Eric Abetz (Tasmania, Liberal Party, Shadow Minister for Employment and Workplace Relations) Share this | Link to this | Hansard source

The Fair Work Amendment (Transfer of Business) Bill 2012 was one of the stunts that we have now come to expect from the would-be Prime Minister and current workplace relations minister, Mr Bill Shorten.

Senators may recall that the genesis of this legislation was Mr Shorten's rushed trip to Queensland to try to make very cheap, nasty, ugly, political capital out of the tough decisions needed to be taken in the state of Queensland by the newly elected premier. Queensland had an unsustainable—still has—debt burden, and I will go through the details of that later on.

Having been confronted with an eight-week illegal blockade and strike at the Queensland Children's Hospital, Mr Shorten saw no need to visit Queensland and call off that dispute. He saw no need to go to Queensland to argue for justice for the workers who actually wanted to go to work at the Queensland Children's Hospital. But, oh yes, it was vitally important for him to go to Queensland to announce the Fair Work Amendment (Transfer of Business) bill. It gives you an indication of the minister's quite warped priorities and what his political motivation is: an eight-week illegal strike blockade, not to be worried about, not worthy of a visit, but to try to slap Premier Newman around the face—that is most definitely worthy of a visit to announce a bill that did not have the normal consultative process applied to it.

This bill is wrong in principle, and will in fact have a perverse outcome for Australian workers. That is the shameful thing about this bill: those public servants, in Queensland in particular, who have been made redundant will find the opportunity of gaining employment so much harder. Allow me to briefly encapsulate that at the commencement of my remarks before going into the details of the bill.

What the bill seeks to do is to say that any public servant, even if they accept a voluntary redundancy from the Public Service, if they are picked up by a private employer that then provides services back to the Queensland public service, will be entitled to all their entitlements that they had as a public servant if they are employed within three months of that redundancy; even a voluntary redundancy—namely, that they voluntarily resigned, accepted the conditions and then tried to gain employment with an employer that might be providing services back to the state government.

I have specifically asked the government and, unusually, they have responded quite clearly. So if I as a prospective employer of a redundant public servant said to that public servant, 'I'd love to employ you but I'd have to employ you on public service conditions. I can't do so. I will not do so. Therefore you won't get the job,' that ex public servant will have no redress in any way, shape or form. So the question is: how does this legislation actually benefit those that it is alleged to protect? It does not. It was a rushed stunt with the perverse consequence of making redundant Queensland public servants and other public servants less employable than they otherwise would be, as a result of which their difficulty will simply be enhanced courtesy of this legislation.

So despite their rhetoric, the government is wrong in relation to motivation behind this bill.

Yes, it certainly helps trade union bosses—and you would expect nothing less from a Labor government made up predominantly of former union officials—but it will leave workers worse off and see employees finding it harder to sell themselves in the employment market as a result.

At the time of the introduction of the then Fair Work Bill the coalition warned:

The Bill as drafted proposes a radical new approach to established transmission of business principles. It replaces the accepted approach of ‘asset transfer/business character’ with a broader concept of ‘transfer of work’. This has the practical effect of overturning the High Court authorities …

Here we have yet another Labor bill deliberately designed to overcome that which the independent umpire determined was a fair and reasonable thing. In this case, it was the highest umpire in the country: namely, the High Court. The Australian people can ask themselves a very simple question: is the collective wisdom of the High Court in relation to these matters to be accepted over and above the wisdom of one Mr Bill Shorten, ex-trade-union-boss? I have no doubt where the majority of Australians would place their faith. They would place their faith in the judgement of the High Court of Australia rather than with this particular decision of Ms Gillard's and Mr Shorten's.

At the time the bill was introduced, we observed:

… the Bill widens the circumstances in which an industrial instrument transfers with the relevant employees affected by a business sale or restructure. The potential also exists for such industrial instrument to form the basis of employment for any new employee that commences after the business has been transferred.

The reason for such a fundamental shift from universally accepted and well settled principle—

a definition settled by the High Court—

is unclear.

It is equally as unclear today.

The proposed transfer of business provisions are at best problematic and economically restrictive, and at worst they are a disincentive to achieve ongoing employment for affected employees. Indeed, Labor's chief or preferred business advisers at the Australian Industry Group were unequivocal about the detrimental affect of the new provisions and had this to say:

The provisions are anti employment and would create a huge incentive for companies not to employ workers of businesses they take over.

