Mathias Cormann (WA, Liberal Party, Minister for Finance) 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—

FAIR WORK AMENDMENT BILL 2014

Only a common sense and practical approach to workplace relations can protect people's jobs and income and, encourage an environment for productive and innovative business. That is the approach this Government promised in our Policy to Improve the Fair Work Laws, released in May last year. Our policy will help make Australian workplaces even better, by improving the Fair Work laws to provide a stable, fair and prosperous future for all. The Coalition's workplace relations reforms will restore the balance back to the sensible centre. This has already begun through the introduction of the Fair Work (Registered Organisations) Amendment Bill 2013 and the Building and Construction Industry (Improving Productivity) Bill 2013.

This Bill will deliver on key aspects of our election policy and does not go any further. Indeed, on Union Workplace Access, Individual Flexibility Arrangements and the removal of the ability to Strike First and Talk Later, we are delivering on specific policy commitments made by the Labor Party prior to the 2007 election but which Labor deliberately broke.

Through our Fair Work Amendment Bill 2014 we are giving effect to a number of commitments in our Policy and further restoring balance to the system. We will do this by:

This Bill also enacts a number of recommendations from the Fair Work Review Panel in its 2012 report commissioned by the now Leader of the Opposition, Mr Shorten.

Union Workplace Access

The Fair Work Amendment Bill will address the current imbalance in union workplace access rules. Our changes will fairly and sensibly balance the right of employees to be represented in the workplace if they wish to be, with the right of employers to go about their business without unnecessary disruption.

The Government sees right of entry as a specific statutory privilege to which conditions ought to apply. Regrettably, some union bosses do not.

In 2007, the Labor Party promised on multiple occasions that there would be no changes to the union right of entry laws. In a press conference on 28 August 2007, then Deputy Opposition Leader Julia Gillard said, and I quote:

" We will make sure that current right of entry provisions stay. We understand that entering on the premises of an employer needs to happen in an orderly way. We will keep the right of entry provisions. "

These promises were not kept and unions were given much easier access to workplaces under the Fair Work Act provisions which were exploited.

This has meant that many businesses face excessive workplace visits from unions even when their employees are not union members and have not asked for the union's presence. The problem has been exacerbated in some workplaces by unions competing to represent employees at the workplace.

The problem was highlighted by the former government's Fair Work Review Panel, which noted that the Pluto LNG Project received over 200 right of entry visits in only 3 months. BHP Billiton's Worsley Alumina plant faced 676 right of entry visits in a single year. Our changes will reduce the capacity for unions to deliberately harass and disrupt businesses in this way.

A recent case featuring CFMEU National President Joe McDonald has underlined the urgent need for these reforms. In the most recent case, where Mr McDonald and the CFMEU were fined $193,600, he ignored the request of an industrial relations consultant to leave a site owned by Citic Pacific's Sino Iron Ore in Western Australia. When asked by the consultant to leave the site because he didn't have a right-of-entry permit, Mr McDonald replied: "I haven't had one for seven years, and that hasn't f**king stopped me". Mr McDonald's attitude reflects the regrettable dark underbelly of the union movement that should have no place in modern and fair workplaces.

To be clear, these amendments will enact Labor's publicly stated promise prior to the 2007 election. A promise that was not honoured. Given that the Labor Party in Opposition, with the strong support of the union movement, supported this 2007 policy platform we expect that these amendments will not be contentious. Most union officials will find these changes are not impacting their sensible approach to their right of entry activities.

Right of entry — Eligibility

Currently, right of entry for discussion purposes can occur when the relevant union is entitled to represent the industrial interests of the employees at the workplace. This means unions can enter and hold discussions even if they have no actual members at that workplace and no-one has sought their presence.

The Bill will amend the provisions so that the ability for unions to enter a workplace is either tied to a union's recognised representative role at the workplace, or employees at the workplace have requested the union's presence. A union will only be entitled to enter a workplace for discussion purposes if:

1. they are covered by an enterprise agreement, or

2. they have been invited by a member or employee they are entitled to represent.

