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

I rise to speak on the Fair Work Legislation Amendment (Protecting Worker Entitlements) Bill 2023. The coalition largely supports this bill and its intent of protecting workers' entitlements, although we will identify a number of areas of serious concern.

This bill deals with issues that both employer and employee groups have had with the operation of the Fair Work Act. It also includes the government's election commitment to introduce a right to superannuation in the NES. The bill is broadly supported by both employer and employee organisations, however employer groups do have specific concerns with certain drafting of the schedules. To address these concerns the coalition will move a number of detailed amendments to improve the operation of the bill, which I will canvass briefly during this part of the debate.

Schedules 1 and 4, dealing with migrant workers and workplace determinations, propose technical amendments, and the coalition does not raise any issue with them. Schedule 1 proposes to introduce a new provision into the Fair Work Act which clarifies that a migrant worker in Australia is entitled to the benefit of the Fair Work Act, regardless of his or her migration status. This means that migrant workers, including temporary migrant workers, would be entitled to wages and entitlements under the Fair Work Act, a modern award or an enterprise agreement for work performed as an employee. Importantly, the provision would only apply for 'the purposes of" the Fair Work Act. Workers who breach migration laws would continue to be held liable for that unlawful behaviour.

Schedule 4 proposes a minor technical amendment that would confirm the common understanding of how workplace determinations and enterprise agreements interact. The bill proposes to clarify that when a workplace determination comes into effect in relation to an employee, any enterprise agreement that covers that employee in relation to that employment will cease to apply and can never apply again. This proposed change is consistent with the Fair Work Commission's approach in relation to this matter, however it is not currently stated in the Fair Work Act.

Schedule 2, dealing with unpaid parental leave, makes changes to the provisions concerning the taking of flexible unpaid parental leave. The coalition supports parental leave, both paid and unpaid, as a means of ensuring that Australians are able to balance their work and family responsibilities, and we believe parental leave greatly assists women in particular to remain connected to the workforce. Businesses of all sizes work closely with their employees to plan for periods of paid and unpaid parental leave, which will often last for a significant period of time. Different businesses will have different needs when it comes to planning when an employee takes parental leave, and we believe that employers and employees working together to plan for these periods is best for both employers and employees. Currently, employees can take up to 30 days or six weeks of their unpaid parental leave flexibly at any time within 24 months of a child's birth or adoption. Flexible unpaid parental leave can be taken as a single continuous period of one day or longer, or for separate periods of one day or longer each. The bill proposes to increase the number of days that can be taken as flexible unpaid parental leave from 30 to 100 days. This equates to an increase from six weeks absence from work to 20 weeks, which can be taken as flexible unpaid parental leave from the employer's entitlement of 12 months or 52 weeks.

Employer groups, including COSBOA, the Ai Group and ACCI, have raised the issue that, as currently drafted, in relation to the notice period to be given the bill fails to recognise that the needs of employees must necessarily be balanced with the operational requirements of the business or organisation for which they work. Employer groups have not opposed the expansion of the number of days that can be accessed flexibly, because it now matches the Paid Parental Leave scheme. There is merit in employees being able to take parental leave more flexibly, but such increased flexibility will pose practical challenges for employers. Employers need enhanced mechanisms to assist them to manage the practical ramifications of the proposed change.

I turn, therefore, to describing the amendments that the coalition is proposing. We have drafted a detailed amendment which would insert a review of schedule 2 of the bill—a schedule relating to unpaid parental leave, which must start after a period of six months of operation of the schedule. The amendment would require the minister to provide a copy of the report of the review to both houses of parliament.

Schedule 3 concerns the superannuation part of the National Employment Standards. The bill and the schedule implement the government's election commitment to introduce the right to superannuation into the National Employment Standards. Currently, the only way for many employees to pursue unpaid superannuation is through the Australian Taxation Office. The effect of the amendments proposed in schedule 3 of this bill would mean that an employee with an entitlement to superannuation contributions, pursuant to a modern award or enterprise agreement, could pursue unpaid superannuation guarantee contributions through the Fair Work regime, and a failure to make adequate contributions would constitute a breach of the Fair Work Act. Including superannuation in the National Employment Standards would mean that employees covered by the Fair Work Act would have an enforceable right to superannuation in the Fair Work Commission, as well as through the tax office.

