Maria Kovacic (NSW, Liberal Party, Shadow Assistant Minister to the Leader of the Opposition) Share this | Hansard source

I rise to speak on the Fair Work Amendment (Protecting Penalty and Overtime Rates) Bill 2025. To be clear, the coalition supports penalty and overtime rates as fair compensation for working unsociable and unpredictable hours. We also support employee choice and flexibility, allowing workers and employers to negotiate arrangements that suit them and best fit their needs. The Fair Work Commission already has adequate powers to safeguard penalty rates through the better off overall test.

So what is the purpose of this legislation? Why is it before our parliament? We have some concerns in relation to this bill, and they are not limited to the fact that it adds significant red tape to small business, which already faces 35 major Fair Work Act changes under this government, 34 of which disproportionately affect Australian small businesses. By constraining the commission, the bill undermines its independence and risks unintended consequences in award variations.

This bill could also operate retrospectively. This is a question that we asked a number of times in the Senate inquiry hearings some two weeks ago. We sought clarity about the retrospectivity of this bill, which would create uncertainty and expose employers to union driven variations to existing awards—not to future agreements, but to existing awards.

I want to talk specifically a little bit around the impact on Australian small businesses. I noted a moment ago that small businesses are being hit with a new compliance burden almost every month under the Albanese Labor government. This is at a time when Australian households are struggling under a cost-of-living crisis. Australian small businesses have also been crushed under a cost-of-doing-business crisis in this country.

This is just too much. This is yet another unnecessary hit to Australian small businesses. Evidence that we were provided during the hearings and that has been available prior shows that small-business owners spend about 15 hours each week on compliance and red tape. That is time taken away from their businesses. And it's easy for me to just say 15 hours, and people say, 'Yeah, well, 15 hours.' But that is 15 hours every single week, week on week. If you look at that 15 hours as a percentage of the average work week—the 38-hour week, Monday to Friday—that's just under 40 per cent of that average week spent in regulatory compliance, the burden of red tape for Australian small businesses.

Australian small businesses want to do the right thing. They don't want to do the wrong thing. They actually want to have fulfilled and engaged and prosperous employees. But they are suffocating under the burden of red tape under this government. Unlike large corporations, small operators cannot absorb extra costs, which leads to fewer jobs and to market consolidations. Employer groups have warned that this bill will discourage employment and drag down productivity. We've just had a productivity roundtable. That was last week, and this week we have a bill before this parliament that is badged as protecting penalty rates, which nobody wants impacted, but it's not really protecting penalty rates; it's protecting the rights of unions to intervene in discussions between employees and the employer.

The minister has no idea how many small businesses will be impacted by this bill, because they didn't do the analysis to find out. What we really need from this government is a clear and focused plan to address the needs of small businesses and our economy, to address the problems of productivity in our country. We need policies that make it easier for businesses to expand, easier for businesses to employ people—to hire young Australians, to give them good jobs and to provide opportunities for them to get a really good foothold in the workplace.

Why do we keep talking about small businesses? Why are we so hyperfocused on them? It is because they are really important. They are the cornerstone of our communities. They're not just economic units. They are family owned. They are community based. They support local jobs and community organisations. They are your local pharmacy, your dentist, your tradies, your mechanic, your tiler, your plumber, your electrician, your dentist, your hairdresser, your real estate agent, your local florist. They are all the different businesses that we go to in our communities that are such a cornerstone of everyday life. Yet month after month under this government we are impacting them. This bill removes choice for workers who may prefer higher base salaries and stability in their income, or flexible arrangements over fluctuating penalty rates. Employees should be able to choose what works best for them.

This bill could also, worryingly, limit work-from-home flexibility, with employers forced into intrusive monitoring to meet record keeping rules. Work from home is such an important part of modern working, particularly in a cost-of- living crisis. Introducing legislation that may potentially make it harder for employers to allow their employees to work from home should give us pause. This is not about being opposed to penalty rates. We support penalty rates. But we support the right to choose and the right to choose the flexibility that matters to you.

