaint about their rights at work.

The government now claims that it has a mandate under which the opposition has no choice but to support the government’s IR legislation. With respect, I do not agree. It is quite clear that the government is trotting out the old mandate catchcry to support its own political ends, when it has always been the worst serial ignorer of mandates delivered to governments other than its own. The most obvious is its rejection of the clear mandate provided to the Howard government following the 1998 GST election. Just 25 days after that election, then opposition leader, Kim Beazley, promised that Labor would oppose the GST lock, stock and barrel—25 days after the election, when the people had given us the mandate. He said, ‘We will manoeuvre tactically in whatever way we can to try to procure the defeat of this GST legislation.’ Prime Minister Kevin Rudd declared in 1999 that the introduction of the GST represented:

… a day of fundamental injustice … the day when the parliament of the country said to the poor of the country that they could all go and take a running jump.

This is despite the government having been given a clear mandate to introduce that legislation by the very people he was talking about. I note that Prime Minister Rudd is silent on the GST even though he now has the power to change it.

Throughout the Howard years, the Labor Party consistently voted against the privatisation of Telstra, despite the coalition winning the 1996, the 1998, the 2001 and the 2004 elections on a platform of privatisation. And of course in the Senate, Labor voted against the Howard government’s 40-plus attempts at unfair dismissal industrial relations reforms despite the party having taken this policy to the people and winning in 1996, 1998, 2001 and 2004. Where was Labor’s commitment to a mandate then? Why was Deputy Prime Minister Gillard not decrying any suggestion of Labor’s rejection of these measures as a slap in the face of democracy or of the people? They were nowhere, because a mandate means nothing to them unless it suits their own grubby political purposes. The fact is that the opposition has been provided with the level of representation it has in the Senate by the people. It is incumbent on the opposition to use that level of representation as it deems in the best interest of those people. Success of parties in the other place and the policies and platforms they espouse prior to their success should not constrict the ability of members of this place to consider decisions before them on the merits. It would be wrong to do so and the fact is that so-called ‘mandates’ should be only one of the factors considered by members of this place when deliberating over matters before them.

This bill purports to remove AWAs, a measure introduced by the Howard government 12 years ago and, as noted, working very well with over 1,300,000 people having taken them up. But the reality is that, despite the Deputy Prime Minister saying she would remove individual contracts, this bill includes individual contracts which, although labelled as temporary, will run indefinitely in effect for those who have entered into them. It also remains to be seen how much of the 2006 new workplace changes they retain. It is almost certain that much of that which they campaigned against in the last election will be retained and I look forward to examining future IR legislation in that regard.

But the fact remains that the IR changes introduced by the Howard government were intended to promote reduced unemployment, better and more flexible conditions for workers and employers, better pay in return for higher productivity, greater flexibility and productivity in the overall workforce—thereby addressing significant supply-side constraints in the macro economy and reducing inflationary pressures—and were driven by a desire to deliver real, practical outcomes for the benefit of all Australians. And it is also a fact that these changes delivered these benefits and more. The opposition to this could only have been driven by ideological dislike and to protect the patches of unions and their apparatchiks, yet the most recent changes did provide much ammunition to inaccurately and dishonestly feed a scare campaign against them.

In time, the wind back of any of these changes will prove to be to the detriment of the people of Australia. It is particularly sad that this bill purports to remove that which was introduced almost 10 years prior to the new workplace reforms and which had been working brilliantly at that time. The fact that AWAs got caught up with the hysteria dishonestly created over Work Choices is a great shame. IR laws need to have the flexibility to deliver what is required by the circumstances at the time. Economic theory states that full employment can be achieved where there are no restrictions or regulations placed on employment, but in such a case the conditions to employ the last of the unemployed will be less than what we as a nation are prepared to accept. As such, as a nation, we all agree on the need for some regulation to protect workers from exploitation, but we need to ensure that an appropriate and fair balance is struck. In times of high unemployment the balance needs to lean more towards employees who are more susceptible to exploitation in such circumstances. Similarly, in times of low unemployment, the balance needs to shift in favour of employers to avoid unwelcome economic consequences such as excessive wage inflation, low productivity in a tight labour market and general inflationary pressures. I have concerns where the passing of this bill will lead, but I understand and accept that it is likely to be passed. I will not object to that course.

Steve Fielding (Victoria, Family First Party) Share this | Link to this | Hansard source

Family First wants to get the industrial relations balance right by making sure that workers and their families are not ripped off, that businesses can be competitive and that the economy can continue to grow. Back in 2005, Family First was in fact the first political party to expose the holes in the Howard government’s Work Choices laws because we understood the effect this legislation would have on ordinary Australians and their families. That is why Family First voted against Work Choices, because the balance was wrong and workers could be easily ripped off.

In considering the Rudd government’s Workplace Relations Amendment (Transition to Forward with Fairness) Bill 2008 Family First is back on the case again, asking the tough questions to ensure that this time we get the balance right. The transition to forward with fairness bill is principally designed to stop new Australian workplace agreements being made, but it also sets up the arrangements for moving forward to the Rudd government’s new workplace relations regime.