Some of the employer groups have identified concerns with the way in which this provision is drafted. Ai Group, for example, has identified a number of issues relating to the unfairness to employers of being subject to multiple and potentially inconsistent enforcement efforts in different jurisdictions in relation to the same obligation, and the likelihood that the proposed approach will undermine the efficacy and utility of the constructive role that the ATO currently plays in providing guidance to individual employers for industry related to complex superannuation obligations.

The coalition will therefore move amendments that will have the following results: firstly, that will ensure that employers are not exposed to competing enforcement activity from two different regulators over the same matter; secondly, that will protect employers which rely on guidance from the ATO; thirdly, that will limit the capacity of the ATO to pursue matters ventilated in the workplace system; and, fourthly, that will limit the capacity of the Fair Work Commission to deal with disputes over the operation of superannuation legislation.

Schedule 5 of the bill before the House deals with employee authorised deductions. This set of provisions is concerning, in that it would see an actual impact to workers' take-home pay through the employee authorised deductions schedule. This is an issue of significant concern to employer groups. The coalition believes that Australians should be able to keep more of the money that they earn and it is important that any deduction from their take-home pay should be closely scrutinised.

Currently, under section 324 of the Fair Work Act, there are various types of permitted deductions that may be made from an employee's pay by an employer where the deduction is authorised in writing by the employee, is principally for their benefit and is the same amount as specified in the authorisation. As currently drafted, the bill before the House would allow for amounts as 'varied from time to time' without additional approval for the increase. This could lead to deductions being made from an employee's salary that greatly exceed the expectations of that employee.

This proposal, put forward by the government and embodied in the bill before the House, does not outline a clear problem which it is seeking to address. Given the lack of a stated rationale for this change, employer groups and the coalition are concerned that this provision is simply an attempt to facilitate unions increasing their fees without obtaining explicit agreement from their members.

That concern, I submit, is well founded. We have already seen many examples of this Labor government rolling over to the demands of their union paymasters, and this looks very much like another case of exactly that. This government certainly loves paying back their paymasters with favourable legislation. We should never be in a situation where a worker's own money can be raided by a union without that worker even being told about that happening. A vastly preferable approach would be to require an employee to provide a new written authorisation when the amount of an authorised deduction from that employee's pay changes. This would provide certainty to the employee and to the employer. This is necessary for employees to understand and authorise the impact of the relevant deduction on their take-home pay and for employers to ensure that they do not breach the Fair Work Act and find themselves liable for the significant and increasing penalties that can be imposed for employee underpayments.

While an employee might agree in general terms to a percentage or a capped amount increase to their authorised deductions over time, this may not be indicative of their consent to any particular increase in a particular period. For example, an employee may authorise a 10 per cent increase to his or her union fees over a five-year period, anticipating that that would equate to around a two per cent increase per year. However, if the union were to choose to increase its fees by eight per cent in year 1 of that authorisation, that may not be something that is acceptable to the employee, notwithstanding that the amount fits within the pre-authorisation provided by the employee to his or her employer. In these circumstances, what safeguards will be in place for the service provider to evidence the employee's consent to the variation in the union fees being deducted from the employee's salary? Will the employer be liable for amounts deducted without the employee's specific consent, even though the employee may have pre-authorised a general increase in the permitted deduction?

Given the current climate of high inflation and elevated cost-of-living concerns, the coalition anticipates that employees would prefer to have a clear choice in deciding whether to agree to any increase to the cost of services deducted from the employee's pay, rather than having those waved through automatically. The coalition considers it is unreasonable to place the burden of communicating increases in fees or premium amounts on employers, rather than that burden being placed upon the service provider which will benefit from the deductions, such as a health insurer or, indeed, a trade union. The proposed amendments would not reduce purported difficulties for employers processing deductions. Rather we consider this bill will create new difficulties and at the same time could reduce the protections for employees that section 324(3) of the Fair Work Act is intended to provide without discernible benefit for either party. Making changes to deductions is a time-consuming and costly task for employers, and the coalition would want an assurance that any changes would impose no further cost on business.

