Monday, 4 December 2017
Fair Work Amendment (Repeal of 4 Yearly Reviews and Other Measures) Bill 2017; Second Reading
The Fair Work Amendment (Repeal of 4 Yearly Reviews and Other Measures) Bill 2017 implements simple, sensible measures to fix some clear issues with the operation of the Fair Work Act. This should not be controversial legislation. Indeed, until recently this reform was not controversial. The need for this legislation has united unions and employer groups, with the Australian Council of Trade Unions, the Australian Industry Group and the Australian Chamber of Commerce and Industry writing a joint letter to me urging that this legislation be progressed as a priority.
The President of the Fair Work Commission, the independent umpire, Justice Iain Ross, advised me in August that there were approximately 75 enterprise agreement approval applications in limbo which were awaiting clarity on this bill. Many of these businesses have since had to renegotiate their agreements. Clearly, stunts by Labor are affecting the commission's capacity to do its job. Unfortunately, again, stunts by Labor are affecting the ability of businesses and unions to offer certainty over their employment arrangements. It reflects very poorly on the Labor Party that they have tried to hold this legislation hostage to a political stunt. It reflects poorly on Labor that they would put political pointscoring ahead of the interests of employers, unions and everyday workers. It reflects poorly on the Labor Party that they cannot bring a commonsense approach to what is and what should be a commonsense bill.
The bill repeals the requirement for four-yearly reviews of modern awards. The Productivity Commission found that the current system is hugely resource intensive for all involved—a statement of the obvious for unions and employer groups who have endured long hours or spent hundreds of thousands of dollars during the current drawn-out process. It is estimated that by removing the automatic requirement for lengthy reviews every four years approximately $87 million in regulatory costs will be saved for employers and unions over the next decade. As the ACTU, Ai Group and ACCI quite rightly pointed out:
The cycle of almost continuous review sits uncomfortably with the stated objective in the Act of a modern awards system that is 'simple, easy to understand, stable and sustainable'.
This legislation is a simple but important way to reduce complexity in Australia's workplace relations system. To ensure an appropriate transition period, the bill will allow the current four-yearly review to conclude under the existing framework. However, it will remove the requirement for a new review to commence in 2018, which is when the next phase is scheduled to commence.
The bill makes another commonsense change to the Fair Work Act, by allowing the Fair Work Commission to overlook minor procedural or technical errors when approving an enterprise agreement, as long as it is satisfied that the employees were not likely to have been disadvantaged by the errors. The inflexibility here is well known. There are numerous examples of minor errors, like inadvertently providing an incorrect phone number or web address, that have prevented the Fair Work Commission from approving enterprise agreements that are supported by employees. Here are just a few examples to illustrate how the current inflexible approach has impacted enterprise agreement approvals. Peabody Moorevale provided three pages stapled together to each employee who was to be covered by the agreement. One of these pages was the notice of employee representational rights, known as the NER. The others were simply bargaining representative nomination forms. DP World Brisbane printed the NER on a piece of paper with the company letterhead. This error meant that the agreement was not approved. Adaptalift asked employees to vote on a proposed enterprise agreement on the 21st day after the last NER was given, rather than at least 21 days after the last NER was given. This error also meant that the agreement could not be approved. Finally, Kimberly-Clark in South Australia, which employs around 500 workers, submitted their agreement to the Fair Work Commission for approval late last year. Three months later, the company was told by the Fair Work Commission that their form contained the phone number for the Fair Work Ombudsman, rather than the Fair Work Commission infoline.
These decisions demonstrate the problems faced by employers and employees in getting agreements affected by these types of errors approved by the Fair Work Commission. This issue will not be completely fixed until this legislation is passed. This sort of ridiculous inflexibility does not protect workers. It just delays potential pay rises and creates uncertainty. Where there is a clear problem with the legislation, which there is in this case, it is the responsibility of all legislators to fix it.