Family First has some concerns about the structure of the new workplace relations system as it may not adequately protect all workers and it may not adequately protect family time from the ever-encroaching demands of work. Family First has long been concerned that there are not adequate safeguards in place to help protect family time from the time demands of work. Time is so important to family life and many parents struggle to find that time with their kids when they work more hours than they want. Last year a report by Relationships Forum Australia concluded that Australia’s economic prosperity has come at a price. Australia is now the only high-income country in the world that combines long average working hours, a strong tendency for weeknight and weekend work and a relatively large proportion of the population in casual jobs. All this results in relationship breakdown and dysfunction, which in turn leads to health problems, strained family relationships, parenting marked by anger and ineffectiveness and reduced child wellbeing.

The industrial relations system proposed by the government sets 10 basic working conditions which form the National Employment Standards. In addition, the proposed industrial relations system allows modern awards to have up to 10 additional minimum standards. However, the National Employment Standards do not include meal breaks and penalty rates. Instead, meal breaks and penalty rates are left to be bargained for in modern awards. This means there is a real danger that workers and their families not employed under awards will be left exposed because they are not guaranteed meal breaks and penalty rates.

Family First asked at a Senate committee hearing for an estimate of the number of workers outside the award system earning less than $100,000. These workers would therefore be reliant on the proposed 10 basic working conditions that form the National Employment Standards. An officer from the Department of Education, Employment and Workplace Relations stated that the number of workers outside the award system earning less than $100,000 would be ‘tens of thousands, and I think 100,000 would be very much the upper limit’. That means that up to 100,000 Australians may fall through the cracks and could be exposed to having their penalty rates and meal breaks stripped away. There is real concern that the government will not be able to find a way to fill in these cracks. In fact, the Shop Distributive and Allied Employees Association and Unions New South Wales told the Senate committee they were not convinced it could be done.

We know awards do not cover every worker. That is why the National Employment Standards are there to ensure all workers are guaranteed basic working conditions. And those basic working conditions should include meal breaks and penalty rates. Why would any government not have meal breaks and penalty rates as part of basic working conditions for all Australians? Why should we allow working at 2 am in the morning to be treated just the same as working at 2 pm in the afternoon? Why should any worker have to bargain for a meal break? If National Employment Standards are designed to be the bare-bones safety net guaranteed for all workers, why would the National Employment Standards not include such basic working conditions as meal breaks and penalty rates?

We should remember that penalty rates were introduced to help achieve the eight-hour day. They were intended to discourage employers from employing workers for more than eight hours a day. They were not introduced to reward workers for working longer or antisocial hours. Family First is concerned that conditions such as penalty rates for working weekends and anti-family hours, along with meal breaks and rest breaks, can be simply traded away for more money. Penalty rates are about family time, not about money. They were never intended to be traded away for dollars. Working long hours is good for the market. Working on weekends is good for the market and having temporary work also suits the market. But none of this suits the family, which is why family life is under threat. Family First is concerned about vulnerable workers who do not have bargaining power and who are not covered by awards. Family First is also concerned about the subtle pressures that may convince employees to trade away conditions for money.

Family First was in fact the first political party to expose the holes in the Howard government’s Work Choices laws because we understood the effect this legislation would have on ordinary Australian families. Family First voted against Work Choices, and went a step further and introduced legislation to give back to workers and their families their public holidays, meal breaks, penalty rates and overtime and to protect their redundancy, all of which the Howard government had taken away.

There were also questions raised during the Senate inquiry about a key ‘flexibility clause’ that the government’s changes depend on and employers were also looking at depending on. The award rationalisation process involves ‘modern awards’, and all modern awards will be required to include a flexibility clause. But no-one knows what those flexibility clauses will be and that will not be determined for some months yet. Given that the wording of the flexibility clauses will not be available for some time, it is difficult to make a decision on the legislation before the Senate without being able to consider the nature of such a flexibility clause.

In conclusion, as we stand at the dawn of a new and fairer workplace system, Family First still wants to ensure we get the industrial relations balance right by making sure that workers and their families are not ripped off, that businesses can be competitive and that the economy can continue to grow. As I said, back in 2005, Family First voted against Work Choices because it got the balance wrong and workers could easily be ripped off. Today Family First will be supporting the transition to forward with fairness bill because it is important to begin the process of dismantling Work Choices. However, Family First will continue to fight to guarantee basic working conditions such as meal breaks and penalty rates for all Australian workers and their families, not just those covered by awards. Therefore, I now move Family First’s amendment to the second reading motion on sheet 5458 revised:

At the end of the motion, add:

                 “but the Senate notes the Government’s proposal for a strong safety net of ten legislated National Employment Standards for all employees is inadequate because it does not provide for:

             (a)    meal breaks; and

             (b)    penalty rates;

for all workers and their families”.

Eric Abetz (Tasmania, Liberal Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Tonight we are debating the Workplace Relations Amendment (Transition to Forward with Fairness) Bill 2008. The fundamental principle that the coalition and I operate under is that the best welfare any government can provide to its citizens is a job. Indeed, we as a government never accepted five per cent as full employment. One of my colleagues said, ‘Let’s be brave and dream of an unemployment figure that commences with a three in front of it.’ Today we are in fact actually celebrating that because, as I understand the official figure, whilst we accept it at four per cent, it is in fact 3.97 per cent—something that people never thought could or would be possible. Indeed, I recall being on the other side of the chamber when the unemployment rate was still above five per cent. The Labor opposition of the time used to goad and joke about what we thought might happen if the employment relations system in this country were to be altered. Today we do have a dividend of an unemployment rate of 3.97 per cent.