The small business peak body, COSBOA, noted during the committee inquiry into the bill that this provision would create an additional administrative burden and potential costs, saying:

This proposal will create additional administrative burden upon employers to take on the role of notifying employees of a change in the amount of a deduction due to actions of which the employee may not be aware. In order to minimise employee confusion, the employer will now have to instigate communication of changes whereas the current system of the employee requesting a change to their salary arrangements maintains a simple and understood process.

When an electricity provider, a health insurer, a bank or a streaming service such as Netflix increases their prices, it is only appropriate for consumers to be notified of that increase and then have the opportunity to reconsider whether they are receiving value for money. Employees should have similar protections for their take-home pay deductions. Unfortunately, on the current drafting, this schedule does not provide that assurance. It appears, in this case, that the government is attempting to change this section of the Fair Work Act to benefit those who are in receipt of employee deductions, with a particular eye to what serves the interests of trade unions.

Mr Deputy Speaker Vasta, as you would be aware, union membership has fallen to eight per cent of the private sector workforce. This appears to be a pretty transparent attempt by the current government to address a decline in union membership. Signing up to a union should not be like signing up to a timeshare agreement—employees should be notified when the cost of the service that is provided to them by a union increases, and they should be given an opportunity to assess whether they wish to continue their membership. It is for these reasons that the coalition is moving amendments which are designed to ensure that organisations which are in receipt of a deduction from an employee's take-home pay first get the agreement of that employee before the deduction is increased. This is important for a whole range of reasons but particularly during a time of cost-of-living pressure for many Australians. It will ensure that more of the money they earn is in their hands, as opposed to giving the unions the ability to increase the membership costs they charge without getting the express consent of members. The coalition therefore will move an amendment which will require employees to be notified by the service provider of price increases relating to employee authorised deductions, and, if the employee does not confirm that agreement, then the deduction cannot go ahead.

I turn next to schedule 6 of the bill before the House, which deals with proposed amendments to the coal mining industry long-service leave funding scheme. This schedule would implement recommendation 4 of the 2021 KPMG independent review of the coal mining industry long-service leave funding scheme report, which recommended legislation 'to ensure that casual employees are treated no less favourably than permanent employees in the scheme'. Currently, employers pay a levy, which is a percentage of an eligible employee's eligible wages to the scheme, to allow employees in the black coal mining industry to accrue and carry their long-service leave entitlements with them between employers.

Stakeholders have identified certain issues with the current drafting. The current drafting does not define what 'eligible wages' are. This has led to a confusion from both employers and employees about the meaning of 'eligible wages' within the scheme, specifically whether eligible wages include a casual loading. Employer groups submit that where a quantifiable casual loading is not discernible from an industrial instrument the reference to ordinary rate of pay if it is intended to encompass a casual loading should specifically exclude any separately identifiable amounts apart from incentivised based payment bonuses or the casual loading. Clarification is therefore required. To address the concerns that have been raised the coalition will move a simple amendment to clarify what eligible wages are. The amendment makes it clear that eligible wages include casual loading to address this confusion and ensure casuals are treated fairly under the scheme.

The coalition has a long history of protecting worker entitlements by balancing the need for businesses to work as efficiently as possible. The coalition is broadly supportive of the bill but believes certain amendments are required. I've set out, in this speech, what the improvements are that we believe are required and the amendments that we are proposing.

I conclude by, again, referring to schedule 5, which is highly problematic. It does not outline the clear problem that it is supposedly setting out to rectify, and I restate the principle that an employee should be required to provide authorisation before an authorised deduction from their pay changes so as to provide certainty for the employer and the employee. There should never be a system put in place that allows money to be taken from employees without their authorisation. I commend the opposition's amendments to the House.

Debate interrupted.