Allegra Spender (Wentworth, Independent) Share this | Hansard source

I rise to speak on the Fair Work Amendment (Protecting Penalty and Overtime Rates) Bill 2025. Penalty and overtime rates are a really important part of our employment system and were, in many cases, fought hard for over the course of Australia's history.

In my electorate, I have St Vincent's hospital, one area of the community where I often meet amazing shift workers who give up their weekends, their nights and their public holidays so that the rest of our community are safe and have help when we need them. Shift work is hard enough, but additionally these essential workers have to give up precious time they could otherwise be spending with friends, with family and out in the community. To them, penalty and overtime rates are crucial, and I recognise that. It is with those people in mind that I considered this bill.

This bill seeks to amend the Fair Work Act to insert a new section requiring the Fair Work Commission to ensure that, in making or varying modern awards, penalty rates are not reduced and that new or varied awards will not include terms that substitute penalty rates or overtime entitlements which reduce additional remuneration from penalty or overtime rates.

Now, no-one disputes the fact that people who work those shifts and those hours should receive fair compensation for doing so. I think it is disingenuous to characterise any questions on this bill in that way, but I do have serious reservations about the bill—principally, that it undermines the role of our independent Fair Work Commission, who we've entrusted to take politics out of such decisions. It will prevent reasonable options and menus in awards and, in some cases, hold back an overwhelming majority of workers from accepting better outcomes, and it adds additional complexity to our already complex award system. None of these objections seek to undermine the ability of workers to receive compensation for their tireless work, particularly those that work in unsociable hours.

My principal concern with this bill is the deliberate interference with the Fair Work Commission's powers to adjudicate such matters. I think it's really critical to identify that the protections this bill seeks to insert are already explicitly stated in the bill under section 134(1) of the Fair Work Act. These protections exist. This section states that, under the objectives of modern awards, they must consider the need to provide additional remuneration for employees working: overtime; unsociable, irregular or unpredictable hours; weekends or public holidays; and shifts. That is already enshrined in the current Fair Work Act, and the Fair Work Commission has to work under those objectives. In other words, the Fair Work Commission is already instructed by the act to consider the provisions the bill seeks to protect. Legislating an additional proposed section 135A represents a lack of faith in the independent Fair Work Commission to adjudicate this matter fairly on the guidance that already exists.

This brings me to my next concern. This bill is in direct response to a current application from one sector to the Fair Work Commission to have an adjustment to the award to allow workers to opt in to a higher, yet stable, salary over a lower base rate reliant on penalty rates. This bill is seeking to prevent workers having a choice about whether they get the current arrangements or whether they accept a different arrangement which they would prefer. I do understand that for some people the concern is that this just represents the thin end of the wedge and that, if we introduce a reasonably acceptable change, this will be start of the slippery slope to gradual degradation of penalty rates. I have heard that argument. But, respectfully, I disagree. I think that this shows an unreasonable lack of faith in the Fair Work Commission and an unreasonable lack of respect for individuals' right to choose what options suit them best.

As I mentioned before, section 134(1) of the Fair Work Act already gives the Fair Work Commission the responsibility to adjudicate on these matters. We want an industrial relations system that accommodates different circumstances and affords workers choice but pushes back when compromises go too far. I believe the current system strikes the appropriate balance, and I believe the bill undermines this important principle. It is entirely reasonable that some workers may want to choose a stable salary over relying on penalty rates, for example. The reasons for this might be as simple as wanting to be able to make applications for credit easier or making it simpler for them to save and budget their weekly wage. Allowing workers the option is exactly what our workplace system, I believe, should have more of rather than less of. In fact, the Productivity Commission's 2023 report Advancingprosperity, explicitly recommended 'introducing menus into industrial rewards' in recommendation 7.14.

The additional concern I have on this bill is the bar under which this could be judged—if a single worker would be worse off under a different penalty rate arrangement then it would not be possible for it to be offered. Again, I think we need to think of context. If the vast majority—and I am talking about the vast, vast majority—of workers are better off under a different arrangement but a very small handful would be worse off under that arrangement, in whose interest is it for that not to be at least offered as an option for people? That is the question I really am asking as the government puts forward this bill.