Our record in providing jobs, and thus in fact creating the much vaunted working families, is clear. There are a lot more working families in Australia as a result of our policies, because we wanted to get people into work. The social data is overwhelming: an individual’s self-esteem and health—physical, emotional, social, in every aspect—is enhanced; the socialisation into society of the children who live in the family unit is enhanced; and, of course, there are the huge benefits to the community at large. You name it—there are positive benefits from employment.

Labor went to the last election claiming that our legislation went too far. We accept that some Australians accepted that notion and that it had an impact, amongst others, on the decision by our fellow Australians. As we have said on a number of occasions, we accept their verdict and that is why we will not be opposing the bill. But what I do say to the Labor Party is: be very careful that you do not actually get that for which you wish; be careful for what you wish. Labor did not go to the people promising to destroy jobs and damage the economy, so I again say to Labor: be careful what you actually wish for. The reality is now dawning on some, especially some opposite, that the good sound bite of the last election campaign is very difficult to translate into sound policy.

A residual fear I have is that Labor will turn their much vaunted working families into welfare families. I think Labor realises this as well, because let us not forget that six days before the election, on 18 November 2007, the then Leader of the Opposition said, ‘We will be recalling the parliament before Christmas.’ There was so much work to be done, and, of course, Work Choices, amongst I think eight or nine other things, was his first priority. How they could all be first priorities, beats me, but it was his top priority. So after the parliament did not resume, as promised, before Christmas, I was expecting an early start—early January, mid January, late January. It was not to be. Indeed, the parliament started on the equal latest date that this parliament has started in this millennium. So much for the rush to get this legislation into the parliament to turn over Work Choices.

It seems it is no longer urgent. Indeed, with all the time that Labor have now had, you would have assumed that they could have overcome the technical difficulties that so many people pointed out to the Senate committee inquiry. Indeed, you would have thought—and I accept Senator Murray’s comments in his report—that with all this time Labor could have brought in their changes to the unfair dismissal laws that they promised as well. It is a very easy, very simple amendment. If all these workers around Australia were being treated so harshly, so unfairly, where was the warm-hearted Mr Rudd in getting rid of this obscenity? Well, it was not before Christmas, was it. They delayed the recommencement of parliament to the latest date possible and then the first bill dealing with these matters did not even refer to unfair dismissals. Methinks Labor are starting to realise that the sound bites of the last election do not translate into sound policy very easily. That is why they are now trying to defer a lot of these impacts until after the next election. So we will be watching that very carefully as well.

We are witnessing a very bizarre approach by Labor to this. They promised to rip up Work Choices lock, stock and barrel. What was the lock? The constitutional lock was the corporate affairs power. Remember how the state Labor governments wasted millions upon millions of dollars of taxpayers’ money in taking a challenge to the High Court for and on behalf of the federal Labor opposition, only to have it thrown out lock, stock and barrel by the court—a complete and utter waste. But having spent so much time and effort in opposing the use of the corporate affairs power, guess what Labor have found? They will now use this constitutional lock of the corporate affairs power and they have accepted it.

The stock of course was the need for a national system. Strangely enough, that is also now accepted by the Australian Labor Party. And the barrel, as far as we were concerned, was the harsh unfair dismissal laws—introduced by Paul Keating—that Labor had refused to amend on 40 separate occasions. It is interesting that these very harsh unfair dismissal laws—the barrel of the Work Choices legislation—are now in fact accepted by those opposite.

The only argument we seem to have is on the quantum. We who have an unashamed bias in favour of small business say that the number ought to be 100. It stands to reason that those who favour small business would seek to balloon it out in favour of small business up to the 100. Those that are anti small business would of course seek to minimise that figure as much as possible. That is why Labor is now arguing, if I understand the latest iteration, for the figure of 15. So the only issue we are talking about is not the principle any more; it is simply the quantum.

When Labor says, ‘We will rip up Work Choices,’ do you know what they are doing? They are getting a little bit of one millimetre of the top right hand corner of Work Choices, ripping it off and saying ‘Look at this, we’ve ripped up Work Choices.’ But of course they have not and they are very slow in going about it. I think we know why. It is because they accept that their rhetoric, aided and abetted by a $100 million trade union campaign, is something that they can no longer deliver on. The slick campaign—the smart sound bite—does not make smart, sound policy when in government.

When I asked the minister at Senate estimates, ‘Can you give us an assurance that under your legislation’—the legislation we are debating here tonight—’there will not be a single worker worse off in this country as a result?’ she was unable to give that guarantee. It is a guarantee that the trade union movement, in a $100 million campaign, demanded of the former Prime Minister and of the former government. They said it was an outrage that the Prime Minister would not give that assurance and that he was letting down the working families of this country. Well, guess what? Now that the need for a sound bite for the election has passed and the need for sound policy has come about, they are unable to give to their much vaunted working families the same assurance that they required from the then Prime Minister and government.

There is no doubt that as a result of the passing of this legislation—which I have said we will not oppose because we accept that Labor ran a campaign on this—there will be losers. Labor has admitted as much. There will be losers as a result of this legislation and we will be championing the cause of those losers. The Prime Minister so proudly boasted ‘the buck stops with me,’ and when he turns working families into welfare families we will be reminding him that the buck stops with him.

