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

The committee is considering the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017, as amended, and amendments (1) to (15) on sheet JH138, moved by Senator Cash. The question is that the amendments be agreed to.

Michaelia Cash (WA, Liberal Party, Minister for Women) Share this | Link to this | Hansard source

If I recall rightly, Senator Cameron had posed a question to me in relation to the technical amendments that the government has moved, and the question, effectively, went to: does an accessory to a serious contravention need to know that it was part of a systematic pattern of conduct, or is some other knowledge required? Senator Cameron, in response to that question, I can advise that this amendment clarifies that the usual rules of accessorial liability apply to a serious contravention of the act. This means that an accessory will need to know that the conduct in which they are involved is a serious contravention within the meaning of these new provisions, meaning it is both deliberate and systematic.

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

I thank the minister for that response. On that basis, can I indicate that we will be supporting the government amendments.

Question agreed to.

David Leyonhjelm (NSW, Liberal Democratic Party) Share this | Link to this | Hansard source

by leave—I, and also on behalf of Senator Bernardi, move Liberal Democratic Party and Australian Conservatives amendments (1) to (6) on sheet 8204 revised 2:

(1) Schedule 1, item 17, page 9 (line 16), omit "affairs.", substitute "affairs; and".

(2) Schedule 1, item 17, page 9 (after line 16), at the end of subsection 558A(2), add:

(c) that influence or control has a material impact on the franchisee entity's compliance or ability to comply with one or more of the civil remedy provisions referred to in subsection 558B(7).

(3) Schedule 1, item 17, page 9 (line 32), after "known", insert ", in the ordinary course of business,".

(4) Schedule 1, item 17, page 10 (line 5), after "known", insert ", in the ordinary course of business,".

(5) Schedule 1, item 17, page 10 (line 18), after "known", insert ", in the ordinary course of business,".

(6) Schedule 1, item 17, page 10 (line 23), after "known", insert ", in the ordinary course of business,".

I won't speak for long. As I outlined in my second reading contribution, item (1) limits the penalty provisions so that they apply to franchisors only if the franchisor influences the franchisee's compliance with employment laws. Items (2) to (6) limit the penalty provisions so that they only apply to franchisors and bodies corporate who knew, or ought to have known, in the ordinary course of business that their franchisees and subsidiaries would fail to comply with employment laws and that the franchisor has a material impact on the franchisee entity's compliance or ability to comply. I commend the amendments to the chamber.

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

I indicate that Labor will be opposing these amendments. These amendments have given even more ground to the Franchise Council of Australia. These amendments simply do the bidding of the Franchise Council. They would narrow the already-too-narrow scope of the civil liability offence for franchisors, applying only to franchisors who have a significant degree of control over the workplace arrangements of the franchisee. In the amendments on sheet 8204 revised 2, that has even been toughened up to talk about 'material impact'.

All these amendments would do is give franchisors an incentive to arrange their commercial relationships with franchisees so that they can claim to have no oversight of or involvement in the way workers are treated or paid. It goes against all the lessons that we've learnt from the 7-Eleven scandal. If the government supports these amendments, it would be a complete capitulation to Bruce Billson and the Franchise Council. It would be a sell-out of all those workers who are being ripped off by companies like 7-Eleven and Caltex, which we've seen so much evidence of over the last period of time. Some of the most vulnerable workers—migrant workers, low-paid workers—are being ripped off by employers who are part of a franchise organisation that sets the rules for these franchisors. So we take the view that agreeing to this would ensure that 7-Eleven would never be fixed and that we would have more evidence and more examples of 7-Eleven coming through. We are about trying to protect vulnerable workers in this country. We are about trying to protect those that are being exploited by companies like 7-Eleven. On that basis, we will not be supporting these amendments.

Michaelia Cash (WA, Liberal Party, Minister for Women) Share this | Link to this | Hansard source

The government will be supporting these amendments, particularly on the basis that, in looking at the amendment, they actually respond to the Senate committee's inquiry on this bill, which recommended that the reach and intent of the bill be clarified. These items amend the proposed definition of 'responsible franchisor entity' in subsection 558A(2) of the bill to clarify that the new franchisor responsibilities only apply to an entity that has a significant degree of influence or control over the franchisee entity's affairs and that the influence or control has a material impact on the franchisee entity's compliance or ability to comply with their obligation to pay workers appropriately.

What the amendment actually does is not only respond to what the committee report has actually asked the Senate to respond to—so clarifying the reach and intent of the bill—but also seek to explicitly clarify, as I said, that franchisors may be liable under the bill where the significant influence or control they exercise over their franchisees has a material impact on the franchisee entity's compliance or ability to comply with their obligation to pay workers appropriately. The amendments also ensure that the assessment of what could reasonably be known by a franchisor about their franchisees is determined in the context of the ordinary course of business. Again, as I said, this actually does respond to an issue that the Senate committee report itself actually asked the Senate to address, so I thank Senators Leyonhjelm and Bernardi for proposing the amendment, and the government will be supporting it.

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

Surprise, surprise—Senator Cash has capitulated to Bruce Billson. He was a former cabinet minister who, while on the government payroll and still a member of parliament, was accepting a payment from the Franchise Council. This is absolutely ridiculous. This just demonstrates that Bruce Billson was in there ensuring that this government does not look after workers that are in a vulnerable position. This makes it more difficult for workers who are being exploited to actually get some fairness within the system. This is a government that is prepared to amend its own legislation because a former cabinet minister who was on the payroll of the Franchise Council while they were still a member of parliament gets his way. This is not something that should be supported in here. This continues this government's lack of concern for exploited workers in this country. This continues a process that this government is happy to capitulate to. That means that, if you are a poor, vulnerable worker, you can be exploited in this country.

This does not deal with the issues of 7-Eleven. Surely, Minister Cash, you are aware of what happened to workers under that 7-Eleven process. You then came and developed amendments to the act to deal with this, yet, when your former cabinet minister knocked on your door and knocked on the doors of Senator Leyonhjelm and Senator Bernardi, what happened? They just capitulated. Here we are, the far Right of politics in this country, lining up with the far Right in the coalition to knock workers' rights off. That's what this is about. It's hear no evil, see no evil—just let everything happen to workers at 7-Eleven and Caltex. Franchisors have no responsibility for trying to ensure that workers get a fair go in this country. We know that we will never get a fair go under the coalition. But, every now and again, I would have thought that Senator Bernardi might have had some little comprehension or understanding of the rip-offs that take place. Senator Leyonhjelm probably wouldn't. But, Senator Bernardi, maybe you should have some understanding. This is about workers getting ripped off by some of the most powerful companies in this country. Again, I suppose it was not a problem when the former owner of 7-Eleven was a high-ranking Liberal apparatchik.

This is about the government. This is about Senator Cash. This is about the coalition using Senator Bernardi and Senator Leyonhjelm as stalking horses to try to get changes to their own legislation after big business and the Franchise Council have said to the government, 'We don't like it.' Bruce Billson comes in, knocks on the door, and workers are put at the bottom of the pack. This is unacceptable. This is just another example of a government that doesn't care about what happens to poor and vulnerable workers in this country. We will not be supporting this amendment. Anyone who has any comprehension of the problems that vulnerable workers are facing in this country would not support this. We think this is a complete capitulation by the minister and by the coalition to a former cabinet minister who was taking money from the Franchise Council while he was still in government. This is a problem for vulnerable workers in this country and it should be opposed.

Cory Bernardi (SA, Australian Conservatives) Share this | Link to this | Hansard source

I feel I should respond to Senator Cameron, if only briefly, to say I am concerned about vulnerable workers in this country, but I do think it is incumbent upon us to remind the Senate and the Australian people that those who have traded away workers' entitlements to the detriment of the workers themselves have basically been the union bosses. The union bosses have engorged themselves and their organisations at the expense of some of our lower paid workers. They've traded away concession penalty rates on Sunday and award rates to big business. I find it galling that Senator Cameron dares to stand up in this place saying how he's the champion of vulnerable workers when his comrades on the other side of the chamber have been so diligent in selling out regular workers to big business. We have seen the Leader of the Opposition, Mr Bill Shorten, receive campaign funds from a union, his own union, that traded away workers' entitlements.

Ultimately, this is a cosy stitch-up between big business and the union movement. I am not interested in furthering a cosy stitch-up. I'm interested in independent enterprise. I'm interested in fostering free enterprise in this country and allowing people to have jobs and businesses to actually make money. I make no bones about that. I think a successful business should be able to make some money and provide for its employees. It will further investment in this country.

I have grave reservations about this bill, but I am trying to uphold, with Senator Leyonhjelm, the principle that, should this bill be successful, independent businesses are independent businesses. A franchise shouldn't just be an extension of the franchisor. It should be an independent business in its own right. Those on the other side of the chamber want to see them dealt with as big businesses so that their workforces can come under the spell of having their entitlements traded away to the benefit of the unions themselves. These are the real issues at work here. I don't believe that more regulation is necessary. I think, in actual fact, what we should be doing is taking away the burdens and the impediments to people being productive and to being successful in business in this country. That means we need to deregulate. It means we have to get the unions away from deregulating or from trading away workers' entitlements. We need to get government out of the system. We can fuel prosperity across this whole country should we go down that path. So, we are trying to improve what I think is a deeply flawed piece of legislation. It is built around the principle that independent businesses should be able to run independently under the rule of law rather than under the yoke of the union movement or under the yoke of oppressive government.

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

That is typical of Senator Bernardi—immediately saying this is all the problem of the union movement. Senator Bernardi, let me tell you: there was no union involvement with 7-Eleven. This was a former high-ranking Liberal office holder, who was one of the richest men in this country, ripping off workers day in, day out.

Cory Bernardi (SA, Australian Conservatives) Share this | Link to this | Hansard source

Just like Bill Shorten did.

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

Senator Bernardi, you can rail all you like, but this is pretty typical of you—living a life that is full of wealth and full of privilege. Sitting in this place on a minimum rate of $200,000 per year, you wouldn't understand what it's like, you wouldn't have a comprehension of what it is like, for somebody in 7-Eleven to have their wages ripped off through a 'hear no evil, see no evil' approach by 7-Eleven. Some of the worst people in this country—some of the richest people in this country, who own 7-Eleven—are ripping young people off, ripping migrants off and ripping workers off mercilessly. Yet you want a government where there is no regulation to support those people.

I can't understand why Senator Cash, who sits down with the department and works out all the issues that she wants to deal with, suddenly comes here and capitulates to Senator Leyonhjelm, capitulates to Senator Bernardi and capitulates to Bruce Billson in the Franchise Council. This is just a nonsense. These workers need regulation. They are the most vulnerable workers in the country; they need regulation. We need to make sure that if they go on a job they get paid properly for the work they do—a fair day's pay for a fair day's work. It doesn't happen with 7-Eleven and it doesn't happen with the Franchise Council, but all we hear from Senator Bernardi is: get government out, get unions out, leave workers to try and deal with some of the richest and most powerful people in the country. It doesn't work that way. Workers in this country need regulation. Workers in this country need legislation to support them. Young workers, who can easily be exploited, need rules, regulations and laws that give them a fair go.

Yet what this minister is doing, what these crossbench senators are doing, is proposing that these workers should be left exposed to some of the most powerful people in the country and that 7-Eleven should have absolutely no accountability for what happens in stores with their name above the door. All they want is for 7-Eleven franchisors to pick up all the profits and to have no accountability and no responsibility. That is absolutely unacceptable. The government, again, is demonstrating that, when it comes to the crunch, they make a lot of noises about looking after people, but that is just an absolute farce. We had WorkChoices under this government and we've had ABCC bills under this government. This bill now is simply saying to franchisors: just pretend you don't know there's a problem, and then you have no responsibility for the ripping off of vulnerable workers in this country. It really beggars belief that we have gone through the expose of workers in 7-Eleven, workers in Caltex and workers on farms in regional Australia being ripped off under franchise systems, and companies then say: 'We don't care. We don't care what happens to those workers. Even though the goods are being sold in our shops, we don't care. Even though we are making massive profits out of the exploitation of these workers, we don't care.'

And this is a 'We don't care' amendment from Senator Leyonhjelm and Senator Bernardi, supported by Senator Cash. They don't care what happens to workers in this country. They don't care if workers can't put a meal on the table. They don't care if an employer says to a worker, 'I'll pay you what I'm supposed to pay you legally but you will give me money back.' They don't care about that. I just can't believe that in this argument for small government Senator Leyonhjelm would just abandon vulnerable workers in this country. Well, it does make a bit of sense when you see what Senator Leyonhjelm does in this place: he's basically a rubber stamp for the coalition. So you can rubberstamp this again, Senator Leyonhjelm. You can lie in bed at night when workers are out there working all night at 7-Eleven, getting ripped off, and it will be your doing and Senator Bernardi's doing, under Senator Cash's watch.

Under Senator Cash's watch, workers in this country get ripped off terribly. Senator Cash gets up and makes noises about supposedly caring about workers. This bill was supposed to be about ensuring that workers get a fair go, but at the first sign from the Franchise Council, when the extreme Right wing of this Senate gets up and moves an amendment, what does Senator Cash do? She gets up and capitulates. She has absolutely no credibility when it comes to looking after workers who have been ripped off with their penalty rates, workers who have been ripped off with their annual leave loading, workers who have been paid and then have to pay money back, workers who are being charged thousands of dollars to get a job, workers who have been sent off to training and have had to pay for it themselves at a premium, and workers who have to supply their own cars and petrol. These are workers who are vulnerable, yet this government doesn't care. Senator Leyonhjelm doesn't care. Senator Bernardi doesn't care. This is an absolute disgrace.

