Tuesday, 5 September 2017
Fair Work Amendment (Repeal of 4 Yearly Reviews and Other Measures) Bill 2017; Second Reading
It's always a pleasure to follow Senator Leyonhjelm with some of his colourful turns of phrase, which had me chuckling listening to that. I think the point you've made about the government losing bladder control can be applied not only to this bill but also to many of its activities at the moment. But, alas, I won't have the opportunity to talk about many of them today.
But I do want to talk about this bill that is before us, the Fair Work Amendment (Repeal of 4 Yearly Reviews and Other Measures) Bill 2017, and some broader implications for industrial relations. The general proposition, of course, is to abolish the four-yearly review. It's something that employers and unions certainly agree on. The process of regular four-yearly reviews whether reviews are required or not is incredibly time consuming and costly for all involved, with little or no potential gain at the end of the day. The provisions that allow reviews as required, of course, remain.
The bill contains provisions which allow the Fair Work Commission to overlook minor technical or procedural errors when approving an enterprise agreement where those errors were not likely to have disadvantaged employees. As Senator Leyonhjelm indicated, that was a recommendation of one of the Productivity Commission reports, which I generally, as a senator, don't rely on. I find the Productivity Commission reports sometimes are all over the place and seem not to have a sense of reality or be grounded in reality when some of their recommendations are made. But in this case it's quite a practical recommendation—one which I thought was probably quite bleedingly obvious anyway. I think it was unfortunate that the commission were restricted by the act, or felt that they were restricted by the act, so that they couldn't deal with agreements that might have had a number wrong in the address or some other very minor technical matters which really didn't go to the substance of the agreement that was before the commission, and this bill fixes that. It certainly enables the Fair Work Commission to process those agreements now, even if they contain some of those minor technical errors.
The Productivity Commission report into Australia's workplace relations system was handed to the Abbott-Turnbull Liberal government on 30 November 2015, and it was publicly released on 21 December 2015. More than 1½ years after it was handed down, in what has seemed to become a standard operating procedure for this government, there hasn't been any formal response to that report. So it's been bouncing around there, with no formal response or consideration that we're aware of by the government. But at least some practical measures are being picked up nonetheless.
But, of course, we're still in the dark. The public's still in the dark about which Productivity Commission recommendations the government does or does not support. Until the government responds to the individual recommendations, we're sort of getting them drip-fed, with no order and no rationale—just drip-fed through different bits of legislation as they come up. Unfortunately, even though the proposition of removing four-yearly reviews was put to the government by employers and unions, it appears that the bill differs from that which the employer associations and the ACTU put to the minister.
We note that the changes contained in this bill are accurately described as 'amendments' to the Fair Work Act, not 'reforms'. Clearly, they're not reforms. This government tries to trumpet abolishing four-yearly reviews as a reform, rather than what it is: removing a process of review from the legislation.
We have in this country a system of workplace relations which is no longer working, unfortunately. We only have to look at what's happening. We've got the profit share of GDP going up, yet we've got the wages share of GDP going down. We've got agreement-making going down—it's at an all-time low—yet award reliance is going up. Not only the share of wages in GDP is going down; actual wages themselves are either stagnant or in fact going backwards in real terms. Noncompliance with legal minimums is at an all-time high, so much so that the Fair Work Ombudsman just can't keep up and really doesn't have a good grip on the extent of noncompliance; and at the same time union membership and the very important role that unions play in compliance are going down as well.
We have a Fair Work Act that enables employers to simply go and terminate agreements they don't like, reducing wages and conditions that have been negotiated and agreed to in the past down to the very minimum legally allowed amount at the time. We see employers taking up that option more and more as their first option in negotiation, which is simply saying: 'Well, even though we've had these terms and conditions over many years and we've negotiated in good faith with our employees, we'll start from the bottom for our new negotiations. We won't start from the wages and conditions we have right now; we'll start from the bottom.' We see that happening time and time again, and we see workers in this country, after an application by an employer to terminate an agreement, sometimes losing 65 or 70 per cent of their income and conditions—because this act allows that to happen. It ought not allow that to happen. It's a new interpretation of the act that's enabled that to happen, and we don't see any action from the government to stop it.
