Thursday, 17 June 2010
Paid Parental Leave Bill 2010; Paid Parental Leave (Consequential Amendments) Bill 2010
Consideration resumed from 16 June.
The Temporary Chairman:
Senator Fifield, what we should do is to deal with the question that is actually before the chair at present, and then come back and consider your recommittal request. So we are now on Australian Greens amendment (12) on sheet 6111, and the question is that that amendment be agreed to.
I seek leave to recommit to a vote on opposition amendments (1) to (5), (7), (10), (11), and (15) to (20) on sheet 6134.
This proposition has been discussed and advised to all parties. There was some uncertainty yesterday about the views of Senator Xenophon in relation to these opposition amendments. As a result, there is, I guess you could say, an incongruity in some of the amendments. Recommittal, if successful, would allow these amendments to be brought into line, and it would also allow an opportunity for the will of the Senate to be appropriately expressed and for this chamber to ensure that it was accurately expressed.
It is certainly not our desire, should this recommittal be successful, to imperil this bill. The opposition has been very responsible at every step through this debate. The opposition did not, for instance, seek to divide on the second reading amendment that I moved. The opposition did not support a number of amendments which would have actually given effect to elements of our own policy, because it was clear that the government would not entertain those in the House of Representatives. So we have been very responsible in the way that we have approached this bill.
We do, however, have a number of concerns about the impact on small business of the bill as it is currently drafted—in effect, it makes small business the paymaster for the PPL scheme. The opposition’s substantive amendments were designed to put the Family Assistance Office in that place, to continue the six-month plan which the government has, and to extend that, given the investment in that. So, as I say, it is not our desire to imperil this bill at all. If we were successful, it would not be our intention to insist, but we would hope that it would give the government pause for some thought.
I wish to respond to Senator Fifield’s comments about Senator Xenophon’s position in relation to these amendments. He suggested that there was some confusion yesterday about the position. Can I say, on behalf of the government—and as someone who was involved in the pairing arrangements, given that Senator Xenophon was absent ill yesterday—that there was absolutely no confusion on our part in relation to those pairing arrangements. As far as I am concerned, we had an unequivocal, clear-cut statement in writing, via Senator Xenophon’s staff, that he wished to oppose the opposition amendments. We then paired him on that basis.
We now have in writing a statement saying that Senator Xenophon wants to support these particular amendments. Senator Xenophon is entitled to change his position. He is entitled to clarify his position. His staff certainly approached this matter in what I would describe as a professional way.
But, lest it be inferred that somehow the government made some error in its pairing arrangements yesterday, I put on the record now, absolutely and unequivocally: we were under the clear understanding, as delivered to us in writing by email, that Senator Xenophon was opposing the opposition amendments. He was therefore paired in that way. He will be paired in any division, if there is one, on this matter in accordance with his now-advised instruction that he wishes to support the opposition’s amendments.
I thank the Government Whip for that explanation. But I support the recommittal of these amendments because they will truly reflect the wishes of the Senate, and the wishes of the Senate, if this vote is carried, will reflect the wishes of millions and millions of small business people—and not only small business people but pharmacists, newsagents, solicitors—who would all have to be paymasters for a government plan.
We are putting forward the proposition that the government, through its Family Assistance Office, directly pay the women who are having the children. The government’s proposition is that for the first six months they will do exactly that, but after six months they will pay the employers and the employers will then pay the women who are on paid parental leave. If that is not a conflict of words and an absolute extension of unnecessary costs that will be passed on to Australia’s already hard pressed business sector, I do not know what is. I do not know the reason why it is being done.
I say to the Leader of the Government in the Senate: a lot of people are listening to this debate at the moment. A lot of people know that, if they are saddled with the administration of this Paid Parental Leave scheme, it will cost them a heap of money. I have something from the Pharmacy Guild wrote to me and I would like to read it into the Hansard:
A local ACT member made enquiries as to the cost of completing upgrades to his payroll software to accommodate the required changes. He has advised that in his particular case he will be able to complete the software upgrade ... in-house, which will not be the case for the majority of community pharmacy employers. Without this in-house expertise, he estimated a cost of $600 - $700 to complete this upgrade. In terms of the ongoing administration as a paymaster, his experienced ... payroll processing staff estimates approximately one hour per employee, per pay plus additional set up and close off time per employee. In the event that he was to have 6 employees on PPL at once, to perform the role of paymaster for the Government, he estimates the time cost to his business for the payroll processing would be half a day each ... fortnight.
I know it does not apply to this government but, in Queensland, the state government has put in a new payroll system, and issues have been going on for six months. People have not been paid, the payments have been different and overtime has not been put in. It has just been a complete farce.
I do not know why we have to go through this process of passing on an oncost that has to be administered by the Family Assistance Office. They have to pay an employer and the employer then pays the employee. Let us cut out the middleman and go direct and save Australia’s small businesses—and big businesses, for that matter—millions and millions of dollars in costs that are completely unnecessary. We are putting up this amendment. If the amendment goes up and the government does not accept it, it will be on their head. They will have inflicted costs of millions of dollars, hundreds of millions of dollars, on the Australian small business sector—and on the big business sector, for that matter. The big businesses might be able to cope because they have officers committed to these sorts of payroll issues, but small business does not.
Madam Temporary Chairman, being a majority shareholder in a business, you would know from your experience that the costs just keep moving up. There is land tax and other costs which just keep escalating for small business. There are electricity charges. Every day a new charge is inflicted on Australia’s small businesses. It has got to the stage that small businesses are coming to me. I had one person yesterday saying: ‘It’s not worth it anymore to employ 60 or 70 people. Every day I get an increase in my costs that I have to absorb.’ We are killing the goose that laid the golden egg, and not only by inflicting a mining tax upon Australia’s most productive sector. With this scheme, we are going to inflict a huge cost on a sector that provides the majority of Australia’s employment.
