Tuesday, 23 February 2021
Fair Work Amendment (Supporting Australia's Jobs and Economic Recovery) Bill 2020; Second Reading
It's a pleasure to talk today on this piece of legislation, the Fair Work Amendment (Supporting Australia's Jobs and Economic Recovery) Bill 2020, because supporting Australia's jobs and economic recovery is really the focus of the government and this side of the parliament right now. COVID-19 as a crisis has really been like no other that has hit the world, at least in the modern era. It's been a health crisis, of course, but it's also been an economic crisis. It's had elements of a supply shock and also a demand shock, and we've seen this around the world.
Just to remind members of the House, the global economic contraction as a result of COVID-19 is estimated by the IMF, the World Bank and other international financial institutions to be in the order of 4.5 per cent over the course of 2020. Four point five per cent is a contraction such as we have not seen in decades. You have to reach back to, potentially, the global oil shocks, although they were shorter in duration, or, more likely, to the Great Depression. The most recent such event, of course, was the global financial crisis. In that period, the global economy contracted by 0.1 per cent. In this crisis, the COVID-19 crisis, the global economy has contracted by 4.5 per cent, so it's orders of magnitude bigger in its severity—almost 45 times as big, in fact.
Australia, of course, has not been immune to this. We've seen a large number of people lose their jobs or have their hours reduced to zero. One point three million Australians, at the start of this crisis or shortly thereafter, either had their hours reduced to zero or lost their jobs. We saw unemployment rise as well, of course. But, through the provisions and the support measures that the government has put in place—through programs and support measures like JobKeeper, JobSeeker and HomeBuilder—we have helped support the economy and get Australians back to work. I'm pleased to report that as of last week, of those 1.3 million Australians who had lost their jobs or had their hours reduced to zero, 93 per cent were back at work. We had 29,000 jobs created just in the month of January, and over the last four months we've had 350,000 jobs created. Unemployment now is at 6.4 per cent. So there's still further to go, but we're certainly heading in the right direction.
But I think members here would be conscious that this is not going to be a normal or straightforward or even, dare I say it, a linear economic recovery. COVID-19 is going to be with us for some time yet. The vaccine rollout is underway in Australia and also around the world, but it's quite likely that some of the restrictions we've had put in place on our lives—be it social-distancing restrictions, limitations on public gatherings or, most importantly, border restrictions and limitations on travel—will persist with us at least for some considerable time yet, until the vaccine program is rolled out, until we can see more data on how effective the vaccine is at suppressing transmission and until other countries are prepared to resume engagement with the normal world.
The purpose and intent of this bill—the Fair Work Amendment (Supporting Australia's Jobs and Economic Recovery) Bill 2020—is not ideological, at least in my opinion; it's about solutions to problems. How do we get more Australians back into work? How do we support those Australians in jobs and industries that continue to suffer because of the necessary health restrictions that have been put in place because of COVID-19?
This bill seeks to do a number of things. It's designed to present practical solutions to the practical problems that have presented themselves through this crisis. The origins of this piece of legislation are when the government brought together unions, employer groups and industrial relations experts through the Industrial Relations Working Group process to identify some of these problems. What are the disincentives to employers hiring more workers? What can we do practically in the legislation to get employers to take on more workers? This bill seeks to address these in a number of ways.
The first is with definitions regarding casuals and fixed terms. It's clear that the current state of law in relation to casual employment is confusing and ambiguous and is causing mistakes and confusion for both employers and employees, and that has associated consequences and costs. The statutory definition that we put on casual employment in this bill seeks to incorporate key aspects of the common law as expressed in recent court decisions here and helps to ensure that casual jobs are genuinely casual and the nature of employment, whether it's casual or ongoing, is determined at the outset, as you would expect, rather than relying on periodic assessments of the relationship as it develops over time. Importantly, as well this legislation introduces a new entitlement to be included in the National Employment Standards, the NES, to allow regular casual employees to convert to full-time or part-time employment. It's providing them a pathway.
Clearly, employees should be characterised appropriately and receive the entitlements reflecting that characterisation at law. If they are casual employees, they should be paid as such and treated as such. If they are part-time or full-time employees, they should be given and afforded the protections that that status deserves. This legislation seeks to clarify exactly that, to reduce confusion and to give employers the confidence they need when taking on new workers to know what their status is and what they need to pay those workers. If we don't address and clarify this issue, costly and time-intensive court processes would be needed to determine the appropriate rights and obligations of individual workers in potentially every individual case.
This bill also addresses award simplification. As we heard through the Industrial Relations Working Group process, award complexity is a significant issue and a significant burden for many businesses, especially small businesses. It's critical in the industries that have been hit the hardest by COVID-19, particularly the hospitality and retail industries, that the government makes it as simple as possible for business to regrow jobs and to hire new workers. This bill adapts specific elements of the successful COVID-19 JobKeeper flexibilities for employers and employees covered by 12 identified awards in distressed industries for a further two years. As members would be aware, these flexibilities have already helped to save literally thousands of jobs during this pandemic, by allowing employers and employees to work together and negotiate details regarding duties and work location to help navigate some of the challenges of working through the pandemic and working in a post-pandemic environment.
This bill also addresses enterprise bargaining. Members opposite, of course, would know that it was one of their heroes—Paul Keating—who abolished compulsory arbitration and introduced enterprise bargaining as part of a suite of microeconomic reforms when he was Prime Minister in 1992. This is one of the reforms he's most proud of. Unfortunately, this signature reform by former prime minister Paul Keating—
He's not, in fact, a constituent. I've checked that. He's just outside the boundary. He's a constituent of the member for Sydney.
Mr Keating abolished compulsory arbitration and introduced enterprise bargaining—for which he deserves full credit, and I'm happy to give it to him in this House. This system has really declined, particularly since 2010. There are now fewer employees covered by enterprise agreements, and few new enterprise agreements are being made. Over the last 10 years the number of enterprise agreements between employers and employees has been steadily declining. In fact, it has fallen by 57½ per cent, which means that the number of employees being covered by enterprise agreements has decreased from its historical peak of 43½ per cent in 2010 to just 38 per cent in 2019.
This bill aims to increase the number of Australians covered by enterprise agreements and help them capture the productivity and wage benefits that these agreements entail. The bill will reduce the level of prescription currently imposed by the Fair Work Act and provide greater flexibility as to the methods by which employees may be provided with a fair and reasonable opportunity to consider whether an enterprise agreement can be made. Enterprise agreements pay, on average, 69 per cent more per week—that's $542 on average weekly earnings—than the award wage. So this is a system that we support to help improve not only choice and flexibility for employers but ultimately wages and take-home income for employees.
The bill also addresses greenfield agreements. Members here would be aware that the construction of major projects in Australia—mining and resources projects and things like that—make a significant contribution to jobs and economic growth in Australia. But there has been a risk of agreements that expire during the construction of a major project because of the time lines around these agreements. That creates uncertainty—uncertainty for investors and uncertainty for employers, including over unexpected delays of protracted negotiations and what the overall wage or salary will be for a particular project. This bill will double the maximum nominal expiry date for greenfield agreements that are made in relation to the construction of major projects from four years up to eight years. It also requires longer-term greenfield agreements to include annual wage increases for employees over the nominal life of the agreement. This will support Australia's economic recovery by attracting investment and driving job growth. It will be good for investors, it will be good for employers and it will be good for employees.
Finally, on compliance and enforcement, here the bill makes a number of amendments designed to do three things: to help businesses comply with the law, as they always should; to enable employees to recover any underpayments faster when they do occur; and to ensure that the maximum penalties for noncompliance are proportionate and are a meaningful deterrent for employers who might engage in that. Part of this is the establishment of an employer advisory service in the Fair Work Commission, with $12.9 million provided in this legislation to help fund the establishment of that office. That employer advisory service will be able to provide employers with authoritative written advice tailored to their individual circumstances. This will provide businesses with certainty about their obligations and how to apply award and agreement provisions and should help reduce the likelihood of wage underpayments occurring in the first place.
The bill will also allow underpaid employees to get repaid faster. Businesses will be encouraged to self-identify and self-report underpayment breaches. The bill will also make it easier and faster for employees to recover unpaid wages by increasing the small claims cap from $20,000 to $50,000, and courts will be able to refer small claims matters to the Fair Work Commission for conciliation. To help respond to exploitation and to better deter noncompliance, the bill introduces a new criminal offence for dishonestly engaging in systematic wage underpayments—as it should—and increases the value and scope of civil penalties and orders that can be imposed for noncompliance. The bill provides further protection to employees by prohibiting businesses from publishing advertisements for jobs with pay rates below the minimum wage and increases the penalties for practices like sham contracting that are used by employers to avoid paying full entitlements.
Finally, the bill also provides improvements to the Fair Work Commission process to help enacting amendments that will enable the Fair Work Commission to deal with certain matters more efficiently and more expeditiously than is currently permitted under the act. The bill will give the commission appropriate powers to deal with vexatious applications more effectively, modelled on the Administrative Appeals Tribunal's powers to deal with vexatious applications. The bill will also confer greater discretion on the commission to decide to deal with an appeal on the papers when it considers a hearing to be unnecessary.
COVID-19 has challenged many aspects of Australian life, and this bill delivers on the government's commitments to put Australians and Australian jobs first on the road to economic recovery. The bill removes barriers that stifle the job growth of today and limit the job creation of tomorrow. If we want Australians to have access to the prosperous jobs they aspire to, we must remove these barriers today, and this is what this bill does.
