Dave Sharma (NSW, Liberal Party, Shadow Assistant Minister for Competition, Charities and Treasury) Share this | Hansard source

The Fair Work Amendment (Protecting Penalty and Overtime Rates) Bill 2025 is not about protecting penalty and overtime rates. That might be its title, but that is not its purpose. Instead, this bill is about taking power from an individual and assuming it on behalf of the state. It's about infantilising grown adults. It's about denying workers freedom and agency. It's about substituting the uncompromising and inflexible judgement of the state for the preferences and desires of the individual. It's about attacking the independence and impartiality of the Fair Work Commission.

This bill is reflective of the anachronistic nature of today's labour movement and today's Labor government. It reflects a patronising attitude that workers do not know what is best for them. It's emblematic of a paternalistic attitude that individuals should not be able to exercise their own choice. It exudes a hostility to business, especially small business, and it reveals a fundamental misconception about the nature of the economy and the workforce today. Finally, it showcases the reflective desire of this government to encroach ever further into the rights and freedoms of individuals. This bill is not about protecting workers' rights. This bill is instead about denying economic freedom and individual agency. This bill, at its heart, lacks a fundamental purpose.

There is overwhelming support in the community for the idea that Australian workers should be fairly compensated for working overtime or unsociable, regular or unpredictable hours on weekends, public holidays and so on. The Liberal Party—and me, personally—support penalty rates, but these principles are embedded right now in section 134 of the Fair Work Act, which has an objective that the Fair Work Commission must apply when using its powers. Instead, what this bill does is undermine employee agency, employee choice, employee flexibility. It harms productivity. It adds to the regulatory burden of business, in particular small business, and it fundamentally attacks the independence, the functions, the integrity and the probity of the Fair Work Commission. Lastly, it fails to strike a balance between protecting workers and preserving the essential flexibility that modern workplaces and, indeed, modern workers demand.

The Fair Work Act has existing safeguards that protect the rights of workers to be fairly paid, fairly compensated, fairly remunerated—most notably, the better off overall test. What this bill does is take away the rights of workers to negotiate based on their own needs, based on their own preferences, based on their own priorities. The bill seeks to create a one-size-fits-all approach. It restricts workers from entering into arrangements that might better suit their personal circumstances. So, for example, even if workers in an industry supported a change to the modern award, for beneficial changes, this would not be permitted if any hypothetical employee might be considered worse off. This fundamentally removes genuine choice from employees, but it also fundamentally limits the discretion and the judgement of the Fair Work Commission.

I notice the previous speaker referenced working from home arrangements and flexible working arrangements. This bill also creates risks to flexible working arrangements and working from home arrangements. If employers now have to start tracking precise start, finish and break times to comply, they may be reluctant to offer flexible work from home options, even if employees have a legitimate desire to shift their hours around in order to meet personal or caring commitments. The Fair Work Commission itself is exploring how to remove award derived impediments to working from home. What this bill will introduce is a potential barrier to such efforts.

The reality is that the Fair Work Commission already has ample authority to protect penalty and overtime rates. Remember, there are no proposals currently before the Fair Work Commission to reduce penalty rates. The government and the trade unions that support them claim that this bill is closing loopholes, but the Law Council confirmed in their submission to the Senate inquiry into this bill that no such loophole exists. The reality is that the bill is simply a response to union hypotheticals and not real-world scenarios.

In their submission to the Senate Education and Employment Legislation Committee, the ACTU, the peak body of unions, concedes that it is only hypothetically possible for the commission to leave workers off under the law as it currently stands today. In fact, to the contrary, the judicial practice of the Fair Work Commission has been a long track record of protecting penalty rates, including rejecting employer applications to varying penalty rates when not justified by the circumstances. Section 134 of the Fair Work Act mandates that the commission ensure that modern awards provide a fair and relevant minimum safety net of terms and conditions, explicitly considering the need for additional remuneration for overtime, irregular hours, weekends and the like.

All the bill does is strip the Fair Work Commission of its independents and the ability of it to exercise its functions. The bill is the government usurping the role of the Fair Work Commission by legislating specific outcomes, or seeking to legislate specific outcomes, rather than trusting an independent tribunal to fairly weight and moderate claims. It repeats a pattern established by this government to reach for a legislative or regulatory solution that is not commensurate with the harm being addressed—if the harm even exists, which they do not in this case.

Let me turn now to retrospectivity, one of the biggest concerns about this bill. The government has consistently argued that the terms of the bill, if passed, will not be retrospective, but the drafting of the bill ensures that existing terms in a modern award that offend the proposed new section 135A of the act are vulnerable. That section makes clear that the commission must ensure modern awards do not reduce penalty rates for any employee when they make, vary or revoke modern awards. What this drafting means is that the commission will have to consider these things the next time an application is made to even vary an award. It will need to look back retrospectively at what has happened to penalty and other rates in the past, even if, when looking at this variation, the variation itself does not attempt to touch penalty, overtime or other covered rates.