There is absolutely no need for it. So bear in mind, Minister, that, when you take this to your cabinet, what you are doing is neglecting Australia’s business sector for no reason at all. You already have an office set up that can make the payments. Just direct the cheque to the women who are having the babies and you will get a pretty general acceptance of this bill. It will not be altogether. There will be people out there, the non-working mums, who will say that they are being underrepresented and underconsidered, and that they are not being taken for the value they give in bringing up their own children. Yes, there will be those people, and I have a great deal of sympathy for them.
But that is not the amendment at the moment. What we are debating at the moment is inflicting costs on Australian businesses. I know, Minister, that you are a fair-minded man; I know that you will take this and make representations to accept this amendment. It will not cost the government one cent more, but it will cost business millions and millions of dollars. If you do not accept this amendment I will be out there, leading the charge, saying: ‘We did our best. Senator Xenophon, Senator Fielding and the National and Liberal parties have done their best for business.’ You will have pulled the rug right out from under them if you do not accept this amendment.
The first thing I ought to do for the many people who are listening is make it clear that we are actually debating a resolution to, as I understand it, recommit the motion. I indicate on behalf of the government that we have agreed to that because we always take the view that the will of the Senate ought to be reflected in any votes. We should not have results that do not reflect the will of the Senate. I think Senator O’Brien explained what occurred as a result of Senator Xenophon’s absence yesterday. It appears that Senator Xenophon’s instructions for yesterday were not clear in terms of his view. But I want to confirm that Senator O’Brien acted appropriately in accordance with the instructions he had. It is always difficult to manage these things when a senator who is not from a major party is absent on leave. The whips are challenged in that regard, but Senator O’Brien acted appropriately in accordance with the instructions. Anyway, we will be supporting the resolution to recommit the motion so that the view of the Senate is properly reflected in any decision. The lights have gone out!
It is always said that senators have good faces for radio, and perhaps this is commentary that is best heard in the dark! Can I indicate to Senator Boswell that we will not be supporting these amendments. While he brings to this debate the same sort of passion that Senator Fielding brought to it yesterday, it does not seem to have much to do with the bill and I think it is a little misplaced. Senator Boswell, you say that hundreds of millions of dollars in imposts will be thrust upon small businesses. In fact, only nine per cent of all businesses, and only three per cent of small businesses, will be involved in paid parental leave in any given year. So I think you might be guilty of a little hyperbole in this respect.
The fact is that small businesses will only be involved in this when one of their employees goes on maternity or paternity leave. If you are a small employer with two or three employees it will not be such a regular occurrence—even if the person is having a big family. The reality is that you will not be involved in paid parental leave arrangements on a regular or long-term basis if you are a small employer. That is the first point. So the hyperbole about hundreds of millions of dollars in imposts on small business is, quite frankly, a nonsense. So, Senator Boswell, while I always listen to your contributions, in this case I think it is misplaced, so I will not be making representations on behalf of the case that you have argued. And, quite frankly, it is a bit rich for a senior member of a government that was responsible for introducing the GST to lecture me about imposts on small businesses. I think we ought to bring this into perspective. Compared to the GST and the impositions on small businesses in terms of accounting costs and their dealings with government, I think it is fairly clear that paid parental leave is a fairly small impost.
The main focus of the debate is whether this is seen as a welfare payment or whether it is about parental leave and the right to have time off work. As Professor Marian Baird said in the Financial Review last week:
If paid maternity leave aims to recognise women’s workforce attachment, then that is an important consideration on how the payment is made—this is why the Productivity Commission recommended an employer link, otherwise it’s seen as a welfare payment.
We want women to maintain a strong connection to the workforce by receiving their government funded parental leave pay through their employer as they would other work entitlements. These are work related entitlements. As I said, only nine per cent of all businesses, and only three per cent of small businesses, will be involved in paid parental leave in any one year. As the Senate is aware, to help employers prepare for the scheme, we have organised a phase-in period over the first six months. We have ensured that employers can receive advances of funds in as little as three instalments. They will only be required to pay when they have received sufficient funds. So a whole range of arrangements have been put in place to work with employers to make this effective and have as little impost on them as possible. Employers will provide parental leave on a business-as-usual basis. They will not be required to lodge regular reports with the Family Assistance Office or establish special bank accounts. Parental leave pay will be paid in accordance with an employer’s normal pay practices and an employee’s usual pay cycle. It is not a payroll tax and there is no workers compensation payable. The design is very much based in the employment contract and the connection to work. That is the way the scheme is designed to operate.
The government will not be supporting the opposition’s amendments, which fundamentally go against the whole basis of and rationale for the scheme. We think the approach the government has adopted is the appropriate response. But we will be voting for the recommittal, because we are always concerned to make sure that the will of the Senate is reflected in the votes.
The Greens will not object to recommitting the motion if that is what needs to be done to reflect the true will of the Senate, but I would like to take this opportunity to highlight the hypocrisy of the opposition. Yesterday we heard over and over again about how they want a better scheme, they want six months, they want superannuation—they want all these things included in paid parental leave, but they were not prepared to stand by them when those amendments were put up. They said, ‘When we get into government we’ll do this, this, this and this.’ It is fairly clear. But their argument was, ‘We didn’t want to frustrate the process.’ I think the antics of yesterday afternoon and again this morning show that the opposition are more than happy to frustrate the process.
In fact, where you are frustrating the process is that you are looking after the bosses, not the mums who have to work and care for their kids. You were not standing up for them yesterday. You were not prepared to put their needs ahead of your issues in relation to frustrating the process or frustrating the government. But you are more than happy to simply stand up for the bosses. Rather than ensuring that women get the length of time that they need, six months, which is apparently your policy, and rather than giving them superannuation, which you agree should be included, you are now not standing up for the policy that you said you held and said you want. Instead, now you are frustrating the process by saying that you want to get rid of the one thing in this bill that is any type of attachment to the workplace.
