Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Hansard source

The government will not support these amendments. The overarching intention of the temporary industrial relations flexibility provisions in this bill is to keep businesses in business, to keep employees connected to their workplace and to preserve as many jobs as possible. The provisions in this bill facilitate this outcome by, among other things, providing legacy employers the ability to reduce an employee's hours in certain circumstances to 60 per cent of their normal hours to take account of the fact that the business is in distress and greater flexibility means a greater chance to save jobs.

Crucially, and this is something the proposed amendment apparently fails to recognise, a legacy business can only reduce hours where the employee cannot be usefully employed for their usual days or hours because of COVID-19—that is, the only employees who could ever be subject to a direction by their employer to have their hours reduced are those who could not be usefully employed to work their normal hours anyway. As such, any comparisons of income obtained by working full hours are deceptive and misleading, as working their full pre-COVID hours would simply not be possible for the employees we are talking about here.

Imposing an artificial minimum income equivalent to JobKeeper payments, as this amendment proposes, may also see an employer forced to pay an employee not to work, as, while the employee in question would be unable to be usefully employed for their normal days and hours, the amendment could have the effect of requiring them to be paid for those days and hours anyway. That is precisely the sort of thing that legacy employers, who, by their nature, must be financially distressed, simply cannot afford right now and that risks further job losses and business closures. Even if the 'cannot be usefully employed' safeguards did not exist, an artificial minimum income might be too expensive for the financially distressed employers we are talking about here and could lead to job losses otherwise avoided through the approach of a temporary and moderate reduction in hours proposed by the bill in its current form.

Finally, the amendment and the various claims of income reductions made by those opposite completely ignore the interaction with the social security system, which can operate to significantly offset the impact of a reduction in hours.