That is, of course, what was found by the Labor government's own Fair Work Act review. Remember that hand-picked panel of Labor sympathisers and the skewed terms of reference designed to force a particular outcome? Even they were mugged by the reality that the existing transfer of business provisions were a disincentive for re-employment. Even they came to that conclusion, yet Mr Shorten, instead of acting on the Fair Work Act review, went backwards even further. One has to wonder what the motivation is.

As recently as this month, on 6 November, Mr Shorten received a letter from the Australian Industry Group Chief Executive. He wrote:

I am writing to communicate Ai Group’s strong concerns about the Fair Work Amendment (Transfer of Business) Bill 2012 which was introduced into Parliament—

and I stress this—

without any consultation with industry, despite the fact that the legislative amendments will have a major impact upon many Ai Group member companies and other private sector employers.

The Government dispensed with the usual process and did not refer the Bill to the Committee on Industrial Legislation (COIL) before introducing it into Parliament. The Bill was introduced into the House of Representatives and voted upon extremely quickly which did not provide the opportunity for adequate scrutiny. This is very disappointing.

I would be pleased to hear from the government what the urgency is in relation to this legislation that they did not consult, did not go through COIL and did not undertake the normal consultations, and why it had to be forced through the parliament in such an inappropriate manner.

With the introduction of this legislation, the government has yet again confirmed that it does not understand our job creators. Let me remind the Senate: governments do not create jobs; employers do. Governments have a role in creating an environment in which businesses are able to flourish, do business and employ people. This legislation does the exact opposite of that.

The transfer of business provisions have created a disincentive for an incoming employer to retain employees engaged within a business. In other words, it is a lose-lose. The business taking over the other business loses the corporate knowledge of the employee and the employee loses the opportunity of ongoing employment. It is a lose-lose. That is what the Fair Work Act review itself found. But, oh, no; Mr Shorten knows even better and wants to cement this inequity even further.

Secondly, they encourage the retention of business practices that may be uneconomic or failing. Of course, that is often one of the reasons that one business takes over another—because the existing business that is being taken over does not have a viable business model. This means that employers, as I said, lose corporate knowledge and employees become less employable—both are worse off. That is Labor's double whammy in this bill. They destroy both the employer's prospects and the employee's prospects.

The coalition appreciates that these provisions are intended to be anti-avoidance in nature and reflect evidence highlighting that some inappropriate practices by some businesses have been engaged in in the past and will undoubtedly, if given the opportunity, be engaged in in the future. However, such evidence must be balanced against the need to ensure that workplace relations do not negatively impact upon normal business transactions or operate in a manner that costs jobs and leaves workers and employers worse off.

That is why we as a coalition say that the High Court of Australia actually got the balance right. They got the balance right, but Labor, of course—Ms Gillard and Mr Shorten; intellectual giants that they are—know better than the High Court. Not surprisingly, the Fair Work review has recommended changes to the existing transfer-of-business provisions to bring them back into line with—guess what?—the High Court decision. Indeed, they could not have been clearer. Let me quote:

The Panel recommends that s. 311 be amended to make it clear that when employees, on their own initiative, seek to transfer to a related entity of their current employer they will be subject to the terms and conditions of employment provided by the new employer.

That is the finding of the government's own Fair Work review, which was announced on 20 December last year by the Minister for Employment and Workplace Relations, and the recommendations of the government's own panel are completely at odds with this legislation. This can only mean one thing: the bill and the measures proposed in it are yet again a political measure and not a practical measure.

Further proof, if it is necessary, that this is a political measure rather than a practical measure, as Mr Shorten is so wont to do: the Fair Work review's recommendations did not stop Mr Shorten, in the other place, from strategically using it to try and vindicate this bill. He conveniently cherry-picked certain sentences from the review document, strung them together and—guess what?—they then said what he wanted them to say. Mr Shorten will never let a review's findings get in the way of his spin, even when it is a Labor government's review and the findings are completely at odds with the government's proposals.

As I have indicated, Mr Shorten announced this in the wake of Premier Newman indicating the need for some 10,000-plus redundancies from the Public Service in Queensland. Let me paint the picture: Labor left the state of Queensland in dire financial circumstances and this bill seeks to make a difficult situation so much worse for thousands of workers.