I've been surprised that those opposite have decided to oppose not just particular elements of the government's bill but all elements of the government's bill. In May last year, we heard the opposition's industrial relations spokesperson saying, in relation to enterprise bargaining: 'Bargaining is much harder at the moment and taking much longer than it should. Policies that get bargaining moving again are going to be really important. And, you know, I don't think that anyone says every rule that's there at the moment should remain unchanged.' I agree. Bargaining is much harder at the moment and is taking much longer than it should, and this is one element that this bill seeks to address. On greenfields agreements, for instance, which those opposite have also decided to oppose, in May 2019, the member for Maribyrnong, then the opposition leader, said:
We want to look at the ability for companies to negotiate with unions for extended greenfields agreements, project life, you can go to the global investors who will back it
Again, this bill does exactly that; it addresses greenfields agreements.
I know those opposite have said over the last several weeks that they're on your side or they're on someone's side. They're taking a slogan from Jeremy Corbyn's campaign in the United Kingdom. I read it today in The Australian, and I was a bit shocked to read it. This was taken from Jeremy Corbyn's campaign, and I was reminded that that was actually his phrase. It begs the question: if you're on someone's side, you're always against someone else. This government, through this legislation, is seeking to govern for all Australians and support all Australians to get back to work and recover from COVID.
What a listless performance from the member for Wentworth! His heart really wasn't in it, nor was logic, reason or an understanding of Australia's industrial relations system. But he's a good fellow, despite those key failings.
I'm keen to make a contribution to the so-called Fair Work Amendment (Supporting Australia's Jobs and Economic Recovery) Bill 2020. You have to start with the title, which is intentionally misleading by this Orwellian government. I guarantee you that, if a slogan like 'supporting Australia's jobs and economic recovery' is in the title of a bill introduced by this government, it is intending to do the opposite. That is what this bill does; it achieves the opposite. It is about further undermining Australia's industrial relations system and further undermining the ability of workers in this country to bargain collectively to achieve an outcome that's good for workers and their employer, and that should really be at the heart of Australia's industrial relations system. Instead, this package of IR amendments tilts the playing field even further towards employers. It gives the employers unprecedented power to impose what they want in the workplace, rather than providing for equal negotiations. This really is turning the industrial relations system back to Work Choices in many respects.
Before I go to the details of the bill, I think it's important to reflect on the economic climate that this bill goes to and the economic context for the debate around this bill. We are in a recession of unprecedented proportions—unprecedented since the Great Depression. We're in economic circumstances where more than two million of our fellow Australians are looking for work or are looking for more hours at work. We are in circumstances where, for example, due to the government's cuts to JobKeeper and JobSeeker, we're seeing huge demand for food banks and shelters. I visited the five largest food banks in my electorate in November last year, and they told me that, when JobKeeper and JobSeeker were cut in late September, they saw a tripling of demand for their service, particularly for food assistance. This is the context. I revisited one of the largest food banks in my electorate only two weeks ago, and, unfortunately, they reported that, when JobKeeper and JobSeeker were cut again in early January, demand again doubled. So food banks on the ground whose job is to provide urgent food assistance to families in danger of starvation and who also provide homelessness assistance are reporting a 600 per cent increase in demand for their services since JobKeeper and JobSeeker were cut. That is the economic context for what we're talking about now. The other context for this legislation is that the biggest cohort on Newstart, or JobSeeker, as it is now called, is unemployed women over the age of 45. They are not new jobseekers. They are people who have lost their jobs and are trying to find new ones.
We have a desperate shortage of demand in our economy at the moment. We've got businesses that are crying out for more customers. What's the best way of getting more customers? It's by people having more money in their pockets. The solution from this government is to cut their pay. How do they do that through this bill? This bill makes it easier for employers to casualise jobs that would otherwise have been permanent. It makes bargaining for better pay and conditions more difficult than it already is. It allows wage cuts. It takes rights off workers on big projects. It weakens wage theft punishments in jurisdictions where wage theft is already deemed a criminal act, such as Victoria.
That is what this bill seeks to do. It seeks to do this by attacking the conditions of many of the frontline workers who have got us through COVID so far, and I want to pay tribute to those workers—frontline workers such as nurses and support staff in hospitals, aged-care workers, transport workers. These are the people who weren't able to work from home when we had the various lockdowns. These are the people who had to go to work every day and risk their lives to keep our society afloat. I had the privilege of thanking retail workers. I got to walk around and thank retail workers at the large supermarkets and department stores in my electorate, who stocked the shelves and made sure that everyone had all that they needed during the COVID lockdown. They're the workers who are under attack now. Their bargaining rights are under attack. Their employment status is under attack. Their penalty rates are under attack. I'm confident that I speak on behalf of the vast majority of the people of Shortland when I say that we should not accept this attack on the frontline workers who kept us going during the COVID crisis.
One of the most pernicious ways that this bill attacks their rights is by allowing the employer to define who is a casual worker. This overturns decades of common law rulings, which have recently been confirmed by the Federal Court in a couple of coalmining cases that I'll turn to in a minute. Giving the employer the ability to define who is a casual worker is a draconian solution. It means that it doesn't matter what the actual circumstances of that worker are. They could be a permanent part-time worker under every common law test, but the employer could define them as a casual with a stroke of a pen. That overturns their rights. It overturns their rights to entitlements such as long service leave, sick pay and annual leave—the things that are really at the heart of our industrial relations system. These are the entitlements that you should receive, as a permanent employee, so you can live a balanced life—time off when you're sick and time off for recreation, and long service leave when you've done enough years at that workplace. Those are the things that are being overturned by this legislation.
Other things that are being overturned are the landmark Federal Court cases I alluded to, which really tried to fix up the huge problems we've got in the coalmining industry around false casualisation and false labour hire. These are cases like the WorkPac case, where the Federal Court ruled that if an employee has a predictable schedule—if they're receiving their shifts up to a year in advance, as they were in one case—they're not a casual worker. They're not on call. They don't find out tomorrow what hours they're going to work; they know what shifts they are going to work a year in advance. Because of the cancer of labour hire in the coalmining industry, these workers have all the obligations of permanent workers—for example, they have to turn up in three months time to do a certain shift—but none of the benefits in terms of entitlements like long service leave, annual leave and sick pay.
To make matters worse, these workers don't even get higher pay, which some people claim casual workers would get in these circumstances. In the coalmining industry, we've got labour hire workers working on predictable shifts, often a year in advance, next to permanent coalminers employed directly by the coalmining company. They're both doing exactly the same job, but the labour hire workers receive pay which is often half that of the permanent worker and they don't get long service leave, annual leave or sick leave. These workers are hugely discriminated against in the workplace. These workers are really being undermined in their conditions, and it's a cancer that is destroying good-paying jobs in the coalmining industry in my region, the Hunter Valley, and in the Bowen Basin in Queensland.
This is what I find most galling about the culture war being engaged in by members of the coalition—people like the member for New England, the member for Dawson and the rest of their ilk—who profess a love for coalminers. They don't love coalminers; they love coalmining companies. If they loved coalminers, they'd be voting against this legislation. If they loved coalminers, they'd be talking about the scourge of black lung returning to the coalmining industry. If they loved coalminers, they'd be with me and my Labor colleagues every year at the miners memorial day at Cessnock, which commemorates the over 1,800 men, women and children—some as young as 11 and some as old as their mid-80s—who have died mining coal in this country. That is how you demonstrate a commitment to coalminers in this country: by fighting to improve their conditions, by commemorating their sacrifice and by fighting to improve safety in the workplace for those workers.
Instead, those on the other side—particularly the member for New England, who prides himself on his virtual love affair for coalminers—don't care about that. All the member for New England cares about is maximising the profits for his mates in the coalmining industry: companies like Whitehaven Coal, where Mark Vaile, a former Leader of the National Party, is very prominent, and that of Gina Rinehart, who happened to take the member for New England to a lovely wedding in India on her private jet. Anyway, I digress by talking about the member for New England's love affair with coalmining companies and not coalminers, but that demonstrates the inconsistency and the empty rhetoric of those opposite.
Another poor aspect of this bill is what it does to casuals on the right to convert to permanent part-time work. We've got a number of industrial awards, through great efforts by workers and their unions, who have secured rights to convert, where a casual worker might be having regular and predictable shifts for a certain amount of time or have been employed for a length of time, and they are able to convert to permanent part-time work if they would like to. This bill claims to do that, but the only obligation on an employer is that they have to consider it. They might have a casual worker who has done a year as a casual and meets all the other criteria within this bill, and all the employer has to do is consider the request by the casual worker.
What happens if the employer decides to turn down that request? Normally, in most other instruments in the industrial relations system, the casual worker, or the union that represents them, would then go to the Fair Work Commission. I've had the privilege of representing workers in that forum in a previous role. The commission is court-like, but it's not run as a court. You can have representatives that aren't admitted to the bar, that aren't solicitors or barristers. It means it's low cost. The barriers to entry and to achieving a good outcome for all sides are low, and that's the way it should be. Instead, in this legislation, if you're a casual worker—if you're a 16-year-old worker at Coles or Woolworths or Kmart—who wants to exercise your right to convert to permanency, you have to go to the Federal Court. You have to hire a barrister and go to the Federal Court. I confess: I was a checkout operator at Coles for five years. I didn't have the resources to hire a barrister to secure permanency, and I would submit that there would be very few checkout operators around this country who have the financial resources to do that. So this claim in this bill to give casuals the right to convert to permanency is just that: a claim. There is no reality to that claim. That, again, is symbolic of this bill: it's all spin; it's all about claiming one thing but actually achieving another.