There are flaws in this bill. It is interesting to hear the minister stand up and say, ‘Oh, well, we need this because this scheme is not about a welfare payment; it is about an entitlement to leave.’ We obviously know that that is a flaw. I spoke about it in my speech and at the Senate inquiry. It is out there on the public record. The government’s own department and drafters of this bill admit that this is a payment scheme, not a scheme that gives you a right to leave. Yet the one part of this legislation which ensures that there is some element—it may be small, but there is some element there—of the idea of attachment to the workplace for women and which therefore perhaps leads in some way to deal with that workforce participation criterion and objective is this issue of the payroll master. That is the only piece of this bill that does that, and the opposition want to kick it out. They are prepared to stand up for the bosses but not stand up for the mothers. That is what this is about.
Your leader goes out there and says, ‘We want six months; we want superannuation,’ but you do not stand for it when it counts. It is spineless—absolutely spineless. Here you are bowing to the bosses because they are obviously your constituents. You do not care about the mothers. You do not care about the dads. You do not want a good scheme in place. This is all politics for you. You had a chance to introduce a six-month scheme to improve this piece of legislation. You had a chance to include superannuation, which is apparently your policy. And you wimped out. Not only is Tony a phoney but he is a wimp too.
I must say that I could get used to this mood lighting! Certainly, Senator Evans has never looked so good! I would like to make it absolutely crystal clear that the opposition, if it is successful with its amendments, has no desire to imperil the bill and has no desire to delay the bill. If we are successful and the bill bounces back from the other place, we will not be insisting on the amendments. But we do hope that the government does pause for thought about this and about these amendments.
In response to Senator Hanson-Young’s comments as to why we are supporting these amendments and not other amendments which had a flavour or reflected some elements of our policy, the reason is quite simply that we knew that the government would not entertain for one second in the other place those other amendments. We do hope that with these amendments the government will pause for thought, because they do not fundamentally change the nature of the scheme that the government is seeking to introduce but they do seek to lift a burden from small business. I say again: I do hope that the government does take these amendments as genuine and at face value and does seriously consider them.
If these amendments are successful, there is no need for that to represent a delay to this legislation. Whether this legislation is delayed is entirely in the government’s hands. How long it takes to be dealt with in the other place, if it is successful, is entirely a matter for the government. How quickly it comes back here is entirely a matter for the government. Mr Albanese was on Sky this morning saying that the opposition was being frustrating and was seeking to delay the PPL legislation and that it was unlikely the legislation would be passed today. The opposition is not frustrating. The opposition is not delaying. We are seeking to make a significant improvement to the bill in the interests of small business. If there is a delay, it is not because of the opposition; it will be because of the government.
The opposition make the commitment that, if a message comes back from the House today, in the event that this motion is successful, we are happy to support the government in interrupting whatever business is taking place in the Senate to facilitate the passage of the legislation. I just want to make it clear that the opposition is being responsible, despite what Mr Albanese has been saying and despite what the Prime Minister has been saying. We are simply seeking to do our job. We are simply seeking to make sure that the Senate does its job. There is no need for delay, and we stand ready to be cooperative with the government in the event that this is successful and bounces back.
I have to correct something that Senator Evans said. Yes, I made a plea for small business and I also made a plea for business. This is not only going to affect small business. I read out an extract from the Pharmacy Guild saying that one pharmacist estimated the cost for him to have to amend his calculations, his computer and his program at $700. That was just to alter the computers. Seven hundred dollars multiplied by 4,000 is a considerable amount of money, but that is just a start. Then you have to chase things. Mabel is going on paid parental leave and the cheque is not in, so you have to ring up the family unit and chase them, and the girl at the family unit is not there—she has gone on leave or something. It is going to be quite hard.
When you go into places like the building I have my offices in, to take a case in point—say, Minter Ellison, to take a name out of the hat—they would have maybe 200 ladies working there. Some of them, from time to time, will be taking paid parental leave. To say flippantly, as you did, that it is only three per cent or nine per cent or whatever you said, is typical Labor. You do not understand business; none of you have ever run a business. You have all been up through the union ranks. Once we would get the odd worker in here who picked up a shovel by mistake, but you do not get that anymore in the Labor Party. You just get union hacks who have never had any experience running a business. Not one of you over there has ever run a business. You flippantly get some researcher to say, ‘Don’t worry about it.’ The difference now is that you are responsible. We have tried. If you do not put this up, I do not expect it will collectively cost you a lot in votes, because I can never find anyone in small business who has ever voted for you—or anyone who is prepared to admit that they have ever voted for you, although there must be some around. You are not going to lose a lot of small business votes, but you would increase your credibility in the business community.
Senator Hanson-Young says that it is a great concern that a woman gets a cheque from her employer. I would suggest, Senator Hanson-Young, that this may affect you but most women would say: ‘As long as I get that cheque—I don’t care whether it’s from the employer or the government—it’s not going to worry me. As long as I have that cheque, as long as I can put it in the bank, as long as I can go on my leave, I’m okay.’ We are double dipping and double handling for no apparent reason other than to say that it is a benefit. It is a benefit, and the benefit is paid by the government. The government has the capacity to fund a woman who is going on maternity leave. The simplicity of that seems to have escaped the Greens, but I would not have thought it would escape the members of the government. As for the comments on the leader of the Liberal Party, I find them pretty offensive. I thought you were above that. One cannot really help people who have to go down to that level, but I did not think it would be you, Senator Hanson-Young.