Hard decisions had to be taken—and, might I add, they had to be taken to ensure that Queensland did not catch the Euro-virus and the 'Greek disease'. Make no mistake; Queensland was on that trajectory. Let's look at what Labor did to Queensland. It is no wonder, when you reflect that the former Prime Minister and the current Treasurer are both Queenslanders, that the Commonwealth books are in the shonky state they are in today.

In Queensland, Public Service numbers increased on a full-time equivalent basis by 40 per cent in the decade between June 2000 and June 2011. Wages growth in the Queensland Public Service outstripped other jurisdictions, with average weekly earnings increasing by 16.7 per cent in real terms since 2000-01 and with the public sector nationally only increasing by 12.7 per cent. As a result, the Queensland public sector became a high-wage jurisdiction over the last decade and was bloated with its 40 per cent increase. But now Queensland is faced with a $62.7 billion debt. To put that into perspective, it is about half the size of the Commonwealth's debt, and that is just in one state of Australia. Queensland represents about 20 to 25 per cent of the population—I am not sure; a Queensland senator might be able to assist with that figure—and has about half of the Commonwealth debt visited upon it because of the mismanagement of state Labor.

So the independent commission of audit predicted that debt in Queensland could balloon out to as much as $100 billion in 2018-19 unless urgent corrective action was taken, and that is what the Queensland government sought to do. In this ill-advised stunt, what Mr Shorten did not tell the Australian people was that Queensland and New South Wales public sector employees were not covered by the Fair Work Act. Why? Because successive state Labor governments did not refer the powers. Also, Labor's transfer-of-business regime leaves workers and employees worse off—which the Fair Work Act review has found.

Also, Labor's own modelling projects that 4,200 full-time jobs and up to 12,000 jobs will be stripped out of the Commonwealth Public Service. But there is no need for legislation if they are doing it down here in Canberra! No need for it for Tasmanian redundancies! No need for it with South Australian Public Service redundancies! Why? They are Labor governments of course. But, when a coalition government in Queensland does it, it requires a visit from the minister to make merry hell.

But this backfired very badly because, shortly after this announcement by Mr Shorten, who should sack and make redundant a lot of workers only to harness and outsource some of this work? None other than the ACTU. The Australian Council of Trade Unions made a lot of workers redundant and said that they would then source this workforce from the private sector. Exactly what Mr Newman did. But did Mr Shorten fly to Melbourne and stand outside ACTU headquarters to condemn this? Of course not. Mr Shorten's silence was overwhelmingly deafening. This legislation was a political stunt; it will make employers worse off and it will make workers worse off, and that is why the coalition opposes it.

Larissa Waters (Queensland, Australian Greens) Share this | Link to this | Hansard source

I rise to speak in favour of the Fair Work (Transfer of Business) Bill 2012. The bill ensures that employees will retain the benefit of their existing workplace arrangements and instruments if their employer changes and their work stays the same, such as when their previous employer transfers assets or outsources work or undertakes corporate restructuring. That will bring the system into line towards a more nationally consistent approach, and the Greens support that on that basis.

Hopefully, in my home state of Queensland, this will mean greater protections to outsourced or privatised workers. It will bring those Queensland workers up to the same level of protection as they would get under the Fair Work Act. That has been the case in other states for some time and it is appropriate to bring that towards national consistency. The Greens will be supporting this bill because it is a small step in the right direction, but, sadly, it does not go anywhere near far enough to deal with the absolute slaughter that we have seen of the Public Service in Queensland.

It also saddens me that we see this legislation coming from the federal Labor government, which itself has a program, through efficiency dividends and program cuts, of slashing in the order of 12,000 federal public servants. I want the record to reflect that we are quite displeased with that approach from both sides of politics at the federal and state levels.

This bill will provide some assistance if workers are outsourced but, sadly, it will not help them if they are sacked. In Queensland we have just seen Campbell Newman slash 14,000 public sector workers. The threat of redundancy would usually preclude such mass sackings were this to happen in the private sector, but the LNP government in Queensland is simply driven by ideology for small government and blow the consequences. Never mind the cost of redundancies; they are just putting people on the scrap heap. Unfortunately, the Premier has forgotten that those public servants actually provide a public service. Who would have thought? These are teachers, nurses, policemen and women, emergency service workers and transport workers who keep our state running. Sadly, they have been tossed aside by the Premier.

