Lisa Chesters (Bendigo, Australian Labor Party) Share this | Link to this | Hansard source

I rise today to alert the House and raise a grievance in relation to a growing trend in Australia where employers are applying to the Fair Work Commission to terminate enterprise agreements. They are doing this to reduce wages and conditions for hundreds of workers across Australia. This is a growing trend, an alarming trend, and flies in the face of the government's rhetoric that they support and want to see high wages and wages growth.

The peak union body, the ACTU, is calling on the government to act. Communities are calling on the government to act, as they see workers—particularly in a lot of our regional areas—suffer from cruel cuts made by companies. These companies are avoiding their obligation and manipulating and using loopholes within the Fair Work Act to cut the wages and conditions of hundreds of employees. In some cases the wage cuts that they are trying to implement are 65 per cent of the original pay the workers were receiving with their collective agreement.

We are seeing these companies apply to terminate agreements and force workers on these agreements back to the award, thus cutting wages and pushing them closer to the safety net. This undermines collective enterprise bargaining results which workers and employers have negotiated successfully for the past 20 years. It is something that is happening at the moment. Whilst it is not new, there has been a spike in companies seeking to terminate agreements under the Fair Work Act.

In July the Fair Work Commission full bench upheld a termination of the Griffin Coal maintenance agreement and rejected the appeal from the workers which claimed that they faced a 43 per cent pay cut—a 43 per cent pay cut to workers in the small regional town of Collie. A Senate inquiry held in the town just a few weeks ago spoke to community members—people involved in the football club, the netball club and organisations—that said that these pay cuts have had an effect on their community. The termination of this agreement, like so many is a tactic that is being used by employers to undermine and cut the wages and conditions of workers, which has the knock-on effect of lowering regional living standards.

This case, which happened last year, is not an isolated incident. There is also the case which has happened up in Queensland with Rail where, again, the company applied to Fair Work to have a series of agreements terminated with the RTBU, forcing those workers to negotiate a much lower rate of pay or be forced back to the award. It is a tactic because the company basically says to the employees in bargaining: 'Agree to our cuts or we are going to force you back to the award.' This whole entire tactic and process is undermining collective bargaining, which is a fundamental pillar of our Fair Work system.

The town of Collie is not alone. We also have had workers that have been affected in Central Queensland, in the small mining town of Middlemount, where their employer, Anglo American—whilst it has not registered to terminate the agreement—replaced a group of local workers with labour hire. Thus, when redundancies came round, it did not make the labour hire workers redundant; it made its own workforce redundant, effectively holding these workers to ransom by saying, 'Unless you agree to our pay cuts, unless you agree to our new agreement, we will replace you with labour hire workers.' These are two clear and obvious underminings of the Fair Work Act, the principles of the Fair Work Act and the principles of collective bargaining that the government would address if it was serious about addressing the rapid collapse in wages and wage growth.

I mentioned a freight operator. Eight hundred jobs were culled over three years, delivering up to $3 million in benefits back to the company—$300 million of wages and conditions were cut from workers' pay packets and from their entitlements. There has also been action by AGL who sought to increase pressure on workers over their stalled bargaining in Victoria's Loy Yang power station and coal mine by applying to terminate the existing agreement. They are doing this under section 225 of the Fair Work Act, which permits the making of applications to terminate an agreement after its nominal expiry date.

Perhaps most grievous is something that has happened just recently just north of my electorate, in the electorate of the member for Murray, at the Parmalat facility where, just five weeks after the agreement had expired, the company filed with Fair Work an application to terminate the agreement of 60 workers who work at the facility, many of them have worked there for decades. The company filed to terminate the agreement and force these workers back to the award. This application will be heard later this month, and what the company has been proposing in bargaining—at the moment, it has locked the workers out. It says it is going to close the facility on a permanent and ongoing basis, yet is still engaging in discussions. This is a heavy handed tactic by the company to bully the workers into copping pay cuts. The dispute there is also about labour hire.

Labour hire is a growing problem in Australian workplaces. Too many companies are starting to use labour hire firms to undercut collective agreement rates and directly-employed-agreement rates of pay. I have stood in this place a number of times and raised examples in my electorate of how big companies like Don KR have used overseas backpackers, paying them the award to undercut their directly employed local EBA workers. The one I have not mentioned which relates to Parmalat is what happened at the Parmalat facility in Bendigo. We do not have within that collective agreement a clause for restricting labour hire.

What happened there last year is that a number of labour hire local workers working for Manpower replaced by workers working for Programmed Skilled. But when they all went to apply for jobs with Programmed Skilled—these are the local workers—they were not given any hours. Instead, Programmed Skilled had hired Irish backpackers to do the work that these previous labour hire workers had done. That is 16 locals from Bendigo who lost work and were replaced with Irish backpackers. Only after a few months was it discovered that the foreign workers were paid $10 less per hour than their Aussie colleagues. Two months after, there was a major payroll dispute. Many, including those who had worked there for many years, were either underpaid or paid late. Penalty rates and overtime did not apply. It is an ongoing dispute at the site, and still to this day a lot of local workers have not been reinstated or received work. This is one of the reasons why the workers at Parmalat and Echuca have the right to be outraged. Just an hour down the road, where there is another Parmalat facility, we have seen local workers replaced with exploited overseas backpackers here in this country being ripped off by their labour hire company.

The government needs to act and take seriously a lot of the corporate avoidance that is going on in relation to the Fair Work Act. There are just too many agreements that are being terminated by Fair Work where workers are being bullied into copping pay cuts and a reduction in conditions. In fact, the Fair Work Commission terminated 416 agreements in the first three quarters of 2016. This is up from 275 in 2015 and 156 in 2014. Most of these agreements are in the construction and manufacturing sector, and 87 per cent of them cover fewer than 100 employees. As I have stated, in many of these agreements the wages and the jobs that they secure are for workers in regional areas. This is money that has not just been taken out of the pockets of these workers but has been taken out of the local economy. It is similar to how, if you cut penalty rates, you cut money that is in the local economy.

We need a government that takes these issues seriously, that works to close the loopholes that have been exposed in the Fair Work Act. If we truly want to have high wage growth in our society then the government must act and close these loopholes.