Indeed, the Australian workplace agreements, which were pilloried as being so obscene and so evil, are going to be allowed to continue forever under this legislation. They are not going to be abolished. Sure, you cannot make new ones, but the ones that are in existence today can continue, not just until 2012 but even beyond 2012. There were those—and especially those opposite in the government—who ran around the countryside saying to people: ‘Australian workplace agreements are obscene and evil. We are going to rip them up lock, stock and barrel. Under us there will be no Australian workplace agreements.’ Well, those who believed that mantra were unfortunately misled because Labor is now going to keep AWAs if the parties to them want them to continue. If I were the ACTU, chances are I would be asking for my $100 million back because the Labor Party, whilst continuing with their mantra, have adopted a large swag of that which we were asserting.

In the time left, I will quickly make reference to the Senate committee. The report does no justice to those government senators who put their name to the majority report. But you only have to turn the page and ask, ‘Who was the chairman?’ It was a member of the Electrical Trades Union—one of Dean Mighell’s mates. Then there was Senator George Campbell of the AMWU, then Senator Glenn Sterle of the Transport Workers Union and finally Senator Wortley of the Media Entertainment and Arts Alliance—all trade union officials. In their pathetic 30-page report, guess who they refer to as the great academic? I must say I laughed when I read this. It was none other than Professor Peetz, the trade union bard who writes poetry for trade unions online—the independent academic; give me a break!

Others, including me, have highlighted the bizarre nature of Professor Peetz and some of his commentary. Did the Labor Party rely on Professor Peetz once, twice or three times? No. There was such a wealth of academic evidence in favour of the Labor Party report that—guess what?—they had to quote him 30 times: once per page, on average. I wonder why there is this overreliance on Professor Peetz. Of course, it is quite obvious. The majority report is, quite frankly, a disgrace to the system. It is pejorative and it is partisan in a way that does no credit to the Senate’s committee system. Paragraph 1.1 of the majority report states:

Yet the insistence of the former government in regarding industrial relations solely for the purposes of driving down wages to increase productivity was ultimately damaging to economic progress.

That is an absolutely false assertion and, because it is such a false assertion, guess what? The committee was unable to footnote it, because there was no evidence before the committee for that untruth. When members of the majority of a Senate report go about putting those sorts of sentences into reports without even the decency of a footnote to suggest where the evidence might have come from, you realise that something foul is at play. There was something foul at play. This was a political speech rather than a Senate report and it does the Senate committee system no good whatsoever.

On page 11 we have a very interesting table telling us how overtime, penalty rates and annual leave loading had somehow been absorbed or abolished and, moving along, how things have changed. That is very interesting. The Media, Entertainment and Arts Alliance negotiated to get rid of—you have guessed it—annual leave loading, penalty rates and overtime in their award. So it is quite okay for the trade unions to do it, but somehow it was not right for people to be able to do that in their Australian workplace agreements.

The list goes on. Indeed, on page 23 of the majority report, it quotes the Shop, Distributive and Allied Employees’ Association. On a previous occasion I was able to point out that the Shop, Distributive and Allied Employee’s Union was responsible for getting rid of penalty rates et cetera in the award for shop workers back in, I think, the 1970s. It was a long, long time ago. But, of course, the Shop, Distributive and Allied Employees’ Association does not refer to that at all.

The coalition report has highlighted that the bill is fundamentally flawed and that there are many difficulties with it. I commend those people who are genuinely interested in this legislation to read that report. If they think that the coalition senators might be a bit biased, I would invite them to read today’s additional remarks of Senator Andrew Murray, where he says:

The more things change, the more they stay the same.

That is interesting, but then he goes on:

It beggars belief that, when a range of witnesses make a case for amendments that would improve the bill—including recommendations from such reputable and experienced witnesses—

And I differ a bit from Senator Murray there but, for the sake of the argument, I will accept it—

as the Australian Industry Group, the Australian Council of Trade Unions, and Professors Buchanan and Stewart—the majority could not find even one change to formally recommend.

It beggars belief. It is a steamroller, arrogant attitude to try and get this legislation through, irrespective of what common sense might dictate.

We will not stand in the way of this legislation, but I remind those opposite that, when the GST came in, they opposed it lock, stock and barrel. They now accept it lock, stock and barrel. When they opposed our budget surpluses, they had people from the other side breaking down the front doors of this Parliament House to oppose them. Today, they say they have always been economic conservatives whilst they have still got the splinters of the front doors of this House under their fingernails. (Time expired)

Penny Wong (SA, Australian Labor Party, Minister for Climate Change and Water) Share this | Link to this | Hansard source

I raise a point of order. I would ask you, Mr Acting Deputy President Bishop, to reflect on some of the comments Senator Abetz made at the conclusion of his speech in which he seemed to assert—and I could be wrong; I was not listening closely—that members on this side had been involved in activities such as breaking down the doors to Parliament House. If that is the case, it is clearly a reflection on those on this side of the chamber and it is also incorrect.

Mark Bishop (WA, Australian Labor Party) Share this | Link to this | Hansard source

I will take advice of the Clerk in due course and come back to the chamber.

Dana Wortley (SA, Australian Labor Party) Share this | Link to this | Hansard source

I seek leave to incorporate a speech by Senator McEwen.

Leave granted.

Anne McEwen (SA, Australian Labor Party) Share this | Link to this | Hansard source

The incorporated speech read as follows

It is with great pleasure that I speak today on the Workplace Relations Amendment (Transition to Forward with Fairness) Bill 2008.