I do not want to extend the debate, but I want to briefly reply to the statement made on behalf of the opposition. I want to make the point that we would certainly appreciate cooperation in finalising the bill today, but we are now debating a recommittal of amendments that were defeated yesterday in order to go back to the House of Representatives with a clear indication that the opposition will not insist upon them when they come back. It can only delay the process for no impact, unless the opposition is to insist on those amendments. I do not want to lengthen the debate or argue the point and delay the Senate. For the record, this is a recommittal to support amendments that will not be insisted upon. Therefore, there will be no impact from this other than delaying the parliament. I do appreciate the offer from the opposition to facilitate the bill this afternoon. If we can organise that we will.
I will not take much time at all. What the opposition is seeking to do is give the government the opportunity to reconsider this in the other place and the opportunity to fix this bill to reduce the impact on small business. I am an eternal optimist. I like to think the best about people and that the government might take this amendment seriously and consider it. It is of a different nature to other amendments that have been put in relation to this legislation. We are simply giving the government the opportunity to consider the impact on small business again, and I would hope that the government would want to make sure that any impact or impost on small business was minimised.
The Temporary Chairman:
We now have a postponed amendment from yesterday—government amendment (6) on AF249?
I am happy to move that amendment—I was yesterday too when I stood up, but it was the wrong one. Please correct me, Chair, if I am wrong in my second attempt. I move government amendment (6) on sheet AF249:
(6) Page 86 (after line 29), at the end of Division 2, add:
99A Payment of paid parental leave does not affect other employer obligations
An obligation of an employer to pay a person parental leave pay under this Act is in addition to any other obligation the employer may have in relation to the person, however that other obligation might arise (including, for example, under another law of the Commonwealth, a State or a Territory, or an industrial instrument (however described)).
I think there was some debate about this yesterday when I was not in the chamber. This amendment seeks to address a question that was raised at the Senate Community Affairs Legislation Committee inquiry into the paid parental leave bill as to whether the government’s scheme was offering entitlements that were in addition to those that already exist or whether employers could use the government funding to offset their own schemes. The government’s legal advice is that the clear implication from the bill as originally drafted is that employers cannot use parental leave pay to fulfil an existing obligation to provide paid parental leave. However, the inquiry process revealed a degree of speculation about the issue, and senators rightly pursued those issues. This amendment seeks to put that matter beyond doubt. The amendment makes it clear that an employer cannot use government funded parental leave pay to meet an obligation to provide employer funded paid parental leave—for example, under an employment contract or industrial agreement.
This amendment clarifies that our paid parental leave is in addition to any existing employer entitlements that may exist from time to time. Nothing in this amendment affects the negotiation processes under the Fair Work Act. Enterprise agreements can be renegotiated in accordance with the provisions of the Fair Work Act, and common law contracts can also be renegotiated and varied in accordance with the law. This amendment simply confirms that the government’s PPL cannot be used to satisfy any other employer obligations, as they may exist from time to time. I request that the Senate support the amendment.
The opposition yesterday requested that the government put this amendment to the end of the list of amendments in order to provide us with a briefing. These amendments were drafted on the 11th of this month and circulated on the 16th, so there was a delay in getting these to the other parties in this chamber. That did not afford us the opportunity to form a full view on the amendments put by the government, so we sought and received a briefing this morning. That briefing did not provide the opposition with total comfort, partly because we have not had the opportunity to consult with the range of stakeholders and experts that we would have in the usual course of events. We did flag in the second reading debate that we feared the government would seek to find a way for small business to top up the government’s own scheme. This part of the legislation has clearly been rushed.
The opposition will not be seeking to oppose this, because we do not want to frustrate this legislation. But be it on the government’s head how this particular section is drafted. We do maintain some serious reservations. I know some of my colleagues—including, I think, Senator Fisher—will be ventilating some of those. I state that the opposition, although it has reservations, will not be opposing these amendments.
As I indicated yesterday, I withdrew the Greens amendment that sought to do exactly this, because the government had obviously put forward an amendment that did the same thing. It is a good acknowledgment from the government that this was a flaw within the legislation. It is really important that, when we are only offering 18 weeks at the minimum wage and when there is clearly no commitment from either side anymore to extending that in the near future, we ensure that the government scheme is used in addition to existing employer funded schemes. It cannot be used as a replacement. It is a really important aspect. Of course, we know that many of the women who do not have access to any type of paid leave other than the government funded scheme will simply still have to sit on the only-18-week scheme the government has put forward in this legislation. That is unfortunate. We would have liked to have seen it at six months. But we cannot allow for any lack of clarity or misunderstanding: this taxpayer funded paid parental leave scheme cannot be simply absorbed by employers or indeed used to replace their existing schemes. That is why the Greens will be supporting the amendment.
Senator Hanson-Young, as I understand it you actually deferred consideration of your amendment yesterday rather than withdrew it. Once we have finished dealing with the government amendment here, we will need to formally deal with yours.
I have some questions about the intent and effect of the amendment, and I thank the Senate for the opportunity to ask them. I also thank the government for its attempt—albeit belatedly—to brief the opposition for some 20 minutes or so this morning on this amendment, which the opposition learnt about when it was first tabled in the Senate some 24 hours ago. I understand some key stakeholders only became aware of it yesterday as well. I am going to try to keep my questions as brief as possible, but I do want to try and ascertain from the government a clear description of what it intends with this amendment and a reassurance that it will achieve that intention.
Minister, the heading of the amendment uses the words ‘does not affect’. The amendment itself uses the words ‘is in addition to’. Minister Arbib yesterday used the words ‘cannot be used to satisfy’ and you this morning used the words ‘cannot be used to fulfil’. Is there any difference between the meanings of those words? If so, why are the words ‘does not affect’ used in the heading to the amendment, the words ‘is in addition to’ used in the guts of the amendment and the words ‘cannot be used to satisfy’ and ‘cannot be used to fulfil’ used by the respective ministers to describe the effect of the amendment? There is a substantive reason for asking. It is not just playing with words. They all have meanings.
