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

by leave—I move opposition amendments (1) and (2) together on sheet 7303:

(1) Clause 23, page 20 (line 8), after "that employment", insert "up to a maximum of 16 weeks' pay".

(2) Clause 23, page 20 (line 11), after "employer", insert "and the 16 weeks' maximum in subparagraph (i) has not been reached".

The coalition will be brief in relation to this amendment: the points were made during the second reading debate.

I would only make this one observation: Senator Urquhart's speech in the second reading debate was a devastating tour de force in destruction of Labor's own National Employment Standards, which were legislated in the Fair Work Act, which was authored by Ms Gillard herself.

The coalition, as I indicated, implemented the forerunner to this scheme. Labor has anxiously changed its name to remove any of the initiating features that came from the coalition; that is one aspect. Good luck to them with the name change. The aspect the coalition is concerned about is that the scheme should only cover redundancies in line with the wider community standard, which at present—and I want to stress this—is set out under the National Employment Standards of the Fair Work Act. Who are the authors of the National Employment Standards? Who are the authors of the Fair Work Act? None other than the Australian Labor Party and Ms Gillard herself. And where did they get those National Employment Standards from—the standards that they thought were so good, the standards that were legislated in relation to the issue of redundancy? A decision of the independent umpire, the Australian Industrial Relations Commission.

So the coalition does not believe that this bill should set a new standard of four weeks per year for an unlimited period of time, as clearly it will set a new standard which will be very difficult to meet for many employers. It will undoubtedly be used to argue for more generous redundancy arrangements in enterprise agreements and modern awards. Can I also say that after 10 years of service there is a long-service leave entitlement that cuts in.

Parliamentary Secretary, is it the intention of the government to set this legislation up as a new high bar, as a new standard, for the purposes of negotiating enterprise agreements and modern award arrangements?

Jacinta Collins (Victoria, Australian Labor Party, Parliamentary Secretary for School Education and Workplace Relations) Share this | Link to this | Hansard source

I can assure Senator Abetz that indeed it is not the government's intention to establish a new minimum standard. Perhaps I can use this as an opportunity to correct some of the errors that occurred in the debate on the second reading of this bill.

Whilst Senator Abetz refers to the provisions in the Fair Work Act he is referring solely to the provisions in relation to the standard for redundancy.

As Senator Abetz well knows, they are the minimum standard and the Fair Work Act provides for enhanced entitlements through other industrial instruments that these measures seek to address. I also noted that in his second reading contribution Senator Abetz referred to the forerunners of GEERS and the Ansett arrangements, but I would like to take this opportunity to remind the Senate that perhaps the first forerunner was the arrangements for Stan Howard and his business and the redundancies involved there. I would also like to take this opportunity to remind the Senate that in the Stan Howard arrangements 100 per cent of entitlements—not minimum entitlements but 100 per cent of full entitlements—were paid out. So these arrangements certainly do have an interesting history, but perhaps the most significant point is that the enhanced arrangements—the removal of the 16-week cap—have been in place for almost two years now, and the fears that have been raised and the issues that have been canvassed have not come to the fore during that period.

I will move specifically to Senator Abetz's question—which is, I suppose, canvassed in a range of different ways. Perhaps I will deal with one that had been raised earlier in discussions in relation to this bill and that, similarly, the Australian Industry Group had canvassed as a concern: won't the generous redundancy entitlements create a greater propensity for moral hazard risks in the scheme? The bill addresses concerns related to moral hazard by including a provision that allows changes to improve the terms and conditions of employment in the six months prior to insolvency to be disregarded where, at the time the change was made, it was not reasonable to expect that the employer could continue to employ the person on those more favourable terms. In the event this provision is used, the Fair Entitlements Guarantee claims would be determined on the terms and conditions that applied before the improvements were made. An equivalent provision has been a feature of the General Employee Entitlements and Redundancy Scheme since 2006, and in that time it has been used only a handful of times. The government intends to strengthen this provision through government amendments in the House that made it clear that the provision also applies to improvement in redundancy and payment in lieu of entitlements.

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

I thank the parliamentary secretary. Can I also ask: will this bill provide employees with the potential of receiving greater benefits than they would otherwise have received under their existing arrangements—their enterprise agreement or their modern award?

Jacinta Collins (Victoria, Australian Labor Party, Parliamentary Secretary for School Education and Workplace Relations) Share this | Link to this | Hansard source

I think that question is actually confusing two different issues. What these provisions will provide for is for an employee to receive their full entitlement under the Fair Entitlements Guarantee. That does not enhance what their entitlement may be. You made the point earlier about employees who may have an entitlement that is greater than the minimum entitlement established under the NES. Those employees have that entitlement regardless of whether their redundancy falls within the scope of the Fair Entitlements Guarantee or whether the employer is able to meet those entitlements themselves without drawing on the Fair Entitlements Guarantee.

David Fawcett (SA, Liberal Party) Share this | Link to this | Hansard source

The question is that opposition amendments (1) and (2) on sheet 7303 be agreed to. A division is required. Due to the provisions of no divisions before 12.30, the committee will report progress and note that a division is required.

Progress reported.

Ordered that the committee have leave to meet again at a later hour of the day.