This bill, while it seeks to address this situation, as I have said, unfortunately will not help those people who have been sacked. What the bill does is to really highlight the lack of parity, of equity, between state public sector workers and federal public sector workers. The Greens would like to see that rectified under the Fair Work Act. In Australia state public sector workers have less protection than their federal counterparts, and that seems illogical and certainly unreasonable. The best example of that is probably the Queensland Premier's recent amendment of state laws—the Queensland Public Service and Other Legislation Amendment Bill 2012—which was passed earlier this year. It actually rewrote some of the agreements between employers and employees. It declared some elements of those agreements void—employment security, contracting out, organisational change—which was simply outrageous. We have never seen this before, to my knowledge, where legislation has intervened in the agreement between private parties and simply declared parts of that agreement invalid. I would expect all sides of this chamber would be up in arms if that approach were taken in any other context. Sadly, because they are public servants, both of the old parties see fit to ignore them.

My concern is that that legislation itself is potentially in breach of our international labour obligations. That would enable the federal government to intervene. I think it is a very interesting question as to what part of our Constitution we should be using as the basis to regulate industrial relations. We have moved from the dispute settlement, conciliation and arbitration basis head of power to the corporations head of power and I think it warrants exploration as to the unintended consequences of that move. That is why the Greens are moving today in the other place for an inquiry into these sorts of issues. That is why we will be urging the government and the Independents—even the coalition if they do decide they care about workers—to support this inquiry. It would look into the ability of the federal government to intervene to assist state public servants, to uphold those ILO obligations and to lift the standards for Queensland workers so that they get the same level of protection as federal public servants. My colleague the member for Melbourne, Adam Bandt, will be moving that tonight.

The inquiry starts off noting with great concern the massive job losses from state governments around the country—particularly in Queensland—and it asks that the Standing Committee on Education and Employment look into and report on the conditions of employment of state public sector workers and the adequacy of protection of their rights—in particular, whether current state industrial relations regimes provide state public sector workers with fewer rights and less protection than it does for workers to whom the Fair Work Act applies. We have seen an indication already that that is the case: all the more reason to get some facts on the table.

It would also examine whether or not those interventions by the Queensland parliament to remove clauses within employee/employer arrangements are in breach of the ILO conventions. Likewise, it would examine whether the rendering unenforceable of those elements of those collective agreements is in breach of the ILO conventions. Importantly, it would look at what legislative and regulatory options are available to the Commonwealth to make sure that all Australian workers, including those in the state public sectors, have adequate and equal protection for their rights at work. I think that is a laudable goal.

Whilst we will be supporting this bill for the small increase in protections that it will provide it is important that members in both this place and the other place support this inquiry, and that we start to look at how we at this level of government can help workers everywhere. When we have seen 14,000 Queenslanders tossed on the scrap heap with no warning, and with the Premier assuring everybody before the election that that would not be his course of action, it is all the more important that we in this place do everything we can to try to help those workers. Likewise, I repeat our concern and dismay at the approach of the federal Labor government with its efficiency dividends and program cuts to see the jobs of in the order of 12,000 federal public servants slashed and put on the scrap heap as well.

We will be supporting this bill, but we will be urging all sides to back the inquiry that the member for Melbourne, Adam Bandt, will be moving in the House later today.

Catryna Bilyk (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak to the Fair Work Amendment (Transfer of Business) Bill 2012. I am proud to be a member of a government that has saved 200,000 jobs during the onset of the global financial crisis and I am proud to be part of a government that also went on to create another 800,000 jobs. I clarify the previous speaker's comments that this government is sacking 12,000 people—she has probably taken that from a media release. She should ring the Special Minister of State's office and check that, because it is not correct.

I am also proud to be part of a government that, when savings needed to be made, focused on efficiency reforms through smarter travel, smarter advertising and smarter use of property and information and communications technology. In other words, not only have we taken action to protect jobs through economic management but we have also made our best efforts to protect jobs in the Australian Public Service.

Creating and protecting jobs is part of Labor's DNA—unlike those on the opposite side, who opposed the stimulus package and would, if they had their way, have sent 200,000 Australians back to the dole queues. Not only do we believe in protecting jobs but we also believe in jobs that deliver fairness to workers. That is why we abolished Work Choices and introduced the Fair Work Act, restoring the rights of millions of workers across Australia.

