Paul Fletcher (Bradfield, Liberal Party, Shadow Minister for Government Services and the Digital Economy) Share this | Hansard source

I rise to speak on the Fair Work Amendment (Paid Family and Domestic Violence Leave) Bill 2022. This bill provides an entitlement to 10 days paid family and domestic violence leave in a 12-month period for full-time, part-time and casual employees. The bill builds on the measures put in place by the former coalition government following the independent Fair Work Commission's 2018 decision to grant five days of unpaid family and domestic violence leave to employees covered by a modern award. The Fair Work Commission made its decision after carefully considering extensive evidence and submissions from unions, employers and other interested parties. The Fair Work Commission's proposal at the time meant that the approximately two million Australians on awards would be eligible to receive five days of unpaid family and domestic violence leave. This earlier Fair Work Commission decision would have created a complexity for Australian businesses, particularly small and medium businesses, that had collective or individual agreements as well as award-reliant employees. This complexity would have seen workers who were on an award entitled to five days unpaid family and domestic violence leave, while a worker in the same organisation who was on a collective agreement might have been unable to access such entitlement unless it was provided in their agreement.

Recognising this, in December 2018 the former coalition government passed historic legislation enshrining five days unpaid family and domestic violence leave in the National Employment Standards, which set out 11 minimum employment entitlements to ensure a consistency of entitlements for employees. The former coalition government's reforms matched the decision of the Fair Work Commission for award-reliant employees. This new entitlement ensured, as far as possible, consistency in entitlements for employees in the national system and reduced complexity for businesses. Reducing this complexity was welcomed by, and has been beneficial for, businesses as it reduced the time businesses spend having to ensure the appropriate allocation of leave. Legislating in the National Employment Standards a right to unpaid family and domestic violence leave was an important step and was part of the various measures put in place by the former coalition government to support family and domestic violence victims and to address this issue.

The coalition has a strong and proud record of investing in measures to support women's safety. From 2013 to 2022, the coalition invested over $2 billion in women's safety, including a record $1.1 billion, under the 2021-22 budget, to prevent and respond to violence against women and their children. Our investment in women's safety was a key part of a $3.4 billion package of new measures to improve outcomes for women in the 2021-22 budget, along with investment in economic security, leadership, health and wellbeing. Key measures in the 2021-22 budget included up to $260 million for a two-year national partnership with states and territories to boost local frontline services and trial new initiatives during the transition to the next national plan; $164.8 million over two years to establish escaping violence payments, which provide up to $1,500 in cash and a further $3,500 in kind for goods or direct payment of bonds, school fees or other items; $416.2 million to build on existing support in the family law system, including through family advocacy and support services, children's contact services and increased legal assistance funding; $129 million to ensure that women can access support for a range of legal issues, including much-needed family law and family violence assistance; $101.4 million to enhance existing, and establish new, children's contact services, which provide a safe, reliable and neutral place for supervised contact and facilitated changeovers to minimise conflict between parents and reduce safety risks for families; $85 million to expand the geographic coverage of the Family Advocacy and Support Service, commencing 2022-23, to ensure that the service is accessible to all family law litigants who need it and is responsive to their needs; and $17.1 million to increase access to legal and mental health support services to women across Australia who have experienced, or are experiencing, family violence.

The coalition government built on these measures in the 2022-23 budget, announcing measures including $87.9 million over four years to expand the important Lighthouse Project and improve culturally responsive support for First Nations Australians; an additional $52.4 million over four years for the Family Violence and Cross-Examination of Parties Scheme, which protects victims-survivors of family violence from being directly cross-examined by their perpetrators; and $14.8 million over five years to support a nationally coordinated approach to education and training on family, domestic and sexual violence for community frontline workers, health professionals and the family law and criminal justice sector.

I now turn to the 2022 Fair Work Commission decision on paid domestic and family violence leave. In its March 2018 family and domestic violence leave decision, the Fair Work Commission decided to vary modern awards to provide employees experiencing family and domestic violence with an entitlement to five days unpaid leave. It also proposed to revisit the question of whether provision should be made for paid family and domestic violence leave in June 2021. In May 2022, the Fair Work Commission handed down its decision recommending 10 days paid family and domestic violence leave for award employees.