On November 30 2005, I spoke against the Workplace Relations Amendment (Work Choices) Bill 2005. I said I couldn’t wait for the day that Labor would tear up that legislation and put it in the bin. And now that day has come.

Australian workers were wronged by the previous Government and I am proud to be part of the Rudd Government that is cleaning up the mess, working towards a better future for all Australians.

Ratifying Kyoto was the first act of this Government. We made a commitment to cleaning up the planet while at the same time cleaning up one of the previous Government’s failings. Another mess left by the previous Government is the economy. The previous Government failed to show fiscal discipline, failed to deal with the skills shortage, failed to prepare for an ageing population, failed to make the most of the best terms of trade in 50 years and failed to address inflation. It also failed to keep its promise of record low interest rates as we saw over and over again. The previous Government was too busy pushing through its ideological agenda, too busy punishing hard working Australians, to address these major issues.

Australia is facing the highest underlying inflation rate for 16 years and it is predicted by the Reserve Bank to stay there for two years. To assist families during this difficult time Labor will introduce low tax First Home Saver Accounts, help to build thousands of new rental properties leased at 20 per cent below market rents, cut out-of-pocket child-care costs and provide a 50 per cent education tax refund to eligible families to cover the cost of education for their children. We are committed to helping families while we deal with the issue of inflation. This is in stark contrast to the former Government which not only paid little attention to inflation, but also introduced Work Choices, cutting the pay and conditions of workers when most needed.

The recent announcement by the Australian Bureau of Statistics that Australia’s unemployment rate fell to 4.0 per cent in February 2008 was exciting news worth celebrating. But to continue celebrating strong jobs growth, we must control inflation and lift productivity. To this end, the Government has developed a five point plan to fight inflation, while boosting productive capacity of the economy and effective labour supply.

We will be working to lift the nation’s productivity as the average annual productivity growth over the last five years has been lower than in any equivalent period in at least the last 16 years. Unlike the previous Government, we have recognised the destructive skills shortage facing our country and its implications for the economy. We have recognised this and have a plan to deal with it. Skilling Australia for the Future is the Government’s commitment to address skill shortages.

This commitment includes establishing Skills Australia. Skills Australia will bring together economic, education and industry expertise to provide Government with advice about the future skill needs of this country.

We will also provide an extra 450,000 Vocational Educational and Training places, including 175,000 for those who are not working or marginally attached to the labour force. The first 20,000 of these places will be available from April I this year.

Today we are tackling the disaster that is, soon to be was, Work Choices.

For months leading up to the election last year, Labor presented a workplace relations policy that resonated with Australian workers and their families. The disastrous effect the previous Government’s IR laws had on workers is real and must be recognised. Work Choices was a mistake and it has been refreshing to hear some members of the previous Government now admit to that, just as it has been disappointing to see others desperately trying to hold onto the ideological dream that was Work Choices.

Labor gave the Australian people an alternative. An alternative that would restore workers’ rights and conditions. An alternative that the Australian public came out in droves to support. Work Choices was not an issue at the margins of this campaign, it was right at the centre, those who voted for Labor voted for these changes. This legislation represents the mandate that the Labor Government was provided with to repeal Work Choices.

Labor’s main pledges in regard to workplace reform were and remain;

• Abolishing AWAs, but respecting existing contractual arrangements;
• Providing 10 National Employment Standards;
• Creating a fast and simple unfair dismissals system;
• Simplifying and modernising some 4,300 awards;
• Limiting the ability to take protected industrial action to bargaining periods, supported by a mandatory secret ballot and prohibiting industry wide strikes;
• Retaining existing right of entry arrangements; and
• Creating a new independent umpire – Fair Work Australia.

Unlike the previous Government, we were straightforward and honest with the Australian public. During the 2004 election campaign, the then Prime Minister announced the Coalition’s industrial relations policy and then once elected, introduced something completely different. The public did not get to vote on Work Choices that election, their voices were not heard by the Coalition. But in November last year they finally got the chance to vote on it and their voices were definitely heard. Australians voted for change and change is what they are getting. We are a Government that stands by its principles and promises. Today is another example of this.

When Work Choices was first introduced into Parliament, debate was quickly gagged.

As a new Senator, it was disenchanting to see this kind of behaviour happening so readily. We wanted to represent the views of our constituents who were incredibly angry by the way they had been treated during the election.

For the next two and a half years, the Howard Government misled Australians about the impact Work Choices was having on workers. One such example was when the Government forced high paid public servants onto AWAs so it could claim that AWAs delivered wage increases. In reality, low paid workers often didn’t get any wage increase at all under their AWA. The true situation once the legislation had been passed was misrepresented.

We then saw $60 million of taxpayers’ money being used by the previous Government to campaign against Labor on workplace relations. The public saw through their obfuscation of the facts.

The true facts have been provided by the Workplace Authority. After analysing a sample of over 1700 AWAs lodged between April and October 2006, the Workplace Authority compiled a significant amount of data. The previous Government claimed this data didn’t exist.

The analysis of the 1748 AWAs shows that;

• 89 per cent excluded one or more so-called protected award conditions;
• 83 per cent excluded two or more so-called protected award conditions;
• 78 per cent excluded three or more so-called protected award conditions; and that
• 52 per cent excluded six or more so-called protected award conditions.

