Tuesday, 5 September 2017
Fair Work Amendment (Repeal of 4 Yearly Reviews and Other Measures) Bill 2017; Second Reading
I rise to support the Fair Work Amendment (Repeal of 4 Yearly Reviews and Other Measures) Bill 2017. To finish off my contribution: last night I was talking about looking at, for example, the retail award, which I have had some experience with in my former life as a trade union official. I noted that there are something like 1.3 million retail workers across Australia, of which probably the majority would be covered by the award system that covers their conditions of employment. Let's say there are 200,000 members of the SDA, which covers those retail workers. That means that there's over a million workers across Australia in the retail industry who receive the benefits of the work that the unions—not the SDA, but other unions—perform in order to maintain our award system.
For the benefit of those listening to parliament today: a lot of people are under the misapprehension that the award system is something that was generated by governments, and that conditions of employment are there because of government legislation or decisions of government. Whilst it's true to say that the architecture of our industrial relations system has come about because of the actions of various levels of government, it's important to make the point that the award system that we have in this country, which is virtually unique throughout the world, relies on the involvement of the trade union movement in order to ensure that those conditions of employment not only come into existence but they are also maintained and improved over a period of time.
For the benefit of those listening, it's important to note that if we're looking at a four-yearly review, which we're now moving away from, there is still going to be the ongoing opportunity for individual unions and, indeed, employer organisations to approach the Fair Work Commission to make applications to vary the various awards. But it's important, generally, for people to be aware that our system of awards came into existence nearly a hundred or so years ago—probably around a hundred years—in the state systems, and that's where I've had my greatest exposure to the award system. Although we had the Commonwealth legislation in 1904 and various states enacted comparable industrial legislation shortly after that, a lot of people are not aware of the fact that it was actually the union movement which had to apply, in those early days, a hundred years or so ago, for the making of an award to cover the industries that those unions represented. Prior to that, there were no minimum conditions of employment. The union movement, on behalf of its members, rallied and made applications to the various tribunals around Australia in order to get minimum conditions of employment established. That is, I think, a fact that a lot of Australians are not aware of: the important role of trade unions in establishing the award system, in arguing for the improvement in the award system, and, in fact—what's most relevant to this topic today—in protecting the awards against attacks by employer organisations. Employers routinely come forward into the various tribunals to apply for reductions in either penalty rates or other conditions of employment, on the grounds of flexibility, et cetera. I think it is important to note that history.
When it comes to the retail award, an award I am most familiar with, I know that the conditions that people take for granted in the awards that we have today came about because of the cases that were taken by unions as part of their day-to-day activities. For my own part, some of the more significant cases I was involved with were the introduction of a 38-hour week into the retail industry in the 1980s and the introduction of occupational superannuation as an award entitlement at around the same time. These are things that had to be fought for. People in the workforce don't understand the history of those things now, and, therefore, they take them for granted.
I want to skip forward to the creation of our modern award system, which was a historic achievement of the Rudd government and something which was initiated under the Howard government with the moving away from the dispute-settling power, under the Constitution, to the corporations power. The Howard government started the process of centralising our industrial relations system but was never able to complete the arduous task of bringing together a system of national awards applying to particular industries. That is, I think, a proud achievement of the Rudd government, but just because we had a Labor government in place didn't mean that unions had a lay-down misere to put in place reasonable conditions of employment in those various awards. In the case of the retail award, for example, there was dispute as to whether or not the national retail award that was going to come into existence in 2010 would have, say, the Sunday penalty rate of 200 per cent as a standard. So, in the lead-up to the introduction of that 2010 modern award, the SDA had to run a case in 2008 to set the Sunday rate at 200 per cent. We did the same thing in respect of the fast-food award, to have a 200 per cent penalty there. In December of 2008, the commission decided that the retail award would be set at 200 per cent for Sunday. Unfortunately, the fast-food award was set at 175 per cent for Sunday, and subsequently we found that employers in that industry sought to cut the 175 per cent rate to 150 per cent. So there have been an ongoing series of cases rotating around these issues of penalty rates. The awards were set in 2010 with the standard penalty rates in place, and then we had the two-yearly interim review of the modern award system, and once again employers took the opportunity to attack the penalty rates which had only just recently become a standard of the modern award, set by the commission. Between 2012 and 2013, the SDA had to run another case to defend the 200 per cent penalty against the employers seeking to reduce the rate to either zero per cent or 150 per cent. In the fast-food award, the SDA successfully defended the 150 per cent Sunday penalty against employers seeking a zero per cent penalty. By July of 2014, the Sunday penalty rate had reached 200 per cent.
So it's important to note that the issue of penalty rates is not something which has been left unaddressed over the course of their history of being settled. It is something which has been very regularly prosecuted and which goes to the issue of the relevance of that particular rate. Then we moved to the first four-yearly review of the modern award system, which commenced in 2014. This was a further case—the third case in around six years or so—where employers were seeking to cut the 200 per cent award rate in retail and the 150 per cent rate in fast food. Of course, the rest is history. In February of this year, the Fair Work Commission, regrettably, decided to reduce the penalty rates in the retail and fast-food awards.