I suppose the general answer on the wording used by ministers is that we are not a scripted government. Ministers choose their own words when responding to issues in the Senate, so I would not place too much emphasis on the particular words chosen by the ministers in the debate. I certainly would not place any on mine, in the sense that they were not meant to carry legal or technical connotations; they were only used to try and explain the purpose of the amendment. I am advised, though, that in the drafting of the amendment we do not have any concerns that the impact of the use of those words will be any different. Our advice is that the amendment achieves what we want it to.
I will just point out that the amendment was drafted in response to concerns raised in the Senate committee process, which is obviously the appropriate process for teasing out any concerns. It serves the Senate and the parliament well. I am advised that we do not have any concerns about how the wording is used in various sections such as the heading and content of the amendment. If you have any particular concerns or you think either of the terms used have some other meaning then I am happy to respond to that. If there is something that you think does not work then we are happy to try to address it.
You now have your special adviser in Senator Collins sitting behind you, so hopefully she can assist. Let me put the same question another way: does this amendment simply ensure that the 18-week parenting payment must be passed on to an employee by the employer or does it do more than that?
I think all it does is mean that it must be passed on. It is designed to deal with the concern about the impact of this matter on other policies or terms of industrial instruments that may apply in a particular workforce, but the intent is that that entitlement be passed on.
If the intent is simply that—to ensure that an employer who receives the 18-week payment to which an employee is entitled passes that payment on—then why does the guts of the amendment not simply use the words in the heading of the amendment, which are ‘does not affect’. Why does the guts of the amendment not say ‘an obligation of an employer to pay a person parental leave under this act does not affect other obligations’?
In the heading we talk about ‘does not affect’, but the amendment makes it clear that it is an additional obligation. It is drafted in a way to make it clear that that obligation is additional. As I say, we do not have any concerns. If you are asking, ‘Why was it drafted in that way and why was a particular term used?’, I cannot quite answer that. You know what we seek to achieve by the amendment. If you have a concern that we are not achieving that, I am happy to respond to that. As to what is in the ‘guts’ of the amendment, to use your delightful term, I am advised that it achieves what it set out to. From the advice I am receiving, we do not think anything hangs on it. If you are mounting the argument that something hangs on it then I am happy to respond to that.
The concern may be that employers and employees may think from the heading to the amendment that it simply compels the passing on by an employer to an employee the 18-week parenting payment rather than going further. You have now confirmed the government does intend the amendment to go further in saying that not only must an employer pass on to an employee the 18-week parenting payment but that employer cannot use the passing on of that 18-week payment to satisfy or fulfil other obligations. In the words of the guts of the amendment itself, it must be in addition to an obligation that an employer has to that person arising in a different way, be it under a Commonwealth or state law or an industrial instrument. So potentially it is arguable that the heading to the amendment has a very different effect from the guts of the amendment. You are saying to the Senate, if I understand you correctly, that the guts of the amendment is what the government actually intends the amendment to achieve, so you might reflect on how that is a potentially misleading heading.
I understand the point you are trying to make. We argue that the legal meaning is that contained in the clause. You raise concerns about whether or not the heading accurately reflects the full policy intent. I guess I regard that as a bit of an argument on semantics. We do not think anything turns on it. The legal meaning is reflected in the clause. I think it is fair to say that most people will get information about their obligations through publications from the department, information sheets and advice from both government and industry bodies where the language will probably be more user-friendly and designed to make clear what the implication of the policy is. You, Senator, and a few others interested in industrial law will be a small group who will come to terms with the detail of the legislation. I must admit that it is more than 20 years since I have grappled with industrial law, so I do not pretend any great expertise any longer. But we think the legal effect is in the clause. We think it properly reflects the government’s policy intention. We think this amendment achieves what we intend for it to achieve.
Semantics keeps a plethora of people outside this place very well occupied. They are called the IR club, and very well cushioned indeed they are. They will be hanging off the words of these amendments. But my concern more so is that employers who have concerns about this amendment may be misleadingly reassured by the heading of the amendment and the popular vernacular with which it will subsequently be described for the purposes of brevity and, potentially, a media grab. On the other hand, employees may well be concerned by the publication of this amendment if the heading is used.
Going to the next aspect of the same concern, can you please clarify whether this amendment allows an employer and an employee to renegotiate a workplace agreement, to which prospect you referred in your opening description of the effect of the amendment? Does this amendment mean that an employee and employer can renegotiate a workplace agreement, either a workplace agreement that exists today or one existing in the future? Can an employee and an employer renegotiate a workplace agreement so that the 18-week parenting payment payable under this bill satisfies an obligation that an employer has today under a workplace agreement to provide a worker with 18 weeks paid parental leave?
This provision makes clear that this obligation is additional to any obligations that the employer has as part of their employment contract or industrial instrument with a worker. Your question is in terms of any renegotiation of that agreement in the future: under normal circumstances involving the Fair Work Act or contract law, can an employer seek to alter the terms as part of that negotiation? Of course the answer to that is yes. In accordance with whatever the term of their agreement is or the nature of their arrangements under the Fair Work Act or contract law, if they are seeking to renegotiate the provisions of that industrial instrument, that is clearly something that an employer or employees can put on the table as part of that process. But the provision here is in addition to whatever other terms are contained in those contracts or industrial instruments.
Let me ask the same question in another way. Say that today an employer has a workplace agreement that obliges the employer to provide a worker with 18 weeks paid parental leave. In six months time the agreement is up for negotiation. Can the employer and the employee, perhaps collectively, agree to provide in their workplace agreement that the employer will provide 18 weeks paid parental leave, both leave from work and pay accompanying, and that the 18-week payment that the employer would otherwise make to the employee will be satisfied in whole for those workers who are earning the minimum wage with the employer—who hopefully will be few—and/or in part for those workers who are earning more than the minimum wage with the employer by the employer passing on to those employees the parenting payment payable under this bill? Sorry, it is still not clear.