What this bill does, if it passes, is cut workers' wages. What this bill does, if it passes, is take away bargaining rights. What this bill does, if it passes, is mean that employers don't even have to show the text of an enterprise agreement to their workers before demanding that workers vote on it. Just imagine that. One of the tenets of democracy and industrial democracy is the right to know what you're voting on. Some people claim that MPs don't read everything they vote on. We have the right to read it; it's tabled here. The legislation is tabled right here and we can read it, review it and make a decision on it. But if this bill passes we'll see employees forced to vote on enterprise agreements without seeing the text. I can't think of anything more draconian and antidemocratic than that, and that really is the heart of this legislation.
This is legislation that is being sought to be enacted by a government that does not care about workers. It does not care about workers; it uses the worst economic recession in almost 100 years as a cover to cut workers' wages and to undermine their conditions. That's because the government sees that as the best way out of a recession. That was completely destroyed as a credible economic argument in the 1929 recession but they're very keen to keep pursuing it. The best way to get out of a recession is to put money in workers' hands; to lift their wages so that they spend that money in the economy so that companies have more customers and more reason to employ more people.
This legislation does the opposite. It just reflects a narrow, ideological obsession by a government which is attempting a Work-Choices-like reform. This is a government which is woefully out of touch with what's happening on the ground. It is out of touch with the 600 per cent increase in demand for food banks and housing services. It's a government so out of touch that when it gets into trouble it just reverts to its ideological background and underpinnings of cutting workers' wages. This legislation should be opposed and I'm proud that Labor will oppose it. On behalf of the 150,000 residents of Shortland, I'm proud to oppose this draconian legislation.
I rise to speak on the Fair Work Amendment (Supporting Australia's Jobs and Economic Recovery) Bill 2020—and, gee, for the gazillionth time we find ourselves arguing about industrial relations! It's hard to come up with a new angle. We were hoping that in the midst of COVID there would be a new angle from this opposition, which would be a focus predominantly on job creation and total hours worked. We saw 436 million hours worked in January this year, up by about five per cent on the previous month. The first priority, of course, is more hours worked in the economy and, secondly, that those hours are fairly spread throughout those working-age Australians. Obviously, if we could distribute working hours perfectly then we wouldn't have any unemployment. We know that's not possible, technically, but to make those hours available means flexibility in the system.
That's something I guess we've always argued about. It's not that there are ogres on that side or greedy people on this side; fundamentally, it's about how much you believe in flexibility and maximising the number of working hours available to an economy. What we recognise is that the clear and present threat right now is that employers don't feel comfortable with the Fair Work Act as drafted by Labor to create as many working hours as they otherwise would. There is no counterfactual, of course—no-one knows what happens if there is no Fair Work Act or how many bosses would change their behaviour—but if we think about it as a bell distribution there'll always be both employers and employees at the tails who don't bargain or barter in good faith. We absolutely accept those criticisms from the other side that, in many cases, the power imbalance means that it's the employee that we must protect most first.
But this legislation says that we can take an even-handed approach to both. It's been consulted incredibly broadly by the Attorney-General. I don't think there has ever been coalition legislation in this area which has been more carefully and assiduously shown to the Labor Party and unions, allowing them to have a say. Let's also not forget one very important point while we're all here: the outrageous attack by overfed and overpaid union lawyers on the principle of casual work, implying that no definition existed, without recognising that it was Labor legislation that failed to do it.
This attack on WorkPac, a completely honest and law-abiding company in this country—putting before them up to $2 million in legal fees just for them to fight the good fight and convince Australia that we do need casual workers—is a real shame which the Labor Party will have to carry on their shoulders. That union attack was the most deconstructive way of solving the problem. The problem here was just to define casual workers in a way that was noncontroversial. We could have done that, but Labor and the unions elected not to. That attack, that legal boondoggle, inflicted on an honest Australian company was a great disappointment. I'm so happy that the Commonwealth agreed to join with WorkPac as a related party in this matter. The end result was this amendment. It accepts that there will always be full-time and permanent work, part-time work and casual work. And now we're seeing platform work, which we debated just an hour ago.
It's remarkable: again, just like clockwork, in came Labor, trying to regulate the platform economy when they know that simply can't be done without throwing so much grit in the wheels that it would just kill off jobs, hours of work and opportunity. What we need to accept is that platform work is highly mobile and not fully controlled by government. You need to allow platforms to drive as much employment as possible. Sometimes that leads to less-than-certain work and sometimes that leads to precarious work, but it's often that work or no work. But precarious work leads to non-precarious work leads to casual work leads to permanent work, and at the margins there will always be that need to accept that there will always be a need for workers who aren't employed full time and permanently.
A flexible work system is what Australia is famous for. You can go and borrow other methods from Europe, but you have to accept that you'll have five per cent, six per cent or eight per cent long-term unemployment rates. We've got to give employers more confidence, because, fundamentally, in that relationship between the employee and the employer—the chicken and the egg—you first need an employer. You start with an unemployed person and you need the employer and you need to give them as much support as possible to create an employee. I think this is what Labor fundamentally don't understand.
When Labor come in here, they are taking that unionised, rigid, lignified approach to employment because it pays them. It's their bread and butter, and I accept that. We don't resent that. We understand where they're coming from. But nor do we, on this side, represent employers. We simply want a flexible system that maximises opportunity and a fair work safety net. It's remarkable that the minute they lose government this Labor opposition suddenly don't trust Fair Work or the commissioners—all of whom were initially employed out of the union movement. You had the former IR minister and former opposition leader actually designing the process, but of course the minute they were in opposition, 'There's no safety at all for workers!' And yet it was actually your government that designed the entire system.
We need to streamline and improve enterprise arrangements and we need to do it now, in the middle of COVID. We've got to strengthen compliance and enforcement, and we've got to provide a pathway through for statutory full-time work for casuals if they are interested in transitioning to that. Of course Labor come up with these incredibly banal and sometimes puerile oppositions to this by going to the absolute 0.1 per cent case of: 'What happens if this breaks down and that breaks down and this breaks down? How do you guarantee that no-one will be worse off in the entire Australian economy?' You're fundamentally misunderstanding that this is about moving a workforce of over 10 million people to make the most of every employment opportunity when and where it arises. This is a highly dynamic system of matching need and expertise, supply and demand. Jobs are disappearing here; they're reappearing over here. The skill sets of those who live over there don't necessarily match the needs over there. This is a complex system. It's a mobile system. It's very difficult to either compartmentalise or generalise.
What we need is an opposition who's prepared to look at some of these simple solutions that are inherent in the legislation. It's almost like the minute we touch IR it has to be a third rail. Labor has to go berserk and go into a meltdown and tell everyone that their income is going to be wiped out. We know that never happens. How many times do we have to have this discussion, where even these tiny sensible improvements can't be agreed upon and you have people like the previous speaker, the member for Scullin—a gent that I highly regard—coming out with the same old, same old, that the world's going to fall apart, and you've got to pay your union membership. So you find your 20 bucks every fortnight, no matter how low your wage is, and as long as they get your union membership of course it's all okay, it's all fine. We can all stop worrying as long the childcare industry is moved into unionised workers. As long as everyone on the platform economy pays a union fee to the STAs, there's actually no problem, right? As long as everyone is unionised.
This deconstructive approach is something that will go on long after all of us in this chamber have left the place, but what is going to happen is that 95 per cent of employees and employers are going to get on with it. They're going to do the enterprise bargaining. They're going to do what's right for both parties. And if ever someone's not happy, they're going to wander off to Fair Work, they're all going to burn time and money they probably don't have, and, in general, the employee will be rewarded, because it's designed that way, and the world goes on.
Right now, in the middle of COVID, we need a bit of constructive dialogue from the other side. Blocking everything, changing nothing, making these lunatic claims that never actually eventuate once the legislation passes is just increasingly disappointing. It is increasingly saddening to everyone listening to a Chicken Licken party that keeps saying the whole thing is going to go into a meltdown if you change one part of the system. The reality is that, like any garage sale, you've got to be constantly updating your legislation, moving out what doesn't work and bringing in the new ideas, and responding to the new economy.
I have to say that, when it comes to IR, back in the old days 10 years ago—Deputy Speaker Vasta, you will remember this—we used to say: 'Don't get the debate onto health or education; we always lose those. Don't get the debate onto IR. If it's an IR election, we always lose those.' Let me tell you what has happened in the time that the Deputy Speaker and I have been here. We continually win education and health debates. On balance, I'd rather be in those and winning them. I have no fear of that debate with a Labor Party that simply can't engage social sector reform anymore.
It's so sad that this once-great party can't even engage IR reform anymore. It's all about holding out, getting painted into the corner with your diminishing union membership and fighting blind, bringing nothing to this chamber by way of good ideas. When was the last health reform brought here by Labor? When was the last education reform or employment services reform brought here? You're just living in the age of the CES. This is a party that stopped thinking about social sector reform sometime in the Howard era, when they all just gave up. It's some sort of vestigial organ in the Labor system. It's just sad. There's no constructive discussion. As long as everyone's getting bulk-billed and the spending's going up, it's all okay. In IR, as long as it's all about the industrial relations rights of workers, it's all okay.