It is unfortunate that not every government in Australia believes as fervently as we do in job security. It is unfortunate that not every government believes in fairness and in protecting the entitlements of Australian workers. Right now, across Australia, there is a war being waged on workers, and it is being waged by the Liberal-National governments. It is being waged against public servants who are being sacked in their thousands and who are having their rights trampled on. The LNP government in Queensland, led by Premier Campbell Newman, has announced that it will cut 14,000 public sector jobs. The Queensland government has also legislated to override employment security provisions and to put limitations on the use of contractors in state public sector agreements. It is clear that Mr Newman is paving the way for outsourcing public sector jobs so that he can cut the hard-won wages and conditions of Queensland public servants.

Mr Newman is following the leads of his mates in Victoria and New South Wales. In New South Wales the O'Farrell coalition government has cut 15,000 jobs in two budgets, including 800 jobs in the TAFE sector as a result of its $1.7 billion education cuts.

And in Victoria, Premier Baillieu has given executives in the Department of Premier and Cabinet bonuses over $600,000, while proposing to sack 4,200 public sector workers. The Baillieu government's main target is the training sector, where they have proposed $300 million in cuts—particularly to TAFE. I think that is a complete shame. This is at a time when the Gillard government is making record investments in education and training.

There is an emerging pattern here. When coalition governments come to power they immediately start to attack hardworking, decent public servants. The actions of Messrs Newman, Baillieu and O'Farrell are a portent of what is to come if a federal coalition were elected to government. Mr Abbott's party has already committed to slash 12,000 public service jobs—and may need to cut more if they are to fill their $70 billion budget black hole.

I know those opposite cry foul at the claim that they would take the slash-and-burn approach of the Newman, Baillieu and O'Farrell governments, but just look at their form. They opposed the stimulus package, which helped save thousands of jobs during an economic crisis. They have already announced that in government they would halt the construction of the National Broadband Network, abolish the trade training centres program and cut essential health services like the GP superclinics, eHealth and the after-hours GP hotline. Leading up to the 2010 election they proposed to cut $1 billion from vocational training and apprenticeships programs. Not only are these essential, vital public services but they are also primarily provided by public servants, who take pride in the work they do and many of whom have families to support.

I mentioned the federal opposition's plans to slash jobs in the context of this bill because this bill is about protecting workers affected by state government cuts, and it is clear that under an Abbott-led government they would have no protections whatsoever. Unfortunately, we cannot stop the likes of Mr Newman and others gutting the public services in their states. But what we can do is protect the entitlements of those workers where they are re-engaged as contract workers.

The transfer-of-business provisions of the Fair Work Act protect employee entitlements where a business changes hands and the new employer employs the old employer's workers to do the same job. These provisions currently only operate where both the old and new employers are covered by the national workplace relations system—in other words, by the Fair Work Act. The Fair Work Amendment (Transfer of Business) Bill 2012 will ensure that where there is a transfer of business from a state public sector employer to a new employer in the national workplace relations system, that the employees will see their existing terms and conditions protected, their accrued entitlements protected and their prior service recognised.

The transfer-of-business provisions already apply where employees are transferred from the public services in the Australian Capital Territory, the Northern Territory and Victoria, because these employees are already part of the national system. However, it is important that public sector employees in other states have their benefits and entitlements protected when that state decides to transfer assets for outsourced work.

Let me remind the Senate what the transfer-of-business provisions of the Fair Work Act are intended to do. They are designed to stop employers restructuring their business in such a way that they can undermine employee entitlements. The recent post-implementation review of the Fair Work Act strongly endorsed the transfer-of-business provisions. The panel considered that there is a clear need to protect employees in transfer-of-business situations and found that transfer of business, as defined in the act, provided better protections for employees than the previous arrangements. However, there are no protections under the current Fair Work Act should a state government decide to restructure its operations, such as by outsourcing.

This bill creates a new federal instrument called a 'copied state instrument'. The instrument will copy the existing terms and conditions of employment for a transferring employee where those terms are derived from a state award or agreement. The bill ensures that a term of copied state instrument has no effect if it is detrimental to the employee when compared to the entitlement of the employment under the National Employment Standards. The bill would also generally ensure that the employee's service with the old employer counts as service with the new employer for the purpose of determining the employee's entitlements.