If the employee who would like the union to come to their workplace wishes to remain anonymous, a union will be able to apply to the Fair Work Commission for an 'invitation certificate'. The Fair Work Commission must issue a certificate if it is satisfied that a worker who performs work on the premises and whom the union is entitled to represent has invited the union to the workplace to hold discussions. The certificate will not identify the employee who has made the request. This will restore the balance in the right of entry regime so that is it similar to prior to the commencement of the Fair Work Act—consistent with the bipartisan consensus at the time of the 2007 election.

Right of entry — Frequency disputes

The Bill will also provide an effective mechanism for the Fair Work Commission to deal with disputes about excessive right of entry visits for discussion purposes.

The previous government amendments to the Fair Work Act in this area were drafted in a way that renders them largely ineffective and only able to be used in extreme circumstances: where there has been an 'unreasonable diversion of the occupier's critical resources'.

These amendments will remove this restriction to ensure the Commission has the power to properly deal with excessive right of entry visits, for example by suspending, revoking or imposing conditions on an entry permit. Additionally, the amendments provide that the Fair Work Commission can take into account the combined impact of visits by all unions to the workplace, reflecting that in some circumstances an employer will be subject to visits by multiple unions.

Right of entry — Repeals

The Bill will also repeal the previous government's amendments, made in 2013, that expanded union right of entry rights even further by allowing for uninvited 'lunchroom invasions' and requiring employers to pay for the cost of 'union boss joyrides' to remote worksites. Those amendments give unions the right to insist on addressing workers in their lunch room, even when the workers have not requested their presence and are not union members. This is unfair to the 87 per cent of private sector workers who are not union members and for all workers that just want to eat their lunch in peace.

This Bill will restore the sensible arrangements that were previously in place, whereby union officials must comply with a reasonable request by the employer to hold discussions in a particular room. Employers will continue to be prevented from nominating locations with the intention of intimidating, discouraging or hindering employees from participating in discussions.

The former government also introduced obligations on employers at remote worksites to provide union officials with transport and accommodation to enable them to access those sites. We will repeal this costly and onerous piece of regulation and instead reinstate the previous approach where unions and employers can reach their own arrangements in these circumstances.

Greenfields agreements

Greenfields agreements can be vital for the commencement of major new projects, as investment funding is often contingent on settled labour arrangements being in place. The Bill will ensure that these agreements are negotiated subject to good faith bargaining requirements and in a reasonable timeframe. These amendments are another step to demonstrate that 'Australia is open for business'. They are essential if Australia is to encourage future investment in new resources projects.

The Bill will remove the effective union veto power over greenfields agreements under the current arrangements, which have enabled them to frustrate the making of these agreements by seeking exorbitant wages and conditions or refusing to agree at all. As the former government's Fair Work Review noted, in somewhat understated language, these practices 'potentially threaten future investment in major projects in Australia'. This is bad for jobs and bad for the economy.

The Bill will extend good faith bargaining rules to the negotiation of greenfields agreements to improve standards of bargaining conduct. This will mean that employers and unions will be required to, for example, attend and participate in meetings with each other and consider and respond to proposals in a timely manner.

To ensure that greenfields agreements can be made in a timely manner, the Bill will establish a new, optional three month negotiation timeframe. The three month timeframe will apply where appropriate notice is provided by an employer to the relevant union or unions. If agreement cannot be reached in this timeframe, the employer will be able to take its proposed agreement to the Fair Work Commission for approval. The agreement will have to satisfy the existing approval requirements under the Fair Work Act, including the better off overall test. The agreement will also have to satisfy a new requirement that it provides for pay and conditions that are consistent with the prevailing standards within the relevant industry for equivalent work. Consistent with the existing framework, the Fair Work Commission must also be satisfied that the union or unions to be covered by the agreement are able to represent the majority of future employees.

The amendments to the greenfields provisions will help to unlock new investment and prevent needless delays to new projects. This will provide confidence and certainty to investors and ensure that Australia and Australians benefit from the prosperity generated by new projects.

These amendments will send a strong message to overseas investors that Australia is open for business and that projects can get underway quickly.