We see employers organising workers to sign off on agreements, or to negotiate with a small group of workers to come to an agreement, on working conditions that will never apply to those workers themselves but to a different group of workers, often in a different state. We've seen that. We saw that in the CUB dispute, which is a classic example, where an agreement was made by, I understand, three workers in Western Australia. One of them, apparently, was the spouse of the human resources manager. They formed an agreement that was never going apply to them. It applied to Carlton United Breweries in Victoria, who had some 60 or 70 maintenance workers. They didn't get to negotiate that. Those workers had an agreement applied that they did not negotiate, that someone else negotiated, but it was an agreement that was never going to be applied to those people that negotiated it. We're seeing that happen more and more. And of course—no surprise—the reason that happened is, again, that wages were cut by 65 per cent to enable it to happen. Inevitably, after a long dispute and a change of owner of Carlton United Breweries, that was overturned, and those workers have gone back on to the rates and working conditions they had in the past.
We have seen also examples such as ExxonMobil, one of the biggest and richest companies in the world, which decided that it would contract out to a different contractor the cleaning and catering of facilities offshore. The people that had been doing that work for many, many years on a set of conditions were simply terminated because that company awarded a new contract for that whose employees—I don't know where they got the employees from—negotiated an award based agreement and won the contract, and those people who had been doing the work were simply removed. This is legal behaviour under the act.
We don't see the government moving to protect workers in those situations at all. That work was being done by people who had been doing it for many years. The reason the company terminated that contract was that someone would compete with that based on award conditions, the lowest legal set of conditions that are allowed in this country. That is not an isolated example. We see big companies doing it and we see small companies doing it: simply organising their workforce and their legal arrangements in order to undercut, sometimes even themselves.
A company called dnata do airport services at our major airports. They have a workforce and they contract for different work for different airlines. They've set up a company to compete against themselves. They've set up a company based on two supervisors at the moment negotiating, or pretending to negotiate, with dnata to set up an enterprise agreement that will apply to exactly the same set of conditions that applies to their existing workforce. Toll dnata intend to bid against themselves—to bid against their own workforce—for the work. They will go back. They're bidding based on the award rates of pay, the lowest legal minimum rates of pay that people can apply here. It's legal. A company can undermine their own workforce. How is that fair? How does that meet the objectives of the act to negotiate in good faith and negotiate above the lowest legal minimum wages that can be paid?
So we see employers engaging in what I think are the most unethical practices, which, unfortunately, are legal under the act, to circumvent enterprise bargaining and lower the wages and conditions and the agreements and deals that have been negotiated over many, many years, simply to put people on the lowest legal set of conditions that can be applied in this country. We see that all over the place. We see big employers doing it. As I said, ExxonMobil, one of the largest multinationals in the world, do it to save a few bucks at the expense of working people, their jobs and their incomes. We see smaller companies doing it.
This is an act that underpins an industrial relations system that sees agreement making going backwards and award reliance increasing; an act that underpins a system where the wages share of GDP is decreasing yet the profit share is increasing; an act that underpins a system where wages themselves are either stagnant or going backwards in real terms; and an act that underpins a system where noncompliance is rife. Noncompliance with even the lowest minimum wages and conditions is absolutely rife in this country.
So it's hard not to conclude that the act itself is a serious problem and needs significant reform. But, instead of some of that significant reform, we see, as a priority, the removal of four-yearly reviews. While I say we agreed with that, it's hardly a reform. In itself, it doesn't protect one of those workers that I've talked about who is being sacked because the company can find someone else who is willing to do it cheaper, to save themselves a few bucks; it doesn't do that at all.
Where is the bill that is going to protect people's jobs and conditions? Where is the bill that is going to stop employers who don't like their existing agreement from simply terminating it and having everyone revert back to the award conditions, as a negotiating tactic? That's exactly what these companies are doing. Where is the bill that will protect penalty rates on weekends? Instead, this government allows the commission—