The analysis also revealed the so-called protected award conditions that were most frequently removed:

• 70 per cent removed shift work loadings
• 68 per cent removed annual leave loadings
• 65 per cent removed penalty rates; and
• 63 per cent removed incentive based payments and bonuses.

The data also revealed that 75 per cent of the 1487 AWAs sampled did not provide for a guaranteed wage increase.

These are the statistics the former Liberal Government didn’t want to tell the Australian people. These are the individual statutory agreements that the Liberal Party brought to Australian working families.

This transition Bill is the beginning of the end for Work Choices. We know from the length and complexity of Work Choices what happens when legislation is implemented without full debate and consultation. Therefore we have facilitated much discussion on this Legislation and are introducing our changes in stages. We have struck a balance between addressing the urgency of the Bill as well as the need for research and scrutiny.

Changes that will be implemented by this Legislation include; preventing the drafting of any new Australian Workplace Agreements, putting arrangements in place for the making of individual transitional employment agreements, and providing the Australian Industrial Relations Commission with the resources and clear direction it needs to get on with the award modernisation process.

As already stated, Australian Workplace Agreements were forced upon many workers, stripping them of their basic rights. Following International Women’s Day on the 8th of March, it is particularly pertinent to speak of the impact Howard’s IR laws had on women. The Women’s Electoral Lobby and National Pay Equity Coalition have spoken on the impact Australian Workplace Agreements had on workers saying that ‘the inclusion of appropriate work and family standards into these Agreements was rare and was to the detriment of women trying to balance their work and family responsibilities.’

Since the introduction of Work Choices, a majority of AWAs have been made within the areas of low-paid employment. Such people include many women, young people and workers of non-English-speaking background, and this is the reason that AWAs have had a negative impact on equal pay for women. AWAs provide little flexibility to workers, thus tipping the scales of a good work and life balance. This will no longer be possible following the Bill’s commencement date. No one will be able to sign a new AWA which is fantastic for all Australians now and for generations of workers to come.

Those already on AWAs will work under that AWA until its expiry, and then new employment arrangements can be made. For those employers who currently have staff on AWAs, transitional arrangements need to be made. The transition to Forward with Fairness amendment does this through the creation of individual transitional employment agreements, ITEAs.

ITEAs can be made until 31 December 2009 by employers who had at least one employee on an AWA as at I December 2007. These agreements are designed to assist employers in adjusting to the new workplace relations system and will expire no later than 3 I December 2009. By this stage employers would have gained a greater understanding of the new system and as of the 1st of January 2010, Labor’s new National Employment Standards and modern simple awards will be up and running.

The ITEAs for employees, employers and union greenfields agreements must be lodged with the Workplace Authority Director. If an ITEA fails the no disadvantage test, introduced in this legislation, the agreements would cease to operate and in some circumstances compensation may be payable to employees. This is a big change from what occurred under Work Choices.

With so many Award conditions lost by workers during the time of Work Choices, it is clear that the Government’s `fairness test’ was unsuccessful. This view was supported by The Women’s Electoral Lobby and national Pay Equity Coalition in their submission to the Senate Inquiry. They ‘support the abolition of the ‘Fairness test’ and its replacement with a more effective ‘No disadvantage test’ that ensures that rights and entitlements contained in collective agreements and awards cannot be avoided through the use of AWAs.’

In November last year the number of agreements failing the fairness test more than tripled, with almost 5,000 workers found to have had their wages and conditions cut without adequate compensation. What is even more disturbing is that there were almost 150 000 workers in the queue to have their job contracts scrutinised. With many of the agreements failing the test, it is likely that a large proportion of those 150 000 workers waiting to have their agreements checked, were also suffering under poorer working conditions.

The number of AWAs that failed the fairness test is indicative of the confusion caused by Work Choices. It shows that the millions of taxpayer dollars spent trying to inform employers and the public about `Work Choices’ was a complete waste of taxpayers’ money. The Bill today repeals the requirement for employers to provide a copy of the Work Choices workplace relations fact sheet to their employees. We saw the requirement that companies had to distribute Government propaganda at the expense of the taxpayer as the outrageous waste that is was.

With this legislation, Labor is introducing a new no disadvantage test for collective and individual workplace agreements. The test will apply to all collective and individual agreements made after the commencement of this legislation. Under this legislation, only workplace agreements, agreement variations and terminations that meet fundamental requirements will come into operation.

Another important aspect of the Bill is that it begins the process of award modernisation for the establishment of a modern award system for Australia. The Bill stipulates that the Australian Industrial Relations Commission must give regard to an awards system that is simple and easy to understand and that reduces the regulatory burden on business; that provides a fair minimum safety net of enforceable terms and standards; that is economically sustainable and promotes flexible work practices; and that is in a form that promotes collective bargaining. Labor expects that the vast bulk of award modernisation will be conducted by the end of 2009.

I look forward to the introduction of a more detailed workplace relations Bill which will be introduced into Parliament later this year. This Bill will ensure that by the 1st of January 2010, Labor’s fairer and more flexible workplaces relations system will be in full operation. Until such a time, it is with great pleasure that I commend the Workplace Relations Amendment (Transition to Forward with Fairness) Bill 2008 to the house.