As a previous industrial officer for the Australian Services Union, one of the entitlements I campaigned hard for was the portability of long service leave entitlements between local governments. So I understand the importance of this provision. It is particularly important in this scenario because we are talking about employees who are transferred not by their own choice but by that of their employer.

This bill sends a strong message to those Australians working in state, territory or Australian public services, and that message is that only Labor will protect and strengthen the public service and only Labor will uphold their rights, entitlements and working conditions. In contrast, the Newman, Baillieu and O'Farrell governments have declared war on their public servants.

It is clear to me and it should be clear to workers in the Australian Public Service that this is the same sort of approach that an Abbott-led coalition government would take. We just need to look at the behaviour of their state colleagues, their election commitments in the past and the $70 billion black hole they will need to make up for should they form government.

For those Australian workers out there, including federal public servants, who hear the opposition say they are not planning to declare war on public servants, who hear them say that WorkChoices is dead, buried and cremated, just remember that the war on workers declared by Messrs Newman, O'Farrell and Baillieu was not declared by any of those gentlemen prior to their election as premiers.

If that is not enough evidence, we can also point to the fact that the coalition voted against this bill in the other place and will oppose it today in the Senate. Not only do they oppose this bill but just a couple of hours ago they opposed a bill that would protect the entitlements of workers affected by the bankruptcy or insolvency of their company. It just goes to show that those opposite, the party of WorkChoices, have no commitment to protecting the rights and entitlements of Australian workers. As always, it falls on a Labor government to protect workers against the attacks on them by the Liberal-National coalition. I commend the bill to the Senate.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

I indicate that I have got serious concerns about the Fair Work Amendment (Transfer of Business) Bill 2012. For the record, I believe that the previous bill that Senator Bilyk has referred to in relation to entitlements for a business that has gone broke and the government stepping in to ensure the entitlements of workers is a worthy bill. I am broadly supportive of that bill but I have concerns in relation to this bill, because I think that it will have some completely unintended consequences. Secondly, I believe that the process by which this bill has been introduced is terribly flawed. Thirdly, I think we need to look at the overarching issue of productivity in this nation in terms of our workforce. I would like to refer to a recent article by emeritus professor in economics Richard Blandy, which I think is worthy of note.

Firstly, in relation to the processes of this bill, my understanding is that this bill did not come out of the Fair Work review at all. This is something that has come out of nowhere in a sense in that it has not been part of due process or appropriate process. I note that Senator Abetz, the Leader of the Opposition in the Senate, made note that the Australian Industry Group is very concerned about this in terms of a lack of consultation with one of Australia's leading industry groups that represents many thousands of employers, representing many hundreds of thousands of jobs. I do not think under any reasonable characterisation the Australian Industry Group could be described as an enemy of the government. I think they have played quite a constructive role with the Gillard and formerly Rudd governments in terms of issues of industrial policy, manufacturing and other policies in relation to broader public policy issues affecting their members. The process appears to be deeply flawed, but I think the outcome is even more flawed.

It is worth referring to an article by Gary Johns, a former ALP minister—I know that his politics seem to have shifted somewhat in recent years. In the Australian on 25 September 2012, his opinion piece bears some note. What he is suggesting is—and I will quote from Mr Johns:

Employer evidence suggests the changes to the former transmission provisions make it less, not more, likely that a purchaser would keep existing employees. This is because the changes make it difficult for a purchaser to restructure the business, including altering inefficient work practices.

The unintended consequences of the changes are that new employers are reluctant to employ any of the previous employees so as not to be bound by the previous industrial agreements. So much for looking after state public servants.

Mr Johns also makes reference to surveys the Australian Human Resources Institute has undertaken. I have looked at those surveys this morning, and the Australian Human Resources Institute has indicated that some 37 per cent of respondents claim that the transfer of business provisions had a negative or very negative impact on business. Overall, this will have the effect of doing the opposite of what it is intended to do: this will actually kill off jobs. This will make it harder for state public servants to find employment, because they will be at a relative disadvantage compared to other employees, which is not what this bill is intended to do. But, in fact, the way that this bill is structured, the way that it has been drafted and the way that it is meant to operate indicate that it will have these huge unintended consequences.