Many workers prefer the stability of a higher and more consistent salary. It helps with budgeting, growing superannuation, borrowing capacity and avoiding income volatility in Centrelink payments. I've had a number of women reach out to me about these issues over time. They highlight the problems with reporting their earnings to agencies such as Centrelink and the child support agency, where fluctuating penalty earnings make those assessments and those estimations irregular, often creating a debt burden. Employees should have the freedom to choose pay structures that best suit their circumstances. By forcing a one-size-fits-all framework, the bill locks employees out of arrangements that might better suit them, that might better suit their families, that might better suit what it is that they are looking to do. Even if the majority of employees want a particular arrangement, the commission is prevented from approving it if any hypothetical worker might at some point be worse off under the terms of this bill. This denies employees the ability to strike a balance between financial security and workplace flexibility.

I asked a question about this in our inquiry a couple of weeks ago of one of the witnesses, Professor Chris Wright, specifically around the impacts to people who'd prefer a steady base—a higher base that they negotiate with their employer—versus the fluctuating impacts of penalty rates. I'll read from the dissenting report:

Professor Chris Wright acknowledged these non-wage benefits are real, but argued they are not typically considered by the FWC, which focuses on 'objective' measures like pay rather than 'subjective' measures like flexibility or stability of income …

These are his words:

Things like working from home arrangements are harder to take into account. The other aspects you mentioned in terms of pay versus social security payments are harder to take account of, partly because of the subjective value in some cases and also the matters that go beyond the Fair Work Commission's remit in terms of those social security dimensions.

So what does that mean? These things are not being taken into account, because we're looking at the dollar value only. We're not looking at the benefit of flexibility, the security of that stability and the right to make a choice about something that works best for you and your family. Again, I think it gives us pause, to have a think about what it is that we're asking Australians to do here.

Instead of empowering Australian employees, this bill strips them of genuine choice. I'll say that again: instead of empowering Australian employees, this bill strips them of genuine choice. True reform should expand workplace options, not shut them down. That is what reform is—making things better, providing greater choice and providing greater opportunity, not taking away your right to choose what works best for you.

We're also a little bit concerned about the claim of closing loopholes. We consider that to be misleading. Rolling penalty rates into higher salaries is already lawful. It is already regulated, and it is already subject to safeguards. It is our view that this bill is a response to union hypotheticals, not to real-world cases of underpayment. Evidence to the Senate committee inquiry showed that this government did not want to have it confirmed that the Fair Work Commission already has both the power and proven track record to safeguard penalty and overtime rates. They can already do that; they already do do that. The Fair Work Commission is not only empowered but required under section 134 of the Fair Work Act to maintain a fair and relevant safety net for employees. That means that they have to take into account the need for penalty rates for unsociable hours, the need for penalty rates for people who work weekends, the need for penalty rates for people who work at night and the need for penalty rates for people who work on public holidays, and so they should.

In practice, the commission has consistently upheld penalty rates. The protections are already in place, and they work. But, instead of trusting the independent umpire, this bill predetermines outcomes, removing the commission's discretion. In our view, this weakens the independence and expertise of the commission, which should be upheld, and, in our view, it politicises the decisions that should be based on evidence.

This government should be legislating for the workers of Australia not for some headlines around protecting penalty rates, which are already protected. I say it again: the coalition is in favour of protecting penalty rates. We are not opposed to penalty rates. This is a solution in search of a problem. The system is already working. We believe that there should be a comprehensive regulatory impact statement before the passage of this bill. We believe that small businesses should be exempt from the operation of this bill, and we believe that the Fair Work Commission should keep its discretion to approve higher pay and simpler conditions supported by both employers and employees—their right to determine themselves what it is that they want in their employment agreements, the flexibility that they want and that meets their needs.

I move the second reading amendment as circulated on sheet 3407 standing in my name:

Omit all words after "That", substitute:

"(a) the Senate notes that:

(i) Australian small businesses have been hit with a new compliance burden almost every month since the Albanese Labor Government came to office,

(ii) evidence shows that small business owners spend 15 hours per week on compliance instead of running their business,

(iii) the Albanese Labor Government has refused to prepare a Regulation Impact Statement for this bill and has no idea how many small businesses are going to be affected by this increased burden, and

(iv) instead of developing a clear and focussed plan to address the needs of small businesses within the economy, the Albanese Government seems intent on only applying a larger regulatory burden on them; and

(b) further consideration of the bill be made an order of the day for the first sitting day after the Government tables a Regulation Impact Statement assessing the impacts of the bill".