The bill provides the obligation to provide 18 weeks paid parental leave. That obligation exists outside of any other obligations entered into by employers and employees. The other arrangements entered into can be additional to those, but this is a provision that must be delivered. The negotiation process beyond that is available to people as they make their arrangements under industrial instruments or contract law. That is the clearest way I can explain it.
It does not have any impact on the Fair Work Act or anything else outside of the bill. It provides an entitlement that has to be met and it does not impact on those other arrangements.
To the extent that the obligation of an employer to pass on the parental leave payment under this bill cannot be used to satisfy an obligation that an employer may otherwise have to a worker, is it the payment component that cannot be used and/or the 18-week period? So is it just the money bit, or is it also the period to which the money relates?
People will, if they seek to access this payment, be entitled to 18 weeks paid parental leave without impacting on the other arrangements that they may have. They do not have to apply for it, but if they apply for it they have that entitlement.
Under this bill, they will be entitled to an 18-week payment of the minimum wage. The bill does not give them an entitlement to 18 weeks paid leave, but I will leave that aside. Given the lack of consultation about this amendment, I fear that there will be large parts of the workplace community hanging off our clumsy attempts here this morning, but I will do my best with my final two questions to help, I hope, to clarify the amendment in terms of its application to any other obligation the employer may have to the employee. This may seem pedantic; however, in workplace parlance it is not. Does ‘obligation an employer has to a worker’ also encompass what might be regarded as a statement of intent—for example, in a policy statement? I ask because it has been argued in the very quick discussion that there has been about this amendment that it is the employer’s right because, to the extent that employers provide paid parental leave, many of them do it by way of a statement of policy which is left outside any sort of legal obligation. So the question is: does the meaning of the word ‘obligation’ in the amendment extend to statements of intent, or is it a legal obligation?
I am advised that, where a policy forms part of an employment contract or industrial instrument, this amendment makes clear that the obligation is additional to parental leave pay. Where a policy is applied in a purely discretionary way—that is, it is not part of the employment contract or industrial agreement—this amendment does not impact on the employer’s ability to vary its own policy. So it is the nature of being included in an industrial agreement or employment contract that is the key, as I understand it.
In terms of your concern in relation to the discussion we have just had, there is an implementation group which includes representatives of businesses to work through the implementation of these policies. If there is concern and confusion around the issue you raise, then that is the appropriate venue for that to be pursued. There will be an opportunity for us to work through that if there is any continuing concern.
Thank you, Minister. I am more reassured by that answer than I am afraid I had been by the preceding answers to the different questions. My final question—and I thank the Senate for its indulgence—relates to the employer and the employees to which the amendment refers. Does the amendment apply to all employers and all employees in Australia, or is it possible that the amendment only applies in respect of employers who are constitutional corporations and employees of constitutional corporations?
I think the answer is—and I am taking this on advisement—that it only applies to employers who have an obligation to pay parental leave under the act. So it is those employers who are bound by the provisions of the act.
I note in closing for the government to consider that, if that be so, that may then mean that the second limb of the amendment—that is, other obligations the employer may have in relation to the employee, howsoever arising—can only apply to employers who are constitutional corporations. The government might indicate whether it has received legal advice to that end, but I may leave that in the lap of the committee now because I understand time is short.
We are advised that we have had the appropriate legal advice to support this framework and that the measures do not rely on the corporations power. So they do not anticipate that is an issue. That is the advice that was received in drafting this amendment.
I understand that the provisions of this bill are not based on that power, but it is the reference to ‘other obligations howsoever arising’ that may attempt to go beyond the basis of the power for this bill.
Question agreed to.
This is one of the amendments that I flagged earlier that the Greens would be withdrawing in light of the fact that the government have agreed to introduce a review into the legislation, so we can be assured it will happen and that there will be some importance placed upon that. The government have obviously accepted that that is an issue. They have put forward their amendment, so I am happy to withdraw ours.
I move government amendment (7) on sheet AF249:
(7) Page 236 (after line 20), after clause 307, insert:
307A Review of the operation of this Act
(1) The Minister must cause a comprehensive review of the general operation of this Act to be begun by 31 January 2013.
(2) The review must consider the following matters:
(a) the amount of time off work that primary carers are taking to care for newborn or newly adopted children;
(b) the availability and amount of leave and payments provided by employers in relation to the birth or adoption of a child, and the interaction of those entitlements with parental leave pay provided under this Act;
(c) the operation of the work test;
(d) whether primary claimants’ partners should be paid parental leave pay separately from, or in addition to, primary claimants;
(e) whether employers should make superannuation contributions in relation to parental leave pay;
(f) the results of any evaluations conducted in relation to the operation of this Act;
(g) the administration of this Act;
(h) any other matter relevant to the general operation of this Act.
(3) The Minister must ensure that public submissions are sought in relation to the review.
(4) The Minister must cause a copy of a written report of the review to be tabled in each House of the Parliament within 15 sitting days of the day on which the Minister receives the report.
The government are making this amendment in order to give legislative effect to our firm commitment to have a comprehensive review of the PPL scheme. The amendment makes clear that the review will commence by 31 January 2013, two years after the scheme commences. The review will be wide-ranging and cover all issues relevant to the operation of the act, including its administration. We also specify particular issues that must be considered in the review: the amount of time off work that primary carers are taking to care for newborn or newly adopted children; the availability and amount of leave and payments provided by employers and the interaction of those entitlements with parental leave pay; the operation of the work test; whether the primary claimant’s partner should be paid parental leave pay separately from or in addition to the primary claimant; and whether employers should make superannuation contributions in relation to parental leave pay, an issue we debated yesterday.
The views of stakeholders and the public will also be sought during the review and the result of any evaluations will be incorporated. We think this is a sensible amendment which allows for proper consideration of the legislation’s impact after an appropriate length of time. It is a device we use in many other bills and we think it is a sensible legislative procedure. I urge the Senate to support the amendment.