This is about Labor standing up for workers who can't stand up for themselves. We do need regulation. We do need laws to support vulnerable people in this country. That's why we have a parliament: to make sure that young people don't get ripped off, to make sure that all workers can go to work and not be ripped off. But to try to conflate this as some agreement that a union might come to with an employer where wages are increased in one area and penalty rates reduced in another is an absolute nonsense. This is about saying that franchisors who have their name above a company, above a garage, above a service station, have responsibility to make sure that the laws of this land are imposed effectively.

They just want to walk away. They don't want to accept any responsibility. I can understand that the government does not want workers to have a fair go in this country. This is a government that would do anything to try to destroy effective collective bargaining. They would do anything to try to destroy effective trade unionism in this country. But by simply turning a blind eye, which this amendment does, to the rip-offs and scandals that companies like 7-Eleven have perpetrated on workers in this country is an absolute disgrace. Senator Cash must have thought that it was worthwhile doing this, or the bill wouldn't have been here in the form in which it was presented.

I did indicate in my speech on the second reading that the pressure was on the government, through the Franchise Council, who are some of the biggest donors to the Liberal Party in this country. The donations come in from 7-Eleven to the Liberal Party, and now the payback is on. That's what this is about. This is about big business buying its way out of any regulations and any laws that impose proper oversight by them on the franchisees that they set up under their name and that end up ripping people off. This is an absolute disgrace.

In this country we really need a government that understands how tough it is for working people; how important it is for working people to have access to penalty rates; how penalty rates actually put food on the table; and how penalty rates let some families send their kids off to school with a decent pair of shoes. This is a government that would have workers in complete servitude if they could. We know their pedigree, we know their background: Work Choices, where the bosses get complete control over workers; where penalty rates can be taken away; and where the union movement can't get access to actually represent the workforce. Yet, on this, where 7-Eleven and Caltex and other big franchisors have turned a blind eye to some of the worst rip-offs in this country, suddenly we find at this late stage that the government won't even stand up for what were pretty ordinary amendments. They want to weaken them even further.

Bruce Billson has done the job on Senator Cash. Bruce Billson has done the job on Senator Leyonhjelm. Bruce Billson has done the job on Senator Bernardi. How ridiculous is it that someone who was in here, a former cabinet minister, was taking money from the Franchise Council while he was still a member of parliament and then has the gall to go around to Senator Cash's office, to Senator Leyonhjelm's office and to Senator Bernardi's office and say, 'This is a terrible thing. We shouldn't really look after exploited workers. Please let 7-Eleven off the hook, please let Caltex off the hook, please let big franchisors off the hook.' They should simply be able to say, 'Well, we don't know what's going on down there,' even though it is their company's name above the door. 'Workers should be allowed to be ripped-off. The penalty rates should be allowed to be taken away. They shouldn't need proper accountability, in terms of what's being paid to some of the poorest and some of the working poor in this country.'

This is a complete capitulation by the right wing of this Senate to big business. This is a complete capitulation to allowing free rein for the rich and the powerful against the weakest people in this country. This is absolute nonsense. The franchisors have a significant degree of control. They can set the payments and they can set the conditions that ultimately lead to what workers are being paid on the job. They have complete control over what happens for franchisees. Franchisees are not independent businesses with no allegiance to someone else. Franchisees have to sign off on codes of conduct and on terms and conditions that are put on them by companies like 7-Eleven, yet when workers are being ripped off 7-eleven says, 'No, we have nothing to do with it.' That's what this government is prepared to capitulate to. Senator Cash, under her watch, sees apprentices being ripped off, the working poor being ripped off, workers' penalty rates being ripped off, and she won't stand up for penalty rates for workers. Senator Cash has the DNA of Work Choices there.

But, Senator Leyonhjelm, you and Senator Bernardi should understand how tough it is for some working people. You should actually be exercising some logic and some common sense instead of giving Senator Cash the excuse to capitulate to the Franchise Council and Bruce Billson. I think it is a nonsense.

David Leyonhjelm (NSW, Liberal Democratic Party) Share this | Link to this | Hansard source

I don't normally respond to these sorts of speeches and, especially, I don't normally respond when I'm personally mentioned, but I think in this case, sir, it warrants a response. Senator Cameron suggests that I don't care about vulnerable workers. Let me explain, Senator, why I am proposing this amendment: it is because I do care about vulnerable workers. In fact, I care so much about vulnerable workers that I think this bill shouldn't pass at all, really.

Now, the point is, of course, that vulnerable workers include people who are, essentially, unemployable. When you think about who might be unemployable, they might include former senators—former Labor senators. I understand, Senator Cameron, that you are proposing to retire from the Senate at the next election. If my memory serves me correctly, you were elected prior to 2004, so you are probably eligible for a parliamentary pension. On the other hand, let's suppose my good friend and colleague Senator Dastyari were to lose his seat at the next election. What would he do to support his wife and two very charming daughters? He would need a job. Now, he is essentially unemployable—that's the bottom line. What could he do? He could take out a franchise. It's a create-your-own-job opportunity to get your own franchise. I've been thinking about what kind of franchise might be suitable for Senator Dastyari or, indeed, Senator Cameron, if he needed to work after retiring from the Senate. A Swimart might be a possibility. Jim's Mowing might also be a possibility. But I think particularly for Senator Dastyari that Dunkin' Donuts would be the go. The point is that, if he didn't have Dunkin' Donuts available, he would be on welfare.

I care a great deal about vulnerable workers but I particularly want to keep them out of the welfare system and generating income. Why? To quote another person with an accent very, very similar to Senator Cameron's: 'I've tried poor. I've tried rich. And rich wins.' His name is Billy Connolly. Even for unemployable former senators who are vulnerable, I think a franchise is better than being poor.

Lee Rhiannon (NSW, Australian Greens) Share this | Link to this | Hansard source

With the legislation before us, we can see the Turnbull government giving another leg-up to very rich, very powerful companies—companies whose business model is based on underpayment of workers. This has been further entrenched by the minister, Senator Cash, rolling over and supporting these amendments from the Liberal Democrats. Why is she doing it? She still hasn't given us an explanation for rolling over. The government might put a fancy title on this bill, which says it is about protecting vulnerable workers, but we know, when the coalition, the Liberal-Nationals, come up with titles like that, the intent is very different, and that is absolutely the case here.

We are talking about franchisors like Caltex, 7-Eleven and Domino's, who make millions of dollars in profits off the backs of vulnerable workers—workers who are largely isolated at their places of work, which are usually not unionised, who have maybe a little English and who are often just out of school. It is very hard for them to stand up for themselves. How do you take on some of these very big, powerful companies that have all the experience under the sun on how to dodge, weave and get away with not giving decent wages and fair conditions to these workers? The level of exploitation—and I pay tribute to many of the journalists who have reported on this issue in detail, as well as the unions who have taken it on so strongly—and the profits of these companies show why they're sticking with their business model and why the minister is locking that in even further. Caltex made a $610 million full-year net profit in 2016. Dominos pulled in a net profit of $103 million, up 25 per cent on the previous year. How did they pull off a 25 per cent increase on the previous year? Some people might say it's a successful company; lots of people eat their pizzas and believe the Dominos slogan that they're the world leader in pizza delivery. But that's not why they are pulling in those profits. They're pulling them in because of the extreme exploitation and underpayment of workers, and it is so hard for workers to recoup their money when they work out what's happened to them. The way these companies dodge and weave is ruthless.

Then we have the other aspect going on here, which is former Minister Billson. This is a scandal the Turnbull government largely got away with—another minister abusing his position was swept under the carpet. It looked like he was well ahead of many other ministers, who were waiting to take up their lobbying activities when they left parliament—he was doing it when he was in parliament, working for franchisors, effectively campaigning and working against many of the small-business communities that he was supposed to be the minister for. He had chosen one sector, the franchisors, to really get behind, really back, and had been lobbying his own ministers in this place. So what we have before us are well and truly the Billson amendments, and the minister should explain why she's backing these amendments to a government bill. I know we have such amendments now and then, but this has gone too far. This bill is not about protecting vulnerable workers—it should be renamed the ripping off vulnerable workers bill.

The CHAIR: The question is that amendments (1) to (6) on sheet 8204 revised 2 be agreed to.

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

by leave—I withdraw opposition amendment (31) on sheet 8144 and move opposition amendment (1) on sheet 8218 as a replacement:

(1) Schedule 1, item 38, page 19 (line 1) to page 20 (line 13), omit section 712A, substitute:

712A Minister may nominate AAT presidential members to issue FWO notices

(1) The Minister may, by writing, nominate an AAT presidential member to issue written notices (FWO notices) under section 712AB.

(2) The Minister may nominate an AAT presidential member who is a Judge to issue FWO notices under section 712AB only if the Judge has consented, by writing, to the nomination.

(3) A nomination ceases to have effect if:

(a) the nominated AAT presidential member ceases to be an AAT presidential member; or

(b) the Minister, by writing, withdraws the nomination.

(4) A nominated AAT presidential member has, in performing a function of or connected with issuing an FWO notice under this Subdivision, the same protection and immunity as a Justice of the High Court has in relation to proceedings in the High Court.

712AA Fair Work Ombudsman may apply to nominated AAT presidential member for FWO notice

General requirements

(1) The Fair Work Ombudsman may apply, in writing, to a nominated AAT presidential member for the issue of an FWO notice referred to in subsection (2) if the Fair Work Ombudsman believes on reasonable grounds that a person:

(a) has information or documents relevant to an investigation by an inspector into a suspected contravention of a provision of this Act, a fair work instrument or a safety net contractual entitlement that relates, directly or indirectly, to:

  (i) the underpayment of wages, or other monetary entitlements, of employees; or

  (ii) the unreasonable deduction of amounts from amounts owed to employees; or

  (iii) the placing of unreasonable requirements on employees to spend or pay amounts paid, or payable, to employees; or

  (iv) the unfair dismissal of an employee; or

  (v) the bullying of a worker at work; or

  (vi) the unlawful discrimination of a person in relation to employment; or

  (vii) a contravention of a provision of the National Employment Standards; or

  (viii) the coercion of an employee by an employer; and

(b) is capable of giving evidence that is relevant to such an investigation.

(2) The FWO notice may require the person:

(a) to give information to the Fair Work Ombudsman, or a specified member of the staff of the Office of the Fair Work Ombudsman; or

(b) to produce documents to the Fair Work Ombudsman, or a specified member of the staff of the Office of the Fair Work Ombudsman; or

(c) to attend before the Fair Work Ombudsman, or a specified member of the staff of the Office of the Fair Work Ombudsman who is an SES employee or an acting SES employee, and answer questions relevant to the investigation.

Form and content of application

(3) An application for an FWO notice must:

(a) if a form is prescribed by the regulations—be in that form; and

(b) include any information prescribed by the regulations.

(4) An application for an FWO notice must not relate to more than one person, but may relate to more than one investigation.

Application must be accompanied by affidavit

(5) An application for an FWO notice must be accompanied by an affidavit by the Fair Work Ombudsman including the following:

(a) the name of the person to whom the application relates;

(b) details of the investigation (or investigations) to which the application relates;

(c) the grounds on which the Fair Work Ombudsman believes the person has information or documents, or is capable of giving evidence, relevant to the investigation (or investigations) referred to in paragraph (b);

(d) details of other methods used to attempt to obtain the information, documents or evidence;

(e) the number (if any) of previous applications for an FWO notice that the Fair Work Ombudsman has made in relation to the person in respect of the investigation (or investigations) referred to in paragraph (b);

(f) information about whether the Fair Work Ombudsman has made, or expects to make, any other applications for an FWO notice in relation to the investigation (or investigations) referred to in paragraph (b) and, if so, the persons to whom those applications relate.

Further information

(6) A nominated AAT presidential member to whom an application for an FWO notice is made may request the Fair Work Ombudsman to give the presidential member further information in relation to the application.

(7) If a request for further information is made under subsection (6), the Fair Work Ombudsman must give the further information in writing as soon as practicable after receiving the request.

712AB Issue of FWO notice

(1) A nominated AAT presidential member to whom an application for an FWO notice has been made must issue the FWO notice if the presidential member is satisfied of the following:

(a) that an inspector has commenced the investigation (or investigations) to which the application relates;

(b) that there are reasonable grounds to believe that the person to whom the application relates has information or documents, or is capable of giving evidence, relevant to the investigation (or investigations);

(c) that any other method of obtaining the information, documents or evidence:

  (i) has been attempted and has been unsuccessful; or

  (ii) is not appropriate;

(d) that the information, documents or evidence would be likely to be of assistance in the investigation (or investigations);

(e) that, having regard to all the circumstances, it would be appropriate to issue the FWO notice;

(f) any other matter prescribed by the regulations.

(2) A nominated AAT presidential member must not issue an FWO notice except in the circumstances referred to in subsection (1).

(3) An FWO notice must not be issued in relation to more than one person, but may be issued in relation to more than one investigation.

(4) If:

(a) an application for an FWO notice is made in relation to more than one investigation; and

(b) the nominated AAT presidential member to whom the application is made is not satisfied of the matters referred to in subsection (1) in relation to each of those investigations;

the nominated AAT presidential member must issue the FWO notice in relation to the investigation (or investigations) in relation to which the nominated AAT presidential member is satisfied of the matters referred to in subsection (1).

712AC Form and content of FWO notice

An FWO notice must:

(a) if a form is prescribed by the regulations—be in that form; and

(b) if the notice requires a person to give information under paragraph 712AA(2)(a)—specify the time by which, and the manner and form in which, the information is to be given; and

(c) if the notice requires a person to produce documents under paragraph 712AA(2)(b)—specify the time by which, and the manner in which, the documents are to be produced; and

(d) if the notice requires a person to attend to answer questions relevant to an investigation—specify the time and place for the attendance; and

(e) be signed by the nominated AAT presidential member who issued it; and

(f) include any other information prescribed by the regulations.