The question of what workplace leave should be available to victims of family and domestic violence was considered in extensive detail by the independent Fair Work Commission in its 2021 inquiry. These considerations included whether leave should be paid, how much leave was appropriate, how it should accrue, the rate at which it should be paid and who should have access to leave. The Fair Work Commission reached its decision after consideration of evidence, and the decision was based on the input and advocacy of a range of unions and employer representative bodies. Submissions were made and hearings were conducted for every single step of the process. In its May 2022 decision the Fair Work Commission recommended:

1. Full time employees and, on a pro-rata basis part-time employees, should be entitled to 10 days paid FDV leave per year.

2. The entitlement to 10 days paid FDV leave per year should accrue progressively across the year in the same way as for personal/carer's leave accrues under the NES … The entitlement should accumulate from year to year, but subject to a 'cap' whereby the total accrual does not exceed 10 days at any given time.

3. The FDV leave entitlement should be accessible in advance of an entitlement to such leave accruing, by agreement between an employer and employee.

4. The FDV leave entitlement should operate on the basis that it is paid at the employee's 'base rate of pay' as defined in s.16 of the FW Act.

5. The definition of 'family and domestic violence' should be in the same terms as the definition in s.106B(2) of the FW Act (and not extend to FDV perpetrated by a member of the employee's household who is not related to the employee).

6. In all other relevant respects the model FDV leave term should reflect the terms of s.106B.

That is 106B of the act, the current unpaid family and domestic violence leave provisions.

Consistent with the decision of the former coalition government in relation to unpaid family and domestic violence leave, this entitlement should be enshrined in the National Employment Standards to ensure as far as possible consistency in entitlements for employees in the national system and to reduce complexity for business. The coalition respects the integrity of the fair and balanced process the Fair Work Commission undertook in making its decision, taking into consideration all the evidence before it.

The bill before the House goes beyond the model recommended by the independent Fair Work Commission and implements many of the claims made by the ACTU during the hearing into the matter. There is a need to recognise that many business stakeholders, whilst supporting the Fair Work Commission's decision and the enshrining of that model in the National Employment Standards, have raised concerns in relation to areas of the government's bill that differ from the Fair Work Commission model.

The government's legislation goes further than the model proposed by the Fair Work Commission in its decision in the following ways. Firstly, it provides 10 days of paid family and domestic violence leave in a 12-month period for casual employees. Secondly, in relation to the accrual, employees would gain 10 days of paid family and domestic violence leave from the commencement date of 1 February 2023 rather than have it accrue like other leave entitlements. Thirdly, it provides for employees to access paid family and domestic violence leave at their full rate of pay for the hours that they would have worked had they not taken the leave. Fourthly, it extends the definition of 'family and domestic violence' to include conduct of a current or former intimate partner of an employee or a member of an employee's household. Fifthly, it extends the full paid entitlement to all employees when the International Labour Organization convention No. 190, concerning violence and harassment, comes into force for Australia.

I now turn to what the Fair Work Commission found in relation to these particular issues following its extensive research and consultation. The Fair Work Commission considered all the issues proposed in the bill, many of which were put forward by the ACTU. In reaching its decision, the Fair Work Commission was clear that it did not support the breadth of the ACTU proposals and found against a number of them. The full bench stated:

Compared to the ACTU claim, the provisional model term provides better alignment with existing NES entitlements and will have less impact on business in terms of employment costs and the regulatory burden.

In relation to the accrual of leave, the Fair Work Commission said:

… the entitlement to 10 days' paid FDV leave per year should accrue progressively during a year of service - in the same way as for personal/carer's leave under the NES … The entitlement should accumulate from year to year, but subject to a 'cap' whereby the total accrual available does not exceed 10 days at any given time. This will have the effect of operating as a phasing-in mechanism for the entitlement for the first 12 months after the entitlement takes effect.