As the Greens had a very similar amendment, which was withdrawn subsequent to the government putting theirs forward, we are happy to see this legislative review included.
Question agreed to.
by leave—I move Greens amendments (13) and (14) on sheet 6111:
(13) Page 236 (after line 25), after clause 308, insert:
Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.
(14) Page 236 (after line 25), at the end of the bill, add:
Schedule 1—Amendments relating to paid parental leave
Fair Work Act 2009
1 Subsection 67(1)
Omit “An”, substitute “Subject to section 67A, an”.
2 Subsection 67(2)
Omit “A”, substitute “Subject to section 67A, a”.
3 After section 67
67A Additional application—paid parental leave
(1) This section applies in relation to an employee if:
(a) the Secretary makes a determination under Part 2-2 of the Paid Parental Leave Act 2010 that parental leave pay is payable to the employee for a child; and
(b) at the time the Secretary makes that determination, the employee does not meet the requirements of subsection 67(1) or (2); and
(c) the employee has, or will have, completed at least 3 months of continuous service with the employer immediately before the day the Secretary makes the determination.
(2) The employee is entitled to leave under this Division.
Note: An employee qualifying under this section is entitled to leave during the employee’s PPL period for the child (see section 70A).
(3) In this section, unless the contrary intention appears, any term that is defined in the Paid Parental Leave Act 2010 has the meaning given in that Act.
4 Section 70
Omit “An”, substitute, “Subject to section 70A, an”.
5 After section 70
70A Modified application—entitlement to paid parental leave
(1) This section applies to an employee who is entitled to leave under this Division because of section 67A.
(2) The employee is entitled to:
(a) unpaid parental leave during the employee’s PPL period for the child; and
(b) if the leave is associated with the birth of a child—an additional period of unpaid parental leave of up to 6 weeks before the birth.
(3) In this section, unless the contrary intention appears, any term that is defined in the Paid Parental Leave Act 2010 has the meaning given in that Act.
These amendments are quite significant. They deal with a significant flaw in this entire legislation, which is that this is a stand-alone piece of legislation. It does not amend the Fair Work Act, which contains the unpaid maternity leave provisions. The government themselves, through both their advisers and the secretary of the department, have acknowledged that, yes, this piece of legislation is simply an entitlement to a payment, not necessarily an entitlement to leave. That is because the maternity leave provisions are held within the Fair Work Act. This bill as it stands does not amend that.
Some women—I hope most women—would be entitled to the payment on the criteria set out in this legislation, which would marry with their eligibility for entitlement to unpaid leave in the Fair Work Act, but there would be some women who would not be. That is because the entitlements for the payment are different to the existing entitlements for leave in the Fair Work Act. It is going to be very difficult for the government to continue to argue that this is a paid parental leave scheme, rather than simply a payment for parents who happen to have to leave their job but are not necessarily given a guarantee that they will get their job back. It is very hard for the government to argue that this is anything more than a payment for parents as opposed to a paid parental leave scheme that is based on a foundation of workplace attachment, of workforce participation of women in particular, and of ensuring that it is a workplace entitlement. The minister himself—in response to some of the comments, whether they are relevant or not, made by Senator Boswell—indicated that this piece of legislation, this scheme, is all about a workplace entitlement. Yes, it should be about a workplace entitlement. Unfortunately, though, because of the way that the bill is drafted—it does not amend the Fair Work Act—it is not a workplace entitlement. You can say it is, but it is not. There is an entitlement to a payment; there is not an entitlement to leave.
It astounds me, to be honest, that the government were not forward thinking enough to be able to say, ‘Look, we are so committed to a paid parental leave scheme, we will put forward a bill that will amend the Fair Work Act to ensure that the entitlements marry with each other.’ So you are not just introducing a social welfare benefit; you are introducing a workplace entitlement. You are not just dressing up the baby bonus but implementing a proper paid parental leave scheme. One of the issues that has been raised in this debate since the moment the government put forward their exposure draft of the bill is that this is a very complex piece of legislation. The attitude is: ‘We can’t play with bits of it because it is so complex. Let’s just ram it through the parliament.’ We have seen that the parliamentary process, and the Senate process in particular, has been able to articulate that there are flaws. We have been able to fix some of them, but this is a major one that we have not yet been able to fix. That is why this amendment is on the table.
If they had indeed simply put forward a piece of legislation that amended the Fair Work Act and included payment for the existing leave entitlements for parents then it would have been a much simpler act to deal with. The piece of legislation that was tabled last year by me on behalf of the Greens amended the Fair Work Act. It was not the 200-odd pages that the government’s bill is; it was not as complex. It was upfront about the fact that this paid parental leave scheme should be a workplace entitlement. To make that the case, we must amend the Fair Work Act. Otherwise, it is all show with no substance behind it—aside from the payment, which I accept. A paid parental leave scheme needs to ease the burden on families and on mums in particular who have to leave the workforce in order to have their babies. It needs to allow, help and support them to do that. But a paid parental leave scheme needs to ensure that they are not discriminated against or disadvantaged in the workplace because they have to take time off work in order to look after and care for their newborn baby.
We need to amend the Fair Work Act and ensure that there is a marrying of the eligibility criteria for those who are entitled to payment and those who are entitled to leave. Those women who the government rightly suggests do not generally have access to any employer funded scheme—casuals, seasonal workers and those in lower paid income brackets—are women who do not necessarily fit into the unpaid leave provisions. While they will be able to access the payment, they are not guaranteed of getting their job back. It will be up to the employer and whether or not they have the goodwill to say, ‘That’s okay: we’ll give you that time off and you can come back.’ That is not a good foundation for government policy: ‘She’ll be right, mate. The boss’ll look after you.’ I cannot believe that that is the type of approach that is coming from the Labor Party, but that is the approach in this legislation: ‘She’ll be right, mate. The boss’ll look after you.’ They are not guaranteeing in the piece of legislation that is before us today that all parents who are eligible for the payment will be eligible to get their job back once their leave period is over. It is a fundamental flaw in the legislation. It is tricky to clean up. Nonetheless, the Greens amendments try to do that.