I make those points because I'm very concerned that a lot of people out there in the community do not understand what happens with these penalty rates, how they come into existence and the incredible amount of work that is involved in relation to the trade union movement maintaining our system of awards. And I reiterate the point that the work of the union movement is not only on behalf of its members. They, of course, are its primary objective, but, because of our unique system, we have millions of Australian workers across all industries who are the beneficiaries of the work of the trade union movement in maintaining our awards. I think that's important to note because we currently have a federal government which does not appreciate the work that unions do. In fact, on a regular basis—a daily basis—the government wants to demonise the trade union movement and demonise union officials, and that is not very helpful to a proper discourse on this issue, particularly at a time when we have people like the Governor of the Reserve Bank advising that unions should be more proactive in seeking wage increases, because at the moment we are stuck in a cycle of historically low levels of wage movements. So these are precisely the wrong behaviours from our federal government to address this issue. After all, Mr Morrison, the Treasurer, has indicated that low wage growth is probably the single greatest threat to our economy going into the future.
I also want to reiterate the point of maintenance and protection of award conditions. If there is one group of workers around Australia that really have benefited from the work of the union movement, it is retail workers in Victoria, who were confronted in 1993 with the abolition of the state award system by the then Premier, Mr Kennett. The award system was abolished on 1 March 1993. That meant that there were no penalty rates and no conditions of employment. It was basically a scorched-earth policy on the part of the Liberal government in Victoria. That left the SDA with the task of seeking to provide award coverage through the federal system. What then ensued was that the SDA Victoria branch, through the national office, had to serve a log of claims on 35,000 retail employers throughout the state of Victoria. This naturally took some time. On 29 December 2000—a historic occasion—a dispute was found between the SDA and 24,400 retail employers across Victoria. What ensued was the making of a roping-in award for 17,628 employers in August 2002. What eventually happened was that an interim award was made on 17 January 2003. Then there was a case, of course, on the issue of what was going to be the appropriate penalty rate for Saturday and Sunday work in the new federal award that applied in Victoria. That wasn't finally settled until 3 December 2003, over 10 years after the decision by the Liberal government of Victoria to abolish the award system.
I make that point because it highlights the fact that, if there's one group of workers throughout Australia that can say that their conditions of employment relate purely and solely to the work of a trade union, it is retail workers in Victoria. I pay tribute to Michael Donovan, the secretary of the Victorian SDA branch, and the work of that branch over that period of time. That is some of the history, which I think is very important for people to hear about in this place.
Coming forward to 2017, we know that workers' take-home pay is under attack by this government, a government that doesn't care about workers who are faced with cuts to their take-home pay. That is the explanation for the amendment which we seek to make in relation to this bill. Despite record low wages growth and rising unemployment and underemployment, this government continues to pursue policies to the detriment of Australia's most vulnerable workers. The cuts disproportionately affect women as well. We know that the cuts to penalty rates will not stop at the retail industry. They will extend to other areas, and other employers are lining up to make similar applications. We know that there are proceedings in relation to clubs, hairdressing, beauticians and restaurants. If these cuts transpire, a further 323,000 workers are in immediate jeopardy of having their penalty rates cut. Labor, through our various union affiliates, has a great and proud history of standing up for workers' pay and conditions in the face of destructive coalition governments such as the one that we have today.
In relation to the other aspects of the bill, I note that there is bipartisan support for the removal of the four-yearly reviews, and that is welcome. I note that there are other changes in this bill which are accurately described as amendments to the Fair Work Act, not as reforms. This government is trying to trumpet abolishing four-yearly reviews as a reform rather than what it is, simply the removal of a process of review from the legislation. We have also been concerned that the removal of the four-yearly review doesn't have any unintended consequences. It's important that the awards continue to be reviewed over time, as they have been, to meet the modern award objective. That's done through a process where workers and employers have the opportunity to have equal access and equal standing. I commend the bill with those amendments. (Time expired)
I rise to speak to the Fair Work Amendment (Repeal of 4 Yearly Reviews and Other Measures) Bill 2017. This bill seeks to amend the Fair Work Act 2009 purportedly to respond to recommendations of the Productivity Commission's final report into the workplace relations framework. Measures include removing the requirement for the Fair Work Commission to conduct four-yearly reviews of so-called modern awards; enabling the commission to overlook minor errors when approving an enterprise agreement, provided it meets the no-disadvantage test; and, in order to respond to complaints regarding the former vice-president of the Fair Work Commission, applying the Judicial Misbehaviour and Incapacity (Parliamentary Commissions) Act 2012 in relation to past and present commission members.
If indeed this bill did simply implement the Productivity Commission's recommendations then it would have my support, but it doesn't. The Productivity Commission recommended that the legislated objective of modern awards be changed to remove the objective of higher pay on weekends and public holidays, and insert an objective of regard for consumers. If this were done, the Productivity Commission said, modern awards would only need to be reviewed as necessary rather than at set four-yearly intervals. The recommendation to abolish four-yearly reviews of modern awards was explicitly tied to the changing of the modern award objective.