Penny Wong (SA, Australian Labor Party, Minister for Climate Change and Water) Share this | Link to this | Hansard source

I rise to make some comments in reply in this debate on the Workplace Relations Amendment (Transition to Forward with Fairness) Bill 2008. At the outset, I thank senators for their contributions to the debate, particularly the senators who participated in the Senate committee inquiry process into this bill.

At the 2004 election, the Australian people did not vote for their pay and conditions to be stripped away through individual Australian workplace agreements. They did not vote to exchange the safety net for a limited number of protected award conditions that could simply be eradicated, without compensation, from a workplace agreement by the flick of a pen.

The opposition now say that they made a mistake with Work Choices. Perhaps, if they had sought at any time to tell the Australian people of their plans, the Australian people could have warned them about the mistake they were making. The member for North Sydney, the former Minister for Employment and Workplace Relations, said:

... I don’t think many ministers in cabinet were aware that you could be worse off under Work Choices, and that you could actually have certain conditions taken away without compensation ...

That is a quote from a minister commenting on cabinet deliberations, confirming that Howard government cabinet ministers were not actually aware of the impact on working families, on ordinary Australians, of the legislation they endorsed. The member for Menzies, who was the Minister for Employment and Workplace Relations at the time the Work Choices legislation was introduced, said in his speech during debate on this bill, ‘I have said before that I believe we did make a mistake in relation to Work Choices.’

At no stage has anyone in the opposition apologised for making that mistake. In fact, what we saw tonight from Senator Abetz was yet another rearguard defence of Work Choices, because he cannot help himself. He is still in this chamber defending Work Choices with every breath. The reality is that he is another one of those on the other side who want these extreme laws to stay in place and who have not accepted that these laws are not good for Australian working families.

I am not sure what is worse: a government that deliberately sought to reduce the rights and entitlements of Australian workers in the workplace or a government that did so accidentally, asleep at the wheel, blindly allowing pay and conditions to be slashed whilst ignoring that it was even occurring—the former Prime Minister insisting that it was merely a perception on the part of some people, saying, ‘We haven’t had people coming up and saying, “I’ve been affected,” but they have this general idea that others might have been.’ These are the same people—that is, the opposition who are now calling on the government to provide the economic modelling of the effects of the transition bill—who did not do any proper modelling on their own Work Choices bill; who refuse to release the limited modelling they did conduct; and who withheld key data of the effects of Work Choices from the Australian people.

Prior to last year’s election, we on this side of the chamber made our workplace relations policy crystal clear. In November last year, the Australian people voted for a fair, balanced and productive workplace relations system for the future. We made it clear that we would act immediately to prevent any new Australian workplace agreements being made. This bill delivers on that promise. We made it clear that we would allow workplaces using Australian workplace agreements as at 1 December 2007 to use individual transitional employment agreements in limited circumstances only in order to assist with the transition to the government’s new workplace relations system. This bill delivers on that promise. We made it clear that we would introduce a genuine no disadvantage test against the full safety net for all agreements. Again, this bill delivers on that promise. We made it clear that we would immediately commence the process of award modernisation, and this bill delivers on that promise.

ITEAs will only be available for a limited transitional period until the government’s new workplace relations system is fully operational from 1 January 2010. Under this government, there will be no scope for any individual statutory agreement to be made after 31 December 2009 and, under this government, there will be no need for any individual statutory agreement to be made after 31 December 2009. That is because this government will deliver on its promise to put in place a fair and flexible safety net of 10 legislated national employment standards and a further 10 minimum conditions contained in simple, modern awards for employees earning $100,000 or less. This will be a safety net that cannot be ripped away. Where an employer and employee choose to make an individual arrangement, it will be underpinned by the safety net. Where an employer and employees agree to make a collective agreement in the government’s new workplace relations system, employees must be left better off overall when compared with the safety net.

I want to turn now to an issue that had some focus in the debate today, and that is the relationship between workplace flexibility and productivity. There is no evidence that having Australian workplace agreements has made any difference to inflation, productivity or industrial harmony. What they did do was assist in stripping away Australian workers’ pay and conditions. Whilst this government is tackling the inflation challenge and the productivity challenge for this nation, the fact is that the former government simply ignored multiple Reserve Bank warnings about the inflation risks arising from skill shortages and infrastructure gaps. What they focused on was introducing a system which enabled workers’ pay and conditions to be stripped away. This is what they did instead of rising to meet the productivity challenge. Instead of meeting the productivity challenge, the former government created a workplace relations system that combined the greatest regulation this country has ever seen while reducing job security and basic protections for employees. Unsurprisingly, productivity growth did not increase with Work Choices changes. While aggregate data is of limited value in determining the impact of AWAs on productivity growth, the most recent national accounts data shows that productivity growth in the market sector was flat between March 2006 and September 2007 compared with the annual average wage growth over the past two decades of 2.3 per cent.

I listened with interest tonight to Senator Abetz claiming credit for the unemployment rate, a bit like Mr Costello in the other place. I wonder whether he will also claim credit for the flatlining of productivity that I have outlined and for the consecutive interest rate rises that we saw under the Howard government, and the last two. Will the opposition also claim credit for that? I wait for those on the other side to actually be consistent about which aspects of their economic legacy they wish to take credit for, because somehow I do not believe—

David Johnston (WA, Liberal Party, Shadow Minister for Resources and Energy) Share this | Link to this | Hansard source

We’ll just take credit for the $20 billion cash in the kitty.