I would like to see the government’s response to this. If they are indeed committed to the idea of expanding this scheme—if they are indeed committed to including superannuation and extending the length of time—how are they going to do that if they do not bed down a scheme that is about a workplace entitlement and not just another form of the baby bonus?
The government does not support these amendments. The Productivity Commission recommended that the eligibility for paid parental leave be more generous than eligibility for unpaid leave under the National Employment Standards. The government accepts that recommendation. This enables more working women to access the scheme, including women who work in casual, seasonal and contract employment, as well as self-employed women. The scheme allows women who have recently changed jobs to also receive parental leave pay.
The National Employment Standards were the subject of extensive consultation prior to being finalised. They have only been in operation since 1 January this year. Most employees eligible for parental leave pay will be eligible for unpaid parental leave under the standards. The government does not believe that it is appropriate to expand them at this time and require employers to provide unpaid leave and a return to work guarantee in the absence of a longer term relationship between the employer and the employee. You are trying to meld in these amendments two different frameworks, which, as the senator admitted, is a little complex and a little difficult. We do not think that it is appropriate to expand the employment standards at this time to put that extra requirement on employers to provide unpaid leave and a return to work guarantee in the absence of that long-term relationship which is at the core of the PPL scheme.
I note also that these amendments do not propose to provide all people eligible for paid parental leave with an unpaid leave entitlement and a return to work guarantee, only those with three months continuous service. Effectively, it is just drawing the line in a different spot. Senator Collins also raises with me that this would see the final employer of someone who had a series of employers over a period of time being the one who would have to guarantee the job, even though the person might have had quite a different set of employment relationships with a number of employers.
The government do not support these amendments. I take the point that the senator is trying to make, but we think that this is not a sensible way to proceed at this stage. We have only just put the National Employment Standards in place. It would put an extra burden on employers and we do not think that the complication in the attempt to marry the two different frameworks that apply is a sensible thing to do.
Thank you, Minister, for giving the government’s response. I am not surprised by it. It was consistent with what you have been saying all along. I have moved these amendments because I obviously think that it is very important. If the government are not going to support them, then they should do the right thing by ensuring that in their promotion of this scheme, when it is eventually passed, they are upfront and honest about the fact that they are not guaranteeing that every person who is entitled to the payment has a guarantee of getting their job back. That is not the way that the government have been speaking about this policy initiative to date. They have been saying that people will get paid parental leave. But not everybody does under the government’s scheme. People are entitled to a payment, yes. But they are not necessarily entitled to leave. The government need to be upfront about that. The minister responsible must be upfront with Australian families and say, ‘I can’t guarantee that you’re going to get your job back.’
All I can do is assure the Senate that the government will be upfront with people as to what the impacts of both this legislation and the National Employment Standards are and what their rights are. We will obviously seek to provide as much material and information as possible so that employers and employees understand those rights.
That the amendments (Senator Hanson-Young’s) be agreed to.
Bill, as amended, agreed to, subject to requests.
Bill—by leave—taken as a whole.
I move opposition amendment (1) on sheet 6133:
This is ancillary to the substantive amendments that the opposition have moved in relation to the primary bill to take the burden off small business in terms of administering the Paid Parental Leave scheme. This is ancillary to that purpose.
I think that is a correct short iteration of what the amendments seek to do. They are consequential to the removal of the role of the employers—that is, the amendments on instalments to be paid by the secretaries, which was dealt with in the substantive bill and which we considered in the context of the main bill as I think it was outlined. The government does not support removing employer involvement in the Paid Parental Leave scheme, for the reasons which were outlined by my colleagues when they dealt with the substantive bill. So, for those reasons and the reasons articulated in the main bill, we do not support the consequential amendment.
I note that Senator Fielding has an amendment identical to this one. Also, Senator Xenophon has indicated by email to the whips that he will be supporting the opposition amendment. I noted that in that situation, with the opposition’s previous substantive amendments, the government did not seek to divide, recognising the numbers in the chamber.
For similar reasons to those for which the Greens would not support the amendment put forward by the opposition to the substantive bill, we cannot support this amendment either. It is really important—particularly in view of the amendment that the Greens put forward to ensure that there was a direct linkage between this Paid Parental Leave scheme and the Fair Work Act and therefore having a workplace entitlement—that the only existing piece of connection that parents will have with their workplace is through the employer being the paymaster. It is absolutely vital that that connection remain in this piece of legislation. I still do not quite understand where the opposition are going with this. If they are not committing to insist on these amendments when the bill comes back from the House, I am not sure why we are going through this facade.
I can answer Senator Hanson-Young: it is because we like to believe the best about the government. We would like to believe that the government might seriously consider this particular amendment and the earlier substantive amendments to the primary bill, because they seek to lift the burden off small business. We know that the government would not entertain a number of the other amendments which were moved by other parties and that had no prospect of success in the other place, but we do hope that the government will seriously look at this. We did indicate that we are not going to seek to imperil the bill or to frustrate it and that, if this is successful and bounces back from the House, we will not insist. That is because we have two objectives. One is that we want to see a paid parental leave scheme in Australia, although this scheme is not perfect. We have another objective, which is to lighten the burden on small business wherever we can. We would hope that the government would share that objective and take the opportunity that a successful amendment would provide for the government to consider that in the other place. So that is what we hope the government will do.
That part 1 of schedule 2 stand as printed
Bill, as amended, agreed to.
Paid Parental Leave Bill 2010 reported with amendments and requests and Paid Parental Leave (Consequential Amendments) Bill 2010 reported with amendments; report adopted.