Finally, my final concern with the bill is simplicity. I understand that awards are simpler than they have been in the past. I have employed many people under awards and I have sat with family members and friends trying to work out what they should be paid, and I can I tell you that we have a long way to go to make awards simple for businesses to make sure they are doing the right thing and simple for people to make sure they're being paid correctly. This change, while modest, adds to the complexity and makes it harder for people trying to do the right thing to make sure they are doing the right thing or they are being paid the right amount. It also makes it potentially more complex to engage with and enter into designing enterprise bargaining arrangements, which I know is a key desire, frankly, of the Labor government and of many employers.

This brings me to my second reading amendment. The government has shown today how easy it is to open the Fair Work Act and legislate provisions to, in the minister's words, 'get wages moving for Australian workers'. Well I ask them, while we're at it, to please consider recommendation 7.14 of the Productivity Commission's report entitled Advancing prosperity, which I referred to earlier. It argued for 'explicitly enshrining productivity as an objective of modern awards'. I move:

That all words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House:

(1) notes:

(a) Australia has just had the worst decade for productivity in the past 60 years;

(b) boosting productivity is the only way Australia can sustainably increase wages over time;

(c) the Government's agenda to lift Australia's productivity is not comprehensive without considering the role of Australia's industrial relations system; and

(d) in 2023, the Productivity Commission's report Advancing Prosperity recommended that the Fair Work Act be amended to explicitly include productivity as an objective of modern awards; and

(2) calls on the Government to amend subsection 134(1) of the Fair Work Act such that Productivity is an objective of modern awards, as per Recommendation 7.13 of the Productivity Commission's report Advancing Prosperity".

We all know that productivity is the only way we can get a sustainable lift in wages over the long-term. In fact, the Intergenerational report suggests that it has represented around 80 per cent of real wage growth since the 1980s. If we don't lift our sluggish productivity levels all of our wages go backwards. All this negotiating, all this fighting over the pie means so much less if the pie isn't growing. How do we grow that pie? We have to grow productivity.

You might not notice it, you might not feel the benefit of productivity, but as Ken Henry outlined in his recent Press Club speech, 'The average full-time Australian worker has been robbed of around $500,000 over the past 25 years,' because of our failure to lift sluggish productivity. I know industrial relations and tax reform are no panacea for productivity. No single action is a panacea for productivity, but we cannot pretend to have a comprehensive discussion about how to lift our lacklustre productivity without acknowledging that there are balances to be struck and, frankly, we need a better evidence base to assess whether changes to the industrial relations acts make a difference, make a negative or positive difference, to productivity and the cost or the benefit that that imposes on the community.

While I'm talking about this, I have been urging the government for some time to ask the Productivity Commission to specifically look at industrial relations through a productivity lens. If we could look at our system, not through a political lens but through a productivity lens—a lens of just understanding how the system works, how it doesn't work and then better understand our choices and our trade-offs when we choose to make them—then we do have a better chance of making all workers better off, which is certainly my objective in coming into this House.

The simplistic message the government is espousing is that anyone who opposes this bill must want to slash wages. That is an unfair argument and it is not worthy of what is actually a really important debate. It just demonstrates how politicised IR has become. I don't want to see industrial relations be an ideological battle between the major parties to the extent that it is virtually impossible to have the sensible debate around IR that we need. It is for that very reason that we determined to have a Fair Work Commission in the first place, an arm's length organisation that can take the politics out of these sorts of decisions, because industrial relations are too important to squabble over for political games.

So, I come back to the workers I spoke about at the very start. I will be honest with all those people in my community who do rely on penalty rates and overtime rates. If I believed that this bill was critical to protecting you getting what you deserve, in terms of those penalty and overtime rates, then I would be voting for this bill. But I'm not because I don't believe it is critical. I believe it is already enshrined in the Fair Work Act, and that it actually removes choice for workers, which is important, and also makes our industrial relations system more complex, which has a burden that is hard to quantify but is significantly there.

I believe that if we are serious about boosting productivity then we need to be absolutely rigorous in scrutinising every piece of legislation that comes through this House and viewing it through a productivity lens as well as all the lenses of the other issues that this piece of legislation is trying to address.

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