Unfortunately, the prospect of genuine industrial relations reform appears to have caused the government to experience a sudden loss of bladder control, so instead of actually implementing the Productivity Commission's recommendation the government has taken the soft, easy path of least resistance. With this bill, the government is retaining the current, flawed legislated objective of modern awards but is removing the requirement to review modern awards every four years. This is like rejecting your doctor's advice that a tumour be removed at once and then cancelling regular check-ups with your doctor. In the absence of changes to the objective, there is no value in changing the review requirement—in fact, there is a positive disadvantage. Retaining these reviews provides an opportunity to reduce the obligations in the awards and to promote employment.
This bill increases the likelihood that job-destroying modern awards will be retained, and it actually runs counter to the whole intent of the Productivity Commission recommendation. Accordingly, the Liberal Democrats cannot support this relic of the original recommendation to simply remove the four-year modern award review requirement as though this were a meaningful improvement.
This Fair Work amendment bill also has provisions to allow parliamentary commissions, which currently investigate judicial behaviour, to investigate misbehaviour by a member of the Fair Work Commission. The bill states that a member of the Fair Work Commission is subject to oversight by the Fair Work Commission president and by the minister, even if the member was first appointed to the Industrial Relations Commission.
The concept of Fair Work Commission oversight by a parliamentary commission is a good idea, but again the implementation by the government falls short. On current wording, it appears that proposed changes in the bill would imperil members for behaviour in the past, making such measures essentially retrospective. This is hardly reasonable.
However, one Productivity Commission recommendation did manage to sneak into the bill without being gelded. This is the proposal to allow the Fair Work Commission to overlook minor errors that do not disadvantage employees when it's considering approving an enterprise agreement. This is, at least, a good change.
In summary, however, with two out of three of its provisions proving to be clangers, this bill does not represent serious industrial relations reform and is largely form dressed up as substance. Since the Liberal Democrats are committed to real labour market deregulation rather than a cardboard cut-out of reform attached to a tricycle, I will therefore be opposing this bill.
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—
to make a decision, taking what we consider to be an absolutely flawed position. Senator Williams says that we established it, and that's true. The Fair Work Act was voted on in this parliament—and supported by you, too, Senator Williams, I must say, and I thank you for that. It was to replace Work Choices. So let's just understand the low floor that the Fair Work Act was replacing. For those who might have forgotten Work Choices, it was a system where—don't worry about enterprise agreements—we were going back to an individual bargaining system, where it was take it or leave it. That is not too different to many circumstances that we're faced with now, but, as an individual, you were told to absolutely take it or leave it under Work Choices. We saw, as a result of that, penalty rates basically disappear in all those Work Choices agreements.
So the government's finally getting their way: they are clawing back penalty rates; they want penalty rates to be less. We've heard the Prime Minister say that he supports the decision of the Fair Work Act to start reducing penalty rates for some people in some industries. We think that's the thin end of the wedge. It will continue to happen.
The government will have an opportunity, in this bill, to actually protect those penalty rates—if it wants to protect working people in this country. We know that around 700,000 people, all low-paid workers, are likely to be affected by this decision, and the government has an opportunity to support the amendments that I understand we'll be moving in the committee stages of this bill to protect those penalty rates—to put them back; to acknowledge that the Fair Work Commission has got it wrong in this instance.
We'll hear lots of squawking about, 'You've got to accept the independent umpire's decision'—as if that's what they've always done. Well, we say: when they get it wrong, that's what we're here to do, as legislators—to fix those wrong decisions. But when those over there didn't like the Road Safety Remuneration Tribunal's decision, not only did they rush in here a bill to overturn that decision; they then abolished the whole tribunal! We see the crocodile tears from the government; we hear them saying, 'You should accept the decisions of independent tribunals,' but their track record has been not just to rush legislation in to overturn decisions they didn't like but to abolish the whole tribunal.
We say with absolute confidence that we don't believe that the lowest-paid people in this country should be punished by having their penalty rates cut, and this government has an opportunity to do something about it. They're the bills that we should be dealing with. We should be dealing with bills that are fixing the exploitation that is allowed under the Fair Work Act—the exploitation not only of vulnerable workers but often of workers who are very highly skilled, in highly unionised areas, because the tools that are at the employers' disposal now are so far weighted in favour of employers against employees that the objects of the act are failing. They are fundamentally failing.
We don't have a system which is providing fair and just outcomes. We don't have a system that's encouraging people to negotiate agreements in good faith to improve productivity—which is, by the way, at an all-time high. We don't have an act and a system that's encouraging those things to happen. So I wait. I think it'll be a forlorn hope, but I do wait in hope that the government will start bringing those sorts of constructive bills—bills that work and improve the lot and the working conditions of the low-paid workers in this country.