712AD Fair Work Ombudsman may give FWO notice to person in relation to whom it is issued and vary time for compliance

Fair Work Ombudsman may give FWO notice to person in relation to whom it is issued

(1) If a nominated AAT presidential member issues an FWO notice, the Fair Work Ombudsman may give the notice to the person in relation to whom it is issued.

(2) If an FWO notice is not given to the person in relation to whom it is issued within 3 months after the day on which it was issued, the notice ceases to have effect at the end of that period.

Variation of time for compliance with FWO notice

(3) If:

(a) the Fair Work Ombudsman gives an FWO notice to a person under subsection (1); and

(b) the time specified in the notice under paragraph 712AC(b), (c) or (d) is not at least 14 days after the notice is given to the person;

the Fair Work Ombudsman must, at the same time as the FWO notice is given to the person, also give notice to the person of a time later than the time specified in the notice.

(4) The Fair Work Ombudsman may, at any time after giving an FWO notice to the person in relation to whom it is issued, give notice to the person of a time later than the time:

(a) specified in the notice under paragraph 712AC(b), (c) or (d); or

(b) notified under subsection (3).

(5) A later time notified under subsection (3) or (4) must be at least 14 days after the FWO notice is given to the person.

(6) If the person is notified of a later time under subsection (3) or (4), the FWO notice has effect as if the later time (or the latest of those times) were the time specified in the FWO notice.

712AE Conduct of examination

Legal representation

(1) A person attending before the Fair Work Ombudsman, or a member of the staff mentioned in paragraph 712AA(2)(c), may be represented by a lawyer if the person chooses.

Oath or affirmation

(2) The Fair Work Ombudsman, or a member of the staff mentioned in paragraph 712AA(2)(c), may require the information or answers to be verified by, or given on, oath or affirmation, and either orally or in writing. For that purpose, the Fair Work Ombudsman, or any member of the staff of the Office of the Fair Work Ombudsman, may administer the oath or affirmation.

(3) The oath or affirmation is an oath or affirmation that the information or answers are or will be true.

We commenced debating this earlier in the piece, and over the break there have been some constructive discussions with Senator Xenophon on this matter. I think we've reached agreement on how we should proceed with this, so I'm happy for this to go very quickly to a vote.

The CHAIR: Senator Cameron, just for the sake of the chamber, of the amendments on sheet 8144, the only one you're withdrawing is amendment (31). So you're moving amendments (28) to (34) minus (31), and then amendment (39)?

Yes.

The CHAIR: Thank you.

Michaelia Cash (WA, Liberal Party, Minister for Women) Share this | Link to this | Hansard source

Could I just clarify, therefore, that, in terms of the amendment we have before us, the change is actually in relation to the limitation of the FWO powers which you've expanded as per the conversations over the break, away from this place?

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

Yes, that's correct.

Michaelia Cash (WA, Liberal Party, Minister for Women) Share this | Link to this | Hansard source

And Senator Cameron is correct: this was previously moved and discussed the last time this bill was before the Senate. The government continues with its objections to this particular amendment. We do acknowledge that the opposition has, however, taken into consideration some of the issues that were raised in debate the last time we met in this place. I do note, for example, they have now added, at clause (viii), 'the coercion of an employee by an employer', and certainly that was one of the issues that were raised by the government in terms of our opposition to this particular amendment.

The issue we still have, though, for the record, is that the Labor Party, or the opposition, is still proposing to limit the Fair Work Ombudsman's powers. The government maintains that, in a very basic form, this is bad law. What you're actually seeing by this amendment is that the list of powers that the Fair Work Ombudsman is able to exercise is incomplete, it is fragmented, and quite frankly, if passed today, is a lawyers' feast in terms of technical and potentially time-wasting objections by recalcitrant employers in underpayment cases. There is no mention of non-monetary entitlements or adverse action generally. It would obviously assist in making this amendment better—in the event that Senator Xenophon is prepared to support the opposition's amendment—if non-monetary entitlements and adverse action were added to the opposition's amendments. It might be that Senator Xenophon is proposing to do that, but we will have to wait and see.

Again, in terms of the Fair Work Ombudsman's powers and the opposition's amendment, what the Labor Party effectively want to do is to tie the hands of the Fair Work Ombudsman, which is a little ironic, considering the Fair Work Ombudsman was appointed by the Labor Party to enforce the laws that the Labor Party themselves introduced when they were last in government. Under the proposed amendment, the ombudsman would have additional powers to seek evidence from witnesses, but only in relation to the subset of breaches of the act—which, again, is a Labor Party act. So the opposition are actually seeking to limit the scope of the Fair Work Ombudsman's investigating powers that they themselves created the last time they were in government.

In terms of the concerns that the government has—and, again, Senator Xenophon may well address some of these concerns when he stands to address the amendment—the proposed amendment means that the Fair Work Ombudsman would not be able to conduct examinations under the new provision to obtain evidence they cannot otherwise get. And we do need to remember that. These powers can only be exercised in the event that the Fair Work Ombudsman has not been able to get the information in the normal course of events. They are in relation to a wide range of unlawful behaviour, including record-keeping failings, false records, adverse action, coercion other than coercion of an employee by an employer, undue influence or pressure, misrepresentation of workplace rights, sham contracting, non-monetary breaches of industrial awards or agreements, and not complying with Fair Work Commission orders. For example, if an employer fails to pay an employee's unfair dismissal compensation, this will not be able to be investigated by the Fair Work Ombudsman.

What I've just read out is the type of conduct that was seen in the 7-Eleven scandal, where vulnerable workers were threatened if they complained about their wages, and franchisees systematically falsified record-keeping systems. This is the big issue. In terms of limiting the powers, effectively what we're saying is that 7-Eleven, should they go down the course of action that they've previously gone down, will continue to get away with that behaviour because the parliament itself has said that it is going to limit the powers of the Fair Work Ombudsman to take into account only a very small subset. In particular in relation to record-keeping failings, false records, adverse action and coercion, the government believes that these do need to be included because otherwise the law is deficient.

Given that I did address this the last time that we were here and that the government's position is clearly articulated in the Hansard, for the time being I'll leave my comments at that and listen very carefully to what Senator Xenophon has to say.

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

The assertions that are being made by the minister are just not true. The bottom line here is that we were very concerned that this would open up a whole range of attacks on workers' representatives and the right of unions to carry out their responsibilities, the same way as the ABCC continually interfered in relation to the legitimate operation of the trade union movement. This is a government that can't be trusted when it comes to workers' rights. It just cannot be trusted. Even when we did, in this place, move legislation in relation to the ABCC, the former minister, Minister Abetz, and the then Prime Minister, Prime Minister Abbott, directed the ABCC not to deal with any issue that went to workers being ripped off. Their whole focus was to attack the trade union movement. This bill, if it goes down the way the minister wants, will be another Trojan Horse to diminish the capacity of the trade union movement to service its members effectively.

We believe the amendments that have been moved, the areas that are covered, deal with the issues that the minister has outlined. All you have to do is go to sheet 8218 to see that 712AA(1)(a)(vii) goes to a contravention of a provision of the National Employment Standards. It goes to the issue that the minister was concerned about, and that was coercion. But what it does ensure is that we can't have another situation like we had under the ABCC, when this place passed legislation and the Prime Minister and the minister then directed an agency not to deal with what we had determined it should be, which was to look after workers' rights as well. This government has form when it comes to these issues.

We are convinced that the discussions we've had with Senator Xenophon, the agreement we have with Senator Xenophon, meets the concerns that the minister had—the genuine concerns, not the rubbish that's been put up to try and muddy the waters on this. It actually goes to the issue of what this bill was supposed to be about. This bill was supposed to be about protecting vulnerable workers, not giving some powers to the Fair Work Ombudsman to attack workers' right to be properly represented by their union.

Alex Gallacher (SA, Australian Labor Party) Share this | Link to this | Hansard source

Senator Cameron, before you resume your seat, is it your intention that 8218 be dealt with along with the amendments on 8144?

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

Yes.

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

I have a number of questions to ask of Senator Cameron in relation to this, and also perhaps the minister as well. It seems that the nub of this is the concern of the opposition that simply having carte blanche, in terms of powers of the Fair Work Ombudsman, would somehow be some Trojan Horse in relation to somehow being some backdoor ABCC-type powers. I don't think that's what the intention of this legislation is. The fact that the Franchise Council has been so vehemently opposed to this legislation, including some key business groups, indicates that this legislation will do a lot of beneficial work in terms of assisting vulnerable workers, and I commend the minister for that. So I think it's unfair to say that this is somehow some Trojan Horse.

I've had useful discussions with the minister's office and Senator Cameron's office in relation to this. I thought that the amendments proposed by Senator Cameron in relation to confining the coercive powers of the Fair Work Ombudsman to the matters set out in the amendment for the new proposed section 712AA subsections (1) to (7)—including the issue of coercion of an employee by an employer, underpayment of wages, unreasonable deductions, unreasonable requirements of employees, unfair dismissal, bullying, unlawful discrimination, contravention of provisions of the national employment standards—would cover the matters that I think the government is proposing. But I understand that the government's point is that there may be difficulties in relation to other matters such as adverse action, record-keeping failings, false records, undue influence—which I suppose could be covered by coercion—misrepresentation of workplace rights and industrial activities, and sham contracting. My understanding of the government's position is that these are the sorts of things, the kind of conduct, that we saw in the 7-Eleven scandal, where vulnerable workers were threatened if they complained about wages and conditions and about the systemic false record keeping.

So there are two aspects to it. I guess the first question to Senator Cameron would be, is he concerned in any way that the sorts of matters that I've raised in terms of adverse action could mean that the Fair Work Ombudsman is constrained? By the same token, in terms of what the minister's concerns have been, will the minister be of the view, should this amendment pass, to have a review of issues of the operation of this act generally and, in particular, in respect to coercive powers? So I guess the first line of questions to Senator Cameron is: I've discussed this issue with you in good faith; I am relatively comfortable about these sorts of matters that have been included; the government has raised some points which I don't see as being a Trojan Horse; but in terms of issues of adverse action, false records, misrepresentation of workplace rights and industrial activities, why do you think that those sorts of matters should not be included? Can we have that on the record?

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

They are included. That's our position. The amendments go to the issue. They can cover the issue of threats, underpayment and record keeping. They go to the national employment standards and to any coercion by an employer. They go to bullying, to unfair dismissal and to unreasonable requirements to spend or pay amounts paid or payable to employees.

Quite frankly, Senator Xenophon, I don't have the same faith in the government that some would have in this place, given their record on using government agencies to attack the capacity of workers to have effective trade unions. It is a legitimate concern that we have. It's there. We've seen Work Choices, we've seen the ABCC, and we've seen the Prime Minister, the former Prime Minister and the former Minister for Employment injecting their views on how the legislation should be applied—so it's on the record about how this government works. We are confident on the advice that we have that this covers the issues that you've raised, and, to be doubly sure, we would agree to a review process to see whether the issues that the minister is raising do raise their heads. We doubt whether they would. We are pretty confident they won't arise. We believe we've got it covered here with these amendments.

The discussions that your office and my office, and you and I, have had in good faith on these issues are clear. We've put our position. We know our position is correct on this: that these are red herrings that are being raised. But, even so, if you need further comfort, we will give you that comfort by going back to a review on these issues. With the discussions that we've had—the discussions that you've had with my office, the discussions that you've had with Mr O'Connor's office and the discussions that you've had with the minister—we believe that these issues are covered. The bottom line is: the fundamental proposition of this bill is to protect vulnerable workers, and that's what we focus on. We believe that's covered in the amendments that we've worked on together.

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

I thank Senator Cameron for his comprehensive response. Could he elaborate on that advice? The fact that he's supportive of a review process is obviously very welcome, but that's up to the minister as well because I think the minister has these ongoing concerns. On the understanding that the opposition does want this legislation to go further, is it the case—taking the principle that the perfect shouldn't be the enemy of the good—that, with this amendment, the opposition will support this legislation on the basis that, even though it believes it should go further, this is at least broadly quite beneficial for workers? And in the absence of these coercive powers that they were concerned about as being a Trojan Horse—which I note that the government vehemently says is not the case—is this the main stumbling block from the opposition's point of view: that if this amendment goes through the opposition will support this legislation with the caveat that it believes it should go further?

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

There are a range of amendments that we have before the Senate. I can't give you any commitment that we will support every aspect of the government's bill. The commitment we have given you is that we will sit down with you—and you gave the same commitment to us—and look at these issues. There are other amendments that we have before us. We can't give a commitment to the overall bill until we see the outcome of the discussion and debate in this committee process. But we certainly will support the propositions that are in our amendments that have been the subject of discussions between your office, my office and the shadow minister's office. I think it's a bit unfair, to be frank, to ask us to give you a commitment to the whole bill until we see what happens with the other amendments.

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

I just want to make the point that, objectively, this bill will help vulnerable workers. It will go a significant step forward in protecting vulnerable workers to prevent the kind of scandal that we saw with 7-Eleven, and the minister does genuinely need to be commended for putting together a package of legislation that is unambiguously a good thing for vulnerable workers. I understand the opposition's concerns in terms of the coercive powers. It's something that the ACTU and other unions have been quite concerned about. I think that what the opposition is proposing is reasonable. It does include the issue of workers being coerced by their employers and it has that protection so that it covers that field, which is something that the minister was concerned about.

