House debates

Thursday, 1 August 2019


Fair Work Laws Amendment (Proper Use of Worker Benefits) Bill 2019; Second Reading

10:25 am

Photo of Mr Tony BurkeMr Tony Burke (Watson, Australian Labor Party, Shadow Minister for the Arts) Share this | | Hansard source

It's another day and another anti-union bill from the government.

Photo of Jim ChalmersJim Chalmers (Rankin, Australian Labor Party, Shadow Treasurer) Share this | | Hansard source

Must be Thursday.

Photo of Mr Tony BurkeMr Tony Burke (Watson, Australian Labor Party, Shadow Minister for the Arts) Share this | | Hansard source

As the member for Rankin says, it must be Thursday. Every day there has to be something where they decide to bash the unions, because when they look at low wage growth, wage theft and challenges with occupational health and safety their response is, 'Clearly the workers have too much representation, and that's what we need to attack. Today's is the Fair Work Laws Amendment (Proper Use of Worker Benefits) Bill 2019. I want to get right back to first principles about why the funds we're talking about today exist. But before I do, I also want to let everyone know that the arguments from the government about this bill in front of us today are the opposite to what the government argued on their last industrial relations bill. In the last bill they argued: 'We need everything to have corporate equivalence. As much as possible, we need the way we treat people under corporations law to be the same as how we treat people under the Fair Work Act.' We never accepted that test, because from our perspective, if you look at it logically, trade unions and companies are in fact different. They have different purposes. Unions first and foremost are representative bodies.

But if you accept the government's test that the last bill they debated was all about making sure that you treat unions the same as corporations—guess how the funds they're dealing with today are currently regulated? Under the Corporations Act. What we have right now is something where there is complete corporate equivalence. The regulation for the funds we're talking about in this bill right now is under the trusts section of the corporations law. It is identical to how companies are treated—and what has the government decided? 'We need to change that.' If ever we wanted to see how transparent their arguments are—their concept of corporate equivalence is inconsistent; their concept of dealing with health and safety is never consistent—but there's one thing that's consistent: wherever they can find a way to blame workers' representative organisations, single out trade unions and create rules for them that apply to no-one else, they will, and that's exactly what has happened today. So I say, before we get into any of the detail, that if the government believes there is a problem with the funds they're talking about then there's a problem with trusts law, because that is how they're regulated.

But guess what? This government is not about to bring in laws to make it tougher on trusts. This government is not going to bring in laws to this parliament to have a higher regulation of all trusts under the Corporations Act. Why? Because too many of their friends are benefiting from trusts in a whole series of ways and they don't want to have corporate equivalence. They want to make sure of that. I will go through some of the arguments during the time I have, but if any of the arguments of the minister were valid then the problem is in the Corporations Act. But they don't want to amend the Corporations Act; they want to single out anything that involves trade unions and create a different set of rules for them. The reason the funds that are the subject of this bill exist in the first place is this: with phoenixing and insolvencies, all too often workers lose their entitlements completely. Then the workers lose their entitlements when the company goes under, and, if there's no other fund or no other security available for them, they then come to the taxpayer, and the taxpayer has to deal with it.

These issues were dealt with by the Senate Economics References Committee in December 2015. The title of its report was I just want to be paidnot a bad title for a committee report, I've got to say. The committee looked particularly at the construction industry, an industry which has been notorious for phoenixing and insolvencies—some pretty high-profile insolvencies, even in the papers today. When the committee did the calculation in that report of total unpaid employee entitlements in 2013-14, for wages it had the minimum amount owed and the median amount owed. The minimum amount owed for wages is $6.4 million. The median amount is $12.4 million. As you go through wages, annual leave, pay in lieu, redundancy, long service leave and superannuation, the total median amount owed is $136 million.

Let's have a think about how workers' entitlements are normally retained and what normally happens if there are earnings off workers' entitlements. Let me give a quick description again of the magnitude of the problem, with the insolvency examples that were in that report. Walton Constructions went into administration in 2013. They'd operated in Victoria, Queensland and New South Wales. They were placed into voluntary administration in October 2013, owing tens of millions of dollars to more than a thousand subcontractors and suppliers, including plumbers and landscapers.