The Fair Work Amendment (Repeal of 4 Yearly Reviews and Other Measures) Bill 2017 is supposedly about consolidating minimum safety nets. That sounds promising, because there is so much work to be done as workers' wages and conditions have been run down over many years. You would expect the bill to be about minimum safety standards and that it would have some teeth, but the teeth are certainly missing here. You'd expect it to have teeth on issues of job security, reducing casualisation and establishing minimum wages and conditions for all workers. And there is also the very important issue of the right of workers to strike, which is recognised internationally as a human right. I will come back to that.
Industrial relations in this country are out of kilter to the point that it's not just damaging wages of workers and their conditions at work but actually damaging the economy. That is shown in the low wages growth. We have the Governor of the Reserve Bank talking about the very fact of low wages growth. He's talking about it in the context of the economy.
That surely should be a wake-up call to this government, but, as we know, this government introduced these industrial relations laws to beat down unions. It's not even about a fair balance. I think a fair balance would be about looking at the redistribution of wealth that's needed in this country, considering the millions and often billions of dollars in profit these companies make when there are so many workers—increasing numbers of workers—who are casualised, meaning they don't get any conditions. They don't have holiday pay. They're deprived of so many other conditions. There's all this evidence that's coming forward about penalty rates. Many of them don't get paid their penalty rates. Even when they try to get them—and I heard Senator Marshall not in his speech today but yesterday or a couple of days ago, and he made the remark and really spelt it out clearly. It is about when workers become aware the penalty rates are owed. The very business model of these companies is based on this. They know some workers will apply for their penalty rates and most of the workers won't get it, because they will give up because the whole system is so complicated. It shouldn't be like that. Companies should be obliged to follow the conditions that are set out.
So we come to this deeply minimalist bill. To repeat: industrial relations are so out of kilter in this country. It's deeply loaded against workers. There are so many hoops that they have to jump through when it comes to the negotiations. Effectively, the companies hold all the cards. Do they negotiate at all? If they do, under what circumstances? This is what we need to face here: the Fair Work Act is about curtailing workers' ability to organise.
So now we start to unravel the sorts of issues that should be dealt with if the government were sincere about bringing forward some real safety nets in terms of wages and conditions. Central to the problem are these extreme limits on the right to strike. In a country like Australia, where the right to strike has been so obliterated by how workers are able to conduct themselves, it's again worth remembering what the international situation is and why it has been so wound back in Australia.
The right to strike is recognised by the United Nations body the International Labour Organization. That same body has given many warnings to Australia about how, and to what degree, our industrial relations laws are out of step with international standards. And why does this international body recognise the right to strike as a human right? Because they recognise the imbalance in relationships here. If you are a CEO working for a corporation, if you have some level of management there, if you've got a big fancy office in a big building at the top end of town, you have all the power. The Turnbull government and successive Liberal-National governments over the years, at a state and federal level, have brought in industrial relations laws that make it much easier for these companies to get away with ripping off workers. And we're at a point now where it's disastrous for the individual who doesn't get paid a fair wage. The company is not obliged to follow the laws. And it's disastrous for the economy. So that's why we need to inject this issue of the right to strike back into how industrial relations is conducted in this country.
Over the years we've seen incredible hysteria from the media and from politicians saying that this is absolutely irresponsible and will destroy the economy. It doesn't destroy the economy. If a company knows that it has to give a fair wage to the workers, time and again you will see that these negotiations can proceed, the economy works and the workers get a fair wage. But under the current system the companies get away with it. The right to strike is just about obliterated from laws in Australia, and inequality in this country is growing.
It would probably surprise a number of members in this place that, believe it or not, in the United States and Britain the right to strike has more prominence than it has in this country. It's much easier for workers to collectively organise. That's what we're talking about here. How did the right to strike come about? At the end of the day the only power workers had was to collectively organise and periodically remove their work from their employer. All they could do was withdraw what they give to the boss—that is, their work. Why did that do that? So they could get a living wage and decent conditions.
We can see that the laws have gone too far in this country. We need to repeat time and time again how amazing it is that the Governor of the Reserve Bank has taken up this issue of wage stagnation in this country. 'Wage stagnation' is a nice economic term that we read about in the business pages of the papers. But it's also talking about wage theft. That has to come into this. Wage theft is extreme in this country. I've had the opportunity to sit in on some Senate inquiries and it is extraordinary to hear about the degree of robbery, the loss of wages, from some of the most disadvantaged workers in this country, who have little ability to organise. It's inspiring to hear of their experiences on the job: under very difficult conditions they've come together, they've organised and they're fighting back.
Let's remember that this bill is about addressing minimum safety standards. Yes, there is a real urgency there. I think it's worth reminding ourselves of the sorts of measures that should be taken up if we want to talk about the minimum safety net. My colleague the Greens industrial relations spokesperson in the House of Representatives, Adam Bandt, summed this up well when he spoke on this bill in the House. He said:
There is a suite of amendments that could be made to the Fair Work Act to actually improve job security, minimum wages and conditions and the right to organise and to bargain for the people of this country, and the government is turning a blind eye to that.