In relation to the extension of 10 days of paid family and domestic violence leave in a 12-month period for casual employees, the Fair Work Commission did not recommend this as the National Employment Standards do not recommend paid leave to casuals. The Fair Work Commission also said:

… the FW Act provides no precedent, nor a model for a workable scheme, for the provision of paid leave to casual employees.

There are significant operational difficulties in extending paid family and domestic violence leave to casuals, as noted by the Fair Work Commission and acknowledged by the ACTU during the hearings, with the ACTU saying:

The ACTU accepts that there are some operational challenges associated with extending paid FDV leave to casuals, including in relation to those casual employees whose hours of work are genuinely uncertain …

What the Fair Work Commission said in relation to casuals is extremely important to note. This is because the government is fundamentally changing the way the Fair Work Act deals with paid leave and casual employees. As the Fair Work Commission said, the Fair Work Act provides no precedent nor a model for a workable scheme for the provision of paid leave of any type to casual employees. Casual employees are often paid a casual loading to compensate them for the lack of entitlements they receive such as paid holiday and sick leave. Casual loading is extra money paid to casual workers over and above the normal hourly rate that full-timers or part-timers get paid in the same job. Even the ACTU acknowledged that there are significant operational difficulties in extending paid family and domestic violence leave to casuals, as noted by the Fair Work Commission.

In relation to the rate of pay, the Fair Work Commission recommended the calculation of the payment should be based upon the employee's base rate of pay, not their full rate of pay, in the same fashion that the National Employment Standards pay leave entitlement operates. The Fair Work Commission also contended that it would be overly disruptive to the integrity of the safety net if it were to depart from the way all other paid leave entitlements operate, which the National Employment Standards provide. The Fair Work Commission also noted that the Fair Work Act applies this rationale even to needs based leave entitlement such as personal or carer's leave.

Business and employer stakeholders in the main limited their support to the terms set out in the Fair Work Commission's model for paid domestic violence leave. They agreed to the enshrining of the 10 days paid family and domestic violence leave in the National Employment Standards, to ensure a consistency of entitlements for employees. They have, however, raised significant concerns with the government's departure from the Fair Work Commission's proposed model, which, I've indicated, goes much further than the model.

I now turn to the positions as advocated by the major employer groups. Ai Group states:

The proposed legislation departs from the carefully considered approach proposed by the Commission in various ways that undermine its workability and reasonableness. It instead adopts elements similar to the ACTU proposal that the Commission had rejected.

The Bill should be amended to reflect the sensible and considered views of the Commission.

Unlike the approach adopted in the proposed legislation, the Commission envisaged that the new 10-day entitlement should apply to permanent employees rather than casuals; be calculated on a pro-rata basis for part-time workers; and should accrue progressively during an employee's first year of employment unless an employer agreed to grant it in advance.

The Commission also proposed that employees should be paid their base rate of pay when accessing the leave. This is the approach taken when an employee accesses personal/carer's leave. The Bill would instead require employers to pay employees amounts including penalty rates, overtime rates and various allowances when they access the leave.

This Bill will be much more costly for employers than the approach proposed by the Commission and there are significant questions about how the rate of pay that must be provided to an employee could even be calculated in practice.

While the Australian Chamber of Commerce and Industry supports the inclusion of paid family and domestic violence leave in the National Employment Standards, it raised similar concerns to Ai Group. As a party to the commission's 2021 review, ACCI advocated for family and domestic violence leave to accrue progressively but not accumulate from year to year. ACCI submitted that providing paid leave upfront will have practical consequences, particularly for small and medium businesses with limited cashflow and cash reserves. The Fair Work Commission itself, at paragraph 842 of the decision, agreed:

We are persuaded by the submissions of ACCI and Ai Group that the paid FDV leave entitlement should not accrue 'upfront' in the way proposed by the ACTU because of the potential cost consequences this will produce upon the commencement of the entitlement and in respect of new employees. In particular, we accept, as ACCI contends, that the provision of paid FDV leave 'upfront' will adversely affect small and medium-sized businesses with limited cashflow or cash reserves.