I will take up the invitation. I know that it became a somewhat sensitive topic talking about social welfare reform and lack of it. But my point is that the industrial relations reform is also needed. We need a virile, hungry, energetic Labor Party willing to talk about solutions, but they've really given nothing here.
I go back to where I started. This debate actually was initiated by blowing up the notion of a casual worker and telling every employer in Australia that they should both pay the casual loaded rate and then all of the additional leave entitlements. It was a patently ridiculous claim that had almost no chance of surviving in court, but of course they were going to go through with it because some employer had to find the $2 million to take on the overpaid union lawyers. That's the essence of this legislation. That's why we're all here today, right? There's that attack on casual workers from the Labor Party and then there's the obvious necessity to retain the JobKeeper flexibility in agreement making while we go through COVID.
So I apologise to one or two on the other side who were somewhat sensitive about noting just how lacking in reform zeal this Labor Party is, but I think it's all been exposed today. I must admit that debate about the platform economy just showed a luddite Labor Party that still wants to walk in front of those newly mechanised carts with a flashing light, saying: 'Warning: there's a car coming down the street.' You've got to move with the times. You've got to learn how to download an app. You've got to realise that people are going to work in the platform economy in a way that can't be regulated by unions. Yes, sadly, they won't be paying their membership dues.
At the heart of it, this nation would be far better off if we had a left-of-centre party that could engage these debates of IR reform without being driven by trade unions.
So today we debate the Fair Work Amendment (Supporting Australia's Jobs and Economic Recovery) Bill 2020. To start off, I should say to the people of Warringah that I've had briefings with all sides of the discussion, including the Business Council of Australia, the Australian Council of Trade Unions, the Council of Small Business Organisations Australia, the Labor Party and the coalition. So I don't take this debate lightly. We must be considerate of the downstream effects of these proposals and ensure that the benefits and costs are shared widely amongst all stakeholders. I've also sought feedback, of course, from the Warringah community. I have, however, felt overall that this debate has been vexed by partisan polarisation. Both sides have sought to scare voters with rhetoric, claiming either that small businesses will be slugged or that workers will take massive pay cuts. I didn't find the examples provided in support of claims to be compelling.
I believe we should be able to have a reasonable discussion about what a 21st-century industrial relations system looks like as we recover from this pandemic. Australia must not simply recover but also design an economy that is dynamic, is innovative and allows business to pivot and adapt and workers to flourish. That's why I urge that we go further in pursuit of those aims. We must look at every way that we can to unlock productivity, wage gains and efficiencies, whether that is tax reform, industrial relations or energy. Now is the time for boldness, not lethargy.
This bill has several schedules which address discrepancies in the classification of casual workers. It simplifies the enterprise bargaining process and combats wage theft. In this speech, I want to focus on the changes to the enterprise bargaining process and provisions addressing part-time and casual workers, as they are very much the changes that affect Warringah constituents. Australia's industrial relations system is needlessly complex and inflexible, to the detriment of employers, particularly small business, and that does ultimately impact workers as well. Warringah is an electorate with many small businesses—just over 20,000 small businesses—so this is an issue that is frequently raised with me.
In relation to enterprise bargaining agreements, this bill seeks to make modest changes, but there are some flaws. It is attempting to reboot the enterprise bargaining system to make it more accessible and streamlined. It's vital that we do this, as the number of enterprise bargaining agreements in the last decade has fallen significantly. The number of people employed under an EBA fell from 2.6 million in 2014 to 1.8 million in 2017. So we need the system to work. EBAs are important, as they drive productivity, better wage outcomes and fairness. But clearly those numbers and the reduction in EBAs show the system isn't working as it should.
The current system leaves business with little option but to exit and rely on awards, give up on making new agreements or settle for a suboptimal EBA. That's because EBAs can be shot down over technicalities or the negotiations hijacked by third parties. This bill seeks to address this. In some cases, the process is just so complicated and time-consuming that businesses simply give up. EBAs should be pushed through the process a lot faster than currently occurs. Even after the parties have agreed, some take more than 120 days to pass through the Fair Work Commission process. I agree that many provisions in the Fair Work Act relating to EBAs can be streamlined to make them less time-consuming, and I support the parts of the bill which seek to do this.
Although this is not covered in this bill, the government should consider provisions for the making of a small business EBA. The constant feedback I get from small to medium-sized businesses is that that is needed, as many have multiple employees and don't fit neatly under one award but need a number. That can make navigating the system an administrative nightmare for small business. The workload attached to the paperwork is simply a deterrent to putting on more staff and takes away from business proactivity. A small business EBA, or better provision for small businesses, could make business owners' and operators' lives easier through simplification, as well as boosting workers' wages.
In relation to part-time workers, this bill includes amendments that will vary 12 identified awards in distressed sectors, including retail, hospitality, fast food and related sectors. Many of those are incredibly relevant in Warringah. These changes will allow part-time employees to pick up extra shifts and days. Currently, part-time employees are passed over in certain circumstances in favour of casual employees when it comes to additional shifts. Appropriately, there are protections for a minimum 16-hour week. However, extra shifts will not result in overtime payments to part-time staff under these changes. But it should be clear, despite the scare campaigns that occur, that these additional hours will still qualify for penalty rates on weekends. I believe this flexibility will support businesses and part-time employees.
The government should consider the concerns of the business community about the paperwork required to agree to additional hours. We hear a lot in this place, especially from coalition ranks, about cutting red tape. I would argue that there is red tape that could be cut here, and there is actually some being created. The bill as written requires a written agreement every time more hours are sought by or offered to a part-time employee. There should be a standing consent clause whereby an agreement is not needed every time but instead an employee gives their written consent once, which will include details of ongoing availability.
This bill will introduce a definition of 'casual employee'. This definition is intended to provide certainty to both employers and employees at the beginning of employment. I would argue that this is helpful, given the legal uncertainty facing small businesses, following the WorkPac Pty Ltd v Rossato litigation, which established that an objectively justified expectation of continual work means workers are eligible for the benefits of a full-time worker, regardless of the casual loading already paid. This leaves wide open the potential of double dipping and workers receiving both full-time entitlements and casual loading. This can't be in the best interests of small business. I recognise that there are instances of large companies doing the wrong thing in underpaying casual loading. Sadly, they do hit the front pages. But I do believe that by and large most business owners, especially in small businesses, set out to do the right thing. There is a relationship between small businesses and their workers. There is a closeness in their intention to prosper and thrive together. These are business owners who have a small number of employees, and they are close to them. They are looking for solutions on how to work together.
I do believe it's the complexity of the system which is leading to mistakes. Many are paying the loading, but now they have a situation which is out of their control and they will have to pay damages above the scope of what is reasonable. I do, however, acknowledge that several submissions to the Senate Education and Employment Legislation Committee, including the Law Council of Australia, have made the point that the definition should be rebalanced. The definition of 'casual employee' proposed in the bill may be open to manipulation, since it is affected by how the offer of employment is phrased.
Regarding the casual-to-permanent conversion mechanism, it will universally enact the conversion rights that exist under various awards and agreements. I support this measure. Employees should be offered the opportunity to become permanent. However, the government should tighten up the language in the provisions which allow employers to object to the granting of a full-time position to casuals. The clause allowing for reasonable grounds to oppose conversion leaves too much discretion to business owners and could allow any excuse for not granting full-time employment.
I am concerned about the lack of right to arbitration, which could disadvantage workers and employers that are seeking a resolution. The rights should be guaranteed where mediation or conciliation through the Fair Work Commission has failed. Finally, the government should remove the requirement to notify employees who do not qualify for conversion. It seems an unnecessary burden for small businesses to have to notify staff of something that does not even apply to them.
In conclusion, although the debate has been incredibly polarised, on balance I'm not swayed that the issues with this bill outweigh the benefits. The bill will introduce modest measures to improve the functioning of the industrial relations system. I urge the government to consider sensible amendments in the Senate, proposed by the Law Council of Australia and the Business Council of Australia, that will improve the bill. These changes will benefit many small businesses in Warringah in particular, from my point of view, making the system streamlined and more efficient. However, I do ask that the government also look at further changes. We must design a 21st-century economy. It is time, and I would urge all members in this place to come together to try and do that.
I rise to speak on this bill, the Fair Work Amendment (Supporting Australia's Jobs and Economic Recovery) Bill 2020, for two reasons. First, I want to acknowledge the piecemeal progress that's been made on this bill so far and express my concerns about specific provisions that need a lot more work and compromise before we can call this sensible, consensus-driven reform. Second, I want to express my total disappointment, on behalf of my constituents, in the political opportunity both major parties have wasted here to put swords down and negotiate reasonable, good-faith reforms, as initially intended. Frankly, it's pathetic that this is the best compromise the opposition and the government could come to on this. I believe it highlights the endemic lack of cooperation and humility on both sides to work together for all Australians.