Finally, this bill will also implement the sensible reform suggested by former Federal Court judge Peter Heerey following his inquiry into complaints about former Fair Work Commission vice-president Michael Lawler. If there are allegations of misbehaviour or incapacity against Fair Work Commission members, the parliament currently has no formal mechanism to consider these allegations. The bill will allow parliament to take appropriate action by quickly establishing an inquiry, so they can be well informed in the event that they may need to ask the Governor-General to terminate an appointment.
So, there you have it. Three simple commonsense changes to fix three clear problems. This legislation, as such, should be noncontroversial and beyond politics. Considering obviously that it was Labor that introduced the Fair Work Act, you would think that they may take responsibility to help with fixing these problems, in particular given the joint letter to me by the Australian Council of Trade Unions, the Australian Industry Group, and the Australian Chamber of Commerce. Instead, what we're about to see is that this legislation is yet again going to be held to ransom by another stunt on penalty rates.
But Labor's hypocrisy on the issue of penalty rates has been thoroughly exposed. When Mr Shorten was national secretary of the Australian Workers' Union his union cut deals to lower penalty rates, including in the retail and hospitality industry. Mr Shorten's union did deals with, for example, Big W, Target and Just Jeans, cutting penalty rates for workers in Queensland from 200 per cent, under the award, to 150 per cent, the same rate the Fair Work Commission is modifying the award rate to over a number of years. Under a deal made by Mr Shorten's union, workers at Rydges Tradewinds in Cairns got no penalty rates at all. What about the company called Clean Event? Bill Shorten stripped penalty rates for low-paid cleaners, with no compensation, while his union accepted payments from the company.
For years, big unions and big businesses have been making agreements to cut Sunday penalty rates in retail and hospitality industries. Mr Shorten apparently thought it was fair that, for work on a Sunday, a bed and breakfast needed to pay $10 more per hour than a five-star hotel; a family owned take-away needed to pay $8 more an hour than McDonald's; a family pizza take-away needed to pay $8 more an hour than Pizza Hut; a family bookshop needed to pay $8 more an hour than Target; a boutique clothes shop needed to pay $7 more an hour than David Jones; and a family greengrocer needed to pay $5 more per hour than Woolworths.
Since these sorts of union deals have been exposed, the wheel of Labor's penalty rates campaign has fallen off. Those opposite have argued it is okay for unions to cut penalty rates, because they offset it with a higher base rate of pay. This has been put to the test and it has been found to be false. For example, workers at Big W were employed on an agreement negotiated by the SDA and Mr Shorten's former union, the AWU. On Sundays, workers under the agreement receive $7.74 per hour less than the award. Those who work a full Sunday shift need to work more than 50 hours during the week to make up for what they lost on Sunday as a result of the union deal. Workers at David Jones got $7.52 an hour less under the agreement. If they work a full Sunday shift, they need to have worked 49 more hours during the week to make up what they lost on Sunday as a result of the union deal. Workers at Pizza Hut under the agreement got $8.13 per hour less. If they work a full Sunday shift, they need to have worked 45 hours more during the week to make up for what they lose on Sunday as a result of the union deal. Workers at McDonald's under the agreement got $8.08 per hour less on Sunday than the award. If they work a full Sunday shift, they need to have worked 37 more hours during the week, as a result of a union deal. So, Mr Shorten and the Labor Party are completely comfortable cutting penalty rates for themselves. However, when small business gets a small break they are completely opposed to it. Labor opposes penalty rate modifications only when an independent umpire modifies them for small business.
Let us not forget the process that led to these modifications. It was put in place by the former Labor government. The terms of reference for the review were set up by Mr Shorten when he was the responsible minister. As minister, Mr Shorten amended the Fair Work Act to require the commission to specifically review penalty rates as part of its review of awards. The fact that the Labor Party are now attempting to reverse a Fair Work Commission decision that they themselves are responsible for, while holding to ransom a bill that is supported even by the ACTU, is as ironic as it is damning. The bill in its present form should be supported by all senators without Labor's amendments. I commend the bill to the Senate.
Bill read a second time.