Steve Nolan Constructions went into administration in 2014. They left 200 subbies unpaid, owed up to $30 million. Records also revealed that the company had donated $150,000 to the Liberal Party in New South Wales and $50,000 to the LNP nationally in late 2012 and early 2013. Apparently there was no problem with those donations; they were never raised as a problem off the back of subbies not being paid.

Q Structures went into administration in 2013. In July 2013 Q Structures closed its doors overnight, leaving approximately 32 employees, various suppliers and subcontractors unpaid. Ferro Con, another company owned by the same person who owned Q Structures, went into administration in 2013. In May 2013 Ferro Con was fined $200,000 for the failure to provide a safe workplace on the Adelaide desal plant, which resulted in the death of a 35-year-old rigger. Ferro Con was placed into liquidation prior to the penalties being imposed.

Queensland Nickel is owned by somebody who found a fair bit of spare cash to spend on an election campaign aimed not at getting elected but squarely at Labor. He was probably able to pay his advertising bills, but he didn't pay his workers. Clive Palmer's refinery was closed in 2016, leaving 546 people unemployed, owing more than $70 million in entitlements. Taxpayers ended up with a $66 million bill under the fair entitlements guarantee.

The reason that some employers and unions have got together and said, 'We need to provide these funds,' is that we've seen what happens. We've seen too many situations where the workers' entitlements disappear. We've seen too many situations where the taxpayer has to foot part of the bill but the taxpayer money comes through late, and the workers lose both their jobs and their entitlements on the way through. But, in these situations, what happens to the earnings on that money? This is the bit that the government will never, never talk about. The subject of this bill is the occasions when employees' organisations—unions—and employers have got together and said, 'Okay, to avoid insolvencies, to avoid the situation where you move from job lot to job lot in some industries and, therefore, you never get 10 years up somewhere'—so if you're going to get long service leave, it needs to be paid into a separate fund—'we'll create a separate fund, and the workers' organisation and the employers' organisation will manage it together.' When that happens the workers' entitlements become guaranteed. If the company's insolvent, it doesn't matter. Well, it matters; it's still a problem for a whole lot of subcontractors who might not be covered. But, in terms of the employees, it means that their entitlements are already secure in a different account. When these funds don't exist the entitlements disappear. What the government will then say is, 'No, no. What this bill is about is the earnings and wanting to have transparency on the earnings.'

Let's just logically think through what happens to the earnings when a fund like this doesn't exist. What happens in almost every industry if the employer puts aside, either into a separate bank account, into a fund that they administer or just into their own cash flow, the future entitlements for the workers? It goes into their bank account. Yet, in different ways, it will bring earnings. It might help them with their cash flow. They might earn interest on the money. They might invest the money. What happens to those earnings? We heard from the Minister for Industrial Relations that he regards those earnings as also being workers' money. So what happens in the vast majority of employment situations with those earnings? They go to the profit of the employer, and the employer keeps every cent. And the government don't have a problem with that! If an employer keeps all the future liability for leave, all the leave entitlements, and they keep it in their bank account or they invest it and make money from it, is it then workers' money? No. It's theirs. So we end up with an extraordinary situation. The hypocrisy of the legislation in front of us is that if you have the earnings of workers' entitlements being spent on a donation to the Liberal Party or the profit of the employer then they have no problem with it, but if the earnings on set-aside entitlements for workers are spent on different programs run by the union or the employer organisation for the benefit of the workers then they're outraged!

If those opposite want to be true to their word, if they actually believe that the earnings on future workers' entitlements are entirely the workers' money, then let's regulate it across the board. Come up with a bill that is true to the rhetoric of the government, and we'll receive it in good faith and work through it. But you can't claim that there's only a concern about the earnings of the workers' money if it's not going entirely to the profit of the employer. That's what this bill says. There's even a clause in there that says, 'If there's a fund that's not jointly managed, if there's a fund that's entirely controlled by the employer, you're exempt from everything that's in front of us. Take it all as profit. Go on a holiday playing golf.' That gets a tick. But spend it on programs for the benefit of the worker and for the benefit of employers and there's a whole regulatory regime that will descend on you. The level of hypocrisy here is breathtaking!