The point that Mr Johns makes, I think, is a very telling one, and I would like to ask the parliamentary secretary to comment either in the response to the second reading contributions and the summing up or, indeed, in the committee stage. I am conscious that we have a very, very heavy legislative agenda this week and that we need to deal with matters as expeditiously as possible, but this is important. Mr Johns makes the assertion that these transfer provisions were not in place when the Hawke-Keating government sold off Trans-Australia Airlines, the Commonwealth Bank, the Commonwealth Serum Laboratories and many more. The tests then in place were a balance to allow the new employer the chance to do better with the existing workforce or, failing that, to move on nonperformers, according to Mr Johns. So my question to the government is this: is the government asserting that these transfer-of-business provisions are equivalent or identical to what the Hawke-Keating government did during their time in office? I have to say that I think history has shown that the Hawke-Keating government struck a pretty good balance between improving productivity and protecting workers' rights. So is what this government is doing quite a departure from the Hawke-Keating era? It seems that it is. It seems that what is being proposed here is radically different from what the Hawke-Keating government did, which I thought struck that balance between productivity and the rights of workers in those formerly state-owned enterprises.

The final matter I want to touch on is the bigger picture of what this means for us as a nation in terms of productivity. I think it is quite disturbing, and I think it is worth referring to comments made by Emeritus Professor Richard Blandy, who is a professor in economics and someone who I have known for many years. Before he is pigeonholed by anyone as being in some way anti-Labor or against the labour movement, I say that Professor Blandy and I got to know each other quite well during the privatisation process of the Olsen Liberal government in South Australia in the late 1990s. Professor Blandy was critical of that privatisation for a number of reasons, including the impact on consumers and the way it was structured—leaving aside the issue of mandate.

It was a bit like the Gillard government saying, 'We'll never, ever have a carbon tax.' John Olsen, as Liberal Premier of South Australia, said, 'We'll never, ever privatise the state's electricity assets,' and bingo—a couple of months after getting into office he said, 'Things have changed and we've got to privatise.' Leaving that aside, Professor Blandy received enormous political heat as an academic because he was critical of the way the Liberal government in South Australia was structuring the privatisation of the electricity assets. In his predictions—along with the predictions of Frontier Economics and Danny Price, the economist who has given advice to the coalition on an emissions trading scheme—he was very critical of what the then Liberal government in South Australia was doing, and I think Professor Blandy's concerns were borne out.

What Professor Blandy has said in a very well-researched opinion piece in the Australian on 24 October of this year is:

… Australia's long-term slow rate of growth in productivity (and high rate of growth in unit labour costs) compared with other countries …

has seen us slip behind. He said:

Australian productivity growth is the third lowest among the 10 countries—

that he analysed—

just nosing Spain into second-last spot. South Korea's rate of productivity growth has been 3.5 times Australia's across the past 20 years. Finland and Sweden's rate of productivity growth has been about double Australia's, and that of the US about 70 per cent faster.

I mention Finland and Sweden because no-one could consider those to be low-growth countries that do not have strong protections for their employees. They are taking an innovative approach to industry, to manufacturing, to value-adding and to having those high-paid, highly productive, innovative jobs. So I think we need to heed the warnings of someone like Professor Blandy—someone who has raised the ire of both sides of politics in what I think is a fearless approach to analysing public policy.

So, I have very real concerns about this legislation. I think it is bad policy, the process has been flawed and, above all, what it is intended to do—and that is supposedly to protect workers—through these transfer-of-business provisions will actually have the opposite effect. My challenge to the government is to say here and now: are these transfer-of-business provisions equivalent to, identical to or substantially the same as what the Hawke-Keating government were doing in relation to their transfer-of-business provisions when they privatised a number of state-owned assets? I dare say that the government cannot credibly say that that is the case. For those reasons I have very real concerns about this legislation and I have real difficulty in supporting it.

Kim Carr (Victoria, Australian Labor Party, Minister for Human Services) Share this | Link to this | Hansard source

I would like to thank senators who contributed to this important debate on the Fair Work Amendment (Transfer of Business) Bill 2012. In particular, I want to acknowledge the important contributions of those who will actually be supporting the government's legislation.

The bill delivers on the government's commitment to introduce legislation to extend the existing transfer-of-business protections of the Fair Work Act 2009 to certain former state public sector employees whose transition to the national system was as a result of a transfer of business. The policy intention guiding this legislation is clear: the government does not accept that these employees should be worse off or that they should have their entitlements put at risk simply because their employer changes as a result of an outsourcing of work or an asset sale, but where their work stays the same.