Fixing the 'strike first, talk later' loophole

The Bill will remove the 'strike first, talk later' loophole under the Fair Work Act, consistent with the promises of the Labor Party prior to the 2007 election and the recommendation of the Fair Work Review Panel. In his speech to the National Press Club of 17 April 2007 the then Labor Leader said:

' …industrial disputes are serious. They hurt workers, they hurt businesses, they can hurt families and communities, and they certainly hurt the economy ' .

…

' They (employees) will not be able to strike unless there has been genuine good faith bargaining ' .

This is not the case under the Fair Work Act, where employees are allowed to strike before bargaining has even commenced.

The Bill will amend the Fair Work Act to provide that protected industrial action can only be taken if bargaining for a proposed agreement has commenced. This amendment will mean that industrial action cannot be the first step in the bargaining process, restoring a balanced and harmonious approach to enterprise bargaining.

The Coalition will fix this loophole. In doing so, Labor's 2007 promise will actually be legislated.

Individual Flexibility Arrangements

The Bill introduces amendments to provide clarity and certainty for employees around the use of Individual Flexibility Arrangements (IFAs).

IFAs are an important tool introduced by Labor with the intent of enabling workers and their employers to mutually agree on conditions that suit their needs, while ensuring that employees are better off overall compared to their underpinning employment instrument.

IFA's ought to be an important option to enable employees to, for instance, manage their childcare or other caring arrangements, to spend time with family or for other commitments. They are specific to the individual and not designed as a management tool for a business.

These amendments about IFAs are all based on the Fair Work Review Panel recommendations. They also include further new safeguards to ensure that employees are better off.

To be clear, the current IFA framework in the Fair Work Act will stay, with additional protections put in place. This means that:

An employer cannot force an employee to sign an IFA or make it a condition of employment;

The employee must be better off overall than what they would have been under the applicable Modern Award or Enterprise Agreement.

A worker must provide a statement to the employer saying that the IFA meets their genuine needs and that they are better off overall.

Under the current system, unions can restrict the scope of flexibility terms under enterprise agreements through the bargaining process to only cover a single matter, for instance the taking of leave. This means that workers may be denied the chance to have IFAs on other matters even if they and their employer want to agree to more suitable arrangements. The amendments will deliver on the promises made by Labor in 2007 and provide that IFAs may be made in relation to all of the matters currently prescribed in the model flexibility term, to the extent that those matters are covered in the agreement. This will ensure that workers have access to fair flexibility without a veto by union bosses.

The Bill also implements the Fair Work Review Panel recommendation that employers should, in limited circumstances, have a legal defence if they enter into an IFA in good faith believing it meets all the requirements of the legislation when it turns out later it doesn't. The defence will only apply where the employer believed on reasonable grounds that all statutory requirements have been met in relation to the IFA. The Bill will also strengthen protections for employees by requiring a statement setting out that the arrangement meets their genuine needs and results in them being better off overall. This will make the position absolutely clear: Employees will only make IFAs that provide for non-monetary benefits when the employees themselves make a clear statement in writing why they are better off overall.Two further amendments recommended by the Fair Work Review Panel will be made to provide clarity and certainty to both employers and employees. First, the unilateral termination period for IFAs made under enterprise agreements will be extended from 28 days to 13 weeks, consistent with the position for awards. In addition, the 13 week unilateral termination period for both modern awards and enterprise agreements will be placed in the legislation.

The second amendment will confirm the existing position that the better off overall test for IFAs can be satisfied by exchanging monetary benefits for benefits that are not monetary. This is already the case under the legislation, as introduced by the Labor Party that operated while the Leader of the Opposition was the Workplace Relations Minister. This position has been confirmed by the independent Fair Work Ombudsman. The amendment, combined with the Government's new requirement for a statement in writing from the employee, will provide greater protection and certainty for all parties.

All other rules relating to an IFA will be retained, including that they cannot be made a condition of employment, must leave the employee better off overall and must be genuinely agreed to.

Anyone who opposes these amendments need to explain to Australian workers why they should not have the opportunity be better off overall if the arrangement genuinely meets their own needs, as assessed by themselves.

Other Fair Work Act Review Recommendations

The Bill will also implement a number of other common sense recommendations that were made by the now Leader of the Opposition's Fair Work Review Panel in 2012 but not implemented by the previous Government.