There's only one way to explain how the government got to this conclusion: they just hate unions. They just hate the concept that unions and employer groups are working cooperatively. If they're working cooperatively, there's a problem. But if the employer gets every cent of the cash—tick; there's no problem with that. There's no argument against that from this government. If all the earnings go to the employer, they're happy. If the earnings are jointly managed, we need a new regulatory regime. I've got to say to those opposite: don't pretend you're a centrist government when you're bringing forward this sort of rubbish. Don't pretend that you're about anything other than trying to attack the organisations that argue for better pay and that argue for safer workplaces when you bring in this sort of rubbish.

I've referred a couple of times to the sorts of purposes that these funds then use for the earnings. It's managed under trust law, as I said. We have employer groups and employee groups managing it jointly. They guarantee that the workers' entitlements can't go missing, which is better for the workforce, it's better for good employers who want to provide that sort of loyalty to their workforce and it's much better for the taxpayer, because otherwise a big chunk of the bill comes to the taxpayer. But there are then earnings, because the money is invested in different ways, and so extra money is available that is then managed jointly between employee and employer.

What sorts of projects is that then spent on? There are the free counselling hotline and free domestic violence awareness seminars. As I go through these, think of the contrast; they have no problem if the money is spent on the employer's personal profit, but we get this bill if the money goes to a free domestic violence awareness seminar. They have no problem if the money goes to the employer's profit, but they do have a new regulatory regime if the money goes to free postnatal depression awareness training, free gambling prevention seminars, anxiety stress management services, first aid for babies and children services, women's self defence, autism behaviour management support, free legal advice or free will kits.

They don't have a problem if all the money goes to the profit of the employer, but they do have a problem when it goes to free financial counselling. They don't have a problem when all the money goes to the employer and they can spend it on whatever they want, but they do have a problem when it goes to a fund that's been delivering free funeral cover. They don't have a problem when all the money goes to the profit of the employer, but they do have a problem when it goes to free or discounted asbestos awareness training, when it goes to a whole range of issues for health and safety or when it goes to a whole range of benefits—funeral cover and ambulance cover. That's where they say, 'Oh no, that's the problem.'

If an employer has a fund governed by the employer only, there is a clause in this bill that says, 'Do what you want; you are exempt.' If the employer doesn't even bother to set up a fund of their own and they just keep it all in their own bank account then the bill doesn't even try to address them at all. But if you get cooperation between employer groups and employee groups then the government is exercised and worried about where the earnings might go. I don't mind the argument that any earnings on workers' future benefits and the investment of future benefits should go to workers. Both the Prime Minister and the Minister for Industrial Relations have come in here and said, 'It's the workers money.' Well, if it is then don't only be upset in the circumstances where workers have some degree of control and turn a blind eye to the vast majority of cases where the employer has sole control.

For every example that those opposite want to bring—and they'll bring different examples—with the different purposes that I just referred to, I haven't heard the Minister for Industrial Relations refer to those in his answers. He'll refer to the dollar amount, but he won't refer to the funeral cover that it's being used for. He'll refer to the dollar amount, but he won't refer to the different training that's being provided. He'll refer to the dollar amount and he won't refer to any of the courses that are then run by the employer organisation to make sure that their members become better employers and can deliver safer workplaces to the benefit of the employer, because employers don't want deaths at their workplaces either!

And, if workers' earnings are being spent on that, surely that is exactly the sort of circumstance where you don't bring down a whole regime of red tape and a whole compliance burden, and certainly where you don't put the Registered Organisations Commission in charge of it. That's the very body that was shown to be so discredited and so politicised that it decided that the biggest industrial issue it had to chase wasn't anything that was happening now but went back to a time when the previous Leader of the Opposition just happened to be in charge of a union, and it was so concerned about it that it would make sure, in its liaison with the minister's office, that the media turned up before the police did! And that's the organisation that the government wants to be involved here.