To be clear, there is an absolute need for industrial relations reform. I was encouraged to hear the opposition leader and the government talk about the roundtable discussions last year as a consensus driven process, akin to the accords of the 1980s and 1990s, on refining our current system. 'Refinement' is a key word here. According to the most recent independent economic review of the workplace relations system conducted by the Productivity Commission in 2015, the system isn't totally dysfunctional; it needs 'refinement' and 'repair'. Refinement requires total attention to detail. Refinement requires an absolute focus on policy, not politics. Refinement requires deep consultation and inclusion. I'm not convinced we've achieved that here.
There are some good features to the bill that I think it's important to acknowledge. First, I believe that the response in this bill to the Rossato decision, which allows employers to offset previous casual loadings against retrospective entitlements, is measured and appropriate and responds to the real concerns of small businesses, who would have struggled to implement the Rossato decision in full in such a difficult economic climate. Those provisions also ensure that those retrospective entitlements do not disappear in their entirety and that those casual workers who have been entitled to minimum benefits can access them. This is a good example of middle ground.
Second, I want to welcome the decision to remove the controversial change to the better off overall test, which was ambiguously drafted and could have led to the progressive erosion of baseline employee rights that have been the agreed bedrock of our industrial relations system for generations. One does have to wonder, though, whether such a controversial proposal was deliberately included by the government so that it could be removed at a later date as a signal of good faith bargaining. It would be disappointing, of course, if that were the case. It would be even more disappointing if the government had used the community's political unity around COVID as a smokescreen to bring on partisan reforms. Just this week, a panel of public health experts from the ANU warned that the provisions in this bill which could erode access to sick leave and other entitlements would actually exacerbate risks in our COVID-19 response and recovery. How deeply ironic, dangerous and disappointing if that were true.
There are also a number of provisions in this bill as it currently stands which need refinement. First, the wholesale revision of the common law definition of a casual worker is problematic and overemphasises the initial terms of employment. We know that prospective employees are deal-takers as opposed to deal-makers when it comes to initial contract negotiations and that a job can sound very different on paper or in an interview compared to what it's actually like in real life. It's obvious to me, small businesses and casual employees alike that this provision needs more work.
Second, more work needs to be done to resolve the arbitration question in the casual conversion provision. I believe casual employees who end up working like permanent employees must be recognised as such. I also believe commercially minded employers who care about business certainly want this too. But, when this pact breaks down and requests for casual conversion are rejected, employees must have somewhere to go that's not burdensome. While the International Labour Organization argues there must be an absolute right to arbitration in these circumstances, it's true that such a right is not an absolute feature of our current industrial relations system, including the dispute resolution provisions of modern awards. There is a way to get this right, but I have not heard either the government or the opposition propose a middle ground here, despite the incessant back and forth during question time for the past week. For example, the unilateral right of an employee to arbitration by the Fair Work Commission could be activated after both parties have participated in a conciliation process led by the Fair Work Commission. This would not require consent from both parties.
Third, I believe the extension of the flexible work duties and location provisions for two years needs further justification. It's absolutely true that small businesses need the flexibility to work with their staff to innovate and redeploy resources to keep their businesses alive and thriving through the post-COVID recovery. It's also important that the power to do so is not unfettered. As the bill is currently drafted, any employer would be permitted to redeploy staff in their business if it would reasonably assist in the revival of the employee's business. This has the potential to be far-reaching and we need to be crystal clear about what is and is not captured by this, firstly, to protect employees from exploitation but also as a tool for businesses to ask themselves: is my recovery strategy commercially sensible and viable? I'm not convinced the provisions help businesses to do this.
The list of issues in this bill that need further good-faith discussions between the government, the opposition, the unions, employers and so on is infinite. The 15 minutes I'm allotted is nowhere near enough time to cover other issues like changes to the minimum size of greenfield agreements; the workability of new criminal offences for wilful theft and the systemic underpayment of employees; or what employers must do to satisfy themselves that culturally and linguistically diverse employees understand the EBA they're voting on. This tells me loud and clear that this is not a good-faith consensus bill. In fact, the only thing that's loud and clear about the bill is that it is complex, unresolved and being politically weaponised to an unreasonable extent.
I've spoken to countless casual workers, small-business owners, local unions, major employers, chambers of commerce and other stakeholders across my electorate of Indi over the past six months about the status of these reforms since the 'swords down' moment of mid last year. It might surprise others in this chamber to learn that these groups which the government and opposition have pitted against each other over this bill in a pseudo-election campaign are actually united by one thing in my electorate: their collective confusion and disappointment about the political hijacking of this issue instead of a focus on constructive conversations. Just this week I spoke to the CEO of Business Wodonga, Neil Aird, who told me that the bill needs more work and that he was concerned that many small businesses have only heard the political headlines in this debate. He was concerned many small businesses and HR advisors alike are still unsure exactly what this bill aims to do and how it does it. That's a total failure in proper political communications, in my view.
When I met with small-business owners and casual hospitality and retail workers in the main streets of Alexandra, Yea and Marysville earlier this month, I did not hear the same crude, media savvy lines I hear from the government and opposition over and over again in question time. Not one casual worker I spoke to was jumping up and down shouting, 'This is a cynical ploy from a cynical government,' like the opposition leader did last week. Not one business owner was saying, 'Labor has its head stuck in an ideological rear-vision mirror, selling unbelievable untruths,' like the Attorney-General did earlier this month. Instead, employers were saying constructive things like: 'We're really keen to get new staff in and make sure we can offer them good hours and conditions to keep them around.' Employees were saying things like: 'I'm part time and keen to do extra hours, but I haven't had time to sit down and look at my contract and figure out how to ask for that.'
If you want a case study in how political rhetoric gets in the way of reasoned progress in this country, I reckon this bill is it. In his Press Club speech announcing these reforms, the Prime Minister said industrial relations is:
… a system that has, to date, retreated to tribalism, conflict, and ideological posturing.
Well, I reckon we have it on full display now, don't we? I've not seen one single detailed amendment from the opposition on this bill—not on the Notice Paper, not in the media, not in meetings in this place. Not one. They're called the Labor Party. This is meant to be the opposition's bread and butter. But how on earth are we to achieve the Productivity Commission's recommended refinement and repair without any good-faith proposals from them to make this bill better?
I'm going to oppose this bill today, not because I think it's unsalvageable—I don't want to run a scare campaign and kick up dust on a possible political election issue, like others in this place—but because there's so much more work to be done on this bill that has not been done. That's just bad policy and bad politics. I've been working and will continue to work with Senate crossbench colleagues who are thinking about this bill very carefully, and I'll assess it again when it almost inevitably comes back to this House amended. That's because I assess each bill based on policy merit, not on political ammunition. In the meantime, I call on both the government and the opposition to step up and to do better, be better and deliver better on this bill.
When this Fair Work Amendment (Supporting Australia's Jobs and Economic Recovery) Bill 2020 came to parliament—when it was first spoken about and introduced—Labor had a simple test for the government. Will this bill create secure jobs and decent pay? It's a pretty simple test. The answer back in December was no. It was no then and it's no now, whichever way you look at it. There is the way we've heard government MPs fluff things up today—and I heard the member for Griffith's contribution, which was a brilliant contribution, about the la-la land of people on the other side saying, 'Oh, all employers work for the best of their employees.' That's absolute rubbish! The reason we have the Fair Work Commission, the reason that we've had industrial relations commissions and the reason we have courts is because people are treated unfairly by bad employers.
Unlike those opposite, I'm not going to say that all employees are good or all employees are brilliant. They're not; there are always bad ones in there. Part of our job as legislators is to make sure that we have laws which protect the good ones and prosecute the bad ones. It's not rocket science; it's what we're about; it's what we should be doing. We see, day in day out, employees who are being ripped off and underpaid. Recently one of the great big franchises—the one with a clown—was even saying, 'Well, maybe we could pay our employees with chippies and cheeseburgers rather than actual cash.' I don't know about you, Mr Deputy Speaker Vasta, but I know when I go to pay my electricity bill that Energy Australia isn't going to accept a happy meal to cover my power bill for my property. And nor should they!
A government member interjecting—
I probably shouldn't eat many happy meals, you're right! When we look at these things we have to look at them holistically; we can't just take little bits and pieces. We have to look at what is going to be the overall test that we set as legislators. The test is that we should always be working for the betterment of employees, to ensure that when they go and work for companies and businesses they have protections in place to keep them safe and to make sure that they get a fair day's pay for a fair day's work. What we see in the bill is that it makes it so much easier for employers to casualise jobs which should otherwise be permanent and it makes bargaining for pay and conditions a lot worse than it already is.
I'm thinking about the time I worked with large employers. Think of a 15-, 16- or 17-year-old kid, trying to get into employment and expected to negotiate their pay and conditions with a multinational company. They're not sitting and negotiating with the foreman of the workshop. They're sitting with the foreman of the workshop and a heap of papers prepared by teams of lawyers—teams of white-collar workers who are in there and focused on the one focus that a lot of businesses have: focusing on profit. Businesses should make profit, yes, but not at the expense of the people who make those businesses run. It's very hard for kids to be able to do that.
I can remember an example myself from when I was younger, working in an automatic transmission place. 'Yes, great, you've got the job, and we're going to pay you a casual rate. But you're working five days a week, eight hours a day and all the benefits.' But they never say: 'Yes, we're paying you a casual rate, but we're putting you on as a casual employee. So when you get injured there's no sick pay. There's no holiday pay. There are a whole range of things that won't happen.' And that still happens today. These are the sorts of things we should be doing something about, making sure that we protect people who apply for jobs and ensuring that we support employees who do the right things. As I said, it's not that hard.