Penny Wong (SA, Australian Labor Party, Minister for Climate Change and Water) Share this | Link to this | Hansard source

Unless, Senator, you are going to be different, I think we will continue to see the opposition ducking its head when it comes to inflation, productivity and interest rate increases.

I have listened to opposition claims that the absence of new statutory agreements from 2010 onwards will reduce labour market flexibility. This is clearly not the case. The focus for determining wages and conditions of employment under Labor’s system will remain at the enterprise level through collective enterprise bargaining. Bans on pattern bargaining remain. Indeed, on 19 February the Reserve Bank’s Assistant Governor said:

Over a period of 20 years or so, the labour market has become much more flexible than it used to be. I do not see that changing in any significant way. I think that we should expect to see that low unemployment can still be sustained without generating a significant lift in inflation.

The opposition is simply on its own in the scare campaign it is attempting to run when it comes to workplace relations.

The government welcomes the opposition’s statements apparently in support of the government’s genuine no disadvantage test. It is not clear to me, however, whether the opposition really supports the no disadvantage test or whether it merely does not oppose it and would be prepared to see it again eroded at some time in the future. After all, the opposition’s original plan, when it was in government, was for workplace agreements to not be tested at all. It was only after more than a year of this approach and the approach of an election that the former government was forced into considering the introduction of a test for agreements, but what they introduced was not a no disadvantage test. It could not be called a no disadvantage test because it still allowed employees to be disadvantaged under workplace agreements when compared with the award. Important award entitlements, such as long service leave, redundancy pay and rostering protections could simply vanish without employees receiving anything in return. The benchmark for Labor’s no disadvantage test will be the full range of entitlements in an earlier award, an ITEA or an earlier collective agreement, if there is one, not merely the handful of conditions that formed the benchmark of the previous government’s so-called fairness test.

The creation of modern awards was a key election commitment by the Rudd Labor government. Along with the new National Employment Standards, modern awards will form an integral part of a fair minimum safety net for employees in the new workplace relations system from 2010. This bill provides the means for the award modernisation process to commence by setting out the Australian Industrial Relations Commission’s award modernisation function and specifying requirements for modern awards. Unlike the former government’s provisions in its legislation, the provisions in this bill are actually going to be used to ensure that this important and significant reform takes place. The commission will undertake award modernisation in accordance with the terms of an award modernisation request. The explanatory memorandum to this bill contains the award modernisation request the Deputy Prime Minister proposes to make to the president of the commission upon passage of the bill. There is no secrecy here and there is no delay. Throughout the award modernisation process, the commission will publish quarterly progress reports. These will keep the public updated about how the process is developing.

Concerns were raised before the Senate inquiry into the bill about the requirement for the commission to ensure that modern awards do not contain state based differences. I would like to note that this does not prevent the commission including in awards terms and conditions that are appropriate and based on objectively ascertainable regional circumstances, based on the evidence of the parties that such a term or condition is necessary to ensure a fair minimum safety net. It is appropriate, though, that new modern awards operating in a national system should not replicate state based differences from old awards which exist merely as a matter of historical circumstance.

This bill will extend the end date for notional agreements preserving state awards, or NAPSAs, and transitionally registered associations to coincide with the commencement of modern awards. Under the current act, NAPSAs and transitionally registered associations would end on 26 March 2009—three years after the commencement of Work Choices. The former government seemed to be entirely unconcerned about the possibility of employees being left entirely without award protections from 27 March 2009. If this government had not moved to extend the operation of those instruments, the employees covered would have been entitled to the five minimum conditions under the previous government’s fair pay and conditions standard but nothing more. Such employees will be covered by a modern award from 1 January 2010 when modern awards will commence and the government’s new workplace relations system will be fully operational.

The government has set out a clear plan for workplace relations. We did so before the election. Nevertheless, we remain engaged in genuine consultation on the detail of our proposed legislation. In framing the bill, the government has sought the views of employer, union and state and territory representatives. The government’s preparedness to listen to and act on a range of views has resulted in better legislation and contrasts starkly with the way in which Work Choices was developed. The government has also listened carefully to the matters raised by stakeholders during the Senate inquiry and the very useful contributions made by senators during the inquiry hearing.

Before I conclude, I want to make some brief comments in relation to Senator Fielding’s second reading amendment. Can I note that one of the central aspects of this bill is to restore a full safety net to ensure that agreements are assessed against the totality of awards. In general, matters such as meal breaks and penalty rates are contained in the full safety net, including awards. The primary issue, therefore, covered by Senator Fielding’s amendment appears to be award-free employees. Can I say on this issue, as Senator Fielding would be aware, the National Employment Standards discussion paper invites comments on a range of issues, including how to best deal with these issues in respect of award-free employees. I would also draw the Senate’s attention to evidence by Professor Andrew Stewart which goes to the difficulty associated with setting into a national employment standard some of the issues raised by Senator Fielding—in particular, to have a single national standard for penalty rates. Given the way in which penalty rates are generally construed, that is obviously extremely difficult to define. For these reasons, the government is not intending to support Senator Fielding’s second reading amendment.

In conclusion, the blueprint for Labor’s new system was detailed before the election. It was endorsed by voters. It will be developed in an open, consultative and rigorous way and it will get the balance right between flexibility and fairness.

Debate (on motion by Senator Wong) adjourned.