But think about this. I don't have a lot of time for the trade union royal commission—I'll be honest. I was the one who came to this dispatch box and just pointed something out. I was holding a Liberal Party invitation at the time. I don't often hold a Liberal Party invitation, but I came in here and held one up. I didn't accept the invitation, but, in fairness, after that speech, the event slightly changed: they lost their key guest speaker—because, at that point, the guest speaker for the Liberal Party event was going to be the person who just happened to be heading up the royal commission. When we made allegations about the bias, how was that resolved by the royal commission? Well, the royal commissioner held a hearing into himself. He decided that he was not biased, and, having reached that determination, went ahead with the inquiry. And even he didn't recommend this bill!

Even he recommended that you would not put the Registered Organisations Commission in charge of this; you'd have ASIC look at it. And why would you have ASIC look at it? Because these are already regulated under Corporations Law. These are already regulated under trusts law. If those opposite believe, as to any of these funds—and it would be a serious allegation—that a breach of trusts law is taking place, then trusts law will need to be strengthened. They won't do that, because they want so many of their friends to have tax protection under trusts law. That's what they want. So they won't come in and deal with the issue in a proper policy, ethical way.

If you accept that it's under Corporations Law, and if you accept any of the arguments they offered on the previous bill, then you'd be in a world, right now, where corporate equivalence mattered, instead of the absurd proposition that: 'Corporate equivalence matters on the previous bill and, now that we're in an area where corporate equivalence already exists, we'll rush for a new argument.' And the new argument is: 'Any earnings on workers' benefits belong to the workers—unless they belong entirely to the employer.' As arguments go—hint to the other side—that's not your strongest one. But it's the only way of arguing for this bill, because embedded in this bill is a very simple principle: if workers have nothing to do with the earnings on their entitlements then the employer can use that money for whatever they want. If workers do have a cooperative say in what happens to the earnings on their entitlements, then the government's exercised by it.

The proliferation of single employer funds, which would happen outside the registration regime created by this bill, leaves an extraordinary and deliberate loophole. Let's not pretend that this is an accident of drafting, because, even if you take that loophole out, employers don't have to set up a fund at all; they can just keep the future entitlements in their bank account, and they get every single cent for themselves. There are the different amounts that the Leader of the House, the Minister for Industrial Relations, has quoted here from that dispatch box. We've all heard the answers, and there'll be more, and there'll be some wonderful gestures—the higher the number, the hands tend to get to a different angle at the moment of crescendo!

Whatever that number is, here's the hint to interpreting it: if that amount of money came off workers' entitlements and went entirely to the employer for profit, he has no problem with it. He has no problem with it at all. It doesn't matter how many millions of dollars the figure is because, in most industries, these funds don't exist. So think about that. Think about major employers in industries where they don't have these funds. Think of what the earnings, in fact, are on the future entitlements of workers that the employers keep in their bank accounts.

I've got to say that this is not something that Labor has been moving forward with a policy on. It wasn't until those opposite raised the argument that I thought, 'The logical conclusion of what they're saying is, if earnings should always belong to the employees because that's employees' money, then there is a principle that will create a major shift for every employer in this country other than the ones that already have these funds operating.' Those opposite should be careful what they wish for, because they've embarked on an argument that is really dumb. They've embarked on an argument that I don't think they, in fact, believe.

But the argument from those opposite is, I suspect, driven by their true motivation. What's really going on in the heads of those opposite is that, wherever employees' organisations have any power at all, they want to stamp it out. If all the money's going to employers then that's good, but if unions have anything to do with it at all then they've got big problems with it. Have the guts to argue that. Have the guts to come in here and say what you really believe. But don't come in here pretending that there's an outrage over funds being spent for the sorts of purposes that I went through—suicide prevention services, apprentice training, personal protective equipment or even employer subsidies with respect to apprentices. Don't pretend to be outraged by all of that when you've got the massive loophole here that, if those programs don't happen, it's fine for that same amount of money to go to the employer and be spent on a holiday playing golf or that it's fine for them to buy a new car with it—no problem with that. Apparently it's fine for them to buy a new investment property with it—no problem with that. It's fine for them to get a new bonus out of the earnings on employees' entitlements—no problem with that. But if it's going for any decent purpose there's outrage.