But when we come to this bill we hear the rhetoric on the other side about how great employers are and how great this government is. It's a Liberal-National government and it's their true values. Yes, their true values are very clear: in every single industrial relations case—every single one—it has been the Labor Party and the union movement fighting for better pay, better conditions and better, safer workplaces, not those opposite. They side with the big end of town that fight to stop these things happening. It's Labor that always fights. We fought against Work Choices and we will fight against this. Because despite the rhetoric that comes out from those opposite, it's in their DNA that they do not fight for workers' rights and workers in this country. They consider them an expendable part of a business enterprise, and they're not. These are people's lives we're talking about.
I've got a letter here that I received—and I have got to thank Minister Sukkar for responding to my letter—about employees getting ripped off at workplaces. I thank him because it's only taken him four months to do that. For four months an employee has lost work, going down from 10 hours a week to three hours a week. At 25 years of age, she's trying to work and save and build herself a life. She's been short-changed. This is what happens with the way this government works. This is not something that's important to them. But it's important to her to get ahead. We see this each and every single day.
When you bring a bill into parliament that's going to make work less secure and increase the option for pay cuts, you know it's the wrong thing to do. We're going through a massive pandemic that's delivered the Morrison recession where people in insecure work are working in three, four or five locations, trying to make ends meet. That's not what we should be about. We should be about trying to build better jobs, secure jobs. Let people know when they go to work that they're going to get paid and they're going to get their superannuation.
That's another subject that the government's backtracked on. They have lied to the Australian people—flat out lied. They legislated a superannuation rise but now they don't want to do it. Of course, they're quite happy to ensure that they've got good superannuation. This is the wrong thing to do. What does the government do? It blames the workers. It says it's their fault, that the economy is not safe, that we can't do these things. Yes, you can—it's about the choices you make and it's about values you have. Stand up and do the right thing and ensure that people get paid the superannuation that they deserve and are entitled to.
As I said, when this bill came out we asked one simple question about whether this is going to make workers better off. It failed that. Each and every day, we've seen that when this gets discussed the government brings out their rhetoric and lines, and blames the victims—something they're getting quite good at. We've seen the better off overall test pulled out. That was one of the most appalling things in this bill, but it's not the only thing. There is a whole range of things here that will make it harder and harder for people to get good, secure work and good pay. When you see bargaining rights and protections for workers whose pay and conditions are covered by agreements being attacked, you've got to sit there and say 'that's not the right thing to do'. It's not what we should be about.
We should ensure that we have safety nets. We heard at question time today, time and time again: do people deserve to have a minimum wage? Do they deserve to go to work and be paid on the reasonable expectation that, for the work that they have done, they will get a wage that actually pays the bills? The government says no—they're disposable. Not to worry—if someone goes to work and works eight hours and only gets paid $40, well, so be it. That's bad luck. We've seen this right through in the way that the government values workers. We've seen the attacks on retail workers.
The Attorney-General was carrying on over the Road Safety Remuneration Tribunal. I tell you what, I don't think any one of you guys on the other side has ever gone to a truck accident in the middle of the night and seen what it causes. If you actually had to go to a motor vehicle accident—where people are working longer and harder to try and make ends meet and being forced by unscrupulous employers to work harder and longer for less money—you would see what happens. The carnage that this causes on the road—let alone actually going in and looking at what it does to families and communities—it's appalling.
Yet the government sits there and says: 'Well, it's not the right thing to do. They can get paid whatever they want.' When it comes to a negotiation on these sorts of things, the person who is paying the money wants to pay out the least amount possible. The person who is doing the work wants to get the highest amount possible. That's fair. But when you're in a bargaining situation where you have nothing but your employment to give versus someone who has got millions of dollars and teams of lawyers behind them, you're behind the eight ball. That is a simple thing to think about when you think about values, morals and ethics.
The right thing to do is to ensure that we build a stronger and better economy by making sure that people in the workplace get paid properly—make sure that they get the entitlements that they rightly deserve and make sure that we aren't bringing stuff into this place that makes work less secure and cuts pay. Without measures to create more secure jobs, where are we going as a country? Where are we going as a nation? Workers will have less capacity and less confidence to spend. That, in turn, suppresses demand, and it's a snowball effect. If people aren't getting paid, they can't spend money. If they don't spend money, they lose jobs. That's what happens. If the government can't understand that, that explains why we're in the Morrison recession. This is not a recession brought on by COVID; COVID's the cover that the government's been using. The fact is that deficit and debt is higher under this government than under any other government in the history of this nation. One person has been in control of that for the entire time, whether as the social services minister, bringing in robodebt; whether as the Treasurer, making cuts for Australian working families; or whether as Prime Minister. And what does he do there? He delivers the biggest recession, debt and deficit we have ever seen.
When it comes to these sorts of things, you have to ask, 'Who are the people who are most going to stand up and deliver the better results?' It's not going to be the government. It's those in the labour movement—the Labor Party and the union movement—who have worked consistently for decades to support workers and workers' rights. It's not a government that has spent every opportunity attacking those working rights, attacking the safety nets that we have and attacking people who find themselves in positions from which they can't defend themselves against multinational companies.
I implore those opposite: look into your morals and values. Just sit there and ask: is the right thing to do to make it harder for people to get paid a fair wage for a fair day's work, or can you turn around and see inside yourselves that what you should be doing is trying to strengthen employment opportunities for working Australians, to give them jobs that pay bills and give them the opportunity to build a life? That's the simple test that needs to be done. As I said at the start, the test of the bill was: will it create more secure jobs and decent pay? It didn't then, and it doesn't now. The government should not be supporting measures that make it harder for people to get ahead.
In many ways, this bill, the Fair Work Amendment (Supporting Australia's Jobs and Economic Recovery) Bill 2020, sums up this government. It's a government governing for last century, governing for the wrong time. It's a government that believes that you can cut people's wages and grow the economy. Those opposite have always believed that. They do it every time they get into government, and they're doing it again through this bill. It's a strategy which simply won't work. You do not grow an economy and create jobs by cutting the wages of a business's customers. I have never, ever heard a business argue for cutting the wages of their customers, yet that's what this bill does. It allows any employee on an award to have their wages and conditions cut by their employer, without, really, any opportunity for that employee to go to arbitration unless they go to court and pay for it.
Let's have a look at what this bill does, before I talk about some of the issues in the context in which this bill will do exactly the opposite of what the government wants. Labor's test for the bill, as it is with industrial relations, is that if unions and employers—through the government's consultation program, which they claimed would be extensive; it turned out not to be—reached an agreement, we would support it. That was our test. It was also our test that workers not be worse off, but we were pretty confident that, in a proper negotiation process, that would not occur. But that's not what we've got here. This bill will not create secure jobs and decent pay. In fact, it will do exactly the opposite.
The most extreme part of the bill—the suspension for two years of what's known as the BOOT test, the better off overall test—has now been withdrawn. The government knew full well that they were on a hiding to nothing with that, so they have withdrawn it. But this bill still allows workers' wages to be cut, and most of the workers who will have their wages cut are the heroes of the pandemic. They're the people who turned up to retail outlets every day. They're the cleaners. They're the people who actually took the risks for the rest of us and held this country together. But this bill is bad for them. It makes it easier for employers to casualise jobs that would otherwise have been permanent, it makes bargaining for better pay and conditions more difficult than it already is, it allows wage cuts, it takes rights off blue-collar workers on big projects and it weakens wage theft punishments in jurisdictions where it already is deemed a criminal act. Some states already have strong wage theft laws. This law, weaker than some of those, overrides those. So while in some states there will be an improvement in wage theft legislation, in others it will be worse. It makes work less secure and it cuts pay.
It also does something which is really quite interesting. The permanent addition of flexible work directions in this bill is absolute proof that changes to the Fair Work Act introduced as temporary by the Liberal-National government are never that. This measure was originally introduced as part of the JobKeeper program and limited to employers receiving the wage subsidy; however, since then it has continued and expanded its application well beyond its original intent. This part deems the modern awards, of which there are 12, to include terms that allow an employer to give a direction to an employee about their duties and location of work. Again, it was a two-year provision based on the original JobKeeper stand-down directions. In other words, during the pandemic, rules were changed a little so it allowed workers to keep their relationship with their employer through JobKeeper. Since then, the provision has been extended to legacy employers—that means for workplaces covered by the identified awards, the special flexibility will be available to every employer; even those that never qualified for JobKeeper. It also allows part-time work to be reduced to 16 hours, with workers being asked to work hours after that effectively on the same rate, without the casual loading. Again, it makes it incredibly flexible for the employer to change the hours of work for an employee, but it doesn't give the employee the kind of certainty that they need in the contemporary world.
I just want to talk about the context in which the government is introducing this bill because they claim that this bill will grow jobs. Again, I have never heard a business argue to cut the wages of its customers. I can't see how cutting the wages of its customers does grow jobs; in fact, it decreases spending. Most of the workers on these rather low incomes relative to the national average would spend every dollar that they get, so it's hard to understand. But I do understand why small business in particular would ask for this greater flexibility in bargaining with their staff. What they tell me is that because of the imbalance in bargaining with the large businesses with which they do business, this is kind of the last remaining place where they feel they can actually negotiate and cut costs at all. We have the highest retail rents in the world—perhaps the government could look at doing something about that. We have incredibly high retail rents. We know that. Talk to any business and they will tell you that. We have seen through COVID just how unreasonable some of those relationships are. There is unequal bargaining with the really large businesses with which they do business every day. They have very little control over their electricity and gas bills.