Taking a cautious approach, it is my view that not only this amendment should be supported but also there should be a review. What the minister has been concerned about and what the minister has been warned of ought to be something that is ventilated through a proper inquiry process. I would be grateful if I could hear from the minister, given what an the opposition has said about this, about a proper review of this, particularly in the context of these coercive powers that the government has sought and that the opposition seeks to constrain so that there is no question of it having the adverse impact on employees.

I think we should get on with it on the basis that the opposition's amendment is supported. But to say that this bill somehow won't be beneficial overall to vulnerable workers, I think, would be quite wrong. It would be quite churlish to say that because I think a lot of good work has gone into this bill in terms of assisting vulnerable workers so we don't see a repeat of the 7-Eleven scandal. So, if I can get some clarification from the minister about her concerns, my inclination is to support this amendment. I know there are other amendments that are contentious that we need to deal with, but I want to get some clarification from the minister about a general review and any other concerns she has about this amendment.

Derryn Hinch (Victoria, Derryn Hinch's Justice Party) Share this | Link to this | Hansard source

I'd just like to say that I will be supporting the government on the amendments. It is called the protecting vulnerable workers bill. But I also will be supporting some of the Labor amendments with the backing of Senator Xenophon. As I understand it, what the government wants to do with this is give the Fair Work Ombudsman new powers to broaden its investigative powers to include new evidence-gathering powers, including compulsory questioning powers, and to provide coercive powers to the FWO to, as they put it, achieve positive investigation outcomes which, of course, would force workers to speak, and they could be fined if they don't. As I understand it, Senator Cameron, your side want to add a layer of oversight to this through the AAT, which isn't always a wonderful institution. It would involve the FWO requesting permission from the AAT to use coercive powers. I hope you'll correct me if I'm wrong, but the FWO would then have to give reasons to the AAT about why they want to use these coercive powers, why they want to question somebody and what they want to question them about. If the AAT did grant the powers, then the FWO could use them. Following the use of those powers, the Commonwealth Ombudsman would then review the FWO and the use of their powers to make sure it had been done properly.

Also, as I understand it, some of these amendments want to limit the scope of these investigative powers to some of the following: the underpayment of wages or other monetary entitlements of employees, the unreasonable deduction of amounts owed to employees, the placing of unreasonable requirements on employees to spend or pay amounts paid or payable to employees, the unfair dismissal of an employee, the bullying of a worker at work, the unlawful discrimination of a person in relation to employment, a contravention of a provision of the National Employment Standards or the coercion of an employee by an employer. So I just want to say that I do support the government amendments to this. I also support some of the ones, especially this one, being put forward by Senator Cameron in association with Senator Xenophon, and I hope we get on with it and get it done quickly.

Michaelia Cash (WA, Liberal Party, Minister for Women) Share this | Link to this | Hansard source

Just for the Hansard record, I have listened carefully to the questions that Senator Xenophon has asked and I understand he will be supporting the amendment moved by Labor. But I also listened very carefully to the response that Senator Cameron gave. I just want to be very clear for the Hansard record: in the event that the government's prediction does come true—and the fact is that the Labor opposition now has the support of Senator Xenophon—I anticipate that well-resourced parties, including those engaging in exploitative practices that the bill intends to address, will no doubt occupy the time and the resources of the Fair Work Ombudsman in protracted and expensive legal arguments about whether or not the Fair Work Ombudsman has the jurisdictional basis to issue a notice, how any power is exercised in an interview or requirement to give information et cetera, and whether or not something falls in or out of the powers in their now limited form again. Although, I do acknowledge that the opposition have amended their previous amendment and have added in the coercion of an employee by an employer. That has addressed one of the government's concerns.

In Senator Cameron's answer to Senator Xenophon's question, he stated, 'The opposition had advice to the effect that the concerns raised by the government'—and I just want to set those concerns out again for the purposes of the Hansard record—'in relation to recordkeeping failings, false records, adverse action, the limiting of coercion, undue influence or pressure, misrepresentation of workplace rights, sham contracting, non-monetary breaches of industrial awards or agreements and not complying with Fair Work Commission orders to, for example, pay unfair dismissal compensation.' Senator Cameron indicated that the advice they had was that these would not be excluded from the amendment.

It would be good obviously if Senator Cameron could table that advice because that would certainly assist us all. It would give Senator Xenophon some comfort. It would certainly give the government comfort that the issues that we have raised well and truly fall squarely within the amendment. That would also then assist the courts or the commission in the event that these matters are litigated and they're looking to extrinsic material. Certainly extrinsic material includes Hansard records during committee debates, second reading debates et cetera and explanatory memoranda. It would certainly assist the commission or a court—whoever ultimately is looking at this—to be able to refer to such advice and say, 'Record-keeping failings are actually within the definition and, therefore, you are in breach.' I would invite Senator Cameron to table that advice but, in the event that that does not occur, just to note for the record what has been put on Hansardthat the advice does go to the effect that the concerns raised by the government are adequately reflected within the amendment that has been drafted.

The CHAIR: The question is that amendments (28) to (30), (32) to (34) and (39) on sheet 8144 and amendment (1) on sheet 8218 as moved by Senator Cameron be agreed to.

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

by leave—I move opposition amendments (40) and (41) on sheet 8144 together:

(40) Schedule 1, item 57, page 32 (after line 13), at the end of Part 4, add:

24A Application of amendments—presumption where records not provided

Section 557C of the amended Act applies in relation to contraventions of civil remedy provisions that occur after the commencement of this Part.

(41) Schedule 1, page 32 (after line 13), at the end of the Schedule, add:

Part 8—Records

Fair Work Act 2009

1 At the end of subsection 535(3)

Add:

Note: If an employer fails to comply with subsection (1), (2) or (3), the employer may bear the burden of disproving allegations in proceedings relating to a contravention of certain civil remedy provisions: see section 557C.

2 Subsection 536(2) (note)

Omit "Note", substitute "Note 1".

3 At the end of subsection 536(2)

Add:

Note 2: If an employer fails to comply with subsection (1) or (2), the employer may bear the burden of disproving allegations in proceedings relating to a contravention of certain civil remedy provisions: see section 557C.

4 Before section 558

Insert:

557C Presumption where records not provided

(1) If:

(a) in proceedings relating to a contravention by an employer of a civil remedy provision referred to in subsection (3), an applicant makes an allegation in relation to a matter; and

(b) the employer was required:

  (i) by subsection 535(1) or (2) to make and keep a record; or

  (ii) by regulations made for the purposes of subsection 535(3) to make available for inspection a record; or

  (iii) by subsection 536(1) or (2) to give a pay slip;

in relation to the matter; and

(c) the employer failed to comply with the requirement;

the employer has the burden of disproving the allegation.

(2) Subsection (1) does not apply if the failure to comply was due to exceptional circumstances beyond the employer's control.

(3) The civil remedy provisions are the following:

(a) subsection 44(1) (which deals with contraventions of the National Employment Standards);

(b) section 45 (which deals with contraventions of modern awards);

(c) section 50 (which deals with contraventions of enterprise agreements);

(d) section 280 (which deals with contraventions of workplace determinations);

(e) section 293 (which deals with contraventions of national minimum wage orders);

(f) section 305 (which deals with contraventions of equal remuneration orders);

(g) subsection 323(1) (which deals with methods and frequency of payment);

(h) subsection 323(3) (which deals with methods of payment specified in modern awards or enterprise agreements);

(i) subsection 325(1) (which deals with unreasonable requirements to spend or pay amounts);

(j) any other civil remedy provisions prescribed by the regulations.

by leave—I move an amendment to amendment (41) on sheet 8144:

That amendment 41 on shee t 8144 be amended by omitting " the failure to comply was due to exceptional circumstances beyond the employer's control " from proposed clause 557C(2) on page 12 and substituting " the employer provides a reasonable excuse as to why there has not been complian ce with subsection 557C(1)(b)" .

The CHAIR: Senator Cameron, could we have a copy of that, rather than asking you to repeat it. And it needs to be signed before you hand it to us. Thank you. Please continue.

I appreciate the opportunity to amend that original amendment. This goes to the issue that has had some debate in this place prior to this bill, and that is the importance of ensuring that there are pay slips provided to an employee by the employer. We have had speeches from Senator Cash about how important this is. We have had speeches about workers not being given their appropriate pay slips. What we are concerned about is that employers can hide behind a proposition that no pay slips have been provided, but then the onus comes on the exploited worker to prove that they have not had an appropriate payment.

We don't believe that where an employer has failed to deliver on what is an obligation under the existing act to provide a pay slip there should be any impediments put before an employee to actually prove that they haven't been paid. It really is a problem created by the employer in not providing a pay slip, which is their legal obligation to provide, and then hiding behind that and indicating to a worker that the worker needs to provide the proof. We understand that you don't reverse the onus of proof easily, but when an employer is breaching the act as it stands then there is, in my view, an obligation on parliament to make sure that that employee doesn't have unnecessary hurdles to jump before they can undertake a case to get what is their legitimate right. If an employer is not complying by providing a pay slip then there should be a reverse onus of proof.

In our original amendment, we had the proposition:

Subsection (1) does not apply if the failure to comply was due to exceptional circumstances beyond the employer's control.

But, following discussions with Senator Xenophon, we are prepared to take out 'exceptional' and substitute 'the employer provides a reasonable excuse as to why there has not been compliance with subsection 557C(1)(b)'. It still would be up to the employer to indicate what circumstances were beyond the employer's control.

We are of the view that, provided the employer has a reasonable excuse as to why there has not been compliance, that's a case they can argue—they can argue what that reasonable excuse is. Obviously, the Fair Work Commission can deal with that by hearing the arguments and making a determination. But in my view a reasonable excuse would still have to be a good excuse. You just can't have an employer saying, 'Well, you know, the dog ate my homework.' You just cannot do that. There has to be a clear and unequivocal but reasonable excuse as to why they haven't complied with their legal obligations.

Remember, what we are talking about here are workers who are in a vulnerable situation. That was the name that Senator Cash came up with for the bill. The bill is the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017. It is not a bill to protect incompetent employers. It is not a bill to protect employers trying to rip workers off. It is not a bill to protect the rights of companies like 7-Eleven and Caltex, who egregiously turned a blind eye to the rip-offs that were taking place. This is about protecting vulnerable workers, so there has to be a reasonable excuse as to why there has not been compliance. That excuse, obviously, would have to meet the judgement either of a court or of the Fair Work Commission.

So it just cannot be a proposition that an employer does not comply with the law. There have been any number of speeches in here about the need to provide a pay slip to a worker. The pay slip is absolutely essential for a worker to know they have been paid for the hours they have worked, that penalty rates are being paid, and that superannuation is being paid. We have seen some recent analysis that billions of dollars of superannuation has not been paid to workers in this country. In the last session, I think, Senator Cash did bring further changes to pay slips and the requirement to provide pay slips. This is consistent with that approach. You must have a pay slip; you just can't argue that for some obscure reason no pay slip was provided. A pay slip cannot be just a scribbled note saying, 'I've paid you $300', or $400. A pay slip has to actually deal with all the obligations the employer has in relation to that worker.

So, we are very clear that this is another protection for vulnerable workers, by having a reverse onus of proof. In actually bringing a case against a powerful employer—an employer who has all the facts, an employer who may have been exploiting the worker—the worker may have some difficulties if they don't have a pay slip. So, the employer has an obligation under law to provide the pay slip, and you can't have noncompliance with legal obligations making it harder for a vulnerable worker, a worker in an exposed position, to actually make a claim for their rights under the law and their rights to get paid for what they've worked. A 'reasonable excuse' has to be reasonable, and the employee cannot be put in a position with the employer because of an omission, either deliberate or non-deliberate, by the employer, where they cannot get a fair day's pay for a fair day's work.

So we believe this is an important proposition. We think it's consistent with the thinking that this parliament has had in the past about the need to supply a pay slip. Employees are entitled to know that they're being paid for the work they've done. Employers have responsibilities to provide pay slips to employees. On that basis, the amendment we are proposing is important, but we are prepared to accept that if a reasonable excuse is what can be put forward then it has to be determined whether that excuse is reasonable or not. I will leave it at that.

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

On the amendment, I just want to break this presumption down, because I think there's been a lot of hyperbole about this—not on the government's part, but I think there's been some concern as to how it would work.

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

Must be me then!

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

No, not from Senator Cameron, but I know from speaking to some small businesses about this that you need to explain to them that the reverse onus would apply only if they have broken the law about the keeping of records in terms of pay, in terms of basic employment records—that is something where I don't know any employer who would not keep records, who would not want to do the right thing. Any responsible employer would keep these records. So in order for the reverse onus to be triggered, it would have to be a situation in which there would be a breach of subsections 535(1), 535(2), 535(3), 536(1) or 536(2) in relation to triggering this particular amendment of Senator Cameron's.

This amendment needs to be seen in the context of what the government has done to significantly increase the penalties for failing to keep records. The opposition says, 'The government isn't fair dinkum about trying to do the right thing by vulnerable workers.' Well, I think the fact that the government is doubling, as I understand it, the penalties for employers who don't keep their pay records, who don't have a proper system of record keeping under the act, shows goodwill on the part of the government to have an environment in place where there is much greater protection for vulnerable workers.

The concern I had about the reverse onus of proof—by the way, just because there is a reverse onus of proof doesn't mean that you cannot disprove that—in the original form of this amendment was that subsection (1) did not apply for failure to comply due to exceptional circumstances beyond the employer's control. I think that is simply too high a hurdle. It is simply too unreasonable. What's been put to me by one person who's run small businesses is there might be circumstances where an employee works a few extra hours and doesn't put in their timesheet as required, and then there's a blue between the employer and the employee. Even though the employer has had a good system of record keeping, it's something beyond that employer's control. Changing it to ensure that there is a safeguard, a safety valve, that it doesn't apply if the employer provides a reasonable excuse—and, again, as Senator Cameron says, it can't be 'The dog ate my homework'—so the concept of reasonableness is brought into it as to why there has not been compliance with subsection 557C(1)(b), I think provides the comfort that fair employers need so they're not caught up in this unnecessarily, but it still does its work to ensure that there ought to be compliance and there ought to be a protection for vulnerable workers in these circumstances.