We know why those opposite hate unions. We know, because those opposite told us that low wages were a deliberate design feature of this government's economic policy. Those opposite told us that low wages were something that they sought as a policy objective in itself. We know what unions do. Unions argue for better wages. We know what unions do. Unions argue for safer workplaces. We know what unions do. Unions argue against wage theft at the same time that those opposite accept donations from those who commit wage theft. Those opposite receive donations from people like Gerry Hanssen, a member of the Liberal Party, and they have no problem with that. Those opposite want to increase the gap between rich and poor. They like that wages are flatlining.

This bill, with the hypocrisy that was written all over it, is about one thing: if workers have any degree of additional power through their organisations, those opposite have a problem with it. I say to those opposite: sorry, but you've been found out. It was a nice try! There was a bit of a crescendo in a couple of question times. But the loopholes that you put in this are entirely to the benefit of one side of the bargaining table. Do you know what?

The employers who are involved in these sorts of funds don't even want that advantage; they'd rather make sure the entitlements of their workers are safe. This bill will be opposed, and I don't care whether it's amended in the Senate. In whatever form it comes out, Labor is going to continue to oppose it.

I move:

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

"the House:

(1) declines to give the bill a second reading; and

(2) notes that:

(a) this Government has not proposed legislation to deal with important workplace relations matters, such as wage theft, flat lining wages growth, or deaths in the workplace;

(b) this bill and the Act it seeks to amend represent an inconsistent approach by the Government to responding to Royal Commissions; and

(c) the Government's entire approach to workplace relations laws is to attack workers' organisations with the specific intention of weakening the capacity of those organisations to combat wage theft, achieve wage growth, and ensure that workplaces are safe".

Photo of Sharon ClaydonSharon Claydon (Newcastle, Australian Labor Party) Share this | | Hansard source

Is the amendment seconded?

10:55 am

Photo of Lisa ChestersLisa Chesters (Bendigo, Australian Labor Party) Share this | | Hansard source

I second the amendment, and rise to say a few words in support of the amendment before my colleague the member for Fraser makes his first speech in this place.

The member for Watson has outlined the flaws in this Fair Work Laws Amendment (Proper Use of Worker Benefits) Bill 2019 in a way that many of us on this side could probably not compete with. He has actually set out in fine detail that this bill is basically about attacking workers. It is an hypocrisy in the way in which it attacks workers who have a say over entitlements as opposed to companies which do very little or hold on to workers' entitlements. There is hypocrisy involved in that.

The people listening were probably quite concerned by what was being said. What happens is that all workers in this country have leave entitlements: long service leave, sick leave and annual leave. Employers, in the main part, are expected to put that money to one side and not spend it. They are to have it there in case a worker chooses to access an entitlement. In some industries, like the construction industry, as has been pointed out by the member for Watson, workers' money for these entitlements is actually paid into a separate fund. It is that fund that is being attacked under this bill—it is that fund, where workers actually have a say in how the earnings on these savings are spent.

Workers don't have a say when their employer makes money from their other entitlements that are put to the side. Workers don't have a say or don't even know what the employer does. The truth is that most employers don't put it aside for when the worker wants an entitlement and then complain when a worker wants their entitlement because it hits their cash flow.

The hypocrisy in this bill is large. In question time, the minister has tried to introduce this and say that because of the way in which these funds spend or how they distribute the income made from these entitlements savings that it's wage theft. Let's actually look at what wage theft in this country is. It is in an Orwellian way, and using a long bow, that the minister has tried to pull together things to say that wage theft is how these funds are actually distributing the earnings that are being made, at a time when wage theft in this country is rampant.

I'd like to remind the House of some of the examples of wage theft that are actually occurring in this country. What is real wage theft in this country? The government, by introducing this argument in question time, allows everyone on this side to remind the House what wage theft actually is. It is basically stealing. It is when employers deliberately underpay their workers. It has become part of a business model that so many employers are now using as a way to cut costs. It's become a race to the bottom in so many industries. What once was considered to be a problem in the contract cleaning industry or the security industry, or for our farm workers—people working in agriculture—is now popping up in every single industry across Australia.