Because of the increasing casualisation in the workforce and the changing nature of work in the workforce, small businesses have less ballast in their market. By 'ballast' I mean customers that have regular income—it used to be public servants or people who worked full time in factories. People who had regular work and didn't respond with fear at the first indication that the economy might be getting a bit rocky or something might be happening overseas—they were like the ballast. They had customers that were there, but this is changing. It's another reason why this is the wrong time for this bill. It really is the wrong time for this bill. One of the reasons why we have less ballast is that workers are in a far more casualised world. In fact, we've had higher growth in casual employment in the last year than we have ever had before. We know from talking to people around us that there are literally millions of Australians now in casual work, many of whom would like more permanent and consistent work.
If you look at the nature of working people now, you're quite often talking about single parents. You're talking about parents with children—of course parents have children! You're talking about working couples with children. They need to be able to organise their working life around their work hours. So just imagine what this bill does to a working couple who are organising their child care around what was permanent part-time work, and now it's 16 hours fixed, with casual hours after that determined by your employer—take it or leave it. How does a working person do that when they have to organise around school drop-off and school pick-up? Again, it's the wrong bill for the wrong time. It doesn't recognise what has actually been happening in our community and the changing nature of work. It really doesn't work at all.
We also have wage stagnation. In fact, we're approaching the second decade of wage stagnation, so we already had workers thousands of dollars worse off over the last 10 years. Again, wages are going down. Workers are relatively worse off every year. It is increasingly difficult for parents to juggle working life and family life, and we have a government that's making it worse with this bill and is actually taking away the level of stability and certainty that workers need in order to juggle their family life and their working life.
That, by the way, is perhaps one of the biggest issues that couples with children face at the moment, and single parents, of course, face it even more. I tell this story quite regularly, but we'll see more of this. I was doorknocking in an area in the south of my electorate where there are more single parents than in any other area in Western Sydney, and I found a six-year-old child at home alone. This little kid answered the door—and opened the door too, which was kind of worse. So I phoned that parent to find out what was going on. That was a parent who found out at 6 am every morning whether she was working that day. If she was, she had to be there by 7 am. If those are the working conditions that this government thinks people should have in order to create jobs, it doesn't understand the nature of modern Australian society.
There's another aspect to this for me too. As a businessperson, I'm saying that cutting wages doesn't grow a business, because it cuts the wages of your customers, but I know that there are some circumstances in which cutting wages does actually grow a business: if the business employs low-wage workers and sells to high-wage customers, it's going to be better off. I'll put it this way: I doubt that the food delivery drivers are finishing their shift on a Saturday night and then becoming customers of other food delivery drivers, because they're just not paid enough. I doubt that fruit pickers, who are being paid appallingly in some areas, are then heading out and buying the high-cost fruit that they've picked. Henry Ford knew about this. Henry Ford knew that there's a relationship between the wages you pay your staff and their ability to buy your products. Are we really moving to a world where we have people on low wages, with very poor conditions and casualised work, working in a business and selling those services to a higher-wage customer? That is the only way that this bill will create jobs. That is the only way that it will do that.
Again, there are a lot of things that a government could be doing at the moment to grow the economy. They could be looking at the nature of work now. They should be looking at the number of people who don't have stable income or stable working hours and trying to find ways to regulate so that we have that ballast in the economy that holds our economy relatively steady when we're faced with headwinds, because I can tell you—we know this well, and any economist or anybody who studies sociology will tell you this—that people who are insecure in their work and have irregular income will be the first ones to stop spending if they fear a shock to the economy, and they'll be the last ones to start spending again.
This bill is at the wrong time and it attacks the wrong people. It really does. It should be strengthening workers. It should be encouraging workers to have the capacity to spend to support local businesses, and it does exactly the opposite. It will not achieve what the government wants to achieve. In fact, I suspect it will achieve exactly the opposite.
We will see customers of businesses with less money to spend. Anyone who has been in business knows that you do not compete by cutting your price and you do not compete by cutting your wages, because everybody else can do exactly the same thing. It is a race to the bottom. If everybody can do it, it doesn't give any business an advantage. It simply cuts the amount of money that people spend in the business next door. It makes no sense. This is the wrong bill for the wrong time and it will backfire badly on a bad government.
I rise to speak against the Fair Work Amendment (Supporting Australia's Jobs and Economic Recovery) Bill 2020 and speak in favour of the second reading amendment moved by the Manager of Opposition Business. This bill has very significant flaws. Even if one were to argue that there were some potential benefits, from what I can see the construction of the provisions of the bill would not provide any real benefits. There are concerns—and Labor has for some time now expressed those concerns—in relation to a whole range of issues that are contained within this bill.
We're aware that the suspension of the better off overall test has been withdrawn, but I think that that provision before its withdrawal by the government underlined and, if you like, exposed the motives of the government to leave unprotected tens of thousands of workers potentially in many sectors of our economy. There was not sufficient protection to ensure that they would not be worse off after entering into a new agreement. That reminds me that in 2005 the then victorious John Howard came to this chamber and, as Prime Minister no less, made a ministerial statement that explained in detail his intentions to change the industrial relations laws of this country and introduce what was then entitled Work Choices. In that speech he talked about removing the no disadvantage test, which was of course the comparable provision to the better off overall test.
As soon as I and others heard that we knew that, if that proposed legislation were enacted, many workers would be potentially worse off and, in some cases, far worse off as a result. That came to pass. Work Choices was legislated. The government held both houses of the parliament and they enacted that legislation. That led to many workers losing penalty rates, overtime provisions and many entitlements and seeing their wages fall considerably. As a result, in part at least, we saw the end of that government and we saw at the election in 2007 a Prime Minister for only the second time in our history lose his seat.
Whilst the breadth and depth of Work Choices are not contained in this bill, I contend that the motives behind the bill in part go to those same issues of deregulating protections for working people in this country and providing greater powers to the employer and lesser powers to the employee or the organised employees—namely, the unions. I say that because some of the provisions here clearly are either seeking to codify the law and legislate over common law decisions in the case of the 'casual' definition or looking to provide capacity for employers to subjectively deem somebody to be casual—and if they so deem them to be casual then they will be seen as such, again reducing the likelihood of a potential challenge by a worker to suggest on the facts of their employment that they are indeed permanent employees.
Of course, that provision was in response to the Federal Court decision in the Rossato case, which found a worker, who was employed by a labour hire company, who had a fixed full-time roster and who was being paid for some years, to be permanent, notwithstanding the contention by the employer that the employee was casual. There has been a lot of commentary on what that decision has meant, but it did not mean—and I would like to correct or contradict, if you like, the minister in relation to this matter—that all people in this country who are casual would somehow be in receipt of back payments. It did not mean that at all. In fact, whilst the construction of the registered agreement that applied to that worker and the facts of the case meant that there would certainly be claims by some casuals in this country, quite rightly, to be afforded the definition of permanent, it wouldn't have meant that in all circumstances. Therefore, the estimate of the costs to businesses were very much exaggerated. I just make that point. But what is really concerning and disturbing about the construction of that provision is that this provision would allow an employer to say, 'You are casual,' and you would be deemed as such, whereas what should happen, if we are going to have a statutory definition of 'casual' in legislation, is an objective test to delineate the difference between permanent and casual work.
Casual employment is a legitimate form of employment. There are workers who also choose to be casual, and they should be able to choose to be casual. It is an important part of the mix in the labour market in order to provide sufficient flexibility for workers and businesses. However, it has been misused and abused on occasion and, indeed, there are now way too many people who are not afforded the right of permanent employment and they need greater levels of certainty in the workplace. They need certainty of employment. They need certainty of income. Because they have permanent families, they need permanent jobs. They have full-time families; they want full-time jobs. They have long-term mortgages; they, therefore, want long-term jobs wherever possible. But this legislation is not actually supporting that endeavour wherever possible. In fact, it is acting contrary to the need to make certain and to provide more opportunities for permanent work in our labour market.
The minister has argued that, for example, some of the provisions of the current Fair Work Act were legislated by the previous Labor government. That may well be true, but it is also true that there are changes to the labour market that have occurred in the last decade that make it necessary for this parliament to consider protecting those workers who have become vulnerable as a result of those changes to the labour market. For example, the idea that you can buy and sell labour over an app was not something that was conceived of 15 years ago, 12 years ago or a decade ago in the way it is now. Whilst the work is traditional, the way the service applies has changed. It should not mean that workers are paid less than what is afforded to them under comparable awards. I think it's fair to say it's not just unions or the Labor Party that say that. I meet with many businesses who are bound to awards and they have to give their workforce a certain set of conditions and certain rates of pay. They are somewhat disturbed by the fact that they have competitors who are able to pay people $6, $7, $8 or $9 an hour to do the same work as their employees, who are being paid at least $20 an hour or above. So it's not just unfair to those workers who are not being afforded permanent employment status and provided at least the minimum wage in this country. It is unfair to those employers who are bound to the same awards and who find themselves now in a very uncompetitive position against their competitors that have been able to have arrangements in place that allow them to pay workers, so-called independent contractors, well below minimum wages.