In their evidence before the committee, the Australian Industry Group, Ai Group—and they weren't alone in this—said that the effect of this bill will pose, in their words, an 'unacceptable risk' to previously agreed and settled awards and other determinations of the Fair Work Commission. This bill is also at odds with all the government's talk about improving productivity in the economy. It's at odds with their embrace of the so-called abundance agenda. It's at odds with one of the supposed outcomes of last week's productivity and economic reform roundtable, to declutter the regulatory agenda. What this proposal does is make working conditions less flexible and more restrictive, and it adds to the burden of doing business in Australia.

COSBOA, the small-business advocacy group, noted that this bill would be the 36th major change to the Fair Work Act since this government came to office. In the first term of government, this government added an additional 757 pages to the Fair Work Act. That's 757 pages that businesses and employers must comply with. That makes the lives of not only employers but also employees impossible to navigate and manage. This change is only going to add dozens more pages to those 757 pages. Each change, no matter how meritorious it might be, represents an additional burden on Australian business, and this is felt most acutely amongst small businesses. Small businesses lack the resources to keep up with each wave of new regulation, with this one being the latest. They don't have legal departments. They don't have HR departments. They don't have outside counsel. They already spend an average of 15 hours per week on compliance, rather than trying to provide a service or a good to a customer, and this is all against a backdrop of additional uncertainty around existing awards, which may now be at risk of being changed retrospectively.

This bill is flawed, unnecessary and counterproductive. It will not advance workers' rights but, instead, limit employee choice. It will not lead to a new nirvana for working Australians. All it will do is impose new burdens on small business. It is not going to make the life of the Fair Work Commission easier; it is going to tie their hands when making these determinations.

When I think back to Labor governments of old, I recall the work that former Labor prime minister Paul Keating did to modernise the industrial relations system; to encourage enterprise bargaining; and to strengthen the role of what was then called the Industrial Relations Commission, now the Fair Work Commission, in adjudicating disputes between workers and employers. The fundamental view was that the one-size-fits-all approach, which had characterised much of labour relations in at least the first three-quarters of the 20th century in Australia, was no longer fit for purpose. Paul Keating reached this conclusion in the 1980s, but what we've had is this government seeking to turn the clock back to a period before then.

The workplace has changed immeasurably since Paul Keating was Treasurer and Prime Minister. The nature of the modern economy has changed immeasurably. These days, people work from home or remotely. Both partners in a relationship often work. Workers have to balance caring, family and other responsibilities with their job, and modern technology has allowed them to do this, so why are we seeking to wind the clock back and apply a set of strictures, mandates and enclosures on the rights of workers, pretending that workplaces have only one kind, only one shape, only one format today?

What this is doing is winding back the clock further. It will hamper flexibility in our economy. It will not get productivity moving. It will add to the regulatory burden. It will add to the compliance burden. Most fundamentally, it will detract from the rights of workers, and their freedoms and actions. Workers are the ones who are best placed to make an assessment about their own interest. They are entitled to bargain collectively in doing so and to negotiate collectively in doing so, but they are the ones who know whether they would prefer more flexible working arrangements or to trade off higher base rates of pay for lower rates of overtime or penalty rates. They are the ones who know the demands on their time and the work tempos. They are the ones who know the demands on their family, personal and other commitments. They are the ones who are best placed to make these judgements. The existing arrangements allow workers to weigh all these factors alongside and with their employers across the table, to make these assessments about what is in their best interests and to reach a conclusion which is then upheld and can be adjudicated on by the Fair Work Commission, which will ensure that workers are better off overall under the better off overall test. They are losing that freedom.

Fundamentally, this bill is not about protecting penalty and overtime rates; it's about a transfer of power and agency from the individual to the state. It's about a transfer of judgement from an individual to a government bureaucracy. It's about taking away judgement, discretion and individual circumstances which characterise the Fair Work Commission's jurisprudence on this issue today. Ultimately it will be to the detriment of workers. Ultimately, yes, it will be to the detriment of business, it will be to the detriment of the economy and it will be to the detriment of productivity, but it will also be to the detriment of workers.

If you are a worker now and you want to work flexibly—if you want to clock on at seven in the morning to do some work, prepare a submission, prepare some points, do some letters or deal with correspondence so you can then take your children to school at nine o'clock, take your elderly grandparent to a medical appointment, go do your groceries or go to the dentist—is an employer going to have to pay you overtime now? Is an employer going to want to support flexible working-from-home arrangements if they are going to have to require that time sheets be kept and if they are going to have to accommodate your flexibility by paying you more? The answer is simply no. What this bill will do is deny workers freedom, choice and agency, and that is why the coalition does not support this bill.