That sums up what's before us now. There are some measures in this bill that you wouldn't argue against, but it's absolutely minimalist in terms of the incredibly serious situation we now find ourselves in.
I will just deal with some of the issues in the bill. With respect to the bill's narrow approach to a minimum safety net of terms and conditions, yes, we need a simple, plain English modern award system that works to reduce the unnecessary overlap of modern awards. We're not disputing that. Four-yearly reviews have been one of the mechanisms to achieve this. I can see the argument for a minimalist approach, and the government has put the case, but one of our worries is: does removing the four-yearly reviews lead to unintended consequences? That's a real issue here. Are we losing one of the few mechanisms that there are to handle this?
I want to go back to the big picture I've been covering in this speech to the Senate today, about the imbalance between workers and corporate Australia. Again, remember the profits that these companies have and the power that they have, with the backup of the law and the state. It is extreme. It makes it so hard. That's why we need to put back on the agenda the right to strike. Australia is in a shameful position of having ignored that human right for so long and ignored the warnings from the ILO, the International Labour Organization. Why do we have record profits and low wage growth? How have we arrived at that situation? It's because there is a deeply flawed industrial relations system in this country. That's why I want to pull those issues together and bring them into focus with regard to this bill.
The government make out that they're doing something. How many IR bills have we had in recent weeks in this chamber? They come up with their fancy titles for bills about protecting vulnerable workers. It's all a sham. They are continuing to work for their constituency, corporate Australia, to make it even tougher for workers in this country. It will change. I'm always an optimist. The people will organise and fight back, but in the meantime people are doing it tough. They're suffering, and it sits at the feet of this government.
I too rise to speak on the Fair Work Amendment (Repeal of 4 Yearly Reviews and Other Measures) Bill 2017. Before I go to the elements in the bill, some of which Labor has managed to convince the government to change for the better and some of which we will continue to debate, I want to put this four-yearly review and the Fair Work Act in a broader context. I listened when Senator Ketter was speaking about his time at his union, where a considerable amount of time was spent on the award modernisation process. I too, at that time, worked at United Voice. For a period of time I was responsible for industrial relations at the national union. I absolutely agree with Senator Ketter that the award modernisation process was something that unions were heavily invested in and spent an inordinate amount of time on, particularly as United Voice is a broad-based membership union. There might have been one or two awards that United Voice didn't have an interest in, so we were extremely busy over that two-year period.
Industrial relations in this country really matter. I think what gets lost—certainly by the government—is how industrial relations can protect the rights of vulnerable workers. When we look at award workers, I think what's overlooked or perhaps forgotten by the government is that it's predominantly low-wage workers in this country who rely on the protections of the award. We already know through academic research that there's an enormous difference between the conditions of female and male workers. Yesterday was Equal Pay Day. We know that we have a shocking gender pay gap in this country, which hasn't moved for 30 years. My state of Western Australia has the highest wage gap in the country, and there's a very solid reason for that. It's because another Liberal government, under Mr Court and his industrial relations minister, Mr Kierath, absolutely tore the award system to bits.
Even though modern awards are much smaller documents and cover only a range of matters, if we want to appreciate the value of awards in this country and what happens when you start tinkering with awards and the protections around them—and I would argue that four-yearly reviews are a protection to award workers even though they have been used in the wrong way by employers—we only have to look to Western Australia to see what the Court government did when, for the first time in our history, it said to the employers in Western Australia, 'You can undercut the award.' We had long held to the view that awards were the safety net. They were the very minimum rate of pay which could be paid to workers in this country. That was not so for Mr Court and his extremely aggressive industrial relations minister, Mr Kierath. For the first time in Western Australia, and indeed the country, employers were able to undercut awards. Awards that had been put in place a hundred years ago were able to be undercut.
What we saw almost immediately in areas where wages are in competition—this is something the government doesn't seem to appreciate—was that when margins are slim, in contracting industries like security and catering, or where there's stiff competition, such as in the early childcare sector, wages are a predominant part of payroll—in the early childhood sector probably making up 75 per cent of the pay. When people are competing in the contracting industry for a contract, if they can snip wages, that's what they'll do. Under the workplace agreement system in Western Australia, for the first time ever, employers were able to strip away award conditions so that overnight, we saw the contract cleaning rate in Western Australia drop by $2 an hour.
Of course, despite most companies actually not wanting to cut wages, when they were up against a big employer who did cut wages, in order to compete they had to go to the lowest common denominator. We saw penalty rates disappear. We saw the hourly rate disappear. We saw ridiculous contracts come into place and zero minimum where you were just told to come in at a whim. And we saw wages and conditions of cleaners—they were the first area that was attacked—disappear almost immediately. What impact does that have on a worker? First of all, cleaners thought they could move to another contract cleaning company. But, lo and behold, they soon found out it didn't matter where they went. The employers were also in the race to the bottom. Their wages were not protected. What happened was that cleaners started working two jobs. I know it's quite common to hear in this place that people are working two jobs. But we heard of cleaners working two and three jobs, and sometimes four jobs, just to try and make up for the loss in wages that had hit their pockets because of this abandonment of the wages system.
