Andrew Murray (WA, Australian Democrats) Share this | Hansard source

As already noted in the Senate, the Long Service Leave (Commonwealth Employees) Amendment Bill 2006 extends the operation of the Long Service Leave (Commonwealth Employees) Act 1976 in respect of Telstra employees for a period of three years after the day on which the Commonwealth ceases to have a controlling interest in Telstra. ‘Controlling interest’ has great legal meaning and should be noted for the debate. As with other organisations that have shifted from Commonwealth owned to privately owned or publicly listed on the Stock Exchange, a savings provision was included in the Telstra (Transition to Full Private Ownership) Act 2005 to protect employee long service leave entitlements arising from pre-sale service that otherwise would be forgone due to the sale of Telstra.

The protection applies generally to Telstra employees with at least 10 years service. However, provisions are also made for employees with less than 10 years service to receive benefits commensurate with the long service leave act standard when they either complete 10 years service with Telstra or cease to be employees in circumstances under which the long service leave act entitlements would have applied but for the sale. The saving provisions for long service leave operate in relation to the ‘designated day’, that is, the day which, in the minister’s opinion, is the first day on which the majority of the voting shares in Telstra are, or were, acquired by persons other than the Commonwealth such that the Commonwealth ceases to have a controlling interest in Telstra. So the minister’s determination is not able to be made isolated from the legal consequences of that particular description.

The amendments proposed in this bill would defer the operation of the substantive and saving provisions for a period of three years after the ‘designated day’. As noted by the Bills Digest, this would have the effect of ensuring that Telstra employees will continue to accrue benefits under the long service leave act for a period of three years after the day on which the Commonwealth ceases to have a controlling interest in Telstra, and deferring the operation of the transitional provisions relating to Telstra employees’ long service leave entitlements for a similar period. So far, so good. The Democrats support this bill because of those provisions, because they do improve the circumstances for Telstra employees.

The shadow minister has drawn attention to other issues which surround this matter. These are not simple transmission of business issues. When the government sells a major corporation like Telstra, in part or in whole, the normal transmission of business issues which are covered off in workplace law and in jurisprudence are complicated by the fact that the Commonwealth has certain constitutional and contractual obligations and liabilities which do not replicate those which are apparent in private transactions.

The shadow minister drew attention to the potential for legal action in this area, where groups of employees—a substantial number; 1,800, I am advised—may join together in a class action to determine just compensation if they feel that their entitlements as promised to them in a contractual sense have been unjustly taken from them. Again, the shadow minister made the point that that would have to be determined in the courts. I have sensed from some—certainly not all—members of the coalition that they think they may have the High Court in their pocket because of the appointment system. I do not agree with that. I think the High Court, if the matter ever got there, would have a mind of their own on this matter.

The liability, of course, may be seen to apply to both the government and Telstra. But I wonder whether it will also apply to the Future Fund. That was the point of my interjection to the shadow minister, which I do not think he picked up. My memory of the Future Fund Bill is that the government has given the Future Fund some legal reassurance that it will be protected from liabilities and indemnified to some extent. But if, subsequent to that bill passing, directors and managers of the Future Fund are aware of a circumstance which they could have intervened on, I wonder whether they will not be exposed to a little more liability danger than we might otherwise think. I am not a lawyer; I am a practical man. I would suggest that the liability issue might be wider than just to the government and to Telstra—which, of course, means that eventually taxpayers will pay.

While the Democrats did not support the Telstra (Transition to Full Private Ownership) Bill 2005, because we felt that the way the bill was structured was not in the national interest, it is my belief and that of my party that the government have mismanaged elements of the interconnections between Telstra, the telecommunications industry and the media industry with respect to competitive and community matters. One of those is with respect to the recent media package, which failed to acknowledge the pivotal role of the telecommunications industry in the provision of media content and access in the future. This is a big hole that should have been addressed. Much of the technology for media delivery in the future—and that future is not far distant—will be on telecommunications platforms. That being the case, it is essential that, for telecommunications and media, Australians, both metro and regional, have access to high-speed broadband.

Mr Acting Deputy President, with respect to security matters—and I note that the Minister for Justice and Customs is the duty minister in the chamber—you might not be aware that there is no requirement on Telstra to immediately, urgently and by law provide satisfactory broadband facilities to designated airports. The whole security system is linked in to broadband access—the ability to access CCTV camera material, the ability to interact in telecommunications bases with rapid response groups et cetera. Key regional airports that do not have dedicated broadband access already applied to them would be an issue. So there are all sorts of areas, frankly, that have not been signed off with respect to Telstra and its sale.

Anyway, the deals have been done. The National Party negotiators did not understand that telecommunications is the way to deliver media diversity in the 21st century, and the sale of Telstra is now a foregone conclusion. The moneys that could have been available for infrastructure, water and other things which the government is now waking up to were not secured from the sale of Telstra. There are all sorts of areas of negotiation which represent a missed opportunity.

I return to what is contained in the bill. The transition from Commonwealth employees to private employees is inevitable for Telstra personnel and will be triggered by the date, the shareholding and the circumstances when the Commonwealth ceases to have a controlling interest in Telstra. That will not necessarily be established by legislation but may well be established by courts, if it is ever challenged.