The Bill will clarify the interaction between leave and workers' compensation, by removing an exception that allows employees in a few jurisdictions to accrue or take leave while absent from work receiving workers' compensation. This will remove inconsistency and confusion that currently exists for employees and employers and ensure that employees on workers' compensation across the country are treated consistently.

In line with the Fair Work Review Panel's recommendation, the Bill will clarify the circumstances where annual leave loading is payable when a person leaves their job. The change will restore the long standing position, that employees are only entitled to annual leave loading when their employment ends if it is expressly provided for in their award or workplace agreement. This will address the confusion that currently exists as a result of the legislation and numerous awards adopting different positions. It will still allow for annual leave loading to be paid (including after employment has ended) if it is in the employee's Modern Award or Enterprise Bargaining Agreement.

The Bill will introduce a requirement that an employer must give an employee who has requested to extend their unpaid parental leave a reasonable opportunity to discuss the request unless the employer has already agreed to the request. To be clear, this discussion does not need to be face to face but can occur by other means, for example a teleconference or videoconference.

The Bill will make changes to the transfer of business rules to assist the transfer of employees who wish to move between associated entities voluntarily. Currently, if an employee wants to take on a new position with an associated entity of his or her employer, there needs to be an application to the Fair Work Commission to prevent the employee's industrial instrument transferring with them. Under the changes, the terms and conditions of employment at the new employer will automatically apply to an employee transferring between associated entities on their own initiative. This change will reduce red tape for employers and employees in such circumstances.

In line with the recommendation of the Fair Work Act Review Panel, the Bill will give the Fair Work Commission clearer powers to dismiss unfair dismissal proceedings 'on the papers' without conducting a conference or hearing in certain circumstances, such as where an applicant fails to attend a conference or hearing or fails to comply with an order or direction made by the Commission. The Bill includes safeguards to ensure procedural fairness for the parties before matters can be dismissed. This will help prevent employers incurring unnecessary costs in defending a claim that is not being seriously pursued by the applicant.

Interest on money held for underpaid workers

The Government is taking action to ensure that employees retain the value of money recovered and held by the Commonwealth on their behalf. When an employee who is owed money, for example unpaid wages, cannot be located then the employer pays the money to the Commonwealth. The Commonwealth holds onto the money until the worker can be found. No interest is payable on these monies, no matter how long it has been held by the Commonwealth.

The Bill will rectify this situation to enable the Fair Work Ombudsman to pay interest on amounts held for more than six months and worth more than $100. Interest payments will be calculated using the Consumer Price Index, similar to the approach used by ASIC for unclaimed money in bank accounts.

Conclusion

The Government released its workplace relations policy well before the 2013 election to address a range of key problems with the Fair Work laws. With this Bill we are continuing to implement the commitments we made in that policy.

This Bill will amend the Fair Work Act to provide a more balanced workplace relations system while safeguarding workers conditions and protections.

The measures in the Bill will help encourage investment in new projects that are important to the Australian economy by preventing unions from vetoing greenfields agreements. This will strongly signal to investors that Australia is open for business.

Unnecessary and costly industrial action will be addressed by ensuring that bargaining must have commenced before strike action can be taken.

Improvements to Individual Flexibility Arrangements will enhance productivity and fairness by giving workers greater scope to negotiate arrangements with their employers that meet their genuine needs, as assessed by workers themselves. Everything we are doing on the issue of IFAs was recommended by the previous Government's Fair Work Review Panel and clearly articulated in the Coalition's election policy.

The Bill will deliver on what was promised by the previous Government in 2007 on union workplace access. It will implement fairer and more effective right of entry laws that mean businesses can carry on without unnecessary disruption and employees can access union representation if they want.

It will also address the failure of the previous government to implement a number of common sense recommendations made by its own Fair Work Review Panel in 2012.

This Bill implements the Coalition's publically stated election policy, nothing more and nothing less.

The Government is strongly committed to these measures. They are necessary to help build a more stable, fair and prosperous future for Australia's workers, businesses and the economy. We therefore call on the Labor Party, and all members of this Parliament, to support the sensible and measured reforms included in this Bill.

Debate adjourned.