There are mechanisms we can use. In fact, the New South Wales Industrial Relations Commission had a deeming provision in it to deem contractors to be employees if the circumstances were right and if the facts of the matter of the job involved were sufficient to show that that relationship was an employment relationship and not a contractual relationship—that is, that person was not a customer but, indeed, their employer. The New South Wales state commission could deem those workers to be employees. That deeming provision is something that we could take up in the federal jurisdiction.
That's why I refute the arguments made by the Attorney-General that it's not possible. In fact, it has been a part of our industrial relations system in other jurisdictions for decades, and it could certainly be determined to be such in the federal jurisdiction. I do believe that if there were a genuine attempt to provide opportunities of permanent employment for workers in this country there would be more effort made by this government to do that. But I'm afraid to say that doesn't appear to be the case. We have a definition of 'casual' which is really an attempt to remove any common law rights that might flow from the Rossato case. We have a definition of 'casual' which allows the employer to deem people to be casual as a subjective test, whereas what we need, if we're going to have a definition in the federal statutes, is an objective test to delineate between casual and permanent. That doesn't exist in this legislation, and that's why we can't support the bill as it stands.
As I say, 16 years ago we saw the then Prime Minister John Howard come in here and introduce his dream for the future of industrial relations in this country, and it was entitled Work Choices. That went deeper and broader in relation to changing the provisions of the current law at the time, but some of the elements of this bill, under the cloak of the pandemic, will deregulate protections for working people, will not make it more likely that exploited workers get even the minimum rate of pay in this country, and will actually be unfair to employers who are paying award wages and competing against employers who are not. For those reasons alone, this bill should be rejected.
But there is more to be done. Above and beyond this bill—and I speak to the amendment moved by the Manager of Opposition Business—we need to see greater protections. We've seen the fissuring of our labour market. We've seen technological change, which can be very good for productivity but can also be disruptive to the employment conditions of working people in the labour market. We should be providing greater protection where the changes that have taken place have led to people losing wages and people's incomes falling. Think about it: the Uber driver or rider is performing traditional forms of work. The fact they're doing it over an app doesn't make it fundamentally different, and yet they're not paid pursuant to an award, which would pay a minimum wage and provide a classification structure of the comparable levels of responsibility and skills required. That, ultimately, is why this bill cannot be accepted by federal Labor.
Again, we are concerned that the government, addicted as it is to deregulating protections for workers in this country, has chosen to seek to enact this legislation, and in some ways this is all the more insulting because the government uses the excuse of a pandemic to do so. For that reason and for the many other reasons outlined by the many Labor members of parliament who have spoken on this legislation, we cannot support the bill, but I do support the amendment moved by Labor.
I would like to thank all of the members for their contributions to the debate on the Fair Work Amendment (Supporting Australia's Jobs and Economic Recovery) Bill 2020. The government obviously takes the view that this bill is a sensible and balanced package that lays the foundations for a fair and efficient industrial relations framework for all Australians. The government recognises that, to rebuild jobs in the economy in a way that best supports everyone's recovery, we need to give businesses the confidence to hire and invest. We need to step out of the way of employees agreeing to higher wages and agreeing to more hours, and we need to ensure the integrity of this system and help businesses to pay their employees correctly. Above all, we need to continue with the co-operative spirit that has been exhibited by employers and employees across the country throughout the pandemic, not the divisive us-versus-them mentality that has been a feature of the industrial relations debate in the past.
After approximately 120 hours of meetings with unions, employer associations, experts, employees and businesses, this bill represents a sensible, composite package of changes aimed at achieving these goals. Still, these are modest changes, and even in their modest form they've been derided and subjected to an abundance of falsehoods during the second reading debate and, unfortunately, elsewhere, and I think it's important to take the time just to clarify some of these issues.
It has been said—I think the shadow minister for industrial relations put this point, which we would not agree with, last week—that the proposed statutory definition of a casual employee would let an employer engage workers on a permanent basis just by saying that they are casual on the first day of their employment. That is not correct. Under our changes, a casual employee must not have a firm advance commitment to continuing in indefinite work according to an agreed pattern of work. Whether this firm advance commitment is present or not is assessed against the key features specified in the statutory definition and canvassed by the courts: such an ability to elect to accept and reject work, whether the person will work only as required, what the parties agreed to in the employment contract and any entitlement to casual loading that is provided for.
To say that the definition gives an employer some unbridled right to simply call an employee a casual is very misleading and totally incorrect. And of course the casual definition is best assessed together with the proposal to give all casual employees a statutory pathway to casual conversion. The shadow minister last criticised that new casual conversion mechanism on the grounds that employers have the right to not offer permanent employment if there are reasonable grounds. These provisions, however, are based on the Fair Work Commission's own casual conversion model clause. The Fair Work Commission spent four years hearing parties' views to develop that clause.
What the shadow minister did not mention is that we are proposing a universal and even stronger casual conversion entitlement to be included in the National Employment Standards in the Fair Work Act. Unlike before, all casual employees will have access to this right, rather than only those under certain awards. And, importantly, our casual conversion mechanism contained within this bill will place an obligation on employers to offer employees casual conversion. Under the Fair Work Commission's model clause, employees only have the ability to ask their employer to convert. Our proposed mechanism is clearly an improvement to the present system.
It has also been claimed that our proposed changes to allow part-time flexibility in distressed industries is somehow an attack on job security. This is also, if I might say so respectfully, incorrect. It is a fact that over 100,000 part-time employees in the retail and hospitality sectors would prefer to work more hours and are available to work more hours but are not getting those hours. Under the current system, those additional hours are likely to be going to casual employees or, indeed, not going to anyone, and our proposed part-time flexibility provisions make permanent employment more attractive for employers and employees alike by allowing those part-time employees to work more hours—being, of course, hours that they want but are not getting under the current settings. How these reforms to address underemployment and encourage permanent employment can somehow be characterised as an attack on job security is very puzzling.
In relation to enterprise bargaining, we are proposing pragmatic and procedural changes to make bargaining faster, simpler and easier. As it stands, the making of enterprise agreements has been in freefall, due mainly to drawn-out approval processes and risks of agreements failing on narrow and technical grounds. Contrary to what some in this chamber have said, the bill makes no changes to existing employee rights to be represented by a union in bargaining. Unions continue, as they should, as the default bargaining representative for employees who are union members, and unions can still apply to be covered by an agreement for which they were a bargaining representative. The bill also does not change the fact that employees must genuinely agree to an agreement.
The changes simplify procedural requirements to ensure that genuine agreement requirements continue to be met and also avoid unnecessary delays and complexity in delivering pay rises. The government has listened to the concerns of the crossbench and agreed to remove the temporary changes that would have adapted Labor's existing public interest exception that allows for the Fair Work Commission to approve an agreement that did not meet the better off overall test. Instead, Labor's existing good exception will remain. Enterprise agreements encourage job creation, wage increases and productivity growth. Those opposite have admitted that the current system is simply not working. So it is astounding that there is still opposition to sensible changes to encourage agreement making designed to drive jobs growth, higher wages and higher productivity.
There have also been claims that the changes to greenfield agreements will mandate eight-year agreements that do not allow for minimum pay rises. Again, this is completely false. The reforms do not mandate an eight-year nominal expiry date for greenfield agreements. The changes simply give employers and unions the capacity to agree to a term of up to that length of time where construction of the major project covered by the agreement will last that long. Under the changes, a greenfield agreement with a nominal expiry date of more than four years must contain a term providing for annual increases for the nominal life of the agreement—that is to say, wage increases. The bill does not affect an employee's rights to raise issues during the nominal life of the agreement, particularly work health and safety matters. What these changes will do is provide certainty about greenfield agreements to attract global investment, with the potential to secure thousands of Australian jobs.
Finally, there have been some claims that our reforms designed to protect workers from the underpayment of wages will make it easier for people to underpay their employees in Victoria and Queensland. Again, this is false. For one thing, the laws in place in Victoria and Queensland are already inoperative to the extent they are inconsistent with the existing Fair Work Act, which establishes the national system both these states voluntarily entered into. Through this bill, the government is introducing tough laws that will protect all underpaid employees covered by the Fair Work Act, not just those in Victoria and Queensland. The proposed criminal offence in the bill, the first ever Commonwealth criminal offence for serious wage underpayments, has been drafted to ensure that unintentional mistakes will not be captured. However, serious consequences will attach to a criminal conviction under this new offence, including automatic disqualification from managing corporations, under the Corporations Law, and the possibility of imprisonment. We are also introducing further reforms to strengthen the compliance and enforcement system, including changes to increase civil penalties to deter underpayments and changes to make it easier for workers to recover unpaid wages.
The majority of Australians want an industrial relations system that simply works for them—one that is simple to use, creates opportunities and supports employers and employees working together in the same cooperative and constructive manner that has characterised our entire nation's response to the COVID-19 pandemic. We are delivering on our commitment to industrial relations reform and we are making the necessary changes to ensure our economy recovers from the pandemic. This bill supports Australians having access to more jobs, to better jobs, to higher-paying jobs and to more productive jobs. On that basis, I commend the bill to the House.
The original question was that this bill be read a second time. To this the honourable member for Watson has moved as an amendment that all words after 'That' be omitted with a view to substituting other words. The immediate question is that the words proposed to be omitted stand part of the question.
Question agreed to.