The bill, in effect, tries to minimise any negative impact that the full privatisation of Telstra may have immediately on Telstra employees’ long service leave entitlements. The amendments will provide certainty to employees beyond the term of the existing certified agreement and for those on AWAs that their entitlements will not fall below current levels for the next three years. This is a sensible position for the government to take and we are pleased, by and large, with their support for this position.

Labor has raised the inconsistent treatment the government has applied to Telstra employees when it comes to other employee entitlements—specifically, superannuation. The government’s bill, passed last year, included a clause that prevents new Telstra employees from being members of the Commonwealth Superannuation Scheme once the Commonwealth is no longer the majority shareholder—and we come back to that issue of when does the loss of controlling interest kick in. Specifically division 3 9L of the Telstra (Transition to Full Private Ownership) Act 2005 states:

If an employee of a Telstra body was an eligible employee for the purposes of the Superannuation Act 1976 immediately before the designated day, the employee is taken to have ceased to be an eligible employee for the purpose of that Act on the designated day.

In other words, that is the day on which the Gordian knot is cut.

Senator Sherry told the chamber very recently that the reductions in the promised defined benefits scheme are significant, although the impacts may vary depending on the circumstances of the 1,800 employees. He has given us a figure—I presume it is not a median or an average figure but an estimated figure—of an $11,000 cut in eventual superannuation entitlement. That is a matter of great concern to anybody who is going to retire. Senator Sherry gave the example of a foreman-linesman who, because of the sale of Telstra and the new pension arrangements that will have to be entered into, will have that cut in his promised pension benefit of $11,000 a year. I therefore assume that, if you did calculations for others, some could have a greater cut and some could have a lesser cut. I note for the purposes of Hansard that the shadow minister has nodded his head. So there could be people who will be more affected than his example.

Senator Minchin told the chamber last week that the Commonwealth is within its rights, as was the then Labor government, to stop membership of the Commonwealth Superannuation Scheme. Once the company is in majority private hands, that responsibility should no longer fall on taxpayers but on the new owners of the business. It is a perfectly reasonable attitude to take with respect to the transmission of business, but the important aspects for the transmission of business with respect to Commonwealth obligations are that those who are transferred have their contractual benefits met.

Superannuation is increasingly a big issue for all Australians. Many Australians will have to live in retirement for a greater number of years, thanks to the better health that so many now have to look forward to, so to be told that you will not get the substantial amount that you expected would obviously be disappointing and frustrating. As the shadow minister rightly says, that might lead to litigation because, when people’s rights are taken away, they will turn to the courts—if there are enough of them and if they can afford it.

Clearly, this is a complex issue. I recognise the government’s arguments and the way in which it has tried to deal with this, but I think the precedent for dealing with these matters was established with the way in which Qantas was dealt with. The point that the shadow minister and others have made is that this matter has not been dealt with on that same basis. In that respect, I draw the attention of the chamber to some remarks made by Mr Stephen Smith, the Labor member for Perth and shadow minister in the House of Representatives. On 17 October he said:

In 1992, the Department of Finance and Administration, Qantas and staff associations determined a solution to shield members of the Commonwealth Superannuation Scheme from superannuation losses triggered by the Qantas sale and loss of active CSS membership. That solution was in two parts. The first part, the ‘delayed updated pensions’ option, or DUP, was added to the Commonwealth Superannuation Scheme subordinate legislation to cater for those with a shorter career but aged close to 55. The normal preservation option was available for longer-serving members, as well as immediate withdrawal of a lump sum for CSS. The second part was in the form of a Qantas Superannuation Trust deed, which provided ongoing benefits for CSS members that broadly topped up the preserved or delayed CSS benefits to give the same pension benefits or lump sum benefits to staff as though CSS membership had continued until normal resignation, retirement or redundancy exit from Qantas.

Given this precedent, it should be no surprise to those listening that Labor was surprised to see that the government saw fit to extend long service leave protections to Telstra employees but has not sought to extend similar protections in the area of superannuation. In spite of its promise, the government has failed to protect the superannuation pension promise made to up to 1,800 Commonwealth Superannuation Scheme Telstra employees.

I freely confess that I am no expert in this complex area, but my reading of the situation is that employees in the privatised Qantas who had formerly been Commonwealth employees were not left in as exposed a situation as employees in the privatised Telstra circumstance. That is to be regretted, particularly if there is a precedent which not only was established but after all these years could be verified as to whether it worked. It is one thing to establish a law; it is quite another thing to see how it works out. So I would appreciate the government answering the perception that I have and the allegations made by Labor that, in fact, Telstra employees are going to be worse off shifting into privatised hands than Qantas employees were with respect to superannuation. I do not make a judgement in other areas but just with respect to superannuation.

In summary, the Democrats support this bill because it does improve the situation for employees of Telstra, which is being privatised. We have a concern arising from these matters, as I have tried to outline in my second reading remarks, and for that reason we will be supporting the Labor second reading amendment.