It didn't just stop in the contract catering industry. It happened in the contract security industry, where rates of pay dropped. Let's be very clear here. We're not talking about very high rates of pay. We're talking about people on low rates of pay—in today's wages, $20 to $21 an hour. In those days under Court-Kierath, it would have been about $15 or $16 an hour. These were not high-wage workers. They were also part-time workers. The security industry was next. We saw one big contractor drop rates and all the rest of them follow.
I heard Senator Birmingham in here yesterday during question time talk about all the innovation that's going on in the early childhood sector. That's a low-paid sector and remains so today because the government tore apart any of the principles that Labor had put in place to increase wages in that sector. But then young workers were given disgraceful, two-page individual agreements. They weren't really individual agreements; the employer would put 15 agreements exactly the same across a childcare centre. So we saw in the early childhood sector, also, a stripping away of wages. Why? It's because, predominantly, it's an area that attracts young people who have no idea about the history of what the wages were in that sector before individual workplace agreements. Of course, if you said no and went to another early childhood service, the chances were that they would have the same individual agreements.
We also saw during this stage employers and employer consultants making a lot of money out of these shocking individual contracts, because most small employers don't know a lot about industrial relations, so they fall victim to people who come around and say, 'We can take care of your industrial relations.' So we saw a lot of shonky individual agreements being peddled by the Chamber of Commerce and Industry of Western Australia and by a whole lot of other consultancy groups. Some of them were very bad, and some of them, because they were put out by shonky operators, were easily knocked off in the various courts you could go to. But, again, that was expensive. Workers were often afraid to put their hand up and be singled out in the workplace, so times were tough.
Certainly from a Western Australian perspective and my experiences under Court-Kierath, with really bad workplace agreements legislation, I can see the value of having protections in our industrial relations system and the value of having a floor that you can't go below. I certainly wouldn't want to see this legislation have any unintended consequences that make it easy for employers to once again start stripping away award conditions. We've already seen some of this, and, as I said earlier—in the federal arena under the Fair Work Act—most low-paid workers still rely on awards.
Again, if you look at the early childhood sector, there's something like 6,000 services across Australia. It's predominantly women who work in the early-childhood space. Many of them are young women who are there because they love the job and really value the opportunity of working with young children. But, of course, love doesn't pay the bills, and it certainly doesn't pay the rent. Many young women find themselves at the age of 27 still living at home because they love their job but they're not making enough money to be able to even rent a property, and buying a property is certainly out of the question. Those workers across the 6,000 childcare services in this country really do rely on the award service—absolutely. That pays their wage. These workers are on $20 or $21 an hour. These are workers with diplomas and certificate IIIs. Again, we see the furphy of, 'If you just get yourself qualified, you'll get a better rate of pay.' But the reality is that, for women workers and low-paid workers on the award, they need all of the protections that we as a parliament can make sure are in the act.
We're not just talking about early childhood educators. We're also talking about cleaners—the cleaners in this place. We know the story here. They haven't had a wage rise for years and years and years. They were part of the Clean Start Collective Agreement which the government cancelled, and those workers are now back on the award. We're also talking about disability services. We've seen the NDIS, which is a champion piece of legislation that Labor put in place. In 20 years to come, it will absolutely be the new Medicare. It's a brilliant piece that enables people who have a disability to be properly cared for and looked after and to be able to be independent in this country. But disability-care workers are extremely precarious workers. They get a text message when they're required to work. This is what we've come to in this country. They get a text message that says, 'Come to work today; we've got an hour of work for you,' or, 'Come to work next week; we've got two hours work for you,' or, 'Sorry, we don't need you today—don't come.' That's all done by text message. This is not just about the workers out there picking tomatoes, which I certainly heard about as the chair of the Senate inquiry that looked at visa workers. These are everyday, ordinary Australians, and it's not their pocket money, as some people may choose to imagine. Again, these are women. This is their bread and butter. This is how they are making the money to feed their kids, to pay their rent and to pay their school fees—yet there is the indignity of receiving a text message. There are very few home care disability workers in Western Australia who actually see the boss and get a roster. Most of them get a text.
So, there again, workers need whatever protections we can offer them through our industrial relations system to ensure that that abuse stops. I'm sure most people in this place would agree with me that getting a text saying to come to work or not to come to work is a very inappropriate way to run your industrial relations system and to run your workforce. It is just not appropriate. But that's how low we've come.
With hospitality workers we saw the attacks. We begged the government to step in and do something about penalty rates. For anyone on the government side to think that losing penalty rates does not have an impact on low-paid workers again demonstrates how out of touch they are, because you can't lose 15, 30 or 40 per cent of your income without it having an impact, particularly when you're on 20 bucks an hour. The reason people work on the weekends is to increase their take-home pay so that they don't have to work three or four jobs, or be an Uber driver or be a worker who gets texts from the disability services employer. Decent jobs—what's happened to that notion? What's happened to the notion of decent pay? What's happened to the notion of decent work? It's just gone. It's as if you don't appreciate that at the end of these reforms are human beings who vote, thankfully, and who can speak for themselves. If you cared to ask them, they could tell you what impact losing penalty rates has on them, award-reliant workers.