The bill gives effect to this policy by ensuring that these employees generally retain the benefits of their existing terms and conditions of employment, where a transfer of business occurs between their former state employer and an employer covered by the national workplace relations system. The bill provides a more nationally consistent set of transfer-of-business protections for former state public sector employees. Employees in the Commonwealth, Victorian, Australian Capital Territory and Northern Territory public sectors are already covered by the transfer-of-business protections in parts 2 to 8 of the Fair Work Act. This bill simply extends these protections to certain public sector employees in the remaining jurisdictions: in New South Wales, Queensland, Western Australia, South Australia and Tasmania.

The bill does not seek to regulate how states conduct their own administrations. However, the Commonwealth is responsible for matters within the national workplace relations system, and this bill ensures that, when a transfer of business occurs between certain state public sector employers and an employer in the national workplace relations system, transferring employees will retain the benefits of their existing industrial instruments and have their hard-earned entitlements protected.

I note that some have criticised the bill for going too far, while others have said that the bill does not build in sufficient protections for former state public sector employees. To those who argue that the bill goes too far and will discourage new employers from hiring former state public sector employees, such as Senator Abetz has put to us in his contribution, I note that the recent post-implementation review of the operations of the Fair Work Act considered a number of submissions on the issues and was not convinced on the evidence before it that the transfer-of-business provisions had had that effect. To the contrary, the panel concluded that the scope for employers to determine the appropriate outcome for their business on application to Fair Work Australia provided sufficient flexibility. I note that the transfer-of-business provisions in parts 2 to 8 of the Fair Work Act already apply to transfers of business between certain public sector employers, including the Commonwealth, Victorian, Australian Capital Territory and Northern Territory governments and the national system employers. As the government has stated on many occasions, the bill is simply extending these protections to certain former state public sector employees in the remaining jurisdictions.

And to those who say that the bill does not go far enough: the government policy intent is clear, and that is to apply the current transfer-of-business provisions to former state public sector employees moving to the national workplace relations system through a transfer of business. Our view is that the bill strikes the right balance between in-practice employees' terms and conditions and the interests of employers in running their businesses efficiently. The government established the transfer-of-business framework currently in the Fair Work Act to ensure fairness and flexibility to both employers and employees and to replace the old, out-of-date and complex provisions.

The government has continued to listen to those and to consult with various stakeholders, including states and territories and unions and businesses on the provisions of the bill. As a consequence, the government will move a number of minor amendments to the bill. Before I go to those, I will deal specifically with the concerns of Senator Xenophon in regard to the transfer-of-business provisions in the Fair Work Act.

These were introduced by the government as part of the fair work reforms. The provisions are different to those previously in Commonwealth industrial law. They are designed both to broaden the circumstances where protections are provided to employees and to ensure flexibility and fairness to employees and employers by providing a clearer and simpler provision than those in the previous Commonwealth legislation. This is an extension of existing provisions and has come about as a direct consequence of an attempt to improve the old system that was in place under previous governments, including the Hawke-Keating governments.

The amendments that the government will move go to four broad categories. Firstly, the government proposes amendments to align more closely Fair Work Australia's powers to make orders in respect of a transfer of business within the scope of the bill with powers currently provided in the Fair Work Act. Secondly, the government proposes amendments to further clarify the coverage of the bill, which applies to certain former state public sector employees only and which does not extend to local government employees. These amendments reflect the intended coverage and the application of the bill as was announced by the minister.

Thirdly, there will be an amendment proposed to clarify the operation of the bill to ensure that the same rules that currently apply to transfer of business under the Fair Work Act in relation to the operation of the general protections provision are also applied to the transfer of business under the new proposed provisions of this bill. Finally, there will be a number of consequential amendments that deal with cross-referencing and numbering.

The bill establishes a more nationally consistent set of rules governing the transfer of business, based on ensuring protections for certain former state public sector employees whose jobs are outsourced and who end up doing the same job for a different employer. The government is very clear that it respects the work of 1.7 million public sector workers around Australia, and it simply cannot condone public servants in some states receiving fewer protections when there is a transition into the national system as a result of a transfer of business than those in other jurisdictions who already have the benefits of these protections. I commend the bill to the Senate.

Question agreed to.

Bill read a second time.