Kate Chaney (Curtin, Independent) Share this | Hansard source

Wages have represented a declining share of GDP since the 1970s. With current cost-of-living issues, it's really important that this changes so that improvements in productivity can be shared fairly between workers and business owners. This bill, the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill, aims to get wages moving, and there are a lot of things to like in it, but some aspects of it raise serious concerns. The good parts include the better off overall test change, gender equity improvements and the focus on low-paid workers in the supported bargaining stream.

The changes to the better off overall test affirms its original intention, and confirms that the test is a global assessment rather than a line-by-line review and comparison of conditions. This is a welcome change which should make it easier for businesses and their employees to come to win-win agreements without reference to theoretical possibilities and arcane provisions.

The gender equity provisions of the bill are welcome. The inclusion of gender equity in the objects clause will put this issue clearly on the agenda. Changes to pay transparency will help make the gender pay gap more visible, and the inclusion of sexual harassment and discrimination issues in the Fair Work Commission will ensure that employees do not have to pursue justice in multiple jurisdictions. Improvements in work flexibility will ensure that women with competing responsibilities can find fair outcomes.

Wages in low-paid, often feminised, sectors need to increase, and, having worked in community services, I'm aware that a different approach is required when the funder is different to the employer, to ensure that government can fund increases in wages. I believe there's a case to be made for increasing access to collective bargaining options in the supported bargaining stream, although simplifying and lifting the awards would be preferable.

So there are good parts of this omnibus bill, but, given the very broad scope of changes made, I have serious concerns about some parts of it which ultimately will prevent me from supporting it unless it's split. Any changes should be guided by principles of fairness, simplicity, flexibility and productivity. I'm not convinced that these principles underpin the proposed changes.

I have four major concerns. My first concern is that I don't think it does anything to address the significant complexity in our industrial relations system. In fact, it may well make it worse. No doubt there are egregious breaches of award conditions, but there are also a lot of examples of awards being so complicated that employers, especially small businesses, inadvertently underpay staff or need to engage specialists to determine whether they're paying correctly, or both. Even large companies with significant human resources teams frequently find they've breached some unknown or complicated term of an award. Adding three separate additional streams of multi-employer bargaining on top of the award system, each with different processes and requirements, is likely to result in delays, uncertainty and a huge increase in the workload of the Fair Work Commission.

The complexity also raises the potential for the system to be gamed by employee representatives or IR professionals motivated by maintaining their relevance. In such a complex regulatory environment, the main winners are the specialists—lawyers, unions, and IR professionals—who'll have a steady stream of work ahead of them. Neither businesses nor workers benefit from complexity. This bill does nothing to simplify our modern award system. Efforts have been made in recent years to rationalise the number of awards, but each award is still ridiculously complicated. There's been no political impetus to tweak the industrial relations framework so it's more functional. We've seen over the years that ideological overhaul wins out over pragmatic iteration.

My second concern is about the potential for businesses to be dragged into the single-interest stream of multi-employer bargaining. The uncertainty of the common interest test raises the very real possibility of competing companies being brought under one bargain. Businesses in Curtin and across the country, especially small businesses, are worried about how this will affect them. Like so many other parts of our historically complex industrial relations system, this would have unintended consequences that go against the aim of the legislation. The government says the aim of this is to prevent a race to the bottom. But it may have the opposite effect and create the lowest-common-denominator approach to agreements, dampening productivity and wages.

It will require the Fair Work Commission to understand every business that comes before it and make an assessment of whether there is a common interest. The Fair Work Commission may consider geographic location, regulatory regime and the nature of enterprises in considering whether there's a common interest. This could result in multiple parts of a supply chain, all competitors, being forced to bargain together. Employers could also be dragged into pre-existing multi-employer bargains and, once in the system, it's challenging to get out of it. No doubt there are some businesses that would rather be part of a multi-employer bargain than have to navigate the awards and enterprise agreements system on their own. But this could easily be addressed through an opt-in approach, rather than a compulsory approach.

My third concern is that the proposed framework greatly increases reliance on the Fair Work Commission and embeds unions in the system, with approval of an employee representative required before an agreement can go to a vote for employees. Unions have played a very important part in protecting workers over the centuries, but undoubtedly have also played a part in our IR system being so complex. The Fair Work Commission is a quasi-judicial body, and its decisions can be unpredictable. This is driven by the lack of judicial training of members, the huge discretion given to the Fair Work Commission, which will increase significantly under this bill, and appointments coming from both ideological sides. More unpredictability is not what we need in our IR system.

My last concern is about the speed with which this has gone through this House. We do need to get wages moving, but, in such a notoriously complex area of law, it would make sense to be cautious. Changes made now are unlikely to be reviewed or amended for some time. Treating the bill as urgent and curtailing debate is only part of the problem. Unlike the Climate Change Bill, there was no exposure draft shared, and, unlike the National Anti-Corruption Commission Bill, there has not been extensive consultation and discussion prior to the legislation being introduced. This makes it difficult for members of parliament and stakeholders alike to provide input to avoid unintended consequences. I've not had time to consult widely in my electorate on this matter. It takes time for businesses, especially small businesses, to understand what's proposed before forming a view. With further time and improvements to the bill, I may have come to the conclusion that this was the right move to get wages moving. But this can't be done thoroughly in two weeks, and the bill contains too much complexity for me to be comfortable with rushing it through. The government says that the intention is that single-employer bargains will remain the primary mechanism for wage setting. Only time will tell if this is the case.

I support the amendments by the member for Dickson to give the parliament three months to review these changes and to split the bill so that the significant matters covered can be addressed and debated separately rather than in an omnibus bill. I support the amendment proposed by the member for Wentworth calling for an inquiry into the more controversial parts of the bill. And I support the amendment proposed by the member for Mayo changing the definition of 'small business' from 15 to 100 employees.

The government has indicated that it will propose a number of amendments to the bill, which make some effort to take into account unintended consequences identified by a range of stakeholders in this short time frame. The scale and range of these amendments is an indication of the broad scope of issues being addressed and the complexity of the regulatory regime being introduced. Given the speed with which they have been drafted and the lack of consultation and testing of these amendments, I have concerns about potential further unintended consequences. I reiterate that I'm supportive of the intended goal of this bill—to get wages moving—in these difficult economic conditions. But its complexity and far-reaching consequences for business mean that I won't be supporting it in its current form.

Given that this bill is likely to pass through this House this week, I urge the Senate to do its best to improve or split the legislation, and I urge the government to consider a fulsome review in 12 months so that this does not end up creating more unforeseen consequences that land in the too-hard basket. Thank you.

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