I read in the media that the employers are now after hairdressers. Everyone in this place who goes to a hairdresser knows that they stand up all day. I don't know how they do that. Their backs must ache at the end of it. They must get repetitive strain injuries, because not only are they standing but they're standing with their arms at shoulder height most of the day when doing people's hair. They're dealing with chemicals. I've seen a lot of them using chemicals without gloves. Again, these are low-paid workers—20 bucks an hour—yet we're going after their penalty rates. I saw an employer the other day quoted in a newspaper as saying that if they were able to reduce penalty rates they could employ another hairdresser. Goodness gracious me, do we really want another hairdresser on low pay? How does that help the economy? How does reducing people's income and putting more people into low-paid work help the economy? It doesn't. When we have the governor of the Reserve Bank coming out and saying, 'Hey, we've gone a bit far,' we really do need to sit up and take note.
I want to make sure that when we tinker with the system, when we look to abolish the four-yearly reviews, we really understand what we are doing. I want a commitment from the government that any unintended consequences that start to give employers a back-door way to reduce award wage workers' wages even further will be looked at. Already, under minimum awards we have minimum start times of zero for some workers. This is just not on. It does not create a modern, productive economy. It just does not.
If the loss in penalty rates is carried over to the hairdressing industry, where will it stop? Are we going to go after aged-care workers next, because I'll tell you what: I was speaking to some aged-care workers just last Sunday and they're very nervous. Are we really going to attack the penalty rates of workers who look after some of the most vulnerable people in Australia—the people in aged-care homes? I hope not. Really, it is time for the government to show some leadership on this issue and say: 'Stop. This is the line in the sand. We will not support any further attack on penalty rates.' But I suspect the gate is open now. Certainly, Labor have said all the way along, 'We are very worried about where this penalty rate onslaught will stop.'
But I'm pleased to say that, with this bill, the government has listened to some of the amendments that we have put forward, and we will put forward further amendments. The time has probably come for those four-yearly reviews to be abolished. The current review hasn't finished. There was a time and place for them. Labor are always prepared to look at sensible, fair amendments, but only if they don't disadvantage the lowest paid workers in this country. Certainly, when you come out of a union such as my union, United Voice, you see the lowest-paid workers in this country, you see disadvantage every day and you see exploitation by employers. That's not to suggest there aren't employers who do the right thing—of course, there are. But when we inadvertently or when we deliberately put pressure into the system that ultimately impacts on workers, that's when it starts to be unfair.
We should be a country that proudly looks at how we have a system which protects workers, particularly low-paid workers, to make sure they can't be exploited. We've seen some shocking cases of exploitation across all aspects of this country. It doesn't matter where you work now, there's exploitation. I would seek assurances from the minister that this bill doesn't have adverse consequences, and, if it does, that we will look to amend those very quickly, because workers right now, in 2017, need their unions and they certainly need the protections of really strong legislation to make sure that they are not being taken advantage of, they are not being ripped off and they are able to join their union when they choose to protest their rates of pay.
In speaking to the Fair Work Amendment (Repeal of 4 Yearly Reviews and Other Measures) Bill 2017, I'll commence by reflecting on, unfortunately, what it is not, rather than what it is. As someone who played a significant role in the introduction of the Fair Work Act, its provisions and, indeed, the necessity to overcome the Work Choices regime that was introduced by the previous government, I'm well aware of the need to review the provisions of the act and the paucity that this bill itself actually represents. So it was interesting to listen to Senator Rhiannon talk about how minimalist these provisions are, as indeed they are. Senator Lines was just then discussing some of the history in workplace relations matters in Australia over the last couple of decades. I want to take just a moment to give credit to Senator Marshall, who from opposition has put in significant energy to ensure that, in the absence of the government addressing these issues, the provisions of the Fair Work Act are being adequately reviewed through Senate inquiry.
The main thing that this bill is not is an adequate response to a review of the Fair Work Act. It's a drip-feed process. The government drip-feeds a few matters and issues here and there. What the government does not have is a workplace relations policy—no policy at all—because it doesn't want to admit to what its real agenda is. And then, indeed, when we do see elements of that real agenda, such as the onslaught of cuts to penalty rates for Australian workers, it attempts to use the complexity of some of the elements of the Fair Work Act to shield and hide what is really being proposed. So I thought I would commence today by taking a step back and revisiting some of the process issues here.
This bill is a lost opportunity. It is a lost opportunity to adequately respond to the operations of the Fair Work Act. It's not, as the government pretends, reform. Simply removing the review process from the Fair Work Act is not workplace relations reform. Indeed, if we go back—and I questioned this approach at the time—to how the Fair Work Act was proposed to be reviewed, we're going back to the Productivity Commission report on Australia's workplace relations system, which was handed to the Abbott-Turnbull Liberal government on 30 November 2015. It was that long ago: November 2015. At the time, I questioned in my own mind whether the Productivity Commission was the appropriate agency to conduct such a review.