Stealing is wrong, yet thousands of Australian workers every year fall victim to wage theft. This is what the government is trying to link to funds which do good for their members. They spend the earnings made from entitlements that have been saved on programs that support workers. There are some cases of wage theft that have hit the media recently. We all know about what's happening in the hospitality industry, and I do want to recognise the work of Hospo Voice. This government tried to claim that it was the work of the Fair Work Ombudsman but it was only after the complaints of Hospo Voice, United Voice and those workers standing up and saying, 'We've been underpaid by this celebrity chef.' Hospo Voice is hospitality workers getting together, standing out the front of restaurants and actually shaming them and damaging their reputations by saying, 'You haven't paid me; I deserve to be paid.'

Some of the underpayments are alarming. In my own area of Bendigo, it is rife. One of the cases that I want to highlight to the House relates to a particular restaurant that underpaid nine casuals and a part-time employee. One of the underpayments was about $11,000. The company actually refused, in the first case, to pay back pay and was then fined by the Fair Work Ombudsman. What rate were they paying these workers? A flat rate of $10.50 per hour. Some of the workers didn't complain because they were here on visas and they were threatened with deportation. Other workers who were born and bred in Bendigo did speak up, and threats of violence and threats against their life were made. It is companies like this that the government are protecting by their failure to take real action on wage theft. They talked about it before the election, but where's the legislation before this parliament? Instead, what they have focused on is anti-union, antiworker bills. Instead what they've focused on is demonising the people who expose the insidious nature of wage theft.

As I said, it doesn't just happen in the hospitality industry; it is rife in the transport and trucking industry. The way in which they are ripping off drivers—all of a sudden their penalty rates have gone. They've been told that they're on a flat rate from now on. In one particular case, again in my electorate, a worker was short-changed $16,635. And, for raising the complaint, this particular worker was sacked and then had to fight an unfair dismissal case! A lot of the workers who are victims of wage theft are also casuals and are suffering from economic insecurity. They go through the torture and trauma of, and put up with, being underpaid because they're too scared to lose their job. This is a big problem for us in this country.

Apart from the work done by the Fair Work Ombudsman—and I should highlight that the number of wage theft cases they've been able to follow up on is just the tip of the iceberg—there have been a number of surveys and research done to try and expose the insidious nature of wage theft. One was the National Temporary Migrant Work Survey. It covered a lot of temporary migrant workers, but at the heart of it was wage theft and the scope of underpayment of these workers. They found that 30 per cent of surveyed participants were paid $12 per hour less, approximately half the minimum wage. Almost half, 46 per cent of participants, earned $15 an hour or less, well below the minimum wage.

This is what is happening in our country. This is the extent of wage theft. Yet this government had the audacity to link workers having their wages stolen to what a fund is doing to support workers, thinking the Australian people would just accept it. Just because you say it's so doesn't make it so, but this government is classic at doing that.

It's not just our backpackers, international students, and people working here on a temporary work arrangement; it's people working on our farms. Again, we talk a lot in this place about the farmers, but what about the farm workers? Whether they're people who were born in Australia or who have become Australians through citizenship, or people who are here on temporary arrangements, many of them are underpaid. They're not sure what the piece rates are. They're rarely paid a proper full-time wage. These workers are not being paid well.

At the beginning of my contribution I talked about what this government says is wage theft. They say it is funds that have gone to a union where members have decided to prioritise certain programs. I'll read out some of the programs that are being funded. Rank and file members have decided—through the organisation of Protect, which is off the earnings of workers' entitlements—that they're going to offer a free counselling hotline, domestic violence awareness seminars, free gambling prevention services, free first aid for babies and children, women's self-defence courses, free legal advice, family baby packs, emergency transport cover and retirement planning. These are a lot of the things we would expect our government to do, but the construction industry has been so frugal in managing workers' entitlements. When they have put workers in charge of it, they have benefited workers, yet this government has a problem with that. They would much rather see this money in the hands of the employers. They would much rather see the government of the day pick up the pieces and pay the workers entitlements when companies go broke.

This is a bad bill. It is another example of how the Liberals want to attack unions, attack workers and tear down anything that is working and is good in our country.

Debate adjourned.