In other words, if an employer is keeping records, has a system of keeping pay records—as they're required to, because the government knows how important this is, with significantly increased penalties for failing to keep records—then the employer would not be subject to this reverse onus of proof. But if you have an employer where there is no record keeping, there's no system of records as to who's working when, then the reverse onus of proof would apply, but there would still be the safeguard that if there's a reasonable excuse then it would not apply. I think this strikes that delicate balance and enhances the legislation. I support this amendment. I think it is quite reasonable in the circumstances, with this additional safeguard of reasonable excuse, for this amendment to pass.

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

I would indicate our good faith in this. We have listened to the concerns of small business, we've listened to the concerns that Senator Xenophon has raised with us, we looked at the wording of the amendment, and the amendment we just moved shows that we are open to sensible concerns. We want to make sure employers who are doing the right thing are not caught, but if an employee is being ripped off then they need to have a fair go. That's the bottom line: if an employee is being ripped off, they have to have a fair go. Senator Xenophon, your assessment of the government when it comes to dealing with workers' rights in this country may be a bit different from my experience over many years of coalition governments. It's quite reasonable for the Labor opposition to have concerns about the behaviour of this government when it comes to industrial relations. It's quite reasonable for us to have concerns about the history of this government in relation to Work Choices and the ABCC. At every opportunity that Senator Cash has to try to denigrate the great Australian trade union movement in this country, she does it. Without the trade union movement in this country, workers would have no penalty rates, workers would have no rights, there would be no annual leave loading. In my view, if this mob could get their own way, there would be a return to serfdom in this country.

Senator Xenophon interjecting—

And you may just say, 'Yeah, yeah'—well, what was Work Choices, Senator Xenophon, if it wasn't forcing ordinary workers in this country into a position where they could not negotiate effectively? That's the bottom line.

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

'Serfdom' is a very harsh term.

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

'Serfdom' might be a harsh term, but what's more harsh than taking the penalty rates away from workers, where they can't pay their bills, where they can't put food on the table and where they can't put shoes on their kids' feet? That's pretty harsh as well. Forcing a worker into an unfair bargaining situation is also pretty harsh. So we've seen it all from those opposite. And they say they're acting in good faith. Well, it's taken them four years to deal with this. They've had plenty of time to deal with it. We've had 7-Eleven, we've had Caltex, we've had migrant workers being ripped off and we've seen the rise of criminal gangs in regional and rural Australia taking payments off migrant workers on temporary visas. We have had many examples of workers being put in a terrible situation with this. So, yes, we've listened to the concerns of small business, we've listened to your concerns and we've made the amendments. I just have a more critical analysis, I would hope, of the coalition's good faith on issues than maybe others in this place do.

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

I thank Senator Cameron for his response, but I wish to make a very quick point. Unambiguously, this bill, if enacted, will help vulnerable workers around the country, and it would be churlish not to congratulate the government for actually taking some solid, meaningful, substantive steps to protect vulnerable workers. That's the point I wanted to make.

Michaelia Cash (WA, Liberal Party, Minister for Women) Share this | Link to this | Hansard source

This amendment was moved the last time we met, and I put on record at that time the government's concerns in relation to this amendment. Basically, as I said in relation to the reverse onus, there were significant issues that the government had with it in relation to, in particular, the situation whereby an employee made a false allegation against an employer. What this amendment would have effectively done is created the impossible situation where an employer would be responsible for an inaccurate claim made by an employee. The example I gave on the Hansard record last time the amendment was debated was in the case of a claim to working certain hours or days that were not actually worked, and an employer will obviously have no records at all and no ability to disprove the allegation. I am pleased, though, that the opposition has come to the Senate today with an amended version of their amendment. The government still will not be supporting it, because of the issues that we still have with it. In relation to the taking out of 'exceptional circumstances' and the insertion of 'provides a reasonable excuse as to why there has not been compliance', this certainly does go part of the way to addressing the concerns that the government has had.

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

I just want to talk about this particular amendment, because I think this debate tries to get a little bit too academic sometimes. If we step back and look at employers who are paying people, first of all, you should know what it is you're going to pay them. You make a decision that you're going to pay at least the minimum legal rate and conditions or you make a decision that you're not. Either way, employers know what they're going to pay their employees, because ultimately they pay them at the end of the day. Every employer knows exactly how long their employees have worked. Again, whether they want to pay them for all of those hours or not is a conscious decision of that employer. Employers that are paying according to their legal minimum requirements or better will have that documented. They know what it is they have to pay; it will be on a pay slip. The employer will know how many hours the employee has worked, as will the employee, and that will be outlined on a pay slip. It will be there for all to see. It is not too much to ask, or expect, that an employer who is paying somebody, knowing what it is they're paying, puts that on a pay slip.

The evidence I've seen around the traps—some of it's hard and physical evidence, some of it's anecdotal evidence and some of it's evidence provided by the Fair Work Commission—is that those employers who have chosen not to pay the legal minimum or above requirements still have records but refuse to make them available. They pretend those records are not there. They pretend they do not exist. We've heard evidence from the Fair Work Commission where they've gone, as a result of a complaint to an employer, that said, 'This employee says they have not received their proper wages and conditions for the hours that they've worked,' and the employer says, 'I don't know who they are. I have no records of them ever working here.' They choose not to provide those records. We know those records are there. If they are there and the employee is being paid correctly, there's no problem; there is no dispute between anybody. But we know it is a business model of some employers simply to pay cash in hand and not pay for all the hours worked—they talk about clean-up time and preparation time and that they shouldn't get paid for that. There are all sorts of different exploitation models that go on, and often these models are part of a structured business plan.

We have heard evidence of some employers who have made the decision that they will underpay people, and they've made the conscious decision that maybe one in 10 of those people will ultimately complain about being underpaid. You then make it difficult for employees to pursue the complaint, and maybe one in five of the one in 10 who actually complained in the first place are able to mount some sort of a case. And then most of those people will take a cash offer less than what they were underpaid to simply go away because 'something's better than nothing' and it's nearly impossible to prove, under the current law, that they are being underpaid when an employer either chooses not to make the records available or pretends there are no records. What's nearly the worst thing that happens to those employers? They have to pay what they were legally supposed to pay for only a fraction of the people they've underpaid. And when they do that they continue on with their business model, very happily stealing wages from those people time and time again.

We know—because they told us—that the Fair Work Ombudsman is frustrated with their inability to go behind some of these business models. It is difficult for them, when an employer chooses not to provide times and wage records, either of legal times and wages or not, to make any case or even to prove that an employee was ever an employee at all. It's difficult to prove that, especially when people are vulnerable and in difficult situations.

I'm not as sympathetic as others because I know that no employer just goes round saying, 'Oh, Jo'—Fred or whatever their name is—'here's $100 bucks for your week's work,' without having any idea of what the hourly rate was or how many hours they worked. It's farcical to think that!

Every employer knows exactly how much they're paying their employees as an hourly rate and how much time they've worked. Whether they choose to pay legal wages and conditions is a completely different matter. I understand that, if someone keeps proper records and is paying correctly, they won't be under investigation in the first place. That's the reality. If you're actually paying by the award or better—the award being the lowest legal minimum wage someone can be paid—or the other entitlements, there's going to be no problem anyway. The problem is only when employers either choose to do the wrong thing by underpaying or choose not to keep official records. And the only reason you would ever do the latter is that you were underpaying; otherwise, as I've already said, of course you would keep your own records. You don't just make up a weekly rate or a daily rate for somebody. You don't pick those things out of the air. There is a formula that you may be using, but of course it simply may be less than the legal entitlement. If there was a fire in the business and all the records were destroyed, fair enough! I think that would be a reasonable excuse. But I really can't think of any other reasonable excuse.

We're happy to pick up the words and hear some of the concerns. I must say, from a personal point of view, as someone who takes an active interest in these matters, I think those concerns are completely overblown. But in order to progress these issues I support the position that we support these amendments and what's been discussed and negotiated with Senator Xenophon, even though the government's not pursuing it, because I think it is important to move forward. If an employee or alleged employee can establish that they did work for a business or an employer, and the employer either has deliberately not kept the records or doesn't want to show the records because they will prove that they were underpaying, it ought to be a reverse onus of proof because the employee is in such a vulnerable position. How do they establish those facts? They can't establish those facts. They're being ripped off in the first place. As if the employer is going to make it easy for them to come and prove that they were going to be ripped off! I know some people say cases where this business model's in place are rare. Well, I'm telling you: they're not rare. They're across industry, and in hospitality in particular.

One of the interesting things that I heard in the debate about penalty rates is that people were saying to me for the first time, 'We didn't know we were entitled to penalty rates.' The fact that we had this discourse about penalty rates raised the issue that they were, in fact, entitled to penalty rates. I had so many employees saying to me, 'I've never been paid penalty rates and didn't know we were entitled to them.'

I think we have to bite the bullet and say that in many respects—in fact, in nearly all respects now—the Fair Work Act is not delivering what it ought to be delivering. The mere fact that we need this protecting vulnerable workers bill actually says that the Fair Work Act in itself isn't working. It's certainly not working for the vulnerable workers. Let's be clear, this bill concerns a very narrow field of vulnerable workers, those dealing with franchisees and franchisors. That is a very narrow protection of vulnerable workers, but they themselves are vulnerable, and I certainly welcome many aspects of this bill. But let's be very, very clear: it is the employees that need protection from unscrupulous and disreputable employers, not the other way around.

So I certainly commend the amendment as it is, but I don't think any of us ought to get too academic in the arguments here. Let's take it back to what we know makes sense on the ground, how what we know actually happens in reality. Let's put a bit of reality into it. But I am certainly happy to support the proposals as they're put.

Michaelia Cash (WA, Liberal Party, Minister for Women) Share this | Link to this | Hansard source

Can I just confirm that when we say 'the proposals as they're put' that's in relation to the amendment that Senator Cameron has placed before us. So perhaps he could just read out the amended amendment.

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

I thought I had placed that on record, but I'll do it.

Michaelia Cash (WA, Liberal Party, Minister for Women) Share this | Link to this | Hansard source

Just for clarification, that's all.

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

I sought leave to move an amendment to amendment (41) on sheet 8144. I moved the amendment:

That amendment (41) on sheet 8144 be amended by omitting 'the failure to comply was due to exceptional circumstances beyond the employer's control' from proposed clause 557C(2) on page 12 and substituting 'the employer provides a reasonable excuse as to why there has been no compliance with subsection 557C(1)(b)'.

That was the amendment that was moved, and I think we've had a fair bit of discussion on that. Again, I want to say that we've listened to the concerns of small business and Senator Xenophon on this. We have changed the wording of the amendment. We are open to sensible and reasonable concerns, and we want to make sure that employers who are doing the right thing aren't caught up in this.

Michaelia Cash (WA, Liberal Party, Minister for Women) Share this | Link to this | Hansard source

Just for the record, the government acknowledge that the amendments do have the majority support of the Senate and, as such, we won't be calling a division.

Barry O'Sullivan (Queensland, National Party) Share this | Link to this | Hansard source

The question is that amendments (40) and (41), as amended by leave, on sheet 8144 moved by Senator Cameron be agreed to.

Question agreed to.

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

by leave—I move opposition amendments (1) to (20), (22), (23) and (36) to (38) together:

(1) Schedule 1, items 14 and 15, page 8 (lines 4 to 14), omit the items, substitute:

14 Section 12

Insert:

franchisee entity of a franchise: see subsection 558A(1).

14A Section 12 (definition of indirectly responsible entity )

Repeal the definition, substitute:

indirectly responsible entity:

(a) in relation to TCF work performed by a TCF outworker—see subsections 789CA(3), (4) and (5); and

(b) in Division 4A of Part 4-1—see subsection 558A(3).

14B Section 12

Insert:

responsible franchisor entity for a franchisee entity: see subsection 558A(2).

supply framework: see subsection 558A(3).

14C Section 12 (before paragraph (a) of the definition of worker )

Insert:

(aa) in Division 4A of Part 4-1—see subsection 558A(3); and

15 Section 537 (after the paragraph relating to Division 4)

Insert:

Division 4A imposes obligations on responsible franchisor entities, holding companies and indirectly responsible entities in relation to certain contraventions of civil remedy provisions by other entities.

(2) Schedule 1, item 16, page 8 (table item 29A), after "558B(2)", insert "558B(2B)".

(3) Schedule 1, item 17, page 9 (lines 1 to 3), omit the heading to Division 4A, substitute:

Division 4A—Responsibility of responsible franchisor entities, holding companies and indirectly responsible entities for certain contraventions

(4) Schedule 1, item 17, page 9 (line 4), omit the heading to section 558A, substitute:

558A Meaning of franchisee entity,responsible franchisor entityandindirectly responsible entity

(5) Schedule 1, item 17, page 9 (line 15), omit "significant".

(6) Schedule 1, item 17, page 9 (after line 16), at the end of section 558A, add:

(3) A person is an indirectly responsible entity for another person (the worker) if:

(a) there is an arrangement, or a chain or series of 2 or more arrangements, for the production or supply of goods or services by the worker (the supplyframework); and

(b) the person is party to an arrangement in the supply framework; and

(c) any of the following applies:

  (i) the person has influence or control over the worker's affairs or the affairs of the worker's employer;

  (ii) under the supply framework, the worker performs work for the purpose of the business of his or her employer and goods or services are provided to the person;

  (iii) the worker otherwise forms part of the conduct of the undertaking of the person; and

(d) the person is not:

  (i) the worker's employer; or

  (ii) a responsible franchisor entity for the worker's employer; and

(e) if the person is a body corporate—the worker's employer is not a subsidiary (within the meaning of the Corporations Act 2001) of the person.