ACCI also opposed the ACTU's claim for family and domestic violence leave to be paid at an employee's ordinary rate of pay, noting that annual and personal carer's leave are calculated at an employee's base rate of pay. Again I note that the Fair Work Commission agreed with these concerns, stating at paragraph 860 of the decision:

However, we consider that it would be overly disruptive to the integrity of the safety net to establish, on an across-the-board basis, a new paid leave entitlement which operates on a radically different basis to the paid leave entitlements for which the NES currently provides.

Finally, ACCI raised concerns regarding the extension of paid family and domestic violence leave to casual employees. This is a position that the independent Fair Work Commission agreed with in its decision.

The Council of Small Business Organisations of Australia in its submission urged the government to consider the needs of all micro and small businesses as it introduces the 10 days of paid family and domestic violence leave into the National Employment Standards. They asked the government to recognise that the circumstances of family and domestic and the varied nature of small businesses make regulation in this area complex. Many small businesses do not possess the requisite knowledge, resources and expertise to provide support to their workers at the very time when they are reaching out for help. We need to be mindful of how small business owners will work through the compliance required in these situations and how they will be provided with appropriate information and support. COSBOA says that this support should be accompanied by funding to support trusted advisers and trusted organisations, the pathways small business owners already turn to for help. COSBOA also has concerns that sole traders and microbusiness owners have not been considered, saying:

There are over 700,000 sole proprietors in Australia. If they themselves are a victim of domestic violence, under the current bill before parliament they have been forgotten. We need to fix that.

…

This is a crucial consideration for government; how do we support women who are sole traders or managing a small business?  How do they access support, particularly in sensitive situations where an abuser may have control or access to the business?

I now turn to the Senate committee inquiry and note that a number of very sensible observations were made by coalition senators on the Senate Education and Employment Legislation Committee in the report tabled on 1 September 2022. Coalition senators noted that the proposed government legislation has gone beyond the provisional model of the Fair Work Commission decision and raised in particular how the additional requirements will affect businesses, particularly small and family businesses. At paragraphs 1.27 and 1.28 of their additional comments coalition senators noted the complexity of introducing paid family and domestic violence leave for businesses, particularly the small and medium business sector, and they advised:

Given the Government's legislation departs significantly from the decision of the FWC in relation to FDVL, the Government needs to urgently clarify how the additional requirements will affect businesses, particularly small and family business.

At paragraph 1.25 of their additional comments coalition senators noted that the proposed legislation is also silent on the reporting obligations of employers:

… this ambiguity only creates further uncertainty and guess work for small business operators, who are already experiencing a challenging economic and labour shortage environment. In this regard, sole traders and small business owners may be in a family-owned small business or partnership, where one partner is the FDV perpetrator, and the other is the victim. According to COSBOA … 35 per cent of business owners were female and accessing paid FDVL will not assist them if sole-trader or micro businessperson is the primary income maker.

Coalition senators also noted at paragraph 1.26 of their additional comments concern around the ambiguity of the new provision with respect to perpetrators of family and domestic violence accessing the new entitlement:

During the committee hearings, department officials indicated that the provision for the entitlement was for those ‘experiencing’ FDV, nevertheless, deliberately vague, or not, the government must clarify its intent within the actual legislation regarding perpetrators of FDV.

Coalition senators in their additional comments made the following recommendations:

The coalition senators also urged the government:

… to continue to build on the work of the former Coalition government in implementing strategies to prevent FDV and support victim survivors of FDV—

And called on the government:

… to do more to limit the impacts this legislation will have on sole traders and small businesses.

I conclude by observing that the coalition notes the rationale provided by the Fair Work Commission in handing down its model for 10 days paid family and domestic violence leave.

The coalition acknowledges the concerns raised by business and employers, in relation to the provisions of the bill that go beyond the Fair Work Commission's recommended model. Notwithstanding the research and consultation carried out by the Fair Work Commission, the government has opted to legislate a scheme for paid family and domestic violence leave which is far broader and, potentially, more costly than the Fair Work Commission and industry previously contemplated. These issues must be worked through with employers, and, in particular, small-business employers, prior to the commencement of the operation of this entitlement.

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