Those who have watched the work of the Productivity Commission—perhaps with one major exception, which this government ignored: paid parental leave—would have seen a fairly narrow economic assessment of the circumstances. Any understanding about the application of workplace relations policy in Australia comprehends that we have this separate system because we understand in Australia that simply relying on the vagaries of economic policy is not appropriate to establish decency within our society and decent and appropriate work for Australians. But, fairly predictably at the time, the government referred the operation of Australia's workplace relations system to the Productivity Commission.
You would expect that a conservative government would have responded to such a report by now, but no. Apart from the drip feed of a few issues such as this one, almost 1½ years after it was handed down, in what has become a fairly standard operating procedure for this government in relation to workplace relations matters we still have no government response to the report—lazy government, distracted government. There has been no government response to a report that you would think would fit fairly neatly within their workplace relations policy space. So the Australian public are in the dark about which Productivity Commission recommendations the government does or does not support. Until the government responds to individual recommendations, all we have is the drip feed that this bill represents. And then we have the pretence that this bill is about more than what it actually is. This is not reform. This is simply dealing with a review mechanism—and indeed not even in the way that the parties had proposed that these issues be addressed.
The Labor opposition has been looking carefully at some of the potential unintended consequences. As other speakers have noted, it seems that the government is prepared to accept some of the amendments to deal with those issues, and they'll be canvassed in a bit more detail in the committee stage debate. In the absence of a workplace relations policy, though, we have seen instead a misrepresentation by this government of how enterprise bargaining operates, within the Fair Work Act, as a shield for their proposed penalty rates cuts. Indeed, the Fair Work Commission's decision in relation to penalty rates fits neatly into the paradigm I was just describing in relation to drawing on the Productivity Commission to reflect on workplace relations policy. Even so, in order to justify and maintain its support for significant cuts to penalty rates, what this government does instead is to completely misrepresent how enterprise bargaining operates within the Fair Work Act.
The best example was yesterday. Since the minister raised this issue in question time yesterday, I thought I would use this opportunity to describe what was wrong, what was inaccurate, what was fallacious about the material the minister was presenting to the Senate, in relation to the operations of enterprise bargaining.
We saw in The Australian yesterday a piece written by Ewin Hannan, claiming 50 hours to cover weekend rates cut. The report itself describes an analysis by the Department of Employment that was submitted to the current Senate inquiry into penalty rates. What hasn't been presented and what needs to be presented is what is wrong with that analysis. Let me refer, for example, to a press release from the SDA outlining some of those issues around what was wrong. It says:
An analysis by the Industrial Relations Minister, Michaelia Cash—
or her department—
is a manipulation of data that deliberately skews the facts and ignores the benefits of Enterprise Agreements for workers.
Why? To shield their cut to penalty rates. SDA national secretary Gerry Dwyer says, 'The report by the minister is fundamentally flawed by using arbitrary dates for her comparison rather than an accurate comparison using dates recommended by the BOOT.' You don't need to only rely on the SDA here. Look at the comment in that article from the ACTU, where it says:
We do not celebrate the fact our system locks in terms and conditions that may be overtaken by the safety net during the life of an agreement.
The minister's analysis doesn't deal with that, because the department simply used arbitrary dates.
Perhaps the biggest misrepresentation this minister continues to make is how enterprise bargaining involves rolling up penalty rates into higher base rates of pay and working conditions. She simply draws comparisons between the Sunday work rate and the award rate without all the other factors, including a higher base rate of pay. The reason they continue to do this is that they want to shield their real agenda about cutting penalty rates and, supposedly, creating more employment by cutting workers' rates of pay.
People who have experienced this government in its earlier forms or the workplace relations policies that have been applied understand where that agenda leads. That agenda leads to the likes of the industrial regime in Victoria under Jeff Kennett: five conditions of employment. Just five. That's part of the history about why most Australian workers moved into the federal jurisdiction. Then they came across Work Choices, and they understood again that the absence of a no-disadvantage test damages workers. So, instead of this minister adequately dealing with how enterprise bargaining operates within the Fair Work Act, we have just one process issue in this bill. Instead of this government having a workplace relations policy that they're prepared to be up-front about and debate, and present to the Australian public at large, we have this drip-feed of piecemeal measures while, at the same time, arguing that Australian workers should lose their penalty rates.
I'm not surprised this government doesn't understand the sorts of issues that workers in retail and hospitality value. Let me read a few of them that are in the agreements that this minister has ignored. They represent things such as improvements to how rosters and hours of work can be changed. They represent guaranteed minimum shifts of work. They represent shorter maximum shifts so that workers can combine their work with their family responsibilities. They represent other types of leaves and support for workers—conditions that those workers have argued for in enterprise bargaining. These are the elements that this minister ignores in the trite analysis that she has allowed her department to present to a Senate committee, and she should be appalled that the quality of that work has been allowed.