(7) Schedule 1, item 17, page 9 (lines 17 and 18), omit the heading to section 558B, substitute:

558B Responsibility of responsible franchisor entities, holding companies and indirectly responsible entities for certain contraventions

(8) Schedule 1, item 17, page 9 (line 27), omit "entity; and", substitute "entity.".

(9) Schedule 1, item 17, page 9 (line 28) to page 10 (line 7), omit paragraph 558B(1)(d).

(10) Schedule 1, item 17, page 10 (after line 8), after subsection 558B(1), insert:

(1A) Subsection (1) does not apply if the responsible franchisor entity proves that it and its officers (within the meaning of the Corporations Act 2001):

(a) did not know and could not reasonably be expected to have known that the contravention by the franchisee entity would occur; and

(b) did not know and could not reasonably be expected to have known, at the time of the contravention by the franchisee entity, that a contravention by the franchisee entity of the same or a similar character was likely to occur.

(11) Schedule 1, item 17, page 10 (line 14), omit "subsection (7); and", substitute "subsection (7).".

(12) Schedule 1, item 17, page 10 (lines 15 to 25), omit paragraph 558B(2)(c).

(13) Schedule 1, item 17, page 10 (after line 26), after subsection 558B(2), insert:

(2A) Subsection (2) does not apply if the body corporate proves that it and its officers (within the meaning of the Corporations Act 2001):

(a) did not know and could not reasonably be expected to have known that the contravention by the subsidiary would occur; and

(b) did not know and could not reasonably be expected to have known, at the time of the contravention by the subsidiary, that a contravention by the subsidiary of the same or a similar character was likely to occur.

Indirectly responsible entities

(2B) A person contravenes this subsection if:

(a) the person is an indirectly responsible entity for a worker; and

(b) the worker's employer contravenes a civil remedy provision referred to in subsection (7) in relation to the worker; and

(c) the contravention by the worker's employer is connected to the worker's work under the supply framework.

Note: This subsection is a civil remedy provision (see this Part).

(2C) Subsection (2B) does not apply if the indirectly responsible entity proves that it and its officers (within the meaning of the Corporations Act 2001):

(a) did not know and could not reasonably be expected to have known that the contravention by the worker's employer would occur; and

(b) did not know and could not reasonably be expected to have known, at the time of the contravention by the worker's employer, that a contravention by the worker's employer of the same or a similar character was likely to occur.

(14) Schedule 1, item 17, page 10 (lines 27 to 32), omit subsection 558B(3), substitute:

Reasonable steps to prevent a contravention of the same or a similar character

(3) A person does not contravene subsection (1), (2) or (2B) if the person proves that, as at the time of the contravention referred to in paragraph (1)(a), (2)(b) or (2B)(b), the person had taken reasonable steps to prevent a contravention by the franchisee entity, the subsidiary or the worker's employer of the same or a similar character.

(15) Schedule 1, item 17, page 10 (line 35), omit "franchisee entity or subsidiary", substitute "franchisee entity, a subsidiary or an employer of a worker".

(16) Schedule 1, item 17, page 11 (lines 3 and 4), omit paragraph 558B(4) (a), substitute:

(a) the size and resources of the franchise, body corporate or parties to arrangements in the supply framework (as the case may be);

(17) Schedule 1, item 17, page 11 (line 7), omit "or (2)(b)", substitute ", (2)(b) or (2B)(b)".

(18) Schedule 1, item 17, page 11 (line 22), at the end of subparagraph 558B(4)(e)(ii), add "or".

(19) Schedule 1, item 17, page 11 (after line 22), after subparagraph 558B(4)(e)(ii), insert:

  (iii) the supply framework;

(20) Schedule 1, item 17, page 11 (lines 29 to 35), omit subsection 558B(6), substitute:

Civil proceedings in relation to contravention by franchisee entity, subsidiary or worker ' s employer not required

(6) To avoid doubt, a reference in paragraph (1)(a), (2)(b) or (2B)(b) to a contravention by a franchisee entity, a subsidiary or an employer of a worker includes any contravention whether or not an order has been sought or made against the franchisee entity, subsidiary or employer under Division 2 for the contravention.

(22) Schedule 1, item 17, page 12 (lines 33 and 34), omit the heading to section 558C, substitute:

558C Right of responsible franchisor entity, holding company or indirectly responsible entity to recover

(23) Schedule 1, item 17, page 13 (lines 3 and 4), omit "of subsection 558B(1) or (2) in relation to a franchisee entity or subsidiary", substitute "of subsection 558B(1), (2) or (2B) in relation to a franchisee entity, a subsidiary or an employer of a worker".

(36) Schedule 1, item 57, page 31 (lines 14 and 15), omit the heading to clause 19 of Schedule 1, substitute:

19 Application of amendments—responsibility of responsible franchisor entities, holding companies and indirectly responsible entities

(37) Schedule 1, item 57, page 31 (lines 17 and 18), omit "or subsidiaries", substitute ", subsidiaries or employers of workers".

(38) Schedule 1, item 57, page 31 (lines 20 to 25), omit subclause 19(2) of Schedule 1, substitute:

(2) To avoid doubt, in determining for the purposes of subsections 558B(1A), (2A) or (2C) of the amended Act whether a person could not reasonably be expected to have had knowledge as referred to in that subsection, a court may have regard to conduct that occurred, or circumstances existing, before the end of the period referred to in subclause (1).

These amendments do three things. Firstly, they limit the definition of 'responsible franchisor' so that a franchisor has to have 'a degree of influence or control, not a significant degree'. Secondly, they extend the new civil liability provisions where labour hire companies are used and across the supply chain. They reverse the onus of proof to make it harder for franchisors and big companies to escape liability. So if what we are about in this bill is protecting vulnerable workers then these three areas are important. It's about a degree of influence or control, not a significant degree. It's about extending the new civil liability provisions where labour hire companies are used across the supply chain and reversing the onus of proof to make it harder for franchisors and big companies to escape liability. Labor are pleased the government has adopted our policy of accessorial liability, which will be applied to franchisors so that they can't escape responsibility for the exploitation of workers by their franchisees.

The recent example of wage fraud and worker exploitation is not, however, limited to franchising. Sadly, Australians have seen that exploitation extends to the practices of labour hire arrangements, and along supply chains. Big companies can't be allowed to avoid their responsibilities for the way in which their business practices allow, and in many circumstances require, worker exploitation to occur. As the Franchise Council of Australia argued to the legislation committee inquiry:

No evidence provided makes the case for singling out franchising when Fair Work compliance concerns are an economy-wide issue.

So even the Franchise Council, which has moved heaven and earth to try to stop this, has conceded the point that worker exploitation is an economy-wide issue. One of the great areas of exploitation is through labour hire arrangements. I think anyone who has seen the Four Corners reports about the labour hire exploitation that takes place against vulnerable visa workers in rural and regional Australia would certainly understand that this is a huge issue. If the Franchise Council can see that, then surely it's incumbent upon this chamber to recognise that this is an economy-wide issue and not simply an issue in franchising.

The Franchise Council also submitted:

Any new legislation should reflect the economy-wide nature of the employee underpayment concern. An economy-wide approach may be assisted by contemplating if the definition of 'parent' company was extended beyond parent and subsidiary to a situation where one party exercised reasonable allocation of responsibilities and significant control over another party, such as in a closely controlled supply chain or a franchise, licence or product distribution arrangement.

Similarly, the Asia-Pacific Centre for Franchising Excellence stated:

Franchising should not be singled out. The proposed amendments appear to have evolved as a reaction to recent media involving the underpayment of employees by franchisees in some high-profile franchise brands. However, it is disingenuous and patently unfair to target franchise organisations …

So not only is the Franchise Council of Australia concerned, but the Asia-Pacific Centre for Franchising Excellence—I don't know if that is an oxymoron—is raising this issue as well. They are saying it is disingenuous and patently unfair to simply target franchise organisations.

Labor's amendments mean that franchisors will not be singled out, and, because it is an economy-wide approach to prevent wage exploitation, we should deal with it on an economy-wide basis. Labor's amendments are aimed fairly and squarely at making the big economic decision-makers accountable for the contracts they enter into. These amendments address the gap in the government's response to worker exploitation by extending liability to 'indirectly responsible entities', so that where companies and businesses outsource their workforce to labour hire firms, or enter into contracts for the supply of goods and services to their businesses, they cannot escape liability for their role in the exploitation of workers by those labour hire or supply chain firms. It falls square on the principles we've just been debating: if you have control over an entity, then you must accept that you have some liability if that entity breaks the law. That's what's been happening. As a former union official, I can recount many examples of labour hire companies coming in and actually working under what was an enterprise agreement or a certified agreement at the time, and the employer turning a blind eye to that certified agreement and the contract labour company paying less. This is unacceptable. This is something that we should deal with, given the concerns of both the Asia-Pacific Centre for Franchising Excellence and the Franchise Council of Australia.

Extending potential civil liability across the supply chain is about stopping big business and companies from negotiating contracts which can only be fulfilled by underpayment of wages. It's about making the economic decision-makers take an active role and ensuring that the people who do the work to supply the goods and services are not exploited. Just because you bring someone in on a contract labour basis, it should not absolve you of your obligation to ensure that workers on your worksite, your factory, your warehouse or your farm are employed legitimately and appropriately in line with the laws of Australia. Yet we see so much of this: farmers employ a contract labour company and that contract labour company then goes on to rip workers off, and when it's exposed the farmer says, 'Oh, I didn't know anything about this. It wasn't my responsibility.' But the work is being done on behalf of that farmer. The work is being done in the warehouse that is owned by the owner. The work is being done in the factory that is owned by that factory owner—the same as the work that is done by a franchisor on behalf of a franchisee is work being done for that franchisee. These are issues of similar concern. These are issues that go to the same principles that we've just been debating. That's why we believe the responsibility should be extended to the employer or the labour hire company to ensure that that labour hire company does the right thing, and there are so many examples at the moment where they don't. It's about stopping big business and companies from negotiating contracts which, as I have said, can only be fulfilled by the underpayment of wages. The economic decision-makers must be engaged.

Currently the bill only imposes civil liability on franchisors where they have a significant degree of influence or control over the franchisee entity's affairs. We believe that this definition is too narrow. It serves to incentivise franchisors to change their models in order to be able to argue that they do not have a significant degree of influence or control. By removing 'significant', these amendments remove that incentive. These amendments also strengthen the government's bill by requiring the franchisor, holding company or indirectly responsible entity to prove that they did not know, or could not reasonably have known, that the exploitation would occur, and that they took all reasonable steps to prevent it. Reversing the onus of proof in this way sends a very strong message that worker exploitation will not be tolerated. With these amendments, the bill would have real teeth to protect workers and would ensure that employers and big companies take responsibility for their obligations under the Fair Work Act and for the impact of the economic decisions that they make.

We've seen examples of companies processing chickens and contract labour coming in under the award wage. Those companies say, 'Well, we didn't know about it.' But these companies are actually working on the premises. These companies are supposed to be working under the law of Australia. These contract companies are, in our view, the responsibility of the employers that engage them on their premises. This is the same principle that we've just dealt with and is an important principle in the context of protecting vulnerable workers. If we are fair dinkum about protecting vulnerable workers then we will go to the issues that have been exposed in the newspapers, on Four Corners, on 7.30 and by people coming and talking to me about the exploitation that's taking place. Many senators in this place would have had workers come in and tell them about the exploitation they've experienced simply because they are employees of labour hire companies.

Now, some of those labour hire companies, such as the one shown on Four Corners, have been run by criminal gangs exploiting vulnerable workers who are here on temporary visas—putting them up in overcrowded housing, with some of them being forced to provide sexual favours to get a job and get an income. This should be unacceptable in modern-day Australia—it is unacceptable at any time in Australian history, but it certainly is unacceptable now. And if an employer has labour hire companies engaged in this type of misbehaviour or illegal activity, then those companies should not simply be allowed to say, 'We didn't see it; we didn't know about it; we've got no responsibility, because it's the responsibility of the labour hire company.'

If we really want to protect vulnerable workers then these amendments will be accepted. By accepting these amendments we will make our industrial relations system better for workers who are employed by labour hire companies. It would be consistent with the submissions from the franchising operations in Australia and consistent with other submissions that we've had. It will make sure that exploitation as a matter of course in this country stops and that the employer has an obligation—whether franchisors, franchisees or labour hire companies—to protect workers.

Michaelia Cash (WA, Liberal Party, Minister for Women) Share this | Link to this | Hansard source

I have to say, it's always very interesting to sit here and listen to Senator Cameron talk about his support for vulnerable workers You would actually think, based on everything Senator Cameron says, that he would then be able to articulate everything the former Rudd-Gillard-Rudd governments did in relation to protecting vulnerable workers. Let me just remind the Senate exactly what the former Labor governments did in relation to this issue. I'd say it's going to take me all day, but it won't. In fact, it's going to take me less than one second, because they did absolutely nothing. So, despite standing here and articulating your support, Senator Cameron, when you were in government and when you had the opportunity to actually change the law to do something to protect vulnerable workers, you did nothing.

But for those who are listening to this debate, it actually gets worse. Not only did the former Labor government actually do nothing by way of policy implementation to protect vulnerable workers but they actually did the exact opposite: they ripped the guts, quite literally, out of the Fair Work Ombudsman. They ripped the guts out of them by way of both the dollars and the number of staff given to the Fair Work Ombudsman. When the Hon. Bill Shorten, the current Leader of the Opposition, was the minister, he decreased substantially the number of staff working at the Fair Work Ombudsman. That's what they did to help to protect vulnerable workers—they decreased the number of staff working at the Fair Work Ombudsman. But it gets worse. Forget about decreasing the number of staff; when in government, those opposite ripped $26 million out of the Fair Work Ombudsman. When the Leader of the Opposition, Mr Bill Shorten, was the minister responsible, he ripped $26 million out of the Fair Work Ombudsman. They ripped the guts out of the Fair Work Ombudsman by taking money away from it and reducing its staff, but they also did absolutely nothing—not by way of one positive policy—to address the issue that they stand up today and say they are so committed to.

In relation to this particular amendment, this is absolutely where Labor's complete disregard for business comes into play. The government is opposing these amendments. Labor's amendment shows that they have no regard for or understanding of how business works. This amendment means that just about any person who is in any way involved in the supply of goods or services could be liable for the underpayment. That's right: any person. Imagine if 10 people were involved in the chain. You'd better hope that you're not number 4, 5 or 6, because you may well be liable. This just reinforces that those opposite are completely out of touch with how this bill works.

Let's turn this into a real-life example so people can understand what this amendment will do. You have a nice young couple. They don't even need to be young; they could just be a couple. They save up their money to renovate their home. They may well be responsible, because of this amendment, for the underpayment of a subcontractor by another subcontractor. Worse still, there is actually a presumption of guilt against this couple. Again, that is something that the government cannot and will not accept. Let's work this example through. If you're renovating your home, as so many have done in Australia, you engage a builder who has a good reputation. Let's face it: you wouldn't want to engage a builder who has a bad reputation. That builder, as many in the building industry do, subcontracts out part of the work. For example, you're renovating your kitchen. The kitchen company, as it can do, further subcontracts work to a plumber. It makes perfect sense to me: they want the plumber to come in and do the plumbing work. The plumber then pockets a premium by underpaying a small subset of their employees. Is that wrong? Absolutely, 110 per cent! And the worker, under current law, can—and should—pursue the plumber for the payment to which they are entitled, with the assistance of the Fair Work Ombudsman should they so desire it. Under the opposition's proposed amendment, you personally would be assumed guilty of the underpayment of the employees three steps removed from you unless you could prove your innocence.

Let's take another practical example that will affect small business: a small printing business. There are plenty out there; we've all used them at one stage in our life. Under this proposal this small business owner, who just wants to run his business, pay his taxes and pay his employees, could be held liable not only for the underpayments of their own workers—which they should be held liable for and can be—but for underpayments by a courier who delivers goods to the small business, the maintenance workers who are contracted to mow the lawns out the front or the service company that comes in once a month to pick up the old toner cartridges for recycling. Not only that, the small business owner would be presumed complicit—that's right, you will be presumed complicit—in any underpayments of workers by these other entities unless you can prove otherwise. In other words, you will now have to provide proof about underpayments that you had no idea were occurring because you were so far removed down the chain. But, under this amendment, you are potentially liable.

Serious concerns have been raised in relation to this amendment by the small-business community right across Australia. If this goes through, it will literally have a chilling effect right across the Australian economy. As we know, given that small business is the biggest employer in Australia, it will have a disproportionate effect on small businesses. In terms of the work the government is doing in relation to labour hire, some time ago—as those opposite will be aware—we established the government's Migrant Workers' Taskforce. It is a cross-portfolio task force. More than that, it is chaired by Professor Allan Fels. I don't think anybody here would dispute, in any way, Professor Allan Fels's commitment to doing the right thing by vulnerable workers. Professor Fels, on behalf of this task force, will be providing the government with seriously considered policy options early next year.

The bill itself is a significant improvement in protections for vulnerable workers, including those engaged by labour hire companies. As I said, we have established the Migrant Workers' Taskforce, which is actively examining, in a very serious and considered way, the issue of exploitation of workers, including labour hire workers. Anyone who can stand here—Senator Cameron has—and say they support laws that will ensure that vulnerable workers are not exploited cannot then, in the same breath, say, 'But if our amendment doesn't get up, we will not support the bill.' Senator Xenophon has clearly articulated the benefits of this bill. This bill is not just confined to the amendment we are discussing today. There is so much more in this bill—in particular, in relation to the increase in penalties. The increase in penalties—and it is a very substantial increase—will send a very clear message to any employer out there: if you are going to underpay employees, you will be caught and you will pay the financial price, as you should.

In relation to this amendment, again, I will not stand here on behalf of the government and say that a mum and dad who are renovating their kitchen should be held liable for the underpayment of someone when they had no knowledge it was happening because they were so far removed down the chain. I will not stand here and declare war on small business in Australia. Why? Because that has already been adequately done by those on the other side and, in particular, by the Leader of the Opposition, Mr Bill Shorten. As I have said, this amendment, if passed, will have a very serious chilling effect across the Australian economy. On that basis, I ask all senators to not support the amendment.

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

The fundamentally crazy propositions that this minister is putting are a load of nonsense. I know, Minister, that you have had some setbacks in this bill but you should not start doing vaudeville when you're in the trouble. That is what you have just done. Having Allan Fels look at something doesn't mean that the government will implement the recommendations. If you are thinking it does mean that, get up and say so. You only have to look at the last inquiry this government had—when the Chief Scientist, Dr Finkel, was asked to look at electricity supply issues in this country—and the biggest change that Dr Finkel proposed concerning the clean energy target, which the government won't deal with because the Prime Minister, Malcolm Turnbull, is so weak, so jelly-backed, that he can't stand up to the climate change deniers. So there is absolutely no guarantee that anything Dr Fels does will end up being in legislation. The response to Dr Finkel's work is another example of this government's talking big and delivering little.

The minister also accused me of saying that Labor would not support the bill. We have not said that. What we did say was that there had to be amendments, and we have proposed a number of amendments. So you, Minister, are behaving badly and what you have just said is off the planet. Labor's amendments are intended to make the economic decision-makers accountable for the contracts they enter to. It is absolutely ridiculous to suggest that under Labor's amendments a small business would be held accountable for contraventions by big companies when they have no reasonable way of either influencing the conduct of a big business or knowing about its conduct. Extending potential civil liability across the supply chain is about stopping big business and companies from negotiating contracts which can only be fulfilled by the underpayment of wages. This is about making the economic decision-makers take an active role in ensuring that the people who do the work to supply the goods and services are not exploited. In the introducing the bill into the House Mr Dutton said in his second reading speech, in reference to extending civil liability to franchisors:

The Fair Work Ombudsman is required to act as a model litigant and will pursue prosecution only in cases where penalties are appropriate.

So the mum-and-dad renovators of Australia have nothing to worry about—Mr Dutton has made it clear. But Minister Cash comes in here, having suffered a number of setbacks, and goes on this rant about mum-and-dad renovators ending up in breach of the act. It is just nonsense. Mr Dutton also said in the second reading speech:

The regulator will also be in a position to support businesses, especially franchisors, franchisees and small businesses, to understand these changes and take any necessary simple steps to ensure that their networks are aware of their obligations under the Fair Work Act.

This is from the representing minister in the House of Representatives, who seems to understand the bill better than the minister in the Senate. What has just been put is nonsense. I repeat:

The Fair Work Ombudsman is required to act as a model litigant and will pursue prosecution only in cases where penalties are appropriate.

If that holds for the government's scheme for franchises, it hold for Labor's amendments as well. I would have thought that rather than trying to put fear into young couples carrying out a home renovation, maybe the minister would have spent a few minutes talking about Baiada, that chicken-processing company that ripped workers off mercilessly. Did we hear anything about that? Not a word. Just this rant, this raving on about how young couples carrying out home renovations are going to end up breaching the law. An absolute nonsense!

Previously the minister spoke about Labor cutting funding to the Fair Work Ombudsman. Let me tell you, if the trade union movement had decent rights of entry and did not have the impediments that this government has put in place to the unions representing the members, then you wouldn't need this massive bureaucracy called the Fair Work Ombudsman. The trade union movement could do what it's done over many years—ensure that its members, and by ensuring its members then non-members, are well looked after without a massive government bureaucracy to try and do it.

The reason that this government runs these scare campaigns is because they know what they're about. They are about fundamentally reducing the capacity of workers to get access to the trade union movement, through restrictions on right of entry, through restrictive anti-union policies and legislation like the ABCC. It's like what it tried to do when it got control of the Senate—take away workers' rights to bargain through Work Choices, forcing workers in small companies around the country to negotiate directly with their employer in an unfair bargaining position.

This is about ensuring that companies like Baiada, who set about destroying workers' capacity to get paid for the work that they're doing through these arrangements with labour hire contractors, are held responsible. That's what we have to do—make sure that vulnerable workers are protected. If this minister really was concerned about protecting vulnerable workers, then the situation that was exposed at Baiada through a combination of the trade union movement, Four Corners and the media exposing it—something would be done about it. But this minister wants to go down this stupid path of saying this will chill the Australian economy and stop young people renovating their house. I have heard a lot of stupid arguments recently, from the foreign minister, Julie Bishop, down, arguing that there is some communist control taking over the country. This just shows how crazy this government is. This government has lost the plot. If anyone wants to see why this government has lost the plot, go back and look at the Hansard of Minister Cash's response prior to my contribution. It was absolute nonsense. It was all about protecting big business; all about protecting businesses that are ripping workers off; only concerned about making sure business can get their nefarious way with ordinary workers.

Vulnerable workers are the issue. Let's deal with protecting vulnerable workers. I think that's why Senator Marshall, in his contribution, indicated that under this government there is a failure in the operation of industrial relations in this country, where companies can get away with doing what Baiada did almost unscathed, where vulnerable workers get ripped off every day on the job. It is not the prettiest job; it is not the best job in the world—processing chickens—but somebody has to do it. If you do it, you should be paid appropriately for doing that work. We should not have this minister raising the spectre of young home renovators being in breach of the law because Labor wants to make sure that those that make the economic decisions actually bear some responsibility. What a load of rubbish we just heard from the minister.

Our amendments are about doing what the Franchise Council of Australia asked us to do—that is, to look more widely at this and not target the Franchise Council themselves. These amendments will also ensure not just that vulnerable workers in franchising operations are given some protection but that workers in all arrangements across the country are given some protection. If the principle is good enough for franchising companies, it is good enough for those employers who are exercising the economic decision-making at the plant level to make sure that their subcontractors and their labour hire companies are paying workers the appropriate wages and conditions. That's what the minister should be thinking about and addressing—not just part of the economic activity of this country. As the Franchise Council itself said, 'You should not look just at us; this is a problem across the economy.' So we've taken that on board and looked at it, and we are moving these amendments so that, if vulnerable workers are being ripped off, there is accountability not only in the franchising industry but across industry to deal with those issues. That's where we are on this matter.

If the trade union movement in this country had decent rights of access and if this government were not setting about creating an atmosphere of fear and loathing towards the trade union movement, workers would be better paid and we could ensure that workers got paid penalty rates. When 700,000 workers are losing their penalty rates, the Prime Minister and the minister simply support that proposition. We are about fairness in the workplace. We are not about Work Choices, in the context of the Howard government and the antecedents of this government. We are determined that vulnerable workers should be protected. These amendments will protect workers in franchise areas and workers doing work for labour hire companies from being ripped off by companies that know what's going on.

These are important amendments, and we would certainly hope that the crossbench would apply the same principles that they've applied to the previous amendments to this bill. The principles are the same; the situation is the same—vulnerable workers are being ripped off. I would ask that the crossbench provide the same support they've given in the franchise area to this area, because the issues are no less important. The rip-offs are no less egregious. The pain and suffering for vulnerable workers is not less if you're being ripped off by a labour hire company than if you're being ripped off in the franchising industry. We would ask that some common sense apply and that the raving of the minister is ignored, that the crazy argument the minister just put up is ignored, and we get on and protect all vulnerable workers in this country.

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

I can indicate that I and my colleagues cannot support these amendments moved by Senator Cameron. We understand his concerns, but these amendments, in their scope, are incredibly broad. It is something that is being looked at by Professor Allan Fels, in terms of migrant workers and other vulnerable workers, and I have great confidence that Professor Allan Fels will be thorough and diligent and do the right thing, in terms of coming up with sensible recommendations to further protect vulnerable workers.

The problem I have with these amendments is that they are so broad, so imprecise, that they will cause litigation chaos in the small-business community and amongst subcontractors. They will have economy-wide effects. For instance, and this is not a criticism of the intent or the good intentions that Senator Cameron has in relation to this, the wording which refers to a person having 'influence or control over the worker’s affairs or the affairs of the worker’s employer'—incredibly wide, incredibly imprecise. The amendment makes reference to the worker otherwise forming part of the conduct of the undertaking of the person. To unpack that, from a drafting point of view, is so problematic. I believe that this amendment needs to be looked at appropriately. Professor Allan Fels ought to look at some of the issues raised here, and this has to be deferred to another time. There already is quite a robust framework of protections in this legislation. Let's make sure that the perfect is not the enemy of the good. I am concerned that the impact on small businesses and on subcontractors could be devastating. I believe that this will be revisited down the track.

We cannot support this amendment, but I would like to get some indication from the minister, further to discussions that have occurred in the chamber in the course of this debate, that there will be an independent review of these clauses and the sorts of issues, in terms of reverse onus, as to the effectiveness the bill. The minister has said that the coercive powers don't go far enough and that they should be all-encompassing. For that issue and for all the issues that have been fairly raised in the bill, can the minister indicate that there will be an independent review once this bill has been in operation for 12 months so that we can then have a thorough, comprehensive independent review? Will she undertake to consult with the opposition and the crossbenches as to the scope of that review so that we can have some idea that it will be something that is robust and well-regarded?

Michaelia Cash (WA, Liberal Party, Minister for Women) Share this | Link to this | Hansard source

I thank Senator Xenophon for his comments and for not supporting the opposition's amendment. Yes, the government had always intended to undertake a review. I'm more than happy to commit to you that we will undertake a review within 12 months in relation to this. Consultation is always an important part of any review process.

Murray Watt (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

I would also like to speak on behalf of the opposition in support of these amendments. Last sitting I spoke on the substantive bill itself and said that I welcomed many aspects of this bill for finally delivering some increased protection to vulnerable workers, particularly those employed through franchise arrangements. I made the point in the last sitting that I did not think that this bill went anywhere near far enough. There's no better example of the need for this bill to be pushed further than the regulation of labour hire firms, particularly if we're talking about underpayments by those labour hire firms. I've spoken about the issue of labour hire and the problems it's causing in Queensland workplaces on a number of occasions in the chamber.

My experience with labour hire firms goes back further than the brief time that I've been a member of the Senate. As a solicitor many years ago, acting for employees in employment disputes, I well remember—this is going back 15 years or so, so this has been a problem for a long time—the problems that people who were employed through labour hire firms had in pinning down exactly who their employer was so. For instance, if they were unfairly dismissed, who was the entity that they were supposed to take legal action against? They'd try to take on the host employer, who had engaged a labour hire firm who then engaged them, and, of course, that employers would say, 'It's not us; we're not the employer. It's the labour hire firm.' You would then try to sue the labour hire firm, and they'd say, 'No, you're not an employee of ours; it's the host employer.' It was very difficult for employees of labour hire firms to determine who they should be taking legal action against, even when they had a really clear-cut case of being underpaid or sacked unfairly, or some other course of action that they needed compensation for.

Even in the fairly brief time that I've been a senator I have been struck by the widespread use of labour hire right across our economy and the incredible abuses that many people experience through labour hire. I should put on the record that I absolutely accept that there is a place for labour hire arrangements within the economy and within workplaces. In particular I can understand that for seasonal work, where there are peaks and troughs in workload, there are going to be times when employers need to turn to labour hire agencies or other short-term mechanisms to gain workers, because they're not going to have work for people there in six, nine or 12 months time. I also acknowledge that there are many labour hire firms that do follow employment laws, employ people fairly, pay the correct rates and respect the legal conditions that people are entitled to. But unfortunately—at least in Queensland, where I spend most of my time—we are seeing more and more instances of workers being absolutely screwed through labour hire arrangements which are designed explicitly to reduce people's pay and conditions, often below legal standards.

Currently, from what I can see, the area in Queensland where this is most rife is Central Queensland. We all know that the mining industry has gone through a downturn in recent years. When times were good and people were earning good money, employers had to turn to any mechanism they could to find workers to fill skills shortages. They were bringing in overseas labour and taking people through labour hire, as well as through direct employment. But, in the last few years, since the industry has been through a downturn, unfortunately a lot of employers, a lot of the big mining companies, are continuing to use those arrangements not simply to gain workers they can't gain through direct employment but to try to force down the wages and conditions of the people who work on their sites.

As I've mentioned before in the chamber, over the winter break this year I spent some time in the Bowen Basin, one of Australia's largest coalmining regions. It's really disturbing to hear the stories of people who are being grossly exploited under labour hire arrangements. That is having an effect not only on them and their own families but also on their communities as a whole. I've seen examples, which I've mentioned here previously, of large mining companies retrenching well over a hundred workers on a certain day, allegedly because they don't have enough work to maintain these people on a permanent basis, but then, the very same day, advertising in the local papers for people to come and work on their site, on labour hire, on far worse terms and conditions than those offered to their permanent workers. It's not as if there's a shortage of work that is leading to these people being made redundant. Clearly, labour hire is being used by these big mining companies to cut their wages bill, at the expense of the people who come and work on their site.

Again, I've personally come into contact with many people who have been engaged via labour hire not just for weeks or months but for years. They turn up to work as an employee of a labour hire company, not always getting the right wages and conditions, sometimes getting worse than what they're legally entitled to, but too scared to complain about it for fear of losing their job. Although they might not like working via labour hire arrangements and might not be getting the legal rates and conditions, it's better than nothing. They're forced to accept these conditions, even if they are below legal standards, simply to hang on to the job that they have.

Senator Cameron was talking about how some of the worst examples of labour hire abuses we've seen have been in the meat industry, and about one particular company, Baiada. Unfortunately the worst example there, again, happened in my home state, in Mareeba, in North Queensland. People were brought in from overseas on 457 or 417 visas to work. They were engaged by labour hire firms and were paid well below legal rates and conditions. For the privilege, they were shacked up in terrible, overcrowded accommodation and they turned up to work every day to find themselves even more exploited. Fortunately the meat industry union was able to take legal action and to get some redress for these people. But these kinds of things are going on over and over again.

There are a range of media organisations, most particularly the ABC, with its Four Corners program, and the Fairfax press, who have done a fantastic job in exposing these abuses. Again, we're seeing these abuses in many farming workplaces—in many workplaces across the board—often combined with the exploitation of overseas labour. Again, people are brought in with the promise of earning good money in Australian workplaces, only to find themselves hired by labour hire firms and underpaid. They are scared not only of losing their job if they complain but also of being deported back to their home country. And that's not an idle threat. There have been many instances in which people who did stand up against the labour hire firm that had hired them were actually deported. You only need to do that once or twice before people hear the message and everyone else in the workplace goes silent.

But it's not happening just in private sector workplaces, and it is not happening just in Queensland. This is a cancer that is eating into workplaces right across the country, and into the public sector as well. Just recently I met with members of the CPSU, who were talking about the expanding reach of labour hire within the Commonwealth public sector. Agencies like the tax office and Centrelink are increasingly turning to labour hire to put people on. Again, it comes with a reduction in terms and conditions. Most recently, at the spillover day that we had for the Legal and Constitutional Affairs Legislation Committee's estimates hearing, we had extraordinary evidence from the Commonwealth Director of Public Prosecutions, who said that in order to meet staffing targets that had been imposed on them by the federal government they had to—rather than employing people directly, because they could only employ a certain number of people that way—meet their additional needs by putting people on via labour hire. That way, people weren't counted as being on their payroll. That was a way of making sure that they had the extra people they needed without those people actually going on the books and being counted as direct employees.

But the sting in the tail, as it always is with labour hire, was that the people who were being engaged by labour hire, working right next to direct employees of the Commonwealth DPP, were actually earning less than the direct employees. The real kicker is that it's actually costing the Commonwealth DPP more, because they've got to pay a fee to the labour hire firms to engage people. So it's no surprise that we see wages stagnating in this country. It's no surprise that people in their workplaces, no matter where they are, feel more insecure than they ever have, when the government's own employment practices are such that employers are turning more and more to labour hire in an attempt to screw down their wages bill and keep their own employees working in more insecure conditions but at greater cost to the taxpayer.

Now, in terms of these amendments themselves, Senator Cameron has already mentioned that it's not just Labor and not just trade unions who are saying that there is a real issue in the labour hire sector and that making host employers liable for underpayments should go beyond franchising arrangements. The Franchise Council itself, in its own submissions in evidence to the inquiry on this bill, made the point that exploitation of vulnerable workers is not something that's happening only in the franchising sector. Certainly some of the worst examples we've seen are in that sector, but this is a problem that is economy wide. It is particularly a problem in the labour hire sector. That's why we think these amendments should go far beyond simply applying to employment arrangements in the franchising sector and should pick up labour hire as well. Minister Cash, in her response to some comments earlier, mounted a pretty strange scare campaign—a strange one even coming from her. She had us all worried that—

Cory Bernardi (SA, Australian Conservatives) Share this | Link to this | Hansard source

Not as strange as your videos!

Murray Watt (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

They're pretty good, too. I'm glad you like my video, Senator Bernardi! Senator Cash tried to conjure up this scare campaign involving a couple—she didn't say if they were a same-sex couple or a heterosexual couple—who were doing a kitchen renovation and might be liable for underpayments made to workers in their kitchen renovation who were engaged through labour hire. Listening to her talk about this I was worried that before long we'd be seeing inspectors run on to The Block or Renovation Rescue, one of those programs, to bail up people who might be underpaying workers on their sites. We all know that's not what this bill is about. This bill is about tackling genuine labour hire arrangements where people are getting screwed and getting paid less than what they are owed. It's not about, as Senator Cash would have you think, the courier who drops stuff off to a small business. It's not about the person who brings in replacement cartridges for the printer, or the person who brings in the new water to go in the water cooler. It's not about those people. It is not about the small business being held liable for underpayments they might make. It's about businesses, whether they be large or small, being held accountable when they enter into a contract with a labour hire firm to employ people—when they try and pass on that responsibility for employment and payment to someone else—but then don't want to have any responsibility whatsoever for making sure the people who are employed are paid properly.

These amendments will go some way to making even the balance between people who are employed via labour hire firms and the host employer who actually has them working on their site. It won't go all the way, and Labor have put forward a number of other proposals which we'd like the government to take up to try to impose greater regulation on labour hire firms that are doing the wrong thing. We've now seen at least two state governments, the Queensland government and the Victorian government, require licensing of labour hire firms to make sure that they meet the legal standards, and we would very much like to see the government take up that proposal as well. In the meantime, the very least that it can do, and the very least that crossbenchers can do, is to support these amendments from Labor to make sure that people who are working via labour hire arrangements actually get paid what they're owed.

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

I want to take up the issue that has just been ventilated, and that is the scare campaign that Senator Cash is trying to run in relation to these amendments. I find it unbelievable that we can have a position where a minister can get up on a bill dealing with vulnerable workers and say that we are now going to have mum-and-dad renovators—young couples doing renovations—being subjected to a problem that's going to destroy the economy. I mean, this is just taking things far too far. This is about vulnerable workers. This is about this government not being prepared to take the next logical step, and that is to ensure that vulnerable workers are protected, whether they are working for a labour hire company, a franchisee or a franchisor. That's what this is about. There is absolutely no logic to what the minister has just been going on about, some scare campaign about home renovators. It just beggars belief.

We have seen some of the worst examples of workers being ripped off by labour hire companies working under the auspices of a farmer who knows that there are problems but simply turns a blind eye to those overseas workers being exploited—by the farmer or the labour hire company. This is about ensuring that everyone that's exploited gets a fair go. If it's good enough to ensure that there's no exploitation for workers in the franchising sector, it's good enough to ensure that the same principles apply across the economy for workers in other sectors of endeavour across this country.

I just noticed that the case involving Bruce Billson, the former cabinet minister, has been put to the committee in the lower house to look at whether he breached parliamentary standards by accepting funding from the Franchise Council while he was still a member of the government. I think there's a complete disregard from those opposite for doing the right thing when you can have a former cabinet minister accepting a job and being paid by the Franchise Council of Australia while he was still a member of parliament. That's what we've seen, and we see now that the Privileges Committee in the House of Representatives are having a look at that. Is it any wonder that Senator Cash is in there opposing aspects of our amendments that go to protecting vulnerable workers in this country? Is it any wonder, when her former cabinet colleagues are out there trying to stop workers who are in vulnerable situations from being looked after by appropriate regulations and appropriate laws in this country?

You never hear Senator Cash getting up and running an argument on behalf of exploited workers. It's always the fault of the trade union movement. It's always the workers' fault; it's never the fault of business. It's never the fault of those businesses that are handing millions and millions of dollars over to the coalition for their election campaigns. It's never their fault; it's always the worker. If you are unemployed, it's your fault you haven't got a job, even though there's no jobs out there for many unemployed workers. We know the situation with this mob: they are absolutely opposed to having decency in the legislative processes in this country.

It was only when it became clear that the 7-Eleven and Caltex situations could not be tolerated that they moved to do anything about them. They had four years to bring legislation to this parliament to try to prevent vulnerable workers being ripped off, but did they do anything? No, they didn't. They didn't do it, and it was Four Cornersit was the media—that was out there exposing workers being ripped off egregiously by employers in this country. It was only then that they were forced to take a stand and were forced to take anything to the parliament. They do not care, in my view, about looking after workers' rights in this country. That's why we had Senator Abetz, when he was the opposition—

Eric Abetz (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Thank you for the recognition.

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

Welcome, Senator Abetz. Senator Cash is following in the footsteps of Senator Abetz. She would probably have been better leaving Senator Abetz there, because Senator Abetz is known for his oppositional views on unions and workers. We now have Senator Cash following in exactly that same mould, trying at every opportunity to attack the trade union movement and at every opportunity to attack workers' rights. When the Fair Work Commission takes away penalty rates, what do they do? They just stay mum. In fact, they go out and they support—

Eric Abetz (Tasmania, Liberal Party) Share this | Link to this | Hansard source

What do you do when Bill Shorten does it? What do you do when Bill Shorten takes away penalty rates?

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

Senator Abetz is getting quite carried away now. Senator Abetz, I don't mind you yelling at me. You've done enough yelling at your colleagues since you got knocked off. That's okay. You can yell at me all you like. You can take all your bile and all your spite out on me; it won't worry me. It will not worry me one bit. Maybe one day you'll stand up here and support vulnerable workers. Maybe one day you'll stand up here and actually support workers' rights in this country, because Senator Cash won't do it. She's following in your footsteps to attack vulnerable workers in this country, to make sure vulnerable workers don't get protections that they should get—even when you've got a former cabinet minister now being referred to the Privileges Committee in the House of Representatives because he was taking money from the Franchise Council while he was still a member of parliament. It just shows